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Supply Chain Disruptions Continue To Interrupt Business Operations

Increasing domestic manufacturing capabilities through licensing freedom and red tape reduction can be an investment in future economic security.

Global business operations have been obstructed for over two years by supply chain woes. The pandemic is often cited as the origination of the disruption, with the United States consuming Chinese products en masse and Chinese manufacturing still being held up by severe economic lockdowns.

Some product shortages have subsided since the early days of the pandemic, with semiconductors identified as an adopter for returning some manufacturing to the United States. Automotive production is one industry severely hampered by inaccessible semiconductor stocks, forcing delays on vehicle delivery across the country.

One product shortage that impacted many households towards the beginning of the pandemic was paper. Some businesses have been able to shift a great deal of communications to digital platforms, paper still remains a major necessity for certain operations. From printer paper to toilet paper, paper shortages are still a major influence of operational disruptions.

Envelopes are impossible without paper, and pre-made envelopes are proving difficult to source. The Southwest Public Policy Institute is being directly impacted by the envelope/paper shortage. An order for envelopes on August 8th would normally have been shipped by August 15th. However, due to “industry-wide supply chain disruptions and labor shortages” turnaround time was updated requiring 6-9 additional days.

The envelopes in question are not fancy. They are a non-custom run-of-the-mill 9″ x 12″ envelope, which SPPI will be using to deliver whitepapers and reports to state legislatures throughout the region as well as periodic updates to supporters of the Institute.

One of the largest print manufacturers in the country, with six production facilities stretching from coast-to-coast, is unable to source envelopes. Asked where the bottleneck was, the company responded “paper”, and that domestically-sourced and foreign papers were both hard to come by. “We get it wherever we can,” replied the representative. Even inks are scarce.

Bringing responsible forestry and more paper production to the United States, as well as returning other vital industries, will improve national security and ensure that domestic business operations are less susceptible to global fluctuations in supply.

Jerry Pacheco with the International Business Accelerator, a nonprofit trade counseling program of the New Mexico Small Business Development Centers Network, has long argued for the need to protect the security interests of the United States by increasing domestic manufacturing capabilities.

It will take time to reestablish strategic industries back in the U.S.

“It will take time to reestablish strategic industries back in the U.S., and in our two North American partners, Mexico and Canada,” says Pacheco in his recent Albuquerque Journal column. “The U.S.-Mexico-Canada Agreement can provide a vehicle for the three partners to secure our economic future and to hedge against future unknowns, such as environmental crises or war in foreign countries. Some people may complain that U.S. consumers will be paying more in the long run, due to higher production costs.”

We agree. While domestic production can lead to higher production costs, thus increasing the final price to consumers, the American Southwest can lead the way in cutting red tape. Reducing barriers to entry means competition, and competition means lower prices and better products, potentially rendering moot the long-term concerns of higher costs for domestic products.

States like New Mexico make it more difficult to even start a business, with the Secretary of State’s office taking over three weeks to process new business applications. Other states, like Delaware, offer expedited processing, allowing for new businesses to start up overnight.

Whether for national security, local economic development, or for securing industrial supply chains, making moves towards licensing freedom and red tape reduction in states like Idaho has helped lead to population booms and economic growth. Additional factors like a qualified work force to attract new businesses, better K-12 schooling options to attract new families, and higher levels of public safety are proven population and business migration motivators.

Which state in the American Southwest will set the new standard? Texas already has a confident lead.

By Patrick M. Brenner

Patrick Brenner is the founder and president of the Southwest Public Policy Institute, a limited-government research institute and think tank focused on the southwestern United States. An advocate for open government, he leads the institute's government transparency and accountability efforts.

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