How we got into this financial mess. At least 3 times.

Daily Kos: Three Times is Enemy Action.

We owe Mark Sumner (aka DevilsTower) a huge debt of gratitude for this piece. (No pun intended. Really.)


College students pay for tax cuts

The money has to come from somewhere. You can’t simply “cut taxes in the face of huge deficits”: and expect no consequences. With the “ridiculousness of the Laffer curve”: (or Bush’s implementation of it) being exposed every day and “record profits”: at oil companies, you’d expect some less mind-bogglingly stupid deficit reduction strategy.

But no. Here it is. Wait for it: “charge college students”: “higher interest rates”: That’s right, as part of the Deficit Reduction Act, we can’t bring ourselves to stop the tax-slashing on rich companies, but we are willing to charge more for people who want an education?

Perhaps it is a valid argument that student loan rates and guarantee fee waivers are too generous. I doubt it, but I will entertain the possibility that, in the face of record deficits and debt, we should take that step. However, let’s place this in context:

  • record profits for oil companies
  • “$70 billion tax cuts”: that will

    Democrats also cited a joint study by the Urban Institute and the Brookings Institution — two center-left think tanks — that shows taxpayers with incomes greater than $1 million per year winning tax cuts of $42,000 under the bill while families with incomes of $50,000 a year would average a $46 tax cut.

  • record debt
  • record deficits

I’m for tax cuts as much as the next guy, but as part of a sensible economic strategy. This strategy is not sensible. This is a strategy of a government that cares more about millionaires than it is about people who go to school to become more productive members of society. Think about it – Rep. McDermott may think of $41,000 as an all-expense-paid vacation, but a state college student would think of it as an education for life.

Drugs, costs, economics

The $800 million figure has been tossed around as the cost of making the first pill of a new drug. Derek Lowe, and some commentors, “discuss the topic”: (Definitely read the comments, also.)

The figure itself hides a lot of issues. As Ben Robinson points out, it is the oft-cited _economic_ cost of drug development, rather than the sum total of receipts entered into the ledger book. Given the time scale of drug development, the effect of inflation isn’t trivial. For example, the price of milk is quite a bit higher than 10 years ago, and that’s the way our growth-oriented economy works. So, which number is the correct one to use? Well, that depends on what you want to examine.

What I can say is that the sum total of receipts goes to hundreds or thousands of people that make a clinical trial work – clinical workers, doctors, patients, statisticians, project managers, medical writers, data entry specialists, medical coding specialists, programmers/information technology specialists, regulatory specialists, and so on. I can also say that this money has to flow even if the drug fails, and few drugs that go through the development process succeed. For example, 4 out of 5 that make it to late stage trials fail.

That leaves us to consider the returns — economic and social — we get on having another pharmaceutical on the market, and that’s a debate I’d love PhRMA to address.

Do we have a free market?

I don’t “think so”:

The oil crisis—what do you think?

James Kunstler of predicts “doom and gloom”: pretty soon due to fallout from falling energy production. The argument, as outlined, goes like this (and include natural gas in with oil here, where appropriate):

1. We don’t have to wait for the last drop of oil to have an energy crisis. The energy crisis starts when the year of “peak production” is over and production starts to slide. This is because the easiest oil is extracted first, followed by harder-to-get and lower quality oil. The crisis involves declining supply and higher prices.
2. Alternative energy sources (in the current generation) depend on high initial energy inputs, presumably from oil. We probably will not get to the point where we can implement self-sustaining non-oil energy production.
3. We probably have hit peak production, and already on the decline.
4. As resources decline, people will resort to violence to maintain their standard of living.

He could be right, but maybe not. I understand the peak oil argument, and to some degree I buy into it. I don’t know if we’ve hit peak production (worldwide), but I wouldn’t be surprised.

My questions are:
1) is the outlook on alternative energy sources really that bleak? Kunstler dismisses each of the popular ones in one sentence or two, though maybe there is a lot of research behind each one of those sentences, I don’t know. Given a sound, forward-looking energy policy, can we develop and implement the technology to maintain a reasonable energy output that is not dependent on oil?
2) is there technology that we can use now to augment our fossil fuel energy source? Can this extend the life of the fossil fuel source we have now?
3) is a lower energy output really that bad? Do we need to use electricity for everything? Really, can we survive without using so much power? I think we can, and I think that people can adjust. People have been thinking for years about conservation and alternative energy strategies, such as alternative transportation. This is on people’s minds, and I think that our only hope for weathering the Long Emergency, should it emerge, is to have faith that people will adjust their lifestyles. Otherwise, we’ll spend a few years in dread and then create the thing we fear.

Yeah, what he said …

I usually enjoy the commentary of “Derek Lowe.”: Today he has an especially pointed article about “capitalism and research.”: Someone apparently made the comment that people in the pharma industry are like automatons producing science for the big profit machine. And it is true that the pharma _business_ is about profit, much the same as the soda _business_ or the entertainment _business_. However, being in business for profit does not mean that workers are automatons. I’d be willing to wager that any job that can be performed without thought will be replaced by a machine in a matter of months or a few years.

Even within the bounds of a contract or regulations there is always room for surprise, and that is why the pharma industry depends on thousands of intelligent and well-educated people. People’s bodies do the darndest things, and, when it comes down to it, we really don’t know how most drugs work. Because we don’t know how drugs work, we can’t really anticipate what rare but serious side effect there will be, and so we have to be on the lookout for them. We have to be able to distinguish side effects of a drug from other illnesses, etc., etc. and the list goes on.

The business side of pharma drives research at a breakneck pace. But it’s not like a “Coca-cola”: factory where one simply monitors the conditions of the machines that produce and bottle. This is real research, and the people I work with are very interested in science, and I’ve been known on occasion to find some unexpected surprises. If I didn’t, I’d change industries.