Freedom Line Blog

Joe Biden’s inexorable march toward the fanatical left continued this week, as he and Bernie Sanders (D – Vermont) introduced their “unity platform” in anticipation of this year’s Democratic convention.  We can thus add weaker U.S. patents and drug price controls imported from foreign nations to Biden’s existing dumpster fire of bad ideas.

Here’s the problem.  As we’ve often emphasized, and contrary to persistent myth, American consumers enjoy far greater access to new lifesaving drugs than people in other nations, including those in “other advanced economies” (Biden’s words) whose price controls Biden seeks to import:

Of all new cancer drugs developed worldwide between 2011 and 2018, 96% were available to American consumers.  Meanwhile, only 56% of those drugs became available in Canada, 50% in Japan, and just 11% in Greece, as just three examples.  Patients in nations imposing drug price controls simply don’t receive access to new pharmaceuticals as quickly as Americans, if they ever receive them at all.”

Even the World Health Organization (WHO) acknowledges that overseas consumers’ lower access to pharmaceutical innovations stems from their governments’ imposition of price control regimes:

Every time one country demands a lower price, it leads to lower price reference used by other countries.  Such price controls, combined with the threat of market lockout or intellectual property infringement, prevent drug companies from charging market rates for their products, while delaying the availability of new cures to patients living in countries implementing those policies.”

Just as dangerously, Biden also advocates weaker patent protections for U.S. pharmaceutical innovators.  The United States has throughout its history led the world in protecting patent and other intellectual property (IP) rights, and as a direct result we’re the most innovative, inventive, prosperous nation in recorded history.  The U.S. claims just 4% of the world’s population, and even our  world-leading economy accounts for less than 25% of global production, yet we account for an amazing two-thirds of all new pharmaceuticals introduced to the world.  Public policy should be strengthening patent rights, not weakening them.

Biden rationalizes his socialized medicine proposal by asserting that “taxpayers’ money underwrites the research and development of many prescription drugs in the first place.”  But as we’ve also noted, private pharmaceutical investment in R&D dwarfs public funding, so he can’t justify his heavy-handed bureaucratic idea on that basis.

Just three months into the coronavirus pandemic lockdown, American pharmaceutical innovators are already entering final testing phases, far ahead of original estimates of their anticipated arrival.  That should come as no surprise, because we’ve long led the world.  But it emphasizes even more that Biden’s toxic proposal to impose foreign drug price controls and to weaken U.S. patent protections is particularly dangerous at a moment like this.

Returning to our recent Liberty Update commentary on how socialist advocates rely on a mythical misimpression of European realities, The Wall Street Journal offered a nice snapshot of the sources of wealth for billionaires in the U.S versus Europe, China and Russia:

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Sources of Wealth

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So would socialists like Bernie Sanders prefer that wealth derive more from inheritance and political connections as they do in Europe or Russia, as opposed to business founders and financial advisors who help American workers and retirees benefit from record stock markets?

The myth of superior livelihoods in supposedly more enlightened European nations remains a curiously persistent one, but Mona Charen’s latest commentary today provides a refreshing corrective:

Median household income reached $61,372 in 2017, which is higher than comparable countries like Canada, Germany, France, Britain and Denmark, and exceeded only by a handful of tiny rich nations sitting on oil (Norway) or numbered bank accounts (Switzerland and Lichtenstein).  U.S. median household size, meanwhile, has declined, so individual wealth has increased even more than the income numbers reflect.”

Something to remember the next time Bernie Sanders or latest leftist darling Alexandria Ocasio-Cortez alleges that “democratic socialist” nations of Europe somehow offer a superior alternative, nevermind that Venezuela actually offers a better illustration of socialism in practice…

Courtesy of James Pethokoukis at the American Enterprise Institute, a splendid visual refutation of budding socialist superstar Alexandria Ocasio-Cortez, the Democratic candidate for Congress in New York, who recently and bizarrely said that the “upper middle class doesn’t exist anymore in America.”  Well:

Sorry, Ms. Ocasio-Cortez: Upper Middle Class Growing, Not Shrinking

Don’t give up on American culture and run off to some deserted island or desolate wilderness hut just yet.  There’s still some good news to report.

According to a new Gallup survey, free enterprise, small businesses and capitalism remain far more popular among Americans than socialism or the federal government.  Despite the media kid-gloves treatment of admitted socialist presidential candidate Bernie Sanders, only 35% of respondents say they maintain a positive view of socialism.  That is actually down from 2010 and 2012, when 36% and 39% reported positive feelings.  As for the federal government, which too many candidates from all parties continue to offer as some sort of elixir for what ails us, only 44% report positive feelings.  That is also down from 2010 and 2012, when 46% and 51% held it in high esteem.

So congratulations, Obama.  Not exactly the transformative presidency in the mold of Ronald Reagan to which you aspired.

Meanwhile, 85% of Americans report positive feelings toward free enterprise, 60% hold capitalism favorably despite constant sloganeering from the political left and an astonishing 96% hold small business in high esteem.

Now it’s just a matter of all of us doing a better job of putting those ideals into practice.

Whereas the term “socialist” was once an epithet, among today’s political left it is a badge of honor, despite socialism’s uninterrupted record of failure across the globe and over an entire century of experimentation.  As we’ve observed, devotees typically offer Scandinavian nations like Denmark as exemplars, in violation of their professed fealty to “multiculturalism” and “diversity.”  But there’s another problem for Bernie Sanders and other leftists who constantly offer Denmark as a model for us to follow:  It’s not the socialist paradise that they imagine.

In a timely commentary this week entitled “Bernie Sanders’s Denmark Comments Show He Doesn’t Even Understand His Own ‘Socialism,'” National Review’s Kevin Williamson summarizes the flaws in their effort well:

[Y]ou probably missed the exchange between Mrs. Clinton and Senator Sanders at last night’s debate, when she lectured him that the United States isn’t Denmark and he responded with a rousing defense of the Danish model.  Never mind, for the moment, that neither of these batty old geezers has the foggiest idea of what’s going on in Denmark, or in the other Nordic countries.  Denmark, like Sweden before it, has been engaged in a long campaign of reforming its famously generous welfare state.  The country’s current prime minister is the leader of a center-right party, which, strangely enough, goes by the name ‘Left,’ Venstre.  (You might even call it libertarian:  it’s former longtime leader wrote a book bearing the positively Nozickian title ‘From Social State to Minimal State.’)  Denmark has been marching in the direction exactly opposite socialism for some time.  Our friends at the Heritage Foundation rank its economy the eleventh most free in the world, one place ahead of the United States, reflecting Denmark’s strong property rights, relative freedom from corruption, low public debt, freedom of trade and investment, etc.  Don’t tell Senator Sanders, but Denmark’s corporate tax rate is a heck of a lot lower than our own.”

More accurate examples of socialism at work include Venezuela, where consumers endure shortages of such things as toilet paper, or increasingly dystopic France.  Regardless, leftists’ image of a Danish socialist utopia simply isn’t accurate.

I’ve written before that the importance of Paul Ryan’s brand of conservative reform is that it puts federal policy on a fundamentally different trend line than its current course under President Barack Obama.

From Ryan’s perspective, the American future post-reform looks like one where there’s more money in everyone’s pocket, less going to the government, and a fiscally sustainable social safety net.

As for President Obama, all you need to know is contained in his campaign’s “Life of Julia” web ad.

If Ryan is true to form, then during his time as Mitt Romney’s running mate he’ll accentuate the choice facing voters this fall of an American future that is either growing thanks to a resurgent capitalism or declining under the weight of a galloping socialism.  Perhaps he’ll do so along the lines described by Harvard economist Robert Barro in the Wall Street Journal:

Drawing correct policy implications is hard because one naturally focuses on the jobs and production that are directly saved or lost when the government bails out GM or when Chinese imports expand. In contrast, it is impossible to detail where U.S. jobs and production would have been created or destroyed if GM had been allowed to fail or if trade with China were curtailed.

What is feasible is to look at the overall impact of a set of policies. For example, a general increase in socialistic policies tends to lower economic growth. And, more specifically, the Obama administration’s weakening of individual incentives to work and produce by its sharp expansion of transfer payments can be reasonably viewed as retarding the U.S. economic recovery since the end of the recession in 2009.

With the addition of conservative thinker and budget expert Rep. Paul Ryan to the Republican presidential ticket, we can hope that the economic dialogue will become more serious. And perhaps this added substance will extend beyond the important issue of long-term fiscal reform to encompass the enduring but still crucial debate about socialism versus capitalism.

Courtesy of a story from UK Reuters:

President Hugo Chavez blamed “criminal” capitalism on Sunday for global climate phenomena including incessant rains that have brought chaos to Venezuela, killing 32 people and leaving 70,000 homeless.

Worst hit is the coastal area of the South American OPEC member nation where millions live in precarious hillside shantytowns and mudslides have been toppling rickety houses.

Hmmm, an oil-rich nation with millions living in shantytowns? How often do you think that happens in capitalist societies, Senor Chavez?

Today’s New York Times draws out an helpful distinction between British and French notions of liberty.  The context is each country’s reaction to the growing public sector spending crisis.

“France’s problem is that, for too long, the economy has been run as a kind of job club for French workers,” said an editorial in The Spectator, a conservative British magazine. “Britain and France believe in liberty, but have different definitions of it.”

While the British believe in “liberty from government,” the editorial said, the French “still like the big state and squeal at the prospect of being removed from its teat.”

The French also pay higher club dues and expect commensurate rewards. French pensions can reach three-quarters of a working wage, compared with just over two-fifths in Britain. So, if French workers and teenagers strike over their pensions, there’s plenty to protest about.

One of the consequences of France’s keener devotion to socialism is a reduced sense of class conflict.  Not so in Britain.

If Britain falls prey to protest, there will be sharper overtones of class struggle than solidarity. Britain is a more divided society than France. Wealth is more ostentatious, poverty more visible. People in Britain have learned to have sharper elbows in pursuit of individual gain, while France prides itself on a broader concordat.

“Social confrontation is part of our democracy,” said Prime Minister François Fillon, “but social consensus is, as well.”

How each country’s government handles the coming backlash to ‘austerity’ in public spending will do much to define the future of freedom for their respective citizens.  Hopefully, they can make a credible argument that limited government and greater individual opportunity go hand-in-hand instead of coming to blows.