The Economy Has No Pause Button (3)

Aside from the wreckage to our small businesses, restaurants, and hospitality businesses, the Democrat shutdown of the economy and the imposition of Wuhan coronavirus work rules have done their worst work on our supply chains. These are the raw materials, components, and wholesale businesses upstream of the assemblers and retailers, that consumers never see. Unless they happen to work in those fields, in which case they see them all too immediately.

But they see the effects of these failures when they have to wait weeks or months for appliances and other products that were formerly readily available.

Economic surveys out of three Federal Reserve districts show these disruptions to be ongoing, if not worsening, a year into the largely-manufactured economic crisis in response to the very real virus.

The New York Fed reported last week that “The surveys also found that supply disruptions were widespread, with manufacturing firms reporting longer delivery times and rising input costs, a likely consequence of such disruptions.” Half of the businesses surveyed said that they had experienced supply disruptions this year, while over 25% said those disruptions had affected their businesses either moderately or substantially.

This confirms earlier reports from both the Dallas Fed and the Kansas City Fed (which has jurisdiction over Colorado). The Dallas Fed survey reported increases in Unfilled Orders, Delivery Time, and Prices Paid for Raw Materials. All of those would indicate supply line pressure. The Tenth District Survey reported decreases in inventories and increases in input prices, which would indicate difficulty in keeping items stocked.

When the shutdowns started, advocates assured us that things could be started up easily, that disruptions would be short-lived, and that people warning otherwise were motivated either by greed or politics. Like most progressive assumptions, they’ve proven to be wrong, and at great cost.

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