President Biden recently announced a spate of actions to “strengthen” supply chains, two years after American and global delivery networks experienced unprecedented challenges. The culprit then amid the COVID haze is well understood now, as goods purchased outpaced the services that have come to dominate U.S. GDP, leaving transportation systems and warehouses unable to meet consumer demand.
The White House’s actions primarily revolve around the expanded use of the Defense Production Act, the creation of new government bodies, and the charge for agencies to better coordinate and share data. Given how much the supply chain problems contributed to the inflation still plaguing U.S. consumers, the Biden administration’s actions may seem understandable.
Yet the new measures also lack the teeth that more meaningful and politically challenging actions would have, such as removing barriers to trade – like tariffs or the outright ban of imports like baby formula – or eliminating long-harmful measures like the Jones Act, which prohibits foreign carriers and crews from using domestic water routes.
More troubling though is that regulators within the Biden administration are pursuing policies that would slow supply chains and increase the cost of goods. A prime example is the desire by some at the U.S. Surface Transportation Board, or the STB, and some in Congress, to consider policies that would turn private freight railroads into public utilities.
They argue that our nation’s railroads are uncompetitive and need the government to supplant market decisions. Yet a recent study shows freight shipping is significantly more competitive today than in the past.
At issue is the industry’s common carrier obligation, a broad requirement that disallows railroads from refusing service requests. The standard is purposefully broad, recognizing that railroads aren’t monopolies nor are they electric utilities transmitting electrons from one end to another.
Read the full Townhall article here.
Steve Pociask is president and CEO of the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter (X) @ConsumerPal.