The economics of glut
Hundreds of airplanes are parked at an airport in the Mojave Desert. The slumping economy and the Sept. 11 attacks caused airlines to put more unused planes in storage. (Tribune photo by Pete Souza)
Businesses can produce far more than we need. Supply has simply outstripped demand. When that happens, production slows, equipment sits idle, costs go up, workers are laid off and investments are postponed.
The capacity glut exists on a scale that this country and many others haven't seen for decades, and it at least partially explains why it is so difficult for the American economy to shake off a recession that by all measures seemed mild.
Copyright © 2012, Chicago Tribune
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