Commentary -- Not Ready For Prime Time -- October 26, 2022

The note below was generated following several discussions with different folks.

It is not ready for prime time and subject to editing.

There are two issues that have perplexed me for quite some time.

1. The shortage of workers in the US.

2. The supply chain shortage.

My nephew was in town. He and his wife are software engineers at a large IT corporation in Minneapolis area. They have worked themselves to pretty high levels in the organization.

He and I talked at length on lots of issues over the past two days.

He has thought about those two issues because at his level, they affect him and his company significantly.

For two years they have been unable to fill employee positions and it does not seem to be getting any better. Much of what I wrote about this subject on the blog yesterday was from our conversation Monday evening.

Second issue: the supply chain issue has really perplexed me and I asked him about that. I could not believe that free market capitalism couldn't have solved this problem over the past two years.

From his vantage point, the supply chain issue does not begin in the US. It begins in 3rd world countries where the basic materials like lithium (and silicon? ) come from.

I posted a chart yesterday on the blog; these raw materials come from China and Russia and Africa. And the vast majority is from China.

I know that a significant percent (50%) of Americans think the Covid-19 vaccines are worthless, and even if not worthless, probably no more effective than the "seasonal flu" vaccines, which are perhaps only 45% to 50% effective. Whatever that means. But that's fine.

However, it's very clear that the vaccines in the US do work. Even if only 50% effective -- again, whatever that means -- vaccines interrupt the spread of infection.

Interestingly, even more important, is this, the perception of things working. The fact that "we" have vaccines and we have antiviral medication to treat folks with viral pneumonia (regardless of virus) gives the government and businesses and childcare centers and schools "wiggle room" / options to stay open even if there are periodic spikes in the number of infections.

It allows "us" -- the US -- to go back to work without forcing a net-zero policy which China has. China has only one option, one tool in their toolbox, and it's a hammer. Shut down the entire city or the entire factory even if only a handful of folks test positive, never mind if they are symptomatic or even infectious.

One can't get to "net-zero" --whatever that means -- and so whenever there's even a small outbreak, the school that is affected, or the factory that is affected, in China, must shut down.

So, if China is providing 50% of the world's lithium at half a dozen mines and there's even a very, very small outbreak at one of the mines, that mine is shut down.

When a Foxconn factory is subject to shut down due to a small outbreak, it makes headlines, Tim Cook is on the phone, and the government and Foxconn try to figure out how to keep operations going.

On the other hand, when a mine is shut down, "no one" knows about it. There are no headlines and some US CEO with "no name" recognition calls and the Chinese mine operator won't even take the phone call.

Now, the really, really bad news. China has its own Covid-19 vaccine and it's considered completely ineffective. No matter how ineffective the US vaccines are, the Chinese vaccines at orders of magnitude less effective. The Chinese vaccine doesn't work and everyone knows that. In other words, we have a country -- China -- that supplies the world with the majority of raw supplies; has an impossible net-zero policy; and no vaccine.

RBN Energy talks about it today in their daily blog, and it's been discussed elsewhere but "no one gets it" yet. The earliest "they" talk about any relief is 2025.