In our Liberty Update commentary entitled "No, Scandinavia Doesn't Vindicate Socialism" this week, we…
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Image of the Day: Gallup Poll on Americans' View of Job Market Hits All-Time Record

In our Liberty Update commentary entitled "No, Scandinavia Doesn't Vindicate Socialism" this week, we rightly ridicule admitted socialist Bernie Sanders, including his odd claim that "we now have an economy that is fundamentally broke and grotesquely unfair."  Well, as this Gallup survey illustrates, he's swimming upstream against American public opinion.  Specifically, in a survey that Gallup has conducted periodically since 2001, the public's view of the job market has now hit an all-time record high:

. [caption id="" align="alignleft" width="720"] Sorry, Socialists[/caption]

 

. Perhaps this helps explain why Sanders has suddenly plummeted in 2020 Democratic candidate surveys, although one wonders how long people like Elizabeth Warren can avoid the same fate.

 …[more]

June 14, 2019 • 02:30 pm

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Healthcare: Beware Price Controls and Weaker Patent Protections Print
By Timothy H. Lee
Thursday, June 06 2019
America became the most inventive and prosperous nation in human history by protecting IP rights, including patent rights, and by elevating free market principles over government control, not by maximizing government control or undermining property rights.

As debate over healthcare policy accelerates, a small number of otherwise conservative and libertarian voices who should know better have begun floating destructive proposals that would only make matters worse. 

As an initial matter, it’s worth highlighting an encouraging recent Gallup survey that may surprise some.  Namely, a remarkable 80% of Americans rate their own healthcare as “excellent” or “good.” 

Accordingly, policy makers should approach this debate with the understanding that proposals that would upset the proverbial apple cart and impose dramatic changes to health policy could suffer a backlash of unpopularity.  Although many claim that we must “do something” about healthcare, doing something that makes matters worse, which is highly likely given overwhelming satisfaction with current healthcare, must be avoided. 

In that regard, two particular proposals must unequivocally be avoided:  (1) foolishly importing other nations’ price control regimes, and (2) weakening patent rights for pharmaceutical innovators. 

On the first point, suggestions that the United States impose de facto drug price controls favored by other nations has achieved inexplicable favor among a small number of right-of-center voices, and the Department of Health and Human Services (HHS) recently proposed a system of reimbursing drug costs that derives from an index aggregating prices paid in over a dozen foreign nations such as France, Greece, Germany and Italy. 

In other words, instead of exporting American free market principles to other nations needing more of them, the proposal would import other nations’ price controls that we do not need. As with all other attempts at government price controls, that would inevitably lead to less innovation, lower supply and rationing. 

Recent data justifies that concern. 

Of 290 new active pharmaceuticals that became available between the years 2011 and 2018, approximately 90% are available in the U.S.  In contrast, consumers in the nations that would constitute the pricing index contemplated by the HHS can only access between 29% and 62% of those new drugs.  The obvious lesson is that price controls create artificial shortages, in this case of critical new drugs that save and improve people’s lives.  That’s a scenario we obviously mustn’t invite. 

Some otherwise conservative or libertarian voices who curiously favor importing other nations’ price systems have responded by simply altering the list of nations they’d use to create the drug price index to countries that they claim constitute more free market systems.  Even in those nations, however, the percentage of new drugs available to consumers changes very little, and artificial price controls remain common, as highlighted cogently in a recent analysis by Doug Badger of the Galen Institute. 

The bottom line is that the “price control lite” pricing mechanisms advocated by some right-of-center voices differ little from other iterations of the idea. 

Even worse, some who advocate importation of price controls also advocate policies even more potentially destructive:  weakening American patent protections that incentivize new drug innovations. 

Throughout our history, the U.S. has maintained the world’s strongest protections for intellectual property (IP) – patents, copyrights, trademarks and trade secrets.  Not only did our Founding Fathers explicitly protect IP in the text of Article I of the Constitution, but year after year we maintain the top position in worldwide rankings of IP protection.  As a result, no nation in human history approaches our legacy of scientific, artistic and commercial innovation.   

That includes patents for pharmaceutical innovations. 

To illustrate, in recent years the U.S. has accounted for approximately two-thirds of new lifesaving and life-improving drugs introduced to the world.  The next closest competitor is Japan at a comparatively tiny 12%, with all of Europe accounting for approximately 10%. 

That’s a direct reflection of America’s strong tradition of patent protections.  Other nations don’t enjoy the innovations that overwhelmingly occur in the U.S. because there’s less assurance that investments of time and money will be rewarded.  As in all other areas of economic activity, property rights create an invaluable incentive to invest and innovate.  Not to mention the fact that depriving innovators of the fruits of their labor constitutes an injustice that our Founding Fathers sought to avoid.  As Abraham Lincoln observed, America’s patent system “added the fuel of interest to the fire of genius.” 

Even the World Health Organization (WHO), hardly a stronghold of free market thought, warned that pharmaceutical price controls and weakening patents suffocate innovation: 

Every time one country demands a lower price, it leads to a 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. 

Fortunately, a better alternative exists.  America became the most inventive and prosperous nation in human history by protecting IP rights, including patent rights, and by elevating free market principles over government control, not by maximizing government control or undermining property rights.  The healthcare industry is no different, and Americans should beware calls to stray from that course that has served us so well. 

Especially when those calls come from otherwise conservative and libertarian minds that know better. 

Question of the Week   
Prior to 2016, what was the last Presidential election year in which the candidate who won had never before held elected public office?
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Quote of the Day   
 
"And so it has come to this.Two oil tankers were just attacked in the Gulf of Oman, presumably by Iran. The United States and China are facing off in a confrontation that is about far more than trade. The southern border remains anarchic and uncontrolled.And Congress is asking: 'Can I get the icon in cornflower blue?'Here is the situation: The president of these United States gets from place to place…[more]
 
 
—Kevin D. Williamson, National Review
— Kevin D. Williamson, National Review
 
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Should the 2020 U.S. Census add a multi-part question regarding U.S. citizenship, including specifically whether the respondent is or is not a U.S. citizen?