"The FDA is trying to gain authority over laboratory developed tests (LDTs). It’s a bad idea. Writing in the WSJ, Brian Harrison, who served as chief of staff at the U.S. Department of Health and Human Services, 2019-2021 and Bob Charrow, who served as HHS general counsel, 2018-2021, write:
We both were involved in preparing the federal Covid-19 public-health emergency declaration. When it was signed on Jan. 31, 2020, the intent was to cut red tape and maximize regulatory flexibility to allow a nimble response to an emerging pandemic.
Unknown to us, the next day the FDA went in the opposite direction: It issued a new requirement that labs stop testing for Covid-19 and first apply for FDA authorization. At that time, LDTs were the only Covid tests the U.S. had, and many were available and ready to be used in labs around the country. But since the process for emergency-use authorization was extremely burdensome and slow—and because, as we and others in department leadership learned, it couldn’t process applications quickly—many labs stopped trying to win authorization, and some pleaded for regulatory relief so they could test.
Through this new requirement the FDA effectively outlawed all Covid-19 testing for the first month of the pandemic when detection was most critical. One test got through—the one developed by the Centers for Disease Control and Prevention—but it proved to be one of the highest-profile testing failures in history because the entire nation was relying on the test to work as designed, and it didn’t.
When we became aware of the FDA’s action, one of us (Mr. Harrison) demanded an immediate review of the agency’s legal authority to regulate these tests, and the other (Mr. Charrow) conducted the review. Based on the assessment, a determination was made by department leadership that the FDA shouldn’t be regulating LDTs.
Congress has never expressly given the FDA authority to regulate the tests. Further, in 1992 the secretary of health and human services issued a regulation stating that these tests fell under the jurisdiction of the Centers for Medicare and Medicaid Services, not the FDA. Bureaucrats at the FDA have tried to ignore this rule even though the Supreme Court in Berkovitz v. U.S. (1988) specifically admonished the agency for ignoring federal regulations.
Loyal readers will recall that I covered this issue earlier in Clement and Tribe Predicted the FDA Catastrophe. Clement, the former US Solicitor General under George W. Bush and Tribe, a leading liberal constitutional lawyer, rejected the FDA claims of regulatory authority over laboratory developed tests on historical, statutory, and legal grounds but they also argued that letting the FDA regulate laboratory tests was a dangerous idea. In a remarkably prescient passage, Clement and Tribe (2015, p. 18) warned:
The FDA approval process is protracted and not designed for the rapid clearance of tests. Many clinical laboratories track world trends regarding infectious diseases ranging from SARS to H1N1 and Avian Influenza. In these fast-moving, life-or-death situations, awaiting the development of manufactured test kits and the completion of FDA’s clearance procedures could entail potentially catastrophic delays, with disastrous consequences for patient care.
Clement and Tribe nailed it. Catastrophic delays, with disastrous consequences for patient care is exactly what happened. Thus, Harrison and Charrow are correct, giving the FDA power over laboratory derived tests has had and will have significant costs."
Wednesday, December 21, 2022
The FDA’s Lab-Test Power Grab
Tuesday, December 20, 2022
Gary Gensler Plays Robinhood
The SEC’s stock trading redesign won’t help individual investors
"Gary Gensler has some plans for you. His Securities and Exchange Commission on Wednesday gave Americans until March 31 to digest and comment on 1,656 pages of proposed regulation that would re-engineer the equities market in the name of fixing a nonexistent problem.
The impetus for the SEC’s stock-trading overhaul was the rally in “meme” shares such as GameStop last year. Multiple stocks surged in price as retail investors trading via firms such as Robinhood shared bullish tips on social media, many with the goal of squeezing hedge funds that had short positions.
Several brokers limited trades amid volatile prices and clearinghouse margin calls. An SEC staff report last fall found no evidence of market manipulation or systemic risks. Yet Mr. Gensler argued that the practice known as “payment for order flow” presents business conflicts that harm retail investors.
Where’s the evidence? We can’t find it in the 1,656 pages of new rules. The payments to Robinhood, Schwab and other brokers from wholesalers such as Citadel Securities aren’t conflicted or shady like Sam Bankman-Fried’s FTX with his Alameda trading house. The arrangements are disclosed to investors.
Here’s how it works: Brokers that offer zero-commission trading route customer orders to wholesalers, which can execute trades at better prices than are available on stock exchanges because they aren’t competing with large institutional investors. This “payment for order flow” lets wholesalers make money from the spread between a stock buying and selling price. Retail investors benefit since they don’t pay commissions and can get better prices on trades even if it’s fractions of a cent.
But stock exchanges are unhappy because less trading on exchanges means less revenue. About 40% of trading volume now occurs off exchanges. Institutional investors such as pension funds that trade mostly on exchanges also complain that they get worse prices when there are fewer counter-parties. Mr. Gensler dislikes trading off exchanges because it’s less visible to regulators. “The markets have become increasingly hidden from view, especially for individual investors,” he said Wednesday.
Yet the SEC’s proposed rules concede that payment for order flow offers better prices for individual investors. The SEC claims, however, that investors would benefit from even better prices if markets were structured differently—i.e., the way Mr. Gensler wants.
The new SEC rules seek to replace payment for order flow with auctions that have “various market participants competing to execute their marketable orders at the best price possible.” These auctions would be separate from the exchanges but could be operated by the exchanges.
Brokers would funnel small retail orders into these auctions where institutional investors and others would compete for best price. Only if wholesalers can beat some price metric would they be allowed to skip the auctions. Institutional investors “potentially could trade at better prices if given an opportunity to interact with the marketable orders of individual investors in fair and open auctions” (our emphasis), the SEC says. It also estimates that its “fair and open auctions” could yield $1.5 billion for investors, or about one cent per $100 traded.
That’s doubtful. Brokers might have to return to charging commissions or other trading fees to replace payments from wholesalers. As GOP Commissioner Mark Uyeda noted in a dissent, the SEC estimate also “does not factor in the potential benefits associated with the proposed changes” from two other SEC rule-makings that could “facilitate competition.”
One change would let exchanges reduce the price increments at which stocks are quoted and traded—known as “ticks”—to less than one cent. This reduction of tick sizes could help “level the playing field,” to borrow Mr. Gensler’s words, between the exchanges and wholesalers that often execute trades at increments smaller than a cent.
But most of Mr. Gensler’s stock-trading overhaul isn’t intended to improve competition or protect retail investors. The beneficiaries are Nasdaq, Calpers and brokers that can support zero-commission trading with other revenue.
***
Amid the crypto crashes and alleged FTX fraud, one would think that Mr. Gensler would have higher priorities than redesigning the stock market to fulfill a thought experiment. An SEC Inspector General report recently warned that his move-fast-and-break-things agenda is overwhelming staff and diverting resources from investor protection. His redesign of stock trading is a regulatory vanity project that won’t help investors."
Now New York Democrats Tell Us
They finally have second thoughts on taxing the rich—a little late
"’Tis the season for epiphanies, and what do you know? It’s finally dawning on some New York Democrats that the state’s steep income tax rates are driving away top earners who fund essential public services. If only this wisdom had visited Democrats in Albany before they raised taxes last spring.
Like an annoying music tape that keeps repeating, progressives are calling on Democratic lawmakers to raise taxes on the rich—again. The Federal Reserve’s monetary tightening has resulted in lower capital gains and trading revenue on Wall Street, which is hurting state and local budgets. Meantime, pension and healthcare costs are climbing.
Yet miracles of miracles, Gov. Kathy Hochul last week ruled out tax increases and said she planned to hold the line on spending next year. “I don’t believe that raising taxes, at a time when we just cut taxes, makes sense,” she said. By tax cuts, she’s referring to one-time property tax rebates for middle-income homeowners that doubled as election bribes.
New York City Mayor Eric Adams last week also shot down a tax increase: “To continually attack high-income earners when 51% of our taxes are paid by 2% of New Yorkers—it blows my mind when I hear people say ‘so what if they leave.’ No, you leave! I want my high income earners right here in this city!” Nice to hear, but he’s a little late.
A New York City Independent Budget Office report this month showed that the number of taxpayers who earned between $1 million and $5 million plunged 11% in 2020 from the prior year. Democrats can’t blame the Fed whose ultra-loose policies helped boost asset prices and thus capital gains among the top 1% by $14 billion, or 37%, that year.
The culprits are high taxes and Covid lockdowns. According to IRS data, New York County lost $14.5 billion in adjusted gross income from out-migration between 2019 and 2020. And this was before Democrats in Albany last spring raised income taxes on individuals making more than $1 million, jacking up the combined state and New York City top rate to 14.8% from 12.7%.
Even New York Comptroller Thomas DiNapoli, who is no moderate, told Bloomberg News last week that the exodus of taxpayers at the upper end “should be a concern for everybody.” He added that “we might be getting near that tipping point where we do make it economically unsustainable for enough of those folks to stay here.”
Democrats have already passed the tipping point, judging by the thousands of high earners who have fled to Florida and other lower-tax climes. But don’t bet on Democrats’ new-found wisdom lasting. “I don’t believe in raising taxes on the rich,” then Gov. Andrew Cuomo said in February 2019. Read his lips. “Tax the rich. Tax the rich. Tax the rich. We did that. God forbid the rich leave.”
Two years later he taxed the rich more—and, God didn’t forbid, more of the rich left."
How Progressives Enrich Oil Companies
By Mario Loyola. He teaches environmental law at Florida International University. Excerpts:
"President Biden wants a clean electricity grid by 2035, but under current permitting standards, only a fraction of the necessary infrastructure would break ground in time. And to achieve a clean grid by 2050, experts believe that more than one million miles of high-voltage transmission lines will have to be added to the grid."
"The reality is that climate activists’ own policy positions help fossil-fuel producers and hurt everyone else. They want to wean Americans off oil and gas by constricting supply. But constricting supply boosts prices and maximizes profits.
Activists’ push for “net zero” electricity is even more counterproductive. As Texas, California and now Europe have learned, there is a limit to how much renewable power like solar and wind can be deployed while still maintaining a stable grid.
Activists dream of getting to 80% renewable energy on the road to “net zero.” But even at about 34% renewable, the California grid is unstable: If there is an overabundance of solar electricity during the day, either solar panels are shut off or utilities pay other states to take the excess energy. There also have been blackouts at night, especially when demand for air conditioning is high."
"California recently voted to phase out gasoline cars by 2035. That’s impossible without major grid expansions."
"without some unforeseen revolution in battery technology, at least half of the added grid capacity will have to come from nuclear power, coal or natural gas. But given the sometimes decades-long permitting odyssey for a nuclear plant in America, California’s environmentalists are headed for a reality check: The transition to electric vehicles will be nearly impossible without quickly building dozens of new coal and natural-gas plants."
Monday, December 19, 2022
Carry Your Groceries, Take the Stairs: Short, Intense Movement Can Improve Your Health (plus non drug ways to fight diabetes and Covid)
A new study confirms that you don’t have to do a hard workout to reap the longevity rewards of exercise.
By Dani Blum of The NY Times. Excerpts:
"Dashing up the stairs to your apartment, weaving between commuters as you dart toward the train — those small snippets of exercise, if they’re intense enough, can add up, according to a new study. The paper is among the first to examine what many exercise scientists have long hypothesized: A little bit of physical activity goes a long way, even movement you might not consider a workout.
The paper, published today in Nature Medicine, shows that tiny spurts of exercise throughout the day are associated with significant reductions in disease risk. Researchers used data from fitness trackers collected by UK Biobank, a large medical database with health information from people across the United Kingdom. They looked at the records of over 25,000 people who did not regularly exercise, with an average age around 60, and followed them over the course of nearly seven years. (People who walked recreationally once a week were included, but that was the maximum amount of concerted exercise these participants did.)
Those who engaged in one or two-minute bursts of exercise roughly three times a day, like speed-walking while commuting to work or rapidly climbing stairs, showed a nearly 50 percent reduction in cardiovascular mortality risk and a roughly 40 percent reduction in the risk of dying from cancer as well as all causes of mortality, compared with those who did no vigorous spurts of fitness."
"One 2020 study linked four-minute bursts of exercise with longer life spans; another in 2019 found that climbing stairs for 20 seconds, multiple times a day, improved aerobic fitness. And still others have found that repeating just four-second intervals of intense activity could increase strength or counteract the metabolic toll of sitting for long stretches of time."
"the average person doesn’t need to go out of their way to identify those small spikes in activity; everyday movements, intensified, can be enough."
"If you have a roughly half mile-long walk — for example, from your apartment to the grocery store — you don’t need to sprint the entire time, he said, but accelerate your pace for a few hundred feet two or three times over the course of your walk. Instead of taking the elevator, opt for the stairs. As long as you go up more than one or two flights, that will count as vigorous activity. Carrying roughly five percent of your body weight for a minute or two can also qualify, like hauling a large backpack"
"And any kind of brief, fast uphill walking can also provide a short spurt of intense exercise."
Also see Intermittent fasting may negate need for diabetes drugs, small study suggests by Judy Packer-Tursman of UPI. Excerpts:
"People with Type 2 diabetes who fast intermittently may no longer need medication, a small study suggests.
After an intermittent fasting diet intervention, most patients in the study achieved complete diabetes remission -- defined as having a stable HbA1c, or average blood sugar, level of less than 6.5% for at least three months -- after discontinuing all anti-diabetic medications.
This is according to findings published Wednesday in the Endocrine Society's Journal of Clinical Endocrinology & Metabolism.
"Type 2 diabetes is not necessarily a permanent, lifelong disease. Diabetes remission is possible if patients lose weight by changing their diet and exercise habits," Dongbo Liu, the study's corresponding author and a professor at Hunan Agricultural University in Changsha, China, said in a news release."
Study: Every little bit of physical activity counts in avoiding severe COVID-19 by Judy Packer-Tursman of UPI. Excerpts:
"People who were more physically active before being diagnosed with COVID-19 -- even those with chronic illness -- had a lower risk of severe outcomes, according to a large-scale study of Kaiser Permanente plan members.
The managed care system's research findings were published Thursday in the American Journal of Preventive Medicine.
"The results of this study document substantially higher odds of hospitalization, deterioration events and death with lower amounts of self-reported physical activity," the research paper says.
People "who were consistently inactive were 191% more likely to be hospitalized and 391% more likely to die than those who were consistently active," the researchers said.
Moreover, the higher odds of severe COVID-19 outcomes among physically inactive people were generally consistent across "all racial and ethnic categories, in most age categories, in all BMI [body mass index] categories, and for patients with and without diagnoses of cardiovascular disease or hypertension."
"The main message is that every little bit of physical activity counts. The more exercise the better, no matter a person's race, ethnicity, age, sex, or chronic conditions," Deborah Rohm Young, the study's lead author, said in a news release."
Related posts:
How lifestyle changes can reduce the risk of dementia (2019)
Good health begins with individual decisions (2018)
Nearly half of U.S. cancer deaths blamed on unhealthy behavior (2017)
Regular Exercise: Antidote for Deadly Diseases? (2016)The Battle Over Work and Welfare
States are fighting back against the Biden drive to use the pandemic to increase dependency.
"The Biden Administration is using the pandemic to expand the class of Americans who are permanent government dependents. Some GOP-led states are trying to exit this road to serfdom, and Georgia recently won its lawsuit against the Administration to impose Medicaid work requirements for low-income, able-bodied adults. This is a major fault line between the parties and deserves more attention.
***
Georgia’s saga began when the Trump Centers for Medicare and Medicaid Services approved its pilot program to expand Medicaid eligibility to individuals making up to 100% of the federal poverty line ($13,590 for singles) while conditioning benefits on working, going to school or volunteering 80 hours a month. The state’s current Medicaid income limit is 35% of the poverty line.
Enter Team Biden, which rescinded the Trump approval. Georgia sued, and a federal judge in August ruled the rescission was arbitrary and capricious because it could result in less Medicaid coverage. The Administration chose not to appeal last month, perhaps because it feared it would lose at the Eleventh Circuit Court of Appeals. If other states seek to emulate Georgia’s program, an appellate-court precedent could make it harder for the Administration to defend rejecting their plans.
Progressives are now trying to deter GOP states from imposing work requirements by flogging the compliance costs. “The systems being set up for work requirements are very costly to implement for states,” a left-leaning Center on Budget and Policy Priorities analyst told MedPage Today. Suddenly progressives care about costs to taxpayers?
For the past two years, the Administration has repeatedly extended the national public-health emergency for no ostensible purpose other than to expand the welfare rolls. President Biden in September declared the pandemic over, but the Health and Human Services Department says it plans to extend the emergency until at least mid-April.
The Families First Coronavirus Response Act of 2020 increased federal Medicaid funding to states on the condition that they don’t kick ineligible beneficiaries off their rolls as long as a public-health emergency is in effect. The law also increased food-stamp benefits and waived work requirements for able-bodied, working-age adults during the emergency.
Since February 2020, Medicaid enrollment has ballooned by 23 million to an all-time high of 97 million. By comparison, Medicaid grew by 14 million between 2013, just before the ObamaCare expansion took effect, and the start of the pandemic. About 21 million Medicaid recipients don’t currently meet eligibility requirements, according to the Foundation for Government Accountability.
As long as the emergency is in effect, Georgia can’t remove able-bodied adults on Medicaid who don’t comply with its work requirements—or if it does, it may have to give up hundreds of millions in federal funds. The emergency is a Faustian bargain for states, delivering some $130 billion in additional Medicaid funds to date while restricting their ability to manage their programs.
The same is true for food stamps whose rolls have swelled by nearly five million nationwide, or about 13%, during the pandemic owing chiefly to the emergency suspension of work requirements, even as unemployment has reached pre-pandemic levels. Anyone who wants a job can get one, but expanded transfer payments have reduced the incentive to look.
Monthly federal food-stamp spending has more than doubled during the emergency to $9.3 billion owing to the sweetened pandemic benefits and a Department of Agriculture regulatory change last year. Benefits are set to increase another 12.5% this fall with an inflation adjustment. Transfer payments fueled inflation, and now the reverse is happening.
States may forgo the enhanced food stamps by ending their own Covid emergencies or disaster declarations. About 20 mostly Republican-led states have done so, including Florida, Tennessee, Iowa and South Dakota. But the lure of “free” federal money has discouraged most, including Texas and Utah.
Most of the growth in food-stamp benefits and enrollment has been driven by these other states. Food-stamp spending modestly increased in Florida ($55 million) and Tennessee ($25 million) between January 2020 and this past September (the latest available data). But spending increased $753 million in California and $409 million in New York.
Several GOP-led states such as Ohio and Arkansas have sought to require able-bodied food-stamp recipients to register for work training. But the Administration has hindered them by insisting that they set aside funding for all able-bodied adults that could possibly be assigned to work training. Most can’t afford that.
***
After the bipartisan welfare reform of the 1990s, labor participation rose, notably among single mothers. Too many politicians of both parties today want to expand government dependency. A top priority for House Republicans in the next Congress should be to reverse the pandemic inflation of the welfare rolls."
Sunday, December 18, 2022
Ignore the Scare Stories: Supplies of Christmas Trees Meet Demand
Repeated accounts of shortages each year don’t stand up to scrutiny
In economics, shortage means that the price is lower than the price where supply and demand intersect so that the quantity demanded is greater than the quantity supplied. It is not always used that way in the media or everyday conversation.
Excerpts from the WSJ article:
"“Shortage to me means, ‘We don’t have enough, we’re going to come up short.’ We never have,” said Marsha Gray, the executive director of the Real Christmas Tree Board, the U.S. Agriculture Department’s research and promotion board for the industry."
"Last year, 87% of consumers found the tree they wanted at the first place they looked,"
"Christmas-tree data isn’t as detailed as for many crops. There are no official annual estimates of sales"
"Growers did cut back in the aftermath of the 2007-09 recession because of several years of weak sales and oversupply. By 2017 the number of Christmas-tree farms was down 3% from 2012 and their total acreage was 4% lower"
"But there is little evidence this translated into trees being unavailable."
"An annual survey from the National Christmas Tree Association, an industry group of growers, found the median price was $74.70 in 2016. In 2017, when stories about the shortage exploded, the price actually fell slightly to $74.30. The median price was $69.50 in 2021."
"Odds are that some of the smaller farms will indeed run out, but that says nothing about the national supply.
“When you talk about undersupply, are you talking about during Covid when you went to buy toilet paper and it was bare shelves? No, that’s not what we’ve ever seen or encountered,” said Jill Sidebottom, a spokeswoman for the NCTA. “Are you talking about some retail lots selling out early? Sure.”"
Related posts:
How Supply and Demand Explain Higher Wages for Teen Babysitters (2022)Is There A Booze Shortage? (2022)
Car makers face ‘chipageddon’ (2021)
Does the U.S. have a firefighter shortage (2021)
Cold Snap Sparks Record Rise in Natural Gas Prices in Asia (2021)
There is no truck driver shortage in the US (2021)
Is there a shortage of homes? (2020)
Why honey prices have climbed about 25% since 2013 (2019-This post is featured in Introduction to Microeconomics by LuÃs Cabral. He is chair of the economics department at New York University.)
Is there really a shortage of construction workers (2019)
Was there really a shortage of meatless burgers? (2019)
What Chocolate Shortage? Cocoa Prices Steady as Record Output Projected (2019)
Is There A Christmas Tree Shortage? (2017)
Is There Really A Honey Bee Shortage? (2013)
Will There Be A Pumpkin Shortage This Year? (2011)
Introduction to Microeconomics by LuÃs Cabral