Results for “food”
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A simple public choice model of currency crises

Assume two classes of asset holders.  The first is liquidity-constrained and does not have rational expectations.  These people extrapolate from present conditions and do not understand intertemporal governmental budget constraints.  Most of their assets are held in a local currency, shall we call it the Argentine peso?  Even if they had more foresight, they cannot afford to set up foreign bank accounts.

The second class of people is wealthier.  They convert all savings into dollar-based accounts, held in Miami, as quickly as possible. 

When the fiscal position of the government deteriorates and a currency collapse comes, both the nominal and real value of the domestic currency will fall.  In Argentina the peso went from 1 to 1 — the former pegged rate — to 3 to 1, the current floating rate.  Prices are a bit higher, but the latter class of investor is much wealthier today.  At home, their overseas dollar holdings are worth more than twice as much as before.  They have greater purchasing power over the local economy, especially over non-tradeables.

The country as a whole is poorer, if only because the currency collapse disrupts  economic activity.  The first class of asset holders is much poorer and many are wiped out altogether.  Non-tradeables are oriented ever more toward wealthy, sophisticated demanders.  Culture will boom, non-shippable foods will improve in quality, and perhaps the women will become more beautiful.  Relatively wealthy vacationers will find that this place is just right for them.  Yet the streets will have more litter and there will be more beggars than before.

This is no conspiracy theory, but it does explain why we do not see greater domestic pressures for fiscal stability.

Has there been a free trade breakthrough?

We at MR are reluctant to recycle posts from the past, but I stand by this previous analysis about WTO agreements on agricultural subsidies.  One excerpt:

Many agricultural interventions keep world prices up, not down, by
preventing the reallocation of farming to its most productive
geographic venues. Nonetheless it is not obvious that the very poor
countries would be big winners in any competitive reshuffling of
sectoral specializations. In fact we might expect technology to make
agriculture increasingly high-tech. We are then back to the case where
export subsidies hurt taxpayers in rich countries but help consumers in
poor countries.

Also keep in mind that many poor countries already enjoy free
bilateral access to EU markets for many agricultural commodities, with
rice, sugar, and bananas being prominent exceptions. So if
liberalization causes food prices in Europe to fall, agricultural
exporters in the poor countries may again be worse off.

Addendum: Today’s NYT has an excellent article on the same.

Brush your teeth to lower weight?

…there is no clear evidence that schools are contributing to the growth in obesity.  The obesity-related complaints about school lunches, vending machines, and physical education are based largely on the assumption that these factors are causing our kids to get fat.  Yet, I find little evidence to support this claim.  For example, in looking at survey data on the health behavior of middle and high school students, the factor I found that best predicted whether or not a kid was obese was tooth brushing [emphasis added].  More important than how much junk food they ate, soda they drank, or physical education they received was whether or not they brushed their teeth.  Among fourteen- to seventeen-year-olds, only 16 percent of kids who brushed their teeth more than once a day were overweight compared to 24 percent who brushed less than once a day.  Of course, other factors were important as well — teenagers who play more computer games, eat more fast-food, and drink less whole milk were also more likely to be obese — but these factors were tiny in comparison with tooth brushing.  Meanwhile school policies, such as whether the kid was in physical education or ate school lunches, had no predictive power for whether or not a child was obese.

Now obviously the act of brushing one’s teeth plays little direct role in a child’s weight, but it is a good indicator of something else — in what type of household the child lives.  Children who brush their teeth more often are more likely to come from homes where health and hygiene are a priority…In other words, outside of genetics, the biggest factor predicting a child’s weight is what type of parenting they receive [emphasis added].

That is from J. Eric Oliver’s Fat Politics: The Real Story Behind America’s Obesity Epidemic.  Here is my previous post on the book; the comments are open.

Tyler Cowen begs for hate mail

Twenty years ago I lived in Freiburg, Germany and I often crossed the border to Colmar for the smoked pork.  Mexican pork — corn-fed and free-range — knocks my socks off.  To put it rudely, I thought the pork at Lexington #1, supposedly the finest bbq in NC, was only slightly better than the carnitas at a good branch of Chipotle.  Yes, that is the Chipotle which is owned by McDonald’s and found in the Virginia suburbs.  Lexington pork was often too dry, a bit bland, and too frequently doused in sauce, albeit delicious sauce.

Only three or four of Lexington’s twenty or so "barbecue" restaurants still use the classic fired pit.  The sadder truth is that it doesn’t matter anymore.  The classic pit places will keep their pork either heated or frozen for at least a day and sometimes up to a week.  Lexington #1 proudly told me that they don’t let their pork sit any longer than a day…or, after slight hesitation, "sometimes overnight…sometimes we mix it with the pork from yesterday."  The pork is also a bit cold, since reheating it thoroughly would dry it out. 

Compare this to the best places in Lockhart, Texas, where they pull the meat out of the pit before your eyes and cut it with a butcher’s knife.  If they run out of their best dishes by 1 p.m., so be it, that is the price of quality.  Did I mention that first-rate barbecue is not always economical?

I can make tastier pork at home.  Take some pork ribs and rub in cumin, salt, pepper, and Mexican (not Italian) oregano.  Cook them in the oven with a cup of milk, a few cloves of garlic, a few sprigs of thyme, and perhaps a little water.  The ambitious will add a bit of fresh lard.  It depends on your cut, pot, and oven, but 1 1/4 hours at 300 degrees often works, figure it out yourself.  Take the pork out, and let it sit a while for the juices to settle.  Scrape the pork off the bone, and then cook it at high heat, using the residue from the ribs as the cooking medium.  Add more fresh lard if you want.  Cook it for a minute or two, until it starts to brown and get crusty.  Remove it immediately at that point; don’t let it get crusty.  Yummy, yummy, yummy.

Oh yes, the dipping sauce is to take one white onion, two tomatoes, two cloves garlic, and a few ancho chilies, fry them all a bit in a neutral oil and then blend them in a food processor.  If you have the time hydrate the fried chiles for thirty minutes in water before blending.  Fresh handmade corn tortillas can be added to this mix, they are increasingly easy to find in Latin markets.

Who needs Lexington?

Democide

Rudy Rummel writes that due to new evidence he has significantly updated his figures for 20th century democide,  i.e. murder by government.

Many scholars and
commentators have referenced my total of 174,000,000 for the democide
(genocide and mass murder) of the last century. I’m now trying to get
word out that I’ve had to make a major revision in my total due to two
books. One is Wild Swans: Three Daughters of China by Jung Chang, and the
other is Mao: the Unknown Story that she wrote with her husband, Jon
Halliday. I’m now convinced that that Stalin exceeded Hitler in
monstrous evil, and Mao beat out Stalin.

From the time I wrote my book on China’s Bloody Century, I have held to these democide totals for Mao:

Civil War-Sino-Japanese War 1923-1949 = 3,466,000 murdered
Rule over China (PRC) 1949-1987 = 35,236,000 murdered

However,
some other scholars and researchers had put the PRC total as from
60,000,000 to a high 70,000,000. Asked why my total is so low by
comparison, I’ve responded that I did not include the China’s Great
Famine 1958-1961. From my study of what was written on this in English,
I believed that:

(1) the famine was due to the Great Leap Forward when Mao tried to catch up with the West in producing iron and steel;
(2)
the factorization of agriculture, forcing virtually all peasants to
give up their land, livestock, tools, and homes to live in regimented
communes;

(3) the exuberant over reporting of agricultural
production by commune and district managers for fear of the
consequences of not meeting their quotas;

(4) the consequent belief
of high communist officials that excess food was being produced and
could be exported without starving the peasants;

(5) but, reports from traveling high officials indicated that peasants might be starving in certain localities;
(6) an investigative team was sent out from Beijing, and reported back that there was mass starvation;
(7) and then the CCP stopped exporting food and began to import what was needed to stop the famine.

Thus,
I believed that Mao’s policies were responsible for the famine, but he
was mislead about it, and finally when he found out, he stopped it and
changed his policies. Therefore, I argued, this was not a democide.
Others, however, have so counted it, but I thought this was a sloppy
application of the concepts of mass murder, genocide, or politicide
(virtually no one used the concept of democide). They were right and I
was wrong.

From the biography of Mao, which I trust (for those
who might question it, look at the hundreds of interviews Chang and
Halliday conducted with communist cadre and former high officials, and
the extensive bibliography) I can now say that yes, Mao’s policies
caused the famine. He knew about it from the beginning. He didn’t care!
Literally. And he tried to take more food from the people to pay for
his lust for international power, but was overruled by a meeting of
7,000 top Communist Party members.

So, the famine was
intentional. What was its human cost? I had estimated that 27,000,000
Chinese starved to death or died from associated diseases. Others
estimated the toll to be as high as 40,000,000. Chang and Halliday put
it at 38,000,000, and given their sources, I will accept that.

Now,
I have to change all the world democide totals that populate my
websites, blogs, and publications. The total for the communist democide
before and after Mao took over the mainland is thus 3,446,000 +
35,226,000 + 38,000,000 = 76,692,000, or to round off, 77,000,000
murdered. This is now in line with the 65 million toll estimated for
China in the Black Book of Communism, and Chang and Halliday’s estimate
of "well over 70 million."

This exceeds the 61,911,000 murdered by the Soviet Union 1917-1987, with Hitler far behind at 20,946,000 wiped out 1933-1945.

For
perspective on Mao’s most bloody rule, all wars 1900-1987 cost in
combat dead 34,021,000 — including WWI and II, Vietnam, Korea, and the
Mexican and Russian Revolutions. Mao alone murdered over twice as many
as were killed in combat in all these wars.

Now, my overall
totals for world democide 1900-1999 must also be changed. I have
estimated it to be 174,000,000 murdered, of which communist regimes
murdered about 148,000,000. Also, compare this to combat dead.
Communists overall have murdered four times those killed in combat,
while globally the democide toll was over six times that number.

Burkina Faso fact of the day

Over 2001 and 2002, America’s 25,000 cotton farmers received more subsidies — about $3 billion — than the entire economic output of Burkina Faso in a year.  Two million people in Burkina Faso live partly or fully from cotton farming.

The information is from Raising Less Corn, More Hell: The Case for the Independent Farm and Against Industrial Food, by George Pyle.  The book is more libertarian and less anti-corporate than the title makes it sound.

My avian flu policy paper

The piece is about forty pages, here is the pdf link.  Your comments are welcome, either below or by email.  You already have heard bits and pieces of this: pro-intellectual property, pro-decentralization, and skeptical of quarantine and centralized stockpiles.  A good plan also should prove useful for catastrophes other than avian flu.  Here is the Executive Summary of the piece:

To combat a possible avian flu pandemic, we should consider the following:

1. The single most important thing we can do for a pandemic–whether
avian flu or not–is to have well-prepared local health care systems. We
should prepare for pandemics in ways that are politically sustainable
and remain useful even if an avian flu pandemic does not occur.

2. Prepare social norms and emergency procedures which would limit
or delay the spread of a pandemic. Regular hand washing, and other
beneficial public customs, may save more lives than a Tamiflu stockpile.

3. Decentralize our supplies of anti-virals and treat timely distribution as more important than simply creating a stockpile.

4. Institute prizes for effective vaccines and relax liability laws
for vaccine makers. Our government has been discouraging what it should
be encouraging.

5. Respect intellectual property by buying the relevant drugs and
vaccines at fair prices. Confiscating property rights would reduce the
incentive for innovation the next time around.

6. Make economic preparations to ensure the continuity of food and
power supplies. The relevant “choke points” may include the check
clearing system and the use of mass transit to deliver food supply
workers to their jobs.

7. Realize that the federal government will be largely powerless in
the worst stages of a pandemic and make appropriate local plans.

8. Encourage the formation of prediction markets in an avian flu
pandemic. This will give us a better idea of the probability of
widespread human-to-human transmission.

9. Provide incentives for Asian countries to improve their
surveillance. Tie foreign aid to the receipt of useful information
about the progress of avian flu.

10. Reform the World Health Organization and give it greater autonomy from its government funders.

We should not do the following:

1. Tamiflu and vaccine stockpiling have their roles but they should
not form the centerpiece of a plan. In addition to the medical
limitations of these investments,  institutional factors will restrict
our ability to allocate these supplies promptly to their proper uses.

2. We should not rely on quarantines and mass isolations. Both tend
to be counterproductive and could spread rather than limit a pandemic.

3. We should not expect the Army or Armed Forces to be part of a useful response plan.

4. We should not expect to choke off a pandemic in its country of
origin. Once a pandemic has started abroad, we should shut schools and
many public places immediately.

5. We should not obsess over avian flu at the expense of other
medical issues. The next pandemic or public health crisis could come
from any number of sources. By focusing on local preparedness and
decentralized responses, this plan is robust to surprise and will also
prove useful for responding to terrorism or natural catastrophes.

Why Americans are fatter

…Americans are not consuming more carbohydrates and trans fats because McDonald’s is super sizing our dinners.  Nor is our diet changing because Uncle Sam is subsidizing corn.  Rather, Americans are eating poorly because of a much more fundamental change in how we eat, specifically, the rise of snacking.  In fact, the amount we eat and drink between meals accounts for nearly all the growth in our consumption of carbohydrates and fats over the past thirty years.  Perhaps the biggest source of America’s recent weight gain and sugary diet is not so much the value "meal" but the simple snack.

…the free market has caught up with American food culture…With snacking, food is no longer about sustenance or even sociability: it is about amusement and self-medication.  We now eat to relieve our stress, to alleviate our boredom, or simply make ourselves feel better.  Food, in short, has become our drug of choice.  And the types of foods that are best suited for these psychological tasks are the very ones that cause us so many health problems, that is, sweets, fats, and refined carbohydrates.  In other words, the ultimate source of the changing American diet goes beyond McDonald’s, corn syrup, or the food pyramid; the ultimate source is the American way of life.

That is from J. Eric Oliver’s excellent Fat Politics: The Real Story Behind America’s Obesity Epidemic.  Here is Steve Levitt’s positive review.  Here is an LA Times review.

What about me? I am not going to exercise beyond my current levels of tennis, basketball, and walking are enough.  So I could become thinner in three ways.  First, I have recently switched from Raisin Bran to Spelts cereal in the morning.  Second, I prefer mineral water to Coke, but Szechuan restaurants do not serve the former.  I am waiting for Markets in Everything, and in the meantime I am not willing to give up Dan Dan Noodles or eat them with plain ice water or tea.  Third, in the last year I have started snacking on high-quality dark chocolate.  I have yet to decide whether I wish to fight this new source of additional calories…

Addendum: Comments are now open…

HIV detection on demand

Ms. Brown would get her results in just 20 minutes, thanks to one of
two new tests that AIDS workers say have revolutionized testing for
H.I.V…

On Thursday, the Food and Drug Administration’s Blood Products Advisory
Committee heard testimony on whether to recommend over-the-counter
sales of the rapid test for home use. The agency approved a home
testing kit in 1996, but users have to mail a blood sample to a
laboratory and wait for results by telephone.

Proponents say
rapid testing in the home will reduce the stigma and other obstacles
that prevent many people, including one in four of the nearly one
million Americans who are infected with H.I.V., from getting tested and
starting treatment. Research shows that people who learn they are
infected are less likely to infect others.

Here are the details, note that test is an easy oral swab.  I am not much worried about immediate suicides ("The most emotional responses come from negatives," says the article).  But what are the further ramifications?

1. The test is in the hands of the individual, and the kit presumably does not issue a credible AIDS-free certificate.  So perhaps we return to a greater reliance on trusting the word of the individual — "don’t worry, I tested negative a few weeks ago."  Formal certificates of health might become less expected.

2. Will lovers-to-be ask for an on-the-site test?  There is a stigma attached to asking a partner about his or her status.  It suggests you often sleep with people whose health status you are unsure about; the alternative impression is "of course I’ve never done this before, and I bet you haven’t either.  I’m not used to asking.  HIV, what’s that?"  And how much fun is it to watch a potential partner waiting for the results?  Do you bring little consolation cards in case the test turns out badly?  The resulting unwillingness to pry may further increase the reliance on verbal assurances.  Again, the presence or lack of a certificate — however dated — may provide a clearer focal point and thus greater information and clarity.

3. How often should you test yourself?  Given the signaling point from #2, what should you tell your next partner?  That you test yourself every year?  Every month?  Every day?  Which frequency would you find most reassuring in a potential partner?  Keep in mind the probability of a lie or false result. 

You can spin this one either way.  You might assume that someone who self-tests every day has dangerous habits.  Alternatively, you might assume (at least in pure theory) that the previous partners have been monitoring the test results, and that you don’t need to.  "Hey, if two hundred people have slept with you in the last year, a few of them must have checked you out."  Don’t you usually find the presence of other "customers" reassuring?

4. Say you test yourself after every new partner.  You have a better sense of who infected you, which in turn identifies a greater number of infected agents in advance and also deters self-recognized infectors.  Therefore people will test themselves less often than is socially optimal.  The main benefits from testing may accrue to others, not to yourself.

Hmm…it’s not so simple after all.  But I still believe this test is likely a positive development.  Comments are open…

p.s. We thank Robin Hanson for his guest blogging!

Lockhart, Texas

Lockhart, a town of about 11,000, has a hollowed out core, perhaps due to the local Wal-Mart.  The architecture dates from the 1890s.  The large County Courthouse is in the style of the French Second Empire.  German names such as Vogel are stencilled on the buildings, although mostly Mexicans hang around downtown these days.  In both look and feel, it reminds me of the more obscure German parts of southern Brazil.  Yet it is only half an hour from Austin.

The best barbecue places in Lockhart open between 7 and 10 a.m..  The pitmasters tell me they have to be there anyway, to look after the meats.  They can close as early as 4 p.m.

The ingredients are simple: salt and pepper rub and meat to die for.  Slow cooking in open pits.  Schmitty’s lets its pit spill over onto the restaurant floor; be careful not to step or fall into the fire when you walk in the door.  Did I mention that town fire and safety regulations are lax and they have a friendly insurance agent with a taste for barbecue?

Barbecue came from the Caribbean to the Carolinas and then to Tennessee; Tennessee migrants brought it to Texas, where it mixed with the indigenous Mexican barbecue tradition.  Germans set up meat markets in Lockhart (drawing supplies from the Chisholm trail cattle drives) and shortly thereafter attached barbecue pits, circa 1900.  The food owes as much to German sausage-making and the Schlachtplatte [slaughter plate] tradition as to traditional barbecue.  Sauce is frowned upon.  In Kreuz Market the food comes on plain paper and you eat with your fingers.  Sauerkraut and German potatoes are the two most prominent side dishes.

All other barbecue will now taste worse.  At what discount rate, or at what implied rate of memory deterioration, am I better off for having been there?  Or do seek something other than happiness through food?

Freakonomics of the sea

"Before the 1880s, it was unusual to see lobster on menus," said Jones. "It was considered trash fish that people didn’t want"

Glenn said his interest in menus as historical resources evolved from a project in which he assigned students in a coastal resources class to study seafood price data based on prices in a 1950s restaurant menu he came across.

Besides documenting the rise and fall in popularity and prices of fish and mollusk species in restaurants, menus also provide scientists with serious documentation of the economics of commercial fishing over the decades, he said.

"Sea scallops don’t show up on the menus until the 1940s," Jones said. "Before that, it was all bay scallops on menus. Now, bay scallops are pretty rare and the ones you get are real small"

Other U.S. seafood resources are depleted as well, Jones said. Industry records show oyster harvests from Chesapeake Bay are down 96 percent from annual hauls in the early 1900s, he said.

In recent decades, American consumers in particular have chewed their way through two trendy delicacies, Jones said.

"In the 1970s and 1980s, orange roughie starts showing up on menus," Jones said. "But it’s a very slow-growing species and they were harvesting it much faster than the species could replace itself so it’s becoming commercially extinct"

Fishing boats simply shifted from chasing roughie in waters around New Zealand and Australia to pursuing Chilean sea bass in the southern Pacific and southern Indian oceans.

"They just moved on to another species," Jones said, citing catch statistics. "Now, the same thing is happening with the Chilean sea bass"

The same type of progression took place among Atlantic ocean species from the 1850s into the 1900s, Jones said.

Analysis so far has included menus mostly from coastal cities like New York, Boston, San Francisco and Providence, R.I., Jones said.

Here is the full story, and thanks to Dylan Alexander for the pointer.  Here is another summary, try this one too.  In Colonial America, servants wrote contracts specifying they would not be asked to eat lobseter (how fresh? and did they give you a bib and that little fork?) more than twice a week.  Here is a Canadian summary of the work.

Did I mention that we are running out of many species of fish, and that we will be consuming lower and lower items on the marine seafood chain?  I favor private ownership of fish stocks, to alleviate the commons problem, but a) this is not always technically feasible, and b) where possible, it would cause current prices to skyrocket, making those fish a luxury good.  Quotas can be a second best solution but they are hard to enforce.  I hope you like seaweed.

What is the social responsibility of business?

Milton Friedman has long suggested that the social responsibility of business is to maximize profits.  Recently he tried to clarify this view:

I shall try to explain why my statement that “the social responsibility of business [is] to increase its profits”…

Note first that I refer to social responsibility, not financial, or accounting, or legal. It is social precisely to allow for the constituencies to which Mackey refers. Maximizing profits is an end from the private point of view; it is a means from the social point of view. A system based on private property and free markets is a sophisticated means of enabling people to cooperate in their economic activities without compulsion; it enables separated knowledge to assure that each resource is used for its most valued use, and is combined with other resources in the most efficient way.

Of course, this is abstract and idealized. The world is not ideal. There are all sorts of deviations from the perfect market–many, if not most, I suspect, due to government interventions. But with all its defects, the current largely free-market, private-property world seems to me vastly preferable to a world in which a large fraction of resources is used and distributed by 501c(3)s and their corporate counterparts.

Friedman has qualified his social responsibility claim for force and fraud, but what about negative externalities more generally (just ponder Tamiflu licensing if you want the appropriate headache)?  Is Friedman’s claim:

1. Profit maximization is the best rule available, even though it fails society in particular instances (in that case, isn’t there some slightly more convoluted rule that can cover at least some of these situations and modify the outcomes?  If only "very simple" rules are allowed, why?)

2. Businesses have no responsibility to behave in an act utilitarian fashion.  Rules are rules, and we should follow them, come what may.

3. Following the doctrine of fiduciary responsibility — in this case to shareholders — is the greatest social good in these situations.  It outweighs potential act utilitarian considerations pointing in other directions.

4. Force and fraud aside, profit maximization always coincides with the social good, at least in the absence of bad government interventions.

5. It is a public choice argument.  The claim is a noble lie, for otherwise business will be regulated by government in a counterproductive manner.

6. So much anti-corporate nonsense has been written, so we need to shock people with an extreme claim in the opposite direction.

In response to Friedman, John Mackey, the CEO of Whole Foods, argues: “I believe the entrepreneurs, not the current investors in a company’s stock, have the right and responsibility to define the purpose of the company.” 

My take: No simple rule can sum up what is right to do, for a business or otherwise.  So I have to read Friedman as falling back on #5 and #6, with his partial belief in #4 convincing him he needn’t worry about the complications so much.

What I’ve been reading

Warped Passages: Unravelling the Mysteries of the Universe’s Hidden Dimensions, by Lisa Randall.  Have you ever tried to read those Scientific American articles on the weak and strong forces, or on how we might live in a three-dimensional universe on a 3 + n dimensional brane?  This book is the closest you will get to understanding such matters.  You can skip the chunk which recaps Einstein and quantum mechanics.  Alternatively, you might wait until scientists figure out the apparent paradoxes, and then read a book with the answers.

Veronica: A Novel, by Mary Gaitskill.  If I like a novel about an aging hippie temptress with hepatitis, and her older AIDS-ridden friend, and the sadomasochism of the fashion world, it must have something going for it.  Nominated for a National Book Award, and rightfully so.

Maize and Grace: Africa’s Encounter with a New World Crop, 1500-2000, by James McCann.  If you are ever bored, go out and read all the books about the history of corn you can find.  Start here.

Postwar: A History of Europe Since 1945, by Tony Judt.  I know what you are thinking.  "I read Tony Judt all the time.  I already know lots about Europe after 1945.  Why do I need this 800-page book?  Why should I pay almost $40?"  Don’t be lured down that fallacious path.  Go for the excellent book by the excellent author, every time.

How to Cook Everything: Simple Recipes for Great Food, by Mark Bittman.  If you could only own one cookbook, this would probably be it.

Should we confiscate Tamiflu property rights?

Tamiflu can combat avian flu, but the Swiss company Roche can’t get us more Tamiflu for well over a year.  They won’t (can’t?) set up a U.S. manufacturing plant for almost two years.  (Face it, in a pinch neither the Swiss nor anyone else will export much Tamiflu, no matter what the previous agreement.)  Roche holds a patent on Tamiflu but India will go ahead and produce a generic version; Taiwan has been making similar noises.  What should we do?  Here is one argument for producing generic tamiflu.  Andrew Sullivan concurs.

I suggest a different approach.  Let’s offer Roche a large prize for speeding up the construction of the U.S. plant.  This can include legal and regulatory waivers (Bush already has suggested this idea).  We also make it clear upfront that if a pandemic comes, the U.S. government will purchase Tamiflu doses at a relatively high price.  This latter round of payments can be made upfront, with a refund to the government if no pandemic arrives.  Ex post, the government distributes the doses for free, with medical workers and key individuals in the supply chain (food, transportation, Typepad) given priority.

Note how avian flu differs from AIDS.  AIDS is a relatively slow acting condition and the possibility of disease hangs around for decades.  Avian flu, if it becomes a pandemic, will likely come and go in a few waves of a few months each, spread out over a year or two.  That makes the case for abrogating property rights weaker.  The key question is not price but whether you have a stockpile at all.

We should not focus on avian flu to the exclusion of other emergencies, including bioterrorism.  Avian flu is just one possible pandemic of many.  If we confiscate property rights this time around, there won’t be a Tamiflu, or its equivalent, next time.  We also need to stop taxing our vaccine-producing infrastructure through liability law.

Respecting Tamiflu property rights would supply an international public good as well.  Many other countries will confiscate Tamiflu property rights.  If the U.S. holds the line, we are subsidizing global R&D and doing a greater service for the world than our critics are willing to admit.

Addendum: The worthier-than-ever Daniel Drezner notes that no country is well prepared for avian flu.  Comments, by the way, are open, please stick to the subject at hand.