The following contains editorial content which is the opinion of the writer.
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WASHINGTON, DC- We haven’t seen a Department of Justice transparently this political since probably the 1960s.
Oh to be certain, the DOJ was clearly political under the Obama administration, as the Durham investigation continues to prove. However they haven’t been this “in your face” political in a long time.
Last week, the DOJ announced it will undertake investigations against corporations which earn what it believes to be “excessive” profits as inflation surges and with supply chain issues continuing to plague not only the US, but the world, Reason reports.
In a press release, the Justice Department announced that its antitrust division (have they taken a look at Meta, Alphabet and Amazon by the way?) will begin investigations in order to “deter, detect, and prosecute those who would exploit supply chain disruptions,” seeking to earn what Justice calls “illicit profit.”
The department wrote that its goal in undertaking the initiative is to prevent companies from “overcharging companies under the guise of supply chain disruptions.” Elizabeth Warren must be beaming.
Not sure if the DOJ has been paying attention, but by outward appearances, in the form of cargo ships laying at anchor outside ports such as Los Angeles, Long Beach, and others, it appears that supply chain issue is, in fact, quite real.
Likewise, the inflation which has raided the wallets of American consumers is quite real, and can be laid at the foot of not only the supply chain issues (the law of supply and demand) but also the trillions of dollars dumped into the U.S. economy in “stimulus” money.
Supply and demand. It’s an age old economic premise that tells us, when the supply of an item is in high demand and low supply, prices go up. The inverse also tends to be true. As American companies are raising prices, one cannot separate the supply chain issues and money dump into the economy from increasing prices. It is simple economics.
As Reason notes, “to the extent that private companies are raising prices, those things are the likely culprits—and higher prices are the market’s way of allocating scarce goods most efficiently, not evidence of price gouging.”
The Cato Institute, a libertarian think tank, was having none of it, however.
“The DOJ and FBI would rather launch a global investigation of ‘illicit’ supply chain profiteering than acknowledge the obvious and inevitable result when unprecedented fiscal and monetary stimulus combines with decades of protectionism and regulatory sclerosis,” said Scott Lincicome, Cato’s director of general economics and trade policy.
All of the DOJ’s grandstanding of course plays right into the Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) playbook. Both United States senators are quick to attack businesses for being in the business of making money, attacking profits as being responsible for inflation.
As Reason notes, the whole thing smacks of a “cockamamie conspiracy theory” which is not quite as amusing when one considers the FBI is looking to charge companies for “illicit products” even as they struggle to keep store shelves stocked.
For Warren, this is nothing new. She’s more than happy to take finance money from companies while at the same time blaming them for inflation, even as it is clear that Biden’s economic policies are chiefly to blame.
Typically, Warren goes after areas such as “big oil,” but more recently, as prices skyrocketed, she took to blaming small mom-and-pop grocery for taking advantage of consumers, despite the fact they are historically low margin businesses.
As Reason notes, did businesses “suddenly [become] more greedy within the past year after previously not caring about profits…?”
Sanders isn’t all that much smarter than Warren. This past week, he tried to lay the blame for high gas prices being “at the highest level in 7 years” due to “corporate greed, collusion, & profiteering.”
Shock. Shock. Shock. Gas prices are at the highest level in 7 years while Exxon Mobil, Chevron, Shell & BP made nearly $25 billion in profits last quarter – the highest level in over 7 years. The problem is not inflation. The problem is corporate greed, collusion & profiteering.
— Bernie Sanders (@SenSanders) February 16, 2022
Of course, it has nothing to do with the fact that the Biden administration attacked the American fossil fuel industry, cut domestic oil exploration for oil and gas, along with a number of policies which raised prices, right? It has nothing to do with going from a net exporter of fossil fuels to once again relying on OPEC and Russia to supply much-needed crude.
Warren is, Reason notes a “broken record when it comes to blaming billionaires and corporations for everything from high college costs to the lack of affordable housing to the current supply chain problems.”
At the same time, Warren ignores government’s own role in either creating or making those issues much, much worse; subsidized student loans, restrictive zoning laws and imposing rules that limit trade such as the Jones Act.
Of course, all of this hyperbole is expected from people such as Warren and Sanders, who are playing to their far-left base. It’s by far a different case when the federal government, in the form of the FBI and DOJ, actually takes such nonsense seriously to the point they will waste valuable investigatory assets looking into it.
Remember the famous Ronald Reagan saying?
“The scariest ten words out there…’I’m from the federal government and I’m here to help.’”
Know this…any “investigation” by the Biden Department of Justice is likely to have the exact opposite consequences of what they claim to want to achieve. Look for more empty shelves, continued exploding inflation, and more delays getting product to market.
For more on the supply chain issues, we invite you to:
DIG DEEPER
UNITED STATES – According to reports, factory production “unexpectedly” declined in December 2021, which also means that an increase in COVID-19 infections further adversely affected manufacturers’ issues with material and labor shortages.
Bloomberg reports that Federal Reserve data showed a 0.6% gain in factory production in November 2021, followed by a 0.3% decrease in factory production in December 2021.
Total industrial production, including “mining and utility output,” dropped an additional 0.1% in December of 2021.
According to Breitbart, that 0.3% decrease in December 2021 was quite a surprise drop that was far short of the forecasted 0.5% gain in factory production.
Supply constraints just got even worse, suggesting more inflation ahead. https://t.co/dYhd54aU2E
— Breitbart News (@BreitbartNews) January 15, 2022
One significant lag was found in the auto industry. Breitbart reports that the index for motor vehicles and parts dropped by 1.3 percent in December of 2021, which was 6 percent lower than the level from a year ago.
Part of that auto industry problem, Bloomberg adds, was the semiconductor shortage which affected vehicle assembly. In addition, there were less available “fabricated metals, aerospace equipment and plastics.”
The ugly hand of COVID has firmly inserted itself into the production arena. Bloomberg reports:
“The omicron variant is just the latest hurdle, as factory floor managers navigate the fallout of the spike in cases on workers and production schedules.
“Challenges related to transportation networks and various materials shortages are also hampering efforts to boost supply.”
Even with that, Bloomberg notes further, “lean inventories, elevated order backlogs and sustained growth in consumer and business demand are poised to offer a tailwind to production this year.”
Stephen Stanley, chief economist at Amherst Pierpont noted:
“I suspect that some industries may have been forced to slow down activity in the second half of the month due to omicron-driven absences.”
Stanley continued:
“In any case, manufacturers will look to get back up to full speed as soon as they can in light of robust demand for goods from consumers and businesses.”
Other significant statistics include a drop in capacity utilization, or the extent to which a company uses its manufacturing and productive capacity. Capacity utilization fell in December by 0.2%, to 77%. In addition, capacity utilization for finished goods also dropped 0.2%, to 76.9%.
Moreover, Breitbart notes that overall industrial production, including factory output, mining, and utilities, dropped for the first time since September 2021, with a decrease of 0.1 percent.
Furthermore, the outlet reports that “mild weather” led to a drop in utilities output of 1.5%.
There was actually an increase of two percent in mining output, “likely driven by increased demand for oil and natural gas.”
There is some slightly good news in terms of supply networks, according to Bloomberg:
“Recent factory surveys have pointed to some alleviation in stressed supply networks, with measures of supplier delivery times improving.
“Institute for Supply Management data earlier this month showed a gauge of manufacturing delivery times dropped to its lowest level in more than a year.”
Think things are awful now? Just wait. U.S. factory production suffered a sharp and unexpected downturn in December, a development that is likely to add to inflationary pressures in an economy beset with supply constraints. https://t.co/lPs4DrtUIv
— Breitbart News (@BreitbartNews) January 16, 2022
However, Breitbart’s analysis of the production and utilization figures features a rather grim outlook for inflation ahead.
John Carney wrote:
“The drop in manufacturing production and utilization in December is particularly troubling because the surge in infections due to the omicron variant of the coronavirus occurred only toward the end of the month.
“It is likely that high rates of infection and quarantines will result in many workers having to stay home for several days in January, which could further weigh on production.
“That would likely raise inflation higher than it would otherwise be.”
Experts warn global economy heading for “mother of all” supply chain issues as China locks down
Originally published January 15, 2022
The content contained herein contains editorial commentary which is the opinion of the writer.
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Over the past few months, we have seen bare store shelves courtesy of supply chain issues. Many have warned for years that the United States was vulnerable as our manufacturing left our shores and went overseas.
For four years starting in 2017, former President Trump was attempting to bring manufacturing back home. Unfortunately, that was derailed after Trump lost last November’s election.
Aside from the supply chain issues, ZeroHedge that another issue may haunt the United States.
They note that over the past several weeks, Wall Street has become optimistic on US growth going forward, along with the Fed, that despite economic numbers continually showing the opposite.
That optimism has led the Fed to signal interest rate hikes, maybe as soon as March.
Alarm bells have been ringing however after the Fed last year stated the belief that inflation was only “transitory,” which turned out to be a fallacy. Current indications are we are in this for a while.
ZeroHedge warns that the Fed is poised to make not one more mistake but possibly several more—up to four—by hiking interest rates that number of times.
Combined with trying to pay off a “massive balance sheet,” all of this comes as growth on a global scale is slowing dramatically.
The Fed is going from one huge error (inflation is transitory) to another huge error (4 rate hikes and runoff won't crash markets).
— zerohedge (@zerohedge) January 11, 2022
The one place beside the United States where a growth slowdown could prove especially troubling is in China.
Taken in combination with a deterioration in US consumption, and increased use of credit cards is helping to support current funding and is due for a “bubble,” we now have China, pursuing a “covid-zero” policy as well as looking to lockdown ports, again due to covid.
All of this, ZeroHedge reports spells big trouble.
Once a lone voice warning of China’s impending Covid-zero policy, now Bloomberg is joining in on warning that restrictions implemented by Beijing “are starting to hit supply chains in the region.”
As Bloomberg warns, the world economy could be headed for the “mother of all” supply chain issues.
Over the past several weeks, the omicron variant of Covid has been spreading across the United States, with a record number of Americans testing positive for the variant this week on at least one day.
Bloomberg reports that if the variant spreads across Asia, China in particular, it would result in a significant disruption in manufacturing. HSBC economists this week wrote that the disruption would be “temporary, one would hope, but hugely disruptive all the same” in the next few months.
As is, movement of goods through some of the busiest and important ports have seen shipping traffic slowed significantly, with a number of shippers now diverting to Shanghai.
It was bottlenecks such as these which eventually led to hundreds of container ships waiting off the coast of California to unload, a situation which still continues to this day.
For example, in November, there were some 80 ships offshore waiting to unload, while as of Jan 6, there were 105 ships waiting.
ZeroHedge reports that sailing schedules are already facing delays of about a week, which has freight forwarders warning of the impact on already clogged gateways both in the United States and Europe.
Last year, China locked down its ports for several days, which led to what ZeroHedge calls “an unprecedented hiccup in global logistics and shipping” which exists today.
Omicron has had relatively little impact in China compared to the West, but of course that is dependent on China actually giving accurate information. That said, Chinese officials are being cautious in order to reach their desire of zero Covid.
Scattered infections in China of both the delta and omicron variants have already seen China shut down clothing factories and cease gas deliveries in the vicinity of one of China’s largest seaports, Ningbo.
In addition, disruptions have occurred at computer chip manufacturers in Xi’an and a city-wide lockdown in Henan province Tuesday, ZeroHedge says.
Bloomberg says that any continued increases in cases in that region, it could impact the supply of iPhones and other smartphones, Bloomberg Intelligence analysts say.
Covid zero, which given the transmissibility of the omicron variant seems like a fool’s errand, yet it is something the communist nation is pursuing.
While such a policy helps to contain virus spread to a degree, it causes significant disruptions and lockdowns while officials limit the movement of people.
Repeated mandatory testing of whole cities, for example, disrupt business and production, yet the issue is nowhere near as bad as currently exists in the United States, where last week some five million people stayed home sick.
However, the news from China isn’t encouraging, with some predictions saying that China’s covid outbreak this winter could be worse than last year.
Also, the number of new cases has been larger this year in the country, and the provinces hit by the outbreaks this year also have a higher GDP and population density.
Bloomberg noted that a number of companies are attempting to mitigate their risk by looking at alternative production facilities, according to Stephanie Krishnan, a supply chain expert at IDC in Singapore.
“We are starting to see companies mitigating risk, seeing where they can increase capabilities for production of different products in different factories so they can shift that around,” she said.
Krishnan also warned that there isn’t currently any light at the end of the tunnel, saying she doesn’t see an end to the global supply crunch anytime soon. She further cautioned that it could take several years for the current supply crunch to unwind.
This is a contrast to the optimism that many felt about the new year, hoping the so-called “Big Crunch” would be winding down, a situation which plagued both producers and consumers for much of 2021.
China’s ability to control the virus will be absolutely critical, said Deborah Elms, executive director of the Singapore-based Asian Trade Centre.
She noted that companies who don’t have supply chains centered in China may be able to avoid issues relative to China’s covid mitigation strategy.
Unfortunately, that won’t apply to everyone and certainly won’t apply to the United States, which relies heavily on China for a lot of our goods.
“Lots of products in supply chains come from outside China,” Elms said. “Given challenges elsewhere, even zero Covid doesn’t solve all the issues of disruption.”
ZeroHedge notes that all of this will make the job of the Fed extremely difficult in the coming months. A rise in interest rates is seen as a hedge against inflation, however as ZeroHedge notes, much of the inflation today is being generated on the supply side.
However, if there is a “surprise” drop in growth in the next few months, the Fed will have to delay or stagger its tightening strategy.
If they time this incorrectly, they would be hiking interest rates into a recession which will mean they would have to revert to easing again. This is referred to as a “bull-whip” effect.
LONG BEACH, CA- Let’s just call the Biden administration thus far “Nine Months of Crises.” With this guy, it’s literally been one cluster f*ck after another. Worse yet, this administration doesn’t appear to have a plan.
The current crisis finds hundreds of container ships stranded outside ports in Los Angeles and Long Beach, California and New York and New Jersey on the east coast.
On Tuesday, the White House told Reuters in an interview that Americans should be aware “there will be things you can’t get” in time for Christmas, as the latest Biden blunder is causing supply chain issues across the country.
Refusing to accept accountability for anything, the unnamed official Reuters spoke to merely suggested Americans might want to purchase goods that are available.
“At the same time, a lot of these goods are hopefully substitutable by other things […] I don’t think there’s any real reason to be panicked, but we all feel the frustration and there’s a certain need for patience to help get through a relatively short period of time,” the official said.
Officials who spoke with Reuters said that inflation has impacted families’ ability to obtain everything they need, especially goods with high consumer demand.
“We recognize that it has pinched families who are trying to get back to some semblance of normalcy as we move into the later stages of the pandemic,” the unnamed official said.
The administration, which has been asleep at the switch for the past couple of weeks and basically ignoring the situation said they are hopeful that “port operators, transportation companies and labor unions” will work longer hours to unload ships and transport cargo across the country to fill empty store shelves, Politico said.
However, it may be too late to do so according to Steve Pasierb, president and chief executive of the Toy Association in a statement to Politico.
“There’s no political intervention that’s going to get this done, and there may not be a human intervention that gets this done because this issue is now going to last well into next year,” he said.
The admonishment from the White House came as container ships holding tens of thousands of shipping containers remain backlogged at ports on both coasts. According to reports, there are 65 cargo ships waiting outside the Los Angeles port, which is currently full. In addition, 8,000 shipping containers are stuck at the Port of Savannah.
Meanwhile, Coresight Research Founder and CEO Deborah Weinswig made an ominous prediction, saying she believes the supply chain issues will linger past next year and into 2023.
“Let’s look at the math: It’s 14 days to get a container from APAC [Asia-Pacific] to the U.S. and 40 days for it to get back,” she told Yahoo Finance. “And we have a complete container misalignment right now. So that’s 80 days, we’re talking, in our opinion—we’re probably looking at Q1 2023 before all of those containers get back and realign.”
“This is not just a holiday challenge—which it is acute, probably the worst I’ve ever seen,” she continued. “I think that this continues. And that is where we’re going to see innovation and new jobs created, but we’re still really short right now.”
All of these issues have exposed the ineptitude and inexperience of Transportation Secretary Pete Buttigieg, the failed mayor of South Bend, Indiana, a city of 103,000 people who saw himself as worthy of being president. Failing at that, he found himself nominated by Biden to the transportation post.
And why wouldn’t he be? After all, as Joe Concha of The Hill points out, South Bend has a fleet of some 60 buses, a small train station and a small regional airport. So clearly, Buttigieg had the “experience” to manage the Department of Transportation, which has over 58,000 employees and a budget of & 87 billion.
Buttigieg has basically done nothing over the first nine months. Oh, he came out when the infrastructure bill was first proposed and talked about “systemically racist” highways…or something. He was all over the news as he and his “husband” adopted a couple of kids, which had the media in orgasmic delight.
But now? Old “Mayor Pete” has himself a genuine crisis to deal with, and clearly, as Concha points out, he is in way over his head.
Expanding on the above, the Washington Post in a tweet broke down the supply chain nightmare facing the country.
“Ships wait off the California coast, unable to unload their cargo. Truckers are overworked and overwhelmed, often confronting logjams. Rail yards have also been clogged, with trains at one point backed up 25 miles outside a key Chicago facility,” they said last Sunday.
Ships wait off the California coast, unable to unload their cargo.
Truckers are overworked and overwhelmed, often confronting logjams.
Rail yards have also been clogged, with trains at one point backed up 25 miles outside a key Chicago facility. https://t.co/9gTuUmZT1g pic.twitter.com/Xit0oPUPFs
— The Washington Post (@washingtonpost) October 10, 2021
Part of the issue, Concha notes is a labor shortage which has not only affected the transportation industry but has impacted industries and businesses across the board. There is a shortage of workers to offload ships, and truck drivers to get the goods to where they need to go. This is nothing new during Biden’s ill-fated, incompetent term since this has been ongoing for ten months. Nobody in the administration is able to explain it, least of all Labor Secretary Marty Walsh, former Boston mayor.
Biden's labor secretary Marty Walsh was stumped on #AxiosOnHBO as to why eligible workers aren't filling up available jobs: "I don't think there is an answer." https://t.co/Rt2cNUSH9C
— Axios (@axios) October 10, 2021
So what of Buttigieg? Surely the media must be curious what old “Mayor Pete” is doing to deal with the crisis, right?
Concha said he did a quick Google search of Buttigieg and used the “News” option. People Magazine, USA Today, and NBC News all were concerned only about his adoption of twins. Business Insider was waxing poetic about another possible presidential run, while only Fox News questioned what the hell he was doing about the supply chain issues.
The issue was finally addressed last week by Buttigieg, where all he said is the “challenges” would continue possibly for years and then turned to pitch the stalled $3.5 trillion socialist reformation of America plan touted as an “infrastructure” package.
“These challenges are definitely going to continue in the months and years ahead,” Buttigieg said. “This is one more reason why we do need to deliver this infrastructure package, so that we can have a more resilient, flexible physical infrastructure to support our supply chain in this country.”
Fine and dandy, Concha notes. “What is Buttigieg doing *right now* to address the crisis?” he asked.
Well, apparently there is a “task force” set up by the White House. He then tried to place blame at least in part on “private sector systems,” and then said the federal government has been doing such apparently useless things such as holding “roundtables” and talking to people.
Kind of like Kamala Harris’s “attacking” the issues at the border, Concha mused. Lots of fluff, not much substance. Actually in the case of Harris, there really hasn’t been fluff…just a bunch of vapid talk about “root causes.”
The best way to address Buttigieg’s amateur inexperience, Concha said, is brought to us by old Sleepy Joe himself…an attack ad from the 2020 presidential campaign mocking Buttigieg’s inexperience.
Joe Biden mocks Pete Buttigieg's experience in a new attack ad https://t.co/CiUPW3KMhL pic.twitter.com/t8AosxShjZ
— CNN Politics (@CNNPolitics) February 10, 2020
Then, after mocking Buttigieg Biden then went on to nominate him not for official White House dog catcher, or maybe West Wing interior decorator…no he nominated him to be Transportation Secretary, clearly payback for Mayor Pete immediately giving Biden his endorsement after dropping out of his laughable campaign for president.
To quote Concha:
“Qualifications? Who needs them?”
Especially in the midst of one of the biggest transportation and supply chain crises in our history.
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