Economics Discussions

PART A – PLEASE RESPOND TO CLASSMATE DISCUSSION WHETHER YOU AGREE OR NOT & A DETAILED WHY:

Consider the topic described in the article in relation to the future of economics. Then respond to the prompts below:

• Provide a link or reference to the article

https://www.wsj.com/articles/trump-to-sign-executive-order-to-boost-u-s-production-of-essential-medicine-11596723074?mod=searchresults&page=1&pos=15

• Briefly summarize the key points of the article

On Thursday September 3^rd, 2020, President Trump signed an executive order aimed at increasing production of essential medicine, medical equipment, and protective gear in the United States. The order has a “buy American” stipulation on government agencies such as the Department of Health and Human Services, the Department of Veterans Affairs, and the Department of Defense. This requirement is designed to help establish a demand for investment in the manufacturing process here in the US.

The article goes on to outline our dependence on China for the manufacturing process of PPE, with many shipments of N95 masks have failed inspection standards in the US. China is also the largest supplier of the raw materials for manufacturing pharmaceuticals, with the United States spending $3.9 billion importing these raw materials from China in 2017. Recent production disruptions due to the global pandemic could lead to shortfalls in the materials needed to manufacture essential medications. The manufacturing process can not be set up overnight and faces many hurdles, including building facilities, clearance from the EPA for these facilities, and billions of dollars in investment. If the order is able to provide preferential treatment for companies who manufacture their drugs in the US, there will be financial incentive to move production to the US.

The ultimate goal of the order is to bring enough production home to ensure our essential medicines, medical equipment, and PPE can be supplied internally in the case of a pandemic or a CBRN (chemical, biological, radiological, or nuclear) threat.

• How do you think this area of economics might change in the future?

This order could bring about a large investment in medical manufacturing in the US, bringing construction jobs as facilities are built, then more jobs to man the production lines and maintain the equipment. With unemployment at a high rate due to the pandemic, this has the potential to put people back to work. While there is a chance that the US manufacturing process could increase cost, Trade Advisor Navarro states that by creating economies of scale and reducing waste the cost will remain the same.

• What impact would those changes have on the U.S. economy (or, if you are an international student, on your home country’s economy)?

Putting people back to work, making it possible for them to pay their bills and have money to spend to stimulate their local economy could have a positive impact on our current pandemic-stricken economy.

• Would those changes directly affect your company or workplace? Why or why not?

To answer this question I have to note that while I have been using an ophthalmology (and therefor surgical) practice as my case study for this class, two weeks ago I made the move professionally to an optometric and optometry practice, where pharmaceuticals and medical equipment are not a regular part of our routine. With that in mind, I would say that this change may only directly impact us when it comes to sourcing PPE for our employees. As it appears that the need for masks, gloves, and an intense cleaning routine will not be lessening anytime soon, we could potentially source our PPE from American companies if the price is competitive in the future.