Unless you live under a rock, think Joe Biden is a good president, or are related to one of the Park Brothers, you likely have heard our supply chain is in dire straits. Our Commander in Chief is obviously bothered as well. I saw the Clinton News Network hosted a “Presidential town hall” with Biden last night to give him a chance to explain away all his failures.
Anderson Cooper was a great host as he cherry picked questions from 15 folks in the “audience chosen at random.” Like any Biden Q and A session, the participants were carefully vetted and handed a softball question to ask. Of the 15, 10 were registered Democrats, 3 were Republicans and 2 were Independent. Definitely a hostile crowd for Ole Slow Joe. This campaign event, I mean propaganda event, I mean town hall was based in Republican voter rich Baltimore. Biden basically said he had no answers for the fuel crisis. But he was considering calling up the National Guard for the shipping crisis. And…. Yeah, thank god my hour on the treadmill at the gym was done, because that was torture to watch. Shame on CNN for airing that, and shame on us for electing this fellow to be President.
I will sum up clearly and succinctly what the supply chain issues are really about. They are not just the doing of Joe Biden’s failed presidency; this has been going on since Bill Clinton. Believe it or not, NAFTA aka the North American Free Trade Agreement was a major catalyst. The goal of NAFTA was to create a free trade zone, free of tariffs, to allow a flow of goods and services across borders. In theory this is a good idea, it tears down borders and disputes and creates “friendly neighbors.” However, NAFTA has evolved and not in a good way.
NAFTA in the last 15 years has become a catalyst for corporations to reduce expenses and outsource jobs. One of the most argued points cited by myself and others are “we used to build things in the USA, now we no longer do.”
The reasoning here is we used to have factories to assemble the parts imported from Mexico, but with increased expenses here domestically, we now build it in Mexico. Furthermore, Mexico sends it here and we “finish it,” in essence we put the stickers and decals on it, and a few other accents and can still call it “made in the USA.” In many ways this was palpable because expenses were cut, and our producing workforce could transition to a “paper pushing” workforce. Workers were mostly happy, shareholders were trilled, and executives bonused out at year end. Win. Win. Win. Right?
Incorrect. As time went on, more and more jobs were sent to Mexico, and Mexico has become a developed country. I say that in a sense that the workers there now want more money and benefits. As a result, the job merry go round has started again. Jobs from Mexico have migrated to China, and neighboring countries. Many of which employ slave labor, child labor, prison labor or just flat-out deplorable conditions. But that’s ok, because you need your new TV, iPhone etc. and you ain’t paying full price. So, you ignore that part of the supply chain.
Enter the virus.
I’m leaving the political BS out of this blog in regard to the Corona Virus. We locked down in the USA, and other countries followed suit. It was supposed to be 14 days, which has turned into almost 2 years. The vaccine was the end all, cure all…. not so much. It didn’t affect the US that much because other countries produce most of what we consume. But over time, the virus spread to countries we import products from, and this has exasperated the issue. Most recently Vietnam has locked down its factories; don’t believe me look it up yourself, most of our clothing is made in Vietnam. With those countries locked down, we get no additional clothing sent here. Contrary to the belief of some, we here in the US are not able to build a factory to make said clothing here.
Furthering my point, the lockdowns here taught us one thing, the workers have the upper hand. Currently and recently, we have seen striking workers for; Nabisco, Frito-Lay, Deere, Kellogg and parts of the healthcare sector. These workers were ordered to work during the pandemic, most given mandatory overtime and restrictions on time off requests. At year’s end they were given a small bonus of a few hundred, maybe a thousand if they were lucky. Management got far bigger bonuses and shareholders got even richer, keep in mind the former stayed at home during the pandemic because it was safer for them and their workers. We are now seeing a revival of unions, don’t believe me, but look around.
The problems at the port are another issue. However, we are focused on the cranes and the operators, what we need are semi-trucks and trailers to move those containers once off loaded. We don’t have those, so the containers are stacked on shore. Running the port 24/7 as senile Joe suggests isn’t the problem. Corporations for years have mistreated the drivers of said trucks, so now we are unable to find workers to do that. Most corporations, especially Target made the drivers contractors, and required them to bid on a route, and pay for the gas, lease payment, insurance et. Al. This resulted in truck drivers making close to zero when expenses were paid. Don’t believe me, look it up. Again, Target is one of the worst offenders here, but that’s ok, because they told Biden they want to help.
Editor’s Note: The Federal government and California in particular has also punished truck drivers in a number of ways including limiting the number of hours per day that they can drive and outlawing independent operators via AB-5, diesel engine regulations, and other restrictions.
The long blog short here is the workers in factories are burned out, and years of consolidation are partly to blame. Look at Campbell Soups, they used to have a plant in California, but due to costs they shut it down, production moved to Texas. This is a no-brainer, until Texas is snowed out. Pretty hard to get soup from Troy, Ohio to California. In addition, try building a plant in the USA to make something, forget for a minute the ungodly amounts of red tape (unless you want to build a basketball arena downtown, somehow the red tape vanishes for that) you also have to build it, hire, train workers, and have production lines set-up and built. This is not easy, and it’s a tough sell to shareholders who expect you to beat last quarter’s earnings and lower your expenses. American workers get breaks, lunch, benefits, and extra time, these are federal and state laws.
While Senile Joe may have won the day yesterday, he has lost long term. The issues of years of outsourcing and production cuts, met with lockdowns have created a toxic cocktail. Sadly, for people like Jorge Riley, this isn’t a cocktail that you want to drink. The problem is going to get worse. Here are a few examples of just what we are facing here.
I bought a jacket on sale $22 marked down from $44, I ordered the wrong size, I shipped back for a return. The company I purchased from said due to supply chain issues I could not exchange unless I paid the difference. Another package I ordered sat in a FedEx office for 7 days in Sacramento prior to making the trip to the world headquarters of reallyright.com. Keep in mind we live about 15 miles from Sacramento.
Editor’s Note: Our family has been buying gift baskets from a company that ships from Oregon to California. Every order that we have placed in the last year starts with an estimated delivery date of about a week but in reality, it takes 6 to 8 weeks before it actually ships to our Sacramento suburb. Ditto for our new Samsung phone order. Delivery keeps getting delayed.