We are living in a growing economic crisis. A Crisis that will shortly see, if you haven't already, and emptying of store shelves, a tightening of vital supplies.
We call this the “Supply Chain” Issue. It's the inability of US consumers to secure the goods and products that they wish to purchase. I recently tried to order a piece of furniture. I was told it would be available in about 7 months. But when pressed the store wasn't really sure that it would really be available then. They just hoped it would.
And I'm not alone in this. Thousands of American's are finding the same. Items that we want to purchase just aren't available.
And this problem grows more severe by the day. I estimate that by the end of this year it is likely that our economy will be in recession. A recession whose principal cause will be “Supply Chain.”
But like so many issues in this country right now, Supply Chain does little to help us understand just what the real problem is. It obscures, rather than enlightens. It hides the real parties who are at fault. Implying that somehow an amorphous transportation problem is at work. When the reality of where we are is much more sinister.
And unfortunately, politicians of all strips in this country, have hidden and obscured this fact from the American Public for years.
I refer you to a January 2004 Federal Reserve Paper entitled: Is China “Exporting Deflation.” This was a concept that had captured Wall Street and the financial markets, that what we were seeing in our economy, was the beneficence of China. That through the wonderful goodwill of the Chinese Communist Party, they were exporting low price goods to us. It was a gift. As if Santa now lived in Beijing. American's were showered with low-priced TV Stereos, Sneakers, and let's not forget iPhones.
It was the best of all worlds. A consumer's paradise. The place where Americans continued to pay lower and lower prices, stretching those paychecks farther and farther.
What could be better?
At least that's how it was portrayed, on this side of the Pacific.
China's just exporting deflation, don't you know. Said Wall Street, and every political leader who walked up behind a podium.
And it was easy for Americans to buy this line. Goods were readily available. The shelves were full. And just the prices were falling.
Just because some of our friends who worked here in American factories, were now out of work, was no reason to stop this gravy train. Just because Walmart shelves were full of Chinese and foreign products wasn't bad. After all the prices were low.
It took the Pandemic, and now the intervening transportation issues, yes there is a transportation chain issue, but as I've pointed out before it's a Finished Product Chain, and not a Supply Chain. But that's another story.
Right about now, it's become apparent to nearly everyone, that something is terribly wrong. That we are in the very precarious position of having many of the goods we need on a daily basis, a thousand miles away across the Pacific Ocean. That we've been played. That a very carefully orchestrated, long-term plan, undercut our market prices and moved our Manufacturing to China, and other Asian nations.
And that, my friends, is the real problem. It's not just a transportation issue, although at the moment that's the focus. The fundamental. Core to our problem is that the most technologically advance, financially sophisticated country on the planet. Is no longer self-sufficient. We must rely on other nations to produce what we no longer can. We consume, but we don't produce.
And unless and until we can turn that around, we will be at the whim of other nations. Nation's that likely do not have our best interest at heart.
Our manufacturing plants were taken away from us. Until we focus on that reality, and the so-called solution will be temporary. Yes, we must first solve the “Supply Chain” issue, but we must immediately start to work on the “Manufacturing Issue.”