(upbeat music) From the Watson Institute for International and Public Affairs at Brown University, this is Trending Globally. I'm Dan Richards. You remember the supply chain problems of 2020 and 2021? When the pandemic disrupted the world's ability to make and transport goods, leaving us with shortages of everything from surgical masks to infant formula. Well, it turns out the real story behind those shortages is much more complicated than that. And it has less to do with the pandemic and more to do with transformations to our economy that had been taking place over decades. Transformations that as our guest on this episode explains made companies more profitable, but our global supply chain much more fragile. This week, we're sharing an episode from another podcast at the Watson Institute. It's called "The Road Center Podcast" and it's hosted by political economist Mark Blithe. In this episode, Mark talks with Peter Goodman, a New York Times global economics correspondent and author of the book, "How the World Ran Out of Everything", inside the global supply chain. Mark and Peter discuss why the pandemic era shocks really occurred, what they looked like inside individual companies and what it all can tell us about the economic ideologies that have shaped our economy over the last few decades. Peter also makes the case that despite the lessons learned from the pandemic, we're at risk of running out of everything. Again, here is their conversation. - Hi, Peter, welcome to the pod. - Great to be here, Mark. - So you've written this book. It's called "How the World Ran Out of Everything", inside the global supply chain. Was it your editor that gave you that title? - I will confess that I came up with the title and I stole it from a story that I wrote in the New York Times that it originally had some more expansive, tedious title and then my editor shortened it to "How the World Ran Out of Everything" and I liked it and as soon as I pitched the book, I said that's gotta be the title. - Fair enough. 'Cause for me, this one word is not quite right. This is an English-American distinction, right? Is the distinction between how and why? - Right. - Because how to me signals a kind of mechanical question about like why something screwed up, right? I see and I said why, right? How something screwed up? Whereas why is the deeper reasons behind that? And what I loved about the book is that you go into the deeper reasons behind this because for you that it's not a question of just, you know, there was a pandemic, there was a supply chain crisis and I'm gonna walk you through that. There's much deeper fundamental causes in there, shareholder value, price gouging, lean production, all that sort of stuff. That's the real animus in this story. Let's start talking about this. - Sure. - Tell us about the lean Taliban. - Yeah, I appreciate your picking up on that. So I think people might be familiar with the concept of just in time, which is this very sensible idea pioneered by Toyota at the end of the Second World War. They're trying to dig out from the devastation of the war. There are capitals limited and they say, well, we can't do like Ford, we can't just mass assemble, you know, without limit. So they study the American supermarket and they say, we're gonna manage our inventory and production. The way a supermarket manages milk. You want enough milk on the shelves that nobody ever shows up and has to leave angry that they can't buy milk, but you don't wanna have so much that you're spilling lots of milk that's gone bad. We're gonna have our suppliers deliver what we need in real time on the assembly line and that way we won't have to have big warehouses. We're only gonna make as many cars as we need to replenish those that are sold. Very efficient, works really well. Toyota becomes, by many measures, the world's most successful car company. And then a long comes shareholder primacy. Financialization, if you will. I focus on McKinsey, one of the many business consulting companies that takes this sensible idea just in time. They turn it into lean manufacturing and other buzzwords and they go around to corporate executives who hire them, saying, here's the magic plan to make your share price go up forever. Instead of putting parts and components in warehouses as a hedge against inevitable trouble, let's just liquidate all that inventory. Take the savings, give it to yourself as a reward for being smart enough to hire McKinsey. So I talked to a guy who's working at this industrial engine factory in the 1980s in Minnesota and he describes how the kids from McKinsey show up in their slick suits all fresh out of Ivy League universities plus one older guy from the Chicago branch. And they say, listen, you know, you might have been doing this for a couple of decades and you might have Minnesota common sense, but we're here to tell you, you got to stop spending on things like $5 sheet metal brackets. So they run out of $5 sheet metal brackets and as a result, they end up paying extra to deliver these giant industrial generators to customers like hospitals. You know, talk about just in time. You have to install those with cranes. If you're not ready to go on that day, it cuts your bottom line. But when people protest, they discover that these McKinsey guys call themselves the lean Taliban. There are consequences if you cross them. So what could happen? Well, what could happen is, of course, what always happens. There's some sort of shock and then we have shortages and the pandemic wasn't the cause of this. This had been going on for decades, but it was kind of the ultimate reveal 'cause we go into the pandemic so lean that we don't have parts to make ventilators. We don't have basic protective gear. We don't have ingredients to make medicines. We don't have lots more frivolous things. You know, we run out of grape nuts cereal. We run out of toilet paper. We run out of tapioca beads for boba tea and on it goes. So I think most people are familiar with the first part of that story, which is to say, okay, there's a big supply shock, as we call it, right, called COVID. And we made loads of stuff in China and we were all like, oh my God, we don't even make our own protective clothing and all this sort of stuff. This is terrible. We need to do something about that. But you're really stressed and you're stressed that they're gonna wanna get into a bit more. No, there's a Wall Street angle on this. So let's think about the favorite metrics. How does pooling inventory off the shelf and liquidating it boost your share price? Let's do a little bit of the mechanics of how these two things intersect. - It's all about return on assets. So less inventory means less asset. So whatever you're taking in, your revenue, is now getting divided by a smaller number, which means you can say to Wall Street, look at that. Return on asset went up simply by, in the case of this particular generator factory, refusing to accept shipments of inventory right near the end of the quarter. In many cases, they stuck stuff out in the parking lot. I mean, this was totally on paper. But as a guy at London Business School put it to me in the middle of the pandemic. Yeah, that's all well and good. You make your return on asset go up. If you don't have the things you need to make a ventilator in the middle of a pandemic, you don't get to say, well, at least our share price is high. - But in a sense, they did, didn't they? I mean, ultimately, were there any consequences for this, for the companies themselves? - Well, there are operational consequences for the companies over time that will hurt society. The problem is that the trick keeps working over and over again. If you optimize your system to make share prices go up, and then by the way, you end up convincing lots of people who's no better that equity prices are the real economy, the trouble is it doesn't work if you're the person who's trying to buy infant formula, and you discover that there's one plant that makes half of it in the United States, and they've got a problem, and now you have no backup plant. So it works really well for investors, doesn't work so well for the rest of us. - So let's take it to a concrete example you talk about in the book, which is the beef industry. Now, there's a weird thing about the pandemic. I think a lot of people share, which is we have a collective amnesia about it, but there was actually a huge price spike in this. And one of the things you notice in the book and you talk about throughout is that these are highly concentrated markets, very few firms control these markets. There are very few, for example, in the beef industry, very few plants. You notice at one point there used to be 140 or thereabouts plants throughout the United States. So you kind of had redundancy in the system with local markets, et cetera. This has just been consolidated by one Brazilian firm, essentially, into four big plants that serve a huge part of America. So if one of these things go down, it's like one central node of failure, right? - Right. - So we've got the concentration story there. This is good for them in terms of they're able to control the market, push on profits, et cetera, squeeze their suppliers. We know this story. How does that kind of intersect with the Wall Street story you just told us? - Well, you know, the magic of the roll-up wave, the way companies like JBS Foods run by these two Fonnius, Brazilian brothers who literally served time in prison for the financial fraud that they used to gin up, the tens of billions of dollars. They used to buy up slaughterhouses all over the world, including the United States. The magic is they always say, well, we're serving consumers. And for decades, you know, from the time that Robert Bork, as a University of Chicago professor back in the '70s, told us that no merger should be opposed as long as it doesn't immediately lead to higher consumer prices. You know, this thinking has guided presidential administrations on both sides of the aisle, you know, both bushes, really right up until Biden changed the script. So the idea was consumers or investors are on the same side. You know, investors benefit from efficiency, consumers get lower prices. The only people who get hurt are workers, producers, nevermind that all of us are workers on some level. But now that doesn't even work anymore because the consumers are now getting hit as well. The only people winning are the investors. And what we see in the pandemic is, you know, you have record beef prices because we're all stuck at home dealing with our cooped up, you know, kids dealing with distance learning. We can't go to restaurants. Now we're cooking 27 meals a day, we're adding barbecues in our backyard. The price of beef goes through the roof. The supply is hit because a lot of slaughterhouses are affected by the pandemic. But ranchers who used to do well in such times are actually going out of business. They're increasingly selling off their herds. They're selling off their land. - So why is that? Why are they getting so squeezed? - Because four companies have 85% of the slaughterhouse capacity and they control the whole production chain. It used to be, you know, before the mergers, ranchers would have multiple options when their cows would get to the time that they had to be slaughtered. They could go to sale barns, there'd be, you know, old fashioned auctions where there were lots of different buyers competing. Now there's usually one player who will buy their cattle. And in the middle of the pandemic, the buying just stopped, the price went through the floor. And so lots of herds basically got liquidated. - Why did it go through the floor rather than go through the roof? Tell the story about the ranchers that you spoke to who only wanted was a buck 50 for the beef. What happened? - Yeah, so I spent time with this one family out in Montana, the charter family, and they raised their animals and then discovered that there was only one place willing to buy them. It was a JBS slaughterhouse down, there's one in Utah, there's one in Colorado. But basically they said, okay, we don't care that your breakeven point is a buck 35 a pound, the price is 90 cents a pound, take it or leave it. And the charters were completely outraged. And eventually they actually tried to bypass this giant integrated company by selling their beef directly to consumers in Montana, which was actually kind of a successful story, but even that didn't cover their cost of production. And by the time I talked to them, they were thinking about selling off their land. The long and short of the story is, ranchers used to get something like 60 cents on the dollar when we go to the store and we buy hamburger meat, and now they're getting around 35 cents a dollar and they can't make any money. - And yet when I go to the restaurant, and this happened to me a couple of weeks ago, I ordered a beef rib, guess how much the beef rib was in the restaurant? Here in Providence. - Here in Providence? - Yeah. - 70 bucks. - Not quite that bad. 45. - All right, I'm calling on me New York. - And your New York color is definitely the all right. But when you consider that like, it used to be 25. Now, let's go back to the original story, we've all been told, right? We lived through a supply shock, and then there was inflation. Luckily the central banks were on top of it, and they raised interest rates. That kept all of our price expectations anchored, and eventually we go out of it. What you're telling me is, nah, that's not what's going on at all, or at least there's something else going on here, which is you've got highly concentrated markets, where you've got pricing power, where you've got firms who are consciously squeezing it. And this is why people still say, well, you keep telling me inflation's going down, but it's 45 bucks for the beef rib. What's going on? - I mean, what's going on is you're paying for fatter dividends and share buybacks for publicly traded companies that have good shares of concentrated markets. And you know, it's worse than that. I mean, I tell the story of my book of this woman from Myanmar, Tin Eye, this refugee from Corrin country, who lived in a refugee camp in Thailand, with her daughter for 15 years, they come to the US, she gets a job at a slaughterhouse in Greeley, Colorado, owned by JBS Foods. And as the first wave of the pandemic happens, her daughter's begging her mother, please don't go to work, seems like perfect conditions for COVID to spread. Nobody has any PPE. You can't wear masks any way. Your safety glasses fog up. And her mom says, look, I don't have sick leave. And if I don't go to work, I can't pay the bills. So she keeps going. She gets COVID and she becomes one of the people in the first wave of the pandemic who dies. And this part of the story I knew when I started to write the book, well, what I subsequently discovered and what I reveal in the book is that, you know, part of the reason why those slaughterhouses are open is 'cause the Trump administration, parroted industry talking points, arguing that if women like Tin Eye didn't keep going to slaughterhouses, we would actually run out of meat. And at the time, what I learned in researching the book, meatpackers were sitting on record volumes of frozen meat. They were boosting exports around the world. Mike Pence was going around saying, listen, you know, we thank you for your heroism, keeping Americans fed. And by the way, if you stay home citing the pandemic, a slaughterhouse worker, you're not getting unemployment benefits. You're not getting food stamps. It was the carrot and the steak all in one. Basically, we sacrifice the lives of slaughterhouse workers to maintain and fatten profit margins to monopolist like JBS Foods. - And it's not just in beef. Let's talk about shipping. Part of the story that I really love this book, because I bought hook line and sinker, it was just simply containers in the wrong place. But there's another story of basically concentration in shipping markets and the shippers sticking it to everybody who needs to use them, right? - They win every time there's a shock. And I hope if my book works, you'll never again read a news story where the shipping companies are thinking, oh no, disruption as Houthi rebels are opening fire on our ships, we can't go through the sewers canal. Oh, what a tragedy dock workers are striking somewhere can't move cargo. That's really a problem because the punch line, it's not a very funny punch line, the end of every chapter of this book, including in shipping, is that they register record profits every time there's a shock to the system because there's engineered scarcity. There's three alliances of shipping carriers that control roughly 90% of the traffic on the most important routes between Asia and the west coast of the US and Asia and Europe. And every single time something happens, and the pandemic was a big thing that happened that messes up the system somewhere. Yeah, look, shipping containers were in the wrong places initially, but what the carriers have figured out is it gives them enormous pricing power. There's then anxiety in the marketplace. I mean, I follow in the book this one company that has this one all important 40 foot container to start up company that's making bath toys for Sesame Street, it's this Elmo theme doll made in China. They got to get it to Mississippi in time for the Christmas holiday season to 2021. And they're willing to pay anything to get their stuff on the ship 'cause they can't disappoint Sesame Street. Companies like Walmart, Target, Amazon, they can afford to charter their own ships. Huge companies like Columbia Sportsware, they can't miss the holiday season. So anxiety is a useful tool of pricing power for this unregulated international shipping cartel. And this explains why the price of moving a container from Shanghai to Los Angeles goes from about 2000 bucks before the pandemic to 25, 27, $28,000 on the spot market only six months into the pandemic. - And that's not just because the containers are in the wrong place. You detail in the book how the companies basically just cancel contracts. - They totally cancel contracts. I mean, they will say to large companies with contracts to move, and I was talking to flooring companies in Georgia that have contracts to move dozens of containers a month. And they would say, well, we know that, you know, your contracted rate is 5,000 bucks for a container from China to Savannah, Georgia. Unfortunately, there's no room on the ship. Oh, if you can pay a special handling charge, you know, an actual fund. - There will be room. There will be room on the same ship, right? Now, if this were happening-- - That's extortion, isn't that just extortion? - I mean, look, if this were happening in an industry that we all understand, I mean, if you could go to JFK for your flight to Glasgow, and the airline says, hey, unfortunately, despite your confirmed ticket, we don't have any room, but if you can pay 10 times as much-- - We're gonna do the same seat. - There'd be congressional hearings tonight. - Absolutely. - But this stuff is, oh, it's too complicated, and by the way, they're all foreign companies. And the incredible thing was I talked to the chair of the Federal Maritime Commission, this body that most people had never heard of, maybe they still haven't, who was tasked by the Biden administration with bringing the container companies to heal. And in a series of candid conversations I had with this guy, Dan Mafay, former congressman, he said, well, I'm a little nervous about pushing the carriers too hard, 'cause they're all foreign companies, and I'm afraid that maybe they won't serve the American market. - But then that would be commercial suicide, right? - Yeah, pause for your head to explode. - Yeah. - So whatever you think of the merits of the United States using its market power as the largest economy to basically get what it wants around the world, the idea that someone who's actually been tasked by the White House with stopping abuses that are in part responsible for inflation, you know what I'm saying? Well, I don't wanna upset the companies. I mean, maybe they'll all go to Mexico. - So you said in the book that I remember correctly, but 75% of everything in the US are raised by truck. The trucking companies are, again, a similar story. They'd managed to design their labor markets for their truck drivers such that they had 100% turnover year on year prior to the pandemic. What business model from hell makes that your business model? How did that even work? Let alone, why did it break? - It's a beautiful form of corporate welfare. You know, you basically make the lives of your drivers not only hellish. I mean, like driving the trucks always been hard, right? You go back to the '80s or '70s. - There wasn't a attempt to romanticize it with convoy that petered out in the early '80s with a television series called BG and the Beers. - Right, right, right. And then everyone was like, nah, I don't believe it. - Yeah, that's when I had a shortwave radio of my own. I was a seven-year-old talking to truckers on the highway. 10-4, good buddy. Yes, it was romanticized. And that's also a part of marketing pitch. So Carter deregulates trucking, right? So before deregulation, yeah, truck driving's really hard. Who wants to sit behind the wheel of a truck for 13 hours a day? You're tired, you're worried about caffeinating enough that you don't fall asleep at the wheel, but you're worried about having to pull over to use the restroom all the time. You're lonely, you're family. If you have one as mad that you're always on the road, that's always been true. But it was really well paid. You were solidly part of the middle class because there was a militant union that had your back that was limiting supply. So Carter deregulates, incomes, ironically, considering what we've been discussing about market concentration, so much competition that the job gets devalues. - This is one of the intellects as well. - Same thing, right. So now the job is not only hellish, but it's poorly paid. So they start running out of people to do it. So they have this recruitment campaign, B.J. and the Bear, the open road, a sense of carawack thrown in there. Nevermind that what you're really seeing is just like the semi-service end of every city in America that looks exactly the same. It's like one long run of Applebee's, super stores. - Microwave hot dogs, terrible coffee on their exercise, the whole lot. - And no place to park your truck. That's what guys are constantly thinking about. So it's hard to recruit. So they get the federal government and even state governments to start subsidizing their training programs and they engage in the sort of predatory shenanigans that we're familiar with from the subprime mortgage fiasco. - How does that work? - You know, they say, well, we will pay for your training. You'll then be obligated to drive for us for two years and nevermind that you could have gone to a community college and gotten the same certificate to drive a truck at a fraction of the cost. And then they sell you on, hey, why use our truck? You should work for yourself. We'll lease you the truck. It turns out you're spending $150,000 to buy a truck that you could have gotten for $90,000. You're locked into service contracts where you can only service your vehicle at outfits that are affiliated with the truck. - Oh my God. - So this explains why the turnover is like 100%. And so they're constantly trying to come up with new reasons to bring more people into the fold. So the latest, right before the pandemic was, let's drop the allowable driving range down to 18. What a fantastic idea. Let's hand the keys to a 53 foot tractor trailer that takes more than the length of a football field to stop, loaded up with God knows what, to an 18 year old and send him on the road from the lead side. - Right, that'll really end well. - Yes, that's a good one. - So that's the model is constantly come up with ways to decry a shortage. I'm putting that in air quotes. I mean, when you have a shortage of a certain type of worker for decades, what you've basically done is downgraded the working conditions to such a point that nobody's willing to sign up for the deal. - So to bring this back to what we were talking about earlier, the logical, rational and reasonable thing to do would be to pay them better and stop exploiting a hell out of them. But if you did that, what would happen to your key Wall Street metrics? - Well, Wall Street might not be so happy about that. It might mean that somebody's gonna have to give up margin somewhere, which from a policy standpoint, if we had competition, wouldn't be a bad thing at all. You know, let's compete. And by the way, consumers will eventually benefit for more efficiency, but we got to remember that so many of the markets that we're talking about have monopoly power priced in. So the normal situation, we're always talking about when will we get back to normal. Normal involves exploiting the hell out of people who often require government assistance. Even though they're working their butts off, they need food stamps to feed their families. And meanwhile, we're paying fat dividends to monopoly companies. So the consumer is like three steps removed from actually getting the benefit out of whatever competition there is. Competition is felt fiercely by drivers who are seeing over the decades their working conditions down. - So we have exploitive competition in the beef sector, which you can generalize to chicken. You can generalize to the egg market. There's a couple of players, Tyson, et cetera. You've mentioned, right. And then we have the trucking industry, just as concentrated, or has that sort of got more going on? - The trucking industry actually has a fair bit of competition. Trucking is different from shipping and rail in that that's an area where we need more workplace safety regulations. I mean, it's not classic competition policy. I mean, in rail and shipping, we just don't have enough competition. - But there's no way that a firm in that more competitive market could then say, here's my competitive move, I'm gonna pay people better because if it does, it hits their bottom line. And then if they're at least publicly traded, then that's gonna be bad news for them. So it just leads to a race to the bottom. - 100%. - You mentioned railways, I do want to get into that. - Sure. - That's again, it's another story of concentration and the people who running it taking advantage of the situation. It wasn't that the box cars were in the wrong place and it wasn't that the workers didn't want to work. What actually happened? - Well, in many cases, the box cars were in the wrong place, but it was by design and it was because of precisely the perverse shareholder incentives that we've discussed. So there was the equivalent of just in time on the rails. This is a precision scheduled railroading, which is a fancy way of saying, let's fire a lot of rail workers, let's force the remaining rail workers to do more than ever. So they're on the road for longer, they can't be home for the births of children, they can't take spouses for surgery. They're effectively on call all the time, though they're only paid for their actual hours work. The trains are longer than ever, though we've limited service. And so every time there's a disaster, it's a bigger disaster than previously. And the ultimate story that I dug up that explains how precision scheduled railroading works for the interests of the shareholder and against the interests of everybody else, is I talked to this engineer for Union Pacific, big rail operation out West, and he was horrified to discover that he was pulling cars routinely to the wrong destinations. And this was because the metric that the rail companies were selling to Wall Street was dwell time. This is how long is cargo sitting in any particular spot? And they promised Wall Street that they would drive down dwell time. So this turns into the imperative for a guy running a Union Pacific rail yard in Nebraska. I don't care where the next train is going. Wherever it's going, I'm attaching as many cars to it as possible. I'll worry about the details later, because I'm doing my part to lower dwell time. So this stuff that's meant to go to California is going to Nebraska and then has to be routed to California by going back to Chicago. And so long as it's moving, nobody cares. Exactly. But somewhere, there's, you know, somebody trying to get their car fixed and the auto parts are stuck in Nebraska when they're supposed to be in California. There's some couple trying to get paint to finish their kitchen renovation. Oh, whoops, the paint manufacturer can't make their products because one of the chemicals is held up on this truck. So here's an example of how efficiency. You know, we're now being sold this idea that what we can have there have resilience or efficiency. We've had efficiency, resilience is going to cost more money or we willing to pay for it. This is the, this is the sort of framing of those who benefit from the status quo. It's worth remembering that efficiency has never been all that it's cracked up to be. Efficient for whom? It's good if you want dwell time to go down so your share price goes up. If you're actually waiting for something, that's inefficient. So to bring this all together, what you're book gives us is a story of corporations following a set of incentives which are clearly designed to basically enrich themselves and their shareholders. This is common across all these sectors. And then when the pandemic hits, this is an opportunity to push on prices and produce excess profits. And we see this in sector after sector. The profits have never been higher. Right. So you're sort of an economic journalist for the New York Times. You've been around the block for a long time. You've spoken to a lot of people, right? Why is it that sort of mainstream economists, at least some of them, and a lot of the central bank crowd, et cetera, are really allergic to the notion that the inflation that we just went through was exactly caused by these factors. Yeah. I think that it's fair to say that people who are card-carrying economists are so fond of their models that they just are reluctant to get into the messiness of market concentration. It's like, that's for historians. First of all, you know, we've had free trade. We've had liberalized trade. We've got the magic of the market. You know, never find that we're now enough removed from the great financial crisis, the great recession that anybody who's gone outside anytime in the last couple of decades and had ample reason to doubt that story. But I think in the academic ranks, we're still full of people who very reflexively go to supply and demand. You know, obviously, supply and demand does explain lots of stuff that's happening economically. But, you know, if you listen to earnings calls as everyone who writes about the economy ought to do, the corporate executives themselves, or they're saying the quiet part allowed. Like, they don't want to tell us publicly that they're-- Did you want to tell their investors what they are? It's called lighted to tell their investors that they can pass on their costs and then some. And this is a trick that gets repeated again and again. Absolutely. Let's try and bring it to a bit of a close here by being more global. Have we fixed any of this? We fixed some of this in that there's now a serious conversation about resilience. There are real companies, you know, the biggest company. You know, Walmart is now honestly moving some of their production out of places like China to areas of industry that are closer to their markets. You know, there's a big push to move production to Mexico. There's a real look at India, which doesn't deal with the shipping problem, but deals with the fact that we've, you know, kind of over concentrated a lot of production in China. But I am dubious that fundamentally we fixed any of this because the same incentives that have time and again replicated this problem of going to the cheapest producer, thinking about the next quarter instead of the resilience of the company. You know, they're still in place. I mean, if you're running a publicly traded company today, yeah, you have to pay some lip service to, instead of just in time, we need to do just in case, even McKinsey's running around saying this now. But listen, if you put redundancy in your supply chain, if you go buy from a supplier who's closer to home, but maybe a little more expensive, you are diluting your earnings in the next quarter. And if everyone else in your industry isn't doing that, the investors are going to notice, and there's a good chance you're going to lose your job. Whereas if you're saying, yeah, resilience, but meanwhile, just doubling down on the ever cheaper China price, because China's not worried about, you know, their own employment, their own growth, the China price is actually low again. Well, there's a good chance that 10 years from now, somebody else will write a book about the next shock, and there's an equally good chance that you'll have cast your stock options. You'll be hoisting a cocktail. It will line on a hammock on some beautiful beach. Those incentives have not changed, and so we should be very skeptical that the right lessons have been learned. - But what about the incentives for companies themselves, not just moving to Vietnam or trying to get closer to home? What about the railroads? Are they still the same? What about, you know, the beef sector? Is it just as concentrated? Are ranchers getting any relief? Is there any move to recognize that concentration and market power are real political problems? - I mean, there've been a bunch of congressional hearings. Lena Kahn at the Federal Trade Commission has opened inquiries into the meat industry. The Biden administration has talked about the shipping industry. But whether this will lead to the sort to follow through, I mean, these are cases that will take years in an atmosphere where the financial incentives are the same for the people running companies and the incentives for those companies to contribute to campaigns where they can get, you know, what they want. I mean, let's note that as Kamala Harris, our raises Trump headed towards this all-important presidential election, there's a lot of talk that the tech people who are writing checks are gonna demand that you fire Lena Kahn, the chair of the Federal Trade Commission, you know, will that happen? Who knows? The optics would be bad, but certainly that's out there as part of the conversation. So the conversation has changed. Whether real action will change is not something we can say with certainty now. - The world might run out of everything again. - Oh, count on it. I mean, the only thing we can say with certainty there will be a shock. We don't know what it will be. We don't know when it will be. But bad stuff happens. That's life. And we will be vulnerable to these same breakdowns. You know, Henry Ford, his story, I also tell him the book is an incredibly problematic character, racist, anti-Semite, crushed, organized labor, but did know a thing or two about supply chains. And he said, any company that's premised on low wage labor is inherently unstable. And that's something that we really need to keep in mind. We've been invited to not think about the army of workers who are behind what happens when we click the buy button on Amazon and wait, sometimes just for a few hours for a package to show up. Well, those people are there. Their lives are increasingly untenable. And if we want that package to show up reliably, if we wanna be able to get stuff like medicine and PPE and ventilators in the middle of a pandemic or whatever thing it is we're gonna end up needing in the next emergency. We gotta give some thought to having the people engaged in the enterprise feel like it's worth their time and to be motivated to show up. - That's a great place to leave it. Thanks very much, Bill. - Thanks so much. (upbeat music) - This episode was produced by me, Dan Richards and Zach Hirsch, Production Assistance from Eric Emma. If you enjoyed this episode, be sure to subscribe to the Road Center podcast wherever you listen to podcasts. And if you haven't subscribed to Trending Globally as well, please do that too. If you have any questions or comments or ideas for guests or topics for the show, send us an email at trending globally@brown.edu. Again, that's all one word, trending globally at brown.edu. We'll be back in two weeks with another episode of Trending Globally. Thanks. (upbeat music) (upbeat music) (gentle music)
