Do Americans really believe that our politicians are going to provide thoughtful well-considered answers to how we get our economy back on track? For example, notes James Freeman in the WSJ, the Senate minority leader went from arguing that “the President is such a threat to the republic that he must be removed from office to demanding that Mr. Trump seize more power over the U.S. economy.”
Supply Chain, Not Psychology
For those who think the average citizen cannot be counted on to wisely keep calm and carry on, there’s a hopeful story suggesting that Americans have not been panicking lately as much as one might think. Will Oremus writes in Medium that there’s an “entirely logical explanation for why stores have run out of toilet paper — one that has gone oddly overlooked in the vast majority of media coverage. It has nothing to do with psychology and everything to do with supply chains.”
According to Mr. Oremus:
In short, the toilet paper industry is split into two, largely separate markets: commercial and consumer. The pandemic has shifted the lion’s share of demand to the latter. People actually do need to buy significantly more toilet paper during the pandemic — not because they’re making more trips to the bathroom, but because they’re making more of them at home. With some 75% of the U.S. population under stay-at-home orders, Americans are no longer using the restrooms at their workplace, in schools, at restaurants, at hotels, or in airports…
If you’re looking for where all the toilet paper went, forget about people’s attics or hall closets. Think instead of all the toilet paper that normally goes to the commercial market — those office buildings, college campuses, Starbucks, and airports that are now either mostly empty or closed. That’s the toilet paper that’s suddenly going unused.
So why can’t we just send that toilet paper to Safeway or CVS? That’s where supply chains and distribution channels come in… the toilet paper made for the commercial market is a fundamentally different product from the toilet paper you buy in the store. It comes in huge rolls, too big to fit on most home dispensers. The paper itself is thinner and more utilitarian… “Not only is it not the same product, but it often doesn’t come from the same mills,” added Jim Luke, a professor of economics at Lansing Community College, who once worked as head of planning for a wholesale paper distributor.
Like most solvable problems, these challenges will be overcome more readily, counsels Mr. Freeman, if government steps aside and lets private citizens and enterprises solve them.
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