Broken Supply Chains...?

There's a saying that goes, "Never Let a Crises Go to Waste".  In this case, the crises' cause is Covid-19 and the 'immediate' resulting crisis is a "faltering" global supply chain.

A failing supply chain?  Let's think about that for a moment.  China has invested trillions in their Global Belt & Road Initiative over the past two decades, and we're experiencing a "global supply chain" problem?  How is that possible?

Oh, wait, by "we" don't we mean the USA?  And why is that?  Isn't it because our aggregate efficiencies are below 20% and aren't nearly as high as those possible in countries like "totalitarian-communist" China's?  How could they be?  We desire 'free" markets, not centrally controlled/ directed ones.

But apparently, our western leaders now wish to emulate China and allow US government bureaucrats to decide where to invest taxpayer-borrowed capital for expanding global transportation infrastructure.  Like the British mercantile fleets before them, the US Commerce Department now wants a series of twenty-first century equivalent "coal bunkering locations" distributed around the world so that the US/ British Navy can sail anywhere.  Or in this case, a US taxpayer funded system of returning empty shipping containers to China cheaply for re-filling with cheap Chinese goods.  Is any of this in the $1.5 trillion dollar "bi-partisan compromise" infrastructure bill?  How about the Democrats pet-partisan $3.5 trillion infrastructure round-up?

I've a better solution.  Let's end the Covid nonsense restrictions and let the world get back to trading without fear.  The "infrastructure problem" will disappear without the need to spend trillions of US dollars on upgrading foreign ports for the benefit of foreign economic backwaters.  WalMart has already received enough in US Government provided and generous US taxpayer backed subsidies.  US corporations already get enough corporate welfare.

from "The Infrastructure Bill Part I"

Roosevelt started rolling out infrastructure programs at home in 1933. One year later, in 1934, he signed the Reciprocal Trade Agreements Act. The RTAA not only reversed the damaging Smoot-Hawley tariffs of 1930. It also paved the way for more than a decade of trade liberalization for the United States – 32 free trade agreements with 27 countries culminating in creating the post-WWII open international economic at Bretton Woods in 1944.

Today, Biden needs to show the same appetite to follow the international dimension to FDR’s transformation of America. He needs to make efforts to unwind Trump’s tariffs and trade wars and consider more radical moves like trying to re-enter the ill-fated Trans-Pacific Partnership or creating a new American-led alternative to it. Now is the time for Biden to start laying the foundation for Globalization 2.0. Think de-coupling without deglobalization, which help promotes customer-centric regional nodes using near-shoring and on-shoring while continuing to participate of global economy.

In part two of this three-part series, we will discuss the “Decoupling of the Supply Chains without Deglobalizing.” It will illustrate how the existing structure of a “single-node/long string” supply chains network is highly vulnerable to disruptions and why the areas that have been left out of the current bipartisan deal – particularly R&D and advanced manufacturing – could cost us dearly in the arena of the global supply chain.