The Chris Voss Show - The Chris Voss Show Podcast – How the World Ran Out of Everything: Inside the Global Supply Chain by Peter S. Goodman

Episode Date: June 30, 2024

How the World Ran Out of Everything: Inside the Global Supply Chain by Peter S. Goodman https://amzn.to/3VFzJca By the New York Times’s Global Economics Correspondent, an extraordinary journey to understand the worldwide supply chain—exposing both the fascinating pathways of manufacturing and transportation that bring products to your doorstep, and the ruthless business logic that has left local communities at the mercy of a complex and fragile network for their basic necessities. "A tale that will change how you look at the world." —Mark Leibovich One of Foreign Policy's "Most Anticipated Books of 2024" How does the wealthiest country on earth run out of protective gear in the middle of a public health catastrophe? How do its parents find themselves unable to locate crucially needed infant formula? How do its largest companies spend billions of dollars making cars that no one can drive for a lack of chips? The last few years have radically highlighted the intricacy and fragility of the global supply chain. Enormous ships were stuck at sea, warehouses overflowed, and delivery trucks stalled. The result was a scarcity of everything from breakfast cereal to medical devices, from frivolous goods to lifesaving necessities. And while the scale of the pandemic shock was unprecedented, it underscored the troubling reality that the system was fundamentally at risk of descending into chaos all along. And it still is. Sabotaged by financial interests, loss of transparency in markets, and worsening working conditions for the people tasked with keeping the gears turning, our global supply chain has become perpetually on the brink of collapse. In How the World Ran Out of Everything, award-winning journalist Peter S. Goodman reveals the fascinating innerworkings of our supply chain and the factors that have led to its constant, dangerous vulnerability. His reporting takes readers deep into the elaborate system, showcasing the triumphs and struggles of the human players who operate it—from factories in Asia and an almond grower in Northern California, to a group of striking railroad workers in Texas, to a truck driver who Goodman accompanies across hundreds of miles of the Great Plains. Through their stories, Goodman weaves a powerful argument for reforming a supply chain to become truly reliable and resilient, demanding a radical redrawing of the bargain between labor and shareholders, and deeper attention paid to how we get the things we need. From one of the most respected economic journalists working today, How the World Ran Out of Everything is a fiercely smart, deeply informative look at how our supply chain operates, and why its reform is crucial—not only to avoid dysfunction in our day to day lives, but to protect the fate of our global fortunes. About the author Peter S. Goodman is the global economic correspondent for The New York Times, based in New York. Over the course of three decades in journalism, Goodman has covered some of the most momentous economic transformations and upheavals – the global financial crisis of 2008 and the Great Recession, as the Times' national economic correspondent; the emergence of China into a global superpower as the Shanghai bureau chief for The Washington Post; the advent of the Web followed by the dot-com crash as a technology reporter for the Post, based in Washington. During a five year stint in London for the Times, he wrote about Brexit, the rise of right-wing populism in Europe, the crises in Turkey in Argentina, the endurance of economic apartheid in South Africa, the struggles of migrant workers in the Persian Gulf, the tragic failure of land reform in the Philippines, and the catastrophe of the coronavirus pandemic. Goodman has reported from more than 40 countries, including stints in conflict zones such as Iraq, Cambodia, Sudan and East Timor. ​ He has been recognized with some of journalism’s top honors, including two Gerald Loeb awards,

You wanted the best. You've got the best podcast. The hottest podcast in the world. The Chris Voss Show. The preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready. Get ready. Strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, folks. This is Voss here from thechrisvossshow.com.

There you go, ladies and gentlemen. This shrill iron Lady sings it and wakes everyone up and tells them it's time to get ready for the show as well. Welcome to the big show. As always, folks, we have the most smartest, most brightest minds, the brilliant authors, the Pulitzer Prize winners, the CEOs, the presidential advisors, the billionaires. All the smartest people are on this show except for me. We have returning guest Peter S. Goodman on the show. You've probably seen him all over TV. He's been doing his tours for his latest book that just came out June 11th, 2024.

It is called How the World Ran Out of Everything Inside the Global Supply Chain. And we'll be talking about his insights and the story of how it all happened and went down. You may have remembered running out of toilet paper three or four years ago. Or has it been four years? Oh, my God. It seems like yesterday. I don't want it to be. Peter S. Goodman is the global economic correspondent for the New York Times based in New York.

I would hope so. Over the course of three decades in journalism, Goodman has covered some of the most momentous economic transformations and upheavals, the global financial crisis of 2008, and the Great Recession as the Times National Economic Correspondent, the emergence of China into a global superpower as the Shanghai Bureau Chief for the Washington Post, or what we like to fondly call the WAPO. The advent of the web, he found and followed by the dot-com crash technology reporter for the Post, based in Washington, and during a five-year stint in London for the Times, he wrote about Brexit, the rise of right-wing populism in Europe. Boy, that turned out really good for them over there in Europe.

The crisis in Turkey, in Argentina, the endurance of economic apartheid in South Africa. I'm not hanging out with him because he seems to be where all the problems pop up. Peter, are you there after the problems start or before the problems start? Yeah, if you figure out what my next gig is, go short it now. That would be my advice to everyone. Yeah, yeah. It seems like you're where all the troubles are. It does seem like I show up right after everything has gone kablooey.

This is a familiar spot for me. Yeah, yeah. How's your marriage doing? Anyway, I'm just kidding. I don't even know if you're married. But yeah, I'm just always going to, like, if you're walking down the street, I'm just going to stay 10 feet behind you. I think that's a good policy. So, Peter, giveinsure.com, where can you find you on the internet?

You know, the usual places. Twitter, still calling it that. Peter S. Goodman. Facebook, same thing. LinkedIn, Peter S. Goodman. And my website is PeterSGoodman.com. There you go. So, what prompted you to write this new book on how we ran out of everything?

Basically, I had no desire to write a book about anything. I had barely begun my last book, Davos Man, How the Billionaires Devoured the World. And it was early 2020, and we were living in London under the first lockdown, and our third child was born. My wife was pretty stoic about the fact that her parents couldn't fly in from New York to help out with the baby. She was okay about the fact that I had to leave the hospital after an hour. But then we got home.

We couldn't take him to a pediatrician. That was all shut down. She could accept that. We tried to order diapers. We tried to order hand sanitizer, face masks. We couldn't get any of these things. We couldn't find toilet paper. We tried to order the components, the ingredients to make our own hand sanitizer we were shut out and at that point

i watched my wife break down i mean it was like at the moment at which we needed it more than any time in our lives this thing that we don't normally think about at all the supply chain i mean what a wonky term that normally would make people's eyes glaze over. It's sort of like we don't think about the electrical system when we flip on the light switch. It's just there. But when we turn it on, it fails. And for everyone, and we're all in the dark, then we give it a thought. And that's how it was for me with the global supply chain. I started to write a lot of stories about different aspects of that failure, the shipping crisis, when I moved back to the States, rail and trucking, and started to see

that I had a book that was essentially the outgrowth of 25 years of reporting starting in China. And to sort of tell it at length, how had this happened? How would we run out of personal protective gear in the middle of a pandemic? How would the United States, the world's wealthiest country, become dependent upon a single country, China, that we not incidentally were having a trade war with for basic things like the ingredients needed to make pharmaceuticals? That was really the genesis of the book. There you go. And there's some rumors that may have began in China.

Thanks, China. I think they suffered the most from it, though, didn't they? That's a complicated subject. My book doesn't really wrestle with that. China actually did very well with very stringent lockdowns that I don't think any of us would want to live through. Initially, I mean, China had problems because they botched the vaccination and wouldn't buy the most effective vaccines. And then there was very slow uptake of vaccines. So they got absolutely hammered when they eventually lifted those zero COVID restrictions much later. No, for a while, they looked like they were doing better than most countries.

Yeah. And I think it seemed like it extended to them longer. They were still having issues long after everybody kind of wrapped their thing, I think. Largely because the rest of us built up herd immunity by getting it. And they didn't have as many cases in China. You would think they would have. I guess that that's right since they were doing such hard lockdowns i remember when people really got sick of the lockdowns and they were like starting to lose some control there and i'm like oh that's gonna get weird if you haven't already give us a 30,000

overview of how did we run out of everything essentially we made ourselves dependent upon these long supply chains spanning oceans. And we pretended that shipping containers would be forever reliable and basically free, as the CEO of Columbia Sportswear once put it to me. So we put ourselves in this position where we had a supply chain that was really governed by investor interests and not resilience. China enters the WTO just as U.S. companies in particular are shifting lots of production to China to take advantage of low costs. And then over the years, we just move more and more production there without giving much of a thought to backup plans while we embrace something called just-in-time manufacturing, lean manufacturing, this idea that we don't have to stash parts and components in warehouses as a hedge against

trouble. We'll just rely on container ships and the internet to summon what we need in real time. So every time there was a shock, yeah, every time something does go wrong, because that's how life works, we run out of stuff. and the pandemic really just revealed those vulnerabilities that had been there building for decades and decades. Yeah. I mean, it was the perfect storm, technically, when you really think about it, I suppose. Yeah, it was, but it wasn't the first time. I mean, the first time I ever wrote about a supply chain shock

was back in 1999. There was an earthquake in Taiwan. Taiwan was already a big source of computer chips. There were shortages for a couple months, and people said maybe we're overdoing it, entrusting this one island 90 miles off the coast of China that happens to claim it as part of its territory as the place to make the brains of modern products. And nobody really listened much to that after we forgot about it. Fukushima nuclear disaster in 2011 in Japan, shortages of electronics and computer chips as well for years after. More voices saying, we got to spread this

stuff around. We can't just be reliant on single countries. Again, nobody really listened because it was too enticing for publicly traded companies in particular to just go to the lowest cost place the place where you could make things at greatest scale and that typically was china there you go and and so we're running around back to the book but let's talk about you for a little bit how did you grow up what influenced you how did you get into being a journalist you know you've written a lot of great books and oh thanks and discussed a of stuff. And we went through a hell of a bio there. I was kind of, is there anything this guy hasn't been on top of when it comes to crises? Tell us about your journey.

What made you motivated to become a journalist and stuff? Yeah, sure. I grew up in New York, went west for college, went to Reed College in Portland, Oregon. I was kind of an activist there and pretty quickly figured out that life seemed a little more complicated than it did to my activist friends. Not many problems can be divided neatly into binaries. These people are good. Those people are evil. Decided it would be more interesting to chronicle and dig analytically. And I'm a storyteller by nature. I'd always been interested in journalism as a kid. So after college,

I did something that I thought would just be fun and interesting. It wasn't like, this will be my career. I went off to Southeast Asia. First went to Japan, actually. Got a job writing features for an English language paper called The Japan Times. Then moved to Southeast Asia, spent some time in the Philippines, lived for a couple of years in Indonesia, was freelancing for a bunch of papers around the world, mostly in the US and the UK and in Hong Kong. And then I came back to the States because I realized that being a freelancer in Southeast Asia meant that I'd spend much of my life just sending invoices to the Australian for $35 in filing charges.

I'd be sitting in the only international phone office in Phnom Penh, Cambodia, spending literally $17 a minute, this is in the time of the US embargo, to file stories by fax to the Atlanta Journal-Constitution. So I'd fax my story, and then I'd wait, and I'd call them in an hour, did you get my story? No, we didn't. Could you try that again? And I'd basically jump off the bridge. Meanwhile, the Washington Post, New York Times, LA Times people, they were out having some wonderful dinner somewhere, sleeping in a comfortable. That seemed like a better deal than I had. So I went back to the States and worked for a time up in Alaska at the Anchorage Daily News, which was a huge amount of fun, covered a then unknown member of the Wasilla

City Council by the name of Sarah Palin. I knew that was coming. Yeah. And then I was fortunate enough to get hired at the Washington Post. Spent 10 wonderful years at the Washington Post. They sent me to China, went to the New York Times, and here we are. There you go. The WAPO and the New York Post.

Washington Post. Washington Post. No New York Post for me. Oh. Thank you very much. There you go. Wait, did I say the Washington Post? The WAPO. The WAPO and the New York Post. Washington Post. No New York Post for me. Oh. Thank you very much. There you go. Yeah. Wait, did I say the Washington Post? The WAPO.

You said the WAPO and the New York Post. No New York Post. Oh, I said New York Post. Yeah. The New York Times. Yeah. Brain fart I was having there. No worries.

We had the. That movie, the paper. We had one of the editors, the senior editors of the New York Post on, or New York Post. What the fuck am I doing, man? Am I having a brain hemorrhage? Of the WAPO, the Washington Post. or two parts what the fuck am i doing man i'm having a brain hemorrhage of the wapo the washington post and it was it was a couple days after trump had demanded the dossiers or he had announced they're making dossiers on all the all the washington post people and so when i had them

on i'd made up a fake binder of of their binder i said you know we got this from the white house today because you know trump has your dossiers they're making i go really and i go yeah we got your binder here and i opened up and it said wapo bad cofefe and we all had a good laugh over it was a great it was a great prop so back to the book and i actually want to get a question here on the davos book because we had you on in 2022, I believe. For Davos, man, how the billionaires devoured the world. So I guess you got that solved, right? It hasn't gotten worse where the billionaires have just devoured more?

How's that working out? It doesn't seem like the billionaires are suffering. Yeah, if you're staying up nights worrying about the fate of the billionaires, I think you can safely sleep peacefully. I mean, Elon seems to be struggling. He needs needs more money he's kind of become like a god he just he's always broke he's bad with money or something i don't know i don't know which god he would be if you're thinking greek gods i they may have to amount to rescue i don't know what was sde the let's see back to your book the newest one and and actually it was kind of funny how the billionaires you know how they that how they strode through through covet did you cover any

that in your book you know they're escaping to yachts and stuff the billionaire class is not front and center in my book the way it is in davos man this book how the world ran out of everything but but the two books are definitely related i mean davos man tells the story of how essentially we have allowed billionaires to perpetuate this myth that not only are they the source of a lot of innovation and i think they take credit for that but that they're the good guys and we don't have to regulate them we don't have to tax them if we just get out of the way we streamline government we can allow them to solve all of our problems, big and small. You know, climate change, gender, racial injustice.

You know, this will all just magically go away if we let the billionaires be the good people they are. And this is kind of elaborate prophylactic against change and people exercising democracy. So in How the World Ran Out of Everything, I'm looking specifically at how supply chains have been affected very directly by unregulated pursuit of shareholder interest. I'll give you just an example that comes to mind. Rail, American rail. The story of railroads in the United States is basically the story of first the robber barons and now publicly traded companies pursuing monopoly and catering to their investors beyond the interest of their customers. In the middle of the pandemic, when rail is kind of buckling under enormous demand, there are all these factory goods coming in from Asia because we're cooped up in our homes. Oh, and by the way, people running publicly traded companies,

they really got it wrong. They really blew it in terms of their forecast of what would happen. They slashed orders for all sorts of things, thinking that it's an economic downturn. We're going to be out of work. We're not going to offices. We're not going to need as much stuff. Of course, we're not going to offices, but now our bedrooms are offices. So we need desk chairs in our bedrooms. Our kids are not going to school. Now we have to cook 27 meals a day for them. We have to entertain them. We're adding trampolines to our backyard if we're lucky enough to have those. Barbecues. We're not going to the gym. So we're buying Pelotons, sticking them in our basements. And the whole supply chain kind of buckles in the face of this surge of factory goods coming in, mostly from Asia.

In the middle of this, rail is especially hard hit. I talked to an engineer in Idaho who tells me that he's horrified to discover that he is pulling rail cars to the wrong places. And this is not by accident. This is not incompetence. This isn't that they're over. This is that the railroads are intently focused on giving Wall Street what it wants. Wall Street will buy shares in railroad stocks if they lower dwell time. That's the amount of time cargo sits in any one place.

So there's some guy running the rail yard in Nebraska who decides wherever the next train's going, I'm attaching as many trains as I possibly can. I'm getting the cargo out of here on that next train, wherever it's going so I can lower dwell time. Nevermind that some of this stuff, auto parts, for example, supposed to be going to California. Now they're going to Oregon because that's the next train. And somebody, of course, is waiting for their car to get repaired. So that's the bridge between these two books. The billionaire class has given us these highly engineered solutions to their own problems, which essentially amounts to anything

that makes share prices go up. And in the supply chain context, that helps us understand why somebody in California can't get their car repaired. Why some factory in Delaware that makes paint can't get the chemical they need. They might have 299 of the 300 chemicals they need, but one chemical stuck on some rail car so they can't make paint so the family that's trying to you know renovate their kitchen they can't find the shade of paint they want and so on into by the way much more important things like medical devices oh yeah of course protective gear this is how we run out of all this yeah the the protective gear things where you had what was it certain

states were just making deals on the side and flying things in and the trump administration just like hey just it's a free-for-all just go for it and the prices they were paying because you know there wasn't a federal buying system to regulate prices i mean it was really fucking crazy there with the mass situation but i mean i, the real question there is, how did we become dependent on one country that's on the other side of the ocean that's linked by container ship? And then again, it's not a minor consideration. We're having a trade war with four basic protective gear in the middle of a pandemic. I mean, the answer to the how question is in Davos, man, the most direct consequences and where we're supposed to go from here is in this new book.

There you go. And you called it a propel, propel aftik for success. So prophylactic against change. So not only do you get book people, you get birth control. So there you go. So at one point in the book, you, you, you go truck driving, truck riding, truck driving, hitchhiking or something. Tell us about that. Yeah, I spent three days in a truck with a truck driver going from Kansas City down to Dallas and back. I did that because one of the reasons why these supply chain shortages were so bad, we kept hearing, we don't have enough truck drivers. We've got the shortage of truck drivers, as if people who used to do this have just lost their appetite for doing it. In some

ways, that's actually true. We've run out of people willing to sign off on the miserable terms that are involved in driving a truck. I decided to see that for myself, climbed in the cab, spent a couple of nights sleeping in a bunk in the cab and discovered that it is indeed a job that you would not do if you could find something else to do that could pay. And it used to pay really well. It used to pay really well. It's always been a good job. I mean, it's always been a tough job. You're away from your family, you're on the road, you're eating crappy food, it's hard to get exercise. I mean, the thing that really hit me was truck drivers are spending a lot of their time just kind of chewing on, where the hell am I going to park this thing?

Where am I going to spend the night? And how am I going to satisfy the federal rules on how much rest I get while picking a good place to spend the night? And how do I caffeinate enough that I don't fall asleep at the wheel, but not so much that I've constantly got to pull over to use the restroom. I mean, this is what these guys were thinking about. And I'll tell you, I will never drive past a tractor trailer on the highway again without giving a thought to the person in the cab. Yeah, it's a hard business.

In fact, we just had Frank Fugluzian for his book about all the truckers they're hunting for. There's 500 truckers in there looking for some of these trucker killers. And it's having me thinking about trucking, too, where I'm not stopping at any rest stops anytime soon. I mean, you know, though, we've got 10 million people with commercial driver's licenses. We only need about a third of that many, but somehow we keep running out of them.

I mean, what's really going on is the trucking industry has got their hands in our pockets. I mean, they're trying to get the federal government to continue, and states in some cases, to keep subsidizing the training programs for new recruits so that they can widen the pool so they can keep finding people to sign off on low pay, very little control over your hours. I mean, the irony is we live in this just-in-time world where a millisecond is crucial in terms of getting things to assembly lines just in time, products to shelves just in time. And we treat these truck drivers like their own time is like unlimited and valueless. They'll sit for hours at warehouses waiting for their stuff to be loaded. They don't get paid for that time. They get paid for the miles they drive and and and you know that's really a major reason why we've had

these shortages is that we put ourselves in the hands of these people who are just exploited and the minute there's a shock and there's something else to do they go find something else to do wasn't there issues with you know wages and different things at the at the yards that that pull the containers off the ships and stuff wasn't there issues there too you mean the warehouses or you mean that on the dock workers the dock stockyards that you know they have the big cranes that pull the the boxes off the ship and and i think i'd heard that they had they had fallen back expecting a supply dip and and turns well the dock workers are some of the only people in the whole supply chain who actually are pretty well paid and that's because they've

got a militant bunch of unions and and you know what you know good for them it's a it's an incredibly dangerous job people get crushed i mean i spent time with a guy who runs one of the unions down in Long Beach, California, the Twin Ports of LA and Long Beach. That's the gateway for 40% of all the products that are imported to the United States that arrive by container. He said, I've spent a lot of my life going to knock on doors of my union brother's house to explain to somebody's spouse and their kids that they're not coming home tonight because the container falls. It's an incredibly dangerous job. And over time, these guys have managed to use the fact that they're a major choke point for

international trade in their favor. And a lot of people criticize them for it. I mean, retailers talk about them like they're the you know, the trolls under the bridge. Truck drivers will speak very disparagingly about the dock workers. But I don't know. And right in the book, I sort of came around to sort of like pointing at the one tree that didn't get burned up in the forest fire and saying, you know, what the hell are you doing standing there still. It's like these guys have actually managed to protect themselves against the forces that have downgraded so many jobs and turned so many previously middle class people into working poor people or just flat out poor people with no jobs at all. And more than a sign of somehow like gluttonous stock workers menacing the

supply chain, they're really a sign of how if the rest of the supply chain paid better, it would be more reliable. I mean, I tell the story of Henry Ford in the book. He's a problematic character for all sorts of reasons, but he knew a thing or two about supply chains. And he famously doubled wages for his assembly line workers back in 1914. Some people called him a communist. He said, no, I'm a capitalist. I'm trying to make my products yeah and i i know i i need people showing up for work without stress over how they're paying their bills and he specifically said any business that's built on dependence on low-wage labor is inherently unstable it's true and so do so now i guess do you get into is the term on shoring that we're doing now

it seems like we're moving more stuff to like mexico and other places now that's near shoring yeah i end the book with near some people talk about reshoring bringing manufacturing back to the u.s it's a good thing it's happening to some degree in the margins but it's not the solution to our supply chain vulnerabilities because we're not going to roll the clock back to a time when, I mean, how far back you want to go? We had no trade at all. You and me wouldn't be sitting here having this conversation, be out hunting or fishing or hacking bark off trees, hoping to feed our family with that if need be.

Trade has got us a lot of progress and it's built a lot of wealth. We just haven't done a very good job sharing it. And we've done an especially poor job looking after people who've lost their jobs to trade, a couple of million workers who've lost jobs most directly after China entered the WTO. So we shouldn't be looking to dump globalization, but we got to reconfigure it so it's less vulnerable. And certainly one way that's happening is some companies are moving production from China to places like Mexico, which is, of course, within reach of the American market by rail, by highway. We're not just dependent on container shipping. We're not having a big trade war with Mexico. So that is part of the solution.

And then in terms of reshoring, Biden administration is spending tens of billions of dollars on subsidies to try to encourage companies to make computer chips, electric vehicles in the States. And some of that is happening, and some of that is quite welcome. Yeah. What do you think about Taiwan? Do you talk about Taiwan in the book?

I mean, China just got done talk about taiwan in the book i mean you know china just got done having drills over there in the south china sea to kind of threaten them i mean when you understand the trip the chip situation i mean china china goes after them it really kind of locks down a lot of the chips and in that we need everybody needs including you know things that ruin our ships and our machines. If we were having a serious, sensible conversation about how to configure the supply chain, no one would say, here's an idea.

Let's take the brains of all modern products, computer chips, and concentrate the most important ones on this one island that's on the other side of the Pacific Ocean from the world's largest economy. And by the way, let's make sure that Island is 90 miles off the coast of another giant country that claims it as part of its own territory. I don't think anyone would sign up for that. Yeah.

Including one that's you know, helping a war, helping a war with Russia, our other enemy and North Korea. And so, yeah, but you know, hopefully that with the chip act and all the things we're doing you know we're moving in the right direction but yeah maybe it was a good i mean it was a good lesson for us to learn that we may might not want to be selling everything that china or you know letting china run our run our lives so much i i fear that we're taking away the wrong lessons i mean you listen to the political debate like we hardly agree about anything in the united states but one thing i would agree about that okay we agree on something yeah you know one thing that another thing i should say that we

do agree about is that china's our enemy and china's this you know job stealing juggernaut i mean let's remember why american factory jobs went to China. It wasn't because Beijing stole them. It was because American companies that wanted to lower the costs of production so they can have fatter margins so executives could pay nicer salaries to themselves moved those jobs. And this is a story that is not new. I mean, you go back to the building of the railroads in the 19th century, and the railroad magnates actively recruited Chinese laborers. They brought them over to undercut local labor, mostly Irish people at that point. They wanted to undercut unions. They were eager to find people who were so desperate for work that they wouldn't

complain about unsafe conditions. And there's really a straight line from there to Walmart, the world's largest retailer from the supposed sentinel of capitalism, going over to form what I call the most important joint venture in the history of the global economy. And that is with the People's Republic of China. In China, they found a country where labor unions are banned, where you can get around workplace safety and environmental standards by cutting in a local Communist Party official. And this is something we've done to ourselves. It's not something that got done to us. And so the lessons have been there for decades on how this could put us in harm's way. I mean, we already undermine

wages for working people. And as we've already discussed, there have been other supply chain shocks, but we've continued with this mode of China-centric globalization because it's been good for the investor class. And hopefully, I mean, there is some movement now to diversify a little bit away from just China. I just came back from a couple of weeks in India, looking at how Walmart in particular, but other big retailers are moving production from China to India. But the incentives are still in place. I mean, if you're a corporate executive

and you're talking about moving production or building an extra factory or putting more parts in warehouses, you're basically diluting next quarter's earnings and you're putting a target on your back. And if you say, I don't care about getting insurance against some other shock, it's probably not happening on my watch in the next quarter. Let's just keep going cheap. Someday that will be revealed as folly. And by then, if you're lucky, you'll be sleeping in a hammock on some beach with a cocktail in your hands yeah that's the real key you just want to make sure that you get that golden parachute before that happens again and you just you're off doing whatever you're doing

short-term thinking is still with us there you go you mean humans are still running things not just any humans look if you and me were running a railroad i i assume i don't know what your priorities are i wouldn't be sending cargo to the wrong places i mean it's not humans it's it's humans answering to i mean it's fiduciary responsibility a fancy way of saying we're not thinking about humans we're not thinking about workers we're not thinking about customers we're thinking about the bottom line we're thinking about some line item on a spreadsheet. I mean, if it were humans, we'd be doing it better, which is why I think the biggest takeaway, and I don't think consumers are going to save us from the vulnerabilities in the global supply chain. We're busy with our kids.

We're busy with our jobs. But I think we can relate as consumers to it's a good idea to try to give your business to people you know in your community who actually do care about humans. I mean, if you've got a drug prescription to fill, CVS is not headquartered in your town, and they can't afford to be particularly generous to workers because their competitors aren't whereas your local pharmacist probably knows their workers and you know goes to the you know birthday parties of some of those workers and knows their kids and and actually has a human interest in making things better which by the way makes them more reliable yeah my local pharmacist knows me he gets all my good stuff the one on the corner? That's what we're talking about, right? So final question for you.

I don't know if you talk about this in the book. Is AI going to be able to save us from ourselves or for the global supply chain utilizing AI? AI is useful for the global supply chain because, I mean, one of the problems with the global supply chain is we call it that, and it implies that like a bunch of wizards went up on a mountaintop and really thought deeply about how to design the supply chain. We call it that, and it implies that a bunch of wizards went up on a mountaintop and really thought deeply about how to design the supply chain so it would work best. And that's not what happened at all. I mean, it's a bunch of overlapping systems, transportation systems, manufacturing systems that sometimes conflict, sometimes don't know anything about what the other one's doing. There's a lot of deregulation in there. Yeah, it's a lot of duct tape. It's jury rigged. It's rickety in places.

And so could AI help? Sure. I mean, AI could figure out where inefficiencies are. And, you know, automation and technology, these are, I mean, we're human beings. We're going to dream up ways to make things work better.

The question is, who's in charge of it? And in some societies where there's national healthcare, where there's social safety nets, it's much easier to introduce things like AI. I remember years ago, I was in Sweden talking to these workers at this mine where they were piloting self-driving trucks. And I asked them, how do you feel about it? And as an American, I expected they'd be horrified by this. It's a threat to their paychecks. Oh no, we're fine with it. It makes our company more efficient, then we'll make more money and we'll get more wages. And if our jobs are gone, well, they'll train us for something else. And this was not some

utopian fantasy. This was based on their lived experience because in Sweden, unions are powerful. They negotiate with employers associations. They get wage increases that track productivity increases. Whereas the American worker can legitimately say, that's a threat to my job. I don't want any part of that. I mean, I don't have national health care. Nobody's going to help train me for the next job. We have this thing called trade adjustment assistance, but we don't have that's worked

out in places like the Rust Belt, really underfunded. People used to work with their hands and make 20 bucks an hour and now lucky to make 12 bucks an hour in some warehouse at Walmart. The question again is who is going to be in charge of introducing it and for whose benefit? Yeah. My understanding is Ronald Reagan was the one who got all the companies to go to China and his, his, and it was part of his union breaking policy. You know, I mean, the first thing he did was, was break the unions of the, was the flight. Air traffic control. Air traffic control. Yeah. You know, actually a lot of the deregulation begins earlier under Carter and, and a lot of the monopoly power that I write about in the book, you know, continues from Reagan on forward through every administration.

I mean, I think Clinton has a lot to do with how factory production goes to China. I mean, Clinton cut the WTO deal, flips from criticizing his predecessor, George H.W. Bush, for coddling the butchers of Beijing. And then Clinton actually goes to Beijing. And I tell the story in the book is, you know, at this banquet at the Great Hall, the people literally crossed the street from Tiananmen Square. And he's, you know, mugging for the camera, salutes Jiang Zemin, the president of China, congratulates him for progress, is now lobbying to get China into the World Trade Organization because retailers really like it. And he even, in a great flourish, picks up the baton as the People's Liberation Orchestra band is playing for his pleasure that night

and conducts them. The PLA, the institution that opened fire on the protestor detainment square. And here's Bill Clinton conducting the band. Boys, speaking as an author metaphors don't get better than that one yeah yeah did he hit on any did he hit on any chicks while he was there anyway that's a lewinsky joke the and then of course nafta right with clinton nafta yeah nafta clinton was the one who ultimately cut the deal yeah that's right yeah there you go this has been wonderful peter give us your final thoughts

pitch out for people to order up your book and dot com where people can find you on the interwebs yeah you can find me again at peter s goodman dot com on twitter at peter s goodman linkedin peter s goodman and you can find my book anywhere it's called how the world ran out of everything inside the global supply chain audible's got it amazon's got it your local bookstore i hope has it and if they don't tell them to get it yeah itunes wherever you like kindle and hopefully they always keep it stuck because it would be ironic to run out of this book that's right actually it had a long lead time because we were worried about supply chain problems that's true you know i published my book in 2021 and and yeah there was people coming on the show back then,

and I would have a copy of their book, and they'd be like, it might have happened when you came on. And I would have a copy of their book, and I'm like, hey, yeah, I got your book here. And they're like, really? What does it look like? I haven't seen it yet because the supply chain has got to. Right. Order it extra and early, people. You know, the holiday season is closer than you think.

There you go. Give it away to all your friends, neighbors, relatives. And it comes with a prophylactic, too, as well. So, Peter, thank you for coming on the show. We really appreciate it. Thanks so much, Chris. It's always fun. Thank you.

What up, folks? Wherever the fine books are sold, June 11, 2024, it came out. How the world ran out of everything inside the global supply chain. I'm still scarred from running out of toilet paper. Thanks, my audience, for tuning in. Go to goodreads.com, 4ChestChristmas, LinkedIn.com, 4ChestChristmas, YouTube.com, 4ChestChristmas.

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