August 2020

August 31, 2020 1:35PM

The AMA Opioid Task Force 2020 Report Should Come as No Surprise to Those Who Follow the Data

The American Medical Association recently released it Opioid Task Force 2020 Report. The Task Force found there was a 37.1 percent decrease in opioid prescriptions between 2014 and 2019; a 64.4 percent increase in the use of state prescription drug monitoring programs (PDMPs) in the last year (739 million queries in 2019); and hundreds of thousands of physicians accessing continuing medical education courses on opioid prescribing (now mandatory in some states). However, the report states:

Despite these efforts, illicitly manufactured fentanyl, fentanyl analogues and stimulants (e.g. methamphetamine, cocaine) are now killing more Americans than ever. The use of these illicit drugs has surged and their overdose rate increased by 10.1% and 10.8%, respectively.

This should come as no surprise. The government’s own data show no correlation between opioid prescription volume and past month nonmedical use of prescription opioids by persons age 12 and up. Nor does it find a correlation between prescription volume and past year diagnosis with prescription opioid use disorder in person age 12 and up.

The Task Force walks up to but doesn’t cross over the line to abandon the false narrative that the overdose crisis was caused by doctors “overprescribing” pain medication to their patients. Yet researchers at the University of Pittsburgh reported in 2018 that overdoses from the nonmedical use of licit and illicit drugs have been increasing steadily and exponentially since at least the late 1970s (well before the invention of OxyContin in 1996), with different drugs dominating the fatality statistics during different periods.

In the end, the fact remains that drug prohibition caused the overdose crisis. A growing population of nonmedical users of licit and illicit drugs are accessing increasingly dangerous drugs provided by the black market fueled by prohibition. The emphasis on prescription opioids only makes patients needlessly suffer and drives nonmedical users away from “diverted” prescription opioids and towards heroin and fentanyl.

The Task Force continues to support efforts to reduce opioid prescribing as well as developing alternative forms of pain management. But it also tacitly recognizes the role of drug prohibition. Its recommendations place a heavy emphasis on harm reduction. The task force urges stakeholders to

Support increased efforts to expand sterile needle and syringe services programs as well as reforms in the civil and criminal justice system that help ensure access to high quality, evidence‐​based care for opioid use disorder, including medication‐ assisted treatment.

Hopefully, as respected organizations such as the AMA and the National Academy of Science, Engineering, and Medicine place more emphasis on harm reduction and less on drug supply and interdiction, policymakers will finally get the message. It is time to end the assault on pain patients and the doctors trying to treat them—not to mention the assault on everyone’s civil liberties—by ending the war on drugs.

August 31, 2020 11:29AM

New Cato Book: Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting

Two years ago, Ronald Bailey from Reason magazine made me an offer I could not refuse. Over a business lunch in Washington D.C., Ron proposed that we join forces to write a short book about human progress. He thought for a while about a market opening for an easy‐​to‐​read compendium of the most important trends in global wellbeing. I jumped at the opportunity. Ron had six well‐​received books under his belt already, and I was itching to write my first. Today, our book comes out – later than we intended (more about that below), but we got there in the end.

In Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting, Ron and I outline 78 improving global and U.S. trends intended to inform readers about the real state of the world. Well‐​known negativity biases that are deeply entrenched in the human psyche, and which we discuss in the introduction, conspire to make us think of the world as being in much worse shape than it is. So, the primary goal of the book is educational. If readers walk away feeling a sense of pride over the degree and scope of human accomplishment and imbued with a sense of rational optimism about our species’ future, so much the better.

Over the past two centuries, the spread of competitive markets and free trade has contributed to the Great Enrichment. Global average per capita income has steeply risen, and poverty has fallen to its lowest level in all of human history. Human ingenuity and innovation have driven down natural resource prices and boosted food production to record levels. Also, many global environmental trends are improving. The amount of land devoted to agriculture is shrinking, thus sparing land for nature. The proportion of wildlands and oceans set aside for conservation and protection continues to expand.

Topically, we show the continued rise in vaccinations against contagious diseases, and the declining prevalence of HIV/AIDS, malaria, and tuberculosis. We also show that the time from identifying an illness to the invention of new vaccines or life‐​saving drugs has been growing ever shorter. Thanks to biotechnological progress, it seems likely that a safe and effective vaccine against the COVID-19 virus will be available in less than a year since the outbreak of the pandemic.

Other positive trends that we discuss include the rise in happiness, decline in global income inequality and most forms of violence, a falling share of the world’s population living in slums, political and economic empowerment of women, an uneven but pronounced rise in IQ scores, decriminalization of same‐​sex relationships, falling cancer death rates, falling rates of military spending and conscription, the shrinkage of nuclear arsenals, reductions in working hours thus leaving more time for leisure, falling rates of child labor and workplace accidents, increasing access to electricity, improving access to sanitation and clean drinking water, and internet‐​driven access to information.

As noted, the book is light on theory and heavy on graphics – a picture, they say, is worth a thousand words. Straightforward charts are combined with brief explanations to provide readers with easy access to the facts that busy people need to know about the real state of the world. You cannot effectively promote further progress or fix what is wrong in the world if you don’t know what’s actually happening. That’s all the more important now that so much of the planet, including the United States, is gripped by protests and violence. And that brings me to the daunting task of publishing a book like Ten Global Trends in 2020.

I think it is safe to say that this year has not panned out in a way that most of us had hoped or expected. The COVID-19 pandemic has wreaked havoc upon the global economy and taken the lives of hundreds of thousands of people around the world. Millions around the globe are newly unemployed, anxious, depressed, and angry. In many countries, people have taken to the streets to protest many wrongs—some real and some imagined.

“My center is giving way, my right is retreating, excellent situation, I am attacking,” wrote Marshal Ferdinand Foch to the French Commander‐​in‐​Chief, Marshal Joseph Joffre, as the German forces advanced on Paris in September 1914. Likewise, Ron and I believe that this a propitious time to launch a counter‐​attack against the all‐​engulfing atmosphere of doom and gloom. People, we feel, need a ray of sunshine as we emerge from the COVID-19 lockdowns.

The pandemic outbreak gave us more time to finalize the text and work with two talented Cato Institute designers, Guillermina Sutter Schneider and Luis Ahumada Abrigo, to make our charts as attractive as possible. We are also grateful to Eleanor O’Connor, Jason Kuznicki, and Ian Vasquez (all from Cato) for helping to shepherd the book through the editing and publishing processes.

In conclusion, I hope that you will buy this book and share it with your family and friends. It is meant to be a conversation piece. Instead of gathering dust on a bookshelf, it is designed to lie on a living room table (like so many architecture and interior design books), for visitors to see and discuss over a martini or glass of wine. I hope that it will alleviate some depression and anxiety, spark a fact‐​filled discussion around the dining room table, and maybe even change some minds. Strangers things have happened. Cheers!

August 28, 2020 5:23PM

Conservative Industrial Policy and the “China Threat”

The Washington Post reports that many conservatives are ditching their “free market orthodoxy” due in large part to Chinese industrial subsidies that allegedly threaten critical parts of the American industrial base:

Since the Reagan years, Republicans have taken the opposite view — that government should stay small and out of the way and not engage in what has been derisively referred to as picking winners and losers. But China’s rise is forcing them to rethink that.

China’s central and regional governments are investing heavily in high‐​tech fields such as aircraft and electric‐​car manufacturing, semiconductors and robotics, by some estimates providing hundreds of billions of dollars to domestic companies through subsidies and other support.

As evidence of this shift, the Post cites to recent federal legislation, passed overwhelmingly by both chambers of Congress and praised by Republican industrial policy advocates, that provides billions of dollars in new subsidies to U.S. semiconductor manufacturers. As I noted a few weeks ago in a lengthy and skeptical blog post on the bill, the primary basis for these subsidies — according to its sponsors and other supporters (and confirmed by the Post) — was the aforementioned China threat, in this case the billions of dollars that the Chinese government is spending to develop a globally‐​competitive semiconductor sector. To its credit, the Post briefly notes my skepticism before quoting many others at length who are supportive of the semiconductor plan and broader U.S. industrial policy efforts (one of whom rejects “naive” libertarian views about government involvement in the economy).

However, the Post unfortunately omits much of my argument against the new U.S. subsidies, most notably the numerous reports (including a lengthy U.S. International Trade Commission analysis in 2019) that China’s semiconductor sector, despite all of those subsidies, was hardly a threat to the thriving — and in many respects globally dominant — American semiconductor industry. Today from the South China Morning Post comes further evidence of that fact:

At an idle construction site in western Wuhan, China’s steep climb to semiconductor independence is clear for all to see.

The partially‐​built factory, owned by Wuhan Hongxin Semiconductor Manufacturing Company (HSMC), was meant to be a key part of a US$20 billion investment that turned the province into a chip manufacturing hub.

But two years after it was started, construction has ground to a halt, with little evidence of progress beyond a few cranes, workers’ dormitories and steel frames jutting into the air.

The project, which the local Dongxihu district government said in July had stalled due to underfunding, is the latest example of a Chinese chip factory hitting the rocks because of poor planning or funding shortfalls.

Earlier this year, a US$100 million manufacturing plant set up by US chip giant GlobalFoundries and the Chengdu city government ceased operations after remaining idle for almost two years. In the country’s east, a US$3 billion government‐​backed chip plant owned by Tacoma Nanjing Semiconductor Technology went bankrupt in July after failing to attract investors.

Be sure to read the whole thing, which details the HSMC project’s many (sometimes humorous) problems and again indicates that China’s grand semiconductor plans and massive subsidies are not nearly as threatening as U.S. politicians and industry lobbyists make them out to be.

The semiconductor episode also permits two broader lessons. First, it shows that the mere presence of foreign government subsidies is rarely, if ever, a good reason for American ones — especially when they’re going to a profitable U.S. industry with billions in domestic capital expenditures (and billions more cash on hand). Second, it provides another good example of why some libertarians remain skeptical of U.S. industrial policy plans. All too often — even (or especially) in the case of “national security” and China (or Japan before it) — ideas that sound good and necessary on paper are revealed upon closer inspection to be corporatist giveaways that counter imaginary threats and end up doing more harm than good. Maybe the U.S. government can overcome these obstacles in the future, but both the semiconductor subsidies and numerous other examples indicate that it’s not the skeptical libertarians who are being naive here.

August 28, 2020 1:42PM

Can Democratic Voters Push Democratic Politicians Towards Trade Liberalization?

Over the past couple months, we at Cato’s Trade Policy Center have been exploring what a Biden administration might do on trade. Back in June, we published a Free Trade Bulletin entitled “Trade Policy under a Biden Administration: An Overview of the Issues and Some Practical Suggestions,” which concluded with some suggestions for trade liberalizing initiatives and systemic changes to U.S. trade laws that a Biden administration might consider. Then a few weeks ago, Cato adjunct fellow (and former Democratic Congressman) Jim Bacchus wrote a Policy Analysis outlining a pro‐​trade policy for the Democratic party.

We can see how people might think we are barking up the wrong tree here. Haven’t the Democrats traditionally been the party of protectionism? President Trump is now embracing protectionism as well, but that doesn’t mean the Democrats will turn away from it. And the Biden campaign has been using a lot of the usual protectionist rhetoric (“Make Buy American Real”).

That’s all true, but to some extent at least, politicians need to take into account what the voters think, and it has been very interesting to watch developments in what voters in general think about trade, and also in what Democratic voters in particular think about trade. Recent polling shows that all voters have become more pro‐​trade in the past several years, but Democrats have moved in this direction a bit faster:

(This data was compiled from multiple documents, and some of it was sent to us directly by the polling people so we don’t have a link, but you can see some of the most recent polling data on trade issues here, here, and here).

We don’t mean to overstate the importance of polling on this issue. As with so many other things, some of this may be a reaction to Trump and it’s not clear what everything would look like in a post‐​Trump world. A Biden presidency would clarify that. Also, people might be more pro‐​trade these days, but not feel strongly enough about it for politicians to take into account their views. Nevertheless, all else equal, it should mean something that the voters have a particular policy preference.

So what are the chances that Democratic politicians will move in the same direction as their voters, if the voters’ currently expressed preferences continue? We’ll see. That is an internal battle that still has to be fought within the Democratic party leadership. But at the least, it makes such a transition more plausible. A policy shift that would have been very surprising 10 years ago seems like more of a possibility now. Politicians may be slow to catch up sometimes, but there are moments when they do and suddenly public policy moves in a new direction.

August 28, 2020 1:21PM

Is Advocating Health Care Licensing Reform About to go Mainstream?

This Tuesday, “Transplant,” a Canadian television hit series, is scheduled to make its American debut on NBC. It’s the story of a Bashir Hamed, a Syrian doctor who emigrated to Toronto and is working at a diner because foreign‐​trained physicians have difficulty obtaining medical licenses. He springs into action to rescue customers injured in a suspected terrorist attack, making it obvious to viewers that his fellow Toronto residents had been deprived of his skills and knowledge.

The story immediately brings to mind my own personal experience as a general surgeon, working with Jamil, an outstanding OR technician, who would not only pass me instruments but sometimes offer very helpful and insightful suggestions during challenging and difficult operations. One day I asked him how he knew so much about surgery, only to learn that, like the fictional character in “Transplant,” he was a practicing general surgeon in Syria but, with a family to support, he could not afford to go through the onerous process of repeating his entire postgraduate residency training in order to get a license to practice in Arizona. So, he worked as an OR tech part of the time while growing his small Mediterranean diner the rest of the time. This illustrates how restrictive licensing laws waste valuable talent. It also illustrates how so many who emigrate to the U.S. from other countries are ambitious and industrious.

I mentioned Jamil in an op‐​ed in the Detroit News that explained how other developed countries, including Canada, Australia, and many in the European Union, make it easier for foreign health care practitioners to provide health care to their residents. I argued that “states should remove regulatory barriers obstructing eager and able doctors from other states and countries who want to help their patients.”

Earlier this month I moderated an online policy forum on the subject that featured Paul J. Larkin of the Heritage Foundation, Cato’s Alex Nowrasteh, and Maqbool Halepota, MD, a Scottsdale oncologist from Pakistan. It was accompanied by a brief video documentary on the same subject produced by Cato’s media staff.

The COVID-19 pandemic continues to provide lessons for policymakers on how regulatory obstacles impede a rapid and nimble response to public health challenges. Health care licensing laws in general—and how they block patients from foreign practitioners who are eager and able to help them—are getting a long‐​overdue reevaluation. Hopefully the advent of the new NBC television series is a sign that public awareness of the licensing problem is becoming more widespread.

August 28, 2020 1:12PM

The Republican Party’s Confusion on Trade

There’s been a lot of talk this week about what today’s Republican Party stands for. Is it still the Buckley‐​Reagan fusionist platform of of lower taxes, less regulation, traditional values, and a strong national defense? Is it George W. Bush’s “compassionate conservatism”? Trump’s “America First,” which always seemed less ideological than most platforms? The talk heated up when the GOP announced that it wouldn’t produce a party platform for the first time in memory, and the Republican National Committee unanimously voted in lieu of a platform its “undivided support for President Donald J. Trump and his effective Presidency”:

The RNC enthusiastically supports President Trump and continues to reject the policy positions of the Obama‐​Biden Administration, as well as those espoused by the Democratic National Committee today; therefore, be it

RESOLVED, That the Republican Party has and will continue to enthusiastically support the President’s America‐​first agenda.

So much for those musty old fights where delegates came from around the country to fight over whether their party should support civil rights, detente, or the gold standard.

I was particularly struck by a fundraising questionnaire I received in the mail last week from the National Republican Senatorial Committee. After some demographic questions and some Republican boilerplate, I got to these two questions:

17. Do you think it’s a good idea to renegotiate international trade deals to make sure we are leveraging our power in favor of American workers and U.S.-based companies?

18. Generally, is there too much government involvement in our free enterprise system?

I assume the NRSC expects recipients to offer a hearty “yes!” to both those questions. But of course they represent diametrically opposed views. Is there too much government involvement in our free enterprise system? Yes: the government should stop telling me what I can buy and from whom. I’d like to be a delegate to a hypothetical Republican convention with a hypothetical debate on the party platform. I’d stand up and say, paraphrasing Hubert Humphrey’s famous 1948 convention speech:

The time has arrived in America for the Republican Party to get out of the shadow of mercantilism and to walk forthrightly into the bright sunshine of free trade and free enterprise.

At this year’s virtual convention there was a lot of talk about “freedom” and “liberty.” And also a lot of talk about restricting Americans’ right to trade with people in other countries. The president once again insisted that “other countries take advantage of us on trade” and denounced agreements that would reduce trade barriers.

When you don’t even debate ideas, you can end up thinking that you support both less government involvement in our free enterprise system and increased barriers to peaceful trade among individuals.

August 27, 2020 1:53PM

With Hurricane Laura Hammering the Gulf, Why Are U.S. Energy Markets So Calm?

An increasingly common refrain in Washington these days is that America's liberalized financial markets and trade policies have made the U.S. economy less resilient to pandemics, wars, or other major shocks, and that more regulation is needed to ensure that Americans have access to essential goods at these perilous times. Hurricane Laura's muted impact on U.S. energy markets, however, provides a clear lesson that "openness" and "resiliency" are not mutually exclusive, and in fact that freer markets can actually reduce U.S. vulnerability to economic shocks.

As Laura makes landfall, the Wall Street Journal warns that it could endanger a substantial portion of U.S. fuel and petrochemical production capacity:

Refineries, petrochemical facilities and ports along the Gulf Coast were closing as Hurricane Laura barreled toward the Texas-Louisiana border....

Hurricane Laura’s winds and storm surge threatened much of America’s fuel-making and chemicals infrastructure. More than 20% of U.S. refining capacity, capable of processing roughly four million barrels of oil a day, is located within the storm’s potential path, analytics firm IHS Markit said. As of Wednesday afternoon, companies had closed or said they planned to shut nearly three million barrels a day worth of capacity, the firm said....

Almost half of the nation’s capacity to produce ethylene, a building block in plastics manufacturing, could shut if the Gulf’s petrochemical hub were hit in the right spot, market intelligence firm S&P Global Platts said. As of Tuesday, chemical makers in southeast Texas and Louisiana—including Motiva, BASF SE, Ineos Ltd. and Total—had already cut 20%, according to IHS Markit.

Chemical maker Dow Inc. said Wednesday it was shutting several facilities and reducing staff to essential personnel in Beaumont, Deer Park and other Texas cities.

Despite all of these closures and the risk of significant damage to U.S. petroleum products manufacturing capacity and infrastructure, however, domestic prices for various petroleum products have barely budged. According to the aforementioned WSJ story and other recent articles, three factors contribute to this surprising resiliency:

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