Executive Orders: This is Trump’s Brain on Drugs

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 opposes — 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.

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Progressive Policies Keep Failing

I laughed when I saw The Washington Post headline: “Minneapolis had progressive policies, but its economy still left black families behind.”

The media are so clueless. Instead of “but,” the headline should have said, “therefore,” or “so, obviously.”

Of course, progressive policies failed! They almost always do.

“If you wanted a poster child for the progressive movement, it would be Minneapolis,” says Republican Minnesota Senate candidate Jason Lewis in my new video. “This is the same city council that voted to abolish the police department.”

The council, which has no Republicans, spends taxpayer money on most every progressive idea.

They brag that they recycle most everything. They have a plan to stop climate change. They tell landlords to whom they must rent. They will force employers to pay every worker $15 an hour. They even tell supermarkets what cereal they must sell.

Despite such policies, meant to improve life for minorities and the poor, the Minneapolis income gap between whites and blacks is the second highest in the country.

While that surprises the media, it’s no surprise to Lewis, who points out, “When you take away the incentive for work and savings and investment, you get less of it!”

Exactly. When government sends checks to people who don’t work, more people don’t work. Guarantees like a high minimum wage raise the cost of potential workers, so some never get hired. High taxes to fund progressives’ programs make it difficult for businesses to open in the first place.

Lewis says; ” I’ve been touring businesses that were burned. They did not mention global warming, recycling, or the environment one single time. You know what they say? Give me low taxes and give me public order.”

Lewis says Minnesota is now a “command and control economy….They’re not even shy about it. (Congresswoman) Ilhan Omar said we need to abolish capitalism!”

Not exactly. But Omar did call for “dismantling the whole system of oppression,” including America’s economic systems that, “prioritize profit.”

Lewis says she wants to create “equal poverty for everybody.”

No, I push back, “She thinks her ideas will lift everybody up.”

“Show us, Ilhan,” he responds. “Where has it worked? Everything that you’re proposing hasn’t worked!”

He’s right.

But Cam Gordon, a current Minneapolis councilman, tells me the city’s economic “disparities were caused by a long trail of historic racism.”

He tweeted: “Time to end capitalism as we know it.”

He says that would be good because “we could have more democratic control of our resources.” Cam Gordon is the kind of guy who gets elected in Minneapolis.

“Every alternative to capitalism brings stagnation and poverty,” I say to him.

Gordon answers, “I think we can take care of each other better.”

Lewis points out that before COVID-19, “the people gaining the most were at the bottom end of the wage scale. Women, Hispanics, African Americans were gaining the most. A rising tide truly lifts all boats.”

He’s right again. In the past 50 years, while progressives attacked profits, capitalism—the pursuit of profit—lifted more than a billion people out of extreme poverty.

When I point that out to Gordon, he simply ignores my point about fabulous progress around the world and says: “The problem with capitalism as we know it is this idea that we have to have constant growth….Capitalism got us the housing crisis right now and…climate change. It’s actually going to destroy the planet.”

Sigh.

His Green Party’s “community-based economics” would give the community control over private property. Seems to me like community-based economics is just another way to say socialism. That’s brought poverty and tyranny every time it’s been tried.

“When socialism fails,” says Lewis, “the apologists always say, ‘We just didn’t do it enough, just didn’t do it the right way.’ (But) it’s always failed.”

Sadly, today in America, the progressives are winning.

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Contra The Short, Simple Dismissal Of Libertarianism: Economics and Markets (31m) – Episode 330

Episode 330 has Skyler giving his commentary on the subtopic “Economics and Markets” from Mike Huben‘s “The Short, Simple Dismissal of Libertarianism“. He writes, “99% of libertarianism is obviously untrue or unacceptable for one or more of these reasons… How can we know that so easily? Here are some simple principles that make it obvious.”

Listen to Episode 330 (31m, mp3, 64kbps)

Subscribe via RSS here, or in any podcast app by searching for “everything voluntary”. Support the podcast at Patreon.com/evc.

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Krikorian’s “Category Error”

During our last debate, an audience member asked Mark Krikorian if his arguments for restricting immigration of foreigners were also arguments for restricting the child-bearing of natives.  You might think that Mark would insist that native babies are somehow better than foreign adults.  How hard could it possibly be to craft such an argument?  However, Mark adamantly refused to compare the worths of different kinds of people.  Instead, he informed the questioner that his question was based on a “category error.”

In so doing, Mark signaled high IQ, because smart people love to announce that someone has made a “category error.”  But precisely what is a category error?  Here’s a standard definition:

To show that a category mistake has been committed one must typically show that once the phenomenon in question is properly understood, it becomes clear that the claim being made about it could not possibly be true.

Here’s a more detailed discussion:

Category mistakes are sentences such as ‘The number two is blue’, ‘The theory of relativity is eating breakfast’, or ‘Green ideas sleep furiously’. Such sentences are striking in that they are highly odd or infelicitous, and moreover infelicitous in a distinctive sort of way. For example, they seem to be infelicitous in a different way to merely trivially false sentences such as ‘2+2=5″ or obviously ungrammatical strings such as ‘The ran this’.

Which raises a big question: How could the audience member’s perfectly intelligible question possibly be a “category error”?!  If you say, “We should restrict immigration because immigrants burden taxpayers,” what on Earth is wrong with responding, “In that case, should we restrict child-bearing if babies burden taxpayers?”  The answer, of course, is: Nothing at all.  Not only is the latter question in the same “category” as the former question; it is the textbook way to check the logic of Mark’s position.  And it starkly reveals the inadequacy of Mark’s original argument.  Whatever your views on immigration, Mark definitely needs to assert something like, “We should restrict immigration because immigrants burden taxpayers and only natives are entitled to burden taxpayers.”

This in turn shifts the argument over to the fundamental question: What is morally permissible to do to foreigners but not natives – and why?  Which recalls a previous Krikorian-Caplan dialogue.  I asked Mark: “Suppose you can either save one American or x foreigners. How big does x have to be before you save the foreigners?”  And Mark responded:

Another meaningless hypothetical.

Not only is this a meaningful question; it gets to the heart of what Mark needs to formulate a coherent position on immigration.  I’m confident that Mark, as an avowed Christian, thinks we have no right to murder or enslave foreigners.  And an avowed restrictionist, Mark clearly thinks we have a right to prohibit foreigners from domestic labor and residential markets – even though plenty of natives are eager to trade with them.  Why, though, does Mark draw the line there?  While it is rhetorically convenient for him to dodge the question by calling it a “category error” or “meaningless,” he intellectually doesn’t have a leg to stand on.

So why not face the question instead of stonewalling?  I stand by my previous explanation: Mark thinks like a politician, not a truth-seeker.  To make his position intellectually credible, he’d have to say, “Foreigners’ welfare is of near-zero value.”  Unfortunately for him, this sounds terrible – and like most politicians, Mark hates to utter anything that sounds terrible.  Occasionally bullet-biting is essential for truth, but it’s bad for winning popularity contests.

I’m never nervous when I debate Mark; he has good manners and reminds me of my dad.  In contrast, I would be quite nervous even to be in the same room as a white nationalist.  They seem like sociopaths.  In terms of intellectual rigor, however, leading white nationalists far exceed Mark.  I naturally think they’re deeply wrong.  Still, if you want to construct an airtight argument for immigration restriction, your best bet is to build on the twin premises that (a) almost all immigrants are inferior to natives, and (b) the well-being of these inferior people is of little worth.

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The Problems We Must Solve Are Too Important to Reduce to Left vs. Right Politics

When considering a way forward, the discussion initially seems to be complicated because there are a lot of things that have gone wrong in the aftermath of George Floyd’s tragic death.

Looting is wrong. Blaming the wrong people for looting is wrong. Using the wrongness of looting to drown out discussions about what preceded the looting is wrong. All of the aforementioned things are wrong, but the key to finding a solution lies in identifying a more subtle form of wrong that blinds us to the answers we need.

And that is the tendency to reduce discussions about race and riots to the same old “Left vs. Right” talking points.

Not only is this also wrong, but it’s a form of being wrong that condemns us to a cycle of repeating our past mistakes.

If our underlying framework for discussing solutions is wrong, then everything that follows will be wrong as well.

We don’t need to pretend that the battle between Left vs. Right is unreal or unimportant, but we do need to remember that this battle is a manifestation of a broader and more fundamental battle between Freedom versus Force, Creativity versus Coercion, and Central Planning versus Voluntary Markets that allow all individuals to opt-in and opt-out of services based on their basic human right to decide for themselves what their preferences and priorities should be.

As everyone searches frantically for a specific group or political figure to blame, lovers of liberty are being presented with an opportunity to take the conversation beyond the familiar mudslinging at personalities and parties.

Nobel Prize-Winning Economist Milton Friedman wrote:

I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either…

The message here is apropos for our times:

Trust incentives more than individuals.

This applies to corporations and governments. This applies to leftist organizations and right-wing organizations. This applies to the religious and the secular. This applies to academia and entrepreneurship. The basic economic principle that “people respond to incentives” applies to us all.

If the incentives of a system are bad, even the work of those who mean well is compromised.

If the incentives of a system are good, we don’t have to place so much faith in our ability to always see things the same way.

The way we’re going to move forward in this world is not by finding a person who’s good enough to make bad systems work, but by investing in systems that incentivize even the bad people to make themselves accountable to creating value for others. And we know of no other system like that than the free market.

The world is more ready than ever to hear from voices who are willing to show them something that offers meaning, healing, and hope in times of conflict and crisis.

There is no better time for us to show those who are hurting how much the free market creates and delivers even when their enemies condemn and disagree.

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True Authority, Pandemics, Memento Mori, & Feminism (14m) – Episode 311

Episode 311 has Skyler giving his commentary on the following topics: where true authority and leadership comes from and why politicians don’t have it; the arbitrary classification of pandemics; how Stoicism prepares us for illness; the feminist creative energy and markets; and more.

Listen to Episode 311 (14m, mp3, 64kbps)

Subscribe via RSS here, or in any podcast app by searching for “everything voluntary”. Support the podcast at Patreon.com/evc.

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