In a $4 a gallon world, some of the past benefits of global supply chains—favored by Wal Mart, Ikea and others—appear to be evaporating, and that will have a huge impact on production if it continues, or perhaps not as the increased costs are just passed on to the long suffering consumers, already adjusting to $4 a gallon gas.
This article from the New York Times looks at that.
An excerpt.
“The world economy has become so integrated that shoppers find relatively few T-shirts and sneakers in Wal-Mart and Target carrying a “Made in the U.S.A.” label. But globalization may be losing some of the inexorable economic power it had for much of the past quarter-century, even as it faces fresh challenges as a political ideology.
“Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.”
