
05-25-2022: Baby formula shortage, Abortion bans
Season 2022 Episode 103 | 27mVideo has Closed Captions
Wall Street analysis, baby formula shortage factors, AZ abortion ban history
Financial adviser discusses Wall Street's worst losing streak in 100 years; ASU supply chain professor explains factors contributing to the baby formula shortage; 19th-century abortion ban still on books in Arizona, and what the state could look like if Roe v. Wade is overturned
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Arizona Horizon is a local public television program presented by Arizona PBS

05-25-2022: Baby formula shortage, Abortion bans
Season 2022 Episode 103 | 27mVideo has Closed Captions
Financial adviser discusses Wall Street's worst losing streak in 100 years; ASU supply chain professor explains factors contributing to the baby formula shortage; 19th-century abortion ban still on books in Arizona, and what the state could look like if Roe v. Wade is overturned
Problems playing video? | Closed Captioning Feedback
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Learn Moreabout PBS online sponsorship>> Ted: Next, we'll look at why the stock market is on one of the longest losing streaks in one hundred years.
That's next on Arizona horizon.
Welcome to Arizona horizon.
I'm Ted Simons.
Yesterday's edition of Arizona horizon was recorded as information regarding the elementary school massacre in Texas was still coming in and we now know that 19 children and two adult teachers were murdered by an 18-year-old local resident who shot and critically injured his grandmother prior to targeting the school and made private messages on Facebook expressing his intentions to, quote, shoot an elementary school and those messages posted 30 minutes before the massacre and it included Rubin Guyago criticizes Ted Cruz and claiming Democrats and the media will politicize it and they said it was Fing nuts to go nothing about this.
Sinema said, in part, people at home all across the country are scared and so I'm going to have conversations again with colleagues on both sides of the aisle to determine whether or not there's something we can do to help increase safety and protect kids across the country.
And then there's Congressman Paul Gossar who tweeted without evidence that the gunman was a leftist alien and later deleted the tweet.
In Texas, the gubernatorial Beto O'Rourke interrupted.
>> This is on until you choose to do something different and this will continue to happen and somebody needs to stand up for the children of the state and they will continue to be killed like they were killed yesterday.
>> He killed for all Texans to come together and support the families of the tragedy.
>>> Wall Street in the midst of the longest losing streak in one hundred years and what's going on with the markets and how long with this trend last and to get insight, we welcome Jay Spector and good to have you.
And since 2022, the DOW is down 15% and NASDAQ down 30% and what is doing on?
>> going on?
>> We've seen a strong pullback in the market due to a myriad of reasons and we're seeing inflation creeping into our daily lives, whether with gas, other energy services, used vehicles.
We're seeing shortages in stores with respect to baby formula, which I know you'll be speaking about later.
Interest rates, the federal reserve is starting to raise the overnight interest rate it charges banks and a lot of things have come to roost.
In terms what else has occurred with the market, people are nervous there's a recession looming.
Whether that happens or hard that will be remains to be seen.
>> Ted: They seem to have an impact and we'll start with the recession fears.
When improve investors are afraid want what do they do?
>> They look for safe investments like cash and not a good thing to do.
Focus on what their investment plan is and goals.
Making a rash decision to try to, you know, save what they have could be more detrimental over the long term.
>> Ted: You mentioned inflation is at a 40-year high and are investors afraid of the inflation or triggering an inflation?
>> Both, but eating into the spending power that the everyday consumer has.
>> Ted: Riding interestRising interest rates and if you have to pay more, you're not likely to pay more.
>> That is also now creeping in psychologically to, for example, the real estate market.
To get a mortgage, you'll be over 5%, people looking to upgrade, even though values have increased on the home sale's side, price for resale have increased and that will hurt people and buying power looking to purchase.
>> Ted: If interest rates go up out of the market into bonds, maybe?
>> Depends on -- >> Ted: Ing getting >> Ted: If you're getting a good return.
>> You have to make sure you outpace inflation in a normalized market and bonds may or may not did that for you againing on what you need in retirement or what your goals are for your money.
>> Ted: They say businesses won't make profits?
>> Whether it's a new car and you can't get computer chips and baby formula and consumers want to spend and production is not there.
>> Ted: The war in Ukraine, is that playing a part here?
>> Absolutely.
That has played a real problem in the energy complex because the U.S. produces 20% of the daily oil needs for the world and we're still importing some oil, and you have the Russian oil in the market and, you know, that has an effect on the gas prices globally.
I know the president has dealt with that by releasing some of the petroleum reserve and we haven't seen that trickle down into the gas pump.
We're paying in phoenix over $5 a gallon for gas.
>> Ted: They brought new people into the market and some of the folks brought in are not used to the volatility and they're buying and selling without the regular layerly inregularity.
>> I think people used the stimulus checks to pay bills and that's another part of what we're seeing in this market.
You had an incredible amount of stimulus come in to keep the economy afloat and we pay for that.
So some of the volatility helped us during the time of the Covid shutdown.
>> Ted: There was a report that about 20 million started investing when the stimulus started.
>> So people are coming into the market and trying to get a short-term win and they're not focused on what their goals are and I think -- I harp on that because that's important and you can't throw money into the stock market and hope it will double or quadruple and that's, I think, with those people that have come into the market, the new market participants, they're not cognizant of that.
>> Ted: How much is cyclical?
>> I think a good part can be cyclical.
We had a good run after the great recession.
I like to say markets settle up and not down.
We have a turn-around as a part of the overall economic recovery and dipping down and getting back if order and hopefully, we see an upward trend.
>> Ted: When do you think that will happen?
>> I'm not predicting.
[ Laughter ] >> Will the road smooth out?
>> Maybe through the end of this year and next year and we'll have to see what next year brings us.
>> Ted: I read the bull marriages return more and bare markets lose.
>> Yes, the bull market will return and a bare market will hurt you and you can't panic and pull the rip cord to get out of the market just because you are afraid.
You have to stick with your plan and stay in for the long temple.
term.
>> Ted: What should we watch the most and if it starts to turn, keep an eye on?
>> Interest rights for my clients and friends because that's really going to tell people what they can buy want what, whatthey can spend.
The average investor, a home or car.
>> Ted: Up next, a closer look at the baby formula shortage.
The baby formula shortage in Arizona and around the country persists and hard to tell if things are better or worse and for more on why, there's joined by Dale Rogers at the school of business.
Good to see you again.
And why are we seeing a baby formula shortage?
>> It's kind of artificial truthfully and there's a bunch of things we're doing to ourselves.
There's only four companies that account for 90% of it and 98% of baby formula is domestically produced.
A big reason is that we want subsidized product out of the market.
What does that mean?
Well, when the Trump Administration redid the NAFTA agreement, most of the U.S. mca was good, but a thing that is hurting us now, you know, for every action, there's a reaction, is the fact that we're stopping Canadian dairy-based components, products and components, from coming into the U.S.
It's not a regulation that they can't come, but we're putting big tariffs on it and so, we're running out of supply.
>> Ted: Can't we do an emergency order?
There's one in Michigan that's a behemoth and they found bacteria and is that the biggest reason?
>> That's a big reason and the structure of how baby formula works is a bigger reason, but the fact that one plant went down because of contamination, obviously, was the tipping point for the whole problem.
>> Ted: Why do we have so few baby formula manufacturers in the U.S.?
Is it because before the new NAFTA we did get so much from Canada?
>> That's a great yes and a question and a lot is because of the regulation around baby formula.
It's a controlled substance and we don't want babies dying.
So there's tight regulations.
The F.D.A.
watches this like it's a controlled drug and not many players.
>> Ted: Because of the new NAFTA, Canada and all sitting up there and not coming down here and I heard what little is out there is possibly stockpiled.
Is that true?
>> What happens when there's a shortage is that people forward buy.
I was in Orlando speaking this weekend and I thought, I'm going to talk to Ted and I better go over and look at a target shelf.
There was a family in there, a grandmother and a mom and this little adorable starving baby and their sixth stop of the day looking for formula.
Ted >> Ted: Oh, boy.
When the shelves aren't empty or can't find something, what's happening to the prices?
>> Well, I think the big retailers aren't really gouging, but some of the folks that are buying formula, because they see profitability -- like, you know, there's people buying it from Amazon, sellers -- not Amazon but people who sell through Amazon who triple the price.
>> Ted: Packaging hang-ups, labor.
, label issues.
>> Label issues is a big issue because the F.D.A.
has strict labeling rules.
>> Ted: So are things better and are things worse and where do we stand right now and where are we headed?
>> I think things are better and, obviously, things are a priority and I'm sure the Biden Administration has called in all of the CEOs and said, look, you better fix this.
The ABBOTT CEO which is 50% of the market, you know, wrote this long apology and what their plan is in the "Washington Post" a couple of days ago and I think it will get better.
I think that there's a problem with this kind of stuff that will probably last at least a couple more weeks.
>> Ted: That's encouraging to hear, a couple more weeks.
The Abbott plant, that's the one this Michigan, the relative behemoth.
>> Yeah, that's huge and taking that much out of the market was a tipping point.
>> Ted: Could this happen to other commodities and things?
>> Yeah, and it is happening, truthfully.
>> Ted: How so in.
>> This is?
>> We're seeing huge shortages for some of the reasons evacuee we've talked about in previous shows and so this absolutely could happen.
I mean one still see it with automobiles and vehicles, that we don't have chips to put in those and so the new cars just aren't available.
I've been looking for a brand must convertible for a few weeks now and I can't get the one I want.
So it is happening with other items.
>> Ted: With that in mind, last question and we appreciate your time, good information, what do we learn from this baby formula shortage situation?
Or is this, again, is this something happens because the market -- a perfect storm?
>> It is a perfect storm and I think there's a lesson here and this is what reshoring will look like.
Because we closed the borders on baby formula, almost all of it comes from the U.S. And it's so tightly controlled that it's really hard to play catch-up.
It's hard to get more stuff and if we make rules to close the borders more on other items, you're going to see more of the kind of thing for sure.
>> Ted: Where tariffs rear their heads, huh?
>> Yeah.
And the idea behind the tariffs are a good one and just the execution and what happens from them is not.
>> Ted: Dale Rogers, school of business, thank you, sir, and good to see you.
>> Great to see you.
[ ♪♪♪ ] (Piano playing).
>> What we know about the elementary school shooting in Texas.
>> Ted: The U.S. Supreme Court's apparent attentions to overturn Roe v. Wade would have an immediate impact in Arizona including the revival of a 19th insurance abortion ban that's in the books.
AZcentral.com would impact the state and thanks for joining us and gives us a 30,000-foot view here and this would impact Arizona how?
>> Well, it's not exactly clear whether the 19th century abortion law would take effect immediately and governor Doug Ducey said this new law that would be a hard ban after 15 weeks would take precedence and others say, no, the trigger law would be this 19th century law.
>> Ted: You wrote about this mandatory prison time.
>> They provided mandatory prison time for the woman who seekseeks an abortion, as well.
>> Ted: That is only blocked by Roe v. Wade, technically, true?
>> Yes.
And, basically, you know, I got the idea for this story because of what's going on with Dobbs versus Jack Jackson case and the 15-week ban and nobody knows exactly what Arizona would be like if Roe v. Wade was overturned, but it would be a pretty big change to the landscape and this law could go into effect and would be enforced.
It was enforced robustly, which I founded in my research.
In fact, it was enforced up until Roe v. Wade and, in fact, there was a guy named Norman Walrab and fighting his prison sentence after Roe v. Wade when the appeal's court decided to dismiss the case.
>> Ted: That's fascinating.
The new law last month, the 15 week ban, low-level felony for women, and I know the governor thinks this would supercede what happened in the 19th century, but this would take effect when?
>> The 15-week ban?
>> Ted: Yes.
>> 9090 days after -- >> Hopefully that will happen sometime this summer.
But the Supreme Court hasn't overturned Roe v. Wade yet but the timing depends if they overturn it next week, it can go into effect, we're talking months and this hard ban.
The 15-week that just passed does include a provision that does not repeal the 19th 19th century law still on the books and the sponsor, Nancy Bartow wanted to ensure if this bill went through it did not supercede the 19th century law.
>> Ted: Where does the governor get the idea that it does?
>> I don't know.
But it's unclear whether a 19th century law would immediately come springing back into action to be enforced or whether the legislature would get involved.
They would probably want to and make some tweaks.
>> Ted: It sounds like they would want to.
>> Doug Ducey said they would go into a special session.
>> Ted: No exceptions for ra particular epeor incest.
>> The Guten mocker institute says that Arizona would be very much affected by an overturning of Roe v. Wade and one of the big effects a lot of women would go to California to contain liberal abortion laws and would be an exodus of women and host most of the out of state women would be from Arizona and to get back to the history portion, that similar situation was in the late '60s after governor Ronald Reagan legalized abortion and then women from Arizona started going to California.
>> Ted: We're seeing it now in Texas and Oklahoma and in surrounding states when they put in their ban and their particular law and that folks were going out of state to neighboring states for abortion services.
>> A lot of other restrictions on the books that affect women in different ways to cause them to seek abortions out of state.
And those laws, it's not exactly clear what would happen to all of the many laws that Arizona has concerning abortion, except, perhaps, the constitutionality would have to be weighed against whatever laws are on the books and things like that 24-hour waiting period, the fact women must see an ultrasound, whether all those laws would stay in effect.
>> Ted: 2021, have all rights, privileges and immunities as a U.S. citizen.
>> That was in the law that they passed in 2021, that bans abortions for the reason of aborting fetus that has a genetic abnormality.
>> Ted: It sounds like we're in a holding pattern here and it's a good bet the legislature will get involved and right quick if Roe is overturned, true?
>> Yes.
However, what they would do is unknown and with the republican dominated legislature, you can assume that there will not be legalized abortion and restrictions in Arizona.
Probably a safe bet.
>> Ted: What about citizen's initiatives and there's an effort right now and a big hill to climb for those folks to get on this year's ballot and who knows what will happen in 2024.
>> Right.
It's a big hill to climb and an initiative would be one way people can change the law in Arizona if they want to legalize abortion and a petition has begun circulating into a big hill to climb and they have to gather 356,000 signatures of valid voter signatures by July 7th.
>> Ted: I guess everything we're talking about depends on exactly when, when and if Roe v. Wade is overturned.
It hasn't happened yet and chief justice Roberts is no big fan of it being leaked he could work out a compromise and it's all timing here, is it not?
>> Well, it's timing and there's later drafts that are occurring within the Supreme Court that are not leaked and so, maybe the end result would not look like what the draft opinion looked like.
>> Ted: Last question, what surprised you most when you did your research on this?
>> Well, I was surprised just how dangerous abortion was back then.
I found one statistics in 1930 that said up to a quarter of all deaths in the maternity ward of 10,000 deaths were believed to be related to abortion.
>> Ted: Wow!
>> That wasn't known for sure but an estimate to the government and, basically, women were being hurt by these back-alley abortions or office abortions and an abortion was less safe.
>> Ted: Great work and good to have you here and thanks for joining us.
Thank you for joining us and you have a great evening.

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