Homeland security takes a bite

Homeland security takes a bite out of economic productivity. The two biggest issues on the domestic agenda right now are terrorism (and all that goes along with it, including Iraq) and the sagging economy. Either one has the potential to undo this administration. But the silliest of policies aimed at the former have the potential to do real damage to the latter.

Real productivity growth was the engine of expansion in the 90s, through the widespread adoption of such inovations as electronic communications and just-in-time delivery. But new U.S. Customs rules may require giving the government as much as 3 days notice before shipping anything into the country.

That means making decisions about what materials are needed in production earlier (possibly with less information, leading to bad decisions and waste). That means stockpiling inventories to hedge against need, meaning inefficiently allocated resources.

Perhaps supply chains need greater security. I’m willing to bet, though, that overloading the Customs service with information on all shipments into the country won’t do much good. They’ll have to process and analyze all of that information, and there’s no reason to suspect they’ll be adept at that.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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