SOME ECONOMIC REALITIES

Marginal Revolution discusses (Nobel prize winning economist) Gary Becker's plan to cut drug prices by cutting FDA red tape: "...a return to a safety standard alone would lower costs and raise the number of therapeutic compounds available. In particular, this would include more drugs from small biotech firms that do not have the deep pockets to invest in extended efficacy trials. And the resulting increase in competition would mean lower prices - without the bureaucratic burden of price controls..."

Is the EU a tax cartel? "Germany yesterday threw cold water on the festive mood ahead of this week's European Union enlargement by telling its eastern neighbours that low corporate tax rates used to attract foreign investment were unacceptable"

In Argentina privatization of the water supply led to a drop in child mortality of 5-7 percent, with reductions of 24% in the poorest areas

The Stossel "problem": "According to some leading journalists and consumer activists, ABC's news division suffers from a major problem: John Stossel. He used to be such a good consumer reporter, years ago, worthy of his numerous Emmies. But now he thinks that markets protect consumers better than governments do, and he's skeptical of all sorts of beliefs that we all just know are right. ... The real Stossel problem is that he's so alone..."

The private sector in Australia has been using new technology (mobile phones and trunk radio) to provide a better service to taxicab users. So the government wants to ban it: "Groups of entrepreneurial cabbies have created a thriving business providing luxurious, limo-class service at cab prices. The passengers are thrilled and the drivers are getting ahead in an ingenious example of how the market can outwit the leaden bureaucracies of big government regulation. But last week, the Transport Minister, Michael Costa, spoiled it all. As part of his "reform" of the taxi industry, Costa announced a ban on "private network" cab drivers who use mobile phones to service private clients, threatening fines ranging from $1100 to a staggering $110,000"

South Africa today. "South Africa now has a high rate of taxation, restrictive labor laws, is Africa's largest welfare state and has Africa's largest, most politically well-connected and politically influential labor union movement... At the present day, an estimated 42% or 8-million employable non-white South Africans are unemployed. The unemployment among this segment of the population is higher today than at any time during the apartheid era... South Africa's long term economic future appears bleak due to the policies that the nation's government has already enacted. The disarming of the civilian population has left it at the mercy of armed criminals."

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