Category Archives: markets

What Are They Going to Do?

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Cut us off?

The chairman of Huawei Technologies Co warned the US to expect countermeasures from the Chinese government if it further restricts the technology giant’s access to suppliers….
Eric Xu, Huawei’s chairman, said he believes Beijing would respond with restrictions of its own on American companies operating in China if the US.

In addition to the draconian restrictions already inflicted on American companies—and other nations’ companies—operating in the People’s Republic of China. These restrictions include demands for government-controlled backdoors into companies’ operating software and transfer of companies’ technologies to domestic partner companies—which are required for most foreign companies in order to operate in the PRC.

With the PRC’s threat to cut us off from needed medicines, intermediate medical chemicals, and medical equipment, and the PRC’s recent attempt to restrict access to rare earth elements, it’s become clear that our manufacturers—and Europe’s, come to that—need to revamp their supply chains to vastly reduce their dependence on PRC intermediaries and suppliers, if not eliminate that dependency altogether.

Xu’s threat only emphasizes that need.

Progressive-Democrats and the Law

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And contracts.  Since the SARS epidemic of some years ago, insurers have declined to cover losses related to virus or bacteria damage, and they wrote their policies to that effect. State regulators—who controlled and still control the structure of insurance policies and the premiums allowed to be charged for those policies outside Obamacare—agreed.

However.

New Jersey Assemblyman Roy Freiman, a Democrat, introduced a bill that would retroactively rewrite interruption coverage contracts and force insurers to foot some losses for any policyholder with fewer than 100 full-time employees.

Contracts be damned. They don’t fit the Progressive-Democrat agenda, so by Progressive-Democrat-run Government fiat, they must be tossed.

Here’s the kicker, though.

Mr Freiman says he doesn’t know if he has the legal authority to do this, but he says he doesn’t care.

The law be damned too—it’s in the Progressive-Democrat’s way. Don’t get enough of his fellows in the legislature to agree with him and change the law. Don’t get actual voters to agree with him and so get legislators to stand with him to change the law.

No. The Progressive-Democrat already Knows Better; everyone should just get out of his way so he can toss the law without any silly delays from the ignorant unwashed.

FDA’s Drug Approvals

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Charles Hooper and David Henderson are on the right track.

The Federal government requires pharmaceutical companies to prove that their drugs are both safe and effective before putting them on the market. Before 1962, companies needed to prove only safety. While there is some appeal to this two-hurdle approach, evidence suggests that there is only a slight benefit and a tremendous cost. With the COVID-19 pandemic sweeping the world, there has never been a better time to revoke the Food and Drug Administration’s efficacy requirement.

I suggest the FDA move to a two-stage approval process. The first stage should focus on safety: does the drug do no harm, at least compared with the condition it’s aimed at treating (because all drugs have side effects).  Once it’s determined the drug is safe, it should be released to the market, limited strictly to on-label use. Let prescribing doctors and patients determine whether the drug is useful, let market forces do their trick. The FDA’s imprimatur for this stage, should be limited to “safe as prescribed, not determined to be effective.”

The second stage should proceed without delay, overlapping the first stage to the extent feasible; in this stage, investigative focus should be on efficacy—does the drug actually have the effect on its target condition that’s intended. Only after the trials associated with this stage have been successfully completed could the drug receive its full-up FDA stamp of approval—and authorization for use, under prescription, off-label.

This modification to the pre-1962 requirement would cheapen development, and it would provide more drugs of greater utility faster to market and to the doctors and patients who use them.

Government Ownership of Private Companies

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There is a move afloat that, as part of a (supposedly) temporary support measure during the current Wuhan Virus situation, the Federal government should inject money into troubled businesses by taking equity stakes—buying shares of stocks—in them.

As The Wall Street Journal pointed out, that’s a bad idea, and it illustrated the dangers by describing the failure of Japan’s moves in this regard.

As it happens, we have a domestic example of the dangers of governments buying private company stocks: CALPERS. That huge (State) government pension fund has, for all the best reasons, invested in a broad range of American companies, and it has invested in some of them heavily.

Like all significant owners, CALPERS is using the influences of its stakes to push those companies to act on its imperatives. Unfortunately, CALPERS’ imperatives are government imperatives, and these are not necessarily sound business imperatives.

The Federal government doesn’t need to expand that negative risk.

Progressive-Democrats and Crises

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We’re seeing their execution of Rahm Emanuel’s theory in spades these days.  The Republican-majority Senate has a proposal in the Senate, agreed in bipartisan fashion with Progressive-Democrat Senators that would aid average Americans and the small, medium, and large businesses—including our farmers and ranchers—weather the government-mandated shutdown of our economy in response to the present Wuhan Virus situation.

The bill would provide loans to businesses to help tide them over the current loss of revenue—many of the loans converted to grants if the businesses retain their employees on the payrolls.

The bill would provide payments of some few thousands of dollars directly to Americans now on lockdowns of varying degrees but that prevent the majority of them from going to work at all, so those individual Americans and their families can stay reasonably current on their ongoing bills.

The bill would facilitate production of badly needed medical supplies, both for the protection of medical personnel and first responders and for the support of hospitalized patients in the care of those medical personnel.

Like I said, these were bipartisanly agreed provisions.  Now those Progressive-Democrats in the Senate have welched on their agreements to these provisions. Now they’re actively—and as a Party—blocking cloture votes so the bill can’t even go to the floor for debate and an up-or-down vote.

Those Progressive-Democrats, having gotten their marching orders from House Speaker Nancy Pelosi (D, CA)—imagine that: even Senate Minority Leader Chuck Schumer (D, NY) has surrendered his Senate authority to Pelosi—who has decided she needs

  • to expand and make permanent unemployment provisions (which would trap the unemployed in the Progressive-Democrats’ welfare cage)
  • anti-carbon provisions added in
  • collective bargaining measures be added in
  • fuel emissions to be imposed on airlines
  • expansion of subsidies for wind and solar energy

None of these have anything to do with the COVID-19 situation and the associated government-mandated economy shutdown.

Progressive-Democrats’ behavior here is just naked blackmail and the holding of American citizens and our economy hostage for the Progressive-Democrats’ personal and ideological profit.

Remember this all up and down the ballot in November.