Economics in the News – Jan. 17-23, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- The omicron surge hasn’t only overwhelmed hospitals with COVID-19, but it has undermined the ability of many patients without COVID to receive care and routine treatments for other ailments. Less-urgent needs and surgeries have been put on hold by hospitals across the country, while waiting times in emergency rooms have been much longer than usual. Some patients are sicker when they finally visit their doctor because of delayed treatment.
Several factors have contributed to overwhelmed hospitals. More people are in the hospital and a number of health care workers are out with COVID-19, exasperating staffing shortages that had already existed. Twenty-three percent of hospitals nationwide were reporting critical staffing shortages. [Associated Press]
- The real estate boom has seen median existing-home prices soar 15.8 percent across the United States last year, but that pales in comparison to the price of farmland. In the Midwest, the value of farmland was nearly double that rate – 29 percent in places such as Iowa. The price for farmland in Iowa has risen from $7,559 an acre in 2020 to $9,751 an acre in 2021.
The rising values are tied to high prices being paid for the key commodity crops of corn and soybeans, plentiful harvests in recent years and low-interest rates. The greatest benefit for individual farmers is the ability to borrow money at lower rates for annual needs such as seeds, fertilizer and equipment supplies. Farmers National Company, one of the nation’s largest landowner service companies, oversaw a record $765 million in agriculture land sales last year compared to $500 million in a typical year. [Associated Press]
- The telecom and aviation industries are feuding over whether the potential for interference between 5G signals – a service meant to speed up mobile devices -- and the radio altimeters that have been used by pilots since the early 1920s. The altimeter is a device that helps pilots determine an airplane’s altitude and distance from other objects.
Aviation experts say that the 5G system used by mobile carriers Verizon and AT&T work in similar frequencies to the ones used by the altimeters and that potential interference could cause airplanes to malfunction and force more cancelled flights. However, telecommunication officials believe that the 5G networks present little to no risk and that the aviation industry has had years to prepare. Verizon and AT&T have thus agreed to restrict 5G near airports. [The New York Times]
- A new year means that it’s time to prepare for tax season. Federal income taxes can be filed beginning Monday, Jan. 24 and runs to April 18 for most taxpayers. Faced with funding and personnel cutbacks, along with a backlog of tax returns from previous years, the Internal Revenue Service (IRS) warned that tax refunds could be delayed past the three-week turnaround period that typically corresponds with refunds.
Families claiming the child tax credit and new self-employed Americans are among those most likely to see big challenges. With half of the $3,600 credit per child for 2021 already distributed via monthly installments in pandemic aid, only half of the payouts will be due in the form of a refund. Self-employed taxes could also cause confusion for new business owners filing taxes for the first time. A record 5.4 million new business applications were filed in 2021.[FORTUNE]
- Companies such as Netflix, Peloton and Zoom became synonymous with working from home at the height of the COVID-19 pandemic. In each case, their stock price and businesses were inflated when households were eyeing ways to entertain themselves and stay productive while staying home.
Recently, stock prices for all three companies have plummeted. Competition is increasing – especially for Peloton and Netflix -- in a fast-growing market for niche products. Another issue is that their stock price may have been overvalued, as investors looked to capitalize on a unique economic environment. Additionally, many went back to work and their old routines, meaning that demand dropped for at-home products. [The Washington Post]