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Home Publications Blogs Beat the Press Washington Post Has Front Page Piece on 157 Percent Tariff on Ironing Boards, Ignores Much Larger Government Imposed Distortions on Prescription Drugs

Washington Post Has Front Page Piece on 157 Percent Tariff on Ironing Boards, Ignores Much Larger Government Imposed Distortions on Prescription Drugs

Tuesday, 22 June 2010 05:09

The Washington Post, which has famously fumed about the fact that union auto workers earn $57,000 a year, devoted a major front page story to an Indiana ironing board factory that benefits from a tariff on Chinese ironing boards that can be as high as 157 percent. The article includes several statements from economists about the unnecessarily high prices that consumers pay for ironing boards and the resulting economic distortions.

It is worth noting that the Washington Post has never once reported on the distortions created by the system of financing prescription drug research through government patent monopolies. As a result of these patent monopolies, drugs that could be profitably sold as generics for $4 a prescription are instead sold as brand name drugs for prices that can be tens or even hundreds of times higher. The mark-up on branded drugs can be equivalent to tariffs of several thousand percent.

The distortions created by patent monopolies are increased as a result of the asymmetric information in the sector. The manufacturer knows far more about its drugs than patients or doctors. This allows the manufacturer to mislead patients and doctors about the safety and effectiveness of drugs. There are more efficient ways to support research into the development of new drugs. (The government already spends $30 billion a year on bio-medical research through the National Institutes of Health.)

Given its interest in ironing boards, and the relative impact on the public's well-being of prescription drugs and ironing boards, it might be reasonable to expect that Post would at least once consider the distortions created by patent monopolies in the prescription drug industry.

Comments (5)Add Comment
written by izzatzo, June 22, 2010 7:00
That's exactly right Mr "Whose Your Protectionist" Baker. Next they'll be banning wrinkle free clothes to stimulate the sales of overpriced ironing boards even more.

Just about the time the down and out unemployed get a toe hold on some crummy job in Indiana making ironing boards designed to smooth and put fine points on the best clothes bankers can wear, along comes some elitist economists lecturing them for distorting the market and benefiting from protectionism.

The ironing board industry must learn economic self sufficiency like the pharmaceutical industry and create Blockbuster Ironing Boards that must be used repeatedly over long periods by desparate customers infected with Obsessive and Compulsive Wrinkle Disorder.

Stupid liberals.
iron man: the myth of strength through technology
written by frankenduf, June 22, 2010 9:14
ok, first of all hellooo- hasn't anyone heard of da ghetto ironing board? (my countertop has scorch marks)- and this isuue is not analagous to drugs- let's face it, nobody really needs to iron- but everyone needs to take drugs- don't believe it?- well, if you get sick and go to the doctor, it's even money a drug will be started- and, if ur healthy, then there's a $billion 'vitamin' industry which can show u what u need, marxist style
written by PeonInChief, June 22, 2010 12:39
On the front page? You gotta be kidding...

I have a lot of trouble getting upset over ironing boards. I mean, I'm not going to die because I can't afford a new ironing board. And it's not something I have to buy a lot of. In fact, I think I've only bought a couple of ironing boards in my life.

Ironing board makers have a lot to learn
written by edward ericson, June 22, 2010 3:38
The ironing board industry needs to take its cue from the computer and automotive and fashion industries, which build-in obsolescence as well as obscene price distortions from all the requisite marketing. Come to think of it, that's probably the WaPo's beef. When was the last time you saw an advertisement for an ironing board?
written by Queen of Sheba, June 22, 2010 5:30
I had no idea the ironing board industry enjoyed such an effective lobbying organization that they could arrange a tariff on foreign-made boards!

I think Dean's point is that once again the Post has seized on a tiny "distortion" in the marketplace that results in a higher price than necessary being paid on a very inexpensive item, by a very few people, while ignoring an enormous distortion that affects nearly everyone in the country at one time or another and some people every day of their lives.

After watching the preferred treatment granted to Big Pharma by the administration and congress while negotiating a health care reform bill, I have no idea what can be done about financing drug research through patent monopolies, but I would guess not much.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.