People who live in New York City need never carry an umbrella. At the first sign of a cloud burst, nearly every corner has a ramshackle opportunist selling chintzy parasols for five or 10 bucks apiece.
Supply magically meets demand. Instantly and without orchestration. It's a microcosm of the way the U.S. economy usually works. Adam Smith's "invisible hand" rarely fumbles.
Needless to say, these aren't normal times, as some supermarkets are emptied of toilet paper, rice, flour and other staples. Nevertheless, pandemic panic consumption shortly will be a distant memory. The recent grocery cart frenzy will seem pointless.
"All the grocery stores are going to have pallets of toilet paper sitting in the aisles, and nobody is going to buy it, because who needs to buy toilet paper when you've got a year's worth sitting in your garage?" Daniel Stanton, a supply chain expert, recently told CNBC.
"The U.S. produces a huge amount of food. We're also an exporter of food, so we're going to be OK," he said.
Hospitals may wait weeks or months to have all the protective clothing and advanced medical gear they'll require as millions fall ill with the coronavirus. But, like the spontaneous umbrella sales force of Manhattan sidewalks, retailers are stepping up to meet the more prosaic needs of U.S. households, from food to pharmaceuticals.
Amazon, Walmart, Lowes and other retailers have announced plans to hire 444,000 more warehouse and delivery workers. Target and eight other major retailers have given employees a temporary pay bump as an incentive to face the perils and fatigue of keeping shelves stocked and checkout lines moving.
That said, widespread shortages of consumer staples in recent weeks reveal the shortcomings of market assumptions that don't apply in times of trouble. While household goods are being restocked, two pervasive forces work against uninterrupted supplies of big-ticket items, from cars and appliances to laptop computers and cellphones.
First, supply chains that extend for thousands of miles make U.S. factories dependent on all manner of parts and materials made from as far away as China, Taiwan, South Korea and Malaysia. With the course of the pandemic's spread unclear, so will be the reliability of foreign vendors.
After a devastating 2012 Pacific Rim tsunami, finding a red Toyota became a challenge. The Japanese factory that made the rosy paint pigment was battered and shut down by ocean waves.
The second current challenge is the likely shortage of inventory — in finished products and parts and materials. Where factory warehouses once brimmed with enough goods and components to last for months, today inventories are designed to be depleted in as little as 30 to 60 days.
"Just-in-time" manufacturing and supply chains — meant to pare the cost of keeping unused inventory on hand — now applies to everything from $2,000 laptops to $2 dish towels.
Apple, Fiat Chrysler and Hyundai lead a growing list of companies that have warned of supply bottlenecks ahead.
For the time being, however, transitory shortages won't rise to the level of emergency. In the midst of a recession that threatens to put millions of Americans out of work, shopping for new cars, fancier iPhones or stylish refrigerators won't be an urgent impulse for some time to come.
