It is amazing how many of the world’s economic problems were directly and intentionally caused by the Biden-Harris regime – particularly by the disastrous energy policy choices of their very first months in office.
But not every problem can be laid at their feet.
It’s a big world, and the global economy is enormous. There are always weather events, distant wars, and other issues occurring on foreign shores that can have international implications, with causes completely independent of anyone in the United States – but we all suffer from their effects nevertheless.
So, if you want something to worry about that can’t be blamed on Joe Biden, here is a biggie:
The current drought in Central America has caused a severe water shortage in Gatun Lake, which supplies water for the Panama Canal.
Opened in 1914 and in virtually continuous use since then, the Panama Canal is a complex series of passages across the narrowest expanse of Central America, using mechanical locks to lift ships across the terrain from the Pacific to the Caribbean and vice versa. Panama needs a lot of water in the lake at the top of their country, to supply these locks with water, so that ships can travel through the canal as if it were a normal, deep river at sea level.
With the lake suffering much lower levels than usual, the water in the locks is not high enough for fully laden modern vessels. When fully loaded, these huge modern ships just need higher water than the canals can currently provide.
A huge amount of global commerce travels through the Panama Canal. Cruise ships, oil and LNG tankers, car carriers, containerships, bulk vessels – all sorts of important seagoing vessels take advantage of this pathway, to avoid having to make the expensive and time-consuming ride around South America to get from ocean to ocean.
In normal conditions, ships can travel through the locks on schedule, without delays. The delays have increased as water levels drop; ships wait a week or more, as much as three weeks of dead time. And with ship lease rates averaging between $50,000 and $100,000 per day, a week of unplanned idle time means somebody’s books are really taking a bath.
The Panama Canal could handle 32 ship crossings per day just a month ago… Panama reduced that number to only 22 per day on December 1.
On February 1, they expect to have to further drop their maximum to 18 ship crossings per day.
And this is already with severe weight restrictions that have been requiring ships to handle less cargo, so carriers have either shifted smaller ships into that trade lane or have only loaded them to be two-thirds or so utilized, in order to be able to move through these shallower locks.
As you can imagine, this affects prices – across global commerce as well as our domestic economy. Hundreds of ships normally call our East and West Coast ports by going through Panama; but the ships also call ports all over the world, in every continent, whether they include USA stops on the way or not. So this crisis is impacting Asian, European, South American, Middle Eastern, Australian and African trade as well.
This all means that a lot of those voyages are more expensive now, or are slower because they’ve had to be rerouted around South America, or both. And when transportation costs increase, so does the cost of the final product being transported, whether that be energy or travel, necessities or luxuries, factory components or Christmas presents.
Now, back to the beginning. Remember how we agreed that this is not Biden’s fault? It’s not. We can stick with that.
But it IS the fault of the Biden-Harris regime’s kind of policies – socialist policies. Destructive, big government, tax-and-spend, anti-market policies.
You see, what Central America really needs – or should we say, what the world really needs in Central America – is a second canal. Why is Panama still the only one after a hundred years?
Nicaragua has had an ambitious plan on the books for years, utilizing a similar canal method to link their east and west coasts, utilizing Lake Nicaragua, the Punta Gorda River, and a new artificial lake. Look at a map, and it makes perfect sense.
Unfortunately, Nicaragua is a socialist country, run by semi-stalinist communists. They can’t print the money needed for such a project, and they sure can’t raise the money needed for it.
The last substantial progress made in the effort was a decade ago, when the socialist administration of Danny Ortega selected a Chinese investment firm as the authorized operator of the project. Nobody else in the world trusted this teaming – perhaps with good reason. Rather than opening the project to normal international competitive bidding, communists partnered with fellow communists, ensuring that the project would collapse, as indeed it did five years later, when Wang Jing, the Hong Kong millionaire hand-selected by Danny Ortega’s government, closed down his offices and the entire business disappeared without leaving a forwarding address.
So, Nicaragua could have provided a solution to the Panama Canal problem years ago, if it weren’t for all these years of largely socialist rule.
(there were about 15 years of limited capitalism in the 1990s and early 2000s, between Ortega’s first and second regimes, slowed and hindered by the resurgent socialists, but that didn’t last long, and the communists regained full control in 2007).
A canal project requires massive economic investment, which not only means a large amount of money, but also global market confidence that the project will be administered properly for generations.
Agreeing that a canal in Nicaragua makes sense just isn’t enough, even if today’s business case for it is undeniable. The business community of the world has to also have confidence that the government isn’t going to nationalize it, or mismanage it, or otherwise cause such a perfectly worthwhile utility to be ruined by neglect or corruption.
And with Nicaragua solidly in the hands of corrupt socialist ideologues, it’s very difficult for outside investors to have confidence in not only the construction, but the next 50 years of regular use thereafter.
More and more, when you study the issues, you find that socialist policies are at the root of all the problems in the world.
Or perhaps we should say, socialist policies don’t always directly cause all the problems, but they sure are the blockades preventing any actual solutions.
Copyright 2023 John F. Di Leo
John F. Di Leo is a Chicagoland-based international transportation and trade compliance professional and consultant. A onetime Milwaukee County Republican Party chairman, he has been writing a regular column for Illinois Review since 2009. His book on vote fraud (The Tales of Little Pavel) and his political satires on the current administration (Evening Soup with Basement Joe, Volumes I, II, and III), are available in paperback or eBook, only on Amazon.
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