Friday, July 13, 2018

Big Pharma and the Rise of Gangster Capitalism

$8 per vial in competing developed-world nations and $38,892 in the U.S. That says it all.
Thanks to decades of gangster films, we all know how gangster capitalism works: the cost of "protection" goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and "customer demand" is jacked up by any means available-- addiction, for example.
This perfectly describes the pharmaceutical industry and every other cartel in America. You might have read about the price increase in Acthar gel, a medication to treat Infantile Spasms. (via J.F., M.D., who alerted me to the repricing of this medication from $40 in 2001 to the current price of $38,892.)
The compound first received approval in 1950, and various branded versions have been approved in recent years. Let's be clear: this medication did not require billions of dollars in research and development, or decades of testing to obtain FDA approval; it's been approved for use for the past 68 years.
Yes, you read that correctly: a medication that's been in use for 68 years went from $40 a dose in 2001 to $38,892 today. Don't you love the pricing? Not a round 38 grand, but $38,892. You gotta love these gangsters!
There's another related term to describe this form of capitalism: racketeering.That's what mobsters do--operate rackets.
The Big Pharma racket enriches a number of gangs practicing gangster capitalism: the drug companies themselves, of course, but some doctors are profiting from the racket, and so are pharmaceutical lobbyists:
Study highlights role of doctor conflicts of interest in Medicare spending on Mallinckrodt drug Acthar Study published in JAMA indicates nearly 90 percent of doctors prescribing HP Acthar Gel took payments from drug's manufacturer.
Here are the money quotes:
In 2014 Mallinckrodt raised the price of Acthar further to $34,000. The Federal Trade Commission and attorneys general from five states sued Mallinckrodt for anti-competitive behavior with regard to the acquisition of Synacthen Depot and the monopolistic pricing of Acthar, and in January 2017 the company settled, agreeing to pay $100 million and to license Synacthen Depot to a competitor. According to Kaiser Health News, Mallinckrodt responded by increasing its Congressional lobbying to $610,000, and its contributions to Congress members to $44,000, in the first quarter of 2017.
As an off-patent pharmaceutical, a similar drug, differing in formulation, available in Europe, made by a different manufacturer, sells for $8 per vial.
So a medication to treat infants costs $8 per vial in Europe and $38,892 in the U.S. Don't you just love gangster capitalism to death? Because death and suffering is the gangsters' ultimate threat: pay up or die.
Here's another example of Big Pharma gangster capitalism at work: Insulin Drug Price Inflation: Racketeering or Perverse Competition?
Don't you wish you had a racket where you could raise prices by 10% a year like clockwork, or triple the price of your "product" every decade?
The increases are effective as of July 1. In most cases, the increases are just over 9%, which is in line with the annual 10% price hikes adopted by most drug companies. Putting that number in context, core inflation printed at 2% last week.
Here's a chart of the net result of gangster capitalism:
Gangster capitalism is the new model of "growth" in America, the model used by every cartel from higher education to Pentagon contractors. Eliminate actual competition, raise prices in lockstep with other cartel members, lobby the government to pay your extortionist prices, and threaten any resisters with severe consequences.
Try resisting your local government's property tax increases to cover insiders' pensions and healthcare benefits: it's always "for the children," of course, and if you don't pay up, we'll just auction off your house.
There's no difference between that and being told you're gonna be wearing concrete overshoes if you don't comply.
The U.S. economy is nothing more than an exploitive jumble of rackets, insider plundering and gangster capitalism. $8 per vial competing developed-world nations and $38,892 in the U.S. That says it all.


Summer Book Sale: 30% off Kindle editions, 25% off print editions. If you're interested in real solutions, check these out:
Resistance, Revolution, Liberation ($6.95 Kindle, $15 print)
Read the first chapter for free.


My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.
Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Kay R. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.
 
Thank you, Price T. ($50), for your magnificently generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Read more...

Wednesday, July 11, 2018

Will AI "Change the World" Or Simply Boost Profits?

The real battle isn't between a cartoonish vision or a dystopian nightmare--it's between decentralized ownership and control of these technologies and centralized ownership and control.
The hype about artificial intelligence (AI) and its cousins Big Data and Machine Learning is ubiquitous, and largely unexamined. AI is going to change the world by freeing humankind from most of its labors, etc. etc. etc.
Let's start by asking: who owns all this AI? This raises two other questions:who benefits as "software eats the world" (to use Marc Andreesen's pithy phrase), and to what purpose is all this technology being applied?
The answers are painfully obvious: large global corporations, many of which function as quasi-monopolies (Facebook, Google et al.), are the owners of these new technologies, and the purpose being pursued is to maximize profits and secure a monopoly that insures high profits into the future.
The hype takes two predictable pathways, one Jetson-cartoonish euphoria and the other dystopian ruin. Self-driving vehicles will change the world in wonderful ways by eliminating the source of accidents: human error.
And that's a nightmarish prospect because what will those millions of people currently driving vehicles do for a living?
Few people ask: who will profit from all this? Obviously, the manufacturers of self-driving vehicles and the owners of services which replace private vehicles.
The real race in AI is to secure profitable franchises and eliminate competitors by scaling up faster than other corporations.
This is why the market cheers Netflix burning billions of dollars every year: if they're burning billions, they must be scaling up faster than competitors, and thus they will be the ultimate "winner" in the race to create and distribute mediocre content globally.
Consider the uses which corporate-owned AI has already been used to maximize profits: Facebook's manipulation of its users' data and content feeds and its selling of their data.
After a brief downturn due to fears of regulation, the market is back in love with Facebook's immense profits, and Facebook's stock is once again at record highs.
AI and Big Data collection is the profitable heart of Surveillance Capitalism, which includes Amazon's gargantuan contracts with the National Security agencies and similar work being performed by many other lower-profile contractors (SAIC, et al.)
Rather than a Jetson-cartoonish world of intelligent robots doing all the work so we can all become poets and watch mediocre films all day long, what AI is doing in the real world is extracting profits from data collected from the populace either to market something more effectively or to control the populace more effectively.
The AI-robotics enthusiasts never seem to actually work in the AI-robotics industries. They are media types who extrapolate extrapolations without asking the key questions:who will own this technology, and to what purpose will it be applied?
We know the answers: global corporations and maximizing profits.
To dismantle just one part of the Jetson-cartoonish worldview of robots and AI becoming essentially free to everyone: fabricating a robot will never be free because robots require large quantities of energy and resources for their manufacture and maintenance. Even if human labor has been completely eliminated, the costs of extracting, refining and transporting resources remain, along with the costs of extracting the energy to do all this work as well as manufacture and assemble all the parts.
Eliminating human labor removes very little of the cost structure.
As for AI software being "free"-- it will be free like the Android operating system and the Apple iOS: free to those developing profitable uses of corporately owned franchises.
In my worldview, AI has one purpose: eliminating bias and privilege. Properly programmed software won't keep track of skin color or other sources of human bias.
The danger is corporately owned software tracks everything that can be used to market or control the populace, and this includes every nuance of bias and privilege.
The real battle isn't between a cartoonish vision or a dystopian nightmare--it's between decentralized ownership and control of these technologies and centralized ownership and control.
The CLIME system (as described in my book A Radically Beneficial World) is in effect a decentralized, distributed AI system that organizes a network of independently, democratically operated community groups that pay members to perform needed work in their communities.
Will AI be harnessed to maximize profits for the wealthy few, or will some thin, decentralized slice of these technologies actually serve unprofitable human needs?
Summer Book Sale: 30% off Kindle editions, 25% off print editions. Read the first chapters for free.... your support of an independent author with zero institutional support is much appreciated.
Resistance, Revolution, Liberation ($6.95 Kindle, $15 print)
Read the first chapter for free.


My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, William M. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.
Thank you, John L. ($20), for your most generous contribution to this site -- I am greatly honored by your support and readership.

Read more...

Sunday, July 08, 2018

The USA Is Now a 3rd World Nation

I know it hurts, but the reality is painfully obvious: the USA is now a 3rd World nation.
Dividing the Earth's nations into 1st, 2nd and 3rd world has fallen out of favor;apparently it offended sensibilities. It has been replaced by the politically correct developed and developing nations, a terminology which suggests all developing nations are on the pathway to developed-nation status.
What's been lost in jettisoning the 1st, 2nd and 3rd world categories is the distinction between developing (2nd world) and dysfunctional states (3rd world), states we now label "failed states."
But 3rd World implied something quite different from "failed state": failed state refers to a failed government of a nation-state, i.e. a government which no longer fulfills the minimum duties of a functional state: basic security, rule of law, etc.
3rd World referred to a nation-state which was dysfunctional and parasitic for the vast majority of its residents but that worked extremely well for entrenched elites who controlled most of the wealth and political power. Unlike failed states, which by definition are unstable, 3rd World nations are stable, for the reason that they work just fine for the elites who dominate the wealth, power and machinery of governance.
Here are the core characteristics of dysfunctional but stable states that benefit the entrenched few at the expense of the many, i.e. 3rd World nations:
1. Ownership of stocks and other assets is highly concentrated in entrenched elites. The average household is disconnected from the stock market and other measures of wealth; only a thin sliver of households own enough financial/speculative wealth to make an actual difference in their lives.
2. The infrastructure of the nation used by the many is poorly maintained and costly to operate as entrenched elites plunder the funding to pad their payrolls, pensions and sweetheart/insider contracts.
3. The financial/political elites have exclusive access to parallel systems of transport, healthcare, education, etc. The elites avoid trains, subways, lenders, coach-class air transport, standard healthcare and the rest of the decaying, dysfunctional systems they own that extract wealth from the debt-serfs.
They fly on private aircraft, have their own healthcare and legal services, use their privileges to get their offspring into elite universities and institutions and have access to elite banking and lending services that are unavailable to their technocrat lackeys and enforcers.
4. The elites fund lavish monuments to their own glory disguised as "civic or national pride." These monuments take the form of stadiums, palatial art museums, immense government buildings, etc. Meanwhile the rest of the day-to-day infrastructure decays in various states of dysfunction.
5. There are two classes that only interact in strictly controlled ways: the wealthy, who live in gated, guarded communities and who rule all the institutions, public and private, and the debt-serfs, who are divided into well-paid factotums, technocrat lackeys and enforcers who serve the interests of the entrenched elites and rest of the populace who own virtually nothing and have zero power.
The elites make a PR show of being a commoner only to burnish the absurd illusion that debt-serf votes actually matter. (They don't.)
6. Cartels and quasi-monopolies are parasitically extracting the wealth of the nation for their elite owners and managers. Google: quasi-monopoly. Facebook: quasi-monopoly. Healthcare: cartel. Banking: cartel. National defense: cartel. National Security: cartel. Corporate mainstream media: cartel. Higher education: cartel. Student loans: cartel. I think you get the point: every key institution or function is controlled by cartels or quasi-monopolies that serve the interests of the few via parasitic exploitation of the powerless.
7. The elites use the extreme violence and repressive powers of the government to suppress, marginalize and/or destroy any dissent. There are two systems of "law": one for the elites ($10 million penalties for ripping off the public for $10 billion, no personal liability for outright fraud) and one for the unprotected-unprivileged: "tenners" (10-year prison sentences) for minor drug infractions, renditions or assassinations (all "legal," of course) and institutional forces of violence (bust down your door on the rumor you've got drugs, confiscate your car because we caught you with cash, so you must be a drug dealer, and so on, in sickening profusion).
8. Dysfunctional institutions with unlimited power to extract money via junk fees, licensing fees, parking tickets, penalties, late fees, etc., all without recourse. Mess with the extractive, parasitic bureaucracy and you'll regret it: there's no recourse other than another layer of well-paid self-serving functionaries that would make Kafka weep.
9. The well-paid factotums, bureaucrats, technocrat lackeys and enforcers who fatten their own skims and pensions at the expense of the public and slavishly serve the interests of the entrenched elites embrace the delusion that they're "wealthy" and "the system is working great." These deluded servants of the elites will defend the dysfunctional system because it serves their interests to do so.
The more dysfunctional the institution, the greater their power, so they actively increase the dysfunction at every opportunity.
The USA is definitively a 3rd World nation. Read the list above and then try to argue the USA is not a 3rd World nation. Try arguing against the facts displayed in this chart:
I know it hurts, but the reality is painfully obvious: the USA is now a 3rd World nation.


My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.
Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Eloise P. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.
 
Thank you, JAG ($10/month), for your outrageously generous pledge to this site -- I am greatly honored by your support and readership.

Read more...

Friday, July 06, 2018

We Are All Hostages of Corporate Profits

We're in the endgame of financialization and globalization, and it won't be pretty for all the hostages of corporate profits.
Though you won't read about it in the mainstream corporate media, the nation is now hostage to outsized corporate profits.
The economy and society at large are now totally dependent on soaring corporate profits and the speculative bubbles they fuel, and this renders us all hostages: "Make a move to limit corporate profits or speculative bubbles, and your pension fund gets a bullet in the head."
Not just pension funds, of course; tax revenues will also be taken out and shotas most of the state and federal income taxes are paid by high-earners and those skimming capital gains from stock options and stock-based compensation packages.
Political and financial authorities have caved in to the implicit threat, lest their share of the corporate swag be tossed in the ditch. To appease public anger, various bureaucratic thickets have been created, but as you can easily see, corporate profits have not been affected.
The global downturn resulting from China's tightening of credit in 2016 caused a remarkably under-reported panic in central banks, which pulled out all the stops to keep corporate profits high.
Subsidies, tax breaks and exclusions keep the profits flowing not just to corporate managers and owners but politicos, lobbyists and the entire food chain that serves the top of the wealth-power pyramid in America.
Notice the difference between normal and abnormal profits? The enormous speculative boom of the dot-com era doubled corporate profits in a mere decade, but those gains pale compared to the tripling in profits since the 2002 downturn:
After the dot-com bubble burst, we belatedly realized the economy had become dependent on bubbles for its growth. The panicky response of central banks revealed the depth of the dependence, and this response inflated a bubble that far surpassed the dot-com excesses.
Corporate profits have ascended through three phases characterized by advancing financialization and globalization.
The first phase of "the great moderation" and "global savings glut" (phrases deployed by the Federal Reserve) fueled the dot-com bubble.
Once that bubble popped in 2001, the Fed and other central banks panicked. Their response--lowering interest rates, unleashing unlimited credit/liquidity, etc.-- inflated a monumental bubble that was further boosted by China's admission into the WTO and the full financialization / globalization of the U.S. economy.
When this bubble predictably popped, the central banks really panicked. If we strip away the hype and propaganda, we are left with a troubling reality: there is no engine of "growth" other than speculative bubbles based on cheap credit and soaring corporate profits.
We are now drifting through the troubled waters of the third phase, the phase of diminishing returns and stagnation: the tricks of increasing liquidity to fund stock by-backs and central; bank purchases of assets are no longer goosing profits or "growth."
We're in the endgame of financialization and globalization, and it won't be pretty for all the hostages of corporate profits. Giving Amazon et al. more tax breaks won't fix what's broken, and neither will lavishing subsidies or taxpayer giveaways on global corporations that maintain the useful illusion of being based in America.
Economies dependent on bubbles for their survival self-destruct.


My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.
Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Michael J. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.
 
Thank you, Thomas Z. ($5/month), for your marvelously generous pledge to this site -- I am greatly honored by your support and readership.

Read more...

Wednesday, July 04, 2018

The Gathering Storm

The gathering storm cannot be dissipated with propaganda and bribes.
July 4th is an appropriate day to borrow Winston Churchill's the gathering storm to describe the existential crisis that will envelope America within the next decade. There is no single cause of the gathering storm; in complex systems, dynamics feed back into one another, and the sum of destabilizing disorder is greater than a simple sum of its parts.
Causal factors can be roughly broken into two categories: systemic and social/economic. The central illusion of those who focus solely on social, political and economic issues as the sources of destabilization is that tweaking the parameters of the status quo is all that's needed to right the ship: if only Trump were impeached, if only GDP hits 4% annual growth rate, if only the Federal Reserve started controlling the price of bat guano, etc., etc., etc.
The unwelcome reality is the systemic issues cannot be reversed with policy tweaks or shuffling those at the top of a crumbling centralized order. The systemic problems arise from the structures of centralization and monopoly capital, the institutionalization of perverse incentives and the depletion of natural capital: soil, water, fossil fuels, etc.
We can create "money" out of thin air but we can't print fresh water, productive soil or affordable energy out of thin air.
Regardless of their ideological labels, centralized socio-economic systems follow an S-Curve of rapid expansion during a "boost phase," a period of stable expansion (maturity) and then a period of stagnation and decline as the system's participants do more of what's failed, as they cannot accept that what worked so well in the past no longer works.
A successful model traps those within it; escape becomes impossible. That's the lesson of the S-Curve:
The Ratchet Effect is another key reason why meaningful reform of the status quo is impossible. In flush times, budgets expand as easily as waistlines, ratcheting up to consume ever-higher revenues. But once revenues start declining, the administrative/consumerist status quo is fiercely resistant to any reduction.
Like a body which has grown fat from excessive consumption and a decline in vitality/ functionality, the status quo resists any reduction in staffing or spending, sacrificing muscle to keep its layers of fat untouched.
In other words, the social crises, the constitutional crises, the financial crises--all of these are to some degree mere manifestations of the failure of centralized systems that arose to benefit from conditions that no longer exist.
Our centralized institutions and systems are failing, and shuffling the management and tweaking the parameters cannot stave off collapse.
What nobody gorging at the trough of the status quo dares admit is the system is failing most of its participants, and this is the source of populism and other manifestations of social disorder. I often publish this chart, as it crystallizes and encapsulates the verboten reality of 21st century America: the few are skimming the vast majority of the rewards of the system, at the expense of the many.
The many are politically powerless and divested of capital. Our centralized system concentrates wealth and power into the very apex of the wealth-power pyramid. In this apex, wealth, power, and control of media and surveillance all mix easily: thus Bezos controls Amazon and The Washington Post and has long-established ties to the National Security State in what's been aptly described as Surveillance Capitalism, a term that also describes Facebook and other quasi-monopolies of social media.
Rather than admit the failure of our socio-economic system, those benefiting from the system's gross imbalances are pursuing a multi-pronged strategy of control:
1. Propaganda. The basic idea here is simple: ignore what your own experience is telling you about the failure of our socio-economic system and believe a carefully tailored host of interconnected narratives that all is well and this is most prosperous, wonderful system in the galaxy, nay, the universe.
Anyone who challenges these narratives is quickly attacked and marginalized:a highly centralized state goes hand in hand with a highly centralized media. Anything outside this apex of wealth and power is dismissed as "fake news."
For example, anyone who dares measure real-world inflation is quickly attacked and marginalized, least the restive masses finally awaken to the reality that the unprotected are being ravaged by 6% to 8% annual inflation in big-ticket items while the protected elites bask in subsidies that protect their self-serving fiefdoms from the harsh reality of rising inflation (i.e. loss of purchasing power).
2. Bribery and buy-offs such as debt forgiveness, tax breaks and Universal Basic Income (UBI). To calm the restive masses who have been disenfranchized, exploited and transformed into tax donkeys, those in the apex of power offer bribes and buy-offs: hey, let's "forgive" student loan debt--but of course it's not actually forgiven; the losses are simply transferred to the taxpayers.
Tax breaks and subsidies are used to mask the ever-greater share of the nation's wealth being skimmed by junk fees, useless licencing, compliance penalties, and taxes on everything.
Universal Basic Income (UBI) is the ultimate systemic bribe. Having stripmined the unprotected non-elites of opportunity and capital, those at the top of the wealth-power pyramid are promoting basic material survival as the substitute for actually having a stake in the system.
The unspoken reality is that UBI is designed to give debt-serfs just enough income to keep servicing their debts. Why not bypass the charade of "helping the powerless" and transfer the taxpayers' money directly to the banking sector?
The gathering storm cannot be dissipated with propaganda and bribes. The status quo is only hastening its demise with its strategy of misdirection and distraction.


My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.
Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Robert P. ($50), for your splendidly generous contribution to this site -- I am greatly honored by your steadfast support and readership.
 
Thank you, Thomas B. ($5/month), for your marvelously generous pledge to this site -- I am greatly honored by your support and readership.

Read more...

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.

Our Privacy Policy:

Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Adsense and Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative)
If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.

Our Commission Policy:

Though I earn a small commission on Amazon.com books and gift certificates purchased via links on my site, I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP