Alex Tabarrok at Marginal Revolution wrote something interesting, Generic Drug Regulation and Pharmaceutical Price-Jacking. It’s about the recent price rise of Daraprim from $13.60 to $750. He noted that the drug is not under patent, so this, at least, is not an issue of our broken intellectual property system. It is just that the the company that makes it is the only company that makes it, and Martin Shkreli is using that fact to price gouge. It is an example of our broken pharmaceutical system generally.

Tabarrok is a libertarian, and he has a bit of an ax to grind — although not like his partner, Tyler Cowen. Regardless, he did note two things that are important. One is that FDA approval for getting a license to produce a generic drug is costly. The other is that we aren’t able to just import drugs from other countries. In an incredible comparison, this drug is available in India for 5¢ per pill. This is the drug that Shkreli has gone around telling people the company was losing money charging $13.60 — and which he now sells for $750.

The main point is that we should allow reciprocity in drug purchases, “All that we would be doing is allowing import of any generic approved as such in Europe to be sold in the United States.” I agree with that. In fact, I would go further, Tabarrok is a bit of a protectionist when it comes to this issue — claiming that allowing patented medicines to be imported might have a “effect on innovation.” I’m getting kind of tired of the “innovation” line when it comes to the pharmaceutical companies. They mostly seem to be providing us with more and more diverse drugs for erectile dysfunction.

I would like to see far more government involvement in the markets for healthcare needs. As it is, the US government already spends a huge amount of money on drug research, but then allows private companies to get all the rents on them. It’s madness. What’s more, I don’t see why the government doesn’t just go into the business of making generic drugs. Clearly, our market system is not working in the case of Daraprim. But personally, I don’t think we need various sources of generic Vicodin.

One thing is certain: this is not a situation where all we need is for the government to get out of the way. It’s true that Shkreli is abusing the existing system. But any system we have will be abused by the likes of him. And I find it interesting that we arrest people for price gouging during a hurricane — charging ten dollars for can of peaches. But when Shkreli does it on a massively larger and more damaging scale, all we get from people is a shrug: that’s just the way our economy works. Well that’s the problem! We need to stop thinking that the way things have been is the way they must be or or that they are the “natural” way.

Work by the Center for Economic and Policy Research has found that our drug patent system costs us many hundreds of billion of dollars per year. Given this, I think we have to ask if the current system is the best that we can do. As it is, pretty much all economists believe that patents are a really bad for the economy. They cause enormous distortions in the market. The only point to having them is if they provide great benefits. Clearly they do provide some benefits. But I think we could do much better for our money through collective action.

It seems that the editors at The Washington Post are very concerned, The End of Globalization? The last three years the global economy has grown more than international trade. The last time this happened was in 1985. Oh. My. God! What are we going to do? I just looked outside and there are no flames as of yet, but clearly it is just a matter of time because the world is on fire. I’m sure that Thomas Friedman is hiding under his bed. How can we possibly survive without ever increasing international trade?! If people are buying more things locally, it must be a sign of Armageddon.

Dean Baker responded, The Trans-Pacific Partnership, International Trade, and Arithmetic Problems at The Washington Post. Because this is all about the Trans-Pacific Partnership (TPP). All our worries will supposedly be over if only we get the TPP — at least until the next trade agreement comes up. But as Baker noted, “The TPP actually will not do much to reduce trade barriers, since the barriers to trade among the countries in the pact are already low in almost all cases.” Like most trade deals these days, it doesn’t have that much to do with trade in a general sense and it has nothing to do with “free trade.”

This reminds me of an article that Noah Smith wrote a few months back, Free-Market Ideology and the Burden of Proof. It was about tax cuts and regulation reductions and their effects on the economy. He said basically, “Let’s assume that Reagan’s changes really helped the economy in the 1980s; isn’t it likely that making taxes even lower and getting rid of even more regulation will have — at best — a far smaller effect on the economy?” I feel the same way about trade agreements: getting rid of trade barriers in the past was doubtless a good idea. But are we really likely to gain much now? Reducing tariffs from 50% to 5% was a much bigger deal than reducing them from 5% to 0%.

And that’s why when we look at the new trade deals they don’t seem to have much to do with their stated intent. Baker has done everything but run through the streets banging pots to bring attention to this. We aren’t talking “free trade” when “one of the main thrusts of the deal is to increase patent and copyright protections.” That’s not about bringing prices down for consumers — quite the opposite, actually. That’s about providing certain industries with economic protection — industries that have a lot of political power.

There is a cargo cult aspect to this too. Thomas Friedman famously said, “I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.” That’s true of most of the trade deal boosters who don’t have a direct stake in the matter: trade deals helped the economy in the past so they must always be good under all conditions. And in the case of Friedman: the deal didn’t even have to be about free trade — it just had to claim to be about it.

William Jennings Bryan once spoke about how the financial types wanted to “crucify mankind upon a cross of gold.” Well, now it is a cross of free trade. And the people advocating it today are no more well informed than the gold standard types were then.

It is well known (among liberals at least), that the economy has done much better under Democratic administrations than under Republicans — going back to World War II. And the difference is big: it’s almost double in terms of GDP growth. But I’ve always been skeptical about the claim. While it is certainly true, it isn’t based upon a lot of data — just 12 presidencies. And besides, I tended to think that the president doesn’t have that big an effect on the economy. But then I read Mark Thoma in The Fiscal Times, The Political Party of the President Matters for the Economy.

Thoma is a liberal, but he’s no bomb thrower. He’s a very careful economist. If it had been just anyone writing such an article, I probably would have passed it by. But instead, I read it, and he makes a very compelling case. He goes through the many ways that presidents do, in fact, effect the economy. It wasn’t all new to me, but it I wasn’t thinking too clearly even about the stuff that I knew. One thing that did surprise me is that because people don’t stay on the Federal Reserve board for very long, both George W Bush and Obama were able to fill it with all their own people. That matters. As Thomas put it, if we had had a Republican in the White House “does anyone doubt that policy would have been much different? Would interest rates still be at the lower bound? Would the Fed’s balance sheet be as large?”

The more obvious way the president matters is in fiscal policy. Democrats approach recessions in ways that actually help: tax cuts for the poor and middle classes; extended unemployment insurance; infrastructure spending. Republicans approach recessions the way they do everything: tax cuts for the rich. Even though “there’s little evidence that cutting taxes on the wealthy spurs economic growth, particularly in a severe recession when the tax reductions mostly end up as idle savings.” Basically, a recession is just an excuse for Republicans to do what they want to do anyway.

What’s more, individuals and businesses are more confident about the economic outlook when the Democrats are in charge. So they spend and invest more. That, I must say, is a bit of a shock to me. If the people know that the economy will do better under the Democrats, why do they ever vote for the Republicans? I understand that turnout is an issue. But if even businesses know it, why hasn’t there been a huge amount of pressure on the Republican Party to change its economic policies?

When put this way, it all seems so clear. The Republicans really are all about the shock doctrine: they don’t care about doing what is best for the economy; they have a set of things they want to do — which they always want to do — and that is what they do. It would be like going to a dentist who only knows how to pull teeth. Before long, you would have no teeth.

If you want to do a little low key activism, you might discuss this issue with people who aren’t much into politics. You don’t have to mention policies. You just have to talk about how they feel about the economy under Democrats and Republicans. Because the last time the economy did reasonably well under a Republican was under Reagan — 30 years ago. And all the Republican Party has offered since are the same policies, only more so. And it hasn’t worked. And it isn’t intended to. It is intended to just take more money away from you and me and give it to the rich.

Martin Longman wrote a very good article last week, Ted Cruz to Push It Real Good. It’s all about the upcoming government shutdown. To my surprise, there are actually some Republicans in the House, called the Main Street Partnership, who are pushing back publicly on the idea. They point out that it is really bad for the economy — which happens to be right. But the Ted Cruz wing of the party thinks they have to shut down the government, because the Republican base is restless. To support this idea, check out this amazing stat: “Survey data released by the Pew Research Center over the summer showed that positive views of the GOP among Republicans declined by an astonishing 18 percentage points since January.”

Longman’s claim is that the Republican Party is in a catch-22. Appealing to the base will necessarily offend everyone else. His advice, “But, as a rule, when you’re in a hole…” That’s certainly true. The problem at this point is that the GOP has made far too many promises. They are now in control of Congress. They told the whole nation that things were going to change. But of course, they haven’t. The base was hoping for a big showdown with the president. Instead, it has managed to get only two bills passed that Obama vetoed: one about the Keystone XL Pipeline and another minor bill trying to micromanage the NLRB. Not exactly exciting stuff.

But I wonder if the Republican Party could stop now even if it wanted to. As it is, I doubt that Donald Trump would be leading in the Republican presidential primary if the party had had its way. But instead, it is all the conservative media sources that have allowed him to become a big deal. This is a classic case of “live by the sword and die by the sword.” People tend to say that the Republican Party has created a monster in its base. But it isn’t the base. If the base weren’t told every day on Fox News that the country was going to hell, it would get in line with the Republican Party.

That’s the true catch-22 here. Because if the GOP doesn’t have Fox News, what does it have? My experience in talking to conservatives is that they don’t know what to think beyond, “America good!” Fox News manages to get them riled up about the most ridiculous stuff in the world. But it also keeps them focused on the thing that Republican elites care most about: tax cuts. Most conservatives I know want to see taxes raised on the rich. If it weren’t for the conservative commentators talking about this stuff, keeping taxes low on the rich would be as politically relevant as whether we should continue to fund the military.

I really don’t know where the Republican Party goes from here. My best guess is that they don’t go anywhere. Most people don’t pay enough attention to politics for it to matter. If China’s economy tanks and it takes down the rest of the world, the Republicans will probably do great in the 2016 election. It’s certainly the case that while the 2013 government shutdown was bad for the economy, it wasn’t bad for the Republicans in the election just a year later. And let’s face it: the power elite in this country know they have nothing to fear from the Democrats. Maybe their taxes will go up a tiny amount — that’s about it. At worst, having Democrats in power just means treading water until the Republicans get control and give the power elite everything it wants.

So maybe it’s not a catch-22 after all. Maybe we are all too focused on the short game. It doesn’t matter what happens to this week, or this year, or even this decade. And don’t forget: the power elite have done great under Obama. Under a Republican, they get a bigger slice of the pie, but a smaller pie. It may be that they support the Republicans just to keep the Democrats from doing anything that would hurt them.