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It’s always important to remember that the problem of high drug prices is almost entirely a government-created problem in the form of patent monopolies. In the absence of these monopolies, almost all drugs would be cheap. In many cases, the free market price is less than 1.0 percent of the patent monopoly price.
It would have been helpful to note this fact in this NYT piece on a Trump Administration plan to lower drug prices to patients. Several Democratic members of Congress, including Senators Sanders, Warren, and Gillibrand, have proposed legislation that would have the government pay for the cost of researching and testing new drugs. By allowing new drugs to sell at generic prices, public funding would not only reduce costs but would also eliminate the enormous incentive for lying about the safety and effectiveness of drugs that exist under the current system.
It’s always important to remember that the problem of high drug prices is almost entirely a government-created problem in the form of patent monopolies. In the absence of these monopolies, almost all drugs would be cheap. In many cases, the free market price is less than 1.0 percent of the patent monopoly price.
It would have been helpful to note this fact in this NYT piece on a Trump Administration plan to lower drug prices to patients. Several Democratic members of Congress, including Senators Sanders, Warren, and Gillibrand, have proposed legislation that would have the government pay for the cost of researching and testing new drugs. By allowing new drugs to sell at generic prices, public funding would not only reduce costs but would also eliminate the enormous incentive for lying about the safety and effectiveness of drugs that exist under the current system.
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The article discusses the agenda of Andrew Yang, a New York-based businessperson, whose political agenda is centered on dealing with mass job displacement due to robots and artificial intelligence. Such mass displacement implies rapid productivity growth, presumably along the lines of the 3.0 percent growth the country saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005.
This sort of rapid productivity growth would make it possible to reach the 3.0 percent growth rate that Republicans projected when they passed their tax cuts. (GDP growth is the sum of productivity growth and employment growth.) In the years since 2005, productivity growth has been close to 1.0 percent. The Congressional Budget Office and most other forecasters have projected that slow rates of productivity growth would continue. However, the robots taking our jobs crew strongly disagree.
Somehow, most reporting has failed to recognize the relationship between job-killing robots and GDP growth. If we do see the more rapid productivity growth envisioned by those concerned about job-killing robots, then deficits will certainly not be a problem. The country will be seeing enormous growth in its productive capacities and will need lots of spending to keep workers employed and fully utilize its capacity.
The article discusses the agenda of Andrew Yang, a New York-based businessperson, whose political agenda is centered on dealing with mass job displacement due to robots and artificial intelligence. Such mass displacement implies rapid productivity growth, presumably along the lines of the 3.0 percent growth the country saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005.
This sort of rapid productivity growth would make it possible to reach the 3.0 percent growth rate that Republicans projected when they passed their tax cuts. (GDP growth is the sum of productivity growth and employment growth.) In the years since 2005, productivity growth has been close to 1.0 percent. The Congressional Budget Office and most other forecasters have projected that slow rates of productivity growth would continue. However, the robots taking our jobs crew strongly disagree.
Somehow, most reporting has failed to recognize the relationship between job-killing robots and GDP growth. If we do see the more rapid productivity growth envisioned by those concerned about job-killing robots, then deficits will certainly not be a problem. The country will be seeing enormous growth in its productive capacities and will need lots of spending to keep workers employed and fully utilize its capacity.
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Here are a few small changes from the article in today’s Post (“Massive infusion of spending ends era of restraint for federal agencies, Pentagon) telling readers how the new budget deal would increase the budget deficit.
“The deal signed into law by President Trump will pump more than $500 billion in additional money (1.2 percent of GDP) into domestic agencies and the Pentagon over two years, the biggest increase in spending in almost a decade. It ends months of budget squabbles and provides greater certainty for the government officials responsible for the military, disaster relief and domestic agencies.”
…
“While Congress approved a 10 percent increase in spending for the Pentagon and domestic agencies — lifting the military budget to $700 billion this year (3.5 percent of GDP) and the domestic budget to $591 billion (3.0 percent of GDP) — appropriators on 12 different committees have to fill in many of the details.”
…
“The nonpartisan Committee for a Responsible Federal Budget projects that the United States will have a $1 trillion budget deficit (5.0 percent of GDP) by next year — extremely high by historical standards — and that it will probably last for years.”
…
“Some of the largest debates on Capitol Hill in the coming weeks — a complete budget is due by March 23 — are probably going to be over border security funding, $86 billion in disaster funding and $140 billion in emergency war funding.” (The piece does not indicate whether these would be single year or multi-year appropriations, so it is not clear how large they are relative to the budget or the economy.)
Here are a few small changes from the article in today’s Post (“Massive infusion of spending ends era of restraint for federal agencies, Pentagon) telling readers how the new budget deal would increase the budget deficit.
“The deal signed into law by President Trump will pump more than $500 billion in additional money (1.2 percent of GDP) into domestic agencies and the Pentagon over two years, the biggest increase in spending in almost a decade. It ends months of budget squabbles and provides greater certainty for the government officials responsible for the military, disaster relief and domestic agencies.”
…
“While Congress approved a 10 percent increase in spending for the Pentagon and domestic agencies — lifting the military budget to $700 billion this year (3.5 percent of GDP) and the domestic budget to $591 billion (3.0 percent of GDP) — appropriators on 12 different committees have to fill in many of the details.”
…
“The nonpartisan Committee for a Responsible Federal Budget projects that the United States will have a $1 trillion budget deficit (5.0 percent of GDP) by next year — extremely high by historical standards — and that it will probably last for years.”
…
“Some of the largest debates on Capitol Hill in the coming weeks — a complete budget is due by March 23 — are probably going to be over border security funding, $86 billion in disaster funding and $140 billion in emergency war funding.” (The piece does not indicate whether these would be single year or multi-year appropriations, so it is not clear how large they are relative to the budget or the economy.)
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It is more than a bit painful to see the media all turn to the Peter Peterson-financed Committee for a Responsible Federal Budget (CRFB) as the experts on budget deficits right now. We can argue over whether the Republicans are pushing too far with their deficits when the economy is near full employment, but one thing that is not arguable is that we had needlessly austere federal budgets for the last decade.
While the austerity was largely attributable to the Republicans in Congress who had as their guiding principle opposing anything President Obama might do to boost growth and create jobs, the CRFB and other Peterson funded outfits provided them with intellectual credibility in pushing this position. They could pretend they were being responsible stewards of the Treasury as they were demanding cuts in a wide range of federal programs and nixing any new ones.
In reality, rather than helping our children as the CFRB and Republican deficit hawks claimed, they were keeping their parents out of work and permanently lowering the economy’s productive capacity. Their policies are easily costing us $1 trillion a year in lost output (5.0 percent of GDP).
It is unfortunate that a long record of being disastrously wrong on budget policy is apparently a credential for getting taken seriously by major media outlets in debates over the federal budget.
It is more than a bit painful to see the media all turn to the Peter Peterson-financed Committee for a Responsible Federal Budget (CRFB) as the experts on budget deficits right now. We can argue over whether the Republicans are pushing too far with their deficits when the economy is near full employment, but one thing that is not arguable is that we had needlessly austere federal budgets for the last decade.
While the austerity was largely attributable to the Republicans in Congress who had as their guiding principle opposing anything President Obama might do to boost growth and create jobs, the CRFB and other Peterson funded outfits provided them with intellectual credibility in pushing this position. They could pretend they were being responsible stewards of the Treasury as they were demanding cuts in a wide range of federal programs and nixing any new ones.
In reality, rather than helping our children as the CFRB and Republican deficit hawks claimed, they were keeping their parents out of work and permanently lowering the economy’s productive capacity. Their policies are easily costing us $1 trillion a year in lost output (5.0 percent of GDP).
It is unfortunate that a long record of being disastrously wrong on budget policy is apparently a credential for getting taken seriously by major media outlets in debates over the federal budget.
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The NYT should have its presses washed out with soap. In an article about plans to impose work requirements for Medicaid it told readers:
“The ballooning deficits created by the budget deal that President Trump signed into law Friday and the recent tax bill are likely to add urgency to the party’s attempts to wring savings from entitlement programs.”
This needs a big “what the f**k are you talking about?” The Republicans do everything they can to increase the deficit with tax cuts and additional spending for the military and now there is “urgency … to wring savings from entitlement programs.”
Sorry, not on this planet. The Republicans have made it as clear as they possibly can they don’t give a damn about deficits. When a Republican says anything about deficits at this point, the only appropriate response is derisive laughter. They have zero right to be taken seriously and the NYT misleads its readers by implying otherwise.
The NYT should have its presses washed out with soap. In an article about plans to impose work requirements for Medicaid it told readers:
“The ballooning deficits created by the budget deal that President Trump signed into law Friday and the recent tax bill are likely to add urgency to the party’s attempts to wring savings from entitlement programs.”
This needs a big “what the f**k are you talking about?” The Republicans do everything they can to increase the deficit with tax cuts and additional spending for the military and now there is “urgency … to wring savings from entitlement programs.”
Sorry, not on this planet. The Republicans have made it as clear as they possibly can they don’t give a damn about deficits. When a Republican says anything about deficits at this point, the only appropriate response is derisive laughter. They have zero right to be taken seriously and the NYT misleads its readers by implying otherwise.
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In an NYT column advocating that companies spend more money on training their workers, former Yale president Richard Levin implicitly endorsed the Republicans’ view that the economy will grow much more rapidly than projected by the Congressional Budget Office and most other forecasters. Levin bases his argument in part on an evaluation by McKinsey, a management consulting company, that up to half of all jobs could be automated over the next two decades.
If we do in fact see half of all current jobs eliminated, that would imply 3.5 percent annual productivity growth, a little better than the 3.0 percent rates we saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005. With even modest labor force growth, we would be looking at GDP growth of more than 4.0 percent. Even if the McKinsey numbers turn out to be overly optimistic on the rate of productivity growth, we should still be able to make the 3.0 percent GDP growth rate touted by the Republicans.
Of course this growth has nothing to do with the Republican tax cut, the McKinsey projections long predate Trump’s election. But they do indicate that the prospect of 3.0 percent growth is not absurd, many respectable types use this sort of assumption as the basis for their NYT columns.
In an NYT column advocating that companies spend more money on training their workers, former Yale president Richard Levin implicitly endorsed the Republicans’ view that the economy will grow much more rapidly than projected by the Congressional Budget Office and most other forecasters. Levin bases his argument in part on an evaluation by McKinsey, a management consulting company, that up to half of all jobs could be automated over the next two decades.
If we do in fact see half of all current jobs eliminated, that would imply 3.5 percent annual productivity growth, a little better than the 3.0 percent rates we saw in the long Golden Age from 1947 to 1973 and again from 1995 to 2005. With even modest labor force growth, we would be looking at GDP growth of more than 4.0 percent. Even if the McKinsey numbers turn out to be overly optimistic on the rate of productivity growth, we should still be able to make the 3.0 percent GDP growth rate touted by the Republicans.
Of course this growth has nothing to do with the Republican tax cut, the McKinsey projections long predate Trump’s election. But they do indicate that the prospect of 3.0 percent growth is not absurd, many respectable types use this sort of assumption as the basis for their NYT columns.
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Hi everyone, this is CEPR, taking over Beat the Press for an important announcement. We’re planning a party in honor of Dean’s 18 years as CEPR’s Co-Director and we’d love for you to come. February 26, 2018, Busboys and Poets 5th and K location, in Washington, DC.
Details can be found here.
Hope to see you there! Now, back to your regularly scheduled programming.
Hi everyone, this is CEPR, taking over Beat the Press for an important announcement. We’re planning a party in honor of Dean’s 18 years as CEPR’s Co-Director and we’d love for you to come. February 26, 2018, Busboys and Poets 5th and K location, in Washington, DC.
Details can be found here.
Hope to see you there! Now, back to your regularly scheduled programming.
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NYT Magazine had an interesting piece on the experience of a woman and her family who were forced out of the Cabrini-Green housing project in Chicago when it was torn down in 2010. The article tells readers that she was unhappy to be forced to leave an apartment that had been her home for more than two decades and where she had raised 13 children. The experience of her and her family in the public housing to which they were relocated proved disastrous, and she ended up dying a seemingly preventable death less than four years later.
While the story presented here is, in fact, tragic, the piece misleadingly implies that Cabrini-Green residents were better off before the high-rise complex was destroyed. This may have been true for some, but that is not likely the case for most of the people who left the project.
A recent re-analysis of data from the “Moving to Opportunity” study conducted in the 1990s found large improvement in school graduation rates and other outcomes for children who left housing in areas of high poverty. A more recent analysis, of outcomes for people who left public housing when the Robert Taylor homes on Chicago’s south side were destroyed, found even larger effects.
The story of Annie Ricks, the woman featured in the NYT piece, is indeed horrible. It reflects the way low-income people, and especially low-income black people, are treated in the United States. But it is absurd to imply that housing projects like Cabrini-Green were somehow good living arrangements for people. This doesn’t mean that at least some of the former residents would not find these projects better than their alternatives, but it is irresponsible to suggest that, in general, this is the case when there is clear evidence showing the opposite.
NYT Magazine had an interesting piece on the experience of a woman and her family who were forced out of the Cabrini-Green housing project in Chicago when it was torn down in 2010. The article tells readers that she was unhappy to be forced to leave an apartment that had been her home for more than two decades and where she had raised 13 children. The experience of her and her family in the public housing to which they were relocated proved disastrous, and she ended up dying a seemingly preventable death less than four years later.
While the story presented here is, in fact, tragic, the piece misleadingly implies that Cabrini-Green residents were better off before the high-rise complex was destroyed. This may have been true for some, but that is not likely the case for most of the people who left the project.
A recent re-analysis of data from the “Moving to Opportunity” study conducted in the 1990s found large improvement in school graduation rates and other outcomes for children who left housing in areas of high poverty. A more recent analysis, of outcomes for people who left public housing when the Robert Taylor homes on Chicago’s south side were destroyed, found even larger effects.
The story of Annie Ricks, the woman featured in the NYT piece, is indeed horrible. It reflects the way low-income people, and especially low-income black people, are treated in the United States. But it is absurd to imply that housing projects like Cabrini-Green were somehow good living arrangements for people. This doesn’t mean that at least some of the former residents would not find these projects better than their alternatives, but it is irresponsible to suggest that, in general, this is the case when there is clear evidence showing the opposite.
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