Saturday, March 28, 2020

Gas Lines, Flour, and PPE

I remember the gas lines in the 1970's when OPEC embargoed oil.  Everyone panicked.  Gas is essential after all. So we all got into lines at gas stations, and we filled our tanks. Every time the gas gauge got down to about half full, we got back in line again.  The effect was to aggravate the shortage, because the amount of gasoline sloshing around in car tanks increased, not to mention the gas wasted idling in long lines. The supply of gas had gone down but hoarding increased the demand.

We're seeing similar effects with Covid-19. People are stocking up  on flour and toilet paper. It's not quite as foolish as it might seem.  John Phipps has tweeted out his concerns that the food supply chains are adapted to supply restaurants and fast food chains with a sizable portion of our food consumption.  The dollars spent between home and restaurant are about equal, but of course it's more expensive to eat out. 

So flour mills would be supplying a large amount to the bakeries which supply hamburger buns and sub rolls. And since a good deal of our elimination of wastes occurs outside the home in normal times, the paper products people are set up to supply the middlemen. This means our current shortages in the supermarkets result from two causes: the fill-the-tank syndrome, stocking up for future disaster'; a slow change in the adaptation of supply chains. Obviously we don't need more food or toilet paper.

The medical community is dealing with shortages of  PPE (*personal protection equipment"), masks, gowns, etc. and other essentials like ventilators.  Here the cause seems to be; we do need more PPE., but countries and people are doing "fill-the-tank" hoarding.

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