The Grand Illusion
From even before the founding of the United States, Americans, in general, have been an impatient lot, and technology has made us even more impatient. With the arrival of cellphones, Amazon, and the internet, more and more people want what they want now, regardless of reality.
My wife, the music professor, encounters this all the time, with students who just want to Google an answer or who want to sing better instantly. They don’t want to hear that learning how to work out the answer develops skills that they need. Nor do they understand that it takes time to train muscles to produce the best singing, or to learn music – because, whether in a musical or in opera, you can’t Google the music while you’re on stage.
But the problems of wanting instant results also bleed into other areas. A few years ago, if you had the money – or the financing – you could go to a car dealer or other sources and get a car of your choice, or close to it, in days, if not hours. Now, depending on the make and model, people may have to wait months. Assembling parts and systems to produce a car takes most manufacturers around two workdays, but what gets overlooked is that the average car consists of around 30,000 parts, which come from different sources, and all of those parts take time to manufacture and ship to the assembly plant, and after assembly, the finished car has to be transported to a dealer. But until COVID disrupted the supply of certain critical computer chips, very few people understood or cared how long the entire process for building a car took. They just paid their money or financing and got a vehicle quickly.
Most products – even produce – get to the end consumer in a similar fashion, and most consumers don’t give the slightest thought to the process, or to the fact that nothing of value is produced instantly, even information on the internet.
The problem arises when there are glitches in the system… or when the system can’t produce the desired results. But the present system is relatively recent, especially historically.
I’m old enough to remember when the only items most people bought on credit were homes and cars. I didn’t even get a credit card until several years after I graduated from college, and in those times, it was difficult for women to get credit cards in their own names. Most people could only get what they could pay for in cash or check, and often you had to save for a time to afford large purchases.
Credit cards and then the internet changed all that, and, curmudgeon that I am, I’m not so sure that the instant credit and purchase system serves most people all that well, especially given the massive growth in personal debt and the seemingly ever-growing anger when instant gratification is denied.
On the car thing – it used to be you walked on a dealers lot, and you had a choice of what they had in stock. If you wanted blue but they had red, tough luck, go elsewhere.
Fifteen years ago, most dealers had skilled techs who would quickly add or remove custom items to a vehicle to adapt them to customer needs. Those techs are largely gone now. Combine that with the modern economic concept of carrying the bare minimum of stock on hand and the increasing complexity of a modern vehicle, and it gets assembled for you at the factory and shipped to your dealer. Eventually.
The recent floods in my area were a disaster for the dealerships on the floodplains – thousands of electric cars drowned just as they were due to be collected, which means their prospective owners went from the front to the back of the queue – the cars would have to be custom made again.
Having driven one briefly before, when my PT Cruiser died during COVID, I got a used (2 y/o then) Kia Sportage (delivered!), having driven one briefly before and heard good things about Kia dealers. The local dealer can no longer support an express lane where you get there early; everything is appointments (not just them, even haircut walk-ins are problematic now). But their service is still very good; they do stick to recommending the recommended, but resist the temptation to do anything not necessary; they plugged rather than replaced a tire with a slow leak that was otherwise ok, for example; and the list of what they always check is extensive.
Supply chains are still a mess, that shows even in huge supermarkets like Wegmans (northeast regional), with what’s gone or only intermittently available.
But the loss of skilled labor due to either death, health problems, or people that might have waited to retire but didn’t due to the pandemic, is perhaps worse and longer to recover from than the lack of resilience due to just-in-time low inventory supply chains. It’s maybe worse in places that were trying to get by with the least of the more skilled people; but even a nearby Wendy’s, nominally open til midnight, seldom takes anything but delivery orders now after 11pm.
And to make it worse, there’s a move toward a 4 day workweek. Yes, the rest of life is important too; but it seems that after so many of the most able and hardworking have left the workplace, it’s not the best time to be going in that direction.
Instant gratification is fragile at best; but any economy needs to not lose its work ethic, or it will be in trouble.
I gather there is pressure to diversify production away from China, esp. for critical supply chains. That’s good and overdue; hopefully some of it will come back here, if we haven’t totally priced ourselves out of the market and the will to work. Taiwan is a scary situation, with the premier chipi fab TSMC so vulnerable. They’re building plants in the US, but apparently frustrated with the red tape required. And in the Phoenix area, the water supply is problematic where large growth of both population and industry is concerned.
From what I’ve read, the biggest issue TSMC is having with their Phoenix plant is the unavailability of skilled and experienced workers. They’ve now had to postpone the opening of the fab by a year while they fly employees in from Taiwan to train up new employees on how to install and operate their cutting-edge technology equipment.
Which does sort of get back to your point…when all the US chip fabs closed in favor of ostensibly cheaper overseas sites, we also lost all the experienced workers.
I have gotten cynical in my old age. Credit cards are not for the people but just a new version of the company store. Lenders want people to have them because people in need carry a balance, can never pay it off, and pay a huge fee for carrying the balance. It also means that people are able to impulse buy which makes businesses happy.
American workers didn’t price themselves out of the market. CEOs and other executives decided to build up their egos and their bank accounts by sending manufacturing elsewhere. It worked in the short term but ask GE about the long term. In the moment it doesn’t seem to have improved global security either. It also seems to have affected the global climate for the worse as well.
This is an important topic that most people don’t know much about and/or take for granted. When the pandemic hit I was absolutely sure some of the high tech corporacions were going to implode due to supply chain disruptions. I was all too surprised that did not happen nearly to the extent I thought. It’s entirely likely that many large companies had wisely kept stock of critical components/intermediates in their supply chains or had some upstrem suppliers do that for them.
As some on this blog might know, I retired from a large pharma firm. One of our cancer products had a one year time from from the start of manufacture of a complex sequence of processes until the finished product could be placed on the market. Components for that manufacture came from around the globe as do those of other products that are even somewhat complex and (maybe) finished or ‘made’ in the USA. Only the simplist products will be able to claim that they are fully made in the USA if one considers cradle to grave manufacture. That’s why an isolationist stratgey is a terrible idea. The former guy has recently proposed an across the board import tarriff of 10% on all imported goods from all countries if he gets elected. I suspect that will quickly get walked back because it’s insane.
I remember when working for McDonalds a few decades ago, there was a regular breakfast customer who always ordered coffee with cream “…if I can get it”. That impressed on me the importance of appreciating what is available and accepting with good grace if it is not.