>> BIDEN'S INDUSTRIAL POLICY-- is he PICKING WINNERS AND LOSERS?

MEDICARE'S NEW PLAN TO CONTROL DRUG PRICES.

AND DOES THE SUPREME COURT NEED A CODE OF ETHICS?

STAY TUNED, IVORY TOWER IS NEXT.

♪ ♪ ♪ ♪ GOOD EVENING.

WELCOME TO IVORY TOWER.

I'M DAVID CHANATRY, FROM UTICA UNIVERSITY.

I'M JOINED AROUND THE TABLE TONIGHT BY NINA MOORE FROM COLGATE UNIVERSITY, TARA ROSS FROM ONONDAGA COMMUNITY COLLEGE, BEN BAUGHMAN FROM GANNON UNIVERSITY, AND RICK FENNER FROM UTICA UNIVERSITY.

CENTRAL NEW YORKERS HAVE BEEN THRILLED THAT MICRON IS PLANNING TO BUILD ITS BIG SEMICONDUCTOR PLANT HERE.

IT'S ONE RESULT OF THE CHIPS ACT, PRESIDENT BIDEN'S PUSH TO USE SUBSIDIES TO ENCOURAGE TECH PLANTS TO LOCATE IN THE U.S.

THIS SAME APPROACH IS ALSO SEEN IN THE INFRASTRUCTURE AND INFLATION REDUCTION ACTS.

TAKEN TOGETHER, THIS "INDUSTRIAL POLICY" IS A BIG CHANGE FOR GOVERNMENT INVOLVEMENT IN THE ECONOMY.

Rick, what should be the role for the government in a market economy?

And is Biden actually picking winners and losers?

>> I'm generally very skeptical of industrial policy for three reasons.

First, picking winners and losers is very difficult.

Which industries to favor, which companies to help?

Second, the problem is there are often major unintended consequences which often run counter to the initial goal of the policy.

And lastly, ultimately, politics and special interests play big roles in these policies.

Again, subverting the original goals.

Now that doesn't mean that there is always failure with respect to industrial policy.

Perfect example when it worked was the development and production of vaccines during the COVID period.

I thought it was a perfect example of that.

But I think that's the exception and not the rule.

>> The fact that we have so few exceptions is precisely why we should think more about the role, specifically of the national government, to do the sorts of things that individual states cannot do.

So, for example, our energy needs.

Those bear potentially our national security best interests.

We don't want to have to rely on Saudi Arabia and on Russia for energy when it comes to the semiconductor chips.

What we learned from the Micron period is that everything can be brought to, basically, a shutdown.

Everything from cars to washers, dryers and I'll make one final point.

We don't want to rely on Taiwan because we know China is making moves there.

But very basic things like baby formula and baby food.

If individual states can't produce that, the national government has to step in.

Biden and Trump realize that.

>> >> I'll second the chips act and national security.

Definitely that's a common.

Component.

I'll push back on the component of the vaccines being an example.

It goes back to Madison, where in Patterson, nurng, where they selected as the first secretary of the treasury, due to the waterfall to put industry there in order to be able to make us more secure as a new country.

So, it's not something new.

I think the location-based, you know, trying to revitalize or trying to secure national security, those kinds of things, I think that's okay.

>> Well, what about the the flip side of some of this argument is if you are arguing for a more active federal role, is protectionism.

This is a type of protectionism.

>> It is... >> I'll give you an example of steel.

For the same reason you mentioned with computer chips, we thought we shouldn't be so dependent on foreign steel.

And so we have instituted a number of takeoffs.

Tarriffs but that has protected the steel industry and steel workers but has negatively impacted automobile workers, negatively impacts construction workers and also those in home appliance industry and it costs all of us millions of dollars in higher costs.

So it really goes counter to what the original intent was.

>> Tara those tariffs, President Biden is stuck with them.

Is he an American first I guess?

>> I think he is an American first in the sense that he has recognized and has been pointed out, part of this came through what we experienced through the pandemic, the shortages we have had and the fact that the country really has lagged behind in certain STEM areas in terms of production.

He recognizes if America does not step up and increase production, if we don't build the factories so these items needed for our future can be produced here, it makes us even more reliant on foreign governments.

Now one of the problems that in a sense I'm not sure I'm seeing being addressed because there has been a lot of emphasis on the fact that, well, these are manufacturing jobs, and it's not really going to hire that many people.

Well, there is a connected component here that is beginning to be addressed but hasn't totally been addressed and that is training American workers for these new industries, for these expanded industries in the case of Micron.

And so that's the thing that I want to see more discussion about is connecting the American worker, the training of American workers with these new policy initiatives.

>> Right, and I think by engaging a more actively in the economy is absolutely not protectionism nor, for that matter, isolationism.

It is realism.

It is recognizing we live in a global economy, but also that other countries are taking steps to protect their country's general welfare and their economies.

We've had, for decades, a trade imbalance with China and also the European Union came into being precisely for the purpose of helping to bolster and protect the economies of the countries that are involved there, to not do something, I think would be a tremendous failure because we are in a different world with a very much integrated global economy.

>> Africa has been protectionist for hundreds of years and it is no secret most economists will agree that much of the reason that their standard of living is a fraction of that... >> I think that is so overly reductionist to say that Africa is having challenges because of its economic policies.

No, it goes back deck Cades.

>> Tariffs are not going to fix that.

You can't throw tariffs and think it is going to be fixed.

Look at the rust belt.

It's location based.

>> Is it not the chicken and egg problem?

I'm thinking of electric vehicles where the market has... >> That's an example of where the government can what is called crowd in investment.

Where, perhaps, private companies are hesitant and they need a push, a nudge.

And there the government can help out in that case.

I'm not saying I'm always against it.

I'm saying generally if you look at the history of industrial policy, it over run by special interests and politics and costs us more... >> One more question about this.

Is this a form of central planning, Nina?

I mean that's got a bad connotation, central planning.

>> I'm sot so sure that I see central planning as having a bad connotation if we go back to the very founding of this country, one of the weaknesses of the Articles of Confederation of 1777, upon which the constitution was to improve in 1787 was that there was no central planning.

There was no central currency.

There was no way to manage trade, no way to avoid states being played off one another by foreign countries, so no.

>> All right.

THE ADMINISTRATION HAS PICKED THE FIRST 10 DRUGS FOR PRICE NEGOTIATIONS BETWEEN MEDICARE AND THE PHARMACEUTICAL INDUSTRY.

THE MEDICINES ARE COMMON ONES INCLUDING BLOOD THINNERS AND DIABETES DRUGS USED TO TREAT CHRONIC ILLNESS.

LOWER PRICES SHOULD REDUCE MEDICARE COSTS, BUT THE DRUG COMPANIES SAY LOWER PROFITS WILL STIFLE INNOVATION, RESULTING IN FEWER NEW DRUGS.

WHICH IS MORE IMPORTANT-REDUCING COSTS OR PRODUCING NEW MEDICATIONS?

>> Both are highly important, obviously.

And here's why.

It is important that there continues to be this price component to be advantageous for our big pharma to do the research and to come up with the new drugs that got us through COVID, for example, to go back to that example, without the research and all the risk taking that is involved in that, that's a big problem.

Now, here we are moving into a new experiment that hasn't been done before and we are going to see if it stifles that research to the level that some people are concerned about.

I think we are going to have to look at it short-term and look at it long-term but I do like that they're not going after all things.

That they're starting with-- they're trying to find the sweet spot.

It's not the newest drugs and it's not the ones that are getting ready to roll off of patents.

So they are trying to find that middle ground, which, of course, is always trick toe start with.

It's going to be interesting to see where we go with this.

>> I think it's reasonable to assume this argument about stifling innovation.

It could easily result in fewer new medications produced.

But we are not talking about very many.

In the big picture, cbo estimate something like 13 fewer new drugs over decades, 30 years.

>> And it depends which 13.

I mean what we are finding here is that a few drugs that are on this list account for as much as 20% of all Medicare expenditures on drugs that are taken by millions of people.

But I think some of the arguments made by the pharmaceutical companies are a little bit stretched.

They have always complained about generics and everything, but they remain very, very profitable.

I think they're really stretching it when they're trying to claim that this is unconstitutional because the only reason that the government has not been negotiating in the past is because Congress specifically put words in the 2003 legislation which prohibited them from negotiating prices.

If it had been unconstitutional, it would have been unnecessary to do that.

That clearly was put in because of the lobbying efforts of big pharma.

>> Tara.

>> And I was going say, if you look at what cms is supposed to look at in terms of negotiating for this price.

First of all, they're supposed to negotiate for the maximum fair price and then they are to look at the manufacturers research and development cost, the extent to which they have recooped those costs.

If you look at-- and that's just one component.

The data on pending or approved drug patents, revenue and sales volumes, et cetera.

If you look at the components of what cms is supposed to look at to determine that price in those negotiations, it does take into account this potential impact on research as well as the money you spent originally developing the drug.

>> So this issue is supposed to be related to our previous discussion.

And so I mention central planning.

I'm wondering, is this a form of price control?

>> You are really coming off as a conservative today, Dave.

No, absolutely not.

It's not price control.

And I'm glad you asked that question.

What this provides for is price negotiation.

And price negotiation, over 13 drugs out of roughly 1300 that are on the market, 13 drugs that impact millions of Americans and potentially millions more and so the congressional budget office estimates that this will have minimal impact on profit.

It won't have zero impact, but minimal impact because you are sort of talking out of the pharmaceutical companyies control the ability to set prices for the disease that we are seeing an increase in.

Diabetes, ardz rights, and others.

Do we want to leave it to the market to decide whether or not individuals suffering from these diseases have access to those?

And if you say yes, Rick, that means you are heartless.

>> I think there are other ways of doing it.

>> This is a tough panel today.

>> The dividing line, what is price negotiation versus price control.

In this case I think the rules are being set by the government so it really is price control.

If they don't come to an agreement, if the pharmaceutical companies do not agree to these negotiations, they lose access for all of their drugs for their entire company to Medicare, so I think this puts almost all of the chips in the federal government's policy.

So this does not mean hopefully they will not look at this as easy and let's cut the prices down to whatever we can because you know, in the end, whether this stifles new drugs, what this does to profits is going to depend on what price the federal government ultimately decides to charge.

>> If it impacts their profits, would they not go to people not on Medicare and raise those price displz they may try to.

But again, these drugs are so widely used and account for so much, they're going to find that insurance companies also have limits to what they're willing to pay.

>> Now trust in our institutions have been falling and that includes the Supreme Court.

THIS WEEK AN ETHICS COMPLAINT WAS FILED AGAINST SAMUEL ALITO BECAUSE OF PUBLIC COMMENTS HE MADE ABOUT AN ISSUE WHICH MAY COME BEFORE THE COURT.

THAT ISSUE-WHETHER CONGRESS CAN REQUIRE AN ETHICS CODE FOR THE JUSTICES.

Criticism generally fall as long partisan lines.

IS THIS JUST POLITICAL THEATER OR HAS THE COURT LOST ITS ETHICAL COMPASS?

>> The court has lost its ethical bearings.

I was really stunned when I first of all learned that, in a Wall Street Journal investigation they found that 150 federal judges have violated their judicial ethics rules and then you read about Clarence Thomas who, you know, we are not just talking one trip or one plane ride.

We are talking numerous trips, numerous plane rides, et cetera.

And then you find that there are other justices who, you know, are making decisions on court cases that are impacted by companies that they have book deals with.

So it really does seem as if the court cans, in terms of upholding its own ethics, has lost its way.

And the notion at that time justice Alito makes, that Congress doesn't have the role.

Congress setted the role of the Supreme Court.

There is a process they would have to use which would mean amending the constitution which the likelihood of that is slim and none, but there is a process for changing the role of the Supreme Court in the sense that you would be specifying, okay, Supreme Court, you are going to have to come up with ethics rules and these are the consequences if you don't follow your own ethics rules.

>> I'm going to push back a little bit that it is in the constitution that the Congress oversees SCOTUS.

It's already there.

It's not like we need to amend anything.

It just means that the best case scenario is the highest court realizes that they need to be held at the highest standard and they do it internally.

That has yet to be done.

Externally the converse, that's in their court.

>> Congress has all sorts of ways that it can control, are you?

, sort of prod the court any particular direction that doesn't call for an a.m.

It can engage in what we call jurisdiction stripping, meaning it can take away certain cases from its appellate jurisdiction.

Remember, also, Congress sets the size of the court.

Congress Seth the budget for the court.

Congress ceded its authority over the course back in the 1920s, 1930s, allowing the court to set its own rules.

It can draw back that power.

But I also wanted to say that the idea that there have been shady characters on the court goes all the way back to the beginning of the court; however, I think Tara makes a point that is well taken about the scale of the egregious behavior on the part of justice Thomas.

That really is outside of the usual scope of things.

The last thing-- the last time we had a Supreme Court Justice resign due to improprieties, it was Abe fortis back in the 1960s.

I don't remember.

I read about it in the history books and he only got like $25,000 in the form of awe supplementary salary for teaching.

Thomas is raking it in and I find that deeply troubling.

>> So do I.

And I'm not very optimistic that any Code of Ethics is going to matter here.

You know, I said I was a sceptic about industrial policy.

Well, I'm a cynic in this area because unless there is enforcement and, you know, very strong sanctions, you know, I think was we have seen here is an arrogance of the court justices, at least some of them, about the rules, about the deadlines, and about taking this seriously.

>> So we are not talking about thugs.

We are talking about nine justices that reached the pinnacle of their career and they're not bad people.

But they do need to be held at the high standard that they hold everybody else at.

So there needs to be that internal mechanism.

>> To get to that high standard, Chief Justice Roberts says he wants the court to have the highest ethical standards of conduct, yet he doesn't want a specific code.

So why wouldn't he want a code?

What is his argument against a code?

>> Yeah, well, because I think that what Roberts wants to do in case is what he has always wanted to do, and that is to protect the independence of the court.

And also sort of the stature of the court.

Congressional interference means the interjex of congressional politics.

I think that's his argument but perhaps also behind this is another junket that we haven't talked about and that is the way in which federal judges are trained.

They're trained by private entities that do it on these yacht vacations and, you know, in the Caribbean and other places.

>> If he wants the court to remain independent, then they need to police themselves as Ben said within themselves and they have shown absolutely no intention of doing so.

>> Just yesterday, I believe, maybe it was Wednesday, justice Kavanaugh was interviewed or gave a speech and he said that there will soon be steps towards addressing what he called the perceivedeth cat-- perceived ethical issues.

So perhaps something is in the works.

I think Roberts has sort of indicated that they're looking into this.

>> I think Ben's point was a booed point, that-- Ben's point was a good point.

Congress getting involved is not going to do it.

The court has to, you know, put on the brakes on its own behavior.

>> We'll leave that right there and go to As and Fs Nina your F. >> Employers continue to struggle with labor shortages with almost two jobs available for every unemployed U.S. worker.

Nearly two million jobs are now open.

Many of these skilled jobs-- I get the whole work-life balance thing but at some point, we all have to return back to work.

>> Tara.

>> My F goes to the Oklahoma state education superintendent Ryan Walters who recently announced that the State Department of Education in Oklahoma had formed a partnership with pregger university to use its resources to ensure high quality materials rich in American history and values.

Since the materials began to be used in Florida, those materials have received criticism from many on both sides of the left and right for their political and historical biases.

>> Ben, your F. >> My F is going to the reckless development of a game called thief simulator where players in virtual reality break into homes with people home.

They have to steal items from the house and they encounter the police and have to escape from the police violently.

I can't believe it's actually a thing, but it is.

>> And Rick.

>> My F goes to environmental protestors at the U.S. open last night.

One of the protestors actually glued his bare feet to the concrete causing a 45-minute delay in the match, preventing thousands of people from watching koko goff play her way into the finals of the open.

>> My a goes to my mother this week whom we affectionately call madea.

She took her first solo flight out of town yesterday in one of the world's busiest airports and should I mention she did it alone at the age of 94.

>> Okay.

And Tara, your A.

>> My A goes to the American academy of pediatrics for its recommendation of zero screen time for babies.

Based on a Japanese study of 7,000 new mothers and their babies, the study showed that the more screen time babies have, the slower their development will be as toddlers.

>> And Ben... >> My A is going to a father and son who have renewed my faith in humanity at least.

They were fishing for walleyes in the seventh lackerrest lake this summer.

They actually caught a wallet instead of a walleye fish and in that wallet was $2,000 along with a little business card of the owner and they tracked down the owner of the wallet based on the business card and returned it to them and the $2,000 and would not take any of that money.

>> Nice.

>> And Rick, your A.

>> My a goes to the U.S. open.

The grandslam tennis tournament is celebrating 50 years of awarding equal prize money to men and women.

Today women in soccer and basketball are fighting to improve their pay and benefits with some success.

But they still, for the most part, lag men by much.

So it's amazing that in 1973, the U.S. open made the commitment to gender equality in prize money.

Kudos to the U.S. open.

>> Yes.

>> So on that topic, I didn't know that until you mentioned it the other day.

And do you know how that came about.

>> Billie Jean King is the force.

She is an amazing person in history of sports, I think, in the United States.

>> There is a reason-- Arthur Ashe, there is a stadium named after him, but the entire complex is named after Billie Jean King.

>> So I guess Billie Jean King gets our group a here today.

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I'M DAVID CHANATRY, FOR ALL OF US AT IVORY TOWER, HAVE A GOOD NIGHT.