Who’s Supposed to Fix It?
Terry H. Schwadron
June 3, 2022
Reports that the nationwide shortage of infant formula is worsening just as we were told that help was on the way show just why Americans are frustrated by government.
But it is just as confusing about when Americans want government to fix anything that goes wrong and when they want government to stay on the sidelines.
Instead of focus on solutions, we continue to focus on blame — read politics, though there is no evidence that this situation would have been better with Republicans in charge rather than Democrats.
The facts of the infant formula mess got, well, messier this week, raising new questions:
— Even as the government was sending military aircraft to ferry in tons of infant formula from Europe and Australia, retailers were now reporting shortages on 70 percent of the nation’s store shelves, up 45% from even a week or two ago. Plainly stated, is this the government’s problem only when the industry itself fails to do its job or do we expect that the White House is monitoring availability of drug store shelves?
— Even as the government moved — late — to order manufacture of materials needed to make liquid and dry formula, the news was focused on when Joe Biden was told that there was a problem rather than just why a safety shutdown was needed in the first place. Is the government’s role safety oversight or to police convenience?
— In a broader context, why is the blame being focused on Biden rather than on Abbott Nutrition and an industry that allowed unsafe products to be distributed to stores? Why does Abbott not face serious penalty for using money, including government subsidies, on stock buybacks for profit rather than on addressing supply and safety issues. Why is the solution to shortage not something this consolidated industry should be taking as a responsibility?
A Troubled White House?
Biden met virtually with executives of five baby food companies not including Abbott on supply and distribution problems. Those company executives told the president that they knew a crisis was in the making from the moment the Abbott plant closed in February.
But Biden, who re-doubled the imports of formula, said he did not hear about a serious supply issue until April.
Surely, there are obvious questions about a timeline from a whistleblower report about the Abbott plant last fall through delayed handling by the FDA to cluing in the White House to a shortage that has parents up in arms.
Once again, we find ourselves wondering whether a White House staff elected and appointed to eliminate drama from public policies knows what it is doing.
At best, it sounded as if agency officials and some in the White House knew and started in on addressing the shortages earlier without notifying Biden. At worst, the infant formula blowup combines with progress on other initiatives from guns to immigration to inflation that make it sound as if we need more focus at the top. Indeed, the only good news out of all of this seemed Biden’s frankness that no one told him how bad infant shortages were.
Once informed, Biden seemed to act forcefully, something being lost in the retelling for political purposes.
According to reports, the industry executives told Biden that they had boosted their production after the Abbott plant was shut towards anticipating any shortages. But data from companies that track the supply of consumer goods suggest that together, these efforts still are falling short, and showing up the folly of specific rules that govern branded products that can be purchased through public food aid programs.
The best-case estimates are that restarted production at Abbott, hastened manufacture of components for the industry under the Defense Production Act and government-aided imports from overseas will take about six weeks to resolve.
What Do We Want from Government?
What we’re missing here is what is the appropriate role of government as the marketplace has insisted on industry consolidation in the name of profit.
It feels a critical question that applies to lots of products, particularly as the rippling effects of global supply chain delays are proving stubborn to repair. The war in Europe is further roiling the American and global marketplaces, and anger about rising prices is marking more of our daily discussion about getting through the day.
What does seem clear is that consolidation of industries makes an individual plant shutdown like that for Abbott have an outsized effect. Cutbacks and antipathy for business regulation are resulting in product safety problems. And, in this case, the desperation of parents to find available formula is creating rationing practices, pricing rises and unnecessary emotional upheaval.
We’re seeing similar shortages in semiconductor chips, fuel oil and gasoline, groceries, and a rolling list of component parts for manufacturing. All of it contributes to both higher industry and consumer prices, a political no-no, and towards the perception that the White House lacks sufficient control over the direction of the national economy.
What we do see from this Democratic White House is a desire to fix things once they understand what is wrong — a reflection that government has responsibilities to bring order to a chaotic marketplace. By contrast, we hear a lot of criticism from Republican opponents about anything Biden proposes, without effective alternative solutions. Generally, Republicans at federal and state levels favor less regulation and less oversight for a private marketplace — even when there are these kind of consequences.
This struggle for a self-governing marketplace, a cornerstone for profit-driven capitalism, is an important understory to the emotion that we hear about the immediate availability of infant formulas on store shelves.