The Supply Chain Crisis is a Global Income Inequality Crisis
Things are harder to find. Prices are rising. For a society that believes in consumption (isn't that what the etymology of consumerism really entails), things feel more dire now than earlier in the pandemic, when it was only human bodies rather than consumer goods that were infected by COVID-19. How the hell did this happen?
Supply chains are complicated, yes, obviously, but the cause of this supply chain crisis is apparent, and I think that more well-paid commentators have only failed to mention this apparent cause out of a moral cowardice. You see, America and the decisions its leaders took with respect to global inequality and global vaccine policy is the obvious cause of this crisis.
Here's the supply chain crisis in short:
Americans, as a group, are richer than they were before the pandemic. The Trump and Biden administration used a thorough stimulus regime to pump money into the economy. This money kept poor and working households afloat, and kept the economy lubricated enough for the stock market to return to its pre-pandemic heights, and thus this money benefited not just the poor but the rich. This worked almost too well: with both the rich richer and the poor richer, American consumer demand has risen to 20% higher than before the pandemic. Many articles have pointed out that, were we to return to a more modest level of demand, the supply crisis would end. But Americans are rich and they believe in consumption. So, I doubt this reversion in consumer demand will come quickly.
The delta variant is currently raging through the countries that manufacture our goods, the poor and developing countries of Southeast Asia. Though Vietnam and Taiwan had both successfully warded off the first COVID-19 strain, with mortality rates in the single digits for most of the pandemic, the delta variant entered these countries late this summer and has overwhelmed them.
While Vietnam had virtually no deaths from COVID-19 prior to July 1st 2021, their mortality rate peaked at 350 deaths a day in September (Google provides these statistics).
Now, 88,000 have died of COVID-19. This is an immense loss of human life, all of whom could have been spared through vaccination, if vaccines were not hoarded by rich countries. And so, just as our economy crashed when Americans started dying, the same thing has happened in Vietnam. While America is richer than it was before the pandemic, Vietnam is now much poorer. And a country so poor, and facing such a crisis, cannot keep up with American demand.
These two forces, an absurd amount of demand from importing rich countries with a punishing crisis in exporting poor countries, made a supply chain crisis inevitable.
It also points to its eventual dissipation: Americans will spend their leftover cash reserves eventually, and Vietnam's vaccination rate has dizzyingly risen this last month, with 50% of the country now having one dose. When all of the countries that export our silicon chips, our energy, our clothes, our PS5s, and our furniture get vaccinated, the supply chain can heal.
But the supply chain crisis isn't a crisis for rich Americans. It is a crisis for Vietnam, a crisis engineered by the Biden Administration, and abetted by Republicans and Democrats with the same nationalist politics. America decided to steal the vaccine from poor countries that Americans rely upon for their much-beloved consumer goods.
What else could follow but a supply chain crisis?