Societal Inventory Reduction

Lately, the folks over at Chicago Boyz have been writing and commenting regularly about some of the practical ramifications of leftism, globalism and the pandemic. Let's start with industry, one of their core topics:

Just-in-time is sometimes not just in time

Dan from Madison provided an update on Industrial Distribution Two Years into the Covidian Era:

Inventories are up in all sectors of my business and every distributor is hoarding as much stuff as their banks will allow. Production patterns are impossible to predict as there always seems to be another calamity in line whether it is Delta, Omicron, another freeze coming to Texas, and so on. It is relentless, never ending and exhausting. Every single day we go to work there is a problem of some sort. The good news is that it isn't even a surprise anymore it is just part of the daily grind.

Where in the past we had smooth curves that were developed over decades of normal pattern buying, now it is all spikes all over the place. It is literally impossible to forecast correctly. So you load up the barn and sort of hope. Honestly, that is true, sad as it seems.

It burns me crisp when I hear about teachers going on strike or when I see a tribute to medical people as if they are the only ones working hard through this. Not that I have anything against medical people, but give the rest of us "essentials" some love once in a while. Next time you see or hear something like that, mentally thank your auto mechanics, grocery workers, truck drivers, utility workers, HVAC techs, factory workers, and everyone else who hasn't missed a day of work through this whole shebang. We are all exhausted too and would like to think that we are helping society by keeping machines running, people moving and fed, and structures lit, warm and/or cool.

Yes. But one commenter caught my attention, too:

One of the things that's going to have to change now that we've blown up the whole "just-in-time" global supply architecture is the set of accounting rules that tax inventory. When they made that change back in the 1980s, it probably looked like a good idea, but it was one of the things that drove a lot of manufacturing offshore, and was only really enabled by the burgeoning of globalization. Now that we're finding out what globalization really costs, well... Yeah, it's due for a bit of a re-think.

Years ago, I read a book that was enthusiastic about the "just-in-time" supply philosophy. But the author stressed the necessity of high trust in relationships between the supplier and manufacturer (or retailer, or whatever) in such a system. "High trust" is not the direction our domestic and international relations are going.

And "just-in-time" systems never really allowed for disasters or emergencies very well. We need more inventory. We don't need to tax businesses more on inventory.

Beyond Industry

Just as the year began, David Foster wrote a comprehensive piece he called The Great Liquidation. You might want to share it with some folks who would be receptive to a broad overview of our current situation, with some historical comparisons. The comments are also interesting.

America is hanging by a thread. A great liquidation is underway, with many of the structures that support American society . . or, in some cases, any viable society . . . being kicked away, sold off piecemeal, or just wantonly destroyed. I'm talking about physical structures, legal structures, and social structures.

I do not think it is too late to turn this trend around, but the situation is very serious, and I'm going to ask you to gaze into the abyss with me before I discuss some reasons for hope.

It's a girthy piece, but I think it is worth your time and consideration. There are some good pull quotes and links. As he said above, "I'm talking about physical structures, legal structures, and social structures." That's a lot of liquidation happening all at the same time. Here are the main categories in which he sees liquidation occurring. They are explained in much more detail in the original piece:

-Significant parts of America's energy infrastructure are being destroyed or targeted for destruction.

All his examples are good, but here are two of them:

The Diablo Canyon nuclear plant, the largest source of electricity in California, is also scheduled for closure in 2025. The cost of Diablo Canyon was $14.5B in present-day dollars, and I estimate that this represents at least 50,000 person-years of labor.

Pipeline construction is being suppressed, at the same time Putin is given the US green light for a Russia-Germany pipeline. Energy is being transformed from an American asset into an American vulnerability.

-Billions of dollars of America military equipment were abandoned in Afghanistan and are now in the hands of the Taliban.

If we use a conservative estimate of $40 billion, that represents at least 400,000 person-years of human labor, thrown away. But that's not the worst of it, of course . .

-American manufacturing has been negatively impacted by numerous policy choices and social factors, and America is no longer the world's factory: that role now falls to China.

-And, speaking of China: the United States has increasingly adopted a submissive position regarding to that country.

Major corporations are bending over backwards to avoid offending the leadership of that country...see my post here for some examples.

That reminds me: the Olympics are coming up. I am not terribly sanguine that the games will have a positive effect on the world.

Universities, too, have become increasingly dependent on Chinese students and money. . .

The situation is unpleasantly like what Churchill observed in the Britain of the late 1930s, where he wrote of "the unendurable .. sense of our country falling into the power, into the orbit and influence of Nazi Germany, and of our existence becoming dependent upon their good will or pleasure" ... A "policy of submission" would entail "restrictions" upon freedom of speech and the press. "Indeed, I hear it said sometimes now that we cannot allow the Nazi system of dictatorship to be criticized by ordinary, common English politicians." (quote from William Manchester, The Last Lion)

At the same time that the Biden administration is pushing for total electrification of transportation, they seem to have little concern about the fact that the US is far from self-sufficient in the minerals required for electrification technologies - and Biden's son Hunter has been involved in a deal to give China a strengthened position in the supply of cobalt, a key material needed for battery production. . .

-Media, academia, and increasingly business, indeed the majority of institutions in our society . . . are being taken over by an obsession with race and ethnicities.

Well, yes. His unsettling examples just scratch the surface.

If this sort of thing continues, then at best . . . at best . . . America becomes something like the Austro-Hungarian Empire, about which historian AJP Taylor wrote:

The appointment of every school teacher, of every railway porter, of every hospital doctor, of every tax-collector, was a signal for national struggle. Besides, private industry looked to the state for aid from tariffs and subsidies; these, in every country, produce 'log-rolling,' and nationalism offered an added lever with which to shift the logs. German industries demanded state aid to preserve their privileged position; Czech industries demanded state aid to redress the inequalities of the past. The first generation of national rivals had been the products of universities and fought for appointment at the highest professional level: their disputes concerned only a few hundred state jobs. The generation which followed them was the result of universal elementary education and fought for the trivial state employment which existed in every village; hence the more popular national conflicts at the turn of the century.

A creaky and dysfunctional society like Austria-Hungary is the best outcome for America if the race obsession continues on its current path . . . it is possible, even likely, that the actual outcome will be something much darker.

The Austro-Hungarian Empire example is bad enough. But there are also real examples of "much darker" . . . And when I read about these, I think of the proposals of Ibram X. Kendi, whose works are being pushed by the Biden Department of Education.

-A high percentage of America's public schools . . . and even some 'elite' private schools . . . are failing to meaningfully educate their students

Scary examples given.

-The whole idea of free speech is under sustained assault, to a degree never seen before in the United States.

Not only are people defriending those who deviate from approved opinions . . . in some cases, they are demanding that other people defriend their ideological enemies. And the turning-in of Wrongthinkers to the 'authorities', whoever those authorities might be, is all too often encouraged and too often actually done . . . see this story about a son who reported his own mother for 'racism', that 'racism, consisting of her have posted a quote from Martin Luther King.

When free speech is lost, the feedback system of society is destroyed-and very bad things tend to happen.

-Far from protesting threats to freedom of speech and the post, much of the media sees itself as the source of approved opinion and the rightful choosers of the country's leadership.

-The very concept of the United States of America...its value and indeed its very physical existence...is under assault.

Illegal immigration, The 1619 Project, etc. . .

And it's not only America as a nation that is under attack-it is the cultural achievements of the West over the past hundreds of years.

Perhaps you can think of other kinds of destructive liquidation of our assets (the Afghanistan example above might be projected into the future, for example), but I think that many of the posts on current events here at AoSHQ could fit into one of Foster's categories. He then asks,

Is there any hope?

Foster describes some developments he sees as hopeful. Do you agree with him? Do you see any others?

Perspective:

Russia is taking Ukraine.

China is taking Taiwan.

America is taking ________.

Music

Vivaldi, The Four Seasons, Winter (part of it), as performed in the Age of COVID. The end of the movement is the best part, I think.

Hope you have something nice planned for the weekend.

This is the Thread before the Gardening Thread.

posted by K.T. at 11:10 AM

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