I've written or tweeted about these topics repeatedly over the last few weeks. In part, this post is motivated by Biden's recent soundbites on Twitter, press conferences and speeches. A number of these were defensive and self-serving. I'm nor motivated by partisan interests, say by Republican cherry-picking pandemic era gas prices under Trump or Democrats comparing job statistics during economic shutdowns. I am well aware that a POTUS has limited ability to influence the private market. The COVID-19 pandemic has in multiple ways affected global supply chains. Yet Biden has exacerbated aspects, e.g., leading an international boycott of Russian energy exports, up to 10% of global supplies, given an already tight global market. It's somewhat disingenuous for Biden to blame "Putin's price hike" when Russia didn't cut exports on its own. Biden's ban on imports in response to the Ukraine invasion is clearly his responsibility. I haven't seen good metrics on how our limited imports from Russia have affected our energy prices, but the boycott obviously affects global prices, which do influence domestic prices. To be sure, some importing countries like China are not participating in the boycott, which eases competition for other global supplies. But let's be clear: it's much more "Biden's price hike" to the extent it was Biden, not Putin, who intervened economically.
As I write, the Abbott Lab Sturgis infant formula plant is scheduled to reopen this week. Of course, it's going to take weeks to restock store shelves. There are 3 other major players (roughly 50% share of the 4) in the domestic market are:Nestle, Danone and Kraft Heinz. (If you recognize the former, it may be because Biden has promoted his military plane airlifts of formula from one of their European plants.) I've already written about some of the reasons the shortage has occurred: protectionist policies (tariffs, FDA formula approval, FDA labeling requirements, etc.), other barriers to entry (marketing restrictions, FDA facility approvals, etc.) There are other relevant policies, in particular, the government-subsidized WIC program accounts for nearly half of sales, and it restricts eligible product purchases.
Now Biden seems unduly defensive about his delayed response to the crisis. Shortages occur for all sorts of reasons. It's sheer hubris for any one person or group of general government elites to resolve what Hayek famously called the knowledge problem. Supposedly government inspectors are going to review the FDA's response to the Abbott product recalls in February. But Biden is being disingenuous in saying no one could have have known of possible shortages from the plant shutdown. In fact, industry participants knew and said they warned the FDA about it. How Biden's bureaucracy communicates relevant warnings is a matter of managerial competence.
Biden has learned nothing from this experience; oh, he pays lip service to wanting new American infant formula companies; this is little more than "buy American" protectionism, similar to Trump's own protectionism. One of Biden's first executive orders was on this theme. One of the components in Biden's infrastructure bill signed into law is the BABA Act (Build America, Buy America). As a libertarian who fully subscribes to the free market and free trade constructs, I have consistently opposed politically corrupt protectionism: concentrated benefits, diffuse costs.
There are ways to liberalize the industry, including dropping or sharply reducing 17.5% tariffs which make foreign products noncompetitive or the USMCA penalty on Canadian import duties which have resulted in zero imports. Our trading partners also regulate their products; baby nutritional requirements are constant across nationality. We should have mutual recognition of regulatory standards. Get rid of nitpicking labeling requirements that have actually led to seizure of usable infant formula imports. Streamline regulatory requirements, including marketing restrictions, that discourage smaller vendors which do not have the scale and sales to absorb the costs. Minimize downtime on inspections and remediations/approvals.
On gun control: I didn't listen to Biden's post-Uvalde televised address. I don't go out of my way one way or another to listen to POTUS; I stopped watching SOTU some years back, but I'll often catch part of various press conferences and impromptu Q&A. But the Dem playbook on gun control has been predictable as clockwork for decades: every mass casualty incident obsessively covered by the mainstream media results in a knee-jerk reaction for federal policy at the expense of individual rights. As I recently wrote on the Uvalde tragedy, I am not a fundamentalist on the second amendment. There are a couple of issues I have with federal legislation on this issue. First, I don't see a constitutional basis for legitimate federal action. The police power rests with the states.
Second, I have problems with the target of so-called "assault weapons" and the prior Clinton era ban (the decade starting in 1994. Sullum does a nice summary here, and I encourage the interested reader to review it. He explains the "assault rifle" fraud: the issue is semi-automatic (one bullet per trigger release) vs. automatic (like machine gun) military-style weapons. So-called assault weapons shoot no faster than other semi-automatic weapons (like a Glock). Most mass shootings involve handguns, which are also a popular weapon for self-defense. The Feinstein-sponsored Clinton ban, which grandfathered certain semi-automatic weapons, focused on about 18 brands or their equivalents, which only accounted for about 2% of gun homicides. While gun homicides dropped (see image below) before, during, and after the Clinton ban, very little could be attributed to the ban or after its end by 2004. Mass shootings were comparable to the rates before the ban. To second amendment absolutists, the ban constituted a toehold which would eventually be expanded to other weapons like handguns. Even in mass shootings, which account for less than 1% of gun deaths, "assault weapons" account for about 20%. So the issue, over and beyond constitutional ones, involves unrealistic expectations. The figures I've seen are over 2 million semiautomatic weapons in circulation; they can be stolen or transferred in the unregulated market. Vendors can develop ban-compliant weapons. Purchasers may acquire weapons under false identity.
So the above figure (from the Carpe Diem blog I've cited in the blog, via Brad Polumbo on Twitter) shows that even as gun ownership expanded during and after the ban, the gun homicide rate was actually lower a decade after the ban's expiration.
One of the key issues here that I've written and tweeted about is massive media coverage, which oddly can stimulate follow-up attacks elsewhere. But let's be clear: as a libertarian, I believe in the non-aggression principle. Gun violence is an abomination. But personally, I have the right of self-defense, and I don't care for political whores deciding my options
Finally, Biden is trying to take full credit for the recovery since pandemic-based economic crash in the spring of 2020 while trying to stave off criticism for inflation, trying to blame it on the Russia/Ukraine conflict. The fact is Dem economist Larry Summers was warning about inflation over a year ago based on fiscal policy and the Fed's loose monetary policy. Obviously flooding a supply-constrained economy with dollars during the pandemic bid up prices. Some of the same things in the infant formula kerfuffle apply more generally; lower tariffs improve competition, often resulting in lower prices; "buy American" policies also exacerbate inflationary pressures by limiting suppliers. There are a lot of things Biden could do to mitigate inflation by promoting free trade, e.g., reducing tariffs, repealing (with Congress) the Jones Act, deregulation (also with Congress), etc. Part of the problem is Biden's base, like environmentalists, want to increase regulations, e.g., to expand energy exploration on federal lands.
