Saturday, July 17, 2021

Daniel Webster Doesn't Understand Capitalism

 Central Florida representative Daniel Webster recently posted on Facebook some startling statistics but provided zero context for them leaving it up to his supporters to figure out what he was implying.

If you couldn't figure it out, Webster was trying to imply that these recent price increases are some result of the Biden administration's policies. 

Seems like a simple connection  to make but it is incredibly wrong. Correlation does not mean causation but Webster's conservative fans did not disappoint. There were a string of posts blaming Biden, blessing former twice-impeached president Trump, and even some that seemed to support the Big Lie and hope for a reinstatement of the former administration.

What these posts (and Webster) ignore are the simple facts of capitalism.

You see, last year during the mismanagement of the pandemic, as the tourism industry tanked car rental companies resorted to selling their fleets to stay afloat. There had also been impacts on car production due to decreased demand from a slowing economy as well as a semiconductor shortage.

Fast forward a year and businesses are starting to open back up and people are beginning to travel again. But what about those car rental companies that sold all their cars? They need to get cars from somewhere so they have resorted to purchasing cars from the used market.

So what does this mean?

If there is a new car shortage and you have a bunch of companies buying up used cars, that would apply upward pressure to the price of new cars. That would explain the 45% increase Webster referenced. And the 88% increase in rental prices? How else are these companies going to afford their acquisitions to stay in business?

And as for the gas prices?

For one, Webster provides zero reference as to what this increase is from. Last week? Last month? Last year?

Again, all fingers can point to the pandemic. Remember when oil prices crashed last year as the world wide economy shut down? You can imagine the impact that had on the price of gasoline. Now that economies are opening up and people are beginning to travel it is only natural prices would increase. And let us not forget that this is also the summer month where people traditionally vacation.

But Webster would rather fuel partisan hatred for the benefit of his own party and himself. Or perhaps Webster really does not understand simple economics.

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