Is "NIFO" really the right way to do accounting? If you sell the government one aircraft carrier, the cost of producing a second one will be much lower, so NIFO doesn't seem to fit there.
What caused all the supply chain bottlenecks?
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Re: What caused all the supply chain bottlenecks?
#22Or maybe attempting to shut down large swaths of world economy for an indefinite amount of time wasn’t such a good idea? In the timescale of months to years all business becomes “essential”. Sure shut it down for “just two weeks” but a year or more? What did people think would happen?
>What did people think would happen? We thought that if we didn't do that we'd run a very real risk of the entire healthcare system collapsing. We were trying to "flatten the curve" so that hospitals could deal with an ongoing roar instead of being hit with a massive explosion.
At least now we know that public health care experts cannot be trusted to make predictions
Re: What caused all the supply chain bottlenecks?
#23Must also take into account that many industrial processes are not easily restartable. Even if only shut down for 1 day or 1 week, it can take multiples of that length of time to ramp back up to 100% output rate. Complex factories do not switch on and off like a lightswitch.
Re: What caused all the supply chain bottlenecks?
#24The pandemic may be the proximate cause. But Petersen is saying the sufficient cause is
Modern finance with its obsession with "Return on Equity."
Re: What caused all the supply chain bottlenecks?
#25Or maybe attempting to shut down large swaths of world economy for an indefinite amount of time wasn’t such a good idea? In the timescale of months to years all business becomes “essential”. Sure shut it down for “just two weeks” but a year or more? What did people think would happen?
A fallacy that might be at work here is comparing the shutdowns that actually occurred with a counterfactual world where business activity remained essentially unchanged.
We'll never know for sure, but I doubt that's the correct comparison. Even without government-mandated shutdowns, many areas--especially major urban cores--would still have experienced massive shocks as people voluntarily shifted to working from home, stopped going out to eat, etc. In other words, much of what the government did through law would likely have happened anyway out of fear and individuals exercising their common sense.
Sure, it wouldn't have been exactly the same, but I think the counterfactual is much less rosy than you assume. And then there are the benefits of the shutdown which helped to direct the drop in activity towards less essential parts of the economy and increased predictability, to say nothing of the benefits of reduced viral transmission.
Re: What caused all the supply chain bottlenecks?
#26While this answers the question of why we couldn't respond to the bottlenecks, I guess I'm still missing the piece of what caused them in the first place. Like sure, "this silly little global pandemic thing" but it's not really an enlightening answer without more detail as to what the pandemic caused that shocked the system.
In normal times, people mostly shrug off biological transfer with other people. Maybe you avoid the odd symptomatic person who comes to work anyway, but you don't act as if everyone else is trying to get you sick. This allows for close working conditions, less sanitary practices, etc. The pandemic invalidated this assumption, requiring workers to become less efficient in response. This is the fundamental dynamic - the secondary effects of denial/overcompensation created additional problems.
It also didn't help that everyone was expecting an economic slowdown, and then the government gave trillions of dollars to corporations to juice the stonk market. The resulting price signals induced a ton of aggregate demand for production capacity that simply wasn't there.
Re: What caused all the supply chain bottlenecks?
#27Or maybe attempting to shut down large swaths of world economy for an indefinite amount of time wasn’t such a good idea? In the timescale of months to years all business becomes “essential”. Sure shut it down for “just two weeks” but a year or more? What did people think would happen?
Where I live the vast majority of people were deemed "essential" for the purposes of working and then not "essential" for the purposes of receiving the vaccine.
The places which were closed were not producing things used in the supply chain.
Re: What caused all the supply chain bottlenecks?
#28Or maybe attempting to shut down large swaths of world economy for an indefinite amount of time wasn’t such a good idea? In the timescale of months to years all business becomes “essential”. Sure shut it down for “just two weeks” but a year or more? What did people think would happen?
Have you forgotten the state of Italy and New York (among others) at the start and middle of 2020? There were literal trucks full of dead bodies in the streets because they couldn't be buried fast enough.
How do you envision the time between march 2020 and the point where herd immunity through vaccines / infection would have been sufficient would have gone without a lockdown?
I'll take a lack of a few non-essential luxury goods for a year or two over a world where everywhere looked like that, any day of the week.
Re: What caused all the supply chain bottlenecks?
#29Ongoing related thread:
An unexpected victory: container stacking at the port of Los Angeles - https://news.ycombinator.com/item?id=29026781
The previous stack:
Long Beach has temporarily suspended container stacking limitations - https://news.ycombinator.com/item?id=28971226 - Oct 2021 (483 comments)
Flexport CEO on how to fix the US supply chain crisis - https://news.ycombinator.com/item?id=28957379 - Oct 2021 (265 comments)
Re: What caused all the supply chain bottlenecks?
#30Nothing it’s just hysteria. There were some companies who made awful decision of canceling existing and future orders.
The suppliers and wholesalers have moved on to different products and customers.
Absolutely scummy companies like GM,Ford,VW and Stellantis are the culprits.
Also it doesn’t help the fact that California the most corrupt state in US history is fighting with the most corrupt dock workers Union in SF port.
Corruption, inefficiency and stupidity are creating mass hysteria.