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Biden’s Policies
THOMAS MCARDLE was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com. Thomas McArdle
Supply Chained
Ongoing crisis in manufacturing supply chains is hurting consumers
Middle east oil restrictions are about to slam a once energy-independent United States, U.S. President Joe Biden is pardoning potheads, and a TV interview has exposed the Pennsylvania U.S. Senate candidate who was in the lead as visibly speech-impaired due to his stroke earlier this year.
So all that talk we heard months ago about the supply chain has been rendered passé.
Or has it? Florida Gov. Ron DeSantis, a very likely candidate for the Republican nomination for president in 2024, lamented last week during a roundtable discussion in his hurricane-ravaged state that “we’re in a challenging economic environment in terms of supply chain.” Then he noted, referring to President Donald Trump’s economic policies, that he did “think that if this had happened three years ago, you’re looking at probably a little bit different in terms of how some of this stuff would have worked.”
It didn’t take DeSantis long before alluded to inflation.
“I don’t know how much more it costs to repair a roof than it did three years ago,” he said. “But it’s a lot more.”
A year ago, DeSantis was calling Biden “the Grinch that stole Christmas due to the ongoing supply chain crisis robbing our loved ones of gifts under the tree.”
Christmastime is once again around the corner, and the supply chain crisis is still ongoing, with food items, baby formula, and electronics likely to experience shortages as the shopping season gets busy.
Rail workers are rejecting the Biden administration’s proposal offering higher pay and more sick leave and may soon strike, while unions in other industries may follow suit, all suspecting that there’s more money available from this big-spending presidency. Major trucking equipment shortages will apparently last until at least 2024.
Earlier this year, a small and midsize business retail supply chain survey of 305 logistics and inventory professionals conducted by Software Advice found half of the respondents to have raised retail prices to offset higher supply chain costs, with 35 percent planning further raising of prices if their costs continue to increase. Some 35 percent reported paying more than 20 percent more for shipping this year than in the first half of 2021. But 22 percent decided against paying shipping premiums, which would ease supply chain tie-ups.
The perennial problem of the advantages that larger firms enjoy cropped up in the answers, with an overwhelming 91 percent of smaller retailers reporting being at a disadvantage in procuring inventory, and half saying the disadvantage comes from not having the larger firms’ prioritized vendor status; 45 percent traced the disadvantage to their inability to switch vendors. About the same proportion reported at least one vendor dropping them because they were too small, while another 23 percent expected to be dropped in the near future.
An analysis of traditional manufacturing supply chains published last month by Deloitte and Manufacturers Alliance found rising shipping costs to be the top operational concern, having risen by 77 percent from Biden taking office to August, because of “increased fuel costs, labor costs, and logistics challenges.”
“Underlying all these concerns is labor, where costs continue to rise,” the analysis reads. “Indeed, total compensation cost per hour worked rose by 6.2 percent to $42 in the manufacturing industry” in the first quarter of this year.
On top of that is the challenge of “continued shortage of critical parts” leading to “the inability to fulfill ongoing contracts. ... Also high on the list were the challenges associated with implementing contingency plans such as switching suppliers.”
Such firms will find that they have to diversify their range of suppliers, but part of that diversification must be to have a supply base that goes beyond China—for both economic and national security reasons. That means turning to countries elsewhere in Asia, such as Japan and Malaysia, as well as within our own hemisphere, but it also means relying on manufacturing right here at home, with domestic supply chains obviously being much less complicated.
We see from these surveys that the businesses themselves identify rising prices as a key cause of supply chain difficulties, so it would help if we didn’t have a government engaged in inflationary climate fanaticism waging war on fossil fuels. Biden shut down the Keystone Pipeline immediately upon taking office, scrapped drilling leases in the Arctic National Wildlife Refuge in Alaska, and prohibited drilling on federal lands.
Oil, natural gas, and coal still make up about 80 percent of this country’s energy industry. If the manufacturing supply chain is already in crisis today and causing consumer pain, imagine letting those in government who instantly want the economy to run on sunshine and windmills have their way.
