My Posts

Infant Formula Lessons

Terry H. Schwadron

May 20, 2022

The continuing lessons from the explosive public reaction to shortages infant formula should make us yet more angry about what passes as normal business in normal times in normal America.

Surely this shortage is a national emergency, and after the late start, government and business that should have been prepared are now focused on solutions.

White House declaration of powers of the Defense Production Act apparently will speed delivery of ingredients to re-opened private manufactures and product distribution. Congress, equally late, is promising hearings with a hint that civil or criminal indictments could follow.

Whatever the shortages, which are spotty around the country, they will be gone in a few weeks, even as the government is arranging for imports from Europe.

It took no time at all to become a partisan political blame football in our current divisive fashion of blaming the White House for any American discomfort.

Joe Biden let us know that had he known about a building problem, he would have acted sooner, but by then, he had become the object of Republican criticism for offering too little too late.

What’s Normal is Worse

But if you really want to get angry, consider what was totally normal about the situation:

Consolidation. As with much American business, this industry has contracted into three main producers — Abbott, Gerber and Reckitt — when the market suggests there is room for more producers. Who is responsible here beside the market forces we so defend? What exactly do opponents want the government to do about encouraging competition in a targeted industry – something they oppose for solar panel manufacturers, for example, or computer chip makers?

Greed. Abbott, which shut its plant for safety reasons, decided to spend recent record revenue on stock buybacks rather than safety improvements. Isn’t this directly on demand of American capitalism that puts profit before all else? Over and over, we learn that companies are taking government tax cuts or other relief packages and using them to lessen corporate expenses all while opposing any increase in taxes on companies.
Protectionism. Because of our latest NAFTA version, the baby formula industry was protected against imports. Isn’t it weird that Mexico and Canada have plenty of infant formula at this moment?  Infant formula turns out to be one of the specified industries that are exempted from import – without recognition of potential emergencies like the one we are witnessing. So much for America First and Only.

Regulation. The Federal Drug Administration has nine people to oversee this industry – and that was up from three until a couple of years ago. The perception of over-regulation has been the bugaboo for American business and Republicans. Now, failure to oversee both manufacturing safety and continued supply have made of regulation has bitten our rear. Meanwhile, the FDA should not escape unscathed after ignoring whistleblowers from this industry’s practices apparently since last November, and certainly since the major plant shutdown in February.

Serving the Poor. In its fouled attempt to protect American taxpayer money, Congress limited the use of Women, Infants and Children (WIC) food stamp aid to a single brand – the brand that has disappeared from store shelves. Whose interest is being served here? Why does it take an emergency to make people look anew at the rules? As always, our problems once again are landing on those least equipped to handle flexible workarounds.

Are Solutions Effective?

The simple solution, as newspaper editorials advise, is to open imports of infant formula from  European Union, Britain, Canada, Australia and Japan. The FDA’s announcement that it was streamlining its review process so that foreign manufacturers could begin shipping more formula  should have happened weeks ago.

What doesn’t help in all this are those crowing about the government sending pallets of infant formula to border detention facilities along with claims that Biden is prioritizing foreign children over America’s youngest. The sales orders were months’ old and were court-ordered.

Also unhelpful are the calls that shame mothers who choose not to breastfeed. How is this possibly helpful or charitable in spirit?

Lastly, faux outrage in Congress from both sides of the aisle towards business officials and federal agencies alike may look good on the campaign trail. But they hardly contribute to getting early deliveries of a needed product in store shelves any sooner.

Keep asking yourself whether the words we are hearing provide effective relief anytime soon, whether we are talking drugs, guns, culture wars or infant formula.

The sorriest lesson learned in the infant formula mess may be that it is a uniquely American outcome of normal capitalist thinking as practiced in our country.

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On Housing & Inflation

Terry H. Schwadron

May 19, 2022

It was with a mix of practical arrangements, political salesmanship and aspirational Congressional approval that Joe Biden announced a set of housing proposals this week that the White House said was aimed at stemming inflationary prices – what Biden has identified as his top domestic agenda item.

Taken together, the plan outlined as a Housing Supply Action Plan combines ideas about assuring rental assistance, helping with down payments and streamlining finance and approvals for adding upwards of a million new homes out of the notion that adding housing units eventually will lower costs. Much of it has been around before.

Reports on U.S. home prices, which usually lag by a couple of months,  have continued to surge higher. One key national home price index reported 19% average year-to-year housing rate increases in February. Housing costs make up about one-third of the market basket for inflation, as measured by the Consumer Price Index,” the White House said.

The Biden plan favors communities where local officials are moving to align zoning for
pre-fab “manufactured housing” and more small, multifamily units over the next five year. Overall, the plan rehashes what Biden has recommended in earlier omnibus spending bills – bills that did not survive in Congress, or that uses approved money from infrastructure bills and a more aggressive approach by the quasi-governmental agencies like Fannie Mae or new money that would require congressional approval.

Like most government programs to deal with inflation and high prices, the plan would require upfront investment and take time for results to ripple through communities across the country. It may sound better on paper to be Doing Something, but the likelihood is that even if all aspects of the plan advanced, high prices will be with us for a good chunk of time.

Money, Assistance and Tax Credits

Some housing policy is about building, some is about finance. Some is about assuring help for those with the greatest need. What makes this program different is its breadth across government jurisdiction, its reliance on cooperation with private industry and local officials, and its timing with public anger over inflation – just before another election.

Indeed, even as the White House was announcing its plan, Housing and Urban Development Secretary Marcia Fudge and Commerce Secretary Gina Raimondo were in Columbus, Ohio, with Sen. Sherrod Brown and Rep. Joyce Beatty, both Ohio Democrats to create a local event of address supply chain disruptions for building materials with industry leaders. The idea is to finish construction in 2022 on the most new homes in any year since 2006.

In other words, these perceived answers to inflation come wrapped in political presentation.

The legislative moves that will require congressional approval, include tax credits for low- and middle-income home buyers and a proposed $25 billion for grants for affordable housing production. It also includes pressing legislators to pass an Unlocking Possibilities Program, which remains pending in the split Senate, to establish a $1.75 billion grant program through HUD. Biden’s 2023 budget request, which has yet to pass, also includes a proposal for $10 billion in HUD grants to increase accessibility to affordable housing.

Among the measures detailed as part of the plan are using new financing mechanisms to build and preserve more housing where there are financing gaps and expanding federal financing by making certain loans more widely available for multifamily developments.

The plan also includes steps to ensure government-owned housing goes to owners who will live in the dwellings, or nonprofits who will rehab the buildings, rather than large investment firms that may neglect the properties. Those behind the plans have expressed concern about housing being treated as investment rather than places for people to live.

What Alternatives?

Republicans have offered few housing programs, but generally have opposed the notion that further investment by government is healthy for an already overheated economy.

Covid’s effects, lockdowns and delayed evictions have allowed a pent-up desire to raise rents and mortgages, and we are seeing the effects of oversized rent increases affect both individual families and small businesses.

The Biden approach is to ease the burden of housing costs over time, by boosting the supply of quality housing in a comprehensive fashion. The White House statements say the goal is help renters who are struggling with high rental costs, with a focus on building and preserving rental housing for low- and moderate-income families, as well as provide more new housing.

You can reject it, but finding alternative plans seems difficult and not less expensive. What is happening is that large commercial firms are taking over more housing and pushing for profit. The single home is still favored over multifamily homes, even as energy prices are making that choice more expensive and putting more pressure on climate concerns. Clearly, people who do not own property are at an increasing disadvantage, including working and lower-middle class people.

Biden argues that today’s rising housing costs have been years in the making.  Fewer new homes were built in last decade since the 1960s, constraining housing supply and failing to keep pace with demand. Land for development has become less available and less affordable, driven by local laws that limit housing density. The plan does encourage single and multifamily homes in general in more rural areas.

In theory, the plan calls for rewarding communities that are reconsidering density limits and linking development to transportation projects; that thinking is at odds with a Congress that favors rural and suburban America over its cities. In theory, the plan suggests that housing, especially in times of inflation, is a bipartisan issue; that is at odds with a time of increased political divide, particularly towards government spending and involvement in the marketplace.

Watching Gas Prices: We’re hearing plenty about how prices are once again reported rising at the gas pump, no doubt angering more U.S. voters as prices over $4 a gallon spread to the Midwest and South. What has not been as publicized is a lean by the oil industry to spend more refining effort right now on processing diesel and jet fuels rather than general auto use – just as we enter the heavy summer driving season.

Amid the anger aimed at the White House, perhaps we should be asking oil execs just why these decisions come about along with the effects at the pump.

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Looking Like Legal Bribery

Terry H. Schwadron

May 18, 2022

The conservative Supreme Court majority has upheld a campaign finance exception that all but assures something that can look an awful lot like bribery.

The case decided on Monday helped Sen. Ted Cruz (R-Texas) who had challenged a federal campaign finance rule that had blocked him from loaning personal campaign money and then collecting it from donors once in office – in payments to himself, with no oversight or reporting.

Until now, the law would have capped such a loan at $250,000; Cruz loaned himself $260,000 to challenge the law. Actually, the decision will allow him to recoup donations towards a half-million-dollar loan he made to his campaign in 2012 as well.

Legally, the case concerned whether the restriction constituted “injury” to a candidate who wanted to loan himself money to run for office.

Substantively, the case revolved around a more understandable proposition: Once in office checks to repay the personal loan could easily be tied to actions by that officeholder that benefit the donor.

The federal rules for pre-election loans treat the action as reportable contributions, but candidate loans fall into a separate category. But repayments of such candidate loans by outside donors  is not addresses.

Since this court decision involves personal loans, we may never know who is giving Cruz that kind of money.

The Arguments

Writing for the 6-3 majority, Chief Justice John G. Roberts Jr. said noted that the limits on the contributions to candidates post-election are the same as pre-election, and thus carry no particularly corrosive effect. He criticized the law’s “need for prophylaxis-upon-prophylaxis,” adding that said the government was “unable to identify a single case of quid pro quo corruption in this context.”

In dissent for the liberal minority, Justice Elena Kagan wrote “both candidate and donor know what they are getting: The candidate is ‘deeply grateful’ because his personal wealth is affected, and the donors know “as they paid him, so he will pay them.” She added, donors could “receive government benefits — maybe favorable legislation, maybe prized appointments, maybe lucrative contracts. The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption.”

The Justice Department argument: “A post-election contributor also usually will know whether the recipient of the contribution has prevailed in the election. The contributor therefore can know ― rather than merely hope ― that the recipient will be in a position to do him official favors.”

What of Accountability?

The idea of campaign finance law is to assure that there is accountability in political contributions. Sure, candidates can self-fund their campaigns as they wish. The law is concerned with how they collect and spend other people’s money.

But over years and multiple decisions now, the Supreme Court has whittled away at the power of such law. The court has enabled corporations to pour money into candidacies, has overseen the growth of political action committees that operate on the edges of anonymity, have discouraged limitations that they see encroaching on First Amendment rights.

In addition, the Supreme Court has helped insist on evidence of cash exchange or demonstrable evidence of specific bribery to justify public corruption.

The combination has been unhealthy for public accountability among politicians, regardless of political orientation.

There is little question that the political money race is a bad thing for the country. No sooner is one election over than winners spend part of each day hunting for contributions towards the next election. With campaigns stretching into well over a year, the amount of cash on the table has become astronomical.

The money goes for television ads, of course, which uniformly end up annoying the voting public, which just wants it all to stop. The campaigns “sell” an image with sound bites and slogans that never solve the public’s problems.

Amid all the hoopla about the legitimacy of the court itself, the question increasingly becomes how this Supreme Court majority is earning the public’s trust. The run of recent cases overturning abortion rights, the pending decision to expand gun-carry permits at a time of heightened concern about gun violence and the court’s own lax ethical rules say different.  

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Looking Squarely at Race

Terry H. Schwadron

May 17, 2022

The sad truth, as seen in recent mass shootings in Buffalo, is that the extended talk, posts and endless repetition of nationalist and racial conspiracy theories are prompting more anger and violence.

For once there was no caterwauling about multiple causes and provocations after the Buffalo supermarket shootings by a single 18-year-old with a weapon gimmicked for more automated shots and festooned with racist notes. Details of the investigation aside, the action was “pure evil,” the local sheriff declared, and it came directed out of racism towards mostly Black citizens.

It wasn’t the first and won’t be the last racially motivated killings. And it is linked with the refrain of “replacement theory” conspiracies moving from the white supremacist edges of America to its mainstream. It should be the job of our generation to meet this singular challenge for Americans to drive a stake into this increasingly dangerous racist blob.

“Those Black victims were murdered by white supremacy, which grows today in fertile soil nourished not just by fringe-dwelling racists but by politicians and other opportunists who call themselves mainstream,” writes Eugene Robinson, a Washington Post columnist. It was a theme picked up by the editorial board of The Wall Street Journal that called out politicians and conservative media personalities for promoting the conspiratorial “white replacement theory”

Whether too gently or too late, the news media are eyeing the spread of racist conspiracy theories into our general political and public affairs conversations, finding particular home in the mouths of a growing number of Republican politicians, their campaigns, and right-leaning political commentators who recognize willing audience for blaming Jews, Blacks, Latinos, gays, immigrants – The Other – for rising anger about our changing demography.

Going Mainstream

“Replacement theory, once confined to the digital fever swamps of Reddit message boards and semi-obscure white nationalist sites, has gone mainstream. In sometimes more muted forms, the fear it crystallizes — of a future America in which white people are no longer the numerical majority — has become a potent force in conservative media and politics, where the theory has been borrowed and remixed to attract audiences, retweets and small-dollar donations,” reports The New York Times.

While Republican officeholders and commentators like Tucker Carlson of Fox denounce literal violence, they keep talking in one fashion or another about the same replacement theory references that fueled violence in Charlottesville, Va., the synagogue shootings in Pittsburgh, the angriest reactions to protests following the killing of George Floyd by Minneapolis police and a string of other violent incidents.

Columnist Robinson noted that “political leaders and commentators from far left to far right will denounce Saturday’s massacre. We will have the customary arguments about the need for sensible gun control and the need to focus on mental health. Gradually, the arguments will peter out. Nothing meaningful will change.

“What we need to talk about is how politicians and thought leaders on the right are using the vile poison of replacement theory to further their own selfish ends — garnering campaign donations and votes, boosting television ratings, achieving fame. And we need to talk about how most of this demagoguery is coming from people who should know, and probably do know, that what they are telling potential killers, such as Payton Gendron, the man in custody after the Buffalo shooting, is complete fiction.”

Joe Biden called for an end to “hate-filled domestic terrorism,” as he called it. But Joe Biden – and Democrats in general – are seen as part of the problem, not a source of cooling.

Robinson recalled that a poll this month by the Associated Press and the NORC Center for Public Affairs Research found that nearly half of Republicans agree at least to some extent with the proposition that there is “a group of people in this country who are trying to replace native-born Americans with immigrants who agree with their political views.” He noted, “This isn’t fringe stuff anymore. It’s becoming central to the modern GOP’s worldview.”

Spread Among Republicans

However polite the wording, the idea of seeing Black Americans, Hispanic immigrants and Jews as “replacers” of white Americans, are being spoken aloud at congressional hearings, echoed in Republican campaign advertisements and embraced by a growing array of right-wing candidates and media personalities.

It’s the persistent stuff of by Republican Representatives Marjorie Taylor Greene, Madison Cawthorn, Matt Gaetz and Sen. Ron Johnson, and now former Speaker Newt Gingrich and Rep. Elise Stefanik (R-N.Y.), third-ranking Republican in the House. It’s a central message for Ohio Republican Senate candidate J.D. Vance, who insists that Democrats are trying to import enough voters so that Republicans would never win a national election. It’s the nightly message from commentator Carlson, who makes no bones about its centrality.

The Washington Post has traced the origin of these theories 70 years ago to former Sen. Theodore G. Bilbo, a Democrat who twice had been governor of Mississippi, who attacked Italians, Jews and Blacks for “mongrelizing” the country. Bilbo saw an existential threat in the growing ranks of American-born descendants’ slaves and wanted to “ship them back.” He wrote, “The mongrel not only lacks the ability to create a civilization, but he cannot maintain a culture that he finds around him,” adding,

“a White America or a mongrel America — you must take your choice!”

What’s troubling is that the conspiracy theories and supporters are growing at the same time that we see efforts to halt monitoring of Twitter and Facebook, in the most recent examples, in the name of “free speech,” however hateful. It is coming as we are turning our back on affirmative action in hiring and admissions in the name of individualism, as we are increasingly disdainful about extending legal protections to gays and transgenders in the name of freedom of religion.   It is coming – or is an outward expression – of new laws to keep white, Christian America for feeling guilty about decades of white privilege built on the effects of slavery and race-tilting policies in government, law and business.

Maybe we should just rename the underlying theme as “Critical Replacement Theory,” and Republicans like Florida Gov. Ron DeSantis will simply ban it because it makes some of us feel bad.

Ending racial tension is our collective responsibility. Why aren’t we doing the job or is this no longer the country we wanted?

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Infant Formula with Blame

Terry H. Schwadron

May 16, 2022

Count me as officially confused about the response to the nationwide infant formula shortage.

It seems there is wide agreement on the need and that there are regional shortages, the result of fouled supply chains that have occasionally plagued other consumer products. And there is agreement that the national supply of formula followed shutdown of an Abbott Nutrition plant in Michigan in February over safety issues – the kind of thing we want to applaud government for forcing, and the Food and Drug administration has been working with the company on its needed improvements.

Last Thursday, the Biden administration announced steps to address the shortage. Joe Biden reported talking with the three main suppliers about speeding their manufacturing process, promised to crack down on price gouging and to increase imports to make up for lagging U.S. supply. Biden also told the Federal Trade Commission to address “any illegal conduct” that might be worsening the shortage, driving hoarding, and to assure that rural areas are not at a disadvantage in a tightened market.

OK, getting to this point took a few weeks longer than it might have, but isn’t this a sign of government doing something rather than sticking its bureaucratic head in the sand?

Instead, we’ve been pummeled with partisan reports about how pallets of infant formula, clearly ordered weeks or months ago, got delivered to the border.

In conservative, anti-Biden speak, this was putting immigrants’ needs before those of American citizen consumers, with Texas Gov. Greg Abbott even suggesting that those deliveries be seized in violation of U.S. law. Rep. Elise Stefanik, (R-NY) was still charging on Friday that Biden lacks a plan to end the nationwide baby formula shortage anytime soon.

Isn’t this what businesses are supposed to plan for? What puts this at the head of the government agenda?

No Timeline

Of course, as with any plan, it’s going to still take time to get the trucks headed in the right direction. But this time, we have an American-made product that is simultaneously needed and wanted in all parts of the country.

There are a few workarounds being recommended by medical authorities, including the use of soy-based milk products.

There is no timeline for immediate resolution.

But among Republicans, this shortage illustrates a problematic Biden administration, not the concentration of an industry in three or four companies that control an industry – and one that has run afoul of health and safety laws. What we should be hearing about is better enforcement and expansion of an American industry that apparently has a ready market – not about blame for Biden.

What makes the criticism more acute is that it is coming from the same Republicans who want to eliminate abortion and force more children, even to those who may be ill-equipped or burdened to raise them, the same Republicans who resist government help for childcare or early education, the same Republicans who now seemingly want us to cancel infant formula deliveries to migrant children forced to remain in detention centers.

In February, Abbott recalled several products after FDA inspectors launched an investigation into complaints that four infants were hospitalized with rare bacteria after consuming formula produced at the plant. Two infants died.

Republicans, including Stefanik, mother of a nine-month-old on formula herself, said the Biden administration has been dragging its heels in recognizing a consumer problem.  Actually, retail formula supplies have been relatively short since last summer, but the problem appears to have worsened in recent weeks and become the stuff of headlines.

Let’s assume Stefanik is right. The point is, that whether because of her or despite her, she has been successful in getting the administration to act.

But somehow, Republican lawmakers have sought to turn the issue into a political weapon against Biden, thus demoting what seems an emotional and persuasive public shortage issue into yet another piece of political theater.

The Political Weapon, Again

Recognizing a political issue, Democrats are getting into the act. House Appropriations Chair Rosa DeLauro (D-Conn.) wants Biden to invoke the Defense Production Act, to force increased production in the name of national security. Two committees controlled by Democrats have called for hearings on May 25.

Biden did not mention the Defense Production Act in taking his actions, choosing to speak to the small number of companies that produce the formula in the United States. U.S. companies produce 98 percent of the infant formula that is consumed here with some imports from Mexico, Chile, Ireland and the Netherlands.

For years, experts have been warning that industry consolidation has left the production of formula — a highly regulated product that is notoriously difficult to manufacture — in the hands of a small number of makers vulnerable to this sort of disruption, reported The Washington Post.

Whatever the emotional impact of empty store shelves, the availability of infant formula varies by region. An analysis by Datasembly, which tracks retail sales, last week found that over two weeks, the out-of-stock percentage for baby formula nationwide increased from 31 to 40 percent. Some states saw out-of-stock rates that exceeded 50 percent. Another survey found that the average in-stock rate is currently about 79 percent across the U.S. — far below the pre-pandemic norms of 95 percent, but not critically low —  none of which helps if the shortage is at your local stores.

What is critically high, however, is politics.

The combination of a shortage of a product needed by infants, forced drives to find substitute markets, and the apparently offensive image of detained migrant families having access to some pre-ordered supplies is driving the political wedge anew.

The issue not addressed: A U.S. industry that seems unresponsive to its market and its safety requirements.

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