Some Links
The crux of the problem is that the IRA imposes price caps that shorten the effective life of a patent and applies those price controls even to later-approved uses. Thirteen years after FDA approval, biologics, which are typically infused or injected, become subject to price controls. For small-molecule drugs, typically pills or tablets, the window is only nine years. The clock starts at a drug’s first approval, leaving a follow-on or alternative use, approved years later, an insufficient period to make up the cost of research.
Two weeks ago, a study I conducted with colleagues at the University of Chicago appeared in Health Affairs. It reveals how much these provisions harm cancer research. In reviewing every Food and Drug Administration-approved cancer drug between 2000 and 2024, we found a large part of innovation in cancer treatment takes place after a therapy is first approved. About 42% of the 184 cancer therapies that were initially approved during that period had follow-on approvals—involving new uses or “indications” for an existing drug—such as treating additional cancer types or being used earlier in the disease, when treatment outcomes tend to be better.
Peter Suderman is no fan of Joe Biden’s CHIPS Act. A slice:
In March, President Donald Trump blasted the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022. He called it “a horrible, horrible thing.” Passed under President Joe Biden, the CHIPS Act was essentially a $52 billion industrial policy slush fund intended primarily to bolster domestic production of computer chips.
When the law passed in 2022, the Biden administration said it was a “smart investment” that would “strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology” while bringing thousands of “good-paying manufacturing jobs back home.”
There was never much reason to believe in the previous administration’s industrial policy boosterism. Early grants largely went either to factories that were already in development and would have been built anyway or to facilities of questionable economic value that might not be completed even with the additional taxpayer funding.
So Trump was on solid ground when he told Congress, “You should get rid of the CHIPS Act, and whatever’s left over…you should use it to reduce debt, or any other reason you want to.” Yet in the months since, Trump has made use of CHIPS funding not to reduce the debt, but to pursue his own questionable industrial policy. His version is even less accountable and may well be even worse for taxpayers.
When a flood of people start emailing me the same article, I know something is afoot. That is the case with Michael W. Green’s “The Valley of Death: Why $100,000 is the New Poverty,” which was recently adapted from his Substack and published in The Free Press. Green’s core argument is that participating in the basics of American life costs much more than it used to, and as a result, we should set a new poverty line: up from about $32,000 a year for a family of four with two kids, to $140,000 a year.
Fortunately for us, this is all wrong. The underlying concepts are wrong, the details are wrong, and the use of evidence is misguided. There are genuine concerns about affordability in the United States, but the analysis in this article is not a good way to understand them.
Green goes off the rails right away when he defines the poverty line by quoting a statement based on a 1965 research paper by Mollie Orshansky: “The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.” He uses this sentence as the foil for his own analysis, noting that rising costs of healthcare, housing, and other factors mean that food is a rapidly decreasing proportion of a household’s overall costs. Orshanksy’s formula, therefore, is outdated.
The problem is that this mischaracterizes how the poverty line is calculated today.
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As Scott Winship recently wrote, food composes a smaller proportion of our cost of living “because we can afford what we could in the past plus a lot more non-food spending. In 2023 dollars, the average household spent about $10,000 on food in 1960 and about $10,000 on food in 2023. . . . But average family income rose by over $85,000 in inflation-adjusted dollars and median family income by nearly $55,000.” In this context, the declining representation of food in the average cost of living is a sign of prosperity, not hardship.
If you’re skeptical about the numbers, consider qualitative standards of living. Green notes that housing costs have risen, but Americans today have more living space on average than ever before, and live alongside fewer people. He also remarks on increasing healthcare costs while failing to address just how much American healthcare has improved. People now have access to advanced prescription medications, higher heart attack and cancer survival rates, and GLP-1 drugs, among other remarkable innovations.
Adam Ozimek tweets: (HT Scott Lincicome)
The defense of the $140k poverty line post have retreated to yes the data is wrong, yes the core claim is wrong, but it is a complaint about standard of living improvement in the US so I must nevertheless say it’s good.
The Editorial Board of the Washington Post rightly applauds this:
More than 80 percent of Swiss voters rebuffed a referendum that would impose a 50 percent inheritance and gift tax on assets above 50 million Swiss francs, or about $62 million. The Young Socialists party that proposed the new law says the money would be used to fight climate change. Yet it was so resoundingly rejected that it may deter others on the continent from following suit.
The right-left wave of hate-the-rich politics that is riding high in the West hit an iceberg on Sunday in Switzerland. Some 78% of voters rejected a 50% inheritance tax on the country’s wealthiest residents.
It’s hard to get that kind of majority these days for endorsing the law of gravity. But a majority of Swiss voters in every canton opposed the referendum sponsored by a group known as the Young Socialists. The tax would have hit all assets exceeding 50 million Swiss francs ($62 million) passed on via inheritance or in gifts.
The sponsors pitched the tax as hitting only some 2,500 people in the country, or the top 0.03% of the population. They also said the money would be used to fight climate change, which is popular in Europe.
But voters across the Continent are figuring out that climate money merely goes toward ideas that do little for the climate. Many of the richest Swiss taxpayers vowed to emigrate if the referendum passed. Switzerland has prospered over many decades as a refuge for the wealthy looking to escape punitive taxation.
GMU Econ alum Dan Smith explains “why modern socialists dodge definition.” A slice:
A precise definition is not mere pedantry; it is the prelude to meaningful investigation. To enable cross-country comparisons, socialism must be defined through specific policies, not vague platitudes. What exact measures constitute this vision? Some socialists point to the Nordic countries as their model, but these countries have important differences between them. And, if a country is the model, then democratic socialists must consistently advocate for all the policies in that country, including those that might contradict their ideals, such as flexible labor markets or low corporate taxes. The Nordic countries, as measured by state ownership of the economy, are capitalist. Similarly, as measured by Fraser Economic Freedom of the World Index, they are also some of the most economically free.
David Harsanyi has no use for conspiracy theories. A slice:
Donald Trump has contended that [Marjorie Taylor] Greene went “BAD” and became a “ranting lunatic.”
This is wrong: She has always been a ranting lunatic and an early adopter of the unhinged conspiratorial notions that have now infected so much of the populist Right.
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