National Planning is Like Hiking on a Rough Trail

It’s the Half-Hidden Roots and Rocks that Will Trip You Up

 Three Key Elements Most of Us Seldom Think About

The global economic, production, and transport disruptions caused by COVID and the war started by Russia have brought to the front some important elements of life and security that are often overlooked until they become a crisis.

To their credit, the Biden administration saw these as concerns early on, and have moved early and aggressively in the face of these recent escalations.

But we are in no way out of the woods on any of them. Getting well will require a long term and focused effort, including resources. Congress, unfortunately, is a key player in this; so far, they have not risen to the occasion.

Here are some sleepers that have recently become loudly awake.

Key Components Manufacturing

If decisions about where to manufacture something is made only on the most short-term economic factors, pretty well nothing will be manufactured in the USA. And that has been the trend for some years.

As consumers, you and I have endorsed that approach more often than not. As taxpayers, we have not been encouraging about using tax dollars to involve the government is such decisions where that can be avoided.

For a lot of products, that is fine, although with many social and economic implications. But someone should be keeping track of manufactured items that are essential for national security and economic insurance and making sure we have at least some capacities in these items.

The best known example today is the high end chips that drive automation. Our military is completely dependent on these chips, as are other critical sectors. Not one is manufactured in the US. Most key chips come from Taiwan or China. We should all lose some sleep on this one.

The Biden administration has legislation proposed to dig us out of this hole in part and industry is ready to invest heavily once the legislation passes. It may not pass – Republicans are holding it hostage to ensure no tax increases are passed on the wealthy. A new low in shortsightedness.

Industrial Surge Capacity

An economy enamored with just in time cost management is unlikely to invest much in capacities to surge when needed. That is understandable for the most part, but the two crises mentioned at the start of this post demonstrate where such shortfalls are dangerous.

We not only lacked the capacity to surge medical production when COVID hit; there were really no plans on what it would take – in time, materiel, and money- to surge. There were not many plans ready to be activated.

In the defense sector, I am delighted we are arming Ukraine at the level we are. I hope we keep it up and grow the list. But for just one example, they are consuming in a week what our industrial capacity to manufacture takes a year to produce.

Again, not much on the shelf in the way of surge planning or capacity. It’s a risk worth taking for now, but it’s not a risk we should have to assume.

If we as taxpayers need to take a financial hit to ensure a reasonable surge capacity, so be it. Unlikely but not impossible (especially given their own shortages) to imagine Russia deciding to risk it all by expanding the war in Europe. Or China deciding now is the time to attack Taiwan.

Our cupboards are close to bear in a worrisome long list of items, with effectively no surge capacity in some of them. Let’s pay the piper and breath a little easier that we can surge when needed.

Rare Earth Minerals and Related Materiels

 There are natural materials absolutely essential to modern life. Lithium is a well-recognized example. So much of the electric car and other electric items depend on lithium batteries.

Unfortunately, most lithium comes from China and a fair amount from Russia. There are many other items just like this – essential and coming from hostile powers.

Some work is ongoing in this area of concern. A number of efforts are ongoing to find lithium in the US and elsewhere. Other efforts are under way to find ways to synthesize lithium or to replace it with other materials.

But the overall list of such critical elements is long, and I do not see much evidence that cutting these risks has the priority it should have in government or industry. We live on borrowed time and the willingness of others not to pull the trigger on us. Not smart.

          Bill Clontz

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