Letting the Door Hit You

For years we have been subjected to odd debates about whether the government should permit, encourage, or attempt to prevent the reimportation of prescription drugs from Canada.  Seniors love it; they want to be able to drive across the border and save money.  The drug companies hate it; they want to charge American prices.

That the entire debate happens offends good sense.  Drugs that are researched, tested, trialed, and manufactured in central New Jersey do not magically become cheaper from a round-trip drive along the New York Thruway.  If we are to discuss prescription drugs, the only policy question should be whether the US should do something to use the purchasing power of its 300mm person market to drive down the cost of drugs, not whether scattered northern seniors should be left to try to free ride on the purchasing power of 30mm Canadians. Continue Reading »


Now here’s an interesting verdict that doesn’t seem to get much press:

In a ruling that could leave the government open to billions of dollars in claims from Hurricane Katrina victims, a federal judge said late Wednesday that the U.S. Army Corps of Engineers had displayed “gross negligence” in failing to maintain a navigation channel — resulting in levee breaches that flooded large swaths of greater New Orleans. Continue Reading »

Couple of Blog Links

Short post to follow up on two things that were on Baseline recently.

First of all, take James’ advice and check out this Interfluidity post:

An enduring truth about financial regulation is this: Given the discretion to do so, financial regulators will always do the wrong thing.

Steve touches on several of the themes I tried to articulate here, and he does a better job explaining the motivations of each of the players. Continue Reading »

Control of the Stakes

I am a huge fan of going for it on fourth down.  The odds are typically on your side, and the main reason coaches don’t do it is that failure is so much more evident than success.  Well, here goes the second-guessing:

All sorts of things went wrong to get the Pats to this position – the offensive and defensive lines had Super Bowl-level fatigue issues down the stretch – but they were still winning by six points.  They had the advantage, and they gave it away trying for the knockout. Continue Reading »

As Night Follows Day

If I may quote myself, from September 4:

When you find yourself in a hole, stop digging. Except the Bernanke/Summers/Geithner team, who seem to believe you try to dig your way through to the other side of the earth. Call it the Martingale Strategy of government finance.

Like every other problem gambler, this team is discovering that the law of large numbers does not work in favor of bad bets: Continue Reading »

Is This an Accident?

In the category of a stopped clock being right twice a day, the Senate seems to have come up with a compelling piece of bank regulation. I don’t like its chances to get passed, but it would be great for the nation:

WASHINGTON — Senate Democrats circulated a plan Tuesday that would impose sweeping curbs on the Federal Reserve, posing the biggest legislative challenge to the central bank in decades and illustrating how divided Capitol Hill remains about the future of financial regulation.

The move is part of a broader 1,136-page proposal by Senate Banking Committee Chairman Christopher Dodd aimed at rewriting how financial markets are overseen. It would create a single banking regulator, a powerful council of regulators to monitor systemic risks to the economy and a Consumer Financial Protection Agency to write and enforce rules on products such as mortgages and credit cards.

This bill has a number of good ideas, and one excellent principle: the Fed should be independent, even when it doesn’t want to be. Continue Reading »

91 Years

The First World War ended ninety-one years ago.

Continue Reading »


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