On environmental investing, Main Street speaks and Wall Street responds

When you’re responsible for other people’s money, mixing it with morality is a mistake. Not that climate change is a moral issue per se, but many of those who believe do so with a fervor that can be described as religious.

Wall Street learned this the hard way. Public policy groups that studied the issue concluded firms that did not prioritize environmental, social, and governance concerns when making investment decisions and casting proxy votes at shareholders’ meetings produced better results for their clients than those that did.

That got the attention of small investors, who realized their capital was being used to force American businesses to go green rather than produce a maximum return on their investment. Predictably, they complained.

Sensibly, some of the biggest firms in the business reversed course. Blackrock, the world’s largest, announced it was backing away from its previous commitment to so-called ESG considerations and would, for example, quit Climate Action 100+ because the group expressed its desire to have all its members commit to using all client assets under management to reduce emissions and support decarbonization.

Other firms, including JPMorgan Chase and State Street, have taken similar steps, cutting the bloom of the bouquet that was once corporate America’s commitment to climate capitalism.

Climate change alarmists who advocate eliminating fossil fuels from the global energy mix make an effective if erroneous case that the changeover, something they hope governments worldwide will eventually mandate, could make investors smart enough to get in on the ground floor very, very rich.

It’s a persuasive argument that led more than one Wall Street tycoon to enlist the resources at their disposal in the battle against climate change, believing it would become a profit center. Environmental investing would drive wealth-creating developments in the marketplace. Carbon credits would be traded. It would be green meeting green, and a splendid time was guaranteed for all.

They failed to consider, or chose to overlook, that for every Telsa, there were probably a dozen or more Solyndras waiting in the wings, soaking up private investment, propped up by the government, and destined to fail.

When they did, U.S. taxpayers would be on the hook. Instead of making money through wise investments, they’d lose money as government bailouts caused federal spending to rise, growth to slow, and interest rates to possibly rise.

When your business is making money, you should focus on it. It’s what people expect you to do. Larry Fink, the CEO of Blackrock, once an aggressive promoter of ESG as an investment strategy, deserves credit for seeming to have come around.

“Everything we do is on behalf of our clients, and everything we do is with the purpose of financial returns. There is not one thing we have ever done, whether it’s ESG or any other issue, that is not in the pursuit of financial return,” Fink said back in October. “That is our fiduciary responsibility, and we live that every day.”

The climate change alarmists can run around like Henny Penny all they like, screaming “the sky is falling” to anyone they encounter. So far, their most dire predictions have failed to come true.

The North Pole hasn’t melted. The sea levels haven’t risen. If people want to worry about those things when investing their own money or voting their shares at an annual meeting, they’re free to do so. They’re even free to try to persuade others to follow suit. But when someone is managing other people’s money, their first responsibility is to maximize their return on their clients’ investments and not to anyone or anything else.

Using one’s skills and understanding of how markets work to help retirees live comfortably is virtuous. Pursuing objectives that some elites deem virtuous that expose others to possible impoverishment is a sin. When it comes down to it, when Main Street talked, Wall Street listened, and we’re better off for it.

Copyright 2024 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on On environmental investing, Main Street speaks and Wall Street responds

Who runs America? Survey says…

If you haven’t figured it out yet, the red states differ from the blue ones. The city dwellers are different from the folks who live in the country. And the rich, as F Scott Fitzgerald put it, are different from the rest of us. So, when one of them says something nice about Donald Trump, listen.

Jamie Dimon, J.P. Morgan’s CEO, probably made many of the other one-percenters uncomfortable recently by admitting Trump had been “kind of right” about many things.

“Just take a step back and be honest,” he urged his fellow autocrats. Trump “was kind of right about NATO. He was kind of right about immigration. He grew the economy quite well. Tax reform worked. He was right about China.”

That’s quite a statement. And he didn’t hedge by backing Joe Biden afterward. If it’s a shift, it’s significant because Dimon, like his fellow one-percenters, has an outsized influence on what America does and what it talks about.

He and those like him are influential in the political arena, finance, the media, business, academia, and the other so-called “talking professions’ to an extent not achieved by the country’s rank-and-file. Dimon and those like him are conversation starters and decision-makers who can keep America on the right track or send it off in the wrong direction.

Their influence cannot be underestimated. What they believe affects all of us. What they encounter in their daily lives, what they are concerned about, and what occupies their time shape and guide the national conversation in ways the experiences and cares of ordinary Americans do not.

Polling conducted for the Committee to Unleash Prosperity and released as a report, Them vs. U.S., shows how, in many essential ways, these elites are different from the rest of us.

In the area of personal financial security example, the data showed nearly three-quarters of these elites – defined as people making over $150,000 a year with at least one post-graduate degree who live in a high-population density area – said they are better off today than when President Joe Biden took office.

The economy has improved lately, and unadjusted growth last quarter broke the 3% mark. Biden consistently gets poor marks for handling it, no matter how many “think pieces” Paul Krugman writes for the New York Times explaining why people should feel better about it and him. He neglects how the inflationary spiral sparked by Biden’s Inflation Reduction Act has made things more expensive.

Real wages are down over the long term. People are forced to buy less with more. That’s likely why most ordinary Americans surveyed for the study said they were worse off now than they were in 2021.

The differences are not limited to kitchen table and pocketbook issues. As to climate change, something that occupies us all these days, 70% of the elite said they would pay $500 or more annually in higher taxes and costs, “up to whatever it takes,” says pollster Scott Rasmussen, who constructed the survey. Among average Americans, $100 or less per year was as high as they would go.

Members of the elite go on television and talk about climate crisis solutions that cost billions, even trillions of dollars over many years, and kill jobs with a straight face. A person who’d end up with their air conditioning rationed in the hot summer months and in the cold in the winter when the windmills freeze doesn’t get on TV very much. As a result, the conversation isn’t balanced.

The elite American is three times more likely than the average American to say we enjoy “too much individual freedom.” That’s worrisome, since a large number of them endorse rationing of meat, gasoline, and other essentials – but curiously, not the construction of coal-fired power plants in China. Maybe because the one-percenters have an easier time getting around the rules they set for everyone else than the rest of us do.

America is two countries living side by side, on top of and next to one another. One consists of people holding views common to middle- and working-class voters. The other is comprised of people who consider themselves more public-spirited and virtuous than the rest of us and talk about politics more. They’re separated by status, income, education, and neighborhood, not political parties. Some very smart folks have missed that, which may be why they also can’t understand Trump’s appeal to the working man and woman.

They need to get outside their bubble once in a while.

Copyright 2024 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Who runs America? Survey says…

Medicare prescription price controls will hurt seniors

The inflationary spiral that drove prices up during the first years of the Biden administration has ended. That’s the good news. The bad news is we’re still paying more for too many things even as real wages underwent a prolonged decline.

To help people buy more with less, Joe Biden appears to have embraced price controls.

That shouldn’t be a revelation. Buried inside the Inflation Reduction Act is a provision that created a pathway for the government to secure lower prices for certain prescription drugs covered under Medicare. It’s controversial. Many economists and the pharmaceutical industry say fewer quality-of-life-improving drugs will be produced because of it. Nonetheless, the Biden administration has continued to move towards its implementation.

Those who are old enough to remember the Nixon years know that government-imposed price controls don’t work. Seniors who are hoping the Biden initiative will reduce what they pay for the drugs they need are in for disappointment. Instead of alleviating their financial concerns, the administration’s scheme will add to them.

It doesn’t have to be that way. In a rational world, adopting a plan that will undoubtedly produce scarcity, higher prices (resulting from a new excise tax on certain targeted drugs), and lead Medicare to determine it should cover fewer rather than more prescription pharmaceuticals would be dismissed out-of-hand. Yet that’s what the president’s plan will do.

There are better ways. Under George W. Bush, America’s seniors benefited through the introduction of Medicare Part D, which allows them to pay for prescription drugs through private insurance purchased with government assistance. Most of the expense was borne by the new program, reducing the amount seniors needed to pay out-of-pocket to get their prescriptions filled.

It worked better than most analysts and economists projected it would. Biden, it seems, is ready to undo that progress and reverse direction through a program sold to the American people as one that merely authorizes the federal agency that oversees Medicare and Medicaid to “negotiate” on price with drug manufacturers.

That sounds reasonable. Who can be against negotiation as a means to resolve disputes? However, the process outlined in the Biden plan isn’t exactly what you find in the private sector. It’s actually quite different.

First, CMS – the Centers for Medicare and Medicaid Services – issues a list of ten drugs it’s targeting for price negotiations and then imposes a price cap on what it will pay for those drugs. The only “negotiation” occurs when the manufacturers are asked if they want to accept those caps or, as a penalty for refusing to accept the imposition of a newly-created excise tax instead.

That tax is an assessment imposed on sales of a particular drug until the tax hits 95 percent of the gross sales price of the drug in all markets. It is an onerous penalty. Additionally, the drug under review will be removed from the list of those covered under Part D. Unless you consider it fair to make someone “an offer they can’t refuse,” that’s not exactly a negotiation. There’s no give and take – just a chance to accept or reject the deal put on the table by the side that holds all the essential cards.

Here, though, is the key: none of that helps seniors. Instead, it harms them. Drugs they need will be subjected to price controls that will lead to scarcity, even rationing to maintain supplies, or they will be kicked out of Part D coverage and hit with a confiscatory tax. Ironically, this same scheme to fix prices would be illegal if the companies that make the drugs tried it.

The only ones who win in the proposed Biden scenario are the government bureaucrats who want to control vital aspects of our lives. Progressives like Bernie Sanders like it because they think it sticks it to the drug companies while forcing us all closer to a national health insurance program modeled on his “Medicare for All” idea. The rest of us, however, should be concerned.

The best way, the only way really to manage prices is through the free market. Medicare for All or any other arrangement that leaves the government in charge of healthcare and puts federal bureaucrats in between decisions that doctors and patients should make is a bad one.

Copyright 2024 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Medicare prescription price controls will hurt seniors

Congress needs to take action, or your taxes will be going up

The latest data suggests a drop in energy prices may have tamed the inflation monster. President Joe Biden certainly hopes so, since the marks he’s getting from the American people for his handling of the economy are some of the lowest on record.

What people think and what the data shows don’t always sync up. People are still feeling the effects of Bidenflation. Prices may have stopped rising, but they’re still way up from where they were when Donald Trump left office. Look at a recent Financial Times/University of Michigan poll that showed just 14% of voters said that financially, they were in a better position now.

The price of gasoline, something everyone watches like a hawk, is down right now from its peak. That adheres to the president’s benefit but, as we know from decades of experience, it can shoot up in a fortnight. The housing market, though, is still dragging. Heritage Foundation economist Richard Stern estimates yearly mortgage payments on median-priced single-family homes have tripled since Biden was elected. It makes sense  the poll had 33% of voters saying Biden’s economic policies “had hurt the economy a lot.”

Nevertheless, the president likes to say that “Bideneconomics” is working and that he created more jobs than any of his predecessors. That’s true, but only if you count the jobs that came back when the lockdowns ended as new jobs. He really shouldn’t take credit for them.

Biden doesn’t like to admit he inherited an economy made stronger by 2017’s Tax Cuts and Jobs Act, which has kept us out of an official recession for most of his presidency.

This is backed up by a new study conducted by the National Bureau of Economic Research that looked at 12,000 corporate tax returns in the two years before and after the tax cuts became law. It found the reduction in the corporate tax rate, bonus depreciation, and other changes made to the tax code increased domestic investment by 20%.

The increase in economic activity created by Trump’s tax cuts before the pandemic provided the cushion needed to survive the lockdowns, not the record level of government dollars distributed under the rubric of assistance during the pandemic.

Some of the new laws’ provisions, like the tax credit for research and development, have bizarrely been allowed to expire. Likewise, the 2021 childcare tax credit. They are politically popular and, up to a point, economically meaningful. Pro-investment policies like the research and development credit help feed American consumers. Farmers buy new equipment to keep productivity up so food prices remain down. American manufacturing’s investments in new and expanded facilities produce what people like Biden used to call “good jobs at good wages.”

Childcare expenses consume an increasingly large portion of family budgets. If these issues aren’t going to be addressed through a rate reduction that keeps that amount of tax paid the same – and there’s not much of a chance of a bill like that getting through this Congress or being signed by the president – then an extension of the entire package of expired deductions through 2025, when the tax cuts expire in their entirety, needs to be a priority for Congress before it leaves for the year.

These extenders are vital to the future growth needed to reduce the debt. We cannot tax our way out of our problems, but that doesn’t mean they’re insignificant. On that point, there’s surprisingly bi-partisan agreement. Referring to the National Bureau of Economic Research study, for example, former Obama economic adviser Jason Furman said it showed “taxes actually do matter,” adding that it provided “the most convincing estimates of the response of investment to corporate tax changes that I have ever seen.”

Congress must act on the extenders package now before the end of the year. If it doesn’t, it invites additional long-term damage from what amounts to a hidden tax increase while the economy is still on very thin ice.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Congress needs to take action, or your taxes will be going up

Wall Street and the overdue ‘green agenda’ market correction

It’s time to acknowledge that investments made based on ESG considerations – environmental policy, social justice concerns, and corporate governance issues – did not kick off the boom many Wall Streeters predicted it would. It probably never will.

That’s because investments in clean energy don’t produce the returns investments in traditional forms of energy do. As a recent headline on a New York Times column explained, “In a Warming World, Clean Energy Stocks Fall While Oil Prospers.”

Green energy isn’t inherently evil. The efforts of the Biden administration to force it on American are another matter. They may, for example, make the small investors who rely on asset managers to handle their portfolios poorer than they otherwise might be.

As the Times reported on Nov. 4, the costs are clear: “The shares of a broad range of clean energy companies have been crushed lately, in a rout that encompasses just about every alternative energy sector, including solar, wind, and geothermal power.” To the paper, that’s “stock market myopia.” To the rest of us, it should be a warning that Biden’s “green agenda” is a financial flop.

No surprise there. Investments in the green energy sector are risky. Remember Solyndra? The country’s biggest money managers do and are reversing course on ESG.

BlackRock CEO Larry Fink told the Fox Business network he wouldn’t use the term anymore because “it had been rendered toxic in too many quarters” by the efforts of these groups and others.

He isn’t wrong. Bloomberg reports that, since August 2022, investors have moved nearly $300 billion from ESG-targeted stocks into better-performing investments. That’s a sign the marketplace has turned against ESG, no doubt because, as a House Ways and Means Committee staff analysis cited by Chairman Jason Smith, R-Mo., at the opening of a Nov. 8 hearing on the issue said, the top 20 ESG investment funds “performed 18 percentage points worse than the stock market as a whole during the past year.”

The reality that ESG investing threatens small investors has hit home. No one should overlook that it’s also hitting large funds that manage retirees’ savings. Data published in 2020 by Boston College that Smith cited demonstrated that “pension funds with an ESG orientation lagged those of non-ESG funds by two basis points per year over a ten-year period.”

That marries up nicely to what Fink told the Wall Street Journal’s Gerry Baker Gerry on his Free Enterprise podcast: “Everything we do is on behalf of our clients, and Everything we do is with the purpose of financial returns. There is not one thing we have ever done, whether it’s ESG or any other issue, that is not in the pursuit of financial return.”

The recognition of that fact, coupled with the sunlight shown on the adverse consequences to investors from ESG highlighted by public policy groups like the Committee to Unleash Prosperity and the Competitive Enterprise Institute, has changed how investors think about ESG. So have reforms pushed by regulators in places like Texas and Florida that block its use as an investment strategy.

The combined impact has cooled the ardor for ESG among the nation’s largest asset management firms. BlackRock’s support at corporate annual meetings for so-called social justice resolutions dropped from 47% to 22% to 7% over the last three years. In 2023, Vanguard backed only 2% of environmental and social resolutions compared to 12% the previous year.

Fink, formerly an ESG cheerleader, would likely say the change in attitude reflects the realities of the marketplace. The asset management business is all about making money and managing risk. He and his colleagues noted the backlash and responded accordingly to the desires of investors now better informed of the risks involved with ESG by concerned pro-market public policy groups.

Hopefully, Wall Streeters will remember the risks involved with ideologically aligned investments. Fink and others in the asset management industry statements of late should reassure investors and policymakers alike what they are for and what they are against.

No one is suggesting people can’t consider ESG when investing their own money. Caveat emptor still applies. When it comes to managing “other people’s money,” the fiduciary responsibility asset managers have to produce the greatest possible return on their clients’ money must remain not just the paramount but the only concern.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Wall Street and the overdue ‘green agenda’ market correction

A U.S. agency you’ve never heard of is destroying innovation

Recent and expected Supreme Court rulings regarding the authority of federal regulators have put the regulatory bureaucracy in the spotlight.

Too many of them have the power to make or break industries. Some, like the U.S. International Trade Commission, are begging to have their wings clipped. Its mission is to protect American companies from unfair business practices by foreign companies, but in recent years it has inserted itself into patent infringement cases, a problematic and exceedingly complex area.

The agency needs to be put back in its lane. Judges and juries should resolve patent disputes, not regulatory bodies – which, like the International Trade Commission, often have the power to impose a ban (called an exclusion order) on imports of all products a company alleges used their intellectual property without permission or compensation.

Exclusion orders can be devastating to U.S. innovators whose supply chains extend overseas. A single order can cause billions of dollars in damage to the U.S. economy. The International Trade Commission regularly grants them because it is its only enforcement mechanism.

Unlike the penalties that a judge can impose, these all-or-nothing orders are not scalable. Worse, the International Trade Commission has ignored its own rules for decades by issuing orders that harm the public interest. Shockingly, it has refused to deny the request for an order on those grounds for more than 35 years.

Many of these requests come attached to suits filed by shady entities known as “Patent Trolls” who are not producers or manufacturers but pursue patent infringement claims to make quick cash.

In other infringement cases, suits involve a legitimate dispute between competing manufacturers in the U.S. who could readily solve their problems through nuanced court decisions.

A prime example of all this is playing out now as Masimo Corporation, a U.S. medical technology company whose products include noninvasive patient monitoring devices, has dragged Apple before the International Trade Commission.

Masino alleges the Apple Watch Series 6 infringes on its patent on light sensors that gauge blood oxygen levels. In January, an International Trade Commission administrative law judge ruled in Masimo’s favor. Now the full commission must decide whether to issue an exclusion order.

If it did, Apple could no longer sell its Series 6 watch in the U.S. market. That would not only be financially damaging to one of America’s best high-tech innovators, it would be a blow to consumers.

It is not a trivial matter. For some people, the Series 6 is essential to self-monitoring their health, and encouraging complainant patent holders to threaten a complete ban on entire product lines in the high-tech space discourages them from pursuing more innovation.

The drag a ban would create affects their operations and the entire economy.

Masimo didn’t just file with the International Trade Commission. It accused Apple in federal court of stealing trade secrets. Those pleas failed to persuade the judge, who declared a mistrial and gave Masimo no relief.

Masimo’s approach is a perfect example of how not to deal with intellectual property disputes. Filing multiple cases that make various claims in different legal venues is wasteful. Not only that, it’s particularly taxing on the system when the issues involve very complex high-tech patents and the devices they support.

The International Trade Commission’s willingness to encourage these disputes while ignoring the public interest imperative leads to chaos and drag on U.S. innovation. The commission is venturing far beyond its intended role of protecting U.S. businesses from unfair foreign competition. It has the structure and the expertise to handle unfair import competition issues. Still, its lack of technical knowledge means it has no business interceding in patent disputes between competing American companies.

Congress must step up. Reps. David Schweikert R-Ariz.) and Don Beyer (D-Va.) recently introduced the Advancing America’s Interests Act, bipartisan legislation to reorient the International Trade Commission back to its core mission of protecting American jobs and the U.S. economy.

The legislation is needed to help the American economy, its industry, and its innovators grow and prosper. Congress should prioritize these changes to protect U.S. innovators and consumers.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on A U.S. agency you’ve never heard of is destroying innovation

Reform the FDA before it kills us

The human capacity for processing information is limited. People running for office who recognize this and adapt their campaign messages accordingly usually do better than those who don’t.

It’s not that the voters are dumb, far from it. In the years since the end of World War II, the federal government has grown in both size and scope to a scale most of the nation’s founding generation would not have believed possible.

The regulatory impulse has led to a permanent and unaccountable meta-government at the bureaucratic level that often ignores the general welfare and the sentiments of the people in the name of protecting them.

Vivek Ramaswamy, a biotech entrepreneur currently seeking the 2024 GOP presidential nomination, is making the need to prune the permanent government back a centerpiece of his campaign. An Ohio-born first-generation American, he’s out on the hustings like a high-tech Paul Revere, calling for us to address the excesses of the administrative state.

It’s a welcome contribution to the national debate. Federal regulators have been out of control for some time, writing rules that have the force of law free of the accountability that comes through the democratic process.

There is, as Ramaswamy acknowledges, a veritable alphabet soup of agencies known by their initials that hold the power of life and death over essential sectors of the economy and, increasingly, over us.

The one that may be most urgently in need of reform is the U.S. Food and Drug Administration. Its focus is literally on things that can keep us alive and things that can kill us. Unfortunately, it continually errs in both directions.

During the recent public health crisis that was COVID-19, it was – until President Donald Trump intervened with Operation Warp Speed and other methods of cutting red tape – an impediment to the development of both rapid testing and a cure.

Since the end of the pandemic, the agency has been curiously silent about the long-term effects of the vaccines many people were ordered to receive either by government mandate or at the cost of losing their job if they refused. Had it been more on the ball, it might have been able to help forestall the ongoing online panic running through social media that the cure did more damage than the disease.

That’s only part of the problem. The FDA’s decades-long war against tobacco – which it decided several years ago included a mandate to regulate vaping devices – is failing.

The number of different devices available in the United States has tripled during the Biden years, most of them coming from China. That’s in stark contrast to regulators’ own figures, which tout the rejection of some 99% of company requests to sell new e-cigarettes while authorizing only a few meant for adult smokers, according to the Associated Press.

Rather than focus on that, the FDA is ramping up efforts to increase its ban on tobacco. As part of that, the agency is seriously considering a ban on the sale of menthol cigarettes, which have been around since the 1920s and became widespread in the 1950s.

One reason is the number of young people smoking is at an all-time low. An FDA ban on menthol would only really affect adults, who, we generally concede, should have the freedom to choose.

Adults may prefer flavored vapes and tobacco, especially if they’ve chosen vaping as an alternative. Young people also prefer flavors, making them a safety hazard in the government’s mind. As such, they were driven from the U.S. market by the FDA – except for what’s coming from China. It apparently can’t do anything about them – or doesn’t want to expend the resources and political capital necessary to try.

The pivot to menthol from flavored vapes might be what you’d see the private sector do. Hit a wall, move to something else. But we want something else from government. We don’t want entrepreneurial regulators looking for opportunities. We want them to follow instructions given to them by Congress or the President, all of whom are accountable to the people.

We’ve been down this road before. When the Volstead Act passed, making the production of alcohol illegal (except for certain specific and highly regulated purposes), we got a black market and bloodshed. When flavored vapes were effectively banned, we got a flood of Chinese imports.

Now the FDA thinks it can get rid of menthol cigarettes. Who does it think it’s kidding?

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Reform the FDA before it kills us

Price controls pad health industry profits

Though policymakers are seldom willing to admit it, some policy ideas are so dumb they should only be mentioned as examples of what not to do.

With apologies to William Goldman and “The Princess Bride,” the most infamous of them involves getting involved in a land war in Asia. However, just behind that is the idea that government price controls work.

Like communism, price controls have failed everywhere they’ve been tried – unless the intent of those who imposed them was to damage the economy. If that was the case, they worked splendidly. Why, then, do people with advanced degrees from some of the nation’s finest universities keep proposing them as a solution to the problem of affordability?

Prices are signals. They tell us about quality, availability, effectiveness, need, demand, and other things that are useful to know as producers and consumers. There are many things the government does in ways that are not objectionable, but setting prices is not one of them. It doesn’t have the information needed to do so.

Even if it did, what it learned would probably be ignored due to political concerns. When the government sets the price of something, it usually does so based on input from lobbyists and other special interests that either have an ox in danger of being gored or some kind of skin in the game.

The people who make health care decisions for the U.S. government are inundated with these kinds of people. They hold enormous sway, not just because they sell so many pharmaceuticals but because the U.S. government buys so much of what they produce, it can make the rules for the entire marketplace.

If you’re thinking that’s not fair and sounds like a monopoly – which it isn’t, strictly speaking – you’re looking at things the right way. One group that has outsized power in this conversation is the pharmacy benefit managers who work on behalf of the big insurance companies.

What pharmacy benefit managers do, and this may be an oversimplification, is manage prescription drug benefits on behalf of health insurance companies, employers and the Medicare Part D drug program, which brings the government directly into the discussion.

If you watch streaming TV, you’ll see ads running rotation that point fingers at the pharmacy benefit managers for causing an increase in the price of some prescription drugs and for blocking consumer access to those that generate for them a lower profit.

These pharmacy benefit managers, which Obamacare created to help keep prices down, are instead driving them up. They’re strong supporters of the government regulation of prescription drugs and mirror the activities of Medicare-for-All in the private sector.

As middlemen who act as third-party authorizers between patients and physicians, the largest of the pharmacy benefit managers have arguably taken control of the prescription drug market. Their dominance in the healthcare space allows them to make enormous profits instead of keeping consumer costs down.

They are in favor of price controls that distort markets in their favor. Instead of saving money for patients, they’ve caused instances where healthcare consumers were unable to count some pharmacy co-pay assistance toward their annual deductible. Costs went up, instead of down.

It should have been predictable – and probably was. Pharmacy benefit managers are blocking patient access to cost-saving generics and other alternatives because they don’t produce the same returns on investment as brand-name pharmaceuticals. Pharmacy benefit managers fees, wouldn’t you know, are tied to the cost of medicine. The higher the price, the more they make.

Some also make money at the pharmacy level because they own many of them. By directing patients to the company store, as it were, they’ve found a way to game the system that needs to be examined on the grounds it may be restraining trade.

In any event, the elements of what was needed for government price controls on medicines became law on a party-line vote, enriching the pharmacy benefit managers and the biggest health insurers at the expense of the consumers.

Liberals like Joe Biden and Bernie Saunders used to be outraged by that kind of thing. Now they’re applauding it. Maybe they need to check their meds.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Price controls pad health industry profits

Don’t crash the U.S. auto market by forcing us to buy EVs

About 20 years ago, the belief that commercially-significant quantities of fuel blends containing organic materials would soon be available led to the passage of alternative fuel requirements. Yet, because science failed to deliver on its promise, America ended up becoming more dependent on ethanol.

That growing dependence affects the price of fuel and feedstocks adversely, making each trip to the grocery store more costly than the last. The bureaucrats responsible for the idea, flush with taxpayer dollars as the result of congressional green-energy largess, made a bad bet.

It’s going to happen again. Just look at the billions Ford Motor Company just announced its shift to an all-electric fleet has cost it. Bad news for corporate management, bad news for stockholders, and bad news for The Ford Foundation, which ironically enough has been using its holdings to promote the global green energy transition.

There’s nothing inherently wrong about wanting to use clean, renewable energy to power the economy. In the abstract, it’s a grand idea that, when fully implemented, should lead to a global reduction in prices that would be a boon to consumers. The problem isn’t “green energy.” It’s that the government bureaucrats who make policies we all have to follow are operating off a timetable that’s divorced from technological realities.

Earlier this year the U.S. Environmental Protection Agency released two rules proposing to regulate the tailpipe emissions of light-, medium-, and heavy-duty- vehicles as part of its promotion of President Joe Biden’s anti-climate change agenda.

The proposal is pretty strict, on purpose. The only way vehicle manufacturers can meet the targets set by the agency is to move most or all of their fleet off the internal-combustion platform onto an electric one. That’s the objective, and the Biden administration is being fairly ruthless in its attempt to get us all there.

If this were a small thing, the U.S. might withstand it but it’s not. America is a mobile nation. Cars and trucks are essential to the nation’s economy and, for the moment, absent something better, gasoline is its lifeblood. Never mind that carbon emissions coming from motor vehicles are down from what they were when our moms drove station wagons the size of battle tanks, the policymakers driving this agenda won’t be happy until they reach zero.

If all new vehicles sold must be powered by electricity, a change the EPA’s proposed rule will force on everyone, the options available to working families will be significantly limited. At around $64,000 a pop for an EV, most of them will see themselves priced out of the new car market.

This isn’t hard to predict. A poll conducted by The Associated Press-NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago makes it obvious. Only 19% of U.S. adults said it’s “very” or “extremely” likely they would purchase an electric vehicle the next time they buy a car.

That means more people shopping in the used car market, leaving older cars on the road longer, producing the same emissions they did when they were new.

The market handles this by redesigning vehicles and power trains and producing greater fuel economy and fewer emissions – yes, all because of government mandates – but because the transition is gradual, vehicles remain affordable. That means older cars with outmoded technologies are swapped for newer ones that produce fewer emissions.

This shouldn’t be hard to understand, but the bureaucrats who wrote these new rules for the EPA can’t see that. They can’t see what they’ve put on the table runs counter to the achievement of their ultimate goal.

No car company is going to stay in business manufacturing cars no one wants. The American auto industry learned that in the 1970s when the Japanese and the Germans moved into the U.S. market with more fuel-efficient, affordable vehicles that were cheaper to operate and maintain and lasted longer than what Detroit was still putting out.

It took us a long time to learn the lessons of that experience. Yet those mistakes are about to be repeated in the government-driven rush to make every car sold in America an EV by the beginning of the next decade.

It’s a bad idea, commercially, technologically, and financially. Someone needs to put the brakes on it before the American auto market crashes and takes the rest of the economy with it.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is former U.S. News and World Report contributing editor and UPI senior political writer now affiliated with several DC-based public policy organizations. He writes for numerous publications and appears regularly on international television talking about U.S. politics. You can reach him at [email protected] and follow him on Twitter @TheRoffDraft.

Comments Off on Don’t crash the U.S. auto market by forcing us to buy EVs

American education is getting better

Fear of the COVID virus may be largely gone, but the consequences of the mistakes made trying to combat its spread will be with us for a long time.

This is particularly true in the education space. Post-pandemic studies are now confirming the school closures, ordered by politicians bending to pressure from teachers’ unions, produced a learning gap that is unlikely to close. The 2022 National Assessment of Education Progress found, as one example, that math scores for 13-year-olds experienced their biggest decline in 50 years.

The fight to keep schools open – public and private – reached a state of alarming combativeness. Orthodox Jews in New York City who unsuccessfully tried to defy orders closing their schools issued by then-Gov. Andrew Cuomo found themselves intimidated and threatened with arrest.

Cuomo was not alone in going overboard. The countless closures and failed experiments with masking and home-based learning led parents to rally for their children’s right to go to school. That cause continues today.

Parents understand as never before the scope of change needed. For the first time since the phrase “school choice” began to be heard in Wisconsin back in the 1980s, the war on “Big Education” is finally out in the open.

The latest campaign started in West Virginia. After persuading people in urban centers and rural communities alike how alternative education opportunities would open the doorway to success for school children, the legislature enacted a robust program tying state education funding to students rather than school systems.

Similar expansions are now occurring across the country under the rallying cry, “Fund students, not systems.” Republican state legislators joined by a very few brave Democrats willing to stand up to the National Education Association and the American Federation of Teachers are pushing education-improving reforms that stand in sharp contrast to the empty promises the education establishment routinely fails to deliver.

State-funded scholarships are catching on. Education funding support is making it possible for the children of low- and middle-income parents to have the ability to escape failing schools the children of the privileged have.

In Arizona, when Democratic Gov. Katie Hobbs (who was elected last year with the backing of the teachers’ unions) threatened to roll back the expansion of education savings accounts that were enacted thanks to the leadership of outgoing Republican Gov. Doug Ducey, it was pressure from families already benefiting from Ducey’s reforms that forced her to back down.

In North Carolina, a Democratic state legislator crossed the aisle – giving the Republicans a veto-proof majority in the state legislature – in protest of the opposition to education savings accounts displayed by her fellow Democrats, including North Carolina Gov. Roy Cooper.

Cooper – who sent his daughter to private school – responded by declaring a “state of emergency” in education. It’s a meaningless gesture because the parents in his state know that one already existed. Too many schools had failed too many children to allow business as usual to continue.

The details are still being worked out, but an expanded scholarship program for K thru 12 students will probably be in place by the beginning of the next school year in North Carolina over Cooper’s veto as it will in Iowa, where Republican Gov. Kim Reynolds made it possible for more than half a million students to participate.

In Arkansas, newly-elected GOP Gov. Sarah Huckabee Sanders made the expansion of education savings accounts one of the first things she did. That’s half a million more students eligible for opportunity while in Florida, GOP Gov. Ron DeSantis led the fight to expand programs that started under Gov. Jeb Bush so that more than 3 million students will have the opportunity to attend better schools than the ones they are assigned because of where they live.

It doesn’t end there. Families in North Dakota and Indiana and Tennessee are now eligible for vouchers while Oklahoma and Nebraska residents can get tax credits. In other states, like Louisiana, New Hampshire, Texas, Ohio, and Pennsylvania, proposals to fund student scholarships instead of schools may still come into being before the start of the next school year.

The education revolution has begun, with parents leading the way. In a few years, it will be possible to prove that parents can rescue their children from failing schools simply by making it affordable to move them to better ones.

Copyright 2023 Peter Roff distributed by Cagle Cartoons newspaper syndicate.

Peter Roff is a media fellow at the Trans-Atlantic Leadership Network, a former columnist for U.S. News and World Report, and senior political writer for United Press International. Contact Roff at [email protected], and follow him on Twitter @TheRoffDraft.

Comments Off on American education is getting better