Page 4 - Mid Valley Times 7-14-22 E-Edition

Thursday, July 14, 2022 | A4 | Mid Valley TiMes Editorial & Opinions
Serving the Readers of the Reedley Exponent, Dimuba Sentinel and Sanger Herald.
A Mid Valley Publishing Newspaper
Founded March 26, 1891, in a two-story building on the corner of 11th and F streets, by A.S. Jones
Guest Column
Biden's shameful gas station attack
By Rich Lowry
Guest columnist
For Joe Biden, the buck stops with small independent business owners trying to make ends meet.
Over the holiday weekend, the president slammed gas stations for the purported sin of not passing along declining oil prices to motorists.
Biden took to Twitter to urge “the companies running gas stations and setting prices at the pump” to heed his message: “Bring down the price you are charging at the pump to reflect the cost you’re paying for the product.”
Yes, sir, whatever you say, Mr. President!
The United States Oil and Gas Association mocking- ly recommended that the intern who posted the tweet should sign up for Econ 101, but it’s worse than that.
Biden has hit the gas stations before on the same grounds. It’s hard to know where the economic illiteracy ends and the shameless demagoguery begins. Regard- less, it’s another indication that the president’s approach to inflation is to cast about for scapegoats and villains, no matter how implausible.
So-called jawboning, or stern rhetoric directed at in- dustries to get them to bend to the presidential will, is nothing new. The most famous example is from John F. Kennedy, who blasted U.S. Steel for raising prices in 1962. JFK’s tack was questionable, but at least he was targeting an enormously influential industry that had breached an agreement to hold the line on prices bro- kered by his administration.
Biden, by contrast, is going after the proverbial Liberty Gas Station and Uni-Mart down on Route 134 started by an immigrant couple hoping to send their children to college for the first time. These small-time entrepreneurs have done nothing wrong, except remain in business at a time when the president’s anti-oil-and- gas policy has backfired spectacularly.
As the business newsletter The Hustle explains, the majority of owners operate a single gas station, either as a branded location of a big famous company or on their own. Given that there are more than 100,000 gas stations in the US. many clustered at the same busy intersec- tions in direct competition with one another, a proprietor hardly has monopoly power to determine prices.
Indeed, when Biden says gas stations set prices, he’s technically correct in the sense that they post the prices on their iconic signs down to the tenth of a cent. They aren’t doing it arbitrarily, though. They all know that if they set a price not justified by broader market forces, customers will simply drive down the street to a more reasonably priced station.
Selling gas usually isn’t the most lucrative part of the business, either. Gas stations make a very small margin on fuel, with the cost of crude and refining, along with transport and taxes, accounting for almost all of the price at the pump. Stations earn a much higher margin on their sales of drinks and foodstuffs. Biden would be on more solid ground urging gas stations to cut consum- ers a break on the price of soda and Doritos.
Biden maintains that the stations should reduce gas prices since it’s a time of “war and global peril.” This appeal might make sense if Biden were browbeating gas stations located in Ukraine or Russia. But the U.S. is not at war, and business owners are under no obligation to sell their product at cost or below because Vladimir Putin is trying to dismember Ukraine.
Although President Biden considers them worthy of a good kicking, gas stations aren’t a growth proposition. The number of stations has markedly declined in recent decades, and the rise of electric cars is putting more pressure on the business model.
At least they are actually doing their job in difficult circumstances. The same can’t be said of the president.
Rich Lowry is editor of the National Review. © 2022 by King Features Synd., Inc.
Wells at the forefront of multiple issues challenging Sanger leaders
Fred Hall — Publisher Emeritus Jon Earnest — Editor
Dick Sheppard — Editor Emeritus
It's been a rough spring and early summer for the city of Sanger, which has been met with multiple setbacks with two main city wells that has resulted in an ongoing is- sue of low water pressure for residents. Pressure low enough that some residents have gone on record saying it's become problematic to shower at cer- tain times of the day.
At its July 7 meeting, the City Council heard remarks from City Manager Tim Chapa regarding the latest challenges. A great deal of effort went into the successful rehabilitation of Well 2-A, located at the fringe of Greenwood Park. But then came the latest hiccup, by fixing the well, it turned out that testing showed the well needed to go an additional 40 feet in depth. To do that, a larger pump and storage bowl needed to be installed. The wait on the additional equipment
figures to be an additional two weeks at minimum.
Addressing the public, Chapa said "Contrary to an earlier comment, you've got an incredible [Public Works] staff. You've got staff who are looking out into the future, are planning and are getting things done. But guess what...things happen. Even with the success- ful project, it triggered in this environment of COVID the need to acquire a new piece of equipment. In these times, things are harder to order."
Chapa said that the city will get daily updates from the con- tractor, and will continue to let the public know when the work can be continued and finished. That may not provide solace to those residents who say they have been plagued with ongo- ing water pressure issues.
In addition to tackling the immediate headache of inac-
tive wells, the
council voted
on a major
first step of the
Sanger North
Academy Cor-
rider and es-
tablishing the
Enhanced In-
frastructure Financing District (EIFD). The city will be allocat- ing incremental property tax money in the new district in a 50-year commitment of funds.
Some members of the pub- lic voiced their frustration — and some outright opposition — to the action while claiming the city should be focusing on getting the present infrastruc- ture situation fixed. Next up with the resolution's approval is public notices and two addi- tional public meetings to fur- ther discuss the financing plan.
Jon Earnest is news-sports editor for The Times.
By Peter Pitts
Guest columnist
The Federal Trade Commis- sion now has a golden oppor- tunity to expose why so many Americans are getting fleeced on prescription medications.
The agency has just voted unanimously to conduct an in- quiry into the business prac- tices of America's silent medi- cal middlemen, giant corpora- tions known as "pharmacy ben- efit managers." Such a probe is long overdue. Drug makers are often painted as the vil- lains for high drug prices, but PBMs are the real profiteers.
The three biggest PBMs, which own or are owned by the nation's largest health in- surers, control nearly 80% of the prescription medicine market. One of their principal jobs is to negotiate discounts with drug companies.
PBMs shroud their negotia- tions in secrecy. They aren't legally bound to operate trans- parently, nor is there any re- quirement that discounts they negotiate get passed on direct- ly to patients. These discounts increased from $89.5 billion in 2016 to $175 billion in 2019. This leaves sick Americans paying needlessly high prices for life-saving medications
while PBMs and their insurer partners get rich.
Suppose the retail price for a drug is $500, and a patient's insurance company obligates him to pay 20 percent of the cost. That means he has to pay $100. But if the PBM se- cured the drug for $300 — a fairly typical discount — the patient's share wouldn't drop to $60, as you might expect. He'd still be billed $100 — and wouldn't have any idea that his insurer picked his pocket and lined its own.
PBM profits are soaring. They and other non-manu- facturers in the drug supply chain managed to pocket 51 percent of the $686.9 billion spent on prescriptions in 2020. That's quite a jump from the 37.2 percent middleman share in2013—andnotabadhaul for paper-pushing entities that produce nothing.
Rising co-pay and co-in- surance costs have led three out of every 10 adults to stop taking their medications as prescribed, according to a re- cent poll by the Kaiser Family Foundation. By making pre- scriptions less affordable, the insurer/PBM nexus drives up overall health costs as patients skip doses and end up needing
expensive hospital stays.
It took a while for the FTC to get to yes on launching this inquiry, which begins as a basic study of PBM business practices but could lead to enforcement action down the road as the truth comes out. Cozy relationships and self- dealing with affiliated phar- macies and insurers and dis- criminatory practices against independent pharmacies are
now the norm.
The FTC inquiry offers the
best hope for a comprehen- sive review of PBM practices nationwide. As patients have been feeling the squeeze on prescription costs, PBMs and their affiliated insurers and pharmacies have been secre- tively maximizing their oppor- tunities for profit. When con- sumers learn what's really go- ing on, they will know exactly where to direct their outrage.
Peter J. Pitts, a former FDA Associate Commissioner and member of the United States Senior Executive Service, is President of the Center for Medicine in the Public Inter- est and a Visiting Professor at the University of Paris School of Medicine. This article was first published in the Washing- ton Times.
QUOTE
“The intelligent man finds almost everything ridiculous, the sensible man hardly anything.”
— Johann Wolfgang von Goethe (1749-1832)
Jon Earnest
Fed inquiry into PBMs a chance for accountability
Letters Policy
MID VALLEY TIMES invites letters from the public on any topic of local relevance. We reserve the right to edit letters for clarity or brev- ity, and we reserve the right to NOT publish them if they could be deemed libelous or profane. Letters should be 350 words or less, and bear the author's name, address, and phone number. Letters can be mailed, emailed, submitted via our website, or personally delivered to: Editor, Mid Valley Times, 1130 G St, Reedley CA 93654.
Have an opinion? Want to share it?
jearnest@midvalleytimes.com