Topic: General

Wanna Fight Superbugs? Stop Overprescribing Government

PHILADELPHIA, PA - JUNE 15: Dr. Ezekiel Emanuel speaks onstage at the Klick Health Ideas Exchange on June 15, 2015 in Philadelphia, Pennsylvania. (Photo by Neilson Barnard/Getty Images for Klick Health)

Ezekiel Emanuel notices that inflated demand for antibiotics has led to overuse, and that antibiotic-resistant infections may be killing 23,000 Americans per year. He notices the pharmaceutical industry is focusing more on expensive non-cures for cancer that only extend life by months than on new antibiotics. But he hasn’t noticed that government intervention is causing these problems, so he thinks the solution is—you guessed it—even more government.

Government Inflates Demand for Antibiotics

In the Washington Post, Emanuel warns that “high patient demand leads to overprescribing” of antibiotics, which “breeds resistance” and can lead to superbugs against which we humans have no defenses.

Yet the main reason patient demand is so high is that the federal government—through Medicare, Medicaid, the tax code, Emanuel’s beloved ObamaCare, and other measures—have anesthetized patients to the cost of antibiotics and everything else. We would have less antibiotic overuse and resistance if government just let people keep their own money to spend on health care.

Government Distorts Pharmaceutical Research

Emanuel then complains pharmaceutical manufacturers are spending far more money to research and develop cancer treatments that only add a few months to cancer patients’ lives (and cost more than $100,000 a pop) that they spend developing lower-cost antibiotics.

If this state of affairs fails to reflect patients’ preferences, perhaps the reason is that Medicare offers to make drug companies and oncologists fantastically wealthy by paying for cancer treatments regardless of value.

Overprescribing Government

Rather than admit that government can be incompetent to the point of contributing to the problems it is trying to solve—as his fellow Obama-administration alumnus Larry Summers does—Emanuel doubles down on the Big Government ideology. He proposes requiring hospitals to track antibiotic (over)use as a condition of receiving Medicare subsidies.

Does it occur to Emanuel that a Medicare program stupid enough to subsidize five decades of antibiotic overuse might not be competent enough to track, much less solve that problem?

Next, Emanuel illustrates why the passive voice should be unconstitutional: “every antibiotic prescription should be electronically reviewed to be certain it meets national guidelines.” Like many devotees of the passive voice, Emanuel employs it to hide what he means, which is: “The federal government and its agents should review every antibiotic prescription you and your family receive, even when the government isn’t paying for it.”

What could possibly go wrong? I mean, can you imagine any reasons why people might want a little privacy when it comes to their use of antibiotics? Emanuel can’t—or he doesn’t care.

Finally, he proposes to have the federal government award $2 billion prizes to anyone who secures FDA approval for a new antibiotic. A system of prizes might actually do a better job than the federal government’s patent system of encouraging antibiotics R&D. But Emanuel does not address such thorny questions as who gets to define which new antibiotics will qualify; who sets the amount of the prize; what sort of complications financing the prizes would create; how this award would affect the FDA, and lobbying of the FDA; or whether the net effect of this system would be positive or negative.

Ezekiel Emanuel has no time for such trifles. He’s got himself a hammer, and by God he’s found a nail.

Conclusion 

Government is like antibiotics. Some amount is necessary. But overprescribing it makes things a lot worse.

A good indication you’ve overdosed on the statist Kool-Aid is when you make dismissive comments like this one Emanuel levels at current antibiotic-tracking programs: “Unfortunately, they are voluntary.”

The Luckiest Crop in History

Recently, the New York Times ran an opinion piece by Gregg Easterbrook, which draws attention to the disconnect between the gloomy public on the one hand and the real state of America on the other hand. The prevailing mood in the United States is one of pessimism. For prominent politicians on both sides of the aisle, to use Easterbrook’s words, “the impending apocalypse has been issue number one.” Yet in almost every measurable way, this is the best time in history to be alive. The evidence goes on and on [links added]:   

Pollutiondiscriminationcrime and most diseases are in an extended decline; living standardslongevity and education levels continue to rise … A century ago, most Americans worked in agriculture: Today hardly any do, and we’re all better off, including farmers. That manual labor, farm or factory, has given way to 60 percent of Americans employed in white-collar circumstances … In 1990, 37 percent of humanity lived in what the World Bank defines as extreme poverty; today it’s 10 percent.  

Where did all this progress come from? Easterbrook rightly credits, “interconnected global economics.” Through an intricate symphony of competition and exchange, humanity has driven technology forward and achieved heights of prosperity that would be unimaginable to our ancestors.   

Unfortunately, Easterbrook also gives credit to top-down government planning where none is due. He cites the Affordable Care Act as an example of a successful reform, but rising life expectancy and improved health outcomes are long-term trends that both predate Obamacare and extend far beyond U.S. borders. It is far too soon to attribute any part of those trends to that highly problematic policy.   

Easterbrook even claims that, “In almost every case, reform has made America a better place, with fewer unintended consequences and lower transaction costs than expected. This is the strongest argument for the next round of reforms.” That is a sweeping overgeneralization, as it obviously hinges on the specific nature of reforms. Plenty of reforms throughout American history are now universally recognized as horrible mistakes – just look at alcohol prohibition.   

Despite some confusion about the drivers of progress, Easterbrook’s opinion piece is a refreshing reminder of the incredible progress humanity has made and well worth a read. It ends with this heartening quote that the data backs up:   

Recently Warren Buffett said that because of the “negative drumbeat” of politics, “many Americans now believe their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.” 

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The Middle Class Shrinks as the Number of High Income Households Grows

The day before yesterday, The Washington Post ran a piece with the alarming headline, “The middle class is shrinking just about everywhere in America.” Although you wouldn’t know it from the first few paragraphs, a shrinking middle class isn’t necessarily a bad thing. As HumanProgress.org Advisory Board member Mark Perry has pointed out, America’s middle class is disappearing primarily because people are moving into higher income groups, not falling into poverty. label Data from the U.S. Census Bureau shows that after adjusting for inflation, households with an annual income of $100,000 or more rose from a mere 8% of households in 1967 to a quarter of households in 2014.

According to the Pew Research Center, 11% fewer Americans were middle class in 2015 than in 1971, because 7% moved into higher income groups and 4% moved into lower income groups. The share of Americans in the upper middle and highest income tiers rose from 14% in 1971 to 21% in 2015. 

One has to read fairly far into the Washington Post’s coverage before seeing any mention of the fact that a shrinking middle class can mean growing incomes: 

“[In many] places, the shrinking middle class is actually a sign of economic gains, as more people who were once middle class have joined the ranks at the top. [For example, in] the Washington, D.C. metropolitan area, the share of adults living in lower-income households has actually held steady [from 2000 to 2014]. The households disappearing from the middle-class, rather, are reflected in the growing numbers at the top.”

Other cities with a shrinking middle class, a growing upper class and very little change in the lower class include New York, San Francisco and New Orleans. So the next time you hear someone bemoan the “shrinking middle class,” take a closer look at the data and keep in mind that it may actually be a sign of growing prosperity. 

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The Necessary and Valuable Economic Role of Tax Havens

Economists certainly don’t speak with one voice, but there’s a general consensus on two principles of public finance that will lead to a more competitive and prosperous economy.

To be sure, some economists will say that high tax rates and more double taxation are nonetheless okay because they believe there is an “equity vs. efficiency” tradeoff and they are willing to sacrifice some prosperity in hopes of achieving more equality.

I disagree, mostly because there’s compelling evidence that this approach ultimately leads to less income for the poor, but this is a fair and honest debate. Both sides agree that lower rates and less double taxation will produce more growth (though they’ll disagree on how much growth) and both sides agree that a low-tax/faster-growth economy will produce more inequality (though they’ll disagree on whether the goal is to reduce inequality or reduce poverty).

Since I’m on the low-tax/faster-growth side of the debate, this is one of the reasons why I’m a big fan of tax competition and tax havens.

Bathroom Battles: Why We Need School Choice

North Carolina governor Pat McCrory (R) has just responded to the federal government’s threat to punish the state over its law prohibiting local governments from allowing transgendered people to choose their bathrooms: We’re suing!

Central to the nation’s bathroom war – which is one among sundry, seemingly endless culture wars – are the public schools. They are mentioned specifically in the Tar Heel State’s embattled law, and schools have been the sites of several lawsuits across the country over who gets to decide where students go to the bathroom or change their clothes. Of course, as Cato’s Public Schooling Battle Map reveals in stark detail, just like the nation, our schools are constant battlegrounds in the culture wars, and our children are essentially innocent civilians with political, social, and cultural bombs going off all around them.

At issue in North Carolina are really two things directly applicable to education: level of public school control, and private rights.

The immediate issue is whether a state should be able to make its own laws without the federal government overruling them. The feds have a legitimate claim, under the Fourteenth Amendment, to do what they are doing – attempting to prevent discrimination by state or local governments – but there is also a good case to be made that there are competing rights at stake – privacy versus nondiscrimination – and perhaps neither should take clear-cut precedence. Moreover, even if it has the authority to intervene, it may be best if Washington allowed social evolution to occur gradually rather than imposing it as people deal with what is, it seems, a pretty new idea: a person should choose which restroom or locker room to use. Of course, North Carolina’s law applies one rule to all municipalities, also potentially curbing natural societal evolution.

Set Fixed Judicial Terms for Supreme Court Justices

Contrary to the judiciary’s reputation as the least dangerous branch, judges exercise almost every executive and legislative power other than going to war. This is why the battle over Antonin Scalia’s successor is so bitter.

That wasn’t the Constitution’s original plan. The courts were important but were not to supplant the other branches. Rather, judges were expected to constrain the executive and legislative branches.

Alexander Hamilton expected the judiciary to play a “peculiarly essential” role to safeguard liberties and act as an “excellent barrier to the encroachments and oppressions of the representative body.” Judges were to “guard the Constitution and the rights of individuals” from “the people themselves.”

James Madison, intimately involved in drafting the Constitution, explained that: “independent tribunals of justice will consider themselves in a peculiar manner the guardians of [Bill of Rights guarantees]; they will be an impenetrable bulwark against every assumption of power in the legislative or executive; they are will be naturally led to resist every encroachment upon rights expressly stipulated for in the constitution by the declaration of rights.”

Seven Reforms to Confront the Populist Wave in America and Europe

Donald Trump keeps winning Republican Party primaries. He could be America’s next president. It’s a sobering thought.

But Trump is not alone. Europe is filled with populist parties, old and new.

It’s too simple to decry a proto-fascist wave, as feared by some alarmists. In fact, most of his Republican competitors were far more aggressive and irresponsible on foreign policy than Trump. Normal folks simply are tired of being viewed as problems to be solved rather than citizens to be engaged.

In the U.S. it doesn’t much matter who people vote for. Government will expand. New regulations will be issued. More tax dollars will be spent. Additional wars will be started. The only certainty is that the views of those who vote will be ignored. Much the same governing consensus dominates Europe.

At the same time, the governing class protects itself. The response of this ruling class to public challenge only increases popular anger and frustration.