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Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

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Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#211

Post by tanilama »

howmayiannoyyou wrote: post #102

"It's better to be in a bad deal with good people, then a good deal with bad people" China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and mo…

> We never expected China to be able to manage domestic risk well

Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.

I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#212

Post by twblalock »

jandrese wrote: post #136
twblalock wrote: post #132

Earlier quoted context omitted.

If we were manufacturing everything in the United States, supply chains would still be disrupted because companies would be sending workers home, which is what they are doing already. No supply chain is safe in the event of a global pandemic. One day there might be a pandemic which affects the West but not China, which would make outsourcing supply chains look pretty smart. You are drawing a general conclusion based…

If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country. You can also harden your supply chain by having multiple suppliers in different countries, so a loss of any one isn't an issue. For something like Covid-19 it's near impossible to avoid disruption, but for less-global outbreaks it can be a…

> If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country.

Yeah but you'd also have all your eggs in one basket.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#213

Post by twblalock »

zkms wrote: post #137
CSSer wrote: post #103

Earlier quoted context omitted.

As someone who thinks both parent comments have a point, I don’t really think they’re putting words in OP’s mouth at all. I think the interpretation that OP really seemed to suggest that we should bring it all home is a valid one. And I get it. I agree with you. There’s probably some things we should make here that we don’t. It’s becoming very clear that wholly interdependent Globalism isn’t a cure all, utopian desti…

> I think the interpretation that OP really seemed to suggest that we should bring it all home is a valid one. "Bring" is the wrong word here, because building up industrial capacity in US for critical sectors (including but not limited to pharmaceuticals and electronic components / semiconductors) doesnt mean destroying the capacity that exists abroad. But yes, I do believe there should be sufficient manufacturing c…

> > China's Xinhua News just posted a piece titled "Be bold: the world owes China a thank you", which says if China imposes restrictions on pharmaceutical exports, US will be "plunged into the mighty sea of coronavirus".

> How does this make you feel?

Amused. It's just saber rattling and propaganda. They've said similar things before. If they restricted exports it would hurt them too. (At one point they threatened to dump all their US treasury bonds, but that would also hurt them just as much as it hurts the US.)

Besides, plenty of other countries can make pharmaceuticals. It might cost more but we'd buy them.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#214

Post by triceratops »

twblalock wrote: post #113
hintymad wrote: post #108

Earlier quoted context omitted.

And I honestly do want a $400 sweater if we have a prospering manufacturing business. How many people stuff their house with clothes that they wear only once? How many people buy toys that their kids play only a few times? How many people hav a whole closet of shoes? Why do we have twice as large of closet room compared with people living in the 50s? Why do people just have to buy clothes every quarter, every month,…

A lot of people can't afford a $400 sweater. What are they supposed to do? Local manufacturing is for rich people who can afford it.

A lot of now-developed countries had 100% domestic textile production 60-70 years ago and yet nobody went naked (OK not 0% obviously but very few). People owned fewer pieces of clothing overall, but everyone could still afford to be clothed.

If textile manufacturing became 100% local again, local wages would also rise by a similar amount. $400 wouldn't seem unaffordable for a sweater. Or the sweater would cost correspondingly less.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#216

Post by krtong »

This is why you produce things domestically. We're at wartime. Alexander Hamilton understood this. George Washington understood this. This is going to be a turning point in globalization and offshoring things that will compromise our economy and ultimately undermine national security.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#217

Post by jrs95 »

twblalock wrote: post #212
jandrese wrote: post #136

Earlier quoted context omitted.

If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country. You can also harden your supply chain by having multiple suppliers in different countries, so a loss of any one isn't an issue. For something like Covid-19 it's near impossible to avoid disruption, but for less-global outbreaks it can be a…

> If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country. Yeah but you'd also have all your eggs in one basket.

Why not do that if you are the basket?

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#218

Post by [deleted] »

tanilama wrote: post #211
howmayiannoyyou wrote: post #102

"It's better to be in a bad deal with good people, then a good deal with bad people" China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and mo…

> We never expected China to be able to manage domestic risk well Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire. I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.

[deleted]

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#219

Post by tootsandboots »

kevin_thibedeau wrote: post #170
tootsandboots wrote: post #143

Earlier quoted context omitted.

In 1949, a nylon sweater cost about $7.95 ( https://mclib.info/reference/local-history-genealogy/histori... ), which in 2020 dollars would be about $86.41. So not $400 and about in line with what an average sweater today would cost. However, the median American did not have more disposable income back then compared to now. In 2020, the median American has about $16763 in disposable income, whereas in 1959 (the furthe…

That $7.95 stayed in the domestic economy. The 99% are slowly exporting their wealth.

In the $7.95 transaction, the buyer spent a higher percentage of their wealth buying the sweater than the $80 transaction today. By keeping the inflation adjusted price the same but boosting a buyer's disposable income, free trade has allowed the buyer to spend more of their income on other things within the domestic economy.

Multiply this scenario across every buyer (i.e. everyone) in the domestic economy, the increased productivity has allowed for more consumption and economic growth.

Let's consider the scenario in reverse, if keeping $7.95 locally is the best policy, would you advocate someone in California to not buy goods made in Missouri? After all, labor is much cheaper in Missouri. How about someone in San Francisco not buying goods from someone in Central Valley?

An average person could build a house themselves and keep the money they would spend in their "domestic" wallet economy instead of paying some contractor. Why do we hire contractors who might live in a far away town then? It's because it's mutually beneficial. I get a house that's better constructed faster than I could ever build it, the contractor gets compensated for their money. The time and productivity I saved in that transaction far outweighs the cost paid to the contractor.

Re: Coronavirus has disrupted supply chains for nearly 75% of U.S. companies

#220

Post by mullingitover »

tanilama wrote: post #211
howmayiannoyyou wrote: post #102

"It's better to be in a bad deal with good people, then a good deal with bad people" China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and mo…

> We never expected China to be able to manage domestic risk well Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire. I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.

> Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.

It's not time to start popping champagne bottles in China quite yet. They have a tiger by the tail. The country is shut down, and as they start rolling back travel restrictions it could easily blow up again. They still have well over a billion people who are vulnerable.

They just tried rolling back travel restrictions two days ago and immediately reversed course[1].

[1] https://www.reuters.com/article/us-health-coronavirus-china-...

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