Executive Orders: This is Trump’s Brain on Drugs

Pills (free stock photo from Pexels)

On July 24, US president Donald Trump signed four executive orders with an eye toward altering the way prescription drugs are priced and purchased in the United States.

Three of the four orders embody good ideas that accord with the goals of think tanks supposedly supporting “free-market policy solutions” to America’s healthcare problems.

Sally Pipes, president of one such think tank (the Pacific Research Institute), writes in opposition to those three orders, and in support of the fourth, anti-free-market order, at Fox News. Her opposition says more about PRI’s supposed support for free markets than about the quality of Trump’s orders. Let’s look at how these four measures stack up against a free-market approach.

The first order requires federally funded community health centers to “pass the giant discounts they receive from drug companies on insulin and EpiPens directly to their patients.”

These clinics advertise affordable, sliding payment scales for low-income patients. Trump’s leveraging their federal funding  to stop them from price-gouging patients. Even if we disagree over whether government should be funding healthcare at all, we should agree that taxpayer funding shouldn’t go toward picking the pockets of the poor.

The second order will “allow the safe and legal importation of prescription drugs from Canada and other countries where the price for the identical drug is incredibly lower.”

Trump usually opposes free trade, but this is a step in that direction, and it’s the RIGHT direction. The US government shouldn’t artificially jack up drug prices by restraining trade across borders.

The third order — which Pipes supports — eliminates market incentives for pharmacy benefit managers who negotiate drug prices between insurer and pharmaceutical companies. Trump, decrying them as parasitical “middlemen,” hath decreed that they may not accept “rebates” from drug companies for successfully negotiating deals.

Yes, these “rebates” can create situations in which consumers ultimately pay more for drugs. They incentivize benefit managers  to negotiate bigger paychecks for themselves instead of lower prices for patients. But that’s an issue for market actors — pharmaceutical companies, insurers, pharmacies, and consumers — not government, to tussle over.

The fourth order brings us back to the same territory as the first: Taxpayer money versus drug pricing. It would require Medicare, the US government’s healthcare program for senior citizens, to negotiate drug prices based on an “International Pricing Index” reflecting prices in other developed nations.

Trump is delaying implementation of that order pending a counter-proposal from the industry, but it should be a slam-dunk. Medicare, whether one supports its existence or not, is effectively the biggest prescription drug purchasing network in the world. That market power should get its members the lowest, not the highest, prices.

Healthcare would be cheaper, better, and more accessible if government got its nose out of the matter entirely — but failing that, three of these four orders make good sense. They’re also a great litmus test. They tell us who really supports freer markets in healthcare and who just pays lip service to the notion while advocating crony capitalism in service to Big Pharma.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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“Peak Libertarianism?” No, Thom Hartmann is Just a Sore Winner.

“We have now reached peak Libertarianism,” Thom Hartmann informs us at CounterPunch, “and this bizarre experiment that has been promoted by the billionaire class for over 40 years is literally killing us.”

That claim is so bizarre on its face that it’s easy to dismiss. On the other hand, even the craziest claims can fool people if nobody takes the time to debunk them.

Even in its most watered-down, weak-tea form, Libertarianism calls for “smaller government.” That’s not its real focal point (opposing aggression is), but let’s give Hartmann the maximum benefit of doubt here and have a look at American government since 1980.

As of 1980, the US government’s total spending came to a little less than $600 billion. As of 2019, that number was nearly $5 trillion. Even adjusting for inflation, the US government spends about three times what it spent 40 years ago (that number will be WAY up for this year due to COVID-19 “relief” and “stimulus” spending).

Of course, spending isn’t the only indicator of size of government. There’s also regulation.  As of 1980, according to George Washington University’s Regulatory Studies Center, about 100 new pages were added to the Code of Federal Regulations each year. After trending generally upward for 39 years,  that number has exceeded 180 new pages each year since 2016. As for total pages published in the Federal Register, that’s gone up and down, but is about the same now (70,000 pages or so) as it was in 1980.

Perhaps Hartmann is thinking of something like the number of cops out there enforcing laws? I couldn’t easily find numbers going back to 1980, but from 1992 to 2012, according to the Bureau of Justice Statistics, the number of full-time law enforcement officers went up from fewer than 800,000 to more than a million, from 3.05 cops per thousand US residents to 3.43 cops per thousand.

Or maybe it’s the “social safety net” Hartmann has in mind?

Social Security outlays are way up in both nominal and wage-adjusted dollars since 1980, and steady as a percentage of GDP.

As of 1980, about 21 million Americans received average monthly benefits of $34.47 through the Supplemental Nutrition Assistance Program (when I was a kid, we called it “food stamps”). As of 2019, more than 35 million Americans received average monthly SNAP benefits of $129.83. SNAP benefit growth has out-paced inflation and the number of beneficiaries has out-paced population growth.

The actual numbers say America hasn’t moved so much as a whisker in the direction of “peak Libertarianism” over the last 40 years. Rather, it’s continued steadily down the road toward “peak Hartmannism” ever since LBJ’s Great Society, with relatively few bumps in that road since FDR’s New Deal.

Faux-“progressive,” actually reactionary, Hartmann  desperately wants to fob  the blame off on Libertarians for the consequences of 85 years of failed policies he still supports.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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CARES Act: Prelude to a $15 Minimum Wage?

Industrial Workers of the World (IWW) demonstration in New York, 11 April, 1914. Public Domain.
Industrial Workers of the World (IWW) demonstration in New York, 11 April, 1914. Public Domain.

Included in the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act were three programs with less euphonious acronyms: FPUC, PEUC, and PUA. These programs extended (by 13 weeks), expanded (to self-employed workers), and added a $600 per week federal kicker to, state-level unemployment benefits. As July comes to a close, more than 25 million Americans are about to lose that federal kicker.

The usual setup for the usual partisan fight over whether generous government benefits help the congenitally hard-working American people through tough times (the Democratic line) or discourage the congenitally lazy American people from getting off the couch and going to work (the Republican line)?

Well, yeah, but that this one’s shaping up a little differently than usual. Most American workers have presumably noticed the math involved here.  I doubt many of them consider that math mere coincidence: Assuming a 40-hour work week, $600 breaks down to $15 an hour.

For several years now, ongoing campaigns have tried to sell Americans on $15 an hour as the bottom end of “living wage” territory, and as a proper minimum hourly wage to be required by law. In fact, some cities and states have already adopted $15 per hour minimum wage laws, and some large employers have committed to that number whether it’s the law or not.

Election-year politics being what they are, I expect a compromise as the House, Senate, and White House negotiate a second edition of the CARES Act:

The Democratic House will grudgingly accept an end —  not immediate, but after an extension of no more than another three months — to the $600 unemployment kicker, in return for a $15 per hour federal minimum wage.

The Republican Senate will grudgingly accept a $15 per hour federal minimum wage, in return for phasing out the unemployment kicker.

US president Donald Trump will fist-pump and claim that he’s putting America back to work. Democratic presidential nominee Joe Biden will strut and claim that his party’s giving America a raise.

I’m against minimum wage laws for several reasons. Here are two: As a libertarian, I want government out of labor markets on principle; and as a supporter of unions, I want workers organizing for good wages and benefits instead of settling for the cheap substitutes Big Business lets its government servants hand out.

But my opposition to minimum wages doesn’t depend on a particular level. I’m no MORE against $15 an hour than I am against the current $7.25 an hour, or against the $3.35 an hour that prevailed when I entered the work force.

While it’s true that minimum wage hikes hurt some of America’s poorest and least skilled workers and don’t really help anyone in the long term, there’s an up side to them as well:

As the effects of each minimum wage hike propagate through the economy and it turns out to have been a wash at best, a few more workers will stop falling for government’s economic planning baloney and unionize themselves instead. Which any good libertarian loves and supports as a fine example of the market at work.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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