This week, U.S. Representative Peter Meijer addressed skyrocketing inflation from the House floor. The Grand Rapids Republican called on lawmakers to craft legislation addressing rising inflation. But what can politicians do?
"The prices are fundamentally a function of the fact that too many people want goods and there's not enough of them available."
Paul Isely is Associate Dean in the Seidman College of Business at Grand Valley State University.
"This is the Babe Ruth baseball card."
"People know that those things are worth more than the exact same baseball card that doesn't have Babe Ruth on it."
"That's what we're seeing right now, is that there's too many people with too much money trying to buy too few goods. And therefore, the price gets bid up."
The pandemic created supply chain bottlenecks and the influx of federal pandemic relief aid pumped too much money into the economy. And that excess money, when added up, has created trillions of dollars in extra individual wealth.
"So, what do we have to do? We have to somehow help with supply chain. And so, that might be thinking about how do we increase the ability of transportation firms to transport goods."
Politicians can create policy helping to move away from long relied-upon supply chains in China and Russia to "friend sourcing" from Japan, India, Europe, and the U.S. — they could also raise taxes.
"If you tax people more they have less money to spend. That's obviously not a politically viable solution."
One other option is capping prices.
"If we cap the price on things, so many people can purchase it. It's the people who can wait in line. The people who can click the fastest to try and get their Xbox, who are the ones who get the goods as opposed to the people with the most money."
What is certain is that lawmakers can provide safety nets for people whose incomes aren't keeping up with basic necessities.