“Madison Avenue” marketing can convince that wrong is right and right is wrong. In the last century it made trillions for corporate America by making people sick, killing them and taking their wealth.
Many advertising campaigns target women. The campaigns were successful by saying the new habit was “liberating.” Some familiar examples are smoking, birth control, abortion, and diet pills (early amphetamines). A common theme has been freedom. The subliminal influence was always the “sexualization” of women.
The trade-off for liberation has been insecurity, disease, death, and being exploited by men.
The recent infant formula shortage exposed many failings in America – the growing use of formula vs breast milk, the exorbitant prices of formula due to a monopoly, no competition leading to defective products, incestuous collusion between business and government corrupting an industry, getting babies / mothers hooked-on dessert-in-a-bottle. (Some formula contains more sugar than soft drinks. Top ingredients in Similac are #1 Corn Syrup and #4 Sugar.)
Abbott Industries received complaints that babies became ill and even died from its formula. The government claims 1) Abbott failed to repair defective equipment 2) Failed to remedy faulty testing procedures 3) Allowed the spreading of bacteria 4) Knowingly falsified records 5) Covered-up blatant health and safety violations.
Abbott Industries is the largest of the big four producers (Perrigo, Nestle and Mead Johnson) that control 89% of the American formula market. The formula scam has been amazing. Marketing firms had to convince moms that formula was equal to breast milk, it was more convenient and it would allow them to regain their figure sooner with less wear and tear.
However, there was one major hurdle – mother’s milk is free and formula must be purchased. So formula lobbyists offered politicians a deal they couldn’t refuse. Have the government buy the formula and give it free to parents. The formula company would bid on the contract, bribe politicians and give the state agencies a rebate. In other words a private business cuts a deal with government to create more welfare to make a profit.
The company winning the contract would then dominate (84% plus) the market because moms getting the product free would then eventually purchase the same brand because the child likes it. The politician voting for free formula for mom / baby is a hero (gets re-elected) and those opposing are Scrooges. More than $6 billion of tax funds annually gives free formula to those parents who “cannot afford” to feed their baby.
To qualify, a “poverty” parent can have income equal to 185% of the federal poverty level – Family of 2 can have $33,873, of 3 - $42,605 and of 4 - $51,337. Some or all of that money could be received from the government, as well.
For parents paying for their own formula they are facing an inflated price to compensate corporations for rewarding politicians and convincing parents to feed their baby junk food versus what came naturally with the newborn.
Throughout history, there has been a need to assist some mothers with their babies. The common practice was wet nurses until it became less popular and the government regulated them out of business. Formula companies don’t want wet nurses! In some primitive societies if a child was fussy in the village any nursing mother would fetch the child to her breast.
The history of mother’s milk substitutes is fascinating but many of the beginning “formulas” were flour / water / sugar, then to animal’s milk, evaporated milk and then combining dehydrated cow’s milk, sugar and chemicals for a liquid piece of pie.
No wonder kids’ teeth are damaged. Formula-fed kids tend to be obese, have diabetes, asthma, are allergic to everything, have the alphabet soup of ailments and are addicted to sugar. What did we expect?
Other than bottled water most every drink in a store is toxic to your health. However, infant formula may be having the most devastating impact. And, since the government is funding this scam it gets to tell the industry what goes in the bottle and then keeps foreign competitors, even those with a better product and price out. It’s like a crack dealer controlling the delivery of his product to his addicts, establishing the quantity, price and quality. The dealer then threatens and purges the competition.
Government regulators today try to make criminals out of raw milk or milk substitute producers to protect the government’s toxic infant tonic scheme. That’s what you get with a socialist government, full of graft and greed, micro-managing the lives of life-long customers.
(Lou Binninger can be heard on No Hostages Radio podcast, live on KMYC 1410AM 10-1 Saturdays, read at Live with Lou on Facebook and at Nohostagesradio.com)
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How Government Created the Baby Formula Shortage—and a Black Market for 'Unapproved' European Imports
As Christina Szalinski reported in the New York Times, “baby formula is one of the most tightly regulated food products in the US."
Thursday, May 12, 2022
Image Credit: iStock
Economics Baby Formula Black Market Choice Individual Choice Free to Choose Thomas Sowell Ludwig von Mises
As many know, the US is confronting a shortage in baby formula that has grown quite serious. What started as complaints on Twitter of “out of stock” messages on Amazon purchases has turned into a national panic.
CBS News reports that at retailers across the country, some 40 percent of the top-selling baby formula products were out of stock as of late April, according to an analysis from Datasembly.
"This is a shocking number that you don't see for other categories," Ben Reich, CEO of Datasembly, told the news network.
The story got enough traction to finally get the attention of the White House.
On Monday, Press Secretary Jen Psaki said the government is doing its best to address the shortage, noting that manufacturers say they’re producing at full capacity following a product recall by the Food and Drug Administration (FDA).
“Ensuring the availability is also a priority for the FDA and they’re working around the clock to address any possible shortage,” Psaki said.
Psaki is not wrong that the product recall has made the baby formula shortage worse.
As Eric Boehm pointed out at Reason, part of the shortage stems from a suspected bacterial outbreak at an Abbott plant in Michigan, which prompted the recall of three major brands of powdered formula. Matters were made worse when the plant was subsequently shut down for FDA inspection.
Still, one could be reasonably suspicious of the idea that a single contamination could upend the entire US baby formula market. And for good reason.
A closer look at US trade and regulatory policies reveals the government itself is primarily responsible for the baby formula shortage.
‘One of the Most Tightly Regulated Food Products’
Few may realize it, but baby formula is one of the most regulated food products in America. That’s not me saying it, but the New York Times.
As Christina Szalinski reported in March 2021, “baby formula is one of the most tightly regulated food products in the US, with the Food and Drug Administration (FDA) dictating the nutrients and vitamins, and setting strict rules about how formula is produced, packaged, and labeled.”
Despite these regulations—more likely, because of them—many American parents buy "unapproved" European formula even though, Szalinski notes, it’s technically against the law.
“There are large Facebook groups devoted to European formulas, where parents share spreadsheets and detailed notes on ingredients and how these formulas compare to their US counterparts,” she notes. “Some caregivers report choosing them because European brands offer certain formula options (like those made from goat’s milk or milk from pasture-raised cows), which are rare or nonexistent in an FDA-regulated form in the US. Others seek out European brands because of the perception that the formulas are of higher quality and that European formula regulations are stricter.”
On this black(ish) market, it turns out Americans are willing to pay big bucks for European formula. Szalinski says that on one website selling EU baby formula, you’ll find German imports that run roughly $26 for a 400-gram box, which is about quadruple the price of the top US baby formulas recommended by the Times.
At times, these nefarious black market imports have resulted in high profile busts, like in April 2021 when US Customs and Border Protection agents in Philadelphia seized 588 cases of baby formula (value: $30,000) that violated the FDA’s “import safety regulations.”
Some may contend that the FDA is simply keeping Americans and their babies safe—which is no doubt what regulators want you to believe—but this overlooks an inconvenient fact: despite the FDA’s efforts, Americans are consuming vast amounts of black market baby formula, and the children are doing just fine.
The government’s regulatory war on baby formula imports isn’t the only way it has contributed to the baby formula shortage, however. Tariffs have also played a role. As Cato scholar Scott Lincicome pointed out on Twitter, the US government imposes a stiff levy on baby formula (technically a “tariff rate quota”) that amounts to 18 percent.
There’s general agreement among economists that tariffs create market distortions that harm domestic consumers over time, and there’s every reason to believe these taxes on imports have made it more difficult for Americans to access baby formula during this shortage (and hit their pocketbooks, too).
Who Gets to Choose
If the Biden administration is serious about addressing the baby formula, they’d forget about “working around the clock” and simply abolish the protectionist policies and regulations that are making it more difficult to purchase formula.
Some may contend that this would result in more foreign imports of baby formula of “questionable” quality, but it’s a mistake to believe that bureaucrats in Washington, DC (or anywhere else for that matter) have the “proper” formula that meets some universal standard.
Indeed, as Szalinski points out in her Times article, though the EU and the US both require a bunch of the same vitamins and minerals in baby formula, there are some striking differences as well, particularly in iron content and DHA (an omega-3 fatty acid).
Because the EU requires high levels of DHA, something that isn’t required at all in the US, nearly all American baby formulas fail to meet the EU standard.
“Currently, the only US formula that would meet the EU’s requirements for DHA is the new infant formula Bobbie,” writes Szalinski. “As a self-described ‘European-style’ formula, Bobbie is marketed as an FDA-regulated alternative to European formulas.”
Bureaucrats in DC no doubt will tell you their formula is the correct and healthy one, while bureaucrats in the EU almost certainly would contend they have the right mixture of ingredients.
This invites an important question: who actually has the best baby formula for infants, the EU or the US?
Many may think they know, but the economist Thomas Sowell reminds us this is the wrong question.
“The most basic question is not what is best, but who shall decide what is best,” Sowell says.
What Sowell was getting at is that consumers with skin in the game must ultimately decide what product or service is best for them, and government attempts to regulate that choice invariably make it more difficult for consumers to get the best product at the best price.
This is why the economist Ludwig von Mises noted that consumers—not politicians, CEOs, or bureaucrats—are the true captains of the economic ship in a free market.
“The real bosses, in the capitalist system of market economy, are the consumers,” Mises wrote in his book Bureaucracy. “They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser.”
The baby formula shortage is the latest example that shows most people in Washington, DC need to crack open some Mises and stop trying to provide “solutions” to markets.
The Baby Formula Shortage Was Made in Washington
The politicians tacitly admit that their policies are responsible.
By
May 19, 2022 6:32 pm ET
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Politicians are scrambling to pacify mothers angry about the baby formula shortage, but the one thing they won’t do is look in the mirror. Fixing the shortage requires fixing the government policies that helped to create it.
Opinion: Potomac Watch
Joe Biden's Baby Formula Shortage Plan
The shortage began after Abbott Laboratories shut down a plant in Michigan after four infants who consumed formula made at the facility fell seriously ill. Abbott controls about 42% of the U.S. market, and the other three large manufacturers (Perrigo, Nestle and Mead Johnson) haven’t been able to increase production fast enough to compensate. Ergo, empty shelves.
Enter President Biden, who on Wednesday invoked the Defense Production Act. The Cold War-era law lets the federal government conscript private businesses to produce goods for national defense and to reorder supply chains, putting some customers ahead of others. Progressives think government is the solution to every problem, which is why the law has become their household remedy to every product shortage.
Mr. Biden says the law will let his Administration prioritize raw ingredients for baby formula. He also plans to send government planes to fly in supply from overseas. But there doesn’t appear to be a shortage of formula ingredients. Nor is there a problem transporting it. The main barriers to increasing supply are regulatory.
Trade protectionism—including tariffs of up to 17.5%—and Food and Drug Administration labeling and ingredient requirements limit competition. About 98% of U.S. infant formula is made domestically, though it’s no safer than European or Australian products. While FDA has the authority to inspect foreign plants, tariffs make imports less competitive.
Solution: Suspend tariffs and ease labeling and ingredient requirements for trusted partners. The FDA now says it will use enforcement discretion on product labeling and provide a streamlined import entry review process for products from foreign facilities with positive inspection records. But these trade barriers shouldn’t exist in the first place.
House Democrats passed a bill Wednesday that would give the FDA $28 million more to inspect foreign plants. OK, but the FDA’s problem isn’t too little money. It’s too much regulation.
A more helpful House bill would let the Secretary of Agriculture waive rules for the Women, Infants, and Children (WIC) program amid formula shortages. These rules limit new mothers to buying formula from the sole-source contractor in the states, which manage WIC.
Exclusive state contracts effectively give formula providers a monopoly. WIC makes up about half of the U.S. formula market, and Abbott and Mead Johnson have program contracts covering 87% of infants. Many supermarkets only stock shelves with the exclusive state-contractor, and doctors at hospitals are more likely to recommend them. Where are Lina Khan’s Federal Trade Commission trust busters when you really need them?
While the House legislation will help at the margin, broader reform is needed. But Democrats say they don’t have time for bigger fixes—it’s so much easier to round up the usual suspects. They’ve already begun investigating Abbott and other producers. “I think there might be a need for indictment,” Nancy Pelosi said this week. She means business executives, not Members of Congress, alas.
Meantime, Oregon Sen. Ron Wyden is blaming the shortage on—you can’t make this up—the 2017 GOP tax reform. What does one have to do with the other? The reform gives producers more capital to increase supply.
The formula shortage should ease as the Abbott plant comes back online and imports increase. But the lesson for America’s political class is that government policies that limit competition create supply-chain vulnerabilities that eventually bite consumers.
The historical evolution of infant feeding includes wet nursing, the feeding bottle, and formula use. Before the invention of bottles and formula, wet nursing was the safest and most common alternative to the natural mother's breastmilk. Society's negative view of wet nursing, combined with improvements of the feeding bottle, the availability of animal's milk, and advances in formula development, gradually led to the substitution of artificial feeding for wet nursing. In addition, the advertising and safety of formula products increased their popularity and use among society. Currently, infant formula-feeding is widely practiced in the United States and appears to contribute to the development of several common childhood illnesses, including atopy, diabetes mellitus, and childhood obesity.
Their mothers had taken thalidomide, an over-the-counter sleeping pill and sedative produced by German pharmaceutical company Grünenthal. Four to five out of every 10 children who were exposed to the drug died shortly after birth.
"As harmless as a sugar cookie" is how thalidomide was advertised at the time. Recommended for infants and small children and for treating nausea during pregnancy, it was a big seller both in Germany and abroad.
Medication containing thalidomide was officially sold by Grünenthal, its partners and licensees in more than 70 countries, according to a report from the University of Münster. Thalidomide went on the market in 1957. Doctors initially observed nerve damage in adults, followed by an increase in deformities in children from 1959 onward. The cases became increasingly frequent.
On November 26, 1961, the German newspaper Welt am Sonntag reported on the "alarming suspicion against a widely used drug." The next day, the drug was withdrawn from the market. But in some countries, sales continued for months.
The Ebers papyrus tells us the Ancient Egyptians had an interesting way to deal with noisy crying babies: just give them a draft of opium. This practice was still very much use in the Victorian era, when it gained notoriety for the dangers the use of children’s opiates posed to general health.
"The Poor Child's Nurse" from an 1849 issue of British humour magazine Punch. Source: HarpWeek.
We know in this era opium was readily used as a cure for a bad cough, or aches and pains, but it is less well known that opium was also given to children, and even babies. Restless or teething babies and small infants would be given concoctions such as Mrs. Winslow’s Soothing Syrup, which contained morphine (an opium derivative). There were at least ten brands of mixtures aimed at children and infants including Atkinson’s Royal Infants’ Preservative, and Street’s Infants Quietness. The most famous preparation of children’s opiates was Godfrey’s Cordial, which was a mixture of opium, treacle, water and spices.
A glamourised and seemingly tranquil card advertisement for Mrs. Winslow’s Soothing Syrup. Source: University of Buffalo.
Medical Officers during this period were convinced that opium was a major cause of infantile death, with the use of opium becoming widespread amongst working class families. Opium was often described as the ‘Poor Child’s Nurse’, due to its ability to stop hungry babies from crying. Attitudes towards the administering of opium to children were often casual, with preparations such as laudanum and paregoric stating recommended doses for children and infants on the labels of bottles.
The label on the back of this bottle of Stickney and Poor's Paregoric states dosages for infants as young as five days old. Source: University of Buffalo.
One Manchester druggist even admitted to selling between five and six gallons of “quietness” every week. That’s around 24 pints! Opium caused infant mortality through starvation rather than overdose; as one doctor stated that infants ‘kept in a state of continued narcotism will be thereby disinclined for food, and be but imperfectly nourished”. The scale of infant mortality at the time was not fully known, as coroners often recorded the cause as ‘starvation’. Lozenges or pastilles containing opium were often displayed within pharmacy shop cabinets in rows, very much like a candy shop.
Torches of Freedom: How women were persuaded to smoke
“Torches of Freedom” was a phrase used to encourage women’s smoking by exploiting women’s aspirations for a better life during the early twentieth century first-wave feminism in the United States. Cigarettes were described as symbols of emancipation and equality with men. The term was first used by psychoanalyst A. A. Brill when describing the natural desire for women to smoke and was used by Edward Bernays to encourage women to smoke in public despite social taboos. Bernays hired women to march while smoking their “torches of freedom” in the Easter Sunday Parade of 31 March 1929, which was a significant moment for fighting social barriers for women smokers.
Smoking as an inappropriate act for women
Before the twentieth century smoking was seen as a habit that was corrupt and inappropriate for women. Dutch painters used cigarettes as a symbol of human foolishness in the 17th century and in the 19th century, cigarettes were perceived as props of “fallen women” and prostitutes. Women’s smoking was seen as immoral and some states tried to prevent women from smoking by enforcing laws. In 1904 a woman named Jennie Lasher was sentenced to thirty days in jail for putting her children’s morals at risk by smoking in their presence and in 1908 the New York City Board of Aldermen unanimously passed an ordinance that prohibited smoking by women in public. Similarly in 1921 a bill was proposed to prohibit women from smoking in the District of Columbia. Some women’s groups also fought against women smoking. The International Tobacco League lobbied for filmmakers to refrain from putting women smoking cigarettes in movies unless the women being portrayed were of “discreditable” character and other women’s groups asked young girls to sign pledges saying that they would not use tobacco. These groups saw smoking as an immoral activity and a threat. Yet during World War I as women took the jobs of men who had gone to war, they also began smoking even though it was still considered a taboo act. Cigarettes were a way for women to challenge social norms and fight for equal rights as men. Eventually for women the cigarette came to symbolize “rebellious independence, glamour, seduction and sexual allure for both feminists and flappers.”
Advertising to women
Cigarette companies began selectively advertising to women in the late 1920s. In 1928 George Washington Hill, the president of the American Tobacco Company, realized the potential market that could be found in women and said, “It will be like opening a gold mine right in our front yard.” Yet some women who were already smoking were seen as smoking incorrectly. In 1919 a hotel manager said that women “don’t really know what to do with the smoke. Neither do they know how to hold their cigarettes properly. Actually they make a mess of the whole performance.” Tobacco companies had to make sure that women would not be ridiculed for using cigarettes in public and Philip Morris even sponsored a lecture series that taught women the “art of smoking”.
To expand the number of women smokers Hill decided to hire Edward Bernays, who today is known as the father of public relations, to help him recruit women smokers. Bernays decided to attempt to eliminate the social taboo against women smoking in public. He gained advice from psychoanalyst A. A. Brill, who stated that it was normal for women to smoke because of oral fixation and said, “Today the emancipation of women has suppressed many of their feminine desires. More women now do the same work as men do. Many women bear no children; those who do bear have fewer children. Feminine traits are masked. Cigarettes, which are equated with men, become torches of freedom.” In 1929 Bernays decided to pay women to smoke their “torches of freedom” as they walked in the Easter Sunday Parade in New York. This was a shock because until that time, women were only permitted to smoke in certain places such as in the privacy of their own homes. He was very careful when picking women to march because “while they should be good looking, they should not look too model-y” and he hired his own photographers to make sure that good pictures were taken and then published around the world. Feminist Ruth Hale also called for women to join in the march saying, “Women! Light another torch of freedom! Fight another sex taboo!” Once the footage was released, the campaign was being talked about everywhere, the women’s walk was seen as a protest for equality and sparked discussion throughout the nation and is still known today.
The targeting of women in tobacco advertising led to higher rates of smoking among women. In 1923 women only purchased 5% of cigarettes sold, in 1929 that percentage increased to 12%, in 1935 to 18.1%, peaking in 1965 at 33.3%, and remaining at this level until 1977.
The 1990s
The “Torches of Freedom” idea saw a resurgence in the 1990s far beyond the borders of America, where tobacco advertising was now becoming increasingly restricted.
In the 1990s, tobacco companies continued to advertise cigarettes as “torches of freedom” as they sought to expand their markets around the world. Such brands as Virginia Slims continued to put forward the idea of modernity and freedom in new markets. The use of this imagery when advertising the cigarette has been specifically targeted at women in countries where women are gaining more equality and liberation.
The images used in the advertising campaigns differ by region. In Spain they use images of women in masculine jobs, such as a fighter pilot, to appeal to young women—and the smoking rates among young women in Spain increased from 17% in 1978 to 27% in 1997. Tobacco companies are also using the cigarette as an image of emancipation in eastern and central Europe where cigarettes are shown as symbols of Western freedom. In the 1990s Germany was a focus for advertising, and between 1993 and 1997 the smoking rates among women aged 12–25 in Germany went from 27% to 47% even though the increase in men’s smoking for the same age group is much smaller. In Japan, various cigarettes advertised to women have encouraged women to be unique. A survey by the Japanese Ministry of Health and Welfare showed that between 1986 and 1999 smoking among women had increased from 10.5% to 23.2%. Advertisements in South Africa have shown women crossing racial barriers as black women are shown accepting cigarettes from white men and in India women have been portrayed in Western clothes with cigarettes as a sign of liberation and upward mobility. In Asia it is becoming more acceptable for women to smoke and this is leading to a greater demand. Tobacco companies advertise to women around the world, showing cigarettes as symbols of upward mobility, gender equality and freedom. The impacts of tobacco companies targeting women can be seen by the increase in the number of women who started smoking in recent years.
2019 – Where are we now?
Summary of data: