More examples of the failure of “trickle-down economics”. Tax cuts did NOT encourage companies to keep buying raw materials nor did they keep or support their employees. They bought back stock. Once demand went down because of the pandemic, companies and developers stopped buying products. Once demand picked, supply was short so prices have gone up.
Quite simply, just another symptom of the Capitalist system that the economists try telling us they have worked out now. Capitalism cycles through bust and boom, spurning any and all attempts to regulate it. Always has, always will.
The most prominent manifestation of too much reliance on Just In Time is found in the very industry that invented it: Automakers have been crippled by a shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.
But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.
I remember when JIT started to become a big thing around 1990. I was never all that convinced that it was the best system. Of course it’s expensive to hold a huge amount of inventory, but it makes good sense to have at least some inventory on-hand to make up for breaks in the supply chain.
brwydave Premium Member almost 3 years ago
Yep. over the past 14 months the supply chains have been disrupted and now folks are starting to buy again, could have an effect of prices.
TimBenzidrene almost 3 years ago
Lumber prices are beyond ludicrous.
I was in Home Depot this weekend – no shortage of lumber.
And then you see the prices.
2×4 wall studs…..
$20.00….
Each.
A 2’ by 4’ piece of 3/4" A/C grade “project” plywood.
$25.00.
They need to offer security escort services now with each lumber purchase.
RAGs almost 3 years ago
Is Joe saying that Q-publicans are like piranha?
Nantucket Premium Member almost 3 years ago
More examples of the failure of “trickle-down economics”. Tax cuts did NOT encourage companies to keep buying raw materials nor did they keep or support their employees. They bought back stock. Once demand went down because of the pandemic, companies and developers stopped buying products. Once demand picked, supply was short so prices have gone up.
grumpypophobart almost 3 years ago
Quite simply, just another symptom of the Capitalist system that the economists try telling us they have worked out now. Capitalism cycles through bust and boom, spurning any and all attempts to regulate it. Always has, always will.
briangj2 almost 3 years ago
The most prominent manifestation of too much reliance on Just In Time is found in the very industry that invented it: Automakers have been crippled by a shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.
But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.
See: https://www.nytimes.com/2021/06/01/business/coronavirus-global-shortages.html
Johnnyrico almost 3 years ago
I remember when JIT started to become a big thing around 1990. I was never all that convinced that it was the best system. Of course it’s expensive to hold a huge amount of inventory, but it makes good sense to have at least some inventory on-hand to make up for breaks in the supply chain.
FrankErnesto almost 3 years ago
No mention of labor costs. Like many, Heller expects labor to remain cheap, and quiet.
briangj2 almost 3 years ago
Question:
What is behind the lumber shortage?
Sources:
Andy Winkler, an economist with the Bipartisan Policy Center and Per Hong, a supply chains expert.
Answer:
The pandemic shut down lumber production early on and it has caused major issues with the wood supply chain over the last year.
What We Found:
To trace the lumber shortage you have to start in March of 2020.
“When the pandemic started and shutdowns ensued, saw mills had to lay off temporarily,” Winkler said.
“They brought capacity down and we saw lumber, at that point, probably dropped by close to 30% to 40%,” Hong said.
While lumber production went down, home construction and renovation did the opposite.
“There was a surge in demand across the board that has led to prices really skyrocketing,” Winkler said.
Eventually consumers bought up the lumber inventory and the lumber companies haven’t been so quick to replenish the supply.
“We still have less operators in sawmills than we had pre-pandemic levels,” Hong said.
https://www.msn.com/en-us/news/us/verify-we-re-running-out-of-wood-here-s-why-there-is-a-lumber-shortage/ar-BB1gDPnt
tee929 almost 3 years ago
Maybe retiring this year wasn’t such a good idea……..