The transitory and modest inflation we were warned about for over a year looks neither transitory nor modest. As each month brings another wave of startling inflationary numbers, families, and businesses are struggling. Spending decisions about the most basic things like groceries are being driven by expectations about the future. Many are wondering, will prices continue to increase? Will supplies be available in the coming months?
Recently, President Biden explained our gas prices as a function of Russia invading Ukraine, but failed to acknowledge that prices have been steadily rising over the past year, not just the past three weeks. Utahns are experiencing the pains of this inflationary cascade in three critical areas: housing, groceries, and gas. These inputs don’t just correlate to higher prices today, they constrain business growth in Utah and the nation into the future.
Utah’s housing challenge continues to grow with eye-popping prices and inventory lag. One initial solution for addressing lack of housing supply is to increase labor through legal immigration. Further, we need to improve and formalize trade relations with neighboring countries, such as Canada, where much of our construction lumber and concrete comes from. Negotiated agreements with countries in our sphere could blunt the rising costs associated with key commodities. In addition, continued zoning reform locally will allow more homes to be built.
When it comes to food prices, domestic farming and ranching should be championed. As earlier generations of Americans produced their own food, we should support local farmers markets and build up a base of demand for their goods. Our water conservation efforts can also help support locally grown food and farm-to-table connections. In some ways, we have forgotten the law of the harvest through the commercialization of our food supply, so efforts to re-instill this principle will have positive effects.
Lastly, for our gas prices and energy needs, the U.S. should follow Utah’s example and develop a deliberate strategy to become energy independent. While we achieved some ground during the prior Administration as a net exporter of oil, we need a durable plan that doesn’t change with each new President. We have a wealth of oil and natural gas here at home that, if accessed, will help families and businesses alike. This would require Congress to outline a consensus plan to access domestic energy sources, while accelerating a transition to cleaner, renewable energy. An important component of this plan should include a national nuclear energy strategy. The truth is we need an ‘all of the above’ approach to combat our short-term energy needs and long-term energy independence.
This same wisdom must be applied to shortening our supply chains and building local demand/usage of our resources. This decentralized approach would also help balance the housing market and re-energize our rural roots. America may experience external problems, but the solutions can be found right here at home.
Derek Miller is the president and CEO of the Salt Lake Chamber