Secular Stagnation Theory: Challenge to DeLong, Summers, Bernanke, Krugman, Keen, Pettis

Some interesting charts came my way today regarding the income inequality debate.

Let’s start with some charts, then explore the meme of the day that rising income inequality is behind “secular stagnation”.

I challenge economists Brad DeLong, Larry Summers, Ben Bernanke, Paul Krugman, Steve Keen, Michael Pettis (and anyone else), to respond to this post.

Big Pharma on Notice – About Time!

A move to open up competition in drugs wold have been one of the few things in Obamacare worth having. It was not to be as big pharma bought off Obama and Democratic senators to keep in from happening.

An amendment to open up competition in drug pricing was narrowly defeated in the Senate Vote-a-Rama last night, but that defeat was not binding by any means.

More importantly, Trump’s Drug-Price Stance Puts Pharma on Notice.

President-elect Donald Trump’s fiery stance on drug prices is putting pressure on pharmaceutical companies that may be designed to bring their support for his planned overhaul of the nation’s health-care system.

Hours after Trump upended pharmaceutical stocks Wednesday with a pledge to force drugmakers to bid for government business, the U.S. Senate narrowly rejected a proposal to allow importation of cheaper prescription drugs from Canada. While votes on most amendments to the budget resolution went along party lines Wednesday night and Thursday morning, 12 Republicans supported the drug-import measure, with 13 Democrats opposed.

Kellyanne Conway, a senior adviser to Trump, said the president-elect wants Democrats to be involved in drug-cost legislation, which she linked to a broader push to repeal the ACA.

“To repeal and replace Obamacare and not have a conversation about drug pricing seems not like a reasonable prospect,” she said Thursday in an interview on Bloomberg Television.

Representatives of Pharmaceutical Research and Manufacturers of America, the Washington drug lobby, didn’t immediately respond to a request for comment.

Members of both parties have been laying the groundwork for bills that could go after the drug industry, including measures to force drugmakers to report any price increase of more than 10 percent and to stop deals that brand pharmaceutical companies make with their generic counterparts to keep low-cost copies off the market.

The importation measure, proposed by senators Bernie Sanders, a Vermont independent, and Amy Klobuchar, a Minnesota Democrat, was meant to give Americans access to cheaper drugs, though opponents argue the safety of other countries’ pharmaceuticals can’t be guaranteed. Klobuchar also proposed an amendment backing the government’s ability to negotiate drug prices on behalf of Medicare but a vote wasn’t taken on the measure.

$80 Billion Buyout

“PhRMA has worked to insulate the industry from bidding on drug prices from government programs. The group pledged $80 billion to help fund Obamacare in 2009 in exchange for protection from drug-price negotiation that Democrats wanted to include in the Affordable Care Act.”

That $80 billion buyout cost consumers how many hundreds of billions in prescription costs?

And paying the competition to not produce generics sounds like a genuine antitrust violation that deserves to be prosecuted.

Trump has a chance from the get-go to do something right. Let’s see if he follows through.

Mike “Mish” Shedlock

Financial Times Editorial Seeks Restrictions On Free Speech to Stop False News “Propaganda War”

A pair of articles by the Financial Times offers quite the take on disinformation hypocrisy.

I suggest the Financial Times look into the mirror if it wants to understand where the problem is.

Worse yet, to stop the spread of fake news, the FT editorial board wants restrictions on freedom of speech.

McCain Gave FBI Dossier on Trump; Trump Feuds With CNN, Calls BuzzFeed “Failing Pile of Garbage”

Yesterday, BuzzFeed posted an article that made unsubstantiated claims regarding Russia and Trump. The source of this round of nonsense is a British journalist who fed a story to be CNN.

I tweeted the story was so ridiculous I would not cover it. But now, CNN, the Financial Times, and others have been caught propagating fake news over the story, and Trump is battling CNN and BuzzFeed.

Trump went so far as to call BuzzFeed a “failing pile of garbage”. It’s an interesting mess, so let’s recap from the beginning.

Trump Euphoria Sets In; Small Businesses Optimism Surges Most Since 1980: What’s It Mean?

Trump Euphoria Sets In

The NFIB Small Business Index surged 7.4 points to 105.8, the
highest reading since December 2004.

Leading the charge was “Expect Better Business Conditions,” which shot up from a net 12 percent in November to a net 50 percent last month.

Bloomberg noted U.S. Small-Business Optimism Index Surges by Most Since 1980. Let’s start with Bloomberg comments, then dive into the report.

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