Get ready for Grinchonomics

This year’s holiday season will be definitively better than last year’s. Nearly 220 million Americans have been vaccinated against Covid-19, compared with essentially none in 2020. Total employment is 5 million more than last December and work is slowly getting back to normal. Plus, there’s no presidential election for anybody to try to sabotage this year.

Yet the outrage industry wishes you a Terrible Christmas, and pandemic hangover effects might just make it so. Snarled supply lines around the world have already made many everyday products scarce, and that is sure to extend to Christmas gifts for kids and family members. Forecasting firm IHS Markit says imported products must arrive at U.S. ports six weeks earlier than usual this year, to make it to shelves during the holiday shopping season. Many items parents will be looking for won’t make it. Those that do could come with sticker shock caused by soaring shipping costs and profiteering.

Some families may have to cut back on gift purchases anyway, since gasoline prices, already up 42% during the last year, seem poised to rise further as global demand picks up and supply remains tight. Home heating costs are headed higher, too, with natural gas prices at a 13-year high. And overall inflation, above 5% for four months in a row, is not proving “transitory” as the Biden administration insisted it would over the summer.

President Biden is clearly concerned. His top aides are pushing ports, shippers, retailers and unions to work 24/7 to get the goods moving. But there’s probably not a lot Biden can do. The federal government can’t flip a switch that clears all the supply-chain snags. There are many crunch points, from Asian factories battered by Covid to a shortage of shipping containers, dock workers and truck drivers to transport goods to their final destination. Getting a toy from a Chinese factory to Aisle 14 at your local Target is a complex ballet that looks pretty ugly at the moment.

Challenging holiday season

So Christmas is going to be somewhat of a challenge—for people who expect everything to go right. There’s the added difficulty of travel amid residual Covid, with the Delta variant still a major threat to the unvaccinated. Dr. Anthony Fauci, the government's top infectious disease expert, recently riled anti-vaxxers by saying it’s “too soon to tell” whether families should get together for Christmas, as if anybody refusing to get vaccinated at this point is going to listen to Fauci.

A sub-optimal Christmas holiday will be a political problem for Biden on two levels. For starters, something is obviously broken when the ruthlessly efficient machinery of the U.S. economy leaves giant cargo ships jammed off the waters off Los Angeles, Seattle, Savannah and New York. Unionized dock workers earn well over $50 per hour, but fight against automation that would make ports more efficient. Meanwhile, poor pay and work conditions in the trucking industry have left a shortage of 20,000 drivers. These are longstanding inefficiencies that weren’t so evident before the pandemic threw everything out of whack. Now, they’re Biden’s problem.