Shanghai Has Been Shanghaied.
Imagine one day waking up and reading that New York, the ports of Los Angeles and Long Beach, and the Automakers in Detroit were all being taken over by the Government. Shut down in an effort to contain the spread of a virus.
The economic impact would be profound. Shanghai is all that and more. Shanghai is the financial capital, the largest shipping port, and the center of industry and auto production. All shutdown.
The economic impact will be profound. The center of three of the nation’s most important hubs of commerce has all taken over. All at once. As economists, we would expect that a nationwide economic slowdown would be quick to follow. And more likely a recession.
But two weeks ago that is just what happened in China. When China shut down Shanghai. The home of the world’s largest shipping port. A vital cog in the supply chain to the United States and the rest of the west.
The home of several automobile makers, such as Tesla, Volkswagen, and Toyota. To say nothing of Pegatron, a principal private label maker of the Apple “iPhone” and Apple Mac Book. All of which are struggling to reopen their factories.
In short, Shanghai has been Shanghaied. A term that gained renown in the 19th century. The place where kidnapped sailors ended up after being conscripted to man sailing vessels from around the world.
And almost two centuries later it’s all happening again. But this time instead of wayward foreigners, it’s the entire population of Shanghai, that is being conscripted.
Citizens are confined to their homes. Not allowed to venture outside. Cut off from food and supplies. All in an effort to contain a virus, which by all accounts seems far less lethal than the means used to confine innocent people.
Shanghai, is one of only four municipalities in China that are ruled directly by the Central Government. Being under central controls means that the procedures initiated by the CCP are quickly, and most effectively carried out by the troops and support personnel of the Chines Communist Party.
While you may think that this is a replay of 2020. All over again. It most definitely is occurring at this very moment. Millions have been locked away. With food and medicines, by all accounts coming in short supply.
Rumors are rife of people left alone to die in their apartments, from starvation or lack of proper medical treatment.
Imagine a long line of ships, a parade if you will stretching from Shanghai China to the Port of Los Angeles. Nearly 6,500 miles in total distance. Taking each ship, depending on its speed and the weather, about a month or two, to make the trip.
A couple of weeks ago, the parade stopped in Shanghai, but those ships already underway will continue for some time until they reach LA. In the meantime, those of us here in America, will not miss a thing. Life will continue as normal. That is until the parade ends.
It is then that things will likely change. Ordinary items, that we’ve grown accustomed to may suddenly become hard to find.
As someone has already pointed out, while the cereal we eat each morning for breakfast may continue to be in supply. The box that contains that cereal, having been made in China, may run out. And the Wheaties or Cheerios become unavailable on our store’s shelves.
For the first time in years, we will learn just how dependent this country has become on off-shore producers.
It represents a tremendous opportunity for the entrepreneurs in this country to begin American production. A chance of a lifetime to re-industrialize and return to “made in America” products. Something that the youngest among us have never heard of.
What a chance for us to set this economy straight. To bring our own production somewhat closer to our consumption.
So while it’s true that Shanghai, has been taken over. Shanghaied if you will. It’s an opportunity for our own captured economy to be set free.
To return to a free producing, open, and free marketplace.
Let’s remember: the free marketplace was central to the American vision.