Democratic Socialists to the Rescue

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K Graham
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Democratic Socialists to the Rescue

Post by K Graham »

First Shipment Of Baby Formula En Route To Indiana From Europe

Republicans are pissed off that Biden is actually going to succeed in saving the lives of babies they would force women to produce.
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Res Ipsa
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Re: Democratic Socialists to the Rescue

Post by Res Ipsa »

:roll: I sincerely doubt that Republicans are unhappy because babies aren't going to die.

The current situation with infant formula illustrates some of the downsides of pursuing a "self-sufficient America" economic strategy as well as some of the consequences of the way we go about making sure that infants have access to reliable and sufficient nutrition.

The U.S. makes almost all domestically consumed formula. Foreign competitors are kept out by a combination of regulatory barriers and tariffs. The year to year demand for formula in the U.S. is pretty predictable based on population trends, so manufacturers know from year to year about how much to make. There is no need to make much excess formula to meet swings in the demand because the demand isn't relatively swingy.

Use of formula is heavily weighted toward low income folks. The U.S. subsidizes the price of formula through the WIC program, and about half of the formula purchased in the U.S. is purchased by low income folks who qualify for WIC. The federal government pays money to the states. To avoid cronyism, the states are required to use a competitive bidding process to select the FDA approved manufacture who offers the biggest discount. That discount is passed on to those who use WIC.

An unintended affect of this delivery system is that manufacturers sell mostly to the states where they hold the WIC contract and not to try to compete in other states.

I think infant formula is exactly the type of thing it is reasonable to regulate. For infants' health and development it is important to make sure that the ingredients include necessary nutrients and not harmful substances or contaminants. And it's reasonable to require inspections to make sure that what is supposed to be in the can, and only what is supposed to be in the can, is actually in the can.

But the regulatory burdens placed on foreign manufacturers, together with the tariffs, result in the having fewer manufacturers being able to compete for those WIC contracts. In fact, there are only four US manufacturers who do. And Abbott is the largest in terms of market share and the number of states in which it holds WIC contracts. And it has developed speciality lines of formula for infants who need them.

As a profit-making enterprise, efficiency is important in terms of reducing costs, so Abbot makes its all its formula in a single plant in Michigan. And there lies the vulnerability -- contamination at that plant can result in loss of a substantial portion of the formula produced for US consumption, and often the vast majority of formula in a specific state if Abbott holds the contract in that state.

Given politics today, every real or imaginary problem is turned into a political weapon. There are things the administration can do to alter the regulatory framework to temporarily allow importing from foreign manufacturers in countries that also have mechanisms in place to make sure the formula is safe and provides the required nutrition. It can also give formula manufactures temporary priority in purchasing the ingredients needed to make more formula. However, it can do so only within the legal framework created by Congress in the relevant laws. And one thing the administration can't do is permit the states to temporarily waive the selected manufacture under WIC. So, Congress has to do that, and the house has already done so. In a separate bill, additional funding is being sought to enable the FDA to take certain steps to address the situation. Responding to a crisis generally means throwing additional bodies at the problem and that takes $$.

All of these steps are what I expect out of a government doing a competent job. I don't expect problems or even crises to never occur. Nobody is that good, and, unless the infant formula industry is socialized and run by the government, it has no ability to avoid all the bad things that could happen. But, at the same time, I expect a reasonably competent government to sit down, take a look at the factors that created problem, and see what, if anything, can the government do to reduce this risk in the future. Perhaps the government shouldn't make it so difficult for foreign manufacturers to compete in the U.S. market. Perhaps the way the government subsidizes the cost of formula for the WIC plan should be changed to promote more domestic companies to enter the formula market. Perhaps government should use the anti-trust laws to break up the current oligopoly on formula manufacturing to increase the number of domestic manufacturers. Unfortunately, the current politicization of everything and the fact that so many anti-government individuals have been elected to federal office will prevent that from happening. Because, apparently, getting re-elected and proving that government doesn't work is more important than feeding babies.
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Gunnar
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Re: Democratic Socialists to the Rescue

Post by Gunnar »

Res Ipsa wrote:
Sun May 22, 2022 10:19 pm
:roll: I sincerely doubt that Republicans are unhappy because babies aren't going to die.
It may well be untrue that Republicans are unhappy because babies aren't going to die because of success in easing or solving the baby formula crisis, but you can bet your bottom dollar that they will be deeply unhappy, if not horrified, if the Biden Administration gets any credit for curtailing the crisis -- especially if that credit is well deserved! They will try their level best to spin both the crisis itself and the Biden Administration's role in solving it in such a way as to make them look like incompetent villains, no matter how little they were initially to blame for it or how laudable their success in solving it.
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K Graham
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Re: Democratic Socialists to the Rescue

Post by K Graham »

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"I am not an American ... In my view premarital sex should be illegal" - Ajax18
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