Sunday, October 4, 2015

Unemployment and work

The labor force participation rate is at a 38-year low. But the interesting thing to note about the labor force participation rate is that it entered its steepest freefall directly after the Great Recession technically ended, a period of time that should have coincided with aggressive expansion.

However, recall that the extension of unemployment benefits up to nearly 2 years was a major political debate at the time. It would seem over-generous handouts inspired laziness in the workforce. Correlation is not causation, but think about the incentives. Why trade free money and leisure time for a 40-hour work week and a marginal increase in income?

The Wall Street Journal reported on November 6, 2009:

President Barack Obama signed legislation into law Friday providing an additional 14 to 20 weeks of benefits for those who have already exhausted theirs or will do so by year-end.

The extension comes on the same day the Labor Department announced the U.S. unemployment rate hit 10.2% in October, crossing into double-digits for the first time in 26 years as the nation’s jobless swelled to 15.7 million.

The bill, passed earlier this week by both the Senate and the House of Representatives, extends federal jobless benefits by 14 weeks for Americans in all 50 states who face exhaustion before year-end, and by 20 weeks for those living in states where the unemployment rate is 8.5% or higher.

The additional 20 weeks in hard-hit states means the maximum a person in one of those states could receive is now up to 99 weeks, or nearly two years — the most in history.

Another policy response at the time was a gargantuan Keynesian stimulus, ballooning spending to $6 trillion across all government levels. The motivation behind such astronomic spending was to increase demand for the services of the millions of workers laid off during the Great Recession. It was a massive failure, as the continued decline in the labor force participation rate shows. The problem was never a lack of jobs to match with the skills of the unemployed. The problem was getting those people into the market to use their skills to others’ advantage.

The government came up with a demand-side solution to a supply-side problem. Workers never match precisely to the skills solicited in a job advertisement. The job they’re given invariably molds to their knowledge and personality, evolving to fit them. The worker supplies his expertise to create value. The value is not in the job that is demanded, but the work and creativity that is supplied. Workers must give in order to receive.

Thanks to Republicans in Congress, the fiscal year 2015 deficit will be the lowest deficit of the Obama administration so far. This declining budget deficit does not betray a burgeoning demand deficit. The supply-side challenges remain. Workers must supply what they know to their work to create demand for their services and command salary and income. For them to do that, welfare incentives and regulations that present barriers to market entry need to be cut back.

Sunday, September 27, 2015

Odds and ends 9/27/2015

Rod Dreher remarks on a professed pedophile:

He says he found hope in a group called Virtuous Pedophiles, who support each other and encourage each other not to act on their desires.

This cross of sin is his to bear, and I’m glad he bears it. We’re all sinners, right? For some it’s lust, for others greed, for others envy. This is what Pope Francis meant when he said, “A gay person who is seeking God, who is of good will—well, who am I to judge him?”

I’m less angered by sin, a universal trait of humanity, than I am by denying sin exists. For an example of that, at Public Discourse, Timothy Hsiao looks at an incestuous “marriage” between a father and daughter:

Her reasoning is typical of contemporary liberal approaches to sexual morality, which are usually justified by appealing to mutual consent. So long as an activity is performed in private between consenting adults, it is argued, there can be nothing inherently objectionable about what they do. Why? Because they have given their consent, and consent is what matters most when it comes to one’s decision to engage in sexual activity.

Whoever said slippery slope is a fallacy didn’t experience the creep of post-Christian relativism.

Pat Buchanan speaks common sense:

Beliefs matter. “Ideas Have Consequences,” as conservative scholar Richard Weaver wrote in his classic of that title in 1948. Yet, for so believing, and so saying, Dr. Ben Carson has been subjected to a Rodney King-style night-sticking by the P.C. police.

Asked by Chuck Todd on “Meet the Press” whether he could support a Muslim for president, Carson replied, “I would not advocate that we put a Muslim in charge of this nation. I absolutely would not agree with that.”

Carson was not out of the studio before the airwaves were filled with denunciations. Nihad Awad, executive director of the Council on American-Islamic Relations, said CAIR is calling on Carson to “withdraw from the presidential race because he is unfit to lead, because his views are inconsistent with the United States Constitution.”

In the name of tolerance, says CAIR, we cannot tolerate Carson. And what does the Constitution say? “[N]o religious test shall ever be required as a qualification to any office or public trust under the United States.”

But Carson did not say no Muslim could serve. He said he would not advocate having a Muslim as president, that Islamic beliefs are inconsistent with the U.S. Constitution. Is he wrong? Or is it now impermissible to question a candidate’s beliefs about God, man, and the state, and about whether his religious convictions might affect his conduct in office?

A man’s religion is a part of who he is. While not an infallible guide to what he will do, it is often a reliable road map.

If Mormons still championed polygamy and declared that blacks could not be Mormons, would it be illegitimate to raise that issue? Should a Quaker who believes in “turning the other cheek” not be pressed on whether his faith disqualifies him to be commander in chief? If an Evangelical running for president believes the “end times” are at hand, would it be un-American to ask of the Armageddonite if his religious beliefs might affect his decision on war in the Middle East?

Islam means “submission.” And a believing, practicing, devout Muslim believes in submission to the teachings of the Prophet. That means not only following the dietary laws and fasting during Ramadan, but adhering to the tenets of Islam on the modesty of dress in women, praying five times a day to Mecca, and treating false faiths like Christianity as the great heresies that they are.

Seeing as how the Iran deal is an alliance with an emerging power, not a check on aggressive nuclear ambitions, I’d say it’s working as it was designed to. The Wall Street Journal reports:

The current fad of the “selfie” photograph has a new category with the news that Iran has been allowed to self-inspect its suspected nuclear site at Parchin. The International Atomic Energy Agency confirmed Monday that Iran had turned over samples that the Iranians had themselves collected from the military site that IAEA inspectors haven’t been allowed to visit in a decade.

ZeroHedge gets some things on right on Martin Shkreli, the Daraprim gouger:

Now that Shkreli’s 15 minutes of fame are over and his Twitter profile is now in “private” mode (we doubt the SEC will investigate his shorting activity of biotech indices—we are confident the young “hedge funder” will have bigger headaches to deal with soon enough) the attention should shift to the real villains—those truly big pharma companies, who do what Shkreli did but on a far vaster and grander, if less obvious, scale taking advantage of the price cushioning effects that Obamacare provides.

We also are curious to see how Hillary’s populist outrage at Shkreli will be explained when the public realizes that it is only thanks to the benefits of socialized insurance programs such as Obamacare, of which Hillary is a staunch supporter, that such price gouging was possible in the first place.

Kenny Webster breaks it down another way.

What strikes me here is not that novelist Andy Weir gets it wrong in his book. It’s the half-assed explanation from a NASA physicist!

Although dust storms on Mars come with their hazards, it’s highly unlikely that any storm would be powerful enough to strand astronauts on the surface or rip apart equipment. The strongest Mars winds top out at around 60 miles per hour (less than 30 meters per second), less than half the speed of hurricane-force winds on Earth. But it’s not the speed of a wind that does the damage, it’s atmospheric pressure, something that Mars is somewhat lacking. The planet’s atmospheric pressure is around 1 percent that of Earth’s, which is a serious bummer if you wanted to fly a kite on the Red Planet.

“The key difference between Earth and Mars is that Mars’ atmospheric pressure is a lot less,” said physicist William Farrell, of NASA’s Goddard Space Flight Center in Greenbelt, Md., who studies atmospheric breakdown in Mars dust storms. “So things get blown, but it’s not with the same intensity.”

It’s all about mass. Less dense air means there’s less force imparted on objects by the wind. You’d need wind speeds up to 10,000 miles per hour to generate the kind of force you see in hurricanes on Earth.

A fraction of the “refugees” entering Europe migrants are actually from Syria. The UK Daily Mail reports:

The EU logged 213,000 arrivals in April, May and June but only 44,000 of them were fleeing the Syrian civil war.

Campaigners and left-wing MPs have suggested the vast majority of migrants are from the war-torn state, accusing the Government of doing too little to help them.

‘This exposes the lie peddled in some quarters that vast numbers of those reaching Europe are from Syria,’ said David Davies, Tory MP for Monmouth. ‘Most people who are escaping the war will go to camps in Lebanon or Jordan.

‘Many of those who have opted to risk their lives to come to Europe have done so for economic reasons.’

Robert Stacy McCain puts Phyllis Schlafly’s name in the ring for the $10 bill. She’s a fine woman, a hero in many ways, but I’m partial to keeping Alexander Hamilton, preeminent author of the Federalist papers, aide-de-camp to Washington during the Revolutionary War, and first Treasury secretary. My second choice is Margaret Sanger, who’s done more for American women than any woman in American history. She’s as American as apple pie.

Commenting on what’s on a video without watching the video is par for the course these days. Jay Caruso writes at RedState:

Hillary Clinton, once again, rushed to defend Planned Parenthood because of all the talk surrounding the effort to stop subsidizing their abortion business with tax dollars:

Hillary Clinton rushed to Planned Parenthood’s defense Thursday, warning congressional Republicans against blocking funding for the entire federal government in an effort to stop the flow of dollars to the organization.

“I would hope that the Republicans—and particularly the Republicans in the House, led by Speaker (John) Boehner—would not put our country and our economy in peril pursuing some kind of emotionally, politically charged, partisan attack on Planned Parenthood to shut our government down,” Clinton told CNN’s Wolf Blitzer on “The Situation Room.” “I think that would be a very, very unfortunate decision.”

This is very typical of Hillary and the left in general. However, the critical information is revealed next:

Clinton wouldn’t answer when asked whether she has seen the controversial videos of Planned Parenthood officials discussing the use of aborted fetuses for research—which has fueled a new GOP push to block government dollars from flowing to the organization.

In other words, she has not watched the videos.

This is nothing new. President Obama, a stalwart defender of Planned Parenthood and their butchery has not seen the videos either:

President Obama likely hasn’t seen and has no plans to view four videos made by an anti-abortion group purporting to prove that Planned Parenthood profits from selling aborted fetal tissue, a White House spokesman said Friday.

They have not seen the videos, but yet they do not hesitate to defend Planned Parenthood. In doing so, they sound like the mother who insists her son is a “good boy” despite just having been arrested for being a serial killer.

They sound like Doc Rivers ripping his boss Donald Sterling without knowing what he really said.

The president and the president-in-waiting are busy people. They don’t have time to know what they’re talking about.

At First Things, Amy L. Wax notes the shortcoming of secular materialism’s explanation for lower class troubles:

Although Putnam admits that life for the working class, and even the poor, used to be dramatically different, he has remarkably little to say about why parents in straitened circumstances were once far more effective in establishing orderly homes, socializing their children, and equipping them to exploit chances for self-improvement or, at least, to achieve a decent, satisfying life. And he devotes no attention to the significant number of less skilled Americans—including many recent immigrants—who effectively resist the social problems that bedevil others at the bottom of the economic ladder.

In fact, Putnam’s own anecdotes belie his tilt toward the economic roots of working-class distress, highlighting the dynamic, two-way relationship between material hardship and life choices. Joe, one of his working-class protagonists, is steadily employed at a decent job managing a pizza franchise. Yet he chronically overspends his earnings and forms tempestuous, unstable liaisons that produce children he can scarcely afford. Indeed, virtually all of Putnam’s working-class subjects seem to specialize in a familiar litany of self-defeating behaviors. Short-lived broken relationships, random spawning and abandonment of children, squandered educational opportunities, repetitive lawbreaking, and drug abuse are staples of their existence. Male incarceration is commonplace. Parenting is often harsh while also indifferent, erratic, and neglectful.

In short, the picture Putnam paints is too often that of people who repeatedly pass up the chance to steady or improve their own lives. The sociologist Isabel Sawhill, whom Putnam cites, has observed that a few simple choices—the so-called “success sequence”—can minimize poverty even for people with modest education and skills. The prescription is to graduate from high school, work steadily at any job available, get married before having children, and avoid crime. These basic prudential steps are within the reach of virtually everyone, regardless of means and background, and most people used to accept them as indispensable way stations to responsible adulthood. Yet these steps are no longer followed by most people without a college degree. Laying this at the feet of economic causes requires adopting a peculiar brand of causal materialism that now dominates the social sciences.

At Public Discourse, Daniel Haqiqatjou analyzes liberals’ adoption of John Stuart Mill’s harm principle, and reveals it for the libertarian bunk that it is, using the example of adultery.

We might wonder, why couldn’t the pain and suffering that the betrayed spouse feels—which some psychologists speak about in terms of post-traumatic stress disorder—be considered harmful in the logic of secular liberalism? One would think that, given how much stock liberal ethical theory puts into sexual autonomy and the negative emotional and psychological impact of curtailing sexual freedom, liberal pundits would express at least some passing consideration for the negative emotional and psychological impact of adultery upon the betrayed spouse.

The difference, we are told, is that the emotional distress of the betrayed spouse is due to a misplaced sense of marital commitment, which is ultimately based on provincial religious attitudes, whereas emotional distress caused by curtailed sexual freedom is based on immutable human needs at the core of personhood. In other words, if a married man has sexual needs that can only be satisfied by someone not his wife, those needs take priority over marriage vows. To put the point succinctly: sexual needs are real, but marriage vows are based on religion, which is not real as far as rational secularism is concerned. If betrayed spouses feel bad, it is their own fault for naively buying into this whole idea of marital commitment. This is similar to the way in which parents and family members who are distressed when a loved one adopts a “gay lifestyle” or chooses to have sex-change surgery are told that their distress is not legitimate. Rather, any negative emotions or harm are their own fault—the result of buying into naive and prudish views on sexuality and gender.

Liberalism is reality denial.

Thomas Sowell defends his book from an ignorant reviewer. Excerpt:

As for inequality of incomes, these depend on so many things — including things that no government has control over — that the obsession with statistical “gaps” or “disparities” that some call “inequities” is a major distraction from the more fundamental, and more achievable, goals of promoting a rising standard of living in general and greater opportunity for all.



Or, if logic doesn’t work, which it often doesn’t, point out many women don’t earn any of the wages they buy phones with. They get it from their husbands.

Horrific is the scene of thousands of people waiting in line for Section 8 vouchers. The article saves the worst part for last:

A fact sheet distributed by the city prior to the event warned prospective applicants that it “may be many months or several years before we are able to assist you with your rent. This is not an emergency program.”

If it’s not a short-term helping hand to help people get back on their feet, then it’s long-term assistance.

We need to reform welfare so that, as Pope Francis told the UN, we can “allow them to be dignified agents of their own destiny.” Wealth redistribution programs don’t work because, as George Gilder points out, “it is extremely difficult to transfer value to people in a way that actually helps them. Excessive welfare hurts its recipients, demoralizing them or reducing them to an addictive dependency that ruins their lives.”

Wealth transfers also don’t work because wealth is knowledge. Giving someone money doesn’t give them the knowledge to replicate it. Capitalism joins knowledge and power.

Now for some gems from Gilder’s Wealth and Poverty:

The flood of protean growth can be comprehended and sustained only by millions of individuals with access to disposable savings and deep involvement in the companies themselves—that is, by investors who have money of their own and who can share in and pass on the profits as they gain new knowledge and investment skills. Although the desire to consume is ubiquitous and plays a significant role in motivating all men, far more important in capitalism is the purposeful drive to understand the world and to create things: to generate wealth (value defined by others) and reinvest it in the continuing drama of human invention and progress.


Even the most indigent families will do better under a system of free enterprise and investment than under an excessively “compassionate” dole that asks no return. The understanding of the Law of Reciprocity, that one must supply in order to demand, save in order to invest, consider others in order to serve oneself, is crucial to all life in society.


The gifts of capitalism generate economic progress chiefly because they comprise an epistemological system, a way of making discoveries and exploiting them. Accompanying every visible profit earned by enterprise is an invisible profit of expanded knowledge. Investments are in fact purposeful experiments, and whatever the outcome, the results are informative.


Steeply “progressive tax rates not only destroy incentives; more important, they destroy knowledge. They take from the givers and thus prevent them from giving again, from reinvesting their winnings in the light of the new information generated by the original gift.


Socialism is an insurance policy bought by all members of a national economy to shield them from risk. But the result is to shield them from knowledge of the real dangers and opportunities ubiquitous in any society.


The spirit factor is best elicited by ownership. Ownership means exposure to the risks and benefits of productive property, whether it is one’s own land and labor or IBM shares. It means, in a competitive economy in a changing world, that the owner lives on the crest of creation, continually informed and inspired, edified and motivated, by the flashes of surprising news about fashion, taste, and technology, that can radically shift the values—the future returns—of what is owned.


Progress is always dependent on the creativity of suppliers.


Nearly all the programs that are advocated by economists to promote equality and combat poverty—and are often rationalized in terms of stimulating consumption—in actuality reduce demand by undermining the production which all real demand derives.


Wealth consists in assets that promise a future stream of income.


In the noosphere of capitalism, all riches must finally fall into the gap between thoughts and things. Wealth is governed by mind but it is caught in matter. To be negotiable, an asset must afford an income stream that is expected to continue.


Saving is often defined as deferred consumption. But it depends on investment: the ability to produce consumable goods at that future date to which consumption has been deferred. Saving depends on having something to buy when the deposit is withdrawn.

More to come.

Saturday, September 26, 2015

Social contract

Witness multiculturalism, or the fantasy that different visions of the public good can coexist in the same space, at work in New Jersey. This is not just about what holidays to observe. It’s about the school district’s identity. Is it Christian, Muslim, all of the above, or none?

The Jersey City Board of Education voted last week not to close schools for the Muslim holiday of Eid al-Adha, one of the most important holidays for Muslims.

School board members in New Jersey made their decision Thursday despite appeals from Muslim attendees who showed up to advocate that the board change the school schedule.

At one point, things became so heated that an official urged security to “take charge” of the situation. At least one person was seen on video being escorted from the meeting.

“We feel alienated from the Board of Education, we feel alienated from this system,” Omar Abouelkhair told WNBC-TV.

“We’re going to be the majority soon,” another said.

The Islamic system they’re demanding is the same one they came to America’s shores to escape, steeped in an ideology of hate and easily swayed by distrust, corrosive to civility, safety, and productivity. Nevertheless, they want it. (Or maybe what brought them here was the commandment to overtake the infidels by mass immigration, hijra.)

The majority imposing what they believe to be right, whether or not it is truly right, is more reasonable than the cognitive dissonance multiculturalism requires, the pretense that the differences in people don’t matter, that we’ll get along if we just mind our private affairs and don’t butt into each other. We are not islands of rational autonomy, able to compartmentalize our private affairs and public personas. We are social beings, destined to cooperate with others. People organize themselves on the basis of mutual interest all the time, from work to politics to clubs. The “cooperation” of opposing interests subtracts from the social peace. To what end this factionalism, if not civil breakdown and war?

The secular, liberal model does not work because men are not monads. You can’t invite people to participate in society and expect them to not bring their inmost beliefs. In the public sphere, something will prevail over nothing. It’s all a matter of what that something is. The key to civility is not an absence of public passion, but a combination of correct passions prevailing over incorrect passions. Those passions develop in the soul, trained to stay in the likeness of God, and extend through the flesh out into the community.

Thursday, September 24, 2015

Capitalism for the common good

Pope Francis confuses unneighborly, exploitive secular materialism, the reduction of man to utilitarian/hedonic units, and the spiritual isolation and dysphoria that entails, with the wealth-building and virtual communion of free-market capitalism. CNN reports:

In the chapter on economics, Francis argued that while it can be good for development, capitalism lacks morals and promotes selfish behavior.

“What the Church criticizes is the spirit that capitalism has encouraged, utilizing capital to subject and oppress the man,” Pope Francis wrote in his book, titled “Dialogues between John Paul II and Fidel Castro.” CNNMoney obtained a copy of the book in Columbia University’s library.

He added that capitalism “develops with characteristics of individuality, in a life where men look for their own good and not the common good.”

Baloney. The free market serves the common man’s interests better than any other economic system. The great leaps in the common man’s standard of living were initially pursuits of passion by innovators looking to profit the lives of others. This requires great ingenuity and perception of people’s needs, learned through close, personal interaction, to address shortfalls and uncertainties in the current order’s ministry to economic man. Free-market experiments are selfless in that they commit men’s savings, industry, and genius to aid others in the struggle of life, with remuneration always coming afterwards. The free market ensures the lessons of what people want, communicated by losses and profits, accrue to the entrepreneur.

I’ll paraphrase my 2013 article on envy at Red Pill Report:

Prosperity is sustained by allowing those who acquire property, whether by luck, hard work, or talent, to keep it for reinvestment. The feedback loop between the producer and his market, which signals human wants and desires, dead-ends when government confiscates his property for redistribution. George Gilder writes: “Entrepreneurs must be allowed to retain wealth for the practical reason that only they, collectively, can possibly know where it should go, to whom it should be given.”

Knowledge of his market sets the businessman apart. He knows better how to invest his winnings than anyone else. Government redistribution cannot meet or supersede the value provided by capitalists. Simply put, government lacks the knowledge. By divorcing the capitalist’s wealth from his knowledge, confiscatory taxation destroys wealth.

For example, Jerry Jones bought the Cowboys for $140 million in 1989. Now the Cowboys are worth $4 billion, a 900 percent increase in value after inflation. If Jones left me the Cowboys in his will, they wouldn’t be worth half as much my first day on the job. I don’t know how to run the Cowboys. I don’t have the knowledge to sustain, let alone build, that kind of value. Jerry Jones evidently does. The profits from that venture, then, belong to him, he who knows best how to keep giving what people want, and even what they don’t yet realize they want.

The capitalist might well hoard his wealth and say he’s made enough, and withdraw from the supply side of the economy. That is the retirement attitude, the slow entropy of static savings and triple-A bonds to consumption and inflation. The risk of retirement is not knowing if you’re savings will outlive you, like letting off the gas and not knowing if you’ll make it to the top of a hill. Retirement’s view of current levels of wealth’s sufficiency is a perilous trait for people in the prime of life and society in general, for legacies cannot sustain successive generations. More wealth must be created, or the standard of living will plummet.

Our society is witness to the temptation to live off the past. Slick corporatists beg politicians for fiscal stimulus for favored projects. Established, calcified big business welcomes regulation as a barrier of entry to competitors. Unions legislate demand for their services to guarantee future income. Welfare dependents pass on entry-level jobs to enjoy perpetual holiday and checks in the mail. Gilder writes:

The so-called me generation of egocentric men seek not the productive adventure of enterprise, but the comfort and security of the welfare state, even if disguised in the form of protectionist tariffs, parity systems, or other invisible handouts. ... Even among exceptionally ambitious and committed men, self-love leads not to the giving of oneself and one’s wealth to the realm of chance and fate, shaped by the decisions of others in the market; rather it leads to a quest for power over others, in an effort to impose the fail-safe fantasies of radical politics.

This is true selfishness, seeking the rents of big government, the guarantees of socialism, or its many manifestations, in an inherently tumultuous, unpredictable world; recoiling from the risks and dangers of using your gifts to minister to others in the marketplace. Socialism l isolates economic man from the real ways he can improve his neighbors’ lot. Socialism, not capitalism, causes men to overlook each other and to look after number one instead, seeking security in a piece of the economic pie, shrinking for the lack of mutual beneficence in society.

Tuesday, September 22, 2015

Socialized healthcare since 2010

This is the second New York Times article I’ve read recently that reports on the socialist dystopia of American healthcare:

It may not seem like much—just an extra hundred dollars or so a year.

But the steady upward creep in health insurance deductibles has easily outpaced the average increase in a worker’s wages over the last five years, according to a new analysis released on Tuesday by the Kaiser Family Foundation.

Kaiser, a health policy research group that conducts a yearly survey of employer health benefits, calculates that deductibles have risen more than six times faster than workers’ earnings since 2010.

Let’s see, what happened in 2010? Oh, that’s right. Obamacare—or the more ironic, official title, Healthcare Affordability Act.

The political director of a nurses union, National Nurses United, tweeted a link to the article, including the hash tag “#Medicare4All.”

Why would nurses want Medicare, a form of socialized medicine, for everyone? Because it subsidizes poor people to buy services they otherwise could not afford. It pumps up demand, giving nurses income security. That’s why one of their unions supports it, even if it means inferior care for the patients they ostensibly serve. Such a tragedy to see a noble profession be claimed by greed.

Demand overreaching supply is the definition of inflation, which is what the Times article highlights. The prescription for seemingly insufficient supply is freedom to innovate to broaden healthcare options and bring costs down. The political establishment, however, is blind to the realities of market supply. Obamacare, an insane Rube-Goldberg device of healthcare delivery, removes unpredictability, especially creativity, closing off new supplies of goods and services while subsidizing and artificially raising demand. This entropic healthcare equation will continue to age and atrophy until it is overthrown for a market-based system.

Related: “Socialism incentivizes price gougers.”

Monday, September 21, 2015

Socialism subsidizes price gougers

The 18th and 19th paragraphs of this New York Times story on pharmaceuticals gouging are the most important:

Daraprim cost only about $1 a tablet several years ago, but the drug’s price rose sharply after CorePharma acquired it. According to IMS Health, which tracks prescriptions, sales of the drug jumped to $6.3 million in 2011 from $667,000 in 2010, even as prescriptions held steady at about 12,700. In 2014, after further price increases, sales were $9.9 million, as the number of prescriptions shrank to 8,821. The figures do not include inpatient use in hospitals.

Turing’s price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.

By raising the price 5,000 percent, Turing is betting more than one-fiftieth of the market will continue to buy Daraprim. It’s a good bet.

In a free market, Martin Shkreli’s apparent greed would have deadly consequence for Turing. First, use of Daraprim would not remain constant after such a sudden and severe price spike. People would immediately curb their consumption. Then, the price gouge all but begs a competitor to come up with a cheaper alternative to Daraprim and in effect shoulder Turing out of business.

But this isn’t a free market. Under our socialist, bureaucratic healthcare regime, innovation and risk-taking are heavily disincentivized. The liability risks, FDA regulations and clinical trials, and costs of research and development may in fact reflect the true price needed to keep Turing profitable and churning out Daraprim while it looks to diversify its product line. New entrants into regulated markets, especially healthcare, have a harder time than established powers staying in business. In other words, a cheaper alternative to Daraprim is likely not forthcoming.

Furthermore, consumers will continue to use Daraprim as long as health insurance shelters them from the increased costs. Health sector inflation is the worst of any other economic sector because of the divorce of runaway demand from finite, government-regulated supply. Private insurers, Medicare, and Medicaid trying to meet consumer demand and their coverage requirements assures the debt of millions owed to Turing, smaller than a rounding error in the federal budget, will be diffused across the rising subsidies of the subsidy-dependent healthcare sector.

The free market is better than this.

Friday, September 18, 2015

The appalled appaller

Hypocrisy has been in the news lately. It has been used incorrectly to describe people who have accepted God’s forgiveness for sins and at the same time condemn sin, as if those two positions were not completely consistent with trying to lead a godly life.

The etymology of hypocrite indicates its true meaning is actor, pretending to be someone you’re not, from the Greek hupokritēs. So the way a sinner is a hypocrite is if they say they’re not a sinner. What condemner of sin claims he has not sinned, that he is pure as Jesus Almighty? No one that I’ve heard of. Secularists, atheists, and materialists, those who categorically deny sin, come closer than anyone else to this claim.

If we say we do not beat the guilt of sin, we are deceiving ourselves and the truth is not in us. (1 John 1:8)

If you want to see real hypocrisy, look at Hillary Clinton, pretending she wants calm debate, contra those hotheads who want to exacerbate divisions in our society. Three weeks after the president-in-waiting likened pro-lifers—the non-barbarian counterrevolutionaries to the apocalyptic sexual autonomy zeitgeist—to terrorists, she lectures on the state of civility, or lack thereof, in public discourse. The Washington Post reports:

Democratic presidential hopeful Hillary Rodham Clinton on Friday denounced Republican front-runner Donald Trump for not challenging an audience member in a rally Thursday night who said that President Obama is Muslim and “not even an American.”

“I was appalled,” Clinton told reporters following an appearance at the University Of New Hampshire. “He should have from the beginning repudiated that kind of rhetoric, that level of hatefulness in a questioner in an audience that he was appearing before.”

Having all but declared war on half of America, which the other half can’t stand but for some reason won’t let go, I’d say she’s in no position to judge.