The Editorial Board of the Wall Street Journal decries “Biden’s political assault on the Supreme Court.” Three slices:
President Biden on Monday announced his plan to “reform” the Supreme Court, and it’s important to understand how radical this political moment is. The President is putting the full weight of the Democratic Party behind an assault on judicial independence and the constitutional order. You might call it an attack on democracy.
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Never mind the spectacle of a man in public life for 50 years demanding term limits. The “breach” is his. As a Senator in 1987, he helped to defeat the superbly qualified Robert Bork for the Court because Bork endorsed judicial originalism. But the originalists have prevailed in the long run and now have great influence on the Court. This is what infuriates him and his fellow Democrats. So they are now willing to destroy the Court to supposedly save it.
“Destroy” is not too strong a word. Mr. Biden is proposing to subject the Court to an ethics regime “enforceable” by someone other than the Court itself. His conceit is that this merely means the Justices would have to abide by the Code of Conduct of the Judicial Conference of the United States.
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The President’s claim that the Court is currently “mired in a crisis of ethics” is simply false. Justice Thomas failed to disclose that he flew on a friend’s private aircraft before the Judicial Conference changed its rules to require that judges disclose such flights. He violated no judicial rules. No one has come up with any evidence that the Court’s rulings, or any Justice, has been influenced by gifts or other outside influence.
If Mr. Biden and Democrats were really concerned about ethics in government, they’d impose a total ban on Congress of all gifts, trips to conferences at fancy resorts, speaking fees, or anything else that provides even the appearance of a conflict of interest. But they won’t because the Members enjoy those perks and their anger at the Court has nothing to do with ethics. They are using ethics as a political ruse to gain more influence over the Court and its decisions.
Regarding “Drug-Benefit Managers Face FTC Suit Over Insulin Prices” (Page One, July 11): The Supreme Court holds that consumer welfare is the paramount goal of antitrust law. Therefore, if the Federal Trade Commission proceeds, it will need to present evidence we’ve yet to see.
It will need to show that the opaque pricing strategies and contracting arrangements restricted the availability of biosimilar competitor drugs without providing countervailing benefits for patients. In practice, unlawful monopolization would essentially mean the rebates—which pharmacy-benefit managers (PBMs) receive from drugmakers in exchange for favorable insurance formulary listings—make no business sense other than for maintaining a drugmaker’s monopoly.
Perhaps the FTC will expand upon the circumstantial and anecdotal evidence flagged in its interim report to argue that rebates are restricting access to drugs, limiting competition from generics and raising prices for payers and patients. PBMs, though, will counter that negotiating rebates in a competitive market lowers premiums or other costs, and that favorable formulary listings encourage the research and development of new cures.
Satya Marar
Visiting fellow, Mercatus Center
Arlington, Va.
Alberto Mingardi is (as am I) a fan of economic historian Alexander Field’s 2022 book, The Economic Consequences of US Mobilization for the Second World War. Two slices from Alberto’s review:
To fight against the ghost of “neoliberalism,” a fierce patrol of scholars has recently rediscovered the entrepreneurial state. From the left (Mariana Mazzucato, Dani Rodrik) to the right (Oren Cass and the “American Compass” group), scholars and journalists are advocating for new industrial policies to address variously perceived “market failures.”
These authors tend to build their theories, explicitly or implicitly, on what is now an economic history cliché: namely, that much of the postwar development in the United States was indebted to the great research and development (R&D) effort expended during World War II. In particular, it is now a commonplace belief that the need to win the war led to the development of a whole range of new technologies and new production methods which then found wide use in peacetime.
In his new book, The Economic Consequences of US Mobilization for the Second World War, Alexander J. Field of Santa Clara University challenges this narrative. His work demonstrates that the war, in fact, had a negative impact on US productivity—and did not foster a cornucopia of inventions either.
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Field’s essay patiently demonstrates in example after example that “after the war, most of what was learned producing B-24s and Sherman tanks, and most of the special-purpose machine tools manufactured to facilitate their production, was scrapped, written off, or vastly reduced in value because the country stopped making most of the product.” Some mischievous observers might suspect that the level of mobilization necessitated by the Cold War—albeit much smaller than that of WWII—can also be explained as a way to continue exploiting the know-how acquired in the 1940s to sustain the war industry. As Robert Higgs pointed out, in 1945 and 1946 the rapid military demobilization brought defense spending to what would remain the lowest level for the next fifty years, namely 4.3 percent of GDP (still three times the 1939 level). Between 1948 and 1989, arms spending on average weighed in at 7.5 percent of GDP. Operating somewhat like an accordion, periods of (relative) demobilization were followed by moments of remobilization, as during the Korean War, the Vietnam War, and the “space wars.” Field might remind us, however, that none of these phases of rearmament prepared a subsequent season of economic growth.
Johan Norberg explains that capitalism is a life-saver and socialism a failure.
Art Carden reminds us that labor isn’t value.
My disagreement with [J.D.] Vance, and many others, is with the content. One of my main issues with our tax code is precisely that it punishes some taxpayers and favors others with tax credits, deductions, exemptions, and preferential tax rates. For example, renters pay more for the same amount of housing than do homeowners with mortgages; households where no one attends college pay higher taxes; and people who don’t own electric vehicles pay more than do EV owners. And, of course, the child tax credit causes adults without children to pay more in taxes than parents do. It should bother us, especially as advocates suggest expanding the child tax credit dramatically.
Also critical of J.D. Vance’s desire to use the tax code to affect family choices is Eric Boehm.
Samuel Gregg writes about Joseph Schumpeter’s posthumously published History of Economic Analysis. A slice:
Therein lies the enduring importance of Schumpeter’s never-completed text. It reminds today’s economists that growth in the explanatory power of economic analysis can sometimes occur via a deeper appreciation of the past. The preoccupations and intellectual trends of the present are not always a reliable guide for fruitful inquiry into economic phenomena.
Postwar economic modeling and econometrics have made significant contributions to the development of economic analysis, but they do not inevitably make redundant the achievements of long-dead economic thinkers. As Schumpeter wrote, progress in thought is not necessarily a straight line between primitive notions of the past towards an ever more enlightened future. True arrogance lies in imagining that we have nothing to learn from the great minds that have gone before us. That is Schumpeter’s message for us today.
