“If limited government is what you’re after, neither political party is your friend, since government expands under both. What’s more, the rate at which it expands depends less on which big spenders are in power than on whether we have divided government.
For evidence, consider President George W. Bush’s presidency, when, for a time, Republicans controlled both the House and Senate. During that time, we saw the creation of a new department (Homeland Security) and of a new entitlement (Medicare Part D), and spending exploded. We didn’t see any restraint during the two years when Republicans were fully in control under Trump, either. Further data confirm that unified government does not keep government restrained, even if the controlling party is supposedly the enemy of big government.
Divided government, on the other hand, encourages more restraint, no matter who is in power or who controls which branch of government. Divided government doesn’t stop the government from growing; both parties are always happy to spend more money on defense, infrastructure, and education, just to name a few favorites. However, the Democrats tend to limit the Republicans’ hunger for wars, and Republicans prevent the worst of Democrats’ fantasies about foisting greater government control on the economy.”
“the incentives for good management in government are very weak, because politicians make decisions using other people’s money. As a result, their exposure to the risk of a bad decision is limited, while there’s rarely any reward for spending taxpayers’ money wisely or providing a service more effectively or efficiently.
Furthermore, each individual voter bears a very small part of the costs of bad government decisions. Politicians can thus shower special interest groups with subsidies at our collective expense, grant costly tariff protection to politically powerful producers, and generally waste our money for their individual political advantage.”
“In politics, decisions aren’t driven by the profit motive like they are in the marketplace. Instead, they’re overwhelmingly driven by the desire to get reelected. Special interests can help with that. In fact, public choice economists have shown that government officials receive more benefits when they act on behalf of special interests than for the public good. This finding doesn’t depend on who is in power.”
“the attention and resources dedicated to repurposing old drugs detracts from the pursuit of new therapies that would be true breakthroughs, exponential advancements in science. Feldman describes such innovation as “value beyond pearls.”
“It’s rare, it’s beautiful, it’s startling, it’s a thing of beauty,” she said.
But that kind of innovation takes time and money with no certain payoff. It’s simpler and cheaper to modify existing products to somewhat improve their efficacy or to tweak them to treat a different condition.
“I worry that our system is not well primed for it,” she said. “It’s all about the incentives. Our incentives aren’t directed properly.”
She pointed to the shift away from antibacterial resistance research and drug development, even though researchers anticipate millions of global deaths annually within the next few decades because bacteria have become resistant to the drugs that we already have to fight them.
Drug makers currently devote a lot of their attention to end-stage cancers, because they can benefit from “orphan drug” designation and other competitively advantageous policies, while Feldman argued that chronic conditions have been underserved. Looking at it from a societal perspective, the latter obviously has more value than the former — and yet that is not necessarily what our innovation system has been designed to reward.
Or look at the antiviral space, which is the most relevant to the coronavirus response.
Antiviral research investment historically has not been a priority for the major drugmakers. The Wall Street Journal reported Pfizer had to reestablish its antiviral research department for its Covid-19 work because the unit was disbanded in 2009. Novartis ended its antiviral and antibacterial research in 2018. One systemic review of the past 30 years of antiviral research found “only a few drugs were approved to treat acute viral infections” in that time.
“Antibiotics and antivirals are both areas that haven’t seen a tremendous amount of new drug development because the economic incentives haven’t justified significant R&D in this area,” Caroline Pearson, senior fellow with NORC-University of Chicago, told me recently.
So long as these incentive structures remain in place, Feldman warned, we will never be ahead of the curve in fighting off the next pandemic. She said that the US should be asking: “What’s of value and what should we incentivize people to do?””