Rarely can you get so many topics covered in one post--and still make sense. This is one of these times.
In case you've been stuck under a rock for the last couple of weeks, there has been an uproar over flu shots, or more specifically, the lack of flu shots. The British government "caused" the shortage when they banned Chiron Corp. from shipping any vaccine manufactured in their UK plants due to fears of contamination.
Within a few hours, the mass media was doing its level best to whip things into a frenzy, and from what I can see, at least locally, they've succeeded nicely. A brief survey of the national media (Google News is your friend) shows pretty much the same thing. There are a lot of people, most the old folks, who are getting pretty bent out of shape about this.
I think the concern is more than a little over-blown, and Tommy Thompson agrees with me. It's also being used by the usual suspects as a political football to scare the bejesus out of anyone who will listen to their twaddle. (I'm amazed she hasn't claimed that if her healthcare plan had only been passed, none of this would have happened. But I digress.)
Myself, I view this as an example of why we don't want the government involved too deeply in healthcare. The decision on just exactly how the vaccine will be constituted--what strains of the flu it will protect against--are made by groups such as the Centers For Disease Control (the CDC) and the United Nations World Health Organization (WHO). The decision has to be made months before flu season starts, because only a few companies make the vaccine, and it takes a long time to produce.
The fact that only a few companies make the stuff is widely blamed on things like low profitability (they're expected to give it away, because it's for the children/seniors) and high risk (they'll get sued out of business by the likes of John Edwards if anything ever goes wrong). A lot of the vaccine is sold to governments, who dole the stuff out (pun intended) through their various healthcare agencies. (In the US, you can get it at a private doctors office as well. No idea how the percentage of government vs. private works here--anyone know?)
So the decisions about what to produce and how it will be distributed are largely made by various government and quasi-government agencies. If anything goes wrong, the media goes into a feeding frenzy and they get sued under a tort system badly in need of reform. Well, don't we all feel warm and fuzzy about this system...
(OK--covered the flue shots, media-induced mass hysteria and socialized medicine. Right, economics.)
Now we see various state attorneys general raising merry hell about price gouging.
There are problems with the crude oil supply--hurricanes, refinery shutdowns, pipelines blown up--and the price of crude oil spikes. This leads to price hikes for gasoline and heating fuel, and crimps the daylights out of certain sectors of the economy. This is a pretty big problem. Total action from the 50 attorney's general? Zero that I can find.
But the "price gouging" on flu vaccine, when the supply has been reduced 50% overnight, rates investigations from the AGs of Florida, Kansas, Ohio and others. (We won't mention the publicity generated for the AGs, who happen to be elected officials, some of whom are only a couple of weeks before an election. Ahem.)
The whole thing strikes me as an exercise in silliness. Why is it that economics isn't allowed to apply to the practice of medicine, at least in the United States, bastion of capitalism? We look to the market mechanism to solve all sorts of problems--remember the pollution credit trading system? But we can't trust it with healthcare? Why? Flu vaccine is in short supply--elementary economics tells you the price will go up. Price gouging? Hardly--it looks more like a market adjustment to me.
But it's a supply and demand thing--government wouldn't understand.