Subsidies gone!!!

The U.S. Congress has repealed the subsidies for ethanol production along with the tariffs on ethanol which have kept Brazilian ethanol out of the U.S. market. Brazil makes ethanol from sugar cane instead of corn (maize) and does it much more cheaply that we do in the U.S. A big industry has developed in the U.S. based on these subsidies and tariffs, so this will have a major impact. It is not often that one can write about the repeal of a tariff or subsidy--note the day for you grandchildren!

California SC Transparency Law

The California supply chain transparency law that just took effect will have a major impact on global supply chains. Businesses will have to be able to certify that no human rights abuses took place in the manufacture of their products, no matter where in the supply chain they could occur. No more blindly buying parts and products; you need to know how they were made. Given the complexity of some supply chains (see my book for a reference to AT&T), this could be a real burden.

Supply chain disasters

The recent events in Japan and Thailand have raised the question of how much should firms spend to protect themselves against disasters. A firm can spend millions with no payoff unless there is a disaster. It all boils down to one's risk aversion. Look for this to be debated in the coming years.