The Rationing Is Already Here

Excuse me, sir, do you have pomegranate liqueur?”

“I don’t have anything! I can’t get anything! I can’t even get bourbon! Everything is running out!”

This was the conversation I had yesterday with a merchant at my favorite liquor store. I was…rather alarmed. He went on to explain that the distributors come to visit him but always with bad news. They don’t have anything to sell. Why come visit? It’s their job. They make the rounds but without any product.

He is not wrong. How long before we face government-imposed rationing? It is already here. Pennsylvania and Virginia have state-run liquor stores. These states have imposed buying limits on bottled liquors. Two bottles per day. If you are having a big party, plan in advance. Or lower your expectations, as they say today.

I asked the man what he sees as the problem. He says it is all about the clogging at the ports. The product is there but no one can get it. It’s not just the finished product. It’s the bottles that the breweries and distilleries need just to package up their product and sell it. So it just sits there in barrels, waiting and waiting. Everyone is losing money.

Most of those bottles come from Mexico or overseas, which accounts for why even products made in America are still sitting on the shelves of manufacturers. The supply constraints are pushing up prices, alongside rising demand stemming from the floods of money pumped out by the Fed to back outrageous spending by Congress, all designed to pump up the appearance of continued prosperity even as the economy had come to a standstill.

There is an additional labor problem. The man working the cash register – he was the only person in the store – is also the owner. He is always there, from 9am to 10pm. Odd, right? Remember how business owners are supposed to get rich and hire other people to do their work? Well, he has had a “Now hiring” sign on his window for months but cannot keep employees. They walk out suddenly and don’t come back. There are no new ones to hire. If someone does stop by, they make outrageous salary demands and then fail background checks.

I asked him what accounts for the labor shortage. He said that the lockdowns showed millions of people that they can get by without working. The government dumped money into their bank accounts. Young people moved home, or rented three-bedroom apartments, stuck six people in there, shared the rent, and discovered that they can live very cheaply and even become richer than they’ve ever been, even without a job.

That was his analysis.

The lady at the Dollar General – the only person working this shift – said something very similar but slightly darker. She believes that there is this general demoralization in the air. People now lack the will to work or take pride in a job. If government can disemploy people randomly or impose shot mandates on them as a condition of employment, where is the dignity we once associated with work and employment?

In her view, there is a growing nihilism (she didn’t use that word but I will) that has generally taken away the individual drive to succeed.

In other words, we are facing the perfect storm, and it is hitting from every direction. The ports are clogged even as inflationary pressure is driving up prices of basically everything. Laborers have dropped out, 4.3 million of them. The flow of goods is slowing more by the day, and consumers are starting to notice.

Stores are frantically moving shelves further apart to disguise the growing shortages. They don’t like empty shelves because that inspires hoarding. Consumers are pretty sensitive at this point. Anything can trigger panic buying. Suddenly all detergent is gone. Suddenly all paper towels are gone. Suddenly the milk is gone. When people spot that they start buying anything and everything. When others come in and notice the shortages, they quickly hurry off to another store and the place loses business.

Empty shelves are indeed bad for business. They will disguise them as long as possible until they cannot do so anymore. We are getting to that point.

Diapers, glass, liquor, beer, wine, lotions, makeup, creams, milk, plywood, aluminum, hammers, candy, flour, salt, spices, heaters, dishwashers, shopping bags, candles, plastic wrap – it can be anything. At this point it is unpredictable, and varies store to store. Fast-food places are running short on cups and lids. Even straws and ketchup packages. Most of this stuff is stuck in the ports in crates. Some of it hasn’t shipped at all. The more shortages there are, the higher the prices go.

There are two major factors behind the clogged ports. The first is a lack of people to drive trucks. They are living on government largess and generally demoralized by vaccine mandates and high regulations on their driver habits pushed by the Department of Transportation. Truckers have to use an app to clock their drives and it regulates how much they can drive in a day. Too annoying. So after lockdowns, many people just stopped working.

In addition, there are far fewer domestic flights now, so those cannot be relied upon for moving goods around the country. The cancellations are continuing too. This is one reason that the demand for trucks and truckers is so high, just as there are extreme shortages in people to move the goods.

Another factor is missing funds to pay for the chassis to move containers from the boat to the trucks. These used to be paid for by the shippers but when lockdowns froze international commerce for weeks and months, major providers stopped their contracts. When they started again, to save money to make up for billions in losses, they stopped paying for this extended piece of their work. No one now wants that hot potato because they are all trying to reduce costs to keep from rising prices.

These kinds of dislocations are pervasive in the global economy today. It’s a stunning experience for basically everyone who is alive. We’ve never seen a situation in which the basic functioning of supply chains has been so broken down. We’ve never had to think about ports, cargo, crates, and the labor required to get goods from here to there and finally to us. It’s always been there for us. No question. Suddenly, as in a novel, it has slowed to a crawl and stopped for many goods.

It was a very strange moment when this week the spokesperson for the president defended inflation and shortages as a high-class problem. She explained that higher prices are merely a sign that economic activity is picking up. People are buying things and that’s good. Of course that pushes up prices, she said. Just deal with it. As for “high class” what these people mean is not that it is only affecting the well-to-do; they mean that it is a first-world problem about which they care not.

And so right on cue – things are moving very fast these days – the Washington Post has published an op-ed by one of its regular contributors (Micheline Maynard) with one message: get used to it. She says that we have come to expect too much for the economy. “Across the country, Americans’ expectations of speedy service and easy access to consumer products have been crushed like a Styrofoam container in a trash compactor,” she writes. “Time for some new, more realistic expectations.”

For example, she writes of the candy shortage. The milk shortage. The everything shortage. Then she concludes: “Rather than living constantly on the verge of throwing a fit, and risking taking it out on overwhelmed servers, struggling shop owners or late-arriving delivery people, we’d do ourselves a favor by consciously lowering expectations.”

How bad can it get? She saves the best for the very end:

“American consumers might have been spoiled, but generations of them have also dealt with shortages of some kind — gasoline in the 1970s, food rationing in the 1940s, housing in the 1920s when cities such as Detroit were booming. Now it’s our turn to make adjustments.”

The defense of gas lines is bad enough. More astonishingly, she is going on about the glorious suffering of wartime…when food was rationed with rationing tickets! You cannot make this stuff up. What’s worse, that the Washington Post published it reveals something about what they imagine could be our future. Given what they say in public, I wonder what they say in private.

In the past when things went wrong, at least our leaders admitted that things were not going so well. They tried to fix the problem. It’s not clear that our current leadership in Washington even believes it is a problem. The response toward existing inflation and shortages is telling.

It doesn’t matter how bad it gets. Our leaders will never admit failure. They will look at the disaster they are creating and call it success. This is what is truly chilling about the unfolding issues: they do not believe it is a crisis.

The failure to admit the enormous and shocking policy failures of the last two years is costing us dearly. The refusal to reverse course and re-embrace fundamentals of freedom and human rights is setting the stage for outcomes even more grim than what we have heretofore experienced.

At some point, it’s going to be back to bathtub gin.

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This article was originally published by The Brownstone Institute and was reprinted with the author's permission.

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