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Trump Claims Obstruction of Justice is an Official Duty of the White House

Trump Claims Obstruction of Justice is an Official Duty of the White House

Tierney Sneed reports on Trump’s latest obstruction of justice:

The Justice Department on Monday issued a legal opinion claiming that Congress could not compel former White House Counsel Don McGahn to testify about special counsel Robert Mueller’s report. The opinion was released not long after reports that the White House was planning to instruct McGahn to not comply with a House subpoena that he testify at a Judiciary Committee hearing Tuesday.

The legal opinion can be found here and states in part:

Congress may not constitutionally compel the President’s senior advisors to testify about their official duties … This testimonial immunity is rooted in the constitutional separation of powers and derives from the President’s independence from Congress.

What an incredibly arrogant canard! McGahn is being asked to testify to Congress about what is clearly obstruction of justice – a crime. How is that an official duty of the White House? Oh wait – the Trump White House is nothing but a den of organized crime so maybe he sees committing crimes as one of his official duties!

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Weekly Indicators for May 13 – 17 at Seeking Alpha

by New Deal democrat

Weekly Indicators for May 13 – 17 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

The stock market’s “tariff tantrum” is driving down interest rates in bonds. We are in a time when government policy decisions – sometimes just passing tweets – are driving winners and losers in economic activity. And these can have immediate impact, disrupting the scheme of long leading -> short leading -> coincident indicators of the economy.

As usual, clicking over and reading helps reward me a tiny little bit for my efforts.

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“Can You Patent the Sun?”

I have access to too many articles on a daily basis to the point of where I can not read them all much less write on each topic. This particular one emanates from SWI or Swiss Info High Pharma Margins Squeeze Health Systems by Jessica Davis Plüss. The topic? Cancer drug pricing is rising rapidly and margins are exceeding 80% of price according to Swiss Public Television known as RTS. I find it interesting the Swiss are discussing what to do with cancer drug companies, the pricing of the drugs, and still maintain a good relationship. This is also relevant to non-cancer related drugs.

As you must know by now, healthcare pricing is controlled in Europe. Pricing and costs are more of a complaint in the US and still not an actionable item where Congress takes notice and “actually does something.” Some examples include cancer drugs such as Rituxan, etc. and far more common drugs such as Humalog, Vimovo, and the more familiar one in EpiPens (epinephrine autoinjector).

What About costs?

EpiPen is a good example of out-of-control pricing. In 2007 Mylan acquired the EpiPen brand from Pfizer; however, Mylan did not acquire the Pfizer subsidiary which manufactures EpiPen. CEO Heather Bresch reported to a congressional committee Mylan pays $69 per two-pack to the Pfizer subsidiary Meridian Medical Technologies. The price of a two-pack of EpiPens is ~10 times its cost.

To calculate the costs of manufacturing a product, one does not need to be an engineer or a PhD. Knowledge of the overhead, process, materials, and labor allows an astute and experienced layman to calculate the cost. Even so in 2016, a Silicon Valley engineering consultancy did perform an analysis of an EpiPen components and estimated the manufacturing and packaging costs at about $10 for a two-pack.

Whether the cost is $10 for a two pack or $34.50 for one EpiPen as Mylan claims, the costs do not vindicate wholesale price increases going from $100 in 2009, to $265 in 2013, to $461 in 2015, and finally $609 in 2016. With insurance some still have a sizeable co-pay. The list price at a CVS pharmacy is $733 for a two-pack. In some cases, a manufacturer will issue a coupon to a buyer which can be used at the pharmacy and shuffles the costs to the insure company leaving the user with a smaller co-pay. In the end, someone is still paying an out-of-control price.

The costs reflected in the attached chart come from Heather Bresch’s testimony to Congress. $334 of the $608 is paid out to pharmacy benefit managers (third-party administrator of prescription-drug programs for end payers, such as private insurers, and Medicare Part D plans), insurance companies, wholesalers, and pharmacy retailers leaving Mylan with $274 after rebates and fees. Deduct the cost of $69 of a two-pack paid to Meridian, and supposedly Mylan is left with $205 for each two-unit injector. After the company deducts expenses for research and development, sales and marketing, regulatory compliance, distribution and various access programs, profit drops to $100 per two-pack. As stated Mylan proposed cost structure is being challenged when compared to the expected costs of manufacture. WSJ claimed Mylan improperly assigned a tax to the expected profit which decreased Mylan’s profit by $66.

“Can You Patent the Sun?”

Times have changed since Jonas Salk and Albert Sabin developed their polio vaccines and purposely did not patent them. As reported by a Forbes analysis, by not patenting their vaccines each inventor/researcher lost out on profits in the $billions.

Jonas Salk had a simple answer when asked why he did not patent his vaccine; “Can you patent the sun?” Salk was not called the “Father of Biophilosophy” without reason . . . a philosophy taking in epistemological, metaphysical, and ethical issues in the biological and biomedical sciences.

Before he died, Salk was attempting to create an AIDS vaccine which he would not have patented either. Times have changed since the Polio vaccine.

As one commenter said, Salk could have patented his discovery; but his research was federally funded and all of his profits would have gone to the Federal Government. Research as tied to business interests has gone in a different direction from where Jonas Salk began as the law has changed. In place of social responsibility, a profit motive has taken hold.

Value Analysis

Novartis CEO Vas Narasimhan: “Cell and gene therapies are bringing about a new era of cancer medicines going beyond ‘just improving lives and are saving them.'” continuing; The new therapies are challenging the traditional model for paying for medical treatment and the industry is divided on this approach. Pricing for these one-time usage therapies are to be based on four key measures of value – the improvements they offer to patients both clinically and in terms of their quality of life, and the resulting benefits to the health-care system and society. As pointed out in the Swiss Info article, based on value to the patient, pharmaceutical companies believe they are justified in getting back $14.50 for every dollar invested in bring a new drug to market.

Pharmaceutical companies have noted four industry determinants (page viii-ix) of setting pricing as detailed in WHO’s “Pricing of cancer medicines and its impacts to the setting of medicine prices” technical report.

(1) Costs of R&D; Prices must account for the R&D costs of the approved medicine and the expenditures from investigating drug candidates for which marketing approvals did not occur, failed attempts, and the cost of capital.

(2) Costs of production and expenditures relating to product commercialization; Costs of production are operating expenses related to commercialization support, regulatory compliance, manufacturing, distribution, marketing and sales, and general administration. The marginal costs of production refer to the added costs of producing an additional unit of product.

(3) Value of medicine to patients, health care system and society; Besides setting prices according to the value of medicines, pharmaceutical companies often place more emphasis on setting prices according to income expectations or they attempt to reach their profit goals by setting prices as high as the market will bear.

(4) Sufficient financial returns to incentivize future R&D programs. The industry justifies prices of medicine by stating the return on investment needs to be sufficient to incentivize the discovery of future medicines and notes 20% of its revenues were re-invested into R&D.

A little bit of a discussion. Point 1 is stating the industry must account for failures, as well as the successes, and changes to the initial product. Point 2 is a capacity remark to which I would say if properly planned the capacity would already be there and the increase in one additional unit is minimal. No one plans to 100% of capacity. Point 3 assesses the value of human life by assigning a price to it with regard to the medicine or “what would you pay for a drink of water in the desert when there is none available for hundreds of miles.” Point 4 is new research and states we need to be able to have revenue to invest in it after expenses. I would question how much is actually needed.

And the other 80% which is now attributed to profit margin?

Typically Pharma has defended new product pricing with a justification of large investments in research and development and numerous clinical trials which can be successful or failures. Indeed CEO Vas Narasimhan pretty much says the same in bringing a product to market and also calls on additional criteria as justification for the increased pricing.

As linked to by Swiss Info, the World Health Organization (WHO) in reviewing the high prices for cancer drugs found the pricing strategy resulted in margins multiple times higher than just the R&D costs and even so when Distribution and Manufacturing costs were included in the analysis. For example, a vial of the breast cancer drug Herceptin costs approximately CHF50 to produce. In 2018 a vial was sold for CHF2,095 in Switzerland or 42 times its manufacturing cost. According to the WHO report ; for every dollar invested in cancer research, pharmaceutical companies earned on average $14.50 (CHF 14.50) in revenue.

The calculations of the cost data (chart) for two specific cancer drugs showed the final pricing for the two top treatments bear little relationship to R&D and/or Manufacturing costs. Swiss TV station’s (RTS) exposé revealed the pricing for two of Roche’s top cancer treatments are far more than just a recovery of R&D, distribution, and manufacturing costs. Herceptin costs are approximately CHF50 ($50) to manufacture and sold for CHF2,095 in Switzerland in 2018 which is 42 times the manufacturing cost. In terms of cost recovery, Herceptin has earned Roche CHF82.8 billion (85% profit margin) over 20 years or more than enough to recoup an investment and provide for R&D. A study of Novartis’s Glivec by the University of Liverpool revealed similar margin excess.

Roche media relations team member Ulrike Engels in defending the pricing strategy suggested the RTS calculations based on just Cost plus Margin data shows a fundamental misunderstanding of how prices are determined. Similar to what was stated by Novartis CEO Vas Narasimhan, Roche/Engels pricing of certain drugs which are life saving are based on the benefits or improvements in the treatment of patients both clinically and in their quality of life afterwards and the resulting benefits to the health-care system and society. It is not just a cost to bring a product to market plus a respectable margin. Neither is it a realization by Roche of having recovered investment costs and gained sufficient funds for R&D, the Failures, the Trials, and the Capitalization, it can relax its pricing.

Older Drugs

Pharma companies are also using the “value-based” analysis to determine pricing for old drugs even without improvement. This is precisely what HHS Alex Azar did at Eli Lilly with Humalog a decades old drug used to treat diabetes. The six million diabetic Americans watched as insulin (Humalog) prices tripled under Azar’s watch at Eli Lilly from 2007 to 2017. During his tenure as president and vice president, Eli Lilly raised the price of Humalog by 345% from $2,657.88 per year to $9,172.80 per year. The resulting pricing shock forced some patients to attempt rationing their taking of the product which in some cases caused death.

According to a JAMA study in 2017, the rising cost of healthcare and “after accounting for inflation, healthcare expenditures increased $933.5 billion from 1996 to 2013.” 50% of the increase in healthcare costs during that period was simply due to higher prices. Be that as it may, different chronic diseases have different patterns of price increases. The biggest increase was seen in diabetes care and driven largely by the rising costs of pharmaceuticals. During that period of time, Diabetes care increased $66 billion in cost of which an approximate two thirds of it being solely due to the increased cost of the pharmaceuticals used in treatment.

To be redundant, value based analysis methodology considers the extra years of life gained, the quality of life during the time period lived, and the healthcare savings gained (an overall cost reduction in treatment), in addition to other benefits, to determine the value of the drug to a person and society in which to set a price. This is the argument being made. Roche’s Herceptin targets HER2-positive breast cancer, an aggressive cancer which occurs in younger women, and claims the benefits of treatment being particularly high thereby deserving of a higher price.

Novartis applied the same “value-based” analysis to justify pricing for Kymriah used to treat unresponsive b-cell acute lymphoblastic leukemia when there are no other options for them or their families. It is a one-time treatment with follow-up treatments far less frequent than traditional therapies.

The Institute for Clinical Economic Review — an independent expert body assessing cost effectiveness of medical treatments — assigned a cost effectiveness value of up to $1,688,000 for Kymriah for its use in children. The value this treatment offers considered the four key measures to set the Kymriah list price for pediatric use at $475,000, which is well below the cost effectiveness value set by ICER, and $373,000 for rapidly progressing adult cancers.

Social Responsibility Over Profits

The questions can be asked of whether it is morally responsible or acceptable for a company to set the valuation/pricing of a product used to save a life at a level tens of times higher than actual cost to bring it to market? Is it also morally responsible or acceptable to increase an older product’s pricing when the costs have been recovered many times over? Yet, this is what the corporate expectation is for cancer drugs with its pricing and also for older drugs such as Humalog, Vimovo, and EpiPen applications based upon a value analysis to patients.

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Morehouse Keynote Speaker To Graduates, I am Paying Off Your Student Loan Debt

Morehouse College seniors got a surprise Sunday, Billionaire investor Robert F. Smith announced during his commencement speech he would pay off the student-loan debt for the historically black college’s graduating class. Morehouse President David A. Thomas; “The total amount of student loan debt from the 396 students adds up to about $40 million. He called Smith’s gesture “a liberation gift.”

Smith: “‘When you have to service debt, the choices about what you can go do in the world are constrained,’ (Smith’s gift) gives them the liberty to follow their dreams, their passions.”

It would be an interesting to track these students and compare the results to others who are burdened with student loan debt.

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Nancy Pelosi is an able tactician, but a poor strategist. She will not save the Republic

Nancy Pelosi is an able tactician, but a poor strategist. She will not save the Republic

A couple of years ago I read Andrew Roberts’ tome on Napoleon. As a schoolboy, Napoleon voraciously inhaled everything he could read about military conflict, including several then-recent books suggesting novel tactics. As a young general, he implemented those tactics to brilliant effect, winning almost every big battle he fought.

But if he was a masterful tactician, he was a so-so strategist. His strategy essentially consisted of:

1. Invade neighbor’s country.
2. Win all the big battles.
3. Occupy his capital.
4. Accept large indemnities, and territorial and political concessions, in return for going home.

By the time he got to the last big continental power, Russia, Tsar Alexander and his generals had thoroughly analyzed Napoleon’s style. So they employed a colossal, masterful rope-a-dope strategy in which they retreated after every battle was started, denying him his decisive big victories while drawing him ever deeper into Russia’s heartland – ultimately 1000 miles. The tsar even allowed him to occupy Russia’s “old capital” of Moscow, and set it afire so that Napoleon could not use it to provision him during the winter. Then he simply ignored Napoleon’s entreaties to negotiate step #4. By the time Napoleon realized the tsar was simply going to refuse to capitulate, it was too late, and Napoleon lost over half a million men in the ensuing retreat through the brutal winter back to his nearest supply lines in Poland. Napoleon was fatally wounded, and Tsar Alexander’s men harried his retreat all the way back across Europe. Three years later, Russian troops occupied Paris.

Okay, so I’m not tarring Nancy Pelosi as making Napoleonic mistakes. But there is a comparison, because while Pelosi is a very able tactician, her excessive caution makes her a poor strategist.

Take the government shutdown. Common wisdom is, Pelosi won that battle. But look what was “accomplished:” in return for a government shutdown for about 45 days, with 800,000 federal workers furloughed without pay, causing an actual downturn in economic activity I’ve called a “mini-recession”:

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Sanctions On Iran Are Hitting Hezbollah

Sanctions On Iran Are Hitting Hezbollah

That is the top headline, upper right corner front page, of today’s Washington Post, a quite long article by Liz Sly and Suzan Haidamous.  WaPo has been much criticized by Trump and his supporters for alleged “fake news” critical of his leaving the Iran nuclear deal while Iran was compliant and not only reimposing the sanctions put on by Obama to get Iran to the negotiating table for that deal, but adding more and yet more leading to a military escalation that may have peaked.  So, now maybe WaPo is rewarding Trump for saying he does not want a war with Iran (I approve of that) by headlining this story that has long been pushed by his fans as a justification for all this sanctions imposing on Iran.  Maybe Iran has been well behaved on the nuclear deal (while wickedly testing ballistic missiles, not part of the deal), but, ah ha! the sanctions will hurt its evil terrorist proxies like Hezbollah, and, wow, now we learn they are, whoopee!

It does look that indeed the heightened economic sanctions on Iran have reduced its financial support for Hezbollah, and I am not a big fan of that group.   One source quoted in the WaPo story put Iran as providing about 70 percent of Hezbollah’s funding, with it unclear by how much that has been reduced.  Hezbollah has publicly reported that it has had its funding reduced and has initiated lots of fundraisers to help offset that.  It claims not to have reduced its support of social services or paying “families of martyrs.”  It is unclear if it has had to pull back much from its involvement in the war in Syria, where the final round is probably now in place in Idlib province in the Northwest.

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US Library of Congress selects Angry Bear to archive

Dan here…the United States Library of Congress will be archiving and collecting material from Angry Bear. The overall digital archiving project began in ernest since 2013.   Abbie Grotke,  Lead Librarian Web Archiving Team, affirmed the process.  Below are excerpts from the letter of request and the Library website.

 

The United States Library of Congress has selected your website for inclusion in the historic collection of Internet materials related to the Economics Blogs Web Archive. We consider your website to be an important part of this collection and the historical record.

The Library of Congress preserves important cultural artifacts and provides enduring access to them. The Library’s traditional functions, acquiring, cataloging, preserving and serving collection materials of historical importance to foster education and scholarship, extend to digital materials, including websites. Our web archives are important because they contribute to the historical record, capturing information that could otherwise be lost. With the growing role of the web as an influential medium, records of historic events could be considered incomplete without materials that were “born digital” and never printed on paper.

The following URL has been selected for archiving:

https://angrybearblog.com/

(Dan here…from the FAQ section)

Why was my web site selected?

The Library maintains a collections policy statement and other internal documents to guide the selection of electronic resources, including web sites. Web sites are selected for archiving by Library Recommending Officers. Sites in the web archive are generally representative samples of web content that document an event or cover a particular theme or subject area for our thematic and event collections.

How often and for how long will you collect my site?

The Library archives sites at various frequencies and for various time periods based on the type of site and the collection it was selected for. Typically the Library crawls web sites once a week, once a month, or quarterly, depending on how frequently the content changes. Some sites are crawled less frequently—just once or twice a year. In some instances, the Library uses RSS feeds to identify rapidly changing content and to crawl multiple times per day.

The Library may crawl your site for a specific period of time or on an ongoing basis. This varies depending on the scope of a particular project. Some archiving activities are related to a time-sensitive event, such as before and immediately after a national election. Other collections we are developing may be ongoing with no specified end date, in order to capture changes in web sites over a longer period of time.

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TDS vs ODS vs BDS

TDS vs ODS vs BDS

This is motivated by running on in the econoblogosphere to Trump supporters who when confronted with hard facts they cannot refute revert to name calling that those stating actual facts are suffering from “Trump Derangement Syndrome” (TDS).  I have recently seen it thrown out “liberally.”  What is going on here?

The beginning of this odd label dates to the George W. Bush era, specifically 2003 when the late Charles Krauthammer, a supporter of W. upset by widespread criticism apparently coined the term “Bush Derangement Syndrome” (BDS). to describe persistent W. critics, apparently especially Barbra Streisand.  As it was, while the term was out there it was not that  frequently used during Bush’s presidency as later, although it was used enough to become established as a legit term.

When Obama came in its obvious successor, Obama Derangement Syndrome (ODS) became a serious phenomenom.  The first version of it was the infamous “birtherism,” led by non  other than Donald J. Trump, now POTUS. This was a total lie, which at an obscure moment in 2016 that got no notice, Trump admitted officially was a lie. But reportedly now his most supremely fave adviser is Lou Dobbs of the CNBC network, who was also long a hard core birtherist.

We were subjected to a later stream of less obviously false accusations against Obama that the ODS crowd accepted without question, even as their factual underpinnings were undermined. So we had a string of supposed scandals that  to this  day anyone living in the Fox News  etc bubble believes without doubt.  So there was there “Fast and Furious,” a complicated matter of US guns being sent across the  Mexican border that later ended up killing US people. This is a complicated matter with arguably some Obama admin input, but ultimately it was a W. Bush program that went sour.

Another hot deal for the ODS crowd, still showing up was the supposedly great IRS scandal that  in the end also turned out to be a big nothing, although this fact has probably had less reporting.  So after the big Tea Party win in 2010 a bunch of their groups showed up at the IRS claiming to be “general welfare” groups but not  “political” groups.  Of course they were all political groups, and it was a low level IRS employee, reportedly a Republican, who initiated the obviously completely appropriate investigation of a bunch of groups claiming tax exempt status for not being political who were blatantly political. In the end they all got their undeserved tax breaks after the ODS gang got going with their false stories that this was all due to Obama plotting.

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Larry Kotlikoff’s Social Security editorial in “The Hill”

by Dale Coberly

KOTLICOFF ON THE HILL

with Social Security

 

Larry Kotlikoff wrote an editorial that appeared May 14 in “The Hill:”  https://thehill.com/opinion/finance/443465-social-security-just-ran-a-9-trillion-deficit-and-nobody-noticed

He cried, “Wolf! Wolf! Social Security ran a 9 Trillion Dollar Deficit last year and nobody noticed!”

He went on to explain this was the increase in the “infinite horizon Present Value of the Unfunded Deficit” from 2017 to 2018.

He neglected to explain that the infinite horizon Present Value of the Taxable Payroll is over ONE THOUSAND TRILLION Dollars. Or that the 9 trillion dollars did not come from Social Security spending any more money, or old people getting more benefits, or taxpayers running out of money. It came from revising the Discount Rate from 2.7% to 2.5%.

The discount rate is a kind of imaginary number at the heart of Present Value calculations. It is a guess about the real interest rate you might have to pay or might expect to get on or from an investment. Change the guess and you change the PV calculated. The PV is a useful concept if you know what you are doing. And insane if you don’t.

A more useful number for evaluating the ACTUARIAL deficit (NOT a debt) in Social Security finances is the percent difference between expected expenses and expected income. That turns out to be about 4%. This deficit starts in about 2030 and remains the same essentially forever. That means an increase in the FICA so-called “payroll tax” (it’s really a savings and insurance plan: you get your money back with interest, more if your luck is bad)… an increase of about 4% starting in about 2030 or so will pay all future needed  benefits essentially forever.
Kotlikoff even says as much, though in a way that neither you nor he noticed.

This is the amount of money you (we) will have to pay whether we have SS or not. It is the amount that will be needed to keep old people from living (dying) in the streets and eating out of garbage cans (this means YOU when you can no longer work). This can come from personal savings, redirecting investment profits, real government taxes (that you don’t get back), or living with your son-in-law. What Social Security does is let you pay for it yourself while you are still working. Protects your money from inflation. Pays interest that keeps up with the standard of living, and insures you against the accidents that all cash is heir to.

And since the worker only sees half of the FICA, he won’t feel the extra 2% deducted from his paycheck… especially as his paycheck will be more than 20% bigger. Moreover, since there is still time to raise the “tax” gradually about one tenth of one percent per year (or less, because as you raise the tax the “deficit” recedes into the future), no sane person will even notice it. One tenth of one percent of a 50k per year salary is one dollar per week.

Kotlikoff offers his own plan: force you to pay 10% of your income to a mutual fund. Then force you to pay real taxes to make up for the difference between what the mutual fund pays you and what you paid in (that’s 0% interest), with no guarantees if you lose your job, become disabled, or die with dependents.

You can find all of this out for yourself by actually reading the Trustees Report, page 200, (NOT the summary) and “doing the math” as opposed to just prating “it’s the math” like the reporters and commentators who have NEVER done the math, or understood it. OR you can run around screaming we are all going to die, and cutting off your own head because Larry Kotlikoff has bad dreams, for which he gets paid.

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