The Rationing Is Already Here

 From Jeffrey Tucker at The Brownstone Institute:

Stores are frantically moving shelves further apart to disguise the growing shortages. They don’t like empty shelves because that inspires hoarding. Consumers are pretty sensitive at this point. Anything can trigger panic buying. Suddenly all detergent is gone. Suddenly all paper towels are gone. Suddenly the milk is gone. When people spot that they start buying anything and everything. When others come in and notice the shortages, they quickly hurry off to another store and the place loses business. 

Empty shelves are indeed bad for business. They will disguise them as long as possible until they cannot do so anymore. We are getting to that point. 

Diapers, glass, liquor, beer, wine, lotions, makeup, creams, milk, plywood, aluminum, hammers, candy, flour, salt, spices, heaters, dishwashers, shopping bags, candles, plastic wrap – it can be anything. At this point it is unpredictable, and varies store to store. Fast-food places are running short on cups and lids. Even straws and ketchup packages. Most of this stuff is stuck in the ports in crates. Some of it hasn’t shipped at all. The more shortages there are, the higher the prices go. 

There are two major factors behind the clogged ports. The first is a lack of people to drive trucks. They are living on government largess and generally demoralized by vaccine mandates and high regulations on their driver habits pushed by the Department of Transportation. Truckers have to use an app to clock their drives and it regulates how much they can drive in a day. Too annoying. So after lockdowns, many people just stopped working. 

In addition, there are far fewer domestic flights now, so those cannot be relied upon for moving goods around the country. The cancellations are continuing too. This is one reason that the demand for trucks and truckers is so high, just as there are extreme shortages in people to move the goods. 

Another factor is missing funds to pay for the chassis to move containers from the boat to the trucks. These used to be paid for by the shippers but when lockdowns froze international commerce for weeks and months, major providers stopped their contracts. When they started again, to save money to make up for billions in losses, they stopped paying for this extended piece of their work. No one now wants that hot potato because they are all trying to reduce costs to keep from rising prices. 

These kinds of dislocations are pervasive in the global economy today. It’s a stunning experience for basically everyone who is alive. We’ve never seen a situation in which the basic functioning of supply chains has been so broken down. We’ve never had to think about ports, cargo, crates, and the labor required to get goods from here to there and finally to us. It’s always been there for us. No question. Suddenly, as in a novel, it has slowed to a crawl and stopped for many goods. 

It was a very strange moment when this week the spokesperson for the president defended inflation and shortages as a high-class problem. She explained that higher prices are merely a sign that economic activity is picking up. People are buying things and that’s good. Of course that pushes up prices, she said. Just deal with it. As for “high class” what these people mean is not that it is only affecting the well-to-do; they mean that it is a first-world problem about which they care not. (Read more.)

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