Government – artdiamondblog.com

We Need Market-Tested Innovation to Cure the Sadly Chaotic, Inefficient, Dishonest, and Unfair Organ Transplant System

The government contracts with, and ‘supervises,’ a network of nonprofits in a sadly chaotic, inefficient, dishonest, and unfair system to allocate scarce transplant organs. The government has set up perverse incentives, with unintended consequences, by telling the nonprofits that they will be evaluated on the basis of not wasting organs; those evaluated badly will not have their contracts renewed. So they have an incentive to get the organs out the door quickly, even if they do not go to patients higher on the waiting list. Hospitals know they will be evaluated on the basis of how many transplanted patients survive at least a year. So they have an incentive to reject below average organs, and, when they get above average organs, to ignore the waiting list, in order to transplant them into the most healthy patients.

The result is that the sickest and those who have waited the longest are frequently skipped over, instead of receiving the organ when it is their turn.

Why don’t we try something bold–allow for-profit entrepreneurs to engage in medical institutional innovation? For instance, if we allow it, one medical entrepreneurs might purchase from willing donors the right to allocate their organs if and when they become available. Another medical entrepreneur might set up an institution appealing to donors who do not want to be paid, but do want a guarantee that their organs will go to the poor at no charge.

In retailing Walmart and Amazon have different models, but both made major logistical innovations. We need a Walmart and an Amazon of organ transplantation. We need market-tested innovation (as Deirdre McCloskey might say).

Allowing some donors to be paid will reduce the scarcity of organs, which is the most basic constraint on this issue. Innovative medical entrepreneurs may find other ways to loosen this most basic constraint, such as mechanical organs, regrowing human organs from stem cells, and growing transplantable organs in pigs.

(p. A1) For decades, fairness has been the guiding principle of the American organ transplant system. Its bedrock, a national registry, operates under strict federal rules meant to ensure that donated organs are offered to the patients who need them most, in careful order of priority.

But today, officials regularly ignore the rankings, leapfrogging over hundreds or even thousands of people when they give out kidneys, livers, lungs and hearts. These organs often go to recipients who are not as sick, have not been waiting nearly as long and, in some cases, are not on the list at all, a New York Times investigation found.

Last year, officials skipped patients on the (p. A10) waiting lists for nearly 20 percent of transplants from deceased donors, six times as often as a few years earlier. It is a profound shift in the transplant system, whose promise of equality has become increasingly warped by expediency and favoritism.

Under government pressure to place more organs, the nonprofit organizations that manage donations are routinely prioritizing ease over fairness. They use shortcuts to steer organs to selected hospitals, which jockey to get better access than their competitors.

. . .

The Times analyzed more than 500,000 transplants performed since 2004 and found that procurement organizations regularly ignore waiting lists even when distributing higher-quality organs. Last year, 37 percent of the kidneys allocated outside the normal process were scored as above-average. Other organs are not scored in the same way, but donor age is often used as a proxy for quality, and data shows there is little difference in the age of organs allocated normally compared with those that are not.

And while many people in the transplant community believe ignoring lists is reducing organ wastage, there is no evidence that is true, according to an unreleased report by a group of doctors and researchers asked by the transplant system last year to study the practice.

. . .

In 2020, procurement organizations felt under attack. Congress was criticizing them for letting too many organs go to waste. Regulators moved to give each organization a grade and, starting in 2026, fire the lowest performers.

They scrambled to respond. They assigned more staff to hospitals to identify donors, grew more aggressive with families and recovered more organs from older or sicker donors.

Those steps increased donations and transplants, dozens of employees said. Both hit record highs last year, when there were 41,115 transplants.

At the same time, the organizations increasingly used a shortcut known as an open offer. Open offers are remarkably efficient — officials choose a hospital and allow it to put the organ into any patient.

. . .

Some procurement organizations sidestep the list because they believe it helps them place more organs. But it can also help their bottom lines.

In 2021, the South Carolina procurement organization phased out its allocation team and handed the task to workers who were already managing donors, testing organs and helping with surgeries. As a workaround, three former employees said, executives created a spreadsheet with preferred doctors’ phone numbers.

If the employees were too busy to do allocation, they said, they were told to give open offers to those doctors.

“They’d tell me to get rid of the organs quickly, so I could be done,” said Aron Knorr, one of the former workers, who said the directive made him uncomfortable.

. . .

Dr. Alghidak Salama, who led South Florida’s organization until August [2024], said open offers were financially beneficial: When organizations distribute organs, they are paid a set fee by receiving hospitals, regardless of what costs they incur. Speeding up allocation (p. A11) saves money on staffing.

. . .

When hospitals get open offers, they often give organs to patients who are healthier than others needing transplants, The Times found. For example, 80 percent of all donated hearts in recent years went to patients sick enough to be hospitalized, records show. But when lists were skipped, it was less than 40 percent.

Healthier patients are likelier to help transplant centers perform well on one of their most important benchmarks: the percentage of patients who survive a year after surgery. The government monitors that rate, as do insurers, which can decline to pay low-performing hospitals.

. . .

Federal regulators have known since 2022 that more people were being skipped, according to meeting notes obtained by The Times. But until last week, they had done little to address it.

The U.S. Centers for Medicare & Medicaid Services monitors hospitals and procurement organizations. The Health Resources and Services Administration tracks the system overall. But for years, they deferred to UNOS.

Records show that when the system’s oversight committee reviews instances of bypassed patients, it closes more than 99.5 percent of cases without action, usually concluding that the organ was at risk of going to waste. In the last five years, the committee has never gone further than sending “notices of noncompliance,” the mildest action it can take.

“The oversight is almost nonexistent, and that’s been true basically forever,” said Dr. Seth Karp, a Vanderbilt University surgeon who served on the committee, which he noted is largely made up of transplant doctors and procurement officials policing themselves.

For the full story see:

Brian M. Rosenthal, Mark Hansen and Jeremy White. “Organ Transplant System ‘in Chaos’ As Waiting Lists Are Ignored.” The New York Times (Monday, March 10, 2025): A1 & A10-A11.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Feb. 26, 2025, and has the same title as the print version.)

Fraudulently Doctored Images and “Suspect Data” in Many Leading Cancer Research Papers

Charles Piller in his Doctored paints a damning picture of doctored images and suspect data rampant in the leading scientific literature on Alzheimer’s disease. Not only were leading scientists guilty of fraud, but the key institutions of scientific research (journals, universities, and government grant-making agencies) failing their oversight duty, and when outsiders stepped in to provide oversight, delayed and minimized their responses. Practicing and turning a blind eye to fraud matters, since Alzheimer’s patients are depending on this research. And researchers who do not commit fraud suffer because they appear to have worse research records than those compiled by the fraudsters. So the honest get worse academic appointments and fewer grants.

After reading Doctored I was depressed, but I at least hoped that this pathology was limited to this one (albeit an important one) area of medical research. But in the article quoted below, evidence is presented that there is substantial similar doctored images and suspect data in the field of cancer research.

A side issue in the quoted article is worth highlighting. In the absence of credible oversight from the institutions tasked with oversight, oversight is being done by competent volunteers, with the aid of A.I. These volunteers do not receive compensation for their work, and in fact are probably pay a price for it, since they alienate powerful scientists and scientific institutions. But if science is a search for truth, and truth matters for cures, they are doing a service to us all, and especially to those who suffer from major diseases such as Alsheimer’s and cancer.

On the connection with the Doctored book, it is worth noting that the article quotes Dr. Matthew Schrag, who is the most important source in Doctored. The article also quoted Elisabeth Bik, who does not have an MD like Schrag but has a PhD in microbiology, and who is another important source in Doctored.

(p. A1) The stomach cancer study was shot through with suspicious data. Identical constellations of cells were said to depict separate experiments on wholly different biological lineages. Photos of tumor-stricken mice, used to show that a drug reduced cancer growth, had been featured in two previous papers describing other treatments.

Problems with the study were severe enough that its publisher, after finding that the paper violated ethics guidelines, formally withdrew it within a few months of its publication in 2021. The study was then wiped from the internet, leaving behind a barren web page that said nothing about the reasons for its removal.

As it turned out, the flawed study was part of a pattern. Since 2008, two of its authors — Dr. Sam S. Yoon, chief of a cancer surgery division at Columbia University’s medical center, and a more junior cancer biologist — have collaborated with a rotating cast of researchers on a combined 26 articles that a British scientific sleuth has publicly flagged for containing suspect data. A medical journal retracted one of them this month after inquiries from The New York Times.

Memorial Sloan Kettering Cancer Center, where Dr. Yoon worked when much of the research was done, is now investigating the studies. Columbia’s medical center declined to comment on specific allegations, saying only that it reviews “any concerns about scientific integrity brought to our attention.”

Dr. Yoon, who has said his research could lead to better cancer treatments, did not answer repeated questions. Attempts to speak to the other researcher, Changhwan Yoon, an associate research scientist at Columbia, were also unsuccessful.

The allegations were aired in recent months in online comments on a science forum and in a blog post by Sholto David, an independent molecular biologist. He has ferreted out problems in a raft of high-profile cancer research, including dozens of papers at a Harvard cancer center that were subsequently referred for retractions or corrections.

From his flat in Wales, Dr. David pores over published images of cells, tumors and mice in his spare (p. A17) time and then reports slip-ups, trying to close the gap between people’s regard for academic research and the sometimes shoddier realities of the profession.

. . .

Armed with A.I.-powered detection tools, scientists and bloggers have recently exposed a growing body of such questionable research, like the faulty papers at Harvard’s Dana-Farber Cancer Institute and studies by Stanford’s president that led to his resignation last year.

But those high-profile cases were merely the tip of the iceberg, experts said. A deeper pool of unreliable research has gone unaddressed for years, shielded in part by powerful scientific publishers driven to put out huge volumes of studies while avoiding the reputational damage of retracting them publicly.

The quiet removal of the 2021 stomach cancer study from Dr. Yoon’s lab, a copy of which was reviewed by The Times, illustrates how that system of scientific publishing has helped enable faulty research, experts said. In some cases, critical medical fields have remained seeded with erroneous studies.

“The journals do the bare minimum,” said Elisabeth Bik, a microbiologist and image expert who described Dr. Yoon’s papers as showing a worrisome pattern of copied or doctored data. “There’s no oversight.”

. . .

Dr. Yoon, a stomach cancer specialist and a proponent of robotic surgery, kept climbing the academic ranks, bringing his junior researcher along with him. In September 2021, around the time the study was published, he joined Columbia, which celebrated his prolific research output in a news release. His work was financed in part by half a million dollars in federal research money that year, adding to a career haul of nearly $5 million in federal funds.

. . .

The researchers’ suspicious publications stretch back 16 years. Over time, relatively minor image copies in papers by Dr. Yoon gave way to more serious discrepancies in studies he collaborated on with Changhwan Yoon, Dr. David said. The pair, who are not related, began publishing articles together around 2013.

But neither their employers nor their publishers seemed to start investigating their work until this past fall, when Dr. David published his initial findings on For Better Science, a blog, and notified Memorial Sloan Kettering, Columbia and the journals. Memorial Sloan Kettering said it began its investigation then.

. . .

A proliferation of medical journals, they said, has helped fuel demand for ever more research articles. But those same journals, many of them operated by multibillion-dollar publishing companies, often respond slowly or do nothing at all once one of those articles is shown to contain copied data. Journals retract papers at a fraction of the rate at which they publish ones with problems.

. . .

“There are examples in this set that raise pretty serious red flags for the possibility of misconduct,” said Dr. Matthew Schrag, a Vanderbilt University neurologist who commented as part of his outside work on research integrity.

. . .

Experts said the handling of the article was symptomatic of a tendency on the part of scientific publishers to obscure reports of lapses.

“This is typical, sweeping-things-under-the-rug kind of nonsense,” said Dr. Ivan Oransky, co-founder of Retraction Watch, which keeps a database of 47,000-plus retracted papers. “This is not good for the scientific record, to put it mildly.”

For the full story, see:

Benjamin Mueller. “Cancer Doctor Is in Spotlight Over Bad Data.” The New York Times. (Fri., February 16, 2024): A1 & A17.

(Note: ellipses added.)

(Note: the online version has the date Feb. 15, 2024 [sic], and has the title “A Columbia Surgeon’s Study Was Pulled. He Kept Publishing Flawed Data.”)

Piller’s book mentioned in my initial comments is:

Piller, Charles. Doctored: Fraud, Arrogance, and Tragedy in the Quest to Cure Alzheimer’s. New York: Atria/One Signal Publishers, 2025.

F.D.A. Does Not Always Decide Based on the Current Consensus of Scientists

The episode mentioned below illustrates that the F.D.A. in practice is not the purely scientific, objective body that it is sometimes portrayed to be in theory.

(p. 29) Susan F. Wood, a women’s health expert who resigned in protest from the Food and Drug Administration in 2005, accusing the agency of knuckling under to politics by not approving over-the-counter sales of the morning-after pill known as Plan B, died on Jan. 17 [2025] at her home in London. She was 66.

. . .

An F.D.A. advisory panel voted 28-0 in 2003 that the pill was safe for nonprescription use. But senior agency officials disregarded precedent and refused to approve over-the-counter sales.

For the full obituary, see:

Trip Gabriel. “Susan F. Wood, Who Quit F.D.A. Over Delay of Plan B, Dies at 66.” The New York Times, First Section (Sunday, February 9, 2025): 29.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the obituary was updated Feb. 8, 2025, and has the title “Susan F. Wood, Who Quit F.D.A. Over Contraception Pill Delay, Dies at 66.”)

If Corn Syrup Hurts Health Then Government Should Stop Subsidizing Corn Farming and Stop Quotas on Sugar Imports

Every semester for many years I would conclude my micro principles class discussing the ill effects of the U.S. government imposing quotas on the importation of sugar. I would point out that the quotas increase the price of sugar for American consumers. Since corn syrup is a substitute for sugar, the increase in the price of sugar will increase the demand for corn syrup.

To support the ill effects of corn syrup, I used to cite a commentary by Michael Waldholz:

In a speech to the International Congress on Obesity last summer, George Bray, a recognized expert on weight gain, said high fructose corn syrup is a “ticking bomb” in our diet because it is more readily converted into fat than other sugars. Unlike other sugars, fructose doesn’t trigger the release of insulin, which controls sugar consumption by telling the brain to send out a feeling of fullness. (Waldholz 2003, p. D3)

It would be interesting to check the current state of the evidence on whether Bray’s claim is true. But if so, then it provides support for Robert F. Kennedy, Jr.’s current initiative against corn syrup, which was discussed in a full-page article in the NYT in December 2024.

Paradoxically, the U.S. government increases the consumption of corn syrup in multiple ways. In my principles classes I pointed out the indirect effect of sugar quotas. The NYT article also points out the subsidies for corn production.

Kennedy wants to ban the use of corn syrup products in federally subsidized school lunches and ban their purchase using federal food stamps. He should also lobby his boss to end federal subsidies for corn production and end the federal quota program on sugar.

The WSJ commentary on corn syrup is:

Waldholz, Michael “Let’s Subtract ‘Added Sugar’ from Our Diets.” The Wall Street Journal (Thurs., Feb. 20, 2003): D3.

(Note: the online version of the Waldholz commentary has the same date as the print version and has the title “Let’s Ditch ‘Added Sugar’ From Our Regular Diets.”)

The NYT article on corn syrup is:

Jonathan Weisman. “Kennedy’s Crusade Comes to Trump Country.” The New York Times (Weds., December 11, 2024): A11.

(Note: the online version of the NYT article has the date Dec. 10, 2024, and has the title “Kennedy’s War on Corn Syrup Brings a Health Crusade to Trump Country.”)

Feds Waste at Least $4.3 Billion in Duplicate Payments to States Where Medicaid Recipients No Longer Reside

Do taxpayers know how much government fraud and inefficiency they are paying for? Hopefully DOGE can clean up these duplicate (and sometimes triplicate and more) payments. If the Wall Street Journal is capable of finding multiple payments, then surely the government itself can find and stop them.

(p. A1) Health insurers got double-paid by the Medicaid system for the coverage of hundreds of thousands of patients across the country, costing taxpayers billions of dollars in extra payments.

The insurers, which are paid by state and federal governments to cover low-income Medicaid recipients, collected at least $4.3 billion over three years for patients who were enrolled—and paid for—in other states, a Wall Street Journal analysis of Medicaid data found.

The patients were signed up for Medicaid in two states at once, in many cases following a move from one to the other. Most were getting all their healthcare services through one insurer in one state, even though Medicaid was paying insurers in both states to cover them.

Private insurers oversee Medicaid benefits for more than 70% of the about 72 million low-income and disabled people in the program. The companies get paid each month for each person they cover. They aren’t supposed to get paid if a patient leaves for another state.

. . .

(p. A9) The Journal’s analysis turned up some cases in which individuals were signed up in five or more states.

. . .

The Journal’s analysis used detailed Medicaid data, obtained under a research agreement with the federal government, to identify duplicate payments to managed-care companies. The analysis examined where double-enrollees got their medical care each month, using that as an indication of their state of residence.

. . .

“There is very little incentive for the managed-care organization to check eligibility,” said industry consultant Kevin Bagley, the former director of Nebraska’s Medicaid program. Bagley and other Medicaid experts said it is difficult for states to claw back payments from managed-care companies for covering relocated enrollees, largely because it can be unclear exactly when they left.

Sometimes a single insurance company covered the same person in more than one state. During the period covered by the Journal’s analysis, Centene insured about 25,000 people a year, on average, in two different states at the same time. For those people, the company was paid at least $151 million extra. Elevance received $48 million extra for covering the same person twice, and UnitedHealth got $53 million.

One Centene supervisor urged some of the company’s case managers in February to keep Medicaid recipients enrolled after they moved. “Please DO NOT close cases when you learn a member has moved out of state,” the supervisor said in a Microsoft Teams message. “If the member shows eligible and are out of state, they can still can [sic] utilize some of the benefits.”

Centene’s spokesman said the company is required to maintain coverage for members until the state decides whether to disenroll a beneficiary.

The inspector general for the federal Department of Health and Human Services examined the issue of double payments several years ago in a study looking only at people enrolled in multiple state-paid managed care plans in August in 2019 and 2020.

The results led the team of investigators to conclude that taxpayers were wasting about $1 billion a year, said John Hagg, assistant inspector general for audit services at the oversight agency.

“It should be low hanging fruit,” said Hagg. “The data is there showing it is a problem. This is ripe for correction.”

For the full story see:

Christopher Weaver, Anna Wilde Mathews, and Tom McGinty. “Medicaid Spent Billions Covering Same Patients Twice.” The Wall Street Journal (Fri., March 28, 2025): A1 & A9.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the WSJ article has the date March 26, 2025, and has the title “Taxpayers Spent Billions Covering the Same Medicaid Patients Twice.” The passages quoted above omit the subheadings that appear in the print, but not the online, version of the article.)

Rampant Fraud in ‘Skin’ Bandages Paid by Medicare

A “quirk” in the Medicare law allows ‘skin’ bandage firms to charge, and have Medicare pay them, exorbitant prices. Are such quirks accidents or intentional? Medicare rules are so voluminous and obscure that few have an incentive to look carefully at the details. But the firms selling ‘skin’ bandages had an incentive. Entrepreneurs within these firms saw an opportunity and seized it. But they are what William Baumol called “destructive entrepreneurs.” Their energy and talent works against the general good.

Since patients are not paying, they have little incentive to reveal the fraud. So the taxpayers are robbed. In a system where the patients are the payers they would have an incentive to reveal fraud, and to seek alternatives to over-priced medical therapies.

But what of the poor, you ask? Susan Feigenbaum proposed an insurance system where patients would receive lump sum payments for different ailments. Then poor patients could be payers, and have the incentives of payer.

(p. 1) Seniors across the country are wearing very expensive bandages.

Made of dried bits of placenta, the paper-thin patches cover stubborn wounds and can cost thousands of dollars per square inch.

Some research has found that such “skin substitutes” help certain wounds heal. But in the past few years, dozens of unstudied and costly products have flooded the market.

Bandage companies set ever-rising prices for new brands of the products, taking advantage of a loophole in Medicare rules, The New York Times found. Some doctors then buy the coverings at large discounts but charge Medicare the full sticker price, pocketing the difference.

Partly because of these financial incentives, many patients receive the bandages who do not need them. The result, experts said, is one of the largest examples of Medicare waste in history.

Private insurers rarely pay for skin substitutes, arguing that they are unproven and unnecessary. But Medicare, the government insurance program for seniors, routinely covers them. Spending on skin substitutes exceeded $10 billion in 2024, more than double the figure in 2023, according to an analysis of Medicare data done for The Times by Early Read, a firm that evaluates costs for large health companies.

Medicare now spends more on the bandages than on ambulance rides, anesthesia or CT scans, the analysis found.

. . .

(p. 19) . . . experts in health care costs said the spike had been driven . . . by sellers and doctors taking advantage of Medicare’s pricing rules. The government will reimburse any price that a company sets for brand-new skin substitutes, even if it is far above the market average. The higher the price, the larger the doctors’ cut.

And the bigger the bandage, the more they can charge. For one patient in Nevada, Medicare spent $14 million on skin substitutes over the course of a year, according to billing records reviewed by The Times. The wound of a patient in Washington State persisted after Medicare paid $6 million for the coverings. A man in Texas got $1.3 million of bandages despite having no wound at all. Health executives trying to ferret out suspicious spending identified these patients and shared their stories with The Times.

As the Trump administration — and particularly the new Department of Government Efficiency run by Elon Musk — aims to shrink the federal purse, profligate Medicare spending is a ripe target, experts said.

Companies have billed Medicare for hundreds of thousands of urinary catheters that doctors never ordered. Other schemes have peddled urine tests and knee braces. In 2023, a federal watchdog agency flagged skin substitute spending as wasteful for both taxpayers and Medicare enrollees, who ultimately pay the costs with higher premiums.

“It’s the patients, it’s the taxpayers — unfortunately everyone is footing a part of the bill for this outsized spend,” said Dana Rye, an executive with Duly Health and Care, a Chicago-based medical group where payments for skin substitutes have risen 1,400 percent since 2022.

. . .

Five years ago, the most expensive skin substitute cost $1,042 per square inch, while some were as cheap as $45. Today, the three most expensive products on the market each cost more than $21,000. (Samaritan Biologics, a company in Memphis that sells the three products, did not answer questions about why they cost so much.)

Companies can set such high prices because of a quirk in Medicare pricing rules, industry experts said. For the first six months of a new bandage product’s life, Medicare will set the reimbursement rate at whatever price a company chooses. After that, the agency adjusts the reimbursement to reflect the actual price paid by doctors after any discounts.

To circumvent the reimbursement drop, some companies simply roll out new products.

In April 2023, Medicare began reimbursing $6,497 for every square inch of a bandage called Zenith, sold by Legacy Medical Consultants, a company in Fort Worth, Texas. Six months later, Zenith’s reimbursement fell to $2,746.

That month, October 2023, Medicare began reimbursing $6,490 for a new Legacy product, a “dual layer” bandage called Impax.

Marketing materials for the two products use identical photographs and similar language. The company describes both products as providing “optimal wound covering and protection during the treatment of wounds.”

Since 2022, spending on Zenith and Impax has exceeded $2.6 billion, according to Early Read’s analysis.

. . .

A cottage industry of doctors and nurses make house calls to treat wounds. Some skin substitute companies pitch themselves to wound care doctors by offering a cut of the rising bandage prices.

Dr. Caroline Fife, a wound care doctor from Texas who often writes about industry excesses, shared on her blog last year an email she received from an undisclosed skin substitute company. The company boasted that other doctors had developed “a healthy revenue stream” from its bandages and that a patch smaller than a credit card “would generate a little over $20,000 for your practice.”

Some companies offer doctors a “bulk discount” of up to 45 percent, according to doctor interviews and contracts reviewed by The Times. But doctors then collect a Medicare reimbursement for the full price of the product.

For the full story, see:

Sarah Kliff and Katie Thomas. “‘Skin’ Bandages Cost Medicare, And Doctors Get a Cut of Billions.” The New York Times, First Section. (Sun., April 13, 2025): 1 & 19.

(Note: ellipses added.)

(Note: the online version was updated April 14, 2025, and has the title “Medicare Bleeds Billions on Pricey Bandages, and Doctors Get a Cut.”)

The article by William Baumol praised in my initial comments is:

Baumol, William J. “Entrepreneurship: Productive, Unproductive, and Destructive.” The Journal of Political Economy 98, no. 5, Part 1 (Oct. 1990): 893-921.

The article by Susan Feigenbaum praised in my initial comments is:

Feigenbaum, Susan. “Body Shop’ Economics: What’s Good for Our Cars May Be Good for Our Health.” Regulation 15, no. 4 (Fall 1992): 25-31.

Croatian Government Does Not Learn from Distant Past (or Recent Past) That Price Controls Do Not Work

In Croatia, as in the United States, inflation resulted when each government “flooded the country with cash” to buy votes during the Covid pandemic.

(p. 4) In 301 A.D., the Emperor Diocletian made a bold but ultimately unsuccessful bid to address the inflation that was rampaging across the eastern half of the divided Roman Empire.

Prices of everything from purple thread and feathers to slaves and cattle were dictated by his Edict on Maximum Prices. Violators faced the death penalty. Diocletian gave up power about four years after issuing his edict, watching his measure fail from his sprawling retirement palace in the heart of what became the city of Split in Croatia.

Now Croatia’s government is trying a similar tactic to rein in prices that have soared in recent years and sparked protests and retail boycotts by the country’s beleaguered consumers.

. . .

The rules that came into effect this month are the Croatian government’s third attempt at controlling prices by fiat since September 2022. The first two efforts were largely ineffective, with retailers simply refusing to stock most price-controlled goods.

. . .

Economists blame the increases on a three-headed hydra of pandemic-era economic rescue packages that flooded the country with cash, increases in public sector wages and retailers rounding up prices after Croatia adopted the euro in 2023.

. . .

John H. Cochrane, an economist and fellow at the Hoover Institution, a research center, pointed to the role Diocletian’s edict played in causing shortages and fueling a black market.

“It’s like trying to stem the symptoms rather than treating the underlying disease,” Mr. Cochrane said of price controls. “It offers people the appearance of help for a while, and then it takes a few weeks or, a month or two, for all the problems to break out.”

For the full story, see:

Joe Orovic. “A Croatian Plan to Rein In Prices Echoes the Tack of an Emperor.” The New York Times, First Section. (Sun., March 9, 2025): 4.

(Note: ellipses added.)

(Note: the online version was updated March 10, 2025, and has the title “Echoing a Roman Emperor, Croatia Tries to Cap Soaring Prices.” Where there is a slight difference in wording, the passages quoted above follow the online version.)

Rice Prices Soar as Japan Government Pays Rice Farmers to NOT Grow Rice

The long-standing policy of Japan’s government is to pay rice famers to grow less rice in order to raise the price of rice, so that rice farmers will earn more. In February 2025 the price of rice in Japan rose by 81 percent and supermarkets limited how much rice consumers could purchase. The average earnings of rice farmers in 2022 was about $23,000 and was not high enough to stop the exodus of rice farmers from farming.

Maybe Japan does not have a comparative advantage in growing rice, possibly due to high land prices and worker wages. Maybe in a totally free world market, Japan would not and should not grow much rice, buying it instead from places where land and wages are cheaper. The Japanese government, and the rest of us too, should embrace laissez-faire.

Source of the Japan rice story is:

River Akira Davis and Hisako Ueno. “Japanese Rice Farmers Blame Shortages on ‘Misguided’ Government Rules.” The New York Times (Mon., March 31, 2025): B4.

(Note: the online version of the NYT article has the date March 30, 2025, and has the title “In Tokyo, Rice Farmers Protest ‘Misguided’ Rules Fueling Shortages.”)

“Republicans in Congress Have Embarked on a Spree of Deregulation”

If Trump achieves a new Golden Age it will be through his “spree of deregulation” (as the NYT labels it), not through his tariffs.

(p. 24) As President Trump moves unilaterally to slash the federal bureaucracy and upend longstanding policies, Republicans in Congress have embarked on a spree of deregulation, using an obscure law to quietly but steadily chip away at Biden-era rules they say are hurting businesses and consumers.

In recent weeks, the G.O.P. has pushed through a flurry of legislation to cancel regulations on matters large and small, from oversight of firms that emit toxic pollutants to energy efficiency requirements for walk-in freezers and water heaters.

To do so, they are employing a little-known 1996 law, the Congressional Review Act, that allows lawmakers to reverse recently adopted federal regulations with a simple majority vote in both chambers. It is a strategy they used in 2017 during Mr. Trump’s first term and are leaning on again . . .

. . .

Because resolutions of disapproval under the Congressional Review Act need only a majority vote, they are some of the only legislation that can avoid a filibuster in the Senate. This allows them to circumvent the partisan gridlock that stands in the way of most significant bills.

So far this year, Mr. Trump has signed three such measures: one overturning Biden-era regulations on cryptocurrency brokers, another canceling fees on methane emissions and a third doing away with additional environmental assessments for prospective offshore oil and gas developers. Another five, including one that eliminates a $5 cap on bank overdraft fees, have cleared Congress and await Mr. Trump’s signature.

That is a much slower pace than eight years ago, when Republicans erased 13 Obama administration rules within Mr. Trump’s first 100 days in office. Before then, the law had been successfully used only once, when President George W. Bush reversed a Clinton-era ergonomics rule.

Now Republicans are trying to go much further with the law, including using it to effectively attack state regulations blessed by the federal government. The House this week passed three disapproval resolutions that would eliminate California’s strict air pollution standards for trucks and cars by rejecting waivers from the Environmental Protection Agency that allowed them to take effect.

. . .

Republicans, . . ., argue that the scope of their review prerogatives should not be determined by unelected bureaucrats.

“It’s members of Congress — not the G.A.O., not the parliamentarian — who decides how we proceed under the C.R.A.,” Representative Chip Roy, Republican of Texas, said in a speech on the House floor.

For the full story, see:

Maya C. Miller. “Republicans Use an Obscure Statute to Roll Back Biden-Era Regulations.” The New York Times, First Section. (Sun., May 4, 2025): 24.

(Note: ellipses added.)

(Note: the online version has the date May 3, 2025, and has the title “Republicans in Congress Use Obscure Law to Roll Back Biden-Era Regulations.” The online version says that the print version of the article in the New York edition was on p. 20 of the First Section. But in my National edition of the print version the article was on p. 24 of the First Section.)

Ramaswamy “Mapped Out” Plan to “Dismantle Much of the Federal Government”

If you choose to submit a suggestion to the deregulatory “suggestion box,” you need to do so by May 12, 2025 for the suggestion to be considered. I apologize for not getting this information out earlier–I only read yesterday the article quoted below.

(p. A1) . . . at the Federal Communications Commission, which regulates radio and television broadcasting and satellite communications, President Trump’s appointees published a seemingly exuberant notice asking for suggestions on which rules to get rid of, titled “DELETE, DELETE, DELETE.”

Across the more than 400 federal agencies that regulate almost every aspect of American life, from flying in airplanes to processing poultry, Mr. Trump’s appointees are working with the Department of Government Efficiency, the cost-cutting initiative headed by Elon Musk and also called DOGE, to launch a sweeping new phase in their quest to dismantle much of the federal government: deregulation on a mass scale.

Usually, the legal process of repealing federal regulations takes years — and rules erased by one administration can be restored by another. But after chafing at that system during his first term and watching President Joseph R. Biden Jr. enact scores of new rules pushed by the left, Mr. Trump has (p. A17) marshaled a strategy for a dramatic do-over designed to kill regulations swiftly and permanently.

At Mr. Trump’s direction, agency officials are compiling the regulations they have tagged for the ash heap, racing to meet a deadline next week after which the White House will build its master list to guide what the president called the “deconstruction of the overbearing and burdensome administrative state.”

The approach, overseen by Russell T. Vought, the director of the White House Office of Management and Budget, rests on a set of novel legal strategies in which the administration intends to simply repeal or just stop enforcing regulations that have historically taken years to undo, according to people familiar with the plans. The White House theory relies on Supreme Court decisions — some recent and at least one from the 1980s — that they believe give them the basis for sweeping change.

. . .

The specifics of the new approach coalesced in the days after the election, when Mr. Musk teamed with Vivek Ramaswamy, the Trump ally who co-founded the Department of Government Efficiency. As Mr. Musk pushed the DOGE team to quickly fire workers and eliminate government offices, Mr. Ramaswamy mapped out a more detailed plan to use a pair of recent Supreme Court rulings to seek out old regulations that, under the new decisions, could now be legally vulnerable.

One of those rulings, in 2022, limited the Environmental Protection Agency’s ability to regulate carbon emissions from power plants. The other, in 2024, ended a precedent known as Chevron deference in which federal agencies were given wide legal latitude to interpret laws.

Together, the Supreme Court’s actions served to limit the broad regulatory authority of federal agencies, and Mr. Ramaswamy asserted that they could justify permanently erasing many rules that had been adopted before those precedents.

The mission has gained steam since the inauguration under the direction of Mr. Vought, who took over the planning after Mr. Ramaswamy left the Department of Government Efficiency to run for Ohio governor.

Mr. Trump ordered agency heads in February to work with DOGE teams to identify rules that impede technological innovation, energy production, and private enterprise and entrepreneurship, among other issues, giving them a 60-day window to prepare their target lists.

Mr. Musk, meanwhile, developed an artificial intelligence tool intended to comb through the 100,000-plus pages of the Code of Federal Regulations and identify rules that are outdated or legally vulnerable in the wake of the two Supreme Court decisions, according to two people familiar with the matter. It is not yet clear whether the tool has succeeded in its assignment, one of the people said.

. . .

Mr. Vought is seeking public input. He posted a call for ideas on the Federal Register, the government portal where the public can comment on proposed regulatory changes, adding a deregulatory “suggestion box.”