Saturday, April 9, 2011

Superbugs, the Federal Reserve Bank and the Grim Reaper

Friday's Wall Street Journal carries an article on page A7 that is more important than the averted government shutdown. The article concerns the spread of superbug bacteria in New Delhi, Britain and Pakistan. The superbug, called New Delhi metallobetalactamease, or NDM-1, destroys antibiotics. It is circulating in the sewage of New Delhi and may spread globally. In a sidebar the Journal points out that there are currently 63,000 deaths each year in American hospitals due to bacterial resistant infections. Until recently, those deaths would not have occurred.

The article also points out that innovation in the antibiotic field has slowed to a halt. It seems to me that the slowing of innovation is directly linked to the Wall Street bailout. Following the growth of government since the 1960s, especially the advent of Medicaid, Medicare and Obamacare, and the Fed's never ending orgy of money printing, the secular reductions in mortality that occurred during the 19th century and through the days when Jonas Salk invented the polio vaccine, may be reversed in the coming years.

Now that trillions of dollars have been diverted to the support of incompetently run investment companies, where will funding for entrepreneurial innovation, specifically including drugs, come from? Does Goldman Sachs and Citigroup aim to stop superbug bacteria? Are the advocates of 50% marginal income taxes certain that a lower tax rate would not have stimulated innovation in new drugs?

The result of the kind of economics that the nation's universities advocate is the absence of new antibiotics; university economists assume that the Federal Reserve Bank can print money and transfer wealth through high taxes, but innovation will be unaffected. You may die as a result. Keynesian economics seems to have been successful in stimulating one kind of activity: the Grim Reaper's.

No comments: