An Infant Story Of American Scarcity

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. [Wiggin Sessions] May 12, 2022 An Infant Story Of American Scarcity “The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” – Thomas Sowell [Addison Wiggin]Dear Reader, In the economy, there is the “seen” and the “unseen.” Frederick Bastiat wrote his foundational economic piece in 1850. How soon we forget. Seen: A baby formula shortage. Check the headlines. Unseen: a mysterious bacteria; the infernal virus; and the usual suspect regulations. This is less a story of “the more things go away, the more people want them,” than it is a failed attempt at market manipulation. It also has aspects of the Pandemic which mask the real culprit. Far be it for us to bloviate on shortages. We still have packages of Charmin Ultra Soft; canned Le Petit Soeur peas and boxes of Barilla pasta in our pantry from the spring of 2020. I’ve often thought, looking at my own pantry, if I was an infantryman from an occupying force, my pantry would be a good find after several days of battle. That said, I’m not a mother. I don’t have an infant. There is a difference between yearning for peas and not being able to feed your newborn. To begin: Abbot is one of the three largest manufacturers of baby formula in the U.S. Gerber is another you’ll recognize. The third is Mead Johnson. “Abbott says it will be at least two months,” reads a headline from FOXNews, “before baby formula from shuttered plant hits shelves.” This morning, [The Atlantic ran this article]( by a writer I’ve come to respect, Derek Thompson, on the baby formula shortage. When did it become normal for a supply chain issue to occupy major headline news? Mr. Thompson asserts 40% of baby formula is out of supply across the United States. A bacterial outbreak of cronobacter sahazakii – which also made headline news – shut down one of Abbot’s plants in Michigan. Still, how is it possible that one plant… one manufacturing plant… can and could be the source of a 40% dearth in baby formula for small humans in the United States? Ahh… there’s the seen and the unseen. Or might we suggest, unseemly. Thompson: FDA regulation of formula is so stringent that most of the stuff that comes out of Europe is illegal to buy here… one study found that many European formula meet the FDA nutritional guidelines – and in some ways, might even be better than American formula because the European Union bans certain sugars, such as corn syrup, and requires formula to have a higher share of lactose. Whether Derek’s conclusion is correct or not, we give it to you knowing full well fructose producers and Abbot may have a concern in the issue: “America’s reasonable instinct to protect infants has metastasized into an unreasonably protectionist trade policy that makes the U.S. formula market exquisitely sensitive to existential shocks (like a pandemic) and domestic shocks (like a major recall).” [Click here to learn more]( To get a reasonable investment perspective of the food supply chains, we have Mark Rossano on The Wiggin Sessions this week. We’re talking about global food supplies from a macro perspective. Click above. Listen closely. Follow your bliss, [Addison Wiggin] Addison Wiggin Founder, The Wiggin Sessions P.S. On my Twitter feed, images like the one below are commonplace: [Click here to learn more]( [Ships waiting to dock because of China’s COVID strategy.]( P.S. More bad news from the financial tech markets. [The Terra Blockchain officially halted today]( after unimaginable losses over the past three days. The TerraUSD is – was? – an algorithmic stablecoin designed to trade 1 to 1 against U.S. Dollars. It has since fallen off its peg, undermining its very namesake as a “stable” coin. This comes two days after Luna, its sister cryptocurrency, [collapsed to nearly $0](. With the blockchain halted, these coins are basically “[trading IOUs]( As Bill Bonner often says, “markets make opinions.” Crypto evangelists are awfully quiet right now as contagion rifles through the blockchains. Enjoy a Collection of Wines From the Edge of the World Get access to exclusive small-batch wines from the remote vineyards of Argentina — for half the retail price! Discover unique bottles you can’t find at your local liquor store. [Click here for details](. Learn more about Justin’s monthly updates and "time-sensitive" intra-month bulletins [here](. Ed. note: Got something to say? 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