Miran to the Fed. Banning drug ads

Miran to the Fed. Banning drug ads

As expected the Senate confirmed Stephen Miran to the Fed’s Board of Governors. The vote was 48-47. Trump tweeted. Triumphally that now the Fed “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND. HOUSING WILL SOAR!!!” Only Lisa Murkowski among the republicans voted against Miran. This was somewhat of a surprise to me because I thought that Rand Paul would also be a “no.” However, Paul did not vote, as did Bernie Sanders and three republican senators, Lee, Lummis and Daines.

Pardon me if I remind the president that housing has fallen due to lack of demand even though the Fed funds rate was unchanged. Again, mortgage rates are more closely aligned to the 10 year Treasury than to the overnight Fed funds rate.

A couple of senate democrats said that Miran would be Trump’s “puppet” at the Fed. Of course he will be and I doubt if anyone thinks differently. Miran wants to return to his job at the Council of Economic Advisors and will do the president’s bidding. I really don’t care one way or the other since Miran is a short timer with this term expiring in January. Trump will still have a minority voice at the Fed with only two other possible allies at this meeting of the Open Market Committee.

No matter what the Fed does on rates, the president will tweet out more caps and exclamation points lambasting them. I know that historically some pundits have wanted the president – regardless of party – to have total control of monetary policy. But the consequence would be an economy characterized by high rates of inflation. I know it is easy and fashionable to be hypercritical of the Fed but it is really really hard to conduct monetary policy in an environment of fiscal irresponsibility. And by the way, if fiscal policy is irresponsible, what do you think monetary policy would be in the absence of the Fed?

No ads for Big Pharma?

In an earlier post I mentioned that RFK jr opposed Big Pharma’s ads to the general public. Only the US and New Zealand allow such advertising. Even though the drugs are only available by prescription, Big Pharma spends billions advertising very expensive drugs with the hopes that patients will urge doctors to prescribe those drugs. There is mixed evidence on whether this leads to greater drug demand. But the president has recently issued a memorandum that does not ban the ads but requires more disclosure. Politicians on both sides of the aisle support some curtailment of the ads. Kennedy claims that the advertising leads to overmedicalization of American children. This is curious since I have not seen any ads targeting children. The mostly appear to be ads on cancer drugs, diabetes and weight loss. Senators Durbin (D-Illinois) and Braun (R-Ind) have expressed the same sentiment. Braun (R-Ind.) wrote “Unfortunately, it appears there are gaping holes in FDA’s oversight of DTC (direct to consumer) promotions that are being exploited on social media at the expense of children and patients.” Maybe I have been looking at just old folks TV. Is there drug advertising on Disney and Nickelodeon? 

Why shouldn’t the drug companies advertise? Are consumers better off or worse off if they have information about the drugs? Suppose there were no advertising. How informed would consumers be about the options available to them for their particular ailment? I guess they could google the information if they were so motivated. No one is contending that the drug companies are advertising fraudulently. That is already illegal. If there were no advertising many patients would be wholly dependent upon their physician for recommendations about drugs. While that recommendation is likely the one taken by the patient, there is little harm in the patient asking about options seen from the ads.

Maybe the opponents are against the volume of ads with the drug companies spending $10 billion a year. But what concerns me is that in the absence of drug advertising, what will be the source of information about the drugs? Will it be the government? Another concern is that if safety is purported to be the reason for curtailing the ads, then what about any other product – automobiles anyone?