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Dec. 30, 2009 - Freedomain Radio - Stefan Molyneux
37:54
1545 'The Conservative Nanny State' - Freedomain Radio Interviews Economist Dr. Dean Baker
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Well, thank you everybody so much for joining us.
This is Stefan Molyneux from Freedomain Radio.
I have on the line Dean Baker, who is the co-director of the Center for Economic and Policy Research in Washington.
He is the author of several books, including Plunder and Blunder, The Rise and Fall of the Bubble Economy, The Conservative Nanny State, How the Wealthy Use the Government to Stay Rich and Get Richer, And the United States since 1980.
Thank you so much for taking the time.
Dean, I really do appreciate it.
And I just wanted to, first of all, compliment you on...
It's been a while since I've come across a really, I think, unique, original and powerful economic idea.
And I think that your analysis of republicanism is really remarkable and I think a very significant intellectual achievement.
Rather than have me tell people what it's about, I was wondering if you could go through the basic thesis of the book The Conservative Nanny State.
Sure. Well, first thanks for having me on.
I appreciate this. The basic story, I'm trying to counter the conventional view in the United States that on the one hand you have republicans who Support leaving things to the market, and then on the other hand, Democrats, liberals, progressives, however you want to call them, who want to have the government intervened ostensibly to protect poor people, moderate income people, whatever it might be.
The thesis of the book is that both sides want the government, but the conservatives want the government to intervene in ways that basically set rules in ways that redistributes income upwards.
What I try to do is go through a number of what I consider key areas in the book where You have rules that have the effect of distributing income upward from alternative rules.
You always will need rules, but the point is you could have different rules.
And just to give a few examples here, patents, and particularly I focus on drug patents.
There's some different issues involved.
If you talk about patents with an industrial process as opposed to basically a consumer product like prescription drugs, In the case of prescription drugs, basically the patent is the price that you pay.
In the United States, we don't have any regulation.
Companies have basically an unregulated monopoly, and they could charge whatever they choose for a drug that, because of the patent, no one is allowed to compete with them.
As a result of that, many drugs can cost hundreds of dollars, even thousands of dollars, of prescription.
And this amounts to a very large redistribution from consumers to the drug companies.
In the United States, we currently spend about $250 billion a year on prescription drugs.
And if you got rid of the government patent monopolies, we'd probably be spending about a tenth of that, about $25 billion.
So it's $225 billion a year that, in fact, is going from consumers to the pharmaceutical industry because of government intervention.
It's about, also another way to put that, it's about 1.5% of GDP. So it's a good chunk of money.
In the same vein, copyrights.
Bill Gates is a very wealthy man because he has a copyright on Windows, I'm in software, and again, it's the same sort of story.
I should point out in both cases, patents and copyrights, I understand that they do serve an economic purpose, but the point is we have alternative ways to finance, in the case of patents, research and development, in the case of copyrights, creative work.
So I understand very well there is an economic purpose, but we could fill that purpose through other mechanisms.
A third way in which we have rules that end up redistributing income upwards has to do with the conduct of monetary policy.
In the United States, the Federal Reserve Board, of course, has control over monetary policy.
I'll ignore the current situation when there's all sorts of issues about how they've, in effect, aided the banks, to my view, at least to the detriment of the rest of the economy.
But in more normal times, the Fed conducts its monetary policy in a way that restrains inflation, and the way in which it restrains inflation is by deliberately keeping the unemployment rate from falling below a level where workers are in a position to push up wages.
So that's a case also where, again, it's a useful purpose.
We want to restrain inflation.
The question is, are there alternative mechanisms?
And in this case, the mechanism that's chosen works to the disadvantage of Particularly less educated workers, workers without college degrees, and we've done some research, myself and a friend of mine, Jerry Bernstein, looking at the impact of unemployment on workers with different education levels, and you find that high rates of unemployment overwhelmingly reduce the wages of those with the least education.
They have much less impact on, say, college educated or certainly people with advanced degrees.
So I go through the book, I go through some other examples of ways in which government policy is structured to redistribute income from those at the middle and bottom to those at the top.
And again, the point is that these are the rules of the game.
So this is, you know, before we talk about taxes and transfer policy, this is setting rules that have this effect.
And my argument in terms of, you know, both understanding the economy and also, you know, in terms of political focus is that, to my mind, I think people's attention is best Right, right.
I'd like to jump back to some of those points, but I thought there was another fantastic point in the book, which was the idea that The Republicans are all about the free market, as they say, and a free market really is a principle.
There's no such thing as a dedication to free market in, say, capital goods or overseas goods versus a free market in the labor market, such as in the realm of law and medicine and finance and so on.
I think the thesis – and I'm sure I'll paraphrase it badly, so please correct me where I go astray – but the thesis is that – or your thesis is something like that Republicans are very keen on allowing goods and services to flow unimpeded within a country and between countries, which is why, of course, all these goods from China and overseas and so on.
And that has the effect of depressing the wage demands of the lower classes.
But at the same time, they are extremely protectionist.
In fact, rigidly so to the point where the debate doesn't even come up around things like free market competition in the realm of law and finance and medicine.
And I was wondering if you could talk about that because I think that has a huge effect.
of redistributing wealth income upwards both in terms of maintaining the wages of the upper classes and in terms of lowering the prices for the things that they pay for and of course destroying the jobs of the lower classes.
That's right. Well, so much of U.S. trade policy certainly has been focused on removing barriers to trade in manufactured goods, and that historically had been a source of good-paying jobs for people without college degrees, for the less educated.
I should qualify that.
It's like 70% of the workforce.
And U.S. manufacturing jobs have just plummeted.
Employment and manufacturing just plummeted over the last three decades, and trade is a big part, not the whole story, but certainly a very, very big part of that story.
And again, it's conscious policy, but if you turn to the highly paid professions, to medicine, to law, to other highly paid professions, there's been very little effort.
In fact, often just the opposite.
They've often had rule changes that make it more difficult for people from other countries to come and practice those fields in the United States.
And whenever I raise this, people often say, well, you don't have people who are qualified.
And of course, there's kind of a classic catch-22, because No one in India is going to train to meet U.S. medical standards unless they have the expectation that once having achieved those standards, they can come to the United States.
And this is a question of changing institutional structure, which we did with manufacturing.
That's exactly... What NAFTA was about when we basically, in terms of incorporating Mexico and NAFTA, it was about rewriting Mexico's laws so that U.S. corporations could feel comfortable investing in Mexico and knowing they didn't have to worry about having their factories expropriated or having restrictions on repatriating profits and other rules that made them comfortable doing that.
Now, we could have done the exact same thing, With Mexico in terms of setting up rules and structures so that Mexican students could study U.S. law to our standards, U.S. medicine to our standards, whatever it might be.
And then once they met our standards, they can come and practice in the United States just as someone born in New York or Chicago goes to med school to practice in the United States.
But there's been no interest in that at all.
And again, they've actually tightened up restrictions in many ways in the 90s.
I'm sorry to interrupt but I would also mention if I were faced with that argument I would also say that people say well we can't verify the skills of doctors or lawyers who are trained overseas but of course we can't directly or even indirectly verify whether people are maintaining occupational health and safety standards or other environmental standards or even the basic quality Of the goods, we let the free market determine the quality that the consumer wants.
And so, if it's the same in goods and services in terms of the quality we'll accept that we can't verify, why would it not be the case with other professions where the consumer could determine the level of quality and price that he or she wanted?
Well, that's exactly right.
And again, you know, obviously being in the United States, we've had issues just last year about this time.
There's an issue with Dog food employer from China, dogs were getting sick here.
So we've had many instances, some getting a lot of attention, where you have had goods of poor quality that entered the United States.
So there's always going to be problems of verifying quality, but none of this is insoluble.
We could have, you know, in the United States to become a doctor, you have to go through medical testing and we have, you know, boards that do that testing.
You could do the same thing with people who are trained in India or China or wherever the country might be, and they could be our people.
We could, there's not, you know, there's nothing, again, you have to set up the structures, but there's no reason at all we couldn't arrange to have tests conducted in these countries by actually people from the United States, people who we recognize as being capable of certifying doctors in the United States.
We could have the same people conduct the test in India or Mexico or wherever country we choose.
So none of this is insoluble.
And to say that nothing's going to be perfect, of course, there'll be quality issues.
There's no doubt about it. There's quality issues now.
But again, if our focus had been to try to facilitate trade among Right.
And it also struck me when you were talking about the legal profession that there should be no intrinsic reason why, if I can call Bangladesh to get tech support from my Vista computer, why I should not be able to call some other land to get legal advice if that's all I'm looking for.
And, of course, that would be a very powerful way to bring down the costs of legal advice In the United States, but that would be I'm sure completely outside the ballpark as far as what's being discussed or proposed at the moment.
Absolutely. I mean, some of this will go on simply because you can't prevent it from going on, but that certainly has not been the focus of the trade deal.
So again, in principle, what we would not want if we actually had people who were concerned first and foremost about removing barriers, they would try to say, okay, why is it difficult for me, you know, sitting here in Washington, D.C., and I'd say, okay, you know, there's smart people in India who can learn the law.
Why is it difficult for me to be able to get on the phone or get on the computer and go, here's my problem.
And have someone at the other end who's qualified and legally able to answer that question.
But that was clearly what went on with manufacturers.
And we didn't even have to argue over that because they actually went to major manufacturers and they said, what is it that keeps you from setting up operations in Mexico?
They said, all right, we're going to remove the barriers.
And in principle, that's what you'd want to do with the highly paid professions.
Yeah, and if you do that, again, I'm not sure it's a conscious class warfare, but if you do that in the fields where the majority of poorer people have jobs and you do almost the exact opposite in the fields where the richer people have jobs, that is a kind of class warfare, I think, that I think is only exacerbated by your very interesting examples which, again, I've not heard before and I've read a fair amount on this stuff over the years.
About the relationship between Federal Reserve monetary policy, and of course we always associate that, those who are somewhat educated in this field, we always associate the policy of the Fed with manipulation of interest rates which has big effects on the Austrian theory of the boom-bust cycle.
And particularly in terms of inflation, but I had not at all and made the connection, and I haven't heard it elsewhere, the connection between federal policy and unemployment, particularly among the lower classes.
I was wondering if you could talk a little bit more about that, which was just a fascinating argument.
Well, if you go through the dynamics of how How raising interest rates, you know, so if we go back, say, in the mid-'90s, sort of a classic case where the Federal Reserve Board in 1994 raised interest rates over the course of a year from February of 1994 to February, maybe March of 1995.
They raised the interest rates by 3-4 percentage points.
And the logic of that was they felt the unemployment rate had reached the lowest level of curve without generating inflation.
So they were determined to slow the economy so that you would not get a further decline in the unemployment rate.
Now, in principle, I shouldn't say in principle, but if you don't analyze things more closely, it looks like a neutral policy.
It affects everyone the same.
But we've done analysis, again, and I should refer to my co-author on this, Jared Bernstein, because he really did most of the work.
We did an analysis of Who sees the most impact from unemployment on their wages?
And we found that those who have the least education are, you can put it either way, that when the unemployment rate falls to very low levels, they gain the most.
On the other hand, when it rises, when you keep the unemployment rate from falling, they're the ones who get hurt the most.
Whereas those who have the most education, people with college degrees, People with advanced degrees, their wages are least affected by the unemployment rate.
So what in effect you're doing is saying, okay, we're going to reduce inflationary pressures, but it's going to be at the expense of the wages of those at the middle and bottom, not at the expense of those at the top.
Right. And there are also elements of culture and race warfare as well, to use a strong metaphor, in terms of the numbers, I think, that you cited among blacks and Hispanics, the degree to which a lowering of inflation causes unemployment in that group.
Those were quite terrifying and staggering statistics, I thought.
That's right. As a general rule, these are kind of rules of thumb, but they've held reasonably well over the last three or four decades.
The unemployment rate for blacks tends to be roughly twice the overall unemployment rate.
It's a little less than that now, thankfully.
So we have a 10% overall unemployment rate, and for African Americans, it's about 15.
But historically, it's been closer to 2 to 1.
For Hispanics, it's typically been about 1.5 to 1.
So if we're talking about raising the unemployment rate overall by one percentage point, typically 1.5 for Latinos, And two, for blacks, and if you were to look at black teens, they really get walloped.
The ratio typically been about 6 to 1, and right now the unemployment rate for black teens nationwide is about 40%, so it's not quite 6 to 1, but they certainly feel the impact of any increase in unemployment far more than other segments of the population.
Right, right. And just by the by, I don't recall this being mentioned in the book, but perhaps you've written about it elsewhere.
I remember being quite, like many people, I sort of came through conservatism to the free market and then became increasingly disillusioned with the conservative consistency of its value of the free market.
Because when you talk to Republicans about the free market, of course, one of the first places you want a more free market is in democracy itself.
And the amount of barriers to entry to the Libertarian Party, to the Green Party, to other third party candidates is enormous, which is why The US is one of the few countries with only two major political parties.
That's the first place that you'd think would be reasonable to open up in terms of a free market for the competition for public office.
But again, the barriers just seem to keep getting higher rather than being lowered, which is again a complete rejection of any kind of free market principle as a principle.
Yeah, and certainly it's been conscious policy.
It's often stated, you know, we want to reinforce the two-party system.
You know, my view is, well, if you end up with two parties, that's fine, but it shouldn't be the government's role to say that you have two parties, and it really is.
I mean, it is explicit policy that we favor a two-party system, and there are a lot of roadblocks, and it varies a little bit state by state, because states have a lot of say in who gets on the ballot, what the rules are exactly.
But I'd say pretty much everywhere it's fair to say.
It's certainly stacked against third parties or independents.
So it's not an impossible barrier, but it's a really big one to overcome.
In the current healthcare debate, which I guess to some degree may be drawing to a close given what happened recently in the Senate, but in the current healthcare debate, it's strange to look at culture.
Sometimes to see what is most important, you have to look at what's not being talked about at all.
And in terms of controlling healthcare costs, I thought that the section that you had where you were comparing The incomes of US physicians versus those, say, in Europe.
I think it was 160,000 for US physicians and about 80,000 for European physicians, which again, for many people, would still be a pretty fair shake at the money can.
And the effects, I think, you worked out some of the effects in terms of the price that these inflated wages for medical personnel have on the healthcare bill as a whole.
Would you mind talking a little bit about that?
Well, sure. I mean, there's no obvious reason we should be paying so much more for our doctors than, say, people in Germany or France, countries with very comparable living standards.
And certainly, if you compare the pay of our auto workers, you know, it's going to be pretty much the same.
So, there's no obvious reason our doctors should be getting twice as much as doctors in those countries.
And the difference, you know, what that comes to in terms of, you know, cost, it's about, it comes to about $80 billion a year.
So if we could get European doctors at, U.S. doctors at European wages, there would be enormous savings, $800 billion.
We tend to price things over a 10-year planning horizon.
So there would be $800 billion over a 10-year planning horizon.
That would be enough to fully cover the cost of extending care.
But this was never even discussed.
You know, doctors are a very powerful lobby.
There's really very little discussion of anything that might lower their wages.
So, you know, it just makes the hurdles much, much greater.
So we're in a situation where we're looking to cover everyone.
Of course, we have 47 million people that aren't covered.
We're trying to extend coverage. The bill doesn't cover everyone.
But the cost ends up being prohibitive.
And the big problem, I think, just about everyone would agree with this, is that The bill that's likely ended up getting through will extend coverage somewhere around 30 million people, but it creates a cost structure that certainly can't be sustained over the long term.
So we could probably cover the cost three years, four years, five years.
We certainly can't continue on this trend, say, 20 years.
So we're going to have to come back and do something, but at the moment, What that something is is not really determined.
Right, right. And I think the thesis as well that when you lower the costs of things like legal advice, but even more particularly I think the cost of medical care, that is a de facto raise to the poorer classes because they have to consume health care.
In fact, in some ways the poorer classes in many ways consume more health care because of a variety of environmental negative health, smoking and obesity and so on, all associated with the lower classes.
If you can reduce the cost of going to see a doctor, let alone the cost of prescription medication, that is a de facto raise in the standard of living to the poorer classes and that to me is the most tragic and fundamentally immoral aspect of this that you really are hitting hardest the people who least can afford it for the sake of enriching those who already have the most money.
It is really like the complete reversal of what we consider a just redistribution of wealth, if we could consider that just.
Absolutely. And also I should point out, again, this is classic free market argument that you get exactly the sorts of distortions that economists predict you get when you have an interference with the free market.
So you have cases where, for example, drug companies are concealing evidence about their drugs being, in some cases, much less effective than they claim, in some cases even harmful.
They stand to make such huge amounts of money.
So they're selling you a prescription that they're going to charge you $150, $200 for.
It costs them, you know, a couple dollars.
So they have an enormous incentive to, in effect, deceive people.
And, you know, if it were the case, if that prescription were actually selling for a few dollars, well, they wouldn't have that incentive.
And same with doctors.
You have cases where doctors often recommend procedures where they could charge very high fees.
Where some cases are not even necessary.
So people go through medical procedures.
Cesarean sections are performed on huge numbers of women on Medicaid, the government program, the government program for poor people, because they know they can get the government to pay for it.
Often they have less educated women and, you know, they give a big bill to the program.
So it's not only hitting them in terms of taking money away.
It oftentimes means bad medicine.
Right, so you're saying that the prevalence of cesarean sections is higher among those on Medicare than it would be among richer people?
That's right, Medicaid. The program for poor people, that's right.
It's really appalling.
No one should be undergoing surgeries, medical procedures they don't need.
Oh, absolutely. I guess the argument particularly in the fields of law and of medicine are that most of the people in the government have a history of law in their career to say the least and of course many of them are so old that the last thing they want to do is irritate doctors because they're really on the doorstep of needing them the most.
But you're right. They are a very powerful lobby and it is startling when you talk about healthcare costs that the disparity in wages between American and foreign doctors, let alone doctors in the third world who could provide, I think, great medical advice much, much more cheaply.
One of the major costs, I guess the two major costs, pharmaceuticals and doctors, is just not on the table.
It's not even rejected as being on the table.
It's like it doesn't exist at all.
That's right. When you raise this, I mean, invariably have people looking at me like I'm just being crazy, like I'm being argumentative.
As I say, I made this comment about patents.
I understand we need to give an incentive to finance the research, but the point is the patent system has huge problems.
Maybe at the end of the day you'd look at all the attorneys and you'd still come back and go, that's the best we could do.
But the point is that should be a very serious discussion because there's so much money at stake.
We just don't even have that discussion.
I'm not talking pie in the sky where I'm saying we could finance research other ways.
The United States spends $30 billion a year financing biomedical research through the National Institutes of Health.
So we are using other mechanisms.
Now most of that money is going for more basic research.
Sometimes they actually do finance the development of drugs, clinical trials, so some of them are financed that way, but the vast majority of $30 billion is going for more basic research.
But the idea that there's no other way to finance research, that's just ridiculous.
And that's the debate we should be having and it just isn't there.
Right. Now, of course, the people who are into the free market and I have lots of – I've had lots of debates and questions around the idea of copyrights and patents and intellectual property as a whole.
I was wondering if you could spend a little time talking about that because most people believe that – In the way that my car is property that is supposed to be protected by the state, that intellectual property is a similar kind of thing.
I was wondering if you could talk a little bit about some of the alternatives so that people can detach intellectual property from their conception of the free market, where I think at the moment, unjustly resides.
Yeah. Well, I mean, first off, just to make the most obvious point, when we talk about your car, well, If someone else uses your car, you can't use your car.
I mean, someone who's driving a car, you can't have it.
Whereas in case of intellectual property, the property is out there.
As many people as want, you know, if I write a book and put it on the web, we could have a billion people read it, and it doesn't affect my own ability to read it all.
We're talking about my ability to profit from it, which is a totally different question.
So there's not the issue of intellectual property that rhymes with other property when I'm talking about Sort of exclusive enjoyment.
We could have infinite number of people enjoying the benefit of that intellectual property.
So we're simply talking about how best to finance the creation of, you know, whether it's a creative work or innovation, if we're talking about research as with patents.
Now, as I was saying before, one mechanism, you have direct funding.
Now, it doesn't have to be through the government.
The government could contract out, and we do that in many cases.
So you could have the government, in the case of pharmaceuticals, that at times you probably want relatively long-term contracts with large companies.
You could even have the same companies. You could even have Pfizer.
You could even have Merck. But the point would be that they're paid for their research up front so that everything that gets developed is then put in the public domain in two ways.
On the one hand, the results are all public.
So this would, I think, lead to much better research, much better medicine.
Pfizer, when they did clinical trials, they had to put everything online so we could all see what were the results and also, more importantly, and I've asked doctors about this.
I'm an economist and they're very different procedures.
I go, well, you know this drug worked overall, but how did it work for people who are overweight?
How did it work for people who have arthritis?
How did it work for people who are taking other drugs?
They don't know that because it's up to Pfizer.
If Pfizer did the test, they'll reveal whatever results they want.
They don't have to make these results public.
And when they go to the Food and Drug Administration to get their drug approved, The FDA is actually prohibited from making anything at all public other than saying we judge based on the evidence that was presented to us that it's a safe and effective drug.
Just to mention the absurdity of that, Pfizer as a publicly traded company has to open their books like a white kimono to show the public down to the last dollar what they've invested, spent and made.
And yet the actual, and that has very little to do with anybody's enjoyment or quality of life, but where you're actually ingesting things into your body for the sake of illness, you can't get at that data.
You can get all the financials, but not the actual test data, which is absurd when you think about it.
That's right. That's right. And it's bad science.
And I just think of that, you know, the difference, you know, in economics, if I publish an article and I, you know, I supposedly show that, you know, let's say the trade agreement with Mexico increased the U.S. GDP by 3% or whatever it might be.
Well, I'm expected to have that data fully available so that some of that will actually appear in the article, but if someone wants to review, did I do all my tests right?
Did I make a mistake here?
I'm supposed to have that data available to them, and that's the professional norm.
In medicine, where people's lives are at stake, it's the direct opposite.
I had occasion once to call a medical researcher and he was like, why are you asking for this data?
This wasn't even done by Pfizer, this was done actually on a research grant from the National Institute of Health.
So they would not make that available.
So, as I say, one alternative is simply direct public funding.
Now, there have been a number of other proposals that people put forward.
You could actually have the patent system as it exists now, but then have a buyout where the government, in effect, would buy out The patent through various mechanisms.
It could be an auction mechanism.
It could be Australia has a system where they evaluate the usefulness of different drugs based on the quality of life years, the extent to which it's used and how much improves quality of life for how many years.
So you could have some system like that where you buy out the patent and then it's placed in public domain so that the drug can be sold as a generic.
There's some other methods that have been suggested, but the point is that there are alternatives, you know, in the case certainly of patents.
In the case of copyrights, what I actually like, it's something that, you know, some others came up with, is having some pool of money and pick, say, $100 as an arbitrary amount, that each person has the right to contribute to the Individual or organization of their choice to support creative artistic work.
And the criteria of accepting it is that all the work that you do, if let's say I'm a writer and I accept money through this system, well, the work that I do while I'm in the system isn't copyright protected.
So I'm free to write whatever I want, and if people like my writing, I can presumably come back next year and more people will give me money and I could do whatever I want, but the point is whatever I do produce, anyone who wants to could just put it on the web, could make copies of it, do whatever they choose to do.
So the point is you're subsidized once, not twice.
Right. I see. I think I understand.
I mean, I'm sure like yourself, I'm always skeptical about solutions that involve the government because the solutions that involve the government are always put into place as a response to all the solutions that the government has already messed up.
So to me, it's like using the same dirty water to wash the same dirty sink.
But, you know, that is debatable.
But I certainly agree with you that the existing system is pretty exploitive.
And of course, wherever there is a fixed cost increase on people's income, it hits As a percentage point, the poorest the most.
And I think you're right. The copyrights, patents, and all of those other forms of monopoly.
And they are, of course, forms of monopoly.
And they are state-enforced monopolies, which is what people often forget in a way that protecting my car, it's not a state-enforced monopoly.
But when you are protecting intellectual property using the power of law and the force fundamentally of imprisonment and fines, you are creating a monopoly.
And, I mean, every economy, Econ 101, it's, you know, monopolies drive up costs and reduce competition.
That's right. That's right.
And again, in the case of drugs, again, I think it's particularly important just because this is people's health, their life.
So it's a very big deal there.
And of course another aspect is reducing the amount of paperwork and interference, some of which of course is probably legitimate in terms of safety but which seems to have become particularly excessive since the thalidomide scare in the 1960s, the FDA hurdles that people have to overcome to get a drug to market.
Are enormous. And I think that that could be reduced if, as you say, there was more pressure put upon companies to open up their research.
Then I think if you had a number of companies working with the same data, it would be very interesting to see how much more quickly the FDA approval could occur.
Because instead of the FDA being the bottleneck, it would be sort of like the scientific community as a whole, where there is no central place that you go to get validation, but it is a collective endeavor based upon the openness of the data.
That's right. It's very likely that by the point someone is bringing a drug for formal approval, the results would already be widely known.
So it would be basically quite a rubber stamp.
You do want to make sure someone is actually reviewing the data, but people would know the results already and if there had been problems, that would be widely known.
So it wouldn't be likely you have many surprises.
So if you had a drug that had shown very good results, the approval process should be relatively quick and straightforward.
If it was problematic, if there were cases where you had good results but also people having bad effects, well then obviously it would take longer and you presumably want to sort that out.
What you presumably want to have in that case is maybe in some cases the drug is appropriate but for other people you simply don't want to prescribe it.
You could rely on competitors within the same field having a very critical review of the data coming out for a new drug that might impact their own ability to sell.
I'm very much one for openness, standards and self-interest for solving problems and I think that Certainly, if I came up with some drug to compete with Lipitor, those who create the Lipitor drug would be all over my data like wolfhounds trying to find problems because they would have that incentive.
Yeah, and that would certainly be exactly what you'd want.
You want people to go over it with a fine-tooth comb, but at the end of the day, everything's public so that if they're making stuff up, that will be caught.
Right, right. And I wanted to also, just if you could release the – give people the information.
As far as I recall, your book is available in PDF format for free on the web.
And I would highly recommend buying it because it's something that you'll want to highlight for people who are listening to this.
you'll want to highlight and remember some of these arguments for when you get into political discussions with people who are very pro free market but only in a particular area which is I think quite negative I wonder if you could just hand out the information where people can get a hold of both the free and the paid version of the book sure it
It's www.conservativenannystate.org www.conservativenannystate.org www.conservativenannystate.org www.conservativenannystate.org Order the book and the price of the book is just the cost of shipping and printing so I don't have any attachment.
No one's doing me a favor in other words if they want to buy the book.
Right and of course that is quite appropriate to a man who is skeptical of copyright and I certainly do applaud you for that consistency.
How has the response to the book been?
Have you received much counter-criticism or has it been largely accepted?
It hasn't gotten that much attention.
This, too, is interesting.
I had several, because we did try to get reviewed, it wasn't reviewed very many places, and I had some places say that they simply, because it was published in the form we did, it wasn't published by a regular publisher, because, of course, there's no money here for a regular publisher, they didn't even consider it for review.
Which, again, I can understand someone say, okay, you know, everyone who, you know, signed to New York Times, everyone obviously wants their book review, New York Times book review, but this wasn't even under consideration because it wasn't done by a regular publisher, which is sort of a remarkable statement.
I mean, what does it mean that it wasn't done by a regular publisher?
I mean, I'm sure I could have found a publisher to publish it, but on top of that, what's a publisher?
It's someone who owns a publisher now.
So it's really not much of a, you know, it's hard to see that that should be a basis for whether or not you're going to review a book.
Yeah, that seems kind of old school, like a guy comes in in a dirty raincoat and a rain-soaked manuscript and says, I want you to read my book.
And it's like, well, I'd rather you go through the hurdle of having an editor and a publisher, but that's not the category that you're in, of course.
I mean, a respected academic and economist, so it's not like you're going to be making stuff up.
And of course, if people have skepticism about the thesis, I mean, they just have to look at the data for the arguments, the sources for the arguments, rather than think, well, if he's jumped the hurdle of a publishing house, that gives him magical legitimacy.
So I think that's a shame, and that's why I thought it would be worth having the interview.
I mean, I certainly can't...
I can't get millions of copies out, but I can certainly get people to be interested in reading it because, as I said, it's one of the really great arguments that I've listened to over the past little while and, again, to commend you on A, writing the book and all the research and work that went into it.
I think it's well written as well.
I think that you have injected an appropriate amount of moral Fervor into the book, which makes it more than just dry reading but less than like someone yelling at you from a soapbox, which I thought was a really nice balance.
I certainly think that the exposure of this falsehood of principle with the free market and republicanism Hopefully you can get people out of that mythological camp where they just say, well, Republicans are about the free market and the socialists, Democrats are about the nanny state and to see that it has actually a worse form of nanny state in many ways to focus.
I mean I'm not much one for government solutions as a whole but if we're going to have them, let's at least not have them benefiting the rich at the expense of the poor.
And I think that the data as a whole that has been running through the stats over the last 20 years has been that you have seen, I think as your book would have predicted based on its data analysis of the 90s, particularly the Fed, you have seen a huge increase in the upper 10 or 20% of people's income.
And you have seen a flattening or even a mild decline depending on how you measure it.
Of people on the poorer end and, of course, over the last two and a half years or so of the recession, it's only gotten worse.
So I think it's a very, very timely message and I hope that more people will read this book because I think it's a really, really worthwhile endeavor.
You can't really understand the political landscape, I think, without seeing this upward suction of money that is going on among the Republicans.
Well, I agree with that, obviously.
I wouldn't expect you to disagree, but I just wanted to point that out.
I'm really big on pitching stuff that I think is new and very interesting.
Okay. Well, thanks a lot. Thank you so much.
I appreciate your time. You can just skip that website one more time.
It was conservativenannystate.org?
That's right. www.conservativenannystate.org.
Okay. I will link this on the video.
Thank you again so much for your time.
I appreciate it. Sure.
Thanks a lot. Have a good night. You too.
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