Last year I went to Home Depot and bought a bag of fertilizer. It was the higher-end stuff, and I was appalled that I paid $53 for it, when the other (regular) big bags I had previously purchased were in the $38 range. But it worked well. So, this year (today, actually) I bought that bag again. Except now – the exact same bag from the exact same store is $89! Yes – that is a 68% increase, YoY. I pulled my collection of receipts from last year to confirm. Wow!
So, all of those folks that say inflation “isn’t Joe’s fault,” my answer is simple: You’re right. It’s not. But it’s not REALLY that simple, is it? Let’s examine this a bit closer:
Fuels costs are up of 217% for diesel (today .. it was a bit more a month ago; wait for the Fall, however). This is clearly tied to global market reactions when Biden was elected and he proclaimed a war on fossil fuels. You could actually see the global market reactions on pricing, knowing he wasn’t going to re-instate policies that would counter their price moves (e.g., re-open ANWAR and Gulf leasing, etc.).
Over-the road transportation costs rose over 300% in the last 14 months. Fuel was a big piece of this, but so was the restricted supply chain and its ability to handle (was used to be) normal shipping volumes. More on that a little further down.
Overseas shipping (e.g., if not the final products, then the materials needed for the final products) increased in costs by 1,000% to 2,000%. Again, a lot of this was associated with opportunistic mandates and shut-downs, and probably a few greedy shippers as well.
Ability to move materials and supplies out of California ports was critically hit in the last 12 months. Why? Simple: The party that controls everything in CA passed legislation that effectively banned (yes, banned) independent and non-unioned trucking from hauling materials from those CA ports (some of the biggest in the US and the world, FYI). The supply chain issues then (not surprisingly) blew up. Mayor Pete flew out there a couple times – zero impact, unfortunately.
Then let’s not forget the bans and mandates that shut down many industries, including a lot of transportation and manufacturing industries. I’m speaking of the bans that were either still in place or new ones put in place after January 2021. We couldn’t get people back to work, and in tens of thousands of cases the employers sympathetic to the mandates fired their people.
And finally, let’s not forget the over $2 trillion in additional, unnecessary COVID relief passed in the first quarter of 2021. Economists all over the country said, “don’t do it.” Then we continued to spend like drunken sailors – which overheated the economy, and we saw inflation spikes continue. We’re not done with those yet, by the way… Especially since we’ve spent another $3 trillion over-and-above a typical $3.8 trillion annual government budget since that last relief bill.
All of those factors add up to my $89 bag of fertilizer, among the countless other more important items that are pricing people out of their ability to keep pace.
My parting thought for the evening: People that play the long game, economically, should run things. They plant pieces in the right places to set us all up for more wide-spread prosperity. Those that play the short game by giving out free money, free healthcare, free cell phones, free (fill in the blank here) do it at opportune times to earn short term votes. And they’re almost always backed by some of the wealthiest people on the planet that could care less over how much my fertilizer costs.
