Author Archives: Sheila

The Public Good

Americans need to reclaim the concept of the public good, and nowhere is that more important than in health policy.

Law Professor Fran Quigley has a new book coming out that examines the interface–or more accurately, the lack of an interface–between Big Pharma, Congress and the common good. Quartz recently published a review of the book, and began by referring to the infamous “Pharma Bro,” Martin Shkreli, who purchased a life-saving drug that had been on the market for some time, and jacked up the price astronomically–because he could.

Shkreli is not an outlier, according to Indiana University law professor Fran Quigley’s new book Prescription for the People. The pharmaceutical industry jacks up prices on life-saving drugs to extort windfall profits from desperate patients as a matter of course. That’s an immoral way to treat medicine, Quigley argues. The solution? Stop treating medicine as private property—and start treating it as a public good, like education or infrastructure.

It’s one thing to allow private companies and markets to set prices for items like big-screen TVs or cars, Quigley explains via email. In those cases, “purchasers can compare prices and walk away from the transaction if they wish.” But a patient with cancer or a child diagnosed with Type II diabetes can’t just walk away. “That kind of choice is not present when the good in question is life-or-death and there are no options for comparison shopping,” he writes.

 One of the great virtues of Quigley’s book is its explanation of the major role government plays in drug research. Big Pharma has long justified high prices by citing the costs of R & D; as Quigley points out, much of that research is funded with our tax dollars–but drug companies, not taxpayers, enjoy the return on that investment.

Furthermore, drug companies don’t actually funnel the bulk of their profits into research and development. Case in point: Reuters has reported that Pfizer made $45.7 billion in revenue in 2014, of which it spent $14.1 billion on sales and marketing and $8.4 billion on research.

The book details the various ways in which drug companies’ concern for the bottom line takes precedence over concern for the public’s health, and it goes into considerable detail about the perverse public policies that have facilitated those companies’ profitability.

The genesis of those favorable policies? Follow the money.

How did we get to this point? “In the last 40 years, the pharmaceutical industry has deployed billions of dollars of lobbying and political campaign contributions” to change laws to their benefit, Quigley says. One of their most remarkable successes was the 1980 Bayh-Dole Act, which allowed corporations to patent publicly-funded research. This means that pharmaceutical corporations essentially receive monopolies to sell government-created products, “truly one of the most bullet-proof business models in modern history,” Quigley says.

Quigley also takes aim at current patent practices.

The US should even consider ending medicine patents altogether, Quigley argues. “The patent system fails miserably in making medicines available to those who need them,” he says. Studies show that 70% of newly marketed drugs make no therapeutic advances on existing medicines; they are “me-too” drugs that try to carve out a portion of already existing markets for things like cholesterol medication, without bringing any improvements to the table. Furthermore, patents prevent competitors from building on previous research. Expanding grants for patent-free, open-source research would focus medical research on innovation, and make research findings available to everyone immediately, Quigley argues.

Quigley is not the only observer who faults the current patent system; economist Dean Baker goes considerably farther:

Are corporate patent and copyright monopolies a form of government-licensed private taxation? Dean Baker of CEPR thinks so: “Government-granted patent and copyright monopolies are actually much more important in determining future flows of income than debt. In the case of prescription drugs alone, patent and related protections raise the price of drugs by close to $370 billion a year over the free market price, a bit less than 2.0 percent of GDP. This is considerably larger than the current interest burden of the debt, which is approximately 1.6 percent of GDP, net of money refunded from the Federal Reserve Board to the Treasury. These monopolies are effectively like privately collected taxes.”

The book is Prescription for the People.

I know Fran Quigley, I know both his passion and his meticulous attention to fact and evidence. He’s a clear writer and a clear thinker. You should buy the book.

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Money, Tax Havens and Inequality

Income inequality has become a major concern over the past several years, as multiple indicators point to a gap between the rich and poor that exceeds that of the Gilded Age. Economists and policymakers recognize the existence of the gap, but haven’t necessarily agreed on its dimensions.

Meanwhile, Congress– surprise!!– is just beginning debate on a tax “reform” bill that in its current form would further exacerbate inequality, with a “reverse Robin Hood” approach that takes from the poor and gives to the rich.

New studies that give us the ability to make more accurate estimates of the gap’s size suggest that–if anything–the distance between rich and poor is far larger than previously supposed.

From Journalists’ Resource, we are directed to recent research on tax havens and other methods used by the very rich to–shall we say “obscure”– the actual amount of their wealth.

And guess what? The rich are a whole lot richer than even the more suspicious among us  thought.

It’s difficult to assess the net worth of the world’s super-rich. Havens like the Cayman Islands, Switzerland and Hong Kong are happy to stash their cash, offering privacy and a shelter (often perfectly legal) from taxes. And without knowing how rich the rich are, we can’t make an accurate assessment of income inequality.

But new sources of data, including leaks such as the Panama Papers, are helping researchers shine light on these shelters.

That is the impulse behind two new working papers for the National Bureau of Economic Research by Annette Alstadsæter of the Norwegian University of Life Sciences, Niels Johannesen of the University of Copenhagen, and Gabriel Zucman of the University of California, Berkeley. The team shows that measuring income by tax declarations alone is misleading – since so many people dodge their taxes – and that income inequality in many countries is far worse than previously thought.

One team of researchers estimates that amounts equivalent to ten percent of global economic output – that was $5.6 trillion in 2007 – are held offshore. Because it is out of the taxman’s sights, it is also out of sight of those trying to account for global wealth and/or global tax avoidance.

Speaking of “tax avoidance” (another word for evasion), a second study focused on Sweden, which the researchers believe–for a number of reasons– is one of the countries with the lowest percentage of tax cheats.

They found that households with $10-12 million in assets were twice as likely as households with $5-6 million to conceal assets from tax authorities. For that matter, the richer the  household, the more likely to cheat; households with over $45 million were four times more likely to “stash” their wealth than those with “only” $5-6 million.

Thus, the wealth in offshore tax havens is “extremely concentrated”; the top 0.01 percent of households own about 50 percent of it.

For the top 0.1 percent of households, accounting for accounts offshore increases their wealth by a third.

So–if the percentage of tax evaders in the United States is no more than the percentage in Sweden (and if you believe that, I have some swampland in Florida to sell you…), the top one percent of American plutocrats have a third more wealth than we previously thought.

And what we previously thought is bad enough! Click through for the graphic…

If history is any guide, this will not end well.

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Trump, Moore And The “Grand Old Party”

Yesterday’s post dealt with Roy Moore’s decisive, ten-point victory over Luther Strange in this week’s Alabama GOP primary. Moore won although Strange had the (mostly) full-throated support of Donald Trump.

Moore’s win suggests that– although Trump’s election may have “unleashed” the party’s rabid base– “the Donald” cannot control it.

The GOP’s Congressional leadership is similarly unable to control the members of what has been called the “lunatic caucus”–Representatives sent to Washington from deep-red gerrymandered districts controlled by that same base.

It’s hard for many of us to wrap our heads around the reality of today’s Republican Party. For those of us who once worked for a very different GOP, the current iteration is nothing short of tragic. All political parties have their fringe crazies–the Democrats are certainly not immune–but in the GOP, the crazies have taken control; sane, moderate, fiscally prudent and socially tolerant Republicans have retreated or departed– or been ejected to taunts of “RINO.”

The number of American voters who identify as Republicans has diminished–in 2016, Gallup put it at 26%– but most of those who remain are dramatically different from even their most conservative antecedents. To the extent they have actual policy preferences, rather than the free-floating animus and overt racism that found its champion in Trump, those preferences are represented by Moore and his ilk.

Roy Moore embodies what the majority of today’s GOP–its most reliable voters, its “base”–support. And that reality is absolutely terrifying, not just because our democratic system requires two sane, adult parties in order to function, but because Moore’s beliefs aren’t just the ravings of a lunatic (although they certainly are that), they’re incompatible with every principle of the American Constitution and legal system.

Think I’m exaggerating?

Before the primary election, The Daily Beast dug out statements Moore has made over the years. During a speech he gave to a fundamentalist Christian political organization, Operation Save America, he said

“I’m sorry but this country was not founded on Muhammad. It was not founded on Buddha. It was not founded on secular humanism. It was founded on God,” he said according to reports by AL.com.

He has frequently charged that Islam is a “false religion” that goes “against the American way of life.”

“[Islam is] a faith that conflicts with the First Amendment of the Constitution,” Moore said during a 2007 radio interview with Michelangelo Signorile, “The Constitution and Declaration of Independence has a direct reference to the Holy Scriptures.”

His homophobia is notorious. In a custody decision, he wrote that homosexuality is  “an inherent evil against which children must be protected.”

CNN also uncovered a 2005 interview between Moore and Bill Press during C-SPAN2’s After Words where he compared homosexuality to bestiality.

“Just because it’s done behind closed doors, it can still be prohibited by state law. Do you know that bestiality, the relationship between man and beast is prohibited in every state?” Moore told Press. When asked if Moore was comparing homosexuality to bestiality, he replied, “It’s the same thing.”

Moore rejects evolution. He attributes the 9/11 attacks to “God’s retribution” for our national “immorality,” and insists (against all historical evidence and the text of the Constitution) that the Founders established America as a “Christian Nation.”

These and similar sentiments–including a deep commitment to White Supremacy– are the banners under which today’s Republicans march. The GOP is now the party of Donald Trump and Roy Moore and Mike Pence–proud racists dismissive of history, ignorant of science and political philosophy, disinterested in actual governance, and obsessed with their own self-importance.

This is what is left of a once Grand Old Party.

Abraham Lincoln weeps.

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Down Memory Lane With Mike And Roy

Roy Moore’s victory yesterday in Alabama’s GOP primary occasioned a walk down memory lane by NY Magazine.

As the magazine’s article reminded us, Moore–crazy as he is–isn’t the only radical conservative peddling a noxious stew of theocracy, white nationalism and assorted bigotries: others identified included Stephen Bannon, Sean Hannity, Ann Coulter, Ben Carson, Sebastian Gorka, Sarah Palin, Steve King, Mark Meadows, and Jim DeMint.

And, of course, Mike Pence. Which will surprise exactly no one who lives in Indiana.

As the article notes, “Pence has spent most of his political career aligned with Roy Moore as a stalwart of the Christian right.” He only looks safe and/or sane when he’s standing next to our unhinged President.

Pence nearly wrecked his gubernatorial tenure in Indiana in 2015 by pushing through a “religious liberty” bill that made his state a national pariah and the subject of major business boycotts before he agreed to modify it. But long before then, as a leader of hard-core conservatives in the U.S. House, Pence was notable in the extremism of his commitment to conservative religious ideology. For one thing, he co-sponsored “personhood” legislation designed to make fertilized ova citizens for purposes of constitutional protection. For another, he was closely associated with the shadowy conservative Christian power-elite group “The Family” (a.k.a. “The Fellowship”) along with Jim DeMint, Sam Brownback, Mark Sanford, and other fire-breathing members of the cultural right.

Political opponents like to point out that Pence failed to pass any legislation during his 11+ years in Congress, as though that is a telling criticism.  In my opinion, we should be profoundly grateful for that failure, given the sorts of legislation he sponsored. For example, Pence was one of the original co-sponsors of what was called at the time the “single most outrageous bit of right-wing legislation introduced in Congress since the days of segregation”: the Constitutional Restoration Act of 2005.

[S]ome of the wingnuttiest members of the Senate have decided to attempt to turn us into a Christian Reconstructionist theocracy once and for all and have introduced the Constitutional Restoration Act.

Though it is described as a “bill to limit the jurisdiction of Federal courts in certain cases and promote federalism,” reading its actual summary proves enlightening as to its true intent: This legislation seeks to make it possible for Congress to remove any judge who refuses to acknowledge that the basis for all law, liberty, and government is God.

We can all guess whose version of God is the “author” (according to Mike and Roy)–or perhaps only the “inspiration for”– the U.S. Constitution.

Not so incidentally, the measure would have eviscerated the Constitution’s Supremacy Clause, and made state court decisions–not decisions issued by that pesky Supreme Court– the final word on “God’s” law.

The co-authors of this modest proposal? They were none other than Roy Moore, along with his longtime sidekick Herb Titus, who was once the vice-presidential nominee of the openly theocratic U.S. Constitution Party.

Pence’s areas of agreement with Moore are extensive: both would strip LGBTQ citizens of any and all legal rights (Moore has advocated recriminalizing same-sex relations); both supported the above-referenced “Personhood Amendment” to the Constitution that would outlaw all abortions by making a fertilized egg the legal equal of a fully-grown human; both believe that Muslims are dangerous terrorists, and that American Muslims are intent upon imposing “sharia law” on Americans; both would defund Planned Parenthood…the list goes on.

The fact that Mike Pence is widely seen as an improvement over the current President–and viewed as a “mainstream” Republican–tells us all we need to know about this President and the current iteration of the Republican Party.

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Good Things Still Happen!

The news isn’t all terrible. (Okay, mostly it is. But not all.) The GOP’s latest effort to strip healthcare from millions of Americans appears to be dead, and Patheos has reported on a rare and welcome bit of bipartisanship:

The U.S. House of Representatives unanimously approved three amendments late Tuesday that would defund a notorious federal forfeiture program that was recently restored by U.S. Attorney General Jeff Sessions…

Sponsored by Reps. Justin Amash, Tim Walberg, and Jamie Raskin and co-sponsored by Reps. Steve Cohen, Jim Sensenbrenner, and Mark Sanford, the amendments address so-called “adoptive” seizures and forfeitures. Under the federal adoption program, state and local law enforcement can seize property without filing criminal charges, and then transfer the seized property to federal prosecutors for forfeiture under federal law. Local and state agencies can collect up to 80 percent of the forfeiture proceeds.

This pernicious practice had been curtailed under former AG Holder, it has been reinstated by Sessions. The amendments cut off funding for the reinstated program. Political sentiment across the spectrum has shifted strongly against asset forfeiture; more than a dozen states have moved to restrict the practice over the past few years.

For those who may not be familiar with civil forfeiture, it is a practice that allows police to seize — and then keep or sell — any property they allege is involved in a crime. Owners of the property need not ever be arrested or convicted of a crime for their cash, cars, or real property to be confiscated by the government.

As the ACLU has explained,

Forfeiture was originally presented as a way to cripple large-scale criminal enterprises by diverting their resources. But today, aided by deeply flawed federal and state laws, many police departments use forfeiture to benefit their bottom lines, making seizures motivated by profit rather than crime-fighting. For people whose property has been seized through civil asset forfeiture, legally regaining such property is notoriously difficult and expensive, with costs sometimes exceeding the value of the property.

After Sessions moved to restore the program, The Atlantic looked at the numbers, which are staggering:

Civil forfeiture has existed in some form since the colonial era, although most of the current laws date to the War on Drugs’ heyday in the 1980s. Law-enforcement officials like Sessions defend modern civil forfeiture as a way to limit the resources of drug cartels and organized-crime groups. It’s also a lucrative tactic for law-enforcement agencies in an era of tight budgets: A Justice Department inspector general’s report in April found that federal forfeiture programs had taken in almost $28 billion over the past decade, and The Washington Post reported that civil-forfeiture seizures nationwide in 2015 surpassed the collective losses from all burglaries that same year.

Civil forfeiture has always been problematic, even in theory. As practiced, it makes a joke of the rule of law, not to mention constitutional values like fundamental fairness and limited governmental authority.

Let’s hope the Senate follows the example set by the House, and tells Jeff Sessions there are limits to his regressive efforts.

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