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**OCTOBER 20, 2021**

Kuttner on TAP

The Supply Chain Story Everyone Is Missing

The deeper cause is too much offshoring and too little domestic
production.

Read the media accounts and everyone is focusing on trees and missing
the forest. Ships are backed up; ports are at capacity; there aren't
enough truck drivers; shortages are compounding on each other as
producers hoard supplies.

Sure, but why are our ports overwhelmed to begin with?

Back in the 1980s, companies began instituting "just-in-time"
production, holding low inventories to save costs. They combined this
strategy with outsourcing more and more supply to Asia, to save even
more costs, mainly labor costs. Ever-larger container ships made the
model even more attractive.

Wall Street loved this strategy because it weakened labor and increased
short-term profits. But as our friend Barry Lynn warned in the

**Prospect** in 2007
, if you combine
just-in-time production with far-flung sources of supply, watch out when
some kind of disruption occurs.

COVID was the crisis that finally exposed all of the system's hidden
vulnerabilities.

Back when most supplies were sourced domestically, we never had a supply
chain crisis-because we made most of the stuff at home. There were
some imports, but they did not overwhelm ports. And back when we had a
regulated trucking industry and a strong Teamsters Union, we never had
shortages of truck drivers

**because these were good jobs**.

We cannot fix this crisis by adding to port capacity or working
longshoremen and truckers overtime. It is a systemic failure, rooted in
too much corporate power and too much faith in markets, deregulation,
and hyper-globalism-the cocktail otherwise known as neoliberalism.
Bring jobs and supplies home, restore some regulation, and the supply
chain crisis goes away.

Joe Biden actually gets this, and he is moving to reshore production and
good jobs. But that will take time. What a cruel irony, on him and on
us, that this slow-fused crisis explodes on his watch.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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