Elizabeth Warren’s generic drugs plan: More placebo than cure

In theory, generic markets should be the Walmart of the health-care world, where everything is dirt cheap and readily available. In practice, the makers of branded drugs often display a malevolent ingenuity at keeping generic competition at bay. And even when they play fair, a number of factors, including tighter safety regulation and more complex formulas, often means that too few firms enter the market.

.. Lots of drugs, especially those used by only a smaller number of patients, have at best a handful of firms producing them. So if one company has production problems — or decides to withdraw from the market entirely — supply contracts dangerously, as prices shoot skyward.

..  you don’t get to be president by saying “The FDA is working on it.” No, you call for action! Specifically, Warren wants the federal government to get into the business of manufacturing drugs or contracting with third parties to do the production.

.. One can describe all sorts of reasons that state-owned firms ought to be better than the profit-grubbing variety. Freed from the incessant demands of greedy investors, state-directed firms can invest for the long term, pursuing innovation and social welfare rather than profit.

One can describe it easily enough; what’s hard is finding one of these creatures in the wild. Rather than providing a shining rebuke to free-market fundamentalists, state-owned enterprises (SOEs) often seem to have a secret mandate to prove their skeptics right about everything.

.. There are examples of well-run SOEs, but they’re suspiciously concentrated in one tiny patch of northern Europe where government institutions more generally outperform counterparts in the rest of the world. And even high-performing SOEs are vulnerable to a change in administration. PDVSA, Venezuela’s state-run oil company, used to be regarded as one of the best in its class. Then Hugo Chávez decided that he would rather use the company’s investment funds for social spending than for stodgy old petroleum extraction, and rather have the firm managed by cronies than professionals. Venezuela’s disastrous economic collapse can be traced directly to those decisions.

.. President Trump’s election has finally nullified the conservative shibboleth that Washington could be fixed if only we could get a businessman into the Oval Office to show all those government chair-warmers how a real organization does things. Unfortunately, the left is busy reviving its own shibboleth, the mirror image of the conservative mistake: that whenever markets frustrate us, the government can and should step in and do it better. Nationalize the health-care system, bring back public housing development … and if you don’t like the price or availability of various drugs, then have the feds become drug-makers, too.

.. This idea is particularly silly given that so many of the problems that make it harder for generic drug-makers to enter the market are created by government regulations in the first place. Unless the government enterprise bypasses the regulatory hurdles constraining supply, it will face much the same difficulties that private firms do.

And if the government is going to relax regulatory requirements, wouldn’t it make more sense to just retool the way the market works for everyone?

Well, yes, it would, if what you wanted to do was actually fix the problem. But that involves a lot of fiddly, boring, regulatory tweaks and can’t possibly happen fast enough to aid Warren’s run for president. It’s unsurprising that Warren has instead hit upon what I call a “Washington issue” — a proposal with little policy merit that nonetheless retains great political charm because it can be explained to voters in under two sentences. Which may be good enough for a presidential candidate. But it’s not nearly good enough for the country.

Will Mexico Get Its Donald?

Mexicans are mad as hell at a system they see as self-dealing, under-performing and corrupt. That should sound familiar to Americans — not to mention Italians, Britons, and those in every other nation swamped by the populist tide. In Mexico’s case, they’re largely right.

.. Enrique Peña Nieto, the outgoing incumbent, came to office promising to cut the crime rate in half. Instead, Mexico suffered more than 25,000 murders last year, a modern record. He promised an end to corruption. His administration is suspected of spying on anti-graft investigators, and his wife was caught buying a $7 million mansion from a government contractor. He promised economic growth of 6 percent a year. It hardly ever got above 3 percent. The average wage fell by about $1,000 during the Great Recession and hasn’t recovered since.

.. American president, who is also on record saying he couldn’t care less whether his policies hurt them. If AMLO wins, Trump will deserve him.

.. AMLO’s popularity rests on the belief that he will end corruption, bring down crime, and redistribute ill-gotten gains to the people. How, exactly? Just as Trump declared at the 2016 Republican convention that he “alone” could fix a broken system, AMLO seems to have convinced his base that he can just make things happen. “Everything I am saying will be done” is how he punctuates his pledge

.. It’s the way of demagogues everywhere.

.. Trump promises to build border walls, win trade wars, keep us safe from terrorism, and end Obamacare, all at the snap of a finger

..  AMLO promises to fix social inequities that date back 500 years in a single six-year term.

.. compares himself to Benito Juárez, Mexico’s answer to Abraham Lincoln.

.. The idea of steady improvement and gradual amelioration isn’t for him. In Mexico’s current anger he seems at last to have found his moment.

.. it isn’t clear whether the softer rhetoric is anything more than an attempt to allay the fear (which factored heavily in his previous defeats) that he’s a Mexican Hugo Chávez.

.. It especially doesn’t work out well when populist policies collapse (as they generally do) on contact with reality. What typically follows isn’t a course correction by the leader or disillusionment among his followers. It’s an increasingly aggressive hunt for scapegoats: greedy speculators, the deep state, foreign interlopers, dishonest journalists, saboteurs, fifth columnists, and so on.

That’s been the pattern in one populist government after another, from Viktor Orban’s Hungary to Recep Tayyip Erdogan’s Turkey to, well, Trump’s America. Now Mexico risks being next.

The price of electing saviours in Latin America

ON JULY 1st Mexicans are set to elect Andrés Manuel López Obrador as their next president. Since they twice rejected him, in 2006 and 2012, by coalescing behind the opponent with the best chance of winning, that requires some explanation. Mr López Obrador is of the left, but he is a would-be saviour rather than a social democrat. Instead of a better future, he promises to return Mexico to a better, safer past of strong, paternalist government. He invites voters to trust in him, rather than in democratic institutions. As the last two contests showed, in normal circumstances he would not win.

.. But Mexicans are not looking for politics as usual. Under the outgoing president, Enrique Peña Nieto, they suffer rampant crime and corruption, and mediocre economic growth. Each day 85 people are murdered. Voters “want blood”, in the form of systematic punishment of corrupt politicians

.. Many think that centrist politicians have failed them and that things cannot get any worse.

.. Brazilians are in a similar mood ahead of their election in October.

.. one of the front-runners in the opinion polls is Jair Bolsonaro, a crudely authoritarian, misogynistic and homophobic former army officer. Brazil, unlike Mexico, has a run-off vote; Mr Bolsonaro may well figure in it but is unlikely to win it.

.. A recent poll found that 62% of respondents aged 16-24 would leave if they could.

.. It is not the first time Latin Americans have turned, in an emergency, to would-be saviours. In 1990 voters in Peru found one in Alberto Fujimori, an obscure former university rector. A political outsider, he was elected when his country faced a terrorist insurgency, hyperinflation and economic meltdown. When he sent tanks to shut down the congress two years later, polite society was appalled but ordinary Peruvians cheered. Mr Fujimori won a second term in 1995.

..Or take Venezuela. The collapse of the oil price in the 1980s and 1990s weakened a stable social democracy, hollowing out its welfare state, causing bank failures and exposing corruption. In anger, Venezuelans turned to an army lieutenant-colonel, Hugo Chávez, who had led a failed coup ..

.. As the oil price surged again, he became a popular hero. But long before his death in 2013 he had propelled his country towards its current feral state of corruption, brutality and penury.

.. Colombians in 2002 were suffering the tightening grip of the FARC guerrillas over much of the national territory as well as a recession and a banking crisis. They normally chose moderate presidents, but they elected Álvaro Uribe, an intense conservative who promised to be “the first soldier of Colombia” and to double the size of the security forces.

Mr Fujimori and Mr Uribe saved their countries, but in both cases there was a dark side. Mr Fujimori governed as a dictator and resorted to systematic bribery. Mr Uribe appointed officials with links to right-wing death squads.

.. When voters choose candidates they normally wouldn’t, the negative consequences are long-lasting. In Venezuela, Colombia and Peru these include political polarisation.

.. This lasting polarisation is what may face Mexico and Brazil. It is the high price that countries pay when the political establishment fails in its most basic functions of protecting the lives of citizens or preventing the pilfering of public money. When that happens, it is hardly surprising that voters look elsewhere. But the problem with saviours is that, sooner or later, countries have to try to save themselves from them.



Madeleine Albright Is Worried. We Should Be, Too.

“If we think of fascism as a wound from the past that had almost healed, putting Trump in the White House was like ripping off the bandage and picking at the scab,”

.. Albright has long been an optimistic exponent of American exceptionalism, a consummate establishment figure not given to alarmist diatribes. It should be shocking that she feels the need to warn us not just about fascism abroad, but also at home.

.. Albright is not accusing Trump of being a full-blown fascist. He has yet to resort to extrajudicial violence — except, of course, for encouraging his acolytes to beat up protesters at rallies — and his efforts to undermine the rule of law have had only mixed success, in part due to his own fecklessness.

.. “The herd mentality is powerful in international affairs. Leaders around the globe observe, learn from, and mimic one another.”

.. “What they do have in common,” she said, “is this assumption, or decision, that they embody the spirit of the nation and that they have the answers and that their instincts are good, that they are smarter than everybody else and can do things by themselves.”

.. I hadn’t realized that Mussolini had promised to “drenare la palude,” or “drain the swamp,” and that his crowds jeered and booed clusters of reporters at his rallies.

.. Mussolini, like Trump, thought it unsanitary to shake hands.

.. Of Chávez, Albright writes, his “communications strategy was to light rhetorical fireworks and toss them in all directions.” He gloried in dominating the media, “boasting about his accomplishments and deriding — in the crudest terms — real and suspected foes.

.. Albright is well known for her collection of brooches, which she uses like shiny emojis to send subtle diplomatic messages and make wry jokes.

.. she found out that Russia had bugged a conference room near her State Department office; at her next meeting with Russian diplomats, she wore an insect pin. When I spoke to her, she was wearing a silver brooch of a winged figure. I asked her what it was. “It is Mercury,” she said. “The messenger.”