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Book Bits: 21 May 2022

● Fragile Futures: The Uncertain Economics of Disasters, Pandemics, and Climate Change Vito Tanzi Summary via publisher (Cambridge U. Press) This book…

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Fragile Futures: The Uncertain Economics of Disasters, Pandemics, and Climate Change
Vito Tanzi
Summary via publisher (Cambridge U. Press)
This book revisits a distinction introduced in 1921 by economists Frank Knight and John Maynard Keynes: that between statistically predictable future events (‘risks’) and statistically unpredictable, uncertain events (‘uncertainties’). Governments have generally ignored the latter, perceiving phenomena such as pandemics, natural disasters and climate change as uncontrollable Acts of God. As a result, there has been little if any preparation for future catastrophes. Our modern society is more interconnected and more globalized than ever. Dealing with uncertain future events requires a stronger and more globally coordinated government response. This book suggests a larger, more global government role in dealing with these disasters and keeping economic inequalities low.

The Power of Crisis: How Three Threats – and Our Response – Will Change the World
Ian Bremmer
Interview with author via Harvard Business Review
It feels like a moment of panic for many. While there were some success stories in how public and private sector leaders managed the global pandemic, it isn’t over, and many more crises — from political polarization to climate change to new technological threats — loom. But one leading political scientist is hopeful that countries and corporations can find ways to overcome their divisions and better collaborate on our most pressing issues over next ten years. He points to historic precedents and makes specific recommendations for the future, noting that in areas where political divisions cause roadblocks, it will be up to corporate leaders to ensure progress.

21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19
Ben S. Bernanke
Interview with author via CNBC
Former Federal Reserve Chair Ben Bernanke said the central bank erred in waiting to address an inflation problem that has turned into the worst episode in U.S. financial history since the early 1980s.
Bernanke, who guided the Fed through the financial crisis that exploded in 2008 and presided over unprecedented monetary policy expansion, told CNBC that the issue of when action should have been taken to tame inflation is “complicated.”
“The question is why did they delay that. … Why did they delay their response? I think in retrospect, yes, it was a mistake,” he told CNBC’s Andrew Ross Sorkin in an interview that aired during Monday’s “Squawk Box” show. “And I think they agree it was a mistake.”

The New Goliaths: How Corporations Use Software to Dominate Industries, Kill Innovation, and Undermine Regulation
James Bessen
Summary via publisher (Yale U. Press)
Historically, competition has powered progress under capitalism. Companies with productive new products rise to the top, but sooner or later, competitors come along with better innovations and disrupt the threat of monopoly. Dominant firms like Walmart, Amazon, and Google argue that this process of “creative destruction” prevents them from becoming too powerful or entrenched. But the threat of competition has sharply decreased over the past twenty years, and today’s corporate giants have come to power by using proprietary information technologies to create a tilted playing field. This development has increased economic inequality and social division, slowed innovation, and allowed dominant firms to evade government regulation. In the face of increasing calls to break up the largest companies, James Bessen argues that a better way to restore competitive balance and dynamism is to encourage or compel these companies to share technology, data, and knowledge.

Beyond Self-Interest: Why the Market Rewards Those Who Reject It
Krzysztof Pelc
Summary via publisher (Oxford U. Press)
A provocative retelling of the workings of self-interest in contemporary market society, which claims the world increasingly belongs to passionates, obsessives, and fanatics: those who do things for their own sake, rather than as means to other ends. In our capitalist market society, we have come to accept that the way to get ahead is through strong will, grit, and naked ambition. This belief has served us well: it has contributed to making our affluent societies affluent. But does the premise still hold? As Krzysztof Pelc argues in Beyond Self-Interest, this default assumption no longer captures reality.

The Downfall of the American Order?
Edited by Peter J. Katzenstein and Jonathan Kirshner
Summary via publisher (Cornell U. Press)
For seventy-five years, the basic patterns of world politics and the contours of international economic activity took place in the shadow of American leadership and the institutions it designed—an order designed to avoid the horrors of previous eras, including, most poignantly, two world wars and the Great Depression. But all things must pass. The global financial crisis of 2008, the legacy of two long, losing wars, and the polarizing and tumultuous presidency of Donald Trump all suggest that global affairs have reached a turning point. The implications of this are profound. The contributors to this book cast their eyes back on the order that once was, and look ahead to what might follow. In dialogue with each other’s appraisals and expectations, they differ in their assessments of the probable, ranging from a hollowed-out American primacy muddling through by default, to partial modifications of old institutions and practices at home and abroad, and to wholesale contestations and the search for new orders.

Oil Leaders: An Insider’s Account of Four Decades of Saudi Arabia and OPEC’s Global Energy Policy
Ibrahim AlMuhanna
Summary via publisher (Columbia U. Press)
Oil is an unusual commodity in that individual decisions can have an outsized effect on the market. OPEC+’s choice to increase production, for instance, might send prices falling, affecting both oil producers and consumers worldwide. What do the leading oil market players consider before making a fateful move? Oil Leaders offers an unprecedented glimpse into the strategic thinking of top figures in the energy world from the 1980s through the recent past. Ibrahim AlMuhanna—a close adviser to four different Saudi oil ministers during that period—examines the role of individual and collective decision making in shaping market movements.

Diplomacy and Capitalism: The Political Economy of U.S. Foreign Relations
Christopher R.W. Dietrich
Summary via publisher (U. of Pennsylvania Press)
At the same time as modern capitalism became an engine of progress and a source of inequality, the United States rose to global power. Hence diplomacy and the forces of capitalism have continually evolved together and shaped each other at different levels of international, national, and local transformations. Diplomacy and Capitalism focuses on the crucial questions of wealth and power in the United States and the world in the twentieth century. Through a series of wide-ranging case studies on the history of international political economy and its array of state and non-state actors, the volume’s authors analyze how material interests and foreign relations shaped each other.

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Science

Why letting Medicare negotiate drug prices won’t be the game-changer for health care Democrats hope it will be

A new law will let Medicare bargain for the first time. But a health policy scholar explains why it’s unlikely to make much of a difference in how much…

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Drug prices have been soaring in recent years. stevecoleimages/E+ via Getty Inages

Democrats hope their new health care, tax and climate law begins to rein in soaring prescription drug prices.

One of its most touted provisions allows Medicare, America’s health insurance program for seniors, to negotiate some prescription drug prices for the first time, with some calling it “game-changing” and a significant victory over the pharmaceutical industry. Drug manufacturers had stubbornly opposed any governmental regulation of drug prices for decades and are likely to challenge the measure in court.

As a scholar who has published extensively on the politics of health policy, I’m skeptical that giving Medicare the ability to negotiate prices on a handful of drugs will be as transformative as the law’s backers hope. While a good step, it is unlikely to make a significant difference in how much seniors pay overall for medicine.

Fortunately, there are several other provisions in the law that will do much more to meaningfully help seniors struggling with the high cost of prescription drugs.

Why US drug prices are so high

Pharmaceutical innovation over the past few decades has been tremendous. The quick response to the COVID-19 pandemic in terms of vaccine development and treatments perfectly exemplifies the incredible benefits that drug developers have brought to the world.

Yet these developments have come at a high price, particularly in the United States, where each person spends more than US$1,100 a year on drugs – up from $831 in 2013. Indeed, Americans are paying substantially more than residents of similar countries like Germany, the U.K. and Australia – who pay $825, $285 and $434 per person each year, respectively.

People who need specific high-priced drugs are even more adversely affected.

Dulera, an asthma drug, costs 50 times more in the U.S. than the international average. Januvia, for diabetes, and Combigan, a glaucoma drug, cost about 10 times more. Americans shell out, on average, $98.70 for a vial of insulin, compared with the $6.94 Australians pay.

These costs impose a big burden on Americans1 in 5 of whom skip medications because of the cost. Seniors are particularly affected by these problems.

The reasons for high prices are varied, including the overall complexity of the U.S. health care system and the lack of transparency in the drug supply chain. But as I noted in a 2019 article in The Conversation, the biggest reason Americans pay so much more than people do elsewhere is simple: Pharmaceutical companies face no limits setting prices.

Changing the game – a little

The new law, known as the Inflation Reduction Act and signed into law on Aug. 16, 2022, seeks to change that.

The main mechanism to do it is by allowing Medicare to negotiate prices for some of the most expensive drugs. The act gives Medicare the ability to negotiate with drugmakers for 10 drugs starting in 2026 and 20 by 2029.

The law specifies that the medications Medicare is supposed to select must account for most of its spending on drugs and be name brands with no generic equivalents. Research has found that a relatively small number of drugs are responsible for most spending.

Importantly, pharmaceutical companies may face civil penalties and additional taxes on drug sales if they do not comply with the requirements to establish a “maximum fair price” as laid out in the law.

The provision is expected to save the U.S. government about $102 billion over 10 years by allowing it to pay less on prescription drugs for Americans on Medicare – currently 63 million people. The annual savings amount to about 5% of what Medicare currently spends on drugs.

There’s also a separate provision that requires pharmaceutical companies, under certain conditions, to provide Medicare with rebates if drug prices outpace inflation. That measure takes effect this year and is expected to yield $71 billion in savings over a decade.

While the government savings are meaningful, I believe seniors themselves are likely to see only a minor drop in costs as a result of this provision, mainly through slightly reduced premiums and lower out-of-pocket costs.

A Black female pharmacist shows Black senior woman some prescription meds.
Measures in the law Biden just signed should lower prices for many seniors. Marko Geber/DigitalVision via Getty Images

Where the real savings are

The provisions that will make a much bigger difference for seniors lie elsewhere.

Importantly, the new law limits seniors’ out-of-pocket expenses for prescription drugs to no more than $2,000 annually. Previously, there were some restrictions but no limit. This will directly help 1.4 million seniors who exceeded the $2,000 threshold in 2020.

The law also limits how fast premiums for Medicare Part D, which provides premium-based prescription drug insurance, can rise over the next few years and implements a number of other adjustments.

It also extends the Medicare Part D low-income subsidy to 400,000 seniors who previously earned too much to qualify. This program helps people pay for premiums, deductible and copays and has been valued at $5,100 a year.

The legislation also limits the cost of insulin to no more than $35 per month for Medicare recipients only. This amounts to more than $1 billion in annual savings for seniors. Almost 16 million American seniors have diabetes and are likely to need insulin at some point in their lives.

Lastly, it also eliminates out-of-pocket costs for seniors for vaccines – a move that would have saved money for 4.1 million people in 2020.

Broader impact

There are real benefits in the bill President Biden signed into law. The government will save by negotiating prices. Seniors will save through the insulin cap and other provisions.

But I don’t believe Medicare’s ability to negotiate prices will be a game-changing reform.

Besides affecting prices paid by only a slice of Americans, we do not know how aggressively the federal government will seek savings. This particularly applies to any future administration headed up by a Republican president.

The pharmaceutical industry may still manage to limit the impact of price negotiations, since it will be four years before the changes take effect. The industry has a history of skillfully exploiting loopholes and a vast lobbying apparatus to put into that effort.

As for Americans who aren’t covered under Medicare, drug prices may actually go up. That’s because, if pharmaceutical companies do end up reducing drug prices for seniors, they may shift those costs to everyone else to make up for those lost profits.

Simon F. Haeder does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Spread & Containment

War, peace and security: The pandemic’s impact on women and girls in Nepal and Sri Lanka

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to improve the lives of women and girls in postwar countries…

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Nepalese girls rest for observation after receiving the Moderna vaccine for COVID-19 in Kathmandu, Nepal. (AP Photo/Niranjan Shrestha)

Attention to the pandemic’s impacts on women has largely focused on the Global North, ignoring countries like Nepal and Sri Lanka, which continue to deal with prolonged effects of war. While the Nepalese Civil War concluded in 2006 and the Sri Lankan Civil War concluded in 2009, internal conflicts continue.

As scholars of gender and war, our work focuses on the United Nations Security Council Resolution 1325 on women, peace and security. And our recently published paper examines COVID-19’s impacts on women and girls in Nepal and Sri Lanka, looking at policy responses and their repercussions on the women, peace and security agenda.

COVID-19 has disproportionately and negatively impacted women in part because most are the primary family caregivers and the pandemic has increased women’s caring duties.

This pattern is even more pronounced in war-affected countries where the compounding factors of war and the pandemic leave women generally more vulnerable. These nations exist at the margins of the international system and suffer from what the World Bank terms “fragility, conflict and violence.”

Women, labour and gender-based violence

Gendered labour precarity is not new to Nepal or Sri Lanka and the pandemic has only eroded women’s already poor economic prospects.

Prior to COVID-19, Tharshani (pseudonym), a Sri Lankan mother of three and head of her household, was able to make ends meet. But when the pandemic hit, lockdowns prevented Tharshani from selling the chickens she raises for market. She was forced to take loans from her neighbours and her family had to skip meals.

Some 1.7 million women in Sri Lanka work in the informal sector, where no state employment protections exist and not working means no wages. COVID-19 is exacerbating women’s struggles with poverty and forcing them to take on debilitating debts.

Although Sri Lankan men also face increased labour precarity, due to gender discrimination and sexism in the job market, women are forced into the informal sector — the jobs hardest hit by the pandemic.

Two women sit in chairs, wearing face masks
Sri Lankan women chat after getting inoculated against the coronavirus in Colombo, Sri Lanka, in August 2021. (AP Photo/Eranga Jayawardena)

The pandemic has also led to women and girls facing increased gender-based violence.

In Nepal, between March 2020 and June 2021, there was an increase in cases of gender-based violence. Over 1,750 incidents were reported in the media, of which rape and sexual assault represented 82 per cent. Pandemic lockdowns also led to new vulnerabilities for women who sought out quarantine shelters — in Lamkichuha, Nepal, a woman was allegedly gang-raped at a quarantine facility.

Gender-based violence is more prevalent among women and girls of low caste in Nepal and the pandemic has made it worse. The Samata Foundation reported 90 cases of gender-based violence faced by women and girls of low caste within the first six months of the pandemic.

What’s next?

While COVID-19 recovery efforts are generally focused on preparing for future pandemics and economic recovery, the women, peace and security agenda can also address the needs of some of those most marginalized when it comes to COVID-19 recovery.

The women, peace and security agenda promotes women’s participation in peace and security matters with a focus on helping women facing violent conflict. By incorporating women’s perspectives, issues and concerns in the context of COVID-19 recovery, policies and activities can help address issues that disproportionately impact most women in war-affected countries.

These issues are: precarious gendered labor market, a surge in care work, the rising feminization of poverty and increased gender-based violence.

A girl in a face mask stares out a window
The women, peace and security agenda can help address the needs of some of those most marginalized. (AP Photo/Niranjan Shrestha)

Policies could include efforts to create living-wage jobs for women that come with state benefits, emergency funding for women heads of household (so they can avoid taking out predatory loans) and increasing the number of resources (like shelters and legal services) for women experiencing domestic gender-based violence.

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to achieve the agenda’s aims of improving the lives of women and girls in postwar countries like Nepal and Sri Lanka.

Luna KC is a Postdoctoral Researcher at the Research Network-Women Peace Security, McGill University. This project is funded by the Government of Canada Mobilizing Insights in Defence and Security (MINDS) program.

Crystal Whetstone does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Government

CDC Announces Overhaul After Botching Pandemic

CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound…

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CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound effect on Americans' lives, the Centers for Disease Control (CDC) announced on Wednesday that the agency would undergo a complete overhaul - and will revamp everything from its operations to its culture after failing to meet expectations during the pandemic, Bloomberg reports.

Director Rochelle Walensky began telling CDC’s staff Wednesday that the changes are aimed at replacing the agency’s insular, academic culture with one that’s quicker to respond to emergencies. That will mean more rapidly turning research into health recommendations, working better with other parts of government and improving how the CDC communicates with the public. -Bloomberg

"For 75 years, CDC and public health have been preparing for Covid-19, and in our big moment, our performance did not reliably meet expectations," said Director Rochelle Walensky. "I want us all to do better and it starts with CDC leading the way.  My goal is a new, public health action-oriented culture at CDC that emphasizes accountability, collaboration, communication and timeliness."

As Bloomberg further notes, The agency has been faulted for an inadequate testing and surveillance program, for not collecting important data on how the virus was spreading and how vaccines were performing, for being too under the influence of the White House during the Trump administration and for repeated challenges communicating to a politically divided and sometimes skeptical public."

A few examples:

Walensky made the announcement in a Wednesday morning video message to CDC staff, where she said that the US has 'significant work to do' in order to improve the country's public health defenses.

"Prior to this pandemic, our infrastructure within the agency and around the country was too frail to tackle what we confronted with Covid-19," she said. "To be frank, we are responsible for some pretty dramatic, pretty public mistakes — from testing, to data, to communications."

The CDC overhaul comes on the heels of the agency admitting that "unvaccinated people now have the same guidance as vaccinated people" - and that those exposed to COVID-19 are no longer required to quarantine.

Tyler Durden Wed, 08/17/2022 - 12:22

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