In a classic, satirical anti-protectionism essay by French economist Bastiat, French candlemakers’ in 1845 petitioned against “the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry is all at once reduced to complete stagnation. This rival is none other than the sun.”
According to yesterday’s FT Times, The European Candle Institute is currently petitioning the European Union against “a surge in Chinese candle imports that is unfairly damaging our businesses.”
The complaint says that hundreds of jobs have been lost in the past few months, and that Chinese producers are selling below the costs of their EU rivals.
The French candlemakers in 1845, according to Bastiat, wanted to pass a law “requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, and blinds — in short, all openings and holes through which the light of the sun can enter houses, to the detriment of the candle industry.”
The European candlemakers today want to impose anti-dumping duties against China in retaliation against “unfair prices.”
HT: Tim Worstall
A: Simple. Because there was a 6X increase in the market capitalization of large companies during that period (see red line in graph above for market cap, vs. blue/green lines for CEO pay), according to this forthcoming QJE article by NYU business professors Xavier Gabaix and Augustin Landier.
HT: Kevin “Angus” Grier at KPC
ASSOCIATED PRESS–Wal-Mart Stores Inc. will open its first in-store medical clinics under its own brand name after leasing space in dozens of stores to outside companies that operate the quick-service health stops.
The world’s largest retailer said Thursday it will open “The Clinic at Wal-Mart” (pictured above) as a joint venture with local hospital systems in Atlanta, Dallas and Little Rock, Ark., starting in April.
Bentonville, Ark.-based Wal-Mart is among several U.S. supermarket and drug store chains that in the past couple of years have begun opening store-based health clinics, which are staffed mostly by nurse practitioners or physician assistants and offer quick service for routine conditions from colds and bladder infections to sunburn.
About 7% of Americans have tried a clinic at least once, and that number is expected to increase dramatically, as chains like Wal-Mart, CVS Corp., Target Corp. and Walgreen Co. partner with mini-clinic providers like RediClinic and MinuteClinic to expand operations. The trade group estimates there will be more than 1,500 by year-end, up from about 800 in November.
From Wal-Mart’s press release: Today’s announcement is the first step towards opening 400 co-branded convenient clinics by 2010 and further proof of Wal-Mart’s commitment to providing affordable, accessible solutions to America’s healthcare challenges. Wal-Mart expects “The Clinic at Wal-Mart” to become synonymous with quality healthcare at affordable prices, provided by trusted, local providers.
Partly due to increasing generic-drug competition (generics were 63% of all prescriptions in 2006 vs. 50% in 2005) and the ongoing, fierce price war among drug retailers (see previous CD posts about $4 prescription drugs at Wal-Mart, Kmart, Publix, and Kroger), the inflation rate for prescription drugs fell to a 34-year low of 1.4% in 2007 (see graph above, click to enlarge), way below the average annual inflation rate of 4.12% for 2007, and way below the 34-year average drug inflation rate of 6.28%.
“The decline in drug prices shows that when things go right in health care — when competitive markets are allowed to function — prices respond favorably for consumers, just as they do in other sectors of the economy. So while politicians and pundits in Washington dream up the next grandiose health care reform, smart consumers know that the most effective health care solutions may be right around the corner at their local retailer.”
Robert Goldberg, Vice-president of the Center for Medicine in the Public Interest
SWEDEN–Health Minister Göran Hägglund publicly criticized the lack of progress made toward shortening wait times in Sweden’s health system.
He made the comments in an opinion article in which he stated that the $39 million spent by the government on lowering wait times has apparently had little effect. The criticism comes in response to a report by the National Board of Health and Welfare showing that nearly 45% of patients have longer wait times than are supposedly guaranteed by the healthcare system.
Wait times for service were also found to vary greatly from one county to another. In Jämtland county, for example, four out of ten patients couldn’t even get through to their local clinic by telephone on the day they become ill.
Just wondering: How long would Domino’s Pizza, Northwest Airlines or Dell Computer stay in business if four out of ten customers couldn’t get through by phone when they wanted to order a pizza, an airline ticket or a computer?
Q: What would happen if Detroit Mayor Kwame Kilpatrick, who is accused of having an affair with his chief of staff and lying about it under oath, were the chief executive of a major corporation or nonprofit group instead of the mayor of Detroit?
A: His fate would be a foregone conclusion. He’d be fired. (I think we could say the same for Monica Lewinsky’s ex-boyfriend.)
Read more here of University of Michigan’s David Hess’ (Ross School professor of business ethics) editorial in the Detroit News
Bottom Line: Isn’t it interesting that the private sector now has higher ethical standards for its CEOs than the public sector has for its highest elected officials?
Countrywide Financial heads towards bankruptcy
Thomas Sowell, on the subprime credit crisis: The government has brought on the housing problem, partly by these very low interest rates, which encouraged many people to go way out on a limb. They’ve brought it on by highly restrictive building policies, which have caused housing prices to skyrocket artificially. And they’ve brought it on by the Community Reinvestment Act, which presumes that politicians are better able to tell investors where to put their money than the investors themselves are. When you put all that together, you get something like what you have. Stan Liebowitz, Professor of Economics, University of Texas at Dallas, writing in yesterday’s NY Post:Perhaps the greatest scandal of the mort gage crisis is that it is a direct result of an intentional loosening of underwriting standards – done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults. From the current hand-wringing, you’d think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards – at the behest of community groups and “progressive” political forces. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money. Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed “the most flexible underwriting criteria permitted.” That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.
Who was that virtuous lender? Why – Countrywide, the nation’s largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy (see chart above of Countrywide’s 90% stock decline).