STAFF NEWS & ANALYSIS
DB Briefs: Global Warming Meme Continues / Obama's Vacation Plans / Drugs & Price Controls
By Staff News & Analysis - August 18, 2011

Perry Says He Doesn’t Believe in Global Warming … GOP presidential candidate Rick Perry told New Hampshire voters Wednesday that he does not believe in manmade global warming … he made his global warming comment in response to a question by an audience member who cited evidence from the National Academy of Sciences. … Perry’s opinion runs counter to the view held by an overwhelming majority of scientists that pollution released from the burning of fossil fuels is heating up the planet. Perry’s home state of Texas releases more heat-trapping pollution carbon dioxide – the chief greenhouse gas – than any other state in the country, according to government data. – Associated Press

Obama’s Dilemma: Should He Take a Vacation Now? … Is there ever really a good time for the president to go on vacation? … This summer, the vacation dilemma is compounded by the country’s urgent demand for jobs, the debt crisis that’s left Washington with a hangover and the public’s frustration with political gridlock. … Mitt Romney said Wednesday that Obama should stay in Washington and call Congress back to work. … “If you’re the president of the United States, and the nation is in crisis — and we’re in a jobs crisis right now — then you shouldn’t be out vacationing. Instead you should be focusing on getting the economy going again. – Associated Press

Price-Gougers Hike Costs of Vital Drugs During Shortage … ‘Gray market’ suppliers offer medications at an average 650 percent mark-up, survey shows. … Amid growing shortages of life-saving drugs, some back-door suppliers are capitalizing on the problem, jacking up prices for medications for cancer, high blood pressure and other serious problems by as much as 4,500 percent, a new hospital survey shows. … So-called “gray market” medical suppliers — vendors who operate through unofficial channels — inflated prices by an average of 650 percent on drugs that were either back-ordered or completely unavailable. … Of the drugs offered by 18 gray market providers, 96 percent were double the normal price, 45 percent were 100 times the normal price and 27 percent were at least 20 times the normal price. – MSNBC

Perry Says He Doesn’t Believe in Global Warming

GOP presidential candidate Rick Perry told New Hampshire voters Wednesday that he does not believe in manmade global warming … he made his global warming comment in response to a question by an audience member who cited evidence from the National Academy of Sciences. … Perry’s opinion runs counter to the view held by an overwhelming majority of scientists that pollution released from the burning of fossil fuels is heating up the planet. Perry’s home state of Texas releases more heat-trapping pollution carbon dioxide – the chief greenhouse gas – than any other state in the country, according to government data. – Associated Press

Dominant Social Theme: Know-nothing global warming deniers would have us cook in an oven of polluted gas.

Free-Market Analysis: There’s that overwhelming majority of scientists again. Whenever global warming is the topic, you can count on them to show up. What never does show up is an overwhelming majority of climatologists. Climatologists don’t get mentioned because a showing of hands from scientists who study climate wouldn’t do the argument for man-made climate change much good. The story runs much more smoothly by relying on everyone with a B.S. degree in some branch of science to read the newspaper and then give the desired answer to the poll-taker’s carefully worded question.

And that dread pollutant, carbon dioxide – excuse me while I exhale – is in fact the stuff of life. Plants can’t exist without it. Visit the produce section of your grocery store and everything you will see consists mostly of water and the chemical byproducts of carbon dioxide.


Obama’s Dilemma: Should He Take a Vacation Now?

Is there ever really a good time for the president to go on vacation? … This summer, the vacation dilemma is compounded by the country’s urgent demand for jobs, the debt crisis that’s left Washington with a hangover and the public’s frustration with political gridlock. … Mitt Romney said Wednesday that Obama should stay in Washington and call Congress back to work. … “If you’re the president of the United States, and the nation is in crisis — and we’re in a jobs crisis right now — then you shouldn’t be out vacationing. Instead you should be focusing on getting the economy going again. – Associated Press

Dominant Social Theme: What the economy needs is more involvement by government.

Free-Market Analysis: Attention all weary government officials! It’s OK. Go on vacation. Maybe you don’t deserve a rest, but we deserve you to have one. Take all the time you want. Lying on the beach or patrolling a mountain stream for twelve-inch trout are good things. Do them. While you’re at it, you won’t be passing more laws limiting our freedom. You won’t be inventing new taxes to take our money. You won’t be announcing more regulations. And you won’t be devising the newest program for maximizing the wastefulness of government spending. You’ll deserve a medal.

And don’t be troubled by the thought that you’re not creating jobs. You never have created a real job and you never will. A real job happens when a worker and a business that needs work done agree that a job should happen. There just is no other way.


Price-Gougers Hike Costs of Vital Drugs During Shortage

‘Gray market’ suppliers offer medications at an average 650 percent mark-up, survey shows. … Amid growing shortages of life-saving drugs, some back-door suppliers are capitalizing on the problem, jacking up prices for medications for cancer, high blood pressure and other serious problems by as much as 4,500 percent, a new hospital survey shows. … So-called “gray market” medical suppliers — vendors who operate through unofficial channels — inflated prices by an average of 650 percent on drugs that were either back-ordered or completely unavailable. … Of the drugs offered by 18 gray market providers, 96 percent were double the normal price, 45 percent were 100 times the normal price and 27 percent were at least 20 times the normal price. – MSNBC

Dominant Social Theme: Without price controls, profiteers will rob the public.

Free-Market Analysis: Framing the message with pill bottles is a variation on an old theme. You usually hear it in connection with a hurricane, flood or other natural disaster. Hard-hearted gougers take advantage of shortages to jack up prices of food (especially baby food), gasoline, water and motel rooms to unconscionable levels.

But consider the actual effects of punishing people for raising prices. Every business maintains inventories. But inventories costs money (capital cost, storage, insurance, etc.), so a business limits its inventories to the level it estimates is the most profitable. Part of that calculation is the exceptional profits that can be made now and then in the event of a temporary shortage. If government price controls prohibit that source of profit, a business will operate with smaller inventories. Then when the hurricane, flood or other disaster occurs, less food, less gasoline, less water and fewer motel rooms are available for the people who are struggling to get by. The victims of natural disaster become also victims of government.

That’s the supply side of the story. On the demand side, higher prices will lead most people to be sparing in using what is in short supply. The family that normally would take two motel rooms while traveling will pack themselves into a single room for the night. No fun, but it leaves the second room available for someone else, who otherwise would be sleeping in his car.

The same economics work with medicine. Government-imposed price limits will dampen the profit motive for maintaining supplies. And when a shortage occurs, those same price limits will dampen the motive for economizing on the use of the medicine, to a possibly disastrous effect when the last pill is swallowed and the inventory falls to zero.

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