Matt Rourke/AP Photo
President Joe Biden speaks during a visit to the Lehigh Valley operations facility for Mack Trucks in Macungie, Pennsylvania, July 28, 2021.
Read the media accounts and everyone is focusing on trees and missing the forest. Ships are backed up; ports are at capacity; there aren’t enough truck drivers; shortages are compounding on each other as producers hoard supplies.
Sure, but why are our ports overwhelmed to begin with?
Back in the 1980s, companies began instituting “just-in-time” production, holding low inventories to save costs. They combined this strategy with outsourcing more and more supply to Asia, to save even more costs, mainly labor costs. Ever-larger container ships made the model even more attractive.
Wall Street loved this strategy because it weakened labor and increased short-term profits. But as our friend Barry Lynn warned in the Prospect in 2007, if you combine just-in-time production with far-flung sources of supply, watch out when some kind of disruption occurs.
COVID was the crisis that finally exposed all of the system’s hidden vulnerabilities.
Back when most supplies were sourced domestically, we never had a supply chain crisis—because we made most of the stuff at home. There were some imports, but they did not overwhelm ports. And back when we had a regulated trucking industry and a strong Teamsters Union, we never had shortages of truck drivers because these were good jobs.
We cannot fix this crisis by adding to port capacity or working longshoremen and truckers overtime. It is a systemic failure, rooted in too much corporate power and too much faith in markets, deregulation, and hyper-globalism—the cocktail otherwise known as neoliberalism. Bring jobs and supplies home, restore some regulation, and the supply chain crisis goes away.
Joe Biden actually gets this, and he is moving to reshore production and good jobs. But that will take time. What a cruel irony, on him and on us, that this slow-fused crisis explodes on his watch.
