One of Murphy’s laws states that “if something can go wrong, it will.” Things often go wrong — that’s life. But seldom do so many things go wrong at the same time, as is happening now.

It could be worse. The war in Ukraine has not yet escalated into a nuclear conflict with Russia that would end civilization — although still plenty of time for that to happen unless cool heads prevail. And in many respects, the economy in general is doing reasonably well for many people.

But doing well in general is not good enough. People don’t feel like the economy is doing well, and are anxious about the future. When polled, respondents of all political persuasion believe the country is going in the wrong direction. However, such answers to a general question reveal nothing about the specifics that are “wrong,” what or who is to blame, and how to fix it. On this, the nation is much divided.

Year 2020 was a tough one with a virulent virus, neither knowing how to deal with its prevention or cure. The economy shut down along with schools and work places. The federal government stepped in with unprecedented relief measures. Year 2021 wasn’t much better, but effective vaccines were in place and elements of the economy began to open up. But vaccines and preventive measures were quickly politicized. With new variants of the virus, deaths and health care emergencies continued. Although public health officials and institutions did their best under difficult circumstances, with continued public frustration with the pandemic, second guessing and criticism by the media and the public were predictable and inevitable.

As economists proclaimed, the economy would open up when the pandemic eased up. The pandemic has eased up, and the economy has opened up. But as public health officials remind us, we may think we’re done with the pandemic, but the pandemic isn’t done with us. There remains the danger of new variants that are resistant to present vaccines. It is still recommended that vaccinations, masking, and precautions be taken, depending on circumstances. Yet, people are tired of masking, social distancing, and other restrictions. Such measures remain politicized.

After over two years of restricted activity, people are anxious to break loose, travel, eat out, and spend money to satisfy pent up demand for goods and services.

This is where a combination of Harry Truman’s frustration with lack of “one handed economists,” and Murphy’s Law, come into play.

In explaining consequences of an economic policy, economists often say, “on the one hand, this will happen, and, on the other hand, that will happen.” This is for good reason; economic policies invariably have multiple consequences. Even when recommending one policy over another, competent analysts will spell out the likely consequences.

The pandemic relief moneys under both the Trump and Biden administrations did a lot of good, enabling many citizens and businesses to get through the pandemic and avoid total financial disaster. Those relief payments undoubtedly prevented total meltdown of the economy.

A consequence of the payments was that with much of the economy shut down, and necessary pandemic cautionary measures in place, some of that relief money was unspent. The national savings rate actually increased, strengthening household balance sheets.

Strong household balance sheets are generally a good thing, freeing up money to spend, generating income and increased tax revenues. But here’s where Murphy’s Law comes into play; if something can go wrong it will, and, now, many things simultaneously.

As the economy opens up, people have the money to spend and are now anxious to spend it — on travel, eating out, buying goods and services to satisfy that pent up demand. But instead of the normally available goods and services to satisfy that pent up demand, consumers face shortages, those shortages being another result of the pandemic.  

With reduced travel and demand for oil during the pandemic, oil companies dramatically reduced production. Now, with sudden increased demand, production cannot instantaneously be increased, and neither domestic nor world producers appear anxious to rev up production. The war in Ukraine and sanctions against Russia further restrain available energy supplies — along with decreased supplies of grain and fertilizer.

Higher energy costs increase shipping costs, adding to higher prices of both domestic goods and foreign imports.

With the economy opening up, demand for workers has increased, along with decreased numbers of workers available. Some workers in low paid sectors have opted for better paying jobs and more rewarding careers. This, along with many of the Baby Boom Generation at or near retirement, reducing the size of the labor pool, has resulted in higher wages, a good thing, but — pardon me — on the other hand, increased production costs and higher prices, and sometimes reduced services as in restaurants and hotels.

Then along comes the bird flu, killing chickens and reducing supply and increasing prices of poultry and eggs.

Chinese restrictions on production resulting from their resurgence of the virus are another complicating factor that reduces supplies.

So what else could go wrong? We now have a shortage of baby formula.

Increased demand facing short supplies — naturally it adds up to inflation.  

Were the federal relief plans under the Trump and Biden administrations bad policy? No, they were necessary and did a lot of good. However politically convenient for politicians and pundits, it is disingenuous to blame it all on Biden’s Rescue plan. Current inflation is a world problem, a consequence of the pandemic and recovery of the economy, not something the White House has created — even though political reality is that Biden will suffer the consequences.

Solution is left to the Fed. But the fed can only act on the demand side, raising interest rates to restrict demand. To raise rates enough to restrict demand enough to stabilize prices risks causing a recession. Pundits overlook the fact that solution to inflation depends on solving supply issues. That requires tools not available to the Fed.  

Lowering prices of prescription drugs could be addressed by congress — but that won’t happen, either by this congress, or by a forthcoming Republican congress.

It appears that Murphy’s Law will prevail for some time.

— John Waelti’s column appears monthly in the Times. He can be reached at jjwaelti1@tds.net.