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Showing posts with label pricecontrols. Show all posts
Showing posts with label pricecontrols. Show all posts

New piece in Philadelphia Inquirer: Speculators smooth out the rough spots

My new piece with Grover Norquist in the Philadelphia Inquirer starts this way:

With regular gas prices topping $3.70 last weekend, angry politicians are blaming the higher prices on speculators and greedy oil companies. On Monday, The Hill newspaper reported that 23 senators and 45 congressmen, all Democrats except for one independent, called for urgent action against the "speculators" they hold responsible. Sen. Bob Casey of Pennsylvania demanded, "Consumers shouldn't be forced to pay higher prices at the pump because of speculative bets on Wall Street."

These politicians want the Commodity Futures Trading Commission to use its new regulatory powers under a law signed by President Obama two years ago to limit the amount of oil that speculators can buy.

This isn't a new concern. Last April, when regular gas prices hit $4 a gallon, the president launched a Department of Justice investigation into what he called "manipulation in the oil markets that might affect gas prices."

Unfortunately, neither the Democrats in Congress nor Obama appear to have a clue how markets work. The policy reminds one of Richard Nixon's attacks on speculators during the 1970s. . . .



Drugmakers raising prices before controls are imposed

Drugmakers raising prices before controls are imposed

I certainly hope that drug companies are trying to raise the prices of drugs before various regulations go into effect. The only problem is that they are being forced to raise prices more than they think that they should. Lowering these prices will only result in fewer new drugs and fewer lives being saved.

Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years.

In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.

The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year.

Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

“When we have major legislation anticipated, we see a run-up in price increases,” says Stephen W. Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota. He has analyzed drug pricing for AARP, the advocacy group for seniors that supports the House health care legislation that the drug industry opposes.

A Harvard health economist, Joseph P. Newhouse, said he found a similar pattern of unusual price increases after Congress added drug benefits to Medicare a few years ago, giving tens of millions of older Americans federally subsidized drug insurance. Just as the program was taking effect in 2006, the drug industry raised prices by the widest margin in a half-dozen years.

“They try to maximize their profits,” Mr. Newhouse said.

But drug companies say they are having to raise prices to maintain the profits necessary to invest in research and development of new drugs as the patents on many of their most popular drugs are set to expire over the next few years. . . . .


Democratic Sen. Bill Nelson of Florida now wants to investigate reports that prescription drug makers are raising prices.
Democrats pushing through Freeze on Credit-card Interest Rates

Democrats pushing through Freeze on Credit-card Interest Rates

Price controls on credit cards, this is smart.

A top Senate Democrat moved Monday to impose an immediate freeze on credit-card interest rates, as congressional Democrats continued pushing to rein in financial-sector practices.

Sen. Christopher Dodd of Connecticut, who heads the Senate Banking Committee, introduced a measure that would freeze rates on existing card balances until February, when tough new rules for the industry are slated to go into effect.

Mr. Dodd said he was making the move because companies are using the delayed implementation of the new standards, passed by Congress in May, to push through aggressive rate and fee increases. "No sooner had it been signed into law, but credit card companies were looking for ways to get around the protections," Mr. Dodd said in a written statement.

The measure is part of a populist push by Mr. Dodd, a fifth-term senator facing a tough re-election battle against former Republican U.S. Rep. Rob Simmons next year. Mr. Dodd's ties to the financial-services industry and his receipt of a home loan from former Countrywide Financial Corp. have hurt his standing with voters. He was cleared of violating Senate ethics rules in the mortgage issue. . . .
Guess what: Raising the minimum wage increases unemployment

Guess what: Raising the minimum wage increases unemployment

Who would have guessed? Minimum price controls creates unemployment.

Here's some economic logic to ponder. The unemployment rate in June for American teenagers was 24%, for black teens it was 38%, and even White House economists are predicting more job losses. So how about raising the cost of that teenage labor?

Sorry to say, but that's precisely what will happen on July 24, when the minimum wage will increase to $7.25 an hour from $6.55. The national wage floor will have increased 41% since the three-step hike was approved by the Democratic Congress in May 2007. Then the economy was humming, with an overall jobless rate of 4.5% and many entry-level jobs paying more than the minimum. That's a hard case to make now, with a 9.5% national jobless rate and thousands of employers facing razor-thin profit margins. . . .
Price controls imported on Prescription Drugs

Price controls imported on Prescription Drugs

You can look up this whole amendment here by plugging in S 1229. This law will mean that people will die because drug companies will not now develop those drugs.

SA 1229. Mr. DORGAN (for himself, Ms. SNOWE, Mr. MCCAIN, Ms. STABENOW, Mr. SANDERS, and Ms. KLOBUCHAR) submitted an amendment intended to be proposed by him to the bill H.R. 1256, to protect the public health by providing the Food and Drug Administration with certain authority to regulate tobacco products, to amend title 5, United States Code, to make certain modifications in the Thrift Savings Plan, the Civil Service Retirement System, and the Federal Employees' Retirement System, and for other purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

DIVISION __--IMPORTATION OF PRESCRIPTION DRUGS
SEC. 1. SHORT TITLE.

This division may be cited as the ``Pharmaceutical Market Access and Drug Safety Act of 2009''.

SEC. 2. FINDINGS.

Congress finds that--

(1) Americans unjustly pay up to 5 times more to fill their prescriptions than consumers in other countries;

(2) the United States is the largest market for pharmaceuticals in the world, yet American consumers pay the highest prices for brand pharmaceuticals in the world;

(3) a prescription drug is neither safe nor effective to an individual who cannot afford it;

(4) allowing and structuring the importation of prescription drugs to ensure access to safe and affordable drugs approved by the Food and Drug Administration will provide a level of safety to American consumers that they do not currently enjoy;

(5) American spend more than $200,000,000,000 on prescription drugs every year;

(6) the Congressional Budget Office has found that the cost of prescription drugs are between 35 to 55 percent less in other highly-developed countries than in the United States; and

(7) promoting competitive market pricing would both contribute to health care savings

[Page: S5954]
and allow greater access to therapy, improving health and saving lives.
SEC. 3. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF PRESCRIPTION DRUGS.

Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by striking section 804.

SEC. 4. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF CERTAIN IMPORT RESTRICTIONS.

(a) In General.--Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by section 3, is further amended by inserting after section 803 the following:

``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF PRESCRIPTION DRUGS.

``(a) Importation of Prescription Drugs.--

``(1) IN GENERAL.--In the case of qualifying drugs imported or offered for import into the United States from registered exporters or by registered importers--

``(A) the limitation on importation that is established in section 801(d)(1) is waived; and

``(B) the standards referred to in section 801(a) regarding admission of the drugs are subject to subsection (g) of this section (including with respect to qualifying drugs to which section 801(d)(1) does not apply). . . . .
House passes credit-card curbs, debate moves to Senate

House passes credit-card curbs, debate moves to Senate

From the WSJ.

Many Senate Democrats want stricter limits on card companies' ability to raise rates on consumers who are paying their credit-card bills on time. But most Senate Republicans want credit-card companies to have the right to establish a price for credit based on risk. That means adjusting terms if a consumer's credit quality has deteriorated -- even if that consumer hasn't been delinquent.

Industry officials say that is necessary to offer credit fairly to consumers. "If you cannot adjust for the behavior of a consumer or the risks that they pose, you're going to have to raise rates for everybody at the outset," said Kenneth Clayton, senior vice president of card policy at the American Bankers Association, an industry trade group. "That's unfair to consumers that have been playing by the rules because they're going to pay the price."

The House overwhelmingly passed legislation last week that would ban numerous practices, such as the retroactive interest-rate increases on existing balances, and require clearer disclosure and advance notice for changes to terms. Most of the House provisions mirror federal regulations, approved by the Federal Reserve in December, that take effect in July 2010. . . . .

Sen. Chuck Schumer (D., N.Y.) said companies are instituting "arbitrary credit-rate increases" -- with interest rates doubling or tripling "without any misconduct" by cardholders. "The companies are doing more of this now. And the feeling is they're doing more of it because they know your rules will go into effect" in more than a year, he told Mr. Bernanke.
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