Month: July 2022

A Little Respect for Older People

Dave Davis Commentary, COVID-19, Policy, Uncategorized

It’s nice to know President Biden had lifesaving Paxlovid as soon as he tested positive for Covid. Of course, President Trump got lifesaving infusions when he had Covid symptoms. Good for them. The reality for other people their age or older is quite different. The Trump Infusions became functionally available only after Florida Governor Ron DeSantis set up centers across his state. Observing Florida’s success in saving lives, other states followed. However, almost a year elapsed after Trump’s treatment before these centers opened.

Even though Paxlovid was approved last December, until recently has been challenging to obtain. Horror stories of people traveling great distances to fill a Paxlovid prescription abound. Things are better, but you still have to check around to find it.

For the average person, this may not seem like a significant problem. For octogenarians like my wife and I, it is a matter of life or death. Four out of five covid deaths occur over 65.

Maybe you can understand my dismay when I asked my doctor for Paxlovid to have for an overseas trip where the drug was unavailable and turned down. No prescription until you test positive. The drug may conflict with other medications.

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Stopping Inflation IV

Dave Davis Commentary, Policy, Stopping Inflation, Uncategorized

In the face of the administration’s claim, there is little it can do about inflation; I’ve pointed out how changes in energy and regulatory policy will change the price trajectory. We also have a labor shortage adding to the upward cost pressures. Only now we’re matching the number of employed before Covid. Yet, we are at a 3.6 unemployment rate, which means upward pressure on wages.

Coupled with lower birth rates, we are facing labor force problems. Baby boomer retirements, already shrinking the labor force, gained momentum during the pandemic. Higher transfer payments, commuting, and childcare costs keep others from returning to work. The result is a labor participation rate of just over 62%, down from over 66% at the turn of the century.

Its possible inflation may force more people to return to the workforce, but this is far from certain. We have to look to solutions that worked in the past. The United States led the world in welcoming legal immigrants, but lately, not so much. The Trump administration made sizable cuts in new legal arrivals. So far, The Biden administration has continued the reductions rather than expanded immigration. 

The inability of both parties to confront our longstanding legal and illegal immigration problems provides little hope for relief from that direction. We forget that along with higher interest, lower taxes, and less regulation, Ronald Reagan signed the last major immigration reform. All these things combined to subdue our worst inflation until now. An increase in green cards would help, but nothing gets done. The present administration largely ignores the problem. 

If we can’t increase the labor force, we must make our workers more productive. Historically machines have multiplied labor output. However, our progress on that front leaves much desired—the U.S. lags on machination. This lack is true even though there is plenty of investment capital. We aren’t matching our competitors.

While other advanced nations with slow-growing populations have replaced workers with robots, The U.S. isn’t among the leaders, lagging in seventh place:

What explains our reluctance to mechanize? Our ports are far less efficient than other major world ports. This failure has added to supply chain disruption. The slow pace, in turn, added to our current inflation.

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Stopping Inflation III

Dave Davis Commentary, Policy, Stopping Inflation, The Long Journey to "More", Uncategorized

In the previous two posts, I pointed out how we have restricted instead of expanded the supply of crucial commodities leading to higher prices. Higher prices are just another way to say inflation. Another way to raise prices is to add to costs. According to Forbes, the United States is no longer in the top 15 countries to do business. While U.S. News & World Report rates us the 6th best nation overall, it drops us down to #45  in their “open for business” category. Why isn’t the U.S.at the top of the business-friendly? What does it mean for prices now and into the future?

I discussed Ezra Klein’s lament that the Government couldn’t do things reasonably a few posts ago. Government policy determines whether a place is an excellent place to get things done. Comparing a Government-sponsored high-speed rail in California and a private venture in Florida, the latter exists while the other is a rumor. Already owning the right of way, the private railroad didn’t have to deal with governments. Unfortunately, most businesses don’t have that luxury. Hence our poor ratings.

Two things vex people in dealing with governments: who are the responsible person I can deal with, and how much time will it take to get approvals? Faced with these hurdles, it’s no wonder many businesses decide to set up shop elsewhere. Being bounced from one agency to another while being hit with lawsuits from environmentalists, nimbies, native Americans, and preservationists have been the fate of far too many ventures.

For those unable to go elsewhere, costs can be open-ended and only recovered at higher prices—a housing project scheduled for one-year development that takes three results in expensive houses. How we can turn this around while still respecting the concerns of others is the challenge. 

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