A Drop of Ink: ‘Made In America’ Must Be More Than A Slogan

admin's picture

By Reed Anfinson

Publisher

There is a renewed focus on America’s vulnerability to two fundamental flaws in our economy: consolidation of businesses and outsourcing the manufacturing of too many critical products and components of products assembled in the U.S.

The COVID-19 pandemic brought to light just how fragile our supply chains are and the threat their collapse means for the health of Americans and our economy.

The manufacturing of pharmaceuticals essential to the health of Americans has been turned over to China, India, Germany, Israel, South Africa, France, and Brazil. China isn’t just a major producer of pharmaceuticals; it also produces the personal protection equipment needed in hospitals and clinics during a pandemic.

Semiconductors are used in vehicles, medical devices, military systems, communication devices and a host of other things essential to our daily lives. They are manufactured in China, Taiwan, Korea, Singapore, the U.S., Germany, and Japan. China is the largest of these suppliers.

In an article for the Brookings Institute, Sarah Kreps, Richard Clark, and Adi Rao say two things are necessary to safeguard the strategic importance of America’s semiconductor supply: deepening our manufacturing relationship with our allies and implementing immigration policies that welcome innovators and employees who can work in fields where we have shortages. 

They also say it will take government assistance in the form of tax breaks, loans, and infrastructure investment to encourage the expansion of domestic production. It will be a difficult sell to the American public, considering the enormous profits these companies make and the lavish pay their CEOs get.

Rather than our businesses building plants overseas, we should do a better job of encouraging foreign investment in facilities in the U.S.

To ensure we are never again in a position where we don’t have the medical supplies required to face a pandemic, Darrell West of the Brookings Institute offers four recommendations: “Decrease dependence on foreign drug-makers, develop U.S. drug manufacturing, provide financial support for domestic capabilities, and offer faster drug approval processes.”

American industry has been built on the free market principle of supply and demand. If consumers demand a product, industry gets to work making sure it is provided. It encourages entrepreneurship. That entrepreneurship stimulates innovation, creating even more jobs. In recent decades, that supply and demand principle has been perverted by Wall Street.

Now those creating the greatest demand and wielding the most power over supply are investors. Their demand is for profits. It comes through eliminating competition and raising prices. 

“People want to make more money, so they push companies to be bigger. The companies charge more. They pay less and keep a greater portion of the profits rather than recognize that without help, they couldn’t make anything,” freelance business writer Erik Sherman says. “Bigger companies snap up more sales and market share, making it increasingly difficult for new companies to come into existence and thrive. “

Sherman goes on to say that some in industry recognize the unsustainable direction of Wall Street-led corruption of our economy where only the needs of the shareholders are met. They seek to see the “customers, employees, suppliers, and communities in which the businesses operate” returned to positions of importance.

One more vulnerability was built into our supply chains that guaranteed they would fail.

Corporations created the “just in time” supplying chain strategy in their quest to maximize profits. It was based on a supply chain so efficient that manufacturers could operate with little inventory, always knowing their orders would arrive in time. Then COVID-19 hit, supply chains collapsed, leaving industries unable to complete orders. It also led to stockpiling by consumers and businesses out of fear of shortages, making the supply problems worse.

COVID-19, earthquakes, climate change, political tensions, and war all have revealed the vulnerability of our supply chains – and will in the future.

In our current economy, we are left exposed to the health priorities of foreign countries whose interests and challenges come before ours. We are left to political manipulation. In both cases, lives are put at risk, and our economy is left in shambles. Skyrocketing inflation, empty grocery shelves, manufacturing operations slowed, and vehicle sales lots at half capacity. 

China and the U.S. are increasingly at geopolitical odds as a once semi-cooperative military, and economic superpower takes increasing strides to regional and world dominance. Cooperation falls to competitive economic and geopolitical ambition.

America has to reduce its dependence on foreign supply chains tied to countries whose interests don’t align with ours. Buying products “Made in America” must be more than a slogan.

America’s economy is built on cheap products that those in the middle and lower classes can afford. To bring manufacturing home means higher costs of labor and doing business. The challenge is to create secure supply chains while keeping goods affordable.

 

Baby formula

In the case of the baby formula shortage stressing young parents today, the limited number of manufacturers plays a key role. 

Last February, Abbott Nutrition shut down its Michigan baby formula plant after four infants in the U.S. became ill with bacterial infections. One was from Minnesota. Their sickness was thought to be linked to the formula causing the Food and Drug Administration (FDA) to require a recall of the plant’s products.

Even when the FDA clears the plant to start manufacturing baby formula again, it will take several months of full production to restock shelves.

Supply chain issues caused by the COVD-19 pandemic and the FDA’s too-strict regulations on the importation of baby formula that is considered as good or better than U.S. products have also created the problem.

Because there are so few domestic produces, families are vulnerable to any manufacturing disruption in production.

Rate this article: 
No votes yet