Category Archives: markets

0% Inflation

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That’s what President Joe Biden (D) said, just a few days ago, when overall inflation came out unchanged in July vs June. (I’ll elide, here, the year-on-year inflation rate of 8.5% in July, which is a little different from 0%.)

Today we received news that our economy had zero percent inflation in the month of July. Here is what that means: while the price of some things went up last month, the price of other things went down by the same amount.

Among those things whose price went up is food, which all of us need for survival, even as we don’t need gasoline or airline tickets just to survive.

…in July, food prices accelerated further, the Labor Department reported on Wednesday. The food at home category, which tracks the cost of groceries, surged 13.1% over the last year, the most significant increase since March 1979. On a monthly basis, prices jumped 1.4%.

The increase in the cost of food for our families was somewhat more than zero. In fact, annualized, that 1.4% month-to-month increase works out to 18.2%, even larger than that realized annual increase of 13.1%.

Biden is determined to make a big deal about one short-term inflation statistic, and he’s equally determined to pretend another short-term inflation statistic, one that’s critical to families, doesn’t exist. He’s speaking Newspeak, not English.

And to Reduce Development of New Drugs

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The Wall Street Journal headline reads Democrats Vote to Raise Drug Prices. That’s in response to the Senate Progressive-Democratic Party’s unilateral vote to pass President Joe Biden’s (D) Build Reduced Back Act last Sunday. Included in that bill is a capability for Medicare to “negotiate” the prices on a select list of drugs. Negotiate: accept Medicare’s offer or pay a 95% tax on revenues. Nice drug you got there….

This is one inevitable result:

If drug makers must give Medicare steep discounts on certain drugs, they will compensate by increasing prices in the commercial market.

Even the Progressive-Democrat Senator Chris Murphy (CT) recognized the foolishness of the price control, even as he voted for it Sunday:

You can’t untangle the private sector from the public sector—one doesn’t work without the other.

Except that Murphy is wrong in one regard, a regard to which Progressive-Democrats everywhere are blind: the private sector works just fine without the public sector. Better, even.

There’s another inevitable outcome for which the Progressive-Democratic Party voted with their just passed Medicare price controls, and it’s far longer lasting and far more dangerous to Americans’ health. That outcome is the delayed effort to innovate and the reduced level of drug development that will occur even then, given the severe restrictions that will exist on a pharmaceutical company’s ability to recoup its cost of development, much less turn a profit on the development, and therewith have funds for further development.

Food or Fuel?

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That’s the choice being forced on Americans by the push for “clean” fuel for our cars, even as the Left and the Progressive-Democratic Party push for elimination of gasoline-burning cars. Dave Loos, Illinois Corn Growers Association’s Director of Biofuels and Research, actually is proud of that diversion of food to fuel.

Illinois has 13 ethanol plants that can produce 1.6 to 1.7 billion gallons of ethanol annually.

A bushel of corn produces 2.8 gallons of ethanol. That’s roughly 590 million bushels of corn diverted from food in Illinois alone. Illinois corn farmers produced 2.13 billion bushels of corn in 2019. The equivalent (because it’s not only Illinois corn in those plants) of more than 27% of Illinois’ corn production is diverted away from food production in Illinois’ plants.

Food or fuel? Food—corn—diverted from Americans’ tables and from ranchers’ animal feed (and so diversion of meat from Americans’ tables) is being sacrificed to produce ethanol for vehicles that are intended to not exist in any great number in a few short years.

And this doesn’t address the environmental and economic damage done by the Renewable Fuel Standard—the Federal government’s ethanol mandate. From Environmental outcomes of the US Renewable Fuel Standard, published in the Proceedings of the National Academy of Sciences last winter:

[T]he RFS increased corn prices by 30% and the prices of other crops by 20%, which, in turn, expanded US corn cultivation by 2.8 Mha (8.7%) and total cropland by 2.1 Mha (2.4%) in the years following policy enactment (2008 to 2016). These changes increased annual nationwide fertilizer use by 3 to 8%, increased water quality degradants by 3 to 5%, and caused enough domestic land use change emissions such that the carbon intensity of corn ethanol produced under the RFS is no less than gasoline and likely at least 24% higher.

That’s an example of the irrationality of Left and of their politicians.

Bias and Gun Trafficking

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Dan Frosch and Zusha Elinson had a piece on illegal gun trafficking in last Thursday’s Wall Street Journal in which they decried the degree of illegal trafficking, especially across State borders. In the graph below, they particularly called out five States as being particularly egregious sources of this interstate trafficking.

Sadly, their article exposes more about the press’ bias in reporting on guns and (by their implication from their trafficking emphasis) on gun control.

No doubt gun-trafficking is a serious problem.

However, some context is informative, also; it took me about 10 grueling seconds to conduct the Bing search that turned up this context from the year following Frosch and Elinson’s graph.

  • 5,000 guns trafficked out of Texas against 1.6 million guns sold in Texas in 2021.
  • 6,000 guns trafficked out of Georgia against 496 thousand guns sold in Georgia in 2021.
  • 4,800 guns trafficked out of Arizona against 480 thousand guns sold in Arizona in 2021.
  • 4,700 guns trafficked out of Virginia against 620 thousand guns sold in Virginia in 2021.
  • 4,300 guns trafficked out of Florida against 1.4 million guns sold in Florida in 2021.

It’s interesting that Frosch and Elinson chose to elide this context-providing information.

On Governor Newsom’s Plan to Produce Insulin

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Regarding that idea, a letter writer in The Wall Street Journal‘s Tuesday Letters section offered this after suggesting that Newsom’s effort would have the salutary outcome of demonstrating the foolishness of such a move:

Targeted subsidies for at-risk populations cost a fraction of the investment needed to bring “affordable” medications to the people….

That’s true enough, could Government actually do that and, further, keep it limited to the truly at-risk. However, actual competition in the market is free, and that brings down costs for everyone. Additionally, that competition allows far better and more accurate identification of those remaining few at-risk who still can’t afford their meds and would be legitimate targets of largesse. That also would facilitate more effective use of sources of largesse, beginning in order with family and friends first, followed by church and local charity, local community, county, then state governments, with the Feds last on the list, rather than the default source.