Thursday, December 1, 2022

Bits and pieces - Dec. 1, 2022

After 6 employees were killed at a Walmart in Virginia in another in a series of mass shootings, the Governor ordered the US and Virginia flags lowered to half-mast, but he made it clear that “now is not the time to talk gun reform.” So, exactly when is the time, Governor Youngkin?

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Former Trump Secretary of State Mike Pompeo accused AFT president Randi Weingarten of being "the most dangerous person in the world." For once I agree with something out of the mouth of a Trumpster! Ms. Weingarten and the teachers she represents are the bulwark between us and fascism, and thus she is the greatest danger to the plans of Pompeo and his Fuhrer.

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The Federal Reserve has been raising interest rates to curb inflation. But in one very important sector, housing, raising interest rates directly contributes to inflation. From Robert Kuttner, The American Prospect, with minor edits:

“Housing costs, both rental and homeownership, have been rising for reasons that have almost nothing to do with the supposedly excessive demand that the Fed intends to depress. On the rental side, due to long-term policy failures, there is just not enough affordable housing. That gives landlords more power to raise rents. Higher interest rates only make this syndrome worse by making it more expensive to build more apartments.

“In the owner-occupied sector, higher rates make it more costly both to buy and to build houses. Mortgage rates have risen from under 4 percent to over 7 percent. Housing starts are down from their April peak of 1.805 million to 1.425 million in October. Reduced supply bids up prices. Homeownership has declined to 35.8 percent among people under 30. That’s fully one-fourth lower than it was in 2009.

“When would-be homeowners can’t qualify for financing, they are thrown back on the rental market, which adds to price pressures. Rents are up 23 percent since October 2019, before the pandemic.”

Unintended consequences? Can the Fed’s Board of Governors be so blind as not to realize what they are doing? I think not. The logic here is the same as it was in the early 1980s; make the working class pay (higher interest rates) and pay again (unemployment) for out of control inflation, so they will accept what the bankers (or should I say, banksters) want, outrageously low inflation rates which benefit the wealthy and the banksters at the expense of working people.

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On the brighter side, striking academic workers in California are making headlines. The strikers are members of the UAW, the United Auto Workers. For those of you who slept through your US History classes, or more likely attended US History classes where the history of working Americans (and Blacks, and Women, and …) was not part of the curriculum (after all how many of the really important people in our history, like presidents, heads of major corporations, etc. were women or Black) …. this is the same union that organized the autoworkers, whose Great Flint Sit-down Strike ignited the union movement in the 1930s. Is history about to repeat? Let’s hope so, or even better, let’s make it so!

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From Americans for Tax Fairness

“Jeff Bezos is crafting the image of a philanthropist by announcing that he’ll be donating much of his fortune to charity (likely using tax write-offs and loopholes to save himself even more money). But this announcement came alongside another―that Amazon would be laying off thousands of workers. This is yet another reminder that Bezos has made his fortune on the backs of working people while utilizing unfair labor practices.”

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The world just passed a new landmark: there are now 8 billion humans occupying earth. World population had reached 4 billion in 1974, 2 billion in 1927 and a measly 1 billion in 1804. So, after reaching 1 billion, it took 123 years for the world’s population to double, then 47 years for it to double again and finally 48 years to double once more. That level of population growth is obviously unsustainable over the next 50 years. The question is “How will it be reined in?” By countries taking drastic action soon, very soon? Or, by proving Malthus correct and allowing famine, pestilence and war to cull the herd.

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As a result of deregulation over the last 40+ years the US has seen a level of corporate consolidation unparalleled since the end of the 1800s. In the retail business, the consolidation has taken the form of chain stores. CVS is an excellent example. “Beginning in 1977, it acquired 12 other pharmacy chains, and then bought Aetna in 2018 for $69 billion. CVS, with 9,939 retail stores as of the end of 2021, is now also a large insurance company, as well as one of the largest pharmacy benefit managers (the latter being a middleman that was advertised as containing costs but now raises them). And with its absentee corporate ownership, CVS is also a sweatshop for pharmacists and technicians, according to this exposé in The New York Times.” From Robert Kuttner on TAP

Neoliberal fantasies which are promoted by both political parties, posit that this consolidation should make drugs cheaper and provide better service. I’m sure I don’t need to tell anyone who has been in a drug store in the last 40 years that it ain’t so! But in case you are not convinced, let’s look at how another country deals with retail drug stores – France.

Under French law, a pharmacy must be owned by a licensed pharmacist and each pharmacist may have only one. As a result, there are 23,000 separately owned pharmacies in France and there are no chains. It would be illegal in France for a pharmacist to front for a chain.

“This system produces plenty of competition for price and for service. Due to the combination of wholesale and retail regulation, and the salutary competition it produces, studies show that the average French person spends about half on prescription drugs what the average American does.

“To some extent, lower-cost drugs are also the result of France’s system of regulation of drug pricing, which evaluates pharmaceuticals on the basis of efficacy and pays accordingly. Once a drug is approved, price increases (common in the U.S.) are illegal. But the system of retail drugstores also accounts for the lower prices (as can be seen in lower prices for over-the-counter drugs). This system produces plenty of competition for price and for service.”

“The French have a neat and simple solution: one drugstore per licensed pharmacist. North Dakota is the one state in the U.S. with a similar law, but it has loopholes. A drugstore has to be 51 percent owned by pharmacists. One Midwestern chain, Thrifty White Pharmacy, uses its employee stock ownership plan as a basis for operating in North Dakota. And six CVS stores there are grandfathered. Even so, the preponderance of locally owned drugstores leaves North Dakota with lower drug costs than most states.” From Robert Kuttner on TAP

Side note: It’s interesting that the only state to have this creative policy regarding drug stores, North Dakota, is also the only state to have a publicly owned state bank. I wonder what’s in the water up there, and can we bottle and ship it elsewhere? Just a thought.

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