<story><title>Bad government policy is fueling the infant formula shortage</title><url>https://reason.com/volokh/2022/05/13/how-bad-government-policy-is-fueling-the-infant-formula-shortage/</url></story><parent_chain><item><author>frankbreetz</author><text>I don&amp;#x27;t think that&amp;#x27;s true. Look at banks, to are highly regulated and there are almost 5000 of them[0]
&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.m.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Banking_in_the_United_States&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.m.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Banking_in_the_United_States&lt;/a&gt;</text></item><item><author>MichaelZuo</author><text>Was just about to say as well. The more regulated an industry is the more consolidated it will become and the higher the costs will have to be, which either get passed on to consumers and&amp;#x2F;or in cutting capacity.</text></item><item><author>bko</author><text>&amp;gt; infant formula is strictly regulated for very good reasons&lt;p&gt;&amp;gt; Also, of course, we shouldn&amp;#x27;t have let such a critical product mostly be made by 3 companies, but that&amp;#x27;s another rant.&lt;p&gt;Do you think these two are related?</text></item><item><author>jonahhorowitz</author><text>The issue here is that the FDA and Abbot didn&amp;#x27;t treat it as an emergency when the Abbot facility was forced to close in the first place. Had they acted as if it was an emergency, they would have mobilized all available resources to clean and disinfect the facility, replace the faulty milk drying equipment, and get the facility back up and running. Here we are, months later and it&amp;#x27;s now an emergency. Sure, importing from other countries will help, but like toilet paper, it&amp;#x27;s a product that has a pretty consistent demand and there isn&amp;#x27;t a lot of surge capacity out there, even in other countries, so we really need to get the facility back online.&lt;p&gt;The issue isn&amp;#x27;t bad government policy - infant formula is strictly regulated for very good reasons, it&amp;#x27;s a lack of urgency from the government and private sector to make sure a medically critical product is available.&lt;p&gt;Also, of course, we shouldn&amp;#x27;t have let such a critical product mostly be made by 3 companies, but that&amp;#x27;s another rant.</text></item></parent_chain><comment><author>missedthecue</author><text>Banks are probably the worst example you could have given.&lt;p&gt;There were ~12,500 banks in the US as recently as 1990 (when the population was much smaller than it is today!)&lt;p&gt;Since the regulations that were passed following the great financial crisis, almost zero new banks have been founded.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;ilsr.org&amp;#x2F;number-of-new-banks-created-by-year-1993-to-2013&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;ilsr.org&amp;#x2F;number-of-new-banks-created-by-year-1993-to...&lt;/a&gt;</text></comment>
<story><title>Bad government policy is fueling the infant formula shortage</title><url>https://reason.com/volokh/2022/05/13/how-bad-government-policy-is-fueling-the-infant-formula-shortage/</url></story><parent_chain><item><author>frankbreetz</author><text>I don&amp;#x27;t think that&amp;#x27;s true. Look at banks, to are highly regulated and there are almost 5000 of them[0]
&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.m.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Banking_in_the_United_States&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.m.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Banking_in_the_United_States&lt;/a&gt;</text></item><item><author>MichaelZuo</author><text>Was just about to say as well. The more regulated an industry is the more consolidated it will become and the higher the costs will have to be, which either get passed on to consumers and&amp;#x2F;or in cutting capacity.</text></item><item><author>bko</author><text>&amp;gt; infant formula is strictly regulated for very good reasons&lt;p&gt;&amp;gt; Also, of course, we shouldn&amp;#x27;t have let such a critical product mostly be made by 3 companies, but that&amp;#x27;s another rant.&lt;p&gt;Do you think these two are related?</text></item><item><author>jonahhorowitz</author><text>The issue here is that the FDA and Abbot didn&amp;#x27;t treat it as an emergency when the Abbot facility was forced to close in the first place. Had they acted as if it was an emergency, they would have mobilized all available resources to clean and disinfect the facility, replace the faulty milk drying equipment, and get the facility back up and running. Here we are, months later and it&amp;#x27;s now an emergency. Sure, importing from other countries will help, but like toilet paper, it&amp;#x27;s a product that has a pretty consistent demand and there isn&amp;#x27;t a lot of surge capacity out there, even in other countries, so we really need to get the facility back online.&lt;p&gt;The issue isn&amp;#x27;t bad government policy - infant formula is strictly regulated for very good reasons, it&amp;#x27;s a lack of urgency from the government and private sector to make sure a medically critical product is available.&lt;p&gt;Also, of course, we shouldn&amp;#x27;t have let such a critical product mostly be made by 3 companies, but that&amp;#x27;s another rant.</text></item></parent_chain><comment><author>caylus</author><text>There may be thousands of banks, but all but a few manage their funds at one of the big few, essentially acting as resellers of the big banks&amp;#x27; services. For example, I my bank is &amp;quot;Ally Bank&amp;quot;, but if I ask them for instructions on how to receive a wire transfer, they instruct me to direct it to &amp;quot;JP Morgan Chase Bank, N.A.&amp;quot;, the largest bank in the U.S. I previously used the brand &amp;quot;Simple Bank&amp;quot;, which provided accounts via &amp;quot;The Bancorp Bank&amp;quot;, the 5th largest.&lt;p&gt;It&amp;#x27;s a similar case to cell phone providers: although there are hundreds in the U.S., all but four do not operate their own network, but rather resell the network of one of the big four.&lt;p&gt;It&amp;#x27;s an interesting question, though, how much this consolidation is due to regulation versus being a result of a natural monopoly, i.e. high barrier to entry for the type of business.</text></comment>