The pandemic wiped out inventories

Many companies acted as if manufacturing and shipping were seamless, Alicke added, without factoring those issues into their business plans.

“No risk of disruption is contemplated there,” he said.

Experts say the omission represents a logical response by the administration to the incentives at stake. Investors reward companies that produce growth in the return on their assets. Limiting merchandise in warehouses improves that relationship.

“As long as you can keep reducing inventory, your books will look good,” said ManMohan S. Sodhi, a supply chain expert at the University of London Business School.

According to one study, from 1981 to 2000, American companies reduced their inventories by an average of 2 percent a year. These savings helped finance another trend that is enriching shareholders: the growth of share buybacks.

In the decade before the pandemic, American companies spent more than $ 6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, the United Kingdom, France, Canada and China quadrupled their buybacks, although their purchases were a fraction of those in the United States.

The share buyback reduces the number of shares outstanding, increasing their value. But the benefits for investors and executives, whose salary packages include sizable stock allocations, have come at the expense of whatever the company would have done with their money: invest to expand capacity or stock parts.

These costs became apparent during the first wave of the pandemic, when major economies, including the United States, found they lacked the capacity to manufacture fans quickly.

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