Shortly after President Biden sat down with top executives from Wal-Mart, a handful of regional grocers and others to hold a "round table" to discuss "supply chain" issues, the FTC announced Monday afternoon that it would launch an investigation into the factors contributing to these types of disruptions, which have been blamed for contributing to inflation by helping to drive up prices.
Just as reports claimed the supply chain crunch appears to finally be waning, President Biden sicced the FTC on the issue. Once again, it's bureaucracy to the rescue; and anybody who doesn't go along with the Biden Administration's preferred narrative (ie that this is part of a global phenomenon, and that the US isn't unique) better hope the administration doesn't accidentally make things worse.
At any rate, it's bureaucracy to the rescue.
And we don't say that because we think America's ports need assistance (they clearly do). The problem is that the supply chain crunch goes far beyond the ships and the ports and the truckers. It's what an economist might call a "complex"" issue.
While President Biden met with a senior Wal-Mart executive in person, and in front of the cameras, as part of Monday's "supply chain round table" at the White House, Bloomberg says it is ordering large retailers, wholesalers and consumer good suppliers including Amazon and Walmart to provide the White House with "detailed information" that might aid in a newly launched inquiry into the ongoing supply chain disruptions that are contributing to President Biden's inflation (or should we say, reflation?) fears.
In addition to Wal-Mart and Amazon, the investigation will target Kroger, Associated Wholesale Grocers, McLane, Procter & Gamble, Tyson Foods, Kraft Heinz and others who are expected to receive their orders from the FTC on Monday. Firms have 45 days to respond.
It's believed the administration intended this is a message to companies everywhere: don't raise your prices unless you absolutely need to, because the White House will be checking the receipts, waiting to bust anybody who can even be remotely construed engaging in price gouging.
According to BBG, information being sought by FTC includes primary factors disrupting their ability to obtain, transport and distribute products, impact of those disruptions on delayed or canceled orders, increased costs and prices, what firms are doing to curb disruptions.
The study will focus on determining whether supply chain problems have led to bottlenecks, anti-competitive practices or higher prices, the agency said in a statement.
FTC Chair Lina Khan said in a statement she was hopeful that the study would "shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects."
The FTC is also asking firms to return the information it's requesting as soon as possible. Firms will have 45 days from the date they receive the order to respond.
"Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber," FTC Chair Lina Khan said in a statement announcing the investigation.
President Biden and his team clearly intended Monday's "round table" with "supply chain" executives like the leaders of Wal-Mart, Food Lion and others as a distraction. Readers can watch the "round table", held at the White House Monday afternoon, at their convenience.
But allow us to save you some time, because, at the end of the day, Biden doesn't need their help.
But he may need them to pay higher taxes, on top of rising costs and expenses for their businesses, to help offset the costs of his social spending package which is expected to further stoke inflation.