Most of our nation's economic problems can be traced back to our economic policies. The problematic policies tend to fall into two categories:
1. Policies that are desirable or necessary, but which are only imposed on American firms
2. Policies that are undesirable or are flat out unreasonable
The first category includes our Bill of Rights, child labor laws, reasonable pollution control laws, and others. Our society values these laws, as do I. However, our current international trade agreements betray these values when we allow for cheap imports from China and other countries that do not value these principles. We should not be surprised that China has such a large trade surplus when they are enslaving their people and destroying their environment. While their is merit to the current debate over China's manipulation of the currency market, the affect of these policies pale in comparison to the destructive policies our own Congress and its trade agreements with countries that do not respect our values. Fixing this problem will go a long way in restoring the American economy.
However, there are plenty of undesirable regulations as well. A prime example is the recent FDA decision to restrict the sale of any generic version of Makena, a drug that has been used for years to prevent preterm labor in high-risk pregnant women. The FDA has now authorized KV Pharmaceutical to be the exclusive maker of the drug. As everyone should know, when you give a firm a monopoly, the price goes up. In this case, the AP is reporting that a single dose of this drug will increase from its current $10 per dose to a whopping $1,500 per dose, meaning that the total cost during pregnancy could rise to $30,000 from a mere $200! This despite the fact that Aetna "was unaware of any quality concerns" with the existing providers. The net impact of this one decision is likely to be an increase in health insurance costs in the range of $600 million*, or $2 for every person in the United States.
The time has come to fix our broken economic policies.
* Based on Aetna's estimate of $30 million cost, and assuming that they have a 10% market share for private health insurance and that half of health care costs are covered by government health programs.