We’re Not in Lake Wobegon Anymore

How did the Party of Lincoln and Liberty transmogrify into the party of Newt Gingrich’s evil spawn and their Etch-A-Sketch president, a dull and rigid man, whose philosophy is a jumble of badly sutured body parts trying to walk?


In the years between Nixon and Newt Gingrich, the party migrated southward down the Twisting Trail of Rhetoric and sneered at the idea of public service and became the Scourge of Liberalism, the Great Crusade Against the Sixties, the Death Star of Government, a gang of pirates that diverted and fascinated the media by their sheer chutzpah, such as the misty-eyed flag-waving of Ronald Reagan who, while George McGovern flew bombers in World War II, took a pass and made training films in Long Beach. The Nixon moderate vanished like the passenger pigeon, purged by a legion of angry white men who rose to power on pure punk politics. “Bipartisanship is another term of date rape,” says Grover Norquist, the Sid Vicious of the GOP. “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” The boy has Oedipal problems and government is his daddy.

The party of Lincoln and Liberty was transmogrified into the party of hairy-backed swamp developers and corporate shills, faith-based economists, fundamentalist bullies with Bibles, Christians of convenience, freelance racists, misanthropic frat boys, shrieking midgets of AM radio, tax cheats, nihilists in golf pants, brownshirts in pinstripes, sweatshop tycoons, hacks, fakirs, aggressive dorks, Lamborghini libertarians, people who believe Neil Armstrong’s moonwalk was filmed in Roswell, New Mexico, little honkers out to diminish the rest of us, Newt’s evil spawn and their Etch-A-Sketch president, a dull and rigid man suspicious of the free flow of information and of secular institutions, whose philosophy is a jumble of badly sutured body parts trying to walk. Republicans: The No.1 reason the rest of the world thinks we’re deaf, dumb and dangerous.

Rich ironies abound! Lies pop up like toadstools in the forest! Wild swine crowd round the public trough! Outrageous gerrymandering! Pocket lining on a massive scale! Paid lobbyists sit in committee rooms and write legislation to alleviate the suffering of billionaires! Hypocrisies shine like cat turds in the moonlight! O Mark Twain, where art thou at this hour? Arise and behold the Gilded Age reincarnated gaudier than ever, upholding great wealth as the sure sign of Divine Grace.

Here in 2004, George W. Bush is running for reelection on a platform of tragedy—the single greatest failure of national defense in our history, the attacks of 9/11 in which 19 men with box cutters put this nation into a tailspin, a failure the details of which the White House fought to keep secret even as it ran the country into hock up to the hubcaps, thanks to generous tax cuts for the well-fixed, hoping to lead us into a box canyon of debt that will render government impotent, even as we engage in a war against a small country that was undertaken for the president’s personal satisfaction but sold to the American public on the basis of brazen misinformation, a war whose purpose is to distract us from an enormous transfer of wealth taking place in this country, flowing upward, and the deception is working beautifully.

The concentration of wealth and power in the hands of the few is the death knell of democracy. No republic in the history of humanity has survived this. The election of 2004 will say something about what happens to ours. The omens are not good.

Our beloved land has been fogged with fear—fear, the greatest political strategy ever. An ominous silence, distant sirens, a drumbeat of whispered warnings and alarms to keep the public uneasy and silence the opposition. And in a time of vague fear, you can appoint bullet-brained judges, strip the bark off the Constitution, eviscerate federal regulatory agencies, bring public education to a standstill, stupefy the press, lavish gorgeous tax breaks on the rich.

There is a stink drifting through this election year. It isn’t the Florida recount or the Supreme Court decision. No, it’s 9/11 that we keep coming back to. It wasn’t the “end of innocence,” or a turning point in our history, or a cosmic occurrence, it was an event, a lapse of security. And patriotism shouldn’t prevent people from asking hard questions of the man who was purportedly in charge of national security at the time.

Whenever I think of those New Yorkers hurrying along Park Place or getting off the No.1 Broadway local, hustling toward their office on the 90th floor, the morning paper under their arms, I think of that non-reader George W. Bush and how he hopes to exploit those people with a little economic uptick, maybe the capture of Osama, cruise to victory in November and proceed to get some serious nation-changing done in his second term.

This year, as in the past, Republicans will portray us Democrats as embittered academics, desiccated Unitarians, whacked-out hippies and communards, people who talk to telephone poles, the party of the Deadheads. They will wave enormous flags and wow over and over the footage of firemen in the wreckage of the World Trade Center and bodies being carried out and they will lie about their economic policies with astonishing enthusiasm.

The Union is what needs defending this year. Government of Enron and by Halliburton and for the Southern Baptists is not the same as what Lincoln spoke of. This gang of Pithecanthropus Republicanii has humbugged us to death on terrorism and tax cuts for the comfy and school prayer and flag burning and claimed the right to know what books we read and to dump their sewage upstream from the town and clear-cut the forests and gut the IRS and mark up the constitution on behalf of intolerance and promote the corporate takeover of the public airwaves and to hell with anybody who opposes them.

This is a great country, and it wasn’t made so by angry people. We have a sacred duty to bequeath it to our grandchildren in better shape than however we found it. We have a long way to go and we’re not getting any younger.

Dante said that the hottest place in Hell is reserved for those who in time of crisis remain neutral, so I have spoken my piece, and thank you, dear reader. It’s a beautiful world, rain or shine, and there is more to life than winning.


North Carolina

Saved Graphics: The Cost of College

The figure I’d heard was that the cost of college had increased eleven-fold since 1979. This goes back even further. The cost for our out-of-state son at the University of Arizona is about $40,ooo a year. Fortunately, he has a National Merit Scholarship, and UA is one of the few state colleges that honor it, covering a major portion. He was accepted also at Berkeley, among others, where he really wanted to go, but even with some decent out-of-state scholarships, it would’ve cost us upwards of $50,000 a year—$200,000 for an undergraduate degree.




Naked Capitalism on the “Free Trade” Rape of Colombia

 fairtrade copy

Don Quijones: Colombia Pays the Steep Cost of So-Called “Free” Trade

By Don Quijones of Mexico and Spain, and editor at Wolf Street. Originally published at Wolf Street

International arbitration lawyers have a soft spot for Latin America, for a reason: over the last ten years, the region has been one of the primary sources of their exorbitant fees, which can range from $375 to $700 per hour depending on where the arbitration takes place.

By 2008, more than half of all registered claims at the International Centre for Settlement of Investment Disputes (ICSID) were pending against Latin American countries. In 2012, around one-quarter of all new ICSID disputes involved a Latin American state.

Today the region faces a fresh deluge of ISDS claims. The countries most affected include Uruguay, whose anti-tobacco legislation has been challenged by Philip Morris at an international arbitration panel; Argentina, Ecuador and Colombia, which until a few years ago had never been on the receiving end of an investor-state dispute settlement (ISDS). Now it is the target of multiple suits that could end up setting its government back billions of dollars.

The claimants include Glencore, the world’s biggest and most heavily leveraged commodities trader; Carlos Slim-owned América Móvil, the leading wireless services provider in Latin America and the third largest in the world; the Spanish insurance company Sanitas; the Swiss pharmaceutical giant Novartis; and the Canadian miner Eco Oro and US miner Tobie Mining and Energy.

Each company on that list feels that decisions or actions taken by the Colombian government have in one way or another cost or will cost them profits to which they feel entitled. And each company is doing what it has the right to do under today’s trade treaties — suing the government of that country for damages.

It is the last company on the list — Tobie Mining and Energy — that is the biggest concern to the Colombian government for the damages it seeks: $16.5 billion. That’s a lot of money for a nation with per-capita GDP of $7,831 and whose currency has lost 40% of its value against the dollar over the last 18 months. It’s the equivalent of 20% of its national budget.

The dispute revolves around a gold mining concession in the Taraira region near Colombia’s border with Brazil. In 2009 the Colombian government created the Yaigoji Apaporis national park in the Amazon rain forest. Tobie and its two consortium partners, Cosigo Resources (Canada) and Cosigo Resources Sucursal Colombia (Colombia), had been granted a mining concession for part of that region. Under the 2011 U.S.-Colombia Free Trade Agreement, the consortium claims that Colombia is liable for the company’s lost investment and future profits, which apparently amounts to €16.5 billion.

According to a new study by Krzysztof J. Pelc, an Associate Professor of Political Science at McGill University in Canada, although companies are winning fewer and fewer cases against national governments — at last count they were winning less than 10% of the indirect expropriation claims they brought against democratic countries — they are litigating more and more.

The fact that corporations can sue nations under ISDS without having to satisfy any pre-conditions, or even run the risk of being sued back, makes it ludicrously easy to bring “frivolous” claims against democratic governments, warns Tech Dirt’s Glyn Moody.

Each time a country is taken to arbitration by an international corporation, it has to shell out millions of dollars in legal fees and potentially hundreds of millions or even billions of dollars in damages. Many cases can drag on for months or even longer, draining valuable national resources and funds. Naturally, the temptation to settle before the case even reaches arbitration is huge. It might be even more tempting, especially for cash-strapped governments like Colombia, to simply reverse the offending legislation.

In Colombia, the government currently faces the prospect of not just one, but two ISDS cases over mining concessions. The second case involves the Canadian mining company Eco Oro Minerals, which has initiated proceedings against Colombia over the Andean state’s decision to protect the high-altitude wetlands, or páramo, of Santurbán, which aside from being the site of Eco Oro’s proposed Angostura mining project, provides as much as 70% of the nation’s water supply.

The gold mine has the financial backing of the World Bank, but so, too, does the Colombian government’s renewed push to protect its rainforest. Millions of dollars have also poured in from USAID’s BioREDD programme, while the governments of Norway, Germany and the UK have agreed to pay over $300 million if Colombia reduces emissions from deforestation.

In other words, while vast sums of Western taxpayer funds are pouring into Colombia to encourage it to protect its environment, Western corporations — with full backing from the World Bank — are doing all they can to prevent the government from safe-guarding its environment, including the water supply its people depend on.

That’s not to say that Colombia’s government is in any way an innocent party in all of this. For years, the current Santos administration and the Uribe administration before it have kowtowed to the demands of miners, as you’d expect from a country that depends enormously on commodities like oil, coal and gold and which has done next to nothing to reduce that dependence.

The government has also signed just about every trade agreement dangled in front of it, ignoring stark warnings that the nation’s infrastructure and companies were not strong enough for the economy to effectively compete with the likes of the U.S., Canada, Mexico, Chile and the EU. The results speak for themselves. In the last five years Colombia’s balance of payments deficit has ballooned from $9.7 billion to $18.92 billion. Since signing a historic bilateral trade agreement with its closest trading partner, the United States, in 2011, the country has gone from having an $8 billion trade surplus to a $2.5 billion deficit in 2015.

Now it faces potentially billions of dollars in damages for threatening the future profits of some multinational corporations. To avoid its current troubles, all it needed to do was carefully read the section on investor-state dispute settlements in each of the bilateral treaties it signed. Indeed, it could have just asked the opinion of the Spanish arbitrator Juan Fernandez-Armesto, who said not so long ago:

When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all […]. Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.

But for Colombia — and many other countries — it’s probably too late, having already signed to dotted line. By Don Quijones, Raging Bull-Shit

Humor: The Borowitz Report

Borowitz Report

Trump: Decision to Consider Women Humans Should Be Left to States


Credit Photograph by Scott Olson / Getty

WASHINGTON (The Borowitz Report)—Attempting to repair some of the fallout from his recent remarks about women, Donald Trump said on Sunday that the decision of whether women should be considered humans should be left to the states.

“I wouldn’t want to tell Texas whether women are humans, for example,” he said on CBS’s “Face the Nation.” “They obviously have some very strong opinions about that.”

When asked point-blank whether he considered women humans, the billionaire responded, “It should be a case-by-case thing.”

Trump also blasted the media for applying what he called a “double standard” to his remarks about women. “I can call a woman a pig and it’s totally taken out of context,” he said.

Trump’s latest comments drew a strong rebuke from his chief rival, Senator Ted Cruz, on the campaign trail in Wisconsin. “Once again, Donald has utterly failed to find a subtle way to express the Republican Party’s anti-woman views,” he said.

The Drug-Company Ripoff


How McKinsey Helped Turn Big Pharma into a Rent Extraction Business

Posted on March 25, 2016 by 

The pharmaceutical industry has long enjoyed very generous government support, yet over the last two decades has taken to putting profits (meaning CEO and C-level bonuses) over combatting disease. Drug companies in the US benefit from decades of large-scale research and development by the National Institutes and Health and other Federal agencies. They also get R&D tax credits that to a large degree represent an acceleration of tax break for the expected future profits. Yet when those profits actually show up, they shift them offshore to avoid paying taxes in the US.*

And let us remind you that it not the responsibility of corporate executives; the “maximize shareholder value” theory of governance was made up by economists and does not have a legal foundation (see here for a longer discussion). And even if that were the case, actually trying to achieve that goal is counterproductive. As John Kay of the Financial Times explained in a 2004 article, and expanded in his book Obliquity, in complex systems, attempting to chart a straightforward path to a goal typically fails. Why? We don’t understand the system well enough to define an efficient way through it. For instance, a study that paired companies in a series of industries, one that chose complex and aspirational goal versus ones that set out to “maximize shareholder value,” found that in every case, the company with richer and loftier objectives performed better than its counterpart.**

One of the poster children for anti-social conduct by Big Pharma is Valeant, which is basically an up-market version of Martin Shkreli, a patent troll whose main method of “adding value” has been to buy drug businesses and jack up prices. A post yesterday at Business Insider recaps some of the high points of the well-warranted consternation over Valeant’s practices:

Valeant’s stock has fallen over 85% in the last year, in part because of scrutiny over its pricing practices. The House of Representatives is investigating the company for jacking up the prices of two heart medications over 200% and 500% respectively. Hillary Clinton has called out the company in her campaign videos, and the Senate has gone after the company for this practice as well.

This issue, combined with accounting issues, forced the company to say that it would change its business model, and rely on sales volume to generate revenue last December. It also said it would cut some prices — just some.

Either way, the market isn’t convinced, and some analysts say that Valeant will never be what it once was because without the ability to jack up prices of the drugs that it acquires. See, Valeant doesn’t really do its own research and development. It only spends about 3% of revenue on that, while its peers spend average of about 13% on it.**

Business Insider also pointed out:

Valeant Pharmaceuticals doubled the price of a drug called Seconal, which helps terminally ill patients end their lives peacefully, according to a report from KQED News.

Valeant purchased the drug last February, and jacked up the price from $1,500 to $3,000 after the state of California proposed legalizing assisted suicide.

The KQED report states that Seconal is an 80 year old drug.

John Gapper put the spotlight on the connection between the consulting firm McKinesy and Valeant today in McKinsey’s fingerprints are all over Valeant:

Valeant’s downfall is not exactly McKinsey’s fault but its fingerprints are everywhere. Half of its six-person senior executive team formerly worked at McKinsey, including Michael Pearson, its chief executive, and Robert Rosiello, its finance director. So did Ronald Farmer, the director who chairs its “talent and compensation” committee, which temporarily transformed Mr Pearson into a billionaire….

Like Enron’s “asset-light” strategy of trading power rather than owning power plants, Mr Pearson brought a consultant’s clinical eye to pharma. He despised costly research (“Be prudent about investing ahead of need — curse of the industry” was one motto), preferring to acquire proven drugs and raise prices.

No one did this more abruptly than Mr Pearson: “Our strategy is basically the education I had through McKinsey,” he said in 2014. He turned Valeant into a hyperactive acquisition vehicle, which not only benefited Wall Street banks but consulting firms for whom post-merger integration work is a labour-intensive, high-margin operation.

But what I find most damning is Gapper’s throwaway observation:

McKinsey provided the intellectual underpinning for pharma companies to rethink radically in the mid-2000s, when drugs pipelines seemed to have dried up and research productivity fell. As the firm’s partners concluded repeatedly in calling for “a bolder, more radical approach to Big Pharma’s operating model”, boards and executives had to alter course and cut costs.

And Pearson put that into place not only at Valeant, but for years before that as the head of its global pharmaceuticals practice. Even though drug companies have very handsome cash flows, they now prefer to leave the hard work of discovering new drugs to smaller players like biotech companies,**** snapping them up if they make a breakthrough.

Roy Poses at The Health Care Renewal blog has written with great energy and detail about the corrosive effect of what he calls generic management, or what could also be described as misrule by MBAs, on the delivery and quality of health care. Not only do they increase the cost of the adminisphere through their lofty pay, but they also make clear that they have little interest in or respect for clinical expertise, and wind up degrading care and demotivating staff.

Given how many MBAs have been churned out, and how they’ve wound up ensconcing themselves in other fields, like higher education, which similar dubious effects, one might argue that Valeant-like strategies would have inevitably have taken hold. But McKinsey operated as a major transmitter and legitimator of extractive practices.
* Pharmaceutical companies pay so little tax that many top tax professionals believe the companies exaggerate the tax savings they will achieve through inversions in order to assure shareholder approval.

** One could argue that “maximizing shareholder value” has served as an excuse for rent extraction by top executives, so this outcome is a feature rather than a bug.

*** Bear in mind that that 13% figure overstates what laypeople would consider to be R&D by a large degree. For the 15 years, well over 80% of FDA “new drug applications” are for extensions or minor reformulations of existing drugs. In other words, the “new drug application” process as currently practiced is mainly about extending license protection, not invention.

**** “What’s the difference between high tech and biotech? How long it takes you to find out you’ve lost all your money.”

Rich black kids are more likely to go to prison than poor white kids




Humor: The Borowitz Report

Borowitz Report

Sanders Sends Vegan Thugs to Attack Peace-Loving Nazis



CINCINNATI (The Borowitz Report)—Republican front-runner Donald Trump was crying foul on Monday after Vermont Senator Bernie Sanders allegedly dispatched an army of vegan thugs to attack a rally of peace-loving Nazis in Cincinnati.

According to Trump, he had begun to address a group of “orderly and civil Nazis” at a downtown arena when his audience was suddenly set upon by an unruly mob of angry vegans, many menacingly clad in Birkenstocks and sustainable garments.

The Sanders supporters, singing an alarmingly militant version of Simon & Garfunkel’s “America,” marched into the arena and began “intimidating and threatening” the Nazis, Trump said.

“Make no mistake about who is starting the violence at these rallies,” Trump said. “It’s the vegans.”

Carol Foyler, a Nazi from suburban Cincinnati, said that she feared for her life when one of the vegans “ripped a Trump sign” from her hands and “tried to recycle it.”

Harland Dorrinson, a Kentucky Nazi who drove to Ohio to hear Trump speak, said he would never have attended the rally if he had known “there would be troublemaking vegans there.”

“One of them tried to swing an NPR tote bag at my head,” the terrified Nazi said.