Capital-Intensive Toilet Paper Firms, Already Near Capacity, Unable to Quickly Fill 600% Surge in Demand

(p. 4) As the chief executive of a company that makes toilet paper, Joey Bergstein has been through an intense few months.

. . .

You’ve mentioned that you anticipated some demand, but nothing like what was about to come.

The week of March 8 [2020] we saw a surge in demand of somewhere between 600 and 750 percent. When you build a supply chain and package, you normally have about a 30 percent buffer to be able to meet a surge in demand. Nobody built a supply chain to be able to respond to that kind of surge in demand. So the team has been in a constant state of triage ever since, and we’re still in that.

. . .

What was it about toilet paper that made it so hard to come by?

First of all, nobody anticipated the level of stocking up you would see on toilet paper. That shocked everybody. But any of these paper businesses are very capital-intensive businesses. You only make money in that business if you’re running your machines pretty close to capacity. So when you have a big surge in demand, it’s hard to increase more than you’re already producing, because you’re generally producing pretty close to capacity. You don’t have the kind of flexibility that you would normally expect to have in another business.

For the full interview, see:

David Gelles, interviewer. “Selling 2-Ply in a Pandemic (It’s Harder Than You Think).” The New York Times, SundayBusiness Section (Sunday, June 7, 2020): 4.

(Note: ellipses, and bracketed year, added; bold in original.)

(Note: the online version of the interview has the date June 5, 2020, and the title “Selling Toilet Paper and Paper Towels During the Pandemic.” The first sentence and the bold questions are from the interviewer David Gelles. The answers after the bold questions are from the interviewee Joey Bergstein.)

Vaccine Progress Gives Hope That Pandemic Will Begin to End in September

(p. A1) In a medical research project nearly unrivaled in its ambition and scope, volunteers worldwide are rolling up their sleeves to receive experimental vaccines against the coronavirus — only months after the virus was identified.

Companies like Inovio and Pfizer have begun early tests of candidates in people to determine whether their vaccines are safe. Researchers at the University of Oxford in England are testing vaccines in human subjects, too, and say they could have one ready for emergency use as soon as September.

. . .

(p. A11) The coronavirus itself has turned out to be clumsy prey, a stable pathogen unlikely to mutate significantly and dodge a vaccine.

“It’s an easier target, which is terrific news,” said Michael Farzan, a virologist at Scripps Research in Jupiter, Fla.

An effective vaccine will be crucial to ending the pandemic, which has sickened at least 4.7 million worldwide and killed at least 324,000. Widespread immunity would reopen the door to lives without social distancing and face masks.

For the full story, see:

Carl Zimmer, Knvul Sheikh and Noah Weiland. “Tests Fuel Hope That Vaccine Is Months, Not Years, Away.” The New York Times (Thursday, May 21, 2020): A1 & A11.

(Note: ellipses added.)

(Note: the online version of the story was updated June [sic] 10, 2020 and has the title “A New Entry in the Race for a Coronavirus Vaccine: Hope.” The online versions says that the title of the New York print version is “Labs Step Up Race to Be First, Or Even 4th, to Find a Vaccine.” the title of my National print version was “Tests Fuel Hope That Vaccine Is Months, Not Years, Away.”)

Like During the Great Depression, Wages May Now Be Sticky-Downward

Economists have sometimes claimed that the reason that the labor market did not quickly clear during the Great Depression, was that wages were sticky-downward. The result of sticky-downward wages can be long-term high levels of unemployment.

(p. 7) Much as now, in the Great Depression people were very focused on maintaining a “fair wage” in the face of economic distress. But this led to nationwide resistance to nominal wage cuts for anyone, even when retail prices were falling rapidly.

This appears to have had the unintended result of inducing employers, who could not afford to keep everyone working at their former wages, to lay off many people. The economists Harold L. Cole of the University of Pennsylvania and Lee E. Ohanian, of U.C.L.A., have shown that this may explain some of the extreme duration of Great Depression unemployment.

For the full commentary, see:

Robert J. Shiller. “ECONOMIC VIEW; Looking Back for Clues About What’s Ahead After the Pandemic.” The New York Times, SundayBusiness Section (Sunday, May 31, 2020): 7.

(Note: the online version of the commentary has the date May 29, 2020 and has the title “ECONOMIC VIEW; Why We Can’t Foresee the Pandemic’s Long-Term Effects.”)

The Cole and Ohanian paper mentioned above, is:

Cole, Harold L., and Lee E. Ohanian. “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis.” Journal of Political Economy 112, no. 4 (Aug. 2004): 779–816.

In Most Red States, the Benefits of Opening Economies Exceed the Costs

(p. A4) Two-thirds of confirmed coronavirus cases are in states with Democratic governors. When states are measured by the sheer number of coronavirus cases, six of the top seven have Democratic governors. Together, those six blue states have about half of the nation’s cases, though only about a third of its population.

. . .

“A red-state governor is losing his business in exchange for blue-state lives,” said Angus Deaton, a Nobel Prize-winning economist at a Brookings Institution seminar last week. “So for him, opening up is a no-brainer, which is sort of why it is happening.”

He added: “It is a lot to ask those governors to kill their businesses and their GDP for people who live far away, and who they may not even like very much.”

For the full commentary, see:

Gerald F. Seib. “CAPITAL JOURNAL; Virus Exacerbates the Red-Blue Divide.” The Wall Street Journal (Tuesday, May 19, 2020): A4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 18, 2020 and has the title “CAPITAL JOURNAL; Why Coronavirus Increasingly Exacerbates the Red-Blue Divide.”)

Deaton’s comments quoted above, are consistent with the central message of his co-authored book:

Case, Anne, and Angus Deaton. Deaths of Despair and the Future of Capitalism. Princeton, N.J.: Princeton University Press, 2020.

Small Is Not Always Beautiful

(p. A16) Zaid Kurdieh has so many fava beans growing at his farm in upstate New York that he could send 4,000 pounds a week to the best chefs in New York City. In Kentucky, Robert Eversole and Thomas Sargent planted enough winter greens to fill the all the salad bars at the University of Kentucky and still have enough left over to feed fans at the state’s two major spring horse races.

But the coronavirus pandemic has postponed the Kentucky Derby and shut the university. And in New York, chefs who would normally be shelling Mr. Kurdieh’s fava beans for their spring menus have closed their restaurants.

So these small farmers, like many others across the country who spent decades building a local, sustainable agricultural system, are staring at their fields and wondering what to do now that the table has been kicked out from under the modern farm-to-table movement.

. . .

Farm-to-table — the term has become a fixture in the culinary lexicon — started in the 1970s, when Chez Panisse and a handful of other restaurants hatched what then seemed like a radical notion: Build menus from food grown by nearby farmers who are thoughtful about everything from the seeds they select and the soil they grow them in to the communities they feed.

That idea grew into a pipeline connecting farmers, ranchers and chefs that in 2019 had generated $12 billion in income for small-scale producers including cheesemakers and vintners. Governments, hospitals and schools have come to see the value in buying locally grown food. No Silicon Valley tech company worth its stock price would dare to design a cafeteria without local food.

Since the pandemic hit, that conduit has shut down. The loss in sales could run as high as $689 million, with much higher costs in jobs and other businesses that make up the farm-to-table economic ecosystem, according to a report compiled in March by the National Sustainable Agriculture Coalition.

For the full story, see:

Kim Severson. “Farm-to-Table Falters, and Growers Are in Limbo.” The New York Times (Friday, April 10, 2020): A16.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 9, 2020, and has the title “The Farm-to-Table Connection Comes Undone.”)

Each Week, Chinese Children Read “Socialism Is Good. Capitalism Is Bad.”

(p. A11) Many Chinese children of my generation read a newspaper column for students called “Socialism Is Good. Capitalism Is Bad.” Each week, it described the wonders of China alongside the hardships of capitalist societies. The lesson: Socialist China takes care of its people, while people in the United States go hungry and the elderly die alone.

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; China Builds Culture of Hate With Selective Coverage of the Pandemic.” The New York Times (Thursday, April 23, 2020): A11.

(Note: the online version of the commentary has the date April 22, 2020, and has the title “THE NEW NEW WORLD; With Selective Coronavirus Coverage, China Builds a Culture of Hate.”)