Show Notes
The Biden administration is struggling to explain and address supply chain issues that are hampering the economy with inflation, empty store shelves, and bobbing container ships off the coast of Los Angeles. Former Rep. Jason Chaffetz, a distinguished fellow of the Government Accountability Institute, joins Eric Eggers on the latest episode of the Drill Down podcast to discuss the problem and what has caused it.
Biden declared in September that “Strengthening our supply chains will continue to be my team’s focus,” promising that “if federal support is needed, I will direct all appropriate action, and if the private sector doesn’t step up, we’re going to call them out and ask them to act.”
There are multiple problems contributing to the crisis. Inflation is higher because of massive infusions of government stimulus spending. There is also an unusual labor shortage, whose causes range from generous unemployment benefits to a soul-searching among dissatisfied employees known as “the Great Resignation.” The thing to remember, Jason says, is “we can’t just turn all of these policies on and off like a switch. They were put in place a long time ago. It will take a while to unbury ourselves.”
“Like what,” Eric asks.
For starters, the US workforce participation rate has declined, with 4-5 million fewer people in the work force than before. In August, a record 4.3 million people quit their jobs. There are approximately ten million unfilled jobs in the American economy right now. And the industries that are directly involved in the movement of goods into and around the country have been hit particularly hard. The Minnesota Trucking Association recently said that nationwide the country is short about 60,000 truck drivers, in part due to COVID-canceled driving school classes and early retirements. “The pool of drivers isn’t really growing,” said a spokesman.
Provisions in the administration’s “Build Back Better” legislation won’t help this either, Jason believes. They’re hiring more regulators, who make hiring more difficult. “The ‘plus-up’ [budget increase] at OSHA” – the Occupational Safety and Health Administration — is a Trojan horse to disrupt private businesses. Just wait until these people start levying $700,000 fines” on businesses.”
The administration has created a number of impediments making it difficult on the trucking industry, Chaffetz said. “They put electronic monitoring in place on truck drivers, limiting how far they could go, and it’s led to this huge backlog of containers and ships you don’t have the warehousing because you can’t get the permits to get the warehousing in order to get the goods to get on the trucks.”
Eric adds that before COVID the cost of shipping a container full of goods from Shanghai to Los Angeles was about $2,000. The same journey now is about $25,000 per container.
Now, add in rising fuel prices. Jason suspects that Democrats and liberals, “in their heart of hearts, want higher fuel prices.” He adds that “they think that higher gas prices will justify their ‘investments’ in new green technologies.”
Jason recalls, “the other day, Pete Buttigieg (Transportation Secretary) flippantly said to Americans, ‘Go out and buy an electric car, then you don’t have to worry about the price of gas.’ They are so tone deaf and out of touch with what the average American is going through.”
