The Federal Trade Commission is launching a probe into on-going supply chain disruptions, and has ordered nine large retailers – including Amazon and Walmart – to provide detailed information on factors disrupting their ability to obtain, transport and distribute their products.
The FTC study comes as economists blame supply chain issues in large part for the supply-demand imbalances contributing to inflation, as consumer prices rose at their fastest rate in decades last month…
Thanks for posting.
I can’t help but to suspect that this is to some degree a created crisis, designed to reap benefits from the “recovery”. I could be completely wrong about that, as I said, it’s just a personal suspicion.
Perhaps it’s just a determination by those in the position trying to make up for losses incurred during the lock down…and it just had a snowball effect. I really can’t say for sure.
But, in the back of my mind I have to wonder if something like that might be motivating the FTC to investigate.
Sort of a “ok, why isn’t this problem being solved, and who is benefitting from it?” sort of thing.
I realize the naysayers like to lampoon such thinking as necessarily “tin foil hat” type stuff, because doing so makes them feel evolved and accomplished. But, stranger things have happened.
Strictly as an aside, I’d think the owners of the transoceanic shipping coumpanies would see it as quite a coup if they somehow managed to eat Walmart’s dinner, in a “I’ll have some of what he’s having” sort of way.
[:-,]
I believe there are “conspiracy nuts”, as well as “anti-conspiracy” nuts. And the truth is usually found somewhere in between.
All crisis are created by ‘someone’.
The problem is in pealing back the layers of the ‘onion’ to find the responsibile party(s). As with onions, each layer that is pealed back will make one cry - generally with anger and disgust.
From the link:
The FTC study comes as economists blame supply chain issues in large part for the supply-demand imbalances contributing to inflation, as consumer prices rose at their fastest rate in decades last month.
“The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities,” Khan added.
Economists also blame the inflating of the money supply by printing money for emergency spending to subsidize people during the lockdown; and also the massive deficit spending for new legislation both passed and anticipated. Not only do economists blame those causes, but they also have been emphatically predicting that those causes would produce significant or catastrophic inflation. This despite being reassured by the Administration that this recent onset of inflation was only transitory.
I share your sentiment, but lets try to veer away from the political end, doing so will only invite the wrath, etc.
But yeah, I can even envision a “cause and effect” where suppliers see all that cash in people’s pockets, and are competing with one another to see which one of them can soak up the most before their competitors do…that sort of thing. Once in a generation sort of opportunity.
I enjoyed your response, suspect that it’s right on the nose. But just to emphasize my intent with branding the crisis as “created”, I was thinking along the lines of the root being synthetic, or for purpose. Something happening because somone decided to make it happen, sort of thing.
This is being a sarcastic post here for the most part. But whoever thought shutting down the world’s largest economy along with all the trade in the world to basically combat a slightly more severe form of the flu virus was a good thing. The entire world runs on a just in time inventory system that was destroyed. Before someone rips me apart for saying that this is a serious disease my husband lost his mother to it.
So who’s the best to blame let’s start with the media that made this crap into a monster worse than it truly is. Then the blame needs to go onto the leaders of the world that panicked to the point where the people who were fighting it on the front lines saw what worked against it were being ignored by their leaders advisors paid off by the big dollar donors.
Awesome Idea on FTC’s part!!! Nail those responsible!!!
Totally agree and the FINGER POINTING on this one issue tells you immediately more than one party is responsible or exacerbating the problem.
You know I participate on NEXT DOOR app from time to time and it is very freakin clear our local Kroger store manager is inept at inventory management yet his employees as well as himself are blaming the pandemic. The idiot keeps running out of easy to obtain products like regular COKE when the stores around him have no issues with stock. Sorry dude IT’S YOU or IT’S KROGER fess up!!!
One thing we have to think about - most stores/organizations utilize some form of computer inventory control - control that is coupled with the Point of Sale terminals for the store. In theory sell a 100 units and then order 100 units, in reality - who knows!
As we most all know from our personal experiences - few people really understand the computer applications that they have to interact with - most especially those involved in ‘management’ tend to be the least competent among those that have to interact with computer application.
There is a saying that people that are incompatent are normally protected by those around them. That is particually true in the retail industry where the good workers are never promoted as they are kept in the trenches so to speak to allow those that fail to get promoted to get them out of the way.
That is not the primary effect of inflating the money supply. Although I do expect that FTC with their nimble and timely use of information gathering, is going to come exactly to that conclusion that you refer to. They are wearing the tin hats and looking for the best conspiracy to blame the inflation on as a diversion from the real cause.
That real cause is not that capitalists smell money in people’s pockets and move to get their hands on it by price gouging. The real cause is that people with newly gifted money in their pockets feel richer, and thus are motivated to increase the consumption of products they desire. So they raise their demand. Fundamentally per Econ 101, raising demand raises prices.
What normally sets prices is what the customers are willing to pay. There is not an arbitrary “fair price doctrine” that sets prices. When you sell your house, you first look around at what similar, nearby houses have sold for. With that market information, you do your best to set your price as high as buyers are likely willing to pay.
At the conclusion the FTC will find nothing.Just like with gas prices.
Oh yeah, something I learned a long time ago. Sometimes if you’re too good at your job you’ll never get promoted up the ladder because those who’d promote you don’t know how they’d replace you!
It doesn’t happen everywhere of course, but it happens often enough.
Uh-huh. The wife tells me the shelves at the local Walmart look like something from a former Warsaw Pact country, empty of things not in short supply. So she’ll go to the Publix or Kroger and find it there. Publix and Kroger will be out of other things. Then it’s back to Walmart.
Why cannot it be obvious when there are 70+ ocean container ships off shore that there is a problem? Companies are moving from “just in time” ordering to “just in case” ordering vastly increasing their inventories and putting more and more pressure on suppliers and supply chain.
Not just companies…how many of us have stocked our pantries? We have a full freezer and enough food to last several months…but we always do. Life as normal for us, including the 100 home canned jars of vegetables from the garden.
Ed
I agree in a way. I don’t think the “crisis” was created. I think that a perfect storm happened, and the people who should have caught it were not paying attention. That being said, I think many companies have seen that they actually benefit from it. So they are in no hurry to fix the issues.
One thing everyone wants to gloss over - EVERY step in the supply chain has a finite capacity - when operating ‘beyond capacity’ everything goes slower and costs more as the ‘article’ will have to have more handling than is necessary when the step is operating within capacity. Multiple links in the chain being stressed beyond each links capacity and we get to watch it taking place in real time.
Each link is ‘trying to buy time’ in handling what is necessary to be handled - buying time costs money in many different ways and also burns time.