Институт нового экономического мышления
07 февраля, 14:23

George Soros’ INET, the Trojan horse of the financial oligarchy

from Norbert Häring Four years ago, I framed it as a question: “George Soros‘ INET: An institute to improve the world or a Trojan horse of the financial oligarchy?” Today I would not use a question mark any more.Frances Coppola came to a similiar conclusion after attending the big INET gathering in Edingburgh in October. On her blog Coppola […]

31 января, 10:00

Energy Transitions 2018 [Promoted Content]

Policymakers, business leaders and industry experts to convene at Chatham House for discussions at the Energy Transitions 2018 conference on 19-20 March.

24 декабря 2017, 15:02

[Из песочницы] Маршрутизация локальной сети через прозрачный socks-прокси

Потребовалось пустить трафик со всех домашних устройств, включая смартфоны, через ssh tunnel. Имелось: маршрутизатор TP-LINK, подключенный к провайдеру. смартфоны и ноутбук подключенные к беспроводной точки доступа маршрутизатора. Ноутбук находился далеко от маршрутизатора (в другой комнате) и регулярно использовался, поэтому пришлось искать решение маршрутизации трафика с помощью встроенного беспроводного интерфейса (и без всяких там eth0). Инструментарий: openssh-client — стандартный ssh клиент для linux. autossh — позволяет проверять соединение с ssh сервером, и подключаться при разрыве. redsocks — прозрачный socks-прокси сервер. isc-dhcp-server — dhcp сервер. iptables — думаю, комментарии излишне. Итак, приступим. Первым делом поднимем DHCP сервер на беспроводном интерфейсе ноутбука. Установка: apt install isc-dhcp-server Настроим нужный интерфейс: nano /etc/network/interfaces # Назначаем статический IP адрес для DHCP сервера на wlan0: auto wlan0 iface wlan0 inet static address netmask broadcast gateway Узнать название необходимого интерфейса можно командой: ip a Назначим DNS: nano /etc/resolv.conf # Публичные DNS сереверы Google: nameserver nameserver # (или DNS серверы провайдера) Читать дальше →

04 декабря 2017, 18:49

Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?

And the video from October is up: **INET Edinburgh Panel**: [Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?](https://www.youtube.com/watch?v=uCgUkfhB8Uk): ---- My notes and slides: ### Ricardo's Big Idea, and Its Vicissitudes Ricardo believes in labor value prices because capital flows to put people to work wherever those things can be made with the fewest workers. This poses a problem for Ricardo: The LTV tells him that capitalist production should take place according to absolute advantage, with those living in countries with no absolute advantage left in subsistence agriculture. The doctrine of comparative advantage is Ricardo’s way out. For him, the LTV holds within countries. Countries’ overall price levels relative to each other rise and fall as a result of specie flows until trade balances. And what is left is international commodity price differentials that follow comparative advantage. Merchants profit from these differentials, and their demand induces specialization. Thus Ricardo reconciles his belief in the LTV with his belief in Hume’s “On the Balance of Trade“ and with the fact that capitalist production is not confined to the industry-places with the absolute advantage. His doctrine reconciles his conflicting theoretical commitments with the reality he sees, as best he...

09 ноября 2017, 20:56

Steve Keen: How I Sold Out To The Putin-Soros-Murdoch Conspiracy To Destroy Western Civilization

Authored by Steve Keen via RT.com, I was delighted to find myself in the Top Ten (alright; top 15) of the European Values list of 2,326 “Useful Idiots” appearing regularly on RT shows, and thus legitimizing Vladimir Putin’s attempt to destroy Western civilization as we know it. Why delighted? Because it completes the set of conspiracies to which I can now be accused of belonging. They include: The Putin Conspiracy, since I am regularly interviewed on Russia Today (and even worse, I now get paid to write for RT!); The Soros Conspiracy, since my research, has been funded by the Institute for New Economic Thinking (INET) which he established; The Murdoch Conspiracy, since I appear every week on Sky News Australia with Carson Scott, and I used to get paid by News Ltd to write a weekly column; and The Alt-Right Conspiracy, since I’ve signed a book contract with Vox Day’s publishing firm Castalia House. So not only am I a “useful idiot,” I’m a useful idiot for four contradictory conspiracies. Does that make me a double-double agent? No, it makes me someone who’s quadruple pissed off with people who attempt to understand the world from the perspective of conspiracy theories in the first place. I don’t deny the existence of conspiracies: in fact, far from it, because they’re everywhere. What I do deny is the implicit assumption that the conspirators understand the system they’re attempting to manipulate. For example, I’ve heard plenty of conspiracy theorists assert that the 2008 financial crisis was caused by the Federal Reserve/George Soros (Hi George!)/Hedge Funds/Academic-Economists-Who-Peddle-The-Efficient-Markets-Hypothesis, and “they” profited from it. This implies “they” knew what “they” were doing. Pardon me, but I’ve met many of these protagonists - and in the case of academic economists, I’ve worked with them for 30 years. “They” don’t have a clue (except George). Even those that were actively conspiring—like many hedge funds during the subprime bubble were doing so on the basis of utterly deluded theories about how the system they were trying to game actually worked. Where apparent conspiracies did work, like Soros’s punt against the British Pound decades ago, they did so because a CSP (Clever Sinister Person) bet against the conventional wisdom of others who thought they understood the system (and did not), rather than because the CSP set up the whole thing in the first place. Higher standards As for the argument that I’m unwittingly playing into Vladimir Putin’s malevolent plans for Western democracy by being interviewed on RT, I have three rebuttals. The first and most important is that RT simply has better programs and better journalists than, for example, the BBC. I would gladly discuss issues such as what caused the 2008 economic crisis on the BBC, were I asked. But the BBC (and most other Western outlets that European Values and other conspiracy theorists think are superior to RT) just isn’t interested in the issues. With precisely two honorable exceptions, BBC programs and its journalists have only been interested in a story involving me when there was a personality angle to it. I have been interviewed by the BBC 11 times since I arrived in the UK in mid-2014. Only two interviews were motivated by the journalist’s or program’s genuine interest in my non-orthodox approach to economics: a HARDtalk interview in August 2016, and an interview by Alice Baxter in January 2016. Fully six were about my friend Yanis Varoufakis when he was Greece’s finance minister. Two others were on November 3rd, 2016, about some news story that I’ve since forgotten. And my most recent interview on the BBC, on September 14th this year to mark the 10th anniversary of the collapse of Northern Rock, was the clincher for me. That failure was the most significant financial event in the UK in almost eighty years: it was the first bank run since the Great Depression. I was pleased to be asked to discuss it on air, and I expected a serious treatment of it. Instead, the item consisted of a two-minute introduction by one presenter, and a three-minute exchange with another which rates as one of the most vacuous interviews I’ve experienced in forty-five years of being interviewed by journalists (my first was as a 19-year-old politically active student at the University of Sydney in 1972). I did my best to answer inane questions seriously, but as one member of my Patreon community commented, you could see my answers parting the journalist’s hair. That was a cruel remark, but frankly a fair one. BBC vacuum Which raises the second riposte: why aren’t there shows that are interested in the in-depth analysis of economic issues on the BBC? Shows like the RT staples on which I was and continue to be interviewed regularly: Capital Account, the Boom Bust, the Keiser Report, Renegade Inc, the 7pm News with Bill Dod, and Going Underground. It’s not because the programs were devised by dastardly Russian stooges: most of them were developed by independent broadcasters and pitched to a number of outlets. I know for a fact that at least one of these shows was pitched to the BBC before it was offered to RT. They weren’t interested, but RT was. This isn’t because the BBC - and most Western media outlets - were too highbrow for these programs: the opposite is more the case. The BBC and its commercial rivals seem more interested in infotainment than analysis, more concerned with filling time with fancy graphics and pretty (male and female) talking torsos, than in actually getting to grips with the serious economic issues in a seriously challenging world. The third rebuttal, which I’ll develop in more depth in a later column, is that if I can help strengthen Russia as a rival axis of power to the USA, then I think that’s a good thing. I’d rather have a bipolar (or tripolar) battle for global dominance between two (or more) Superpowers, than have a unipolar world with a single Superpower, led by a leader with a bipolar personality.

06 ноября 2017, 20:40

Links for 11-06-17

Macroeconomics: Religion or Science? - Roger Farmer Has Trump Captured the Fed? - Joseph E. Stiglitz America’s great decoupling - Lane Kenworthy The journalist as amateur scientist - mainly macro Global real interest rates since 1311 - Bank Underground Disagreement...

30 октября 2017, 23:22

Procrastination/Links and Such for October 30, 2017

**Must-Reads**: * [What Is a "Static" Revenue Analysis?](http://www.bradford-delong.com/2017/10/what-is-a-static-revenue-analysis.html) * [Basic Econ 1-Level Tax Incidence Primer: Owen Zidar Requests MOAR Tax Incidence Model Blogging](http://www.bradford-delong.com/2017/10/basic-econ-1-level-tax-incidence-primer-owen-zidar-requests-moar-tax-incidence-model-blogging.html) * [A Question I Did Have Time to Ask Alice Rivlin](http://www.bradford-delong.com/2017/10/another-question-i-do-not-have-time-to-ask-alice-rivlin.html) * [Another Question I Didn't Have Time to Ask Ask Alice Rivlin: Possibilities for Technocracy](http://www.bradford-delong.com/2017/10/another-question-i-didnt-have-time-to-ask-ask-alice-rivlin-possibilities-for-technocracy.html) * [A Question I Will Not Have Time to Ask Alice Rivlin This Afternoon...](http://www.bradford-delong.com/2017/10/a-question-i-will-not-have-time-to-ask-alice-rivlin-this-afternoon.html) * [Q & A: Should We Focus Our Attention on a Revitalized Public Sector and Social Insurance System?: INET Edinburgh](http://www.bradford-delong.com/2017/10/q-a-should-we-focus-our-attention-on-a-revitalized-public-sector-and-social-insurance-system-inet-edinburgh.html) * **Alan Auerbach**: [Five Questions for Congress on Tax Reform](https://www.bloomberg.com/view/articles/2017-10-27/five-questions-for-congress-on-tax-reform): "Congressional leaders say they’re working on a corporate tax reform... * **Will Wilkinson**: [Public Policy after Utopia](https://niskanencenter.org/blog/public-policy-utopia/): "That all our evidence about how social systems actually work comes from formerly or presently existing systems is a huge problem for anyone committed to a radically revisionary ideal of the morally best society... * **Chandrasekhar Ramakrishnan**: [The DeLong-Shiller Redux](https://medium.com/@cramakrishnan/the-delong-shiller-redux-dc9dd21eefd1): "2014, Robert Shiller and Brad DeLong.... [Shiller] claims if the value of this [CAPE] ratio is above 25, a major market drop is probably brewing... **Should-Reads**: * **Kim Clausing**: [Would Cutting [U.S.] Corporate Taxes Raise Workers' Incomes?](http://econofact.org/would-cutting-corporate-taxes-raise-workers-incomes): "Overall, it is difficult to document a relationship between lower corporate taxes and...

25 октября 2017, 00:16

Q & A: Should We Focus Our Attention on a Revitalized Public Sector and Social Insurance System?: INET Edinburgh

Is a sufficiently revitalized social insurance state and public infrastructure and other public goods provision system what we really need? That is a very difficult and a very hard question. Let me give a particular partial answer to it. My decision to give this partial answer is, I think, motivated in large part by my perception that the six of us here on this panel agree on too much. There is insufficient Dixit-Stiglitz variety up here on the panel for it to be in any sense optimal. Therefore let me, for the moment, fly my rootless neoliberal cosmopolite freak flag. Let try to push back a little against the idea that a better social insurance state is all we need. If you think about say the people of rural and semi-rural Kentucky, facing the continued long-term decline of their regional resource-based export industries and increasingly facing global competition for manufacturing industries in which their principal advantage within the United States was a relatively low real wage level, and if you ask "what could have been done to make their lives better over 2009 to 2016", the answer would have been: Obamacare. Give them health insurance. Give them access to the...

25 октября 2017, 00:13

Q & A: What Can We Economists Do Right Now to Be Useful?: INET Edinburgh

What can we economists do right now to be useful, as far as policy is concerned? I believe that we economists can do very little, right now, to materially affect policy. Joe Stiglitz is an economist. Joe Stiglitz was in fact the chief economist in the late 1990s. Joe Stiglitz then argued that TRIPS was a bad idea. It enriched not America but rather the holders of pharmaceutical patents. It did so at the cost of charging poor countries like Vietnam and Congo through the nose for intellectual property that was non-rival in some very basic sense, and for which the appropriate market price was zero. Joe Stiglitz lost that argument. USTR does not regard its mission as primarily that of promoting the health of the world or even the U.S. economy. One thing we should be doing is laying the groundwork for some future day in which we can affect policy. We should be pushing very hard right now developing arguments for an expanded public sector—a public sector that will produce real marginal cost pricing for things that are non-rival, or perhaps liable only because of increasingly sophisticated and onerous layers of legal "protectionism", but that somehow is not...

22 октября 2017, 05:40

Ricardo's Big Idea, and Its Vicissitudes: INET Edinburgh Comparative Advantage Panel

### Ricardo's Big Idea, and Its Vicissitudes #### INET Edinburgh Comparative Advantage Panel Ricardo believes in labor value prices because capital flows to put people to work wherever those things can be made with the fewest workers. This poses a problem for Ricardo: The LTV tells him that capitalist production should take place according to absolute advantage, with those living in countries with no absolute advantage left in subsistence agriculture. The doctrine of comparative advantage is Ricardo’s way out. For him, the LTV holds within countries. Countries’ overall price levels relative to each other rise and fall as a result of specie flows until trade balances. And what is left is international commodity price differentials that follow comparative advantage. Merchants profit from these differentials, and their demand induces specialization. Thus Ricardo reconciles his belief in the LTV with his belief in Hume’s “On the Balance of Trade“ and with the fact that capitalist production is not confined to the industry-places with the absolute advantage. His doctrine reconciles his conflicting theoretical commitments with the reality he sees, as best he can. By now, note that we are far away from the idea that “comparative advantage” justifies the claim that free trade...

13 октября 2017, 04:20

"Worse Than Big Tobacco": How Big Pharma Fuels The Opioid Epidemic

Authored by Lynn Paramore via The Institute for New Economic Thinking, Once again, an out-of-control industry is threatening public health on a mammoth scale Over a 40-year career, Philadelphia attorney Daniel Berger has obtained millions in settlements for investors and consumers hurt by a rogues’ gallery of corporate wrongdoers, from Exxon to R.J. Reynolds Tobacco. But when it comes to what America’s prescription drug makers have done to drive one of the ghastliest addiction crises in the country’s history, he confesses amazement. “I used to think that there was nothing more reprehensible than what the tobacco industry did in suppressing what it knew about the adverse effects of an addictive and dangerous product,” says Berger.   “But I was wrong. The drug makers are worse than Big Tobacco.” The U.S. prescription drug industry has opened a new frontier in public havoc, manipulating markets and deceptively marketing opioid drugs that are known to addict and even kill. It’s a national emergency that claims 90 lives per day. Berger lays much of the blame at the feet of companies that have played every dirty trick imaginable to convince doctors to overprescribe medication that can transform fresh-faced teens and mild-mannered adults into zombified junkies. So how have they gotten away with it? A Market for Lies The prescription drug industry is a strange beast, born of perverse thinking about markets and economics, explains Berger. In a normal market, you shop around to find the best price and quality on something you want or need - a toaster, a new car. Businesses then compete to supply what you’re looking for. You’ve got choices: If the price is too high, you refuse to buy, or you wait until the market offers something better. It’s the supposed beauty of supply and demand. But the prescription drug “market” operates nothing like that. Drug makers game the patent and regulatory systems to create monopolies over every single one of their products. Berger explains that when drug makers get patent approval for brand-name pharmaceuticals, the patents create market exclusivity for those products—protecting them from competition from both generics and brand-name drugs that treat the same condition. The manufacturers can now exploit their monopoly positions, created by the patents, by marketing their drugs for conditions for which they never got regulatory approval. This dramatically increases sales. They can also charge very high prices because if you’re in pain or dying, you’ll pay virtually anything. Using all these tricks, opioid manufacturers have been able to exploit the public and have created a whole new generation of desperate addicts. They monopolize their products and then, as Berger puts it, “market the hell out of them for unapproved and dangerous uses.” Opioids are a drug class that includes opium derivatives like heroin (introduced by German drug maker Bayer in 1898), synthetics like fentanyl, and prescription painkillers like oxycodone (brand name: OxyContin). A number of factors are aggravating the addiction crisis: There has been a movement in medicine to treat pain more aggressively, while at the same time wide-ranging economic distress has generated a desire to escape a dismal reality. But a key driving force is doctors—who have been wooed by pharmaceutical marketing reps—overprescribing for chronic pain. “For the first time since the years after heroin was invented,” writes investigative journalist Sam Quinones in Dreamland: The True Tale of America’s Opiate Epidemic, “the root of the scourge was not some street gang or drug mafia but doctors and drug companies.” Doctors were once reluctant to write prescriptions for opioids. The U.S. drug regulator, the Food and Drug Administration (FDA), would only approve such drugs for severe cases like cancer patients in chronic agony or certain people in short-term pain after, say, an operation. But representatives of Connecticut-based drug maker Purdue, which released OxyContin in 1996, along with other companies, began to flood doctors’ offices with reports asserting that using the drug for off-label purposes was harmless. Often the targets were primary care physicians with little training in addiction. Have a chronic arthritis case? Give your patient OxyContin. Tell folks take it every day, for weeks, even years, to treat just about any kind of chronic pain. The upshot was addiction —typically not because people were getting high for fun, but because they used a legal drug in precisely the way the doctor ordered. Purdue and others whisked doctors to stylish retreats to push them to prescribe drugs for uses not approved by U.S. regulators—a marketing strategy banned by federal law. They even created fake grassroots organizations to make it seem as though patients were demanding more prescriptions. Pharmaceutical companies like to dodge responsibility for the opioid crisis by blaming dishonest distributors and pointing out that they’re not the ones prescribing or handing out drugs to patients. True enough: They don’t need to, because they’ve done their work hooking you long before the drug is in your hands. “The marketing is not only fraudulent; it’s incredibly elaborate,” says Berger.   “Fake scientific studies promote the lie that opioids are better than other medications for pain. They’ve gone to just about any length. Bribery, you name it. It’s outrageous.” OxyContin is so addictive that it can create physical dependency in a matter of weeks. As drug makers and doctors who began to dole out pills by the handful in pain clinics learned, addicts do not behave like ordinary consumers. They don’t “choose” to buy or to wait until next week. They need their drug right away and will do anything to get it because if they don’t, they will suffer excruciating symptoms. A Los Angeles Times report shows that among the lies Purdue spread about OxyContin was that one pill subdued pain for twelve hours. Except that for many patients it wears off much sooner, exposing them to horrific pain and withdrawal. Purdue knew this, but feared lower sales if it admitted the truth. So sales reps advised doctors to just give stronger doses, which increased the addiction risk. As the money from hooked patients piled up, so did the bodies. So many bodies that earlier this year the Ohio Coroner’s Office found nowhere to store them.  In 2007, Purdue pleaded guilty in federal court in Virginia to misleading doctors and patients about OxyContin’s safety and paid a $600 million fine. But that sum was hardly an annoyance. From 1995 to 2015, Purdue made $35 billion from OxyContin sales alone. The Sacklers, who own the company, are now one of the richest families in America, as revealed by this triumphant Forbes spread. They know that lax regulation keeps the heat off, and that even litigation and criminal prosecutions can do little to stop them. Berger says that until such legal programs are massive in scale and scope, companies will go on with business as usual. “We have to have injunctive relief [a court order to stop a behavior] that bans the marketing to doctors of opioids completely for unapproved uses, as well as an expansion of the FDA and DEA [Drug Enforcement Agency] to specifically target the drugs,” says Berger. His law firm, Berger & Montague, is involved in the effort to seek relief for the city of Philadelphia, which has seen above-average opioid prescribing and suffered the highest rates of fatal drug overdoses in the state last year. Even though prescriptions have been slightly reduced across the country since 2012, Philadelphia is finding out what happens to many people hooked on opioids when they can’t get a prescription or find the price too high: They turn to smack. Fatal overdoses of heroin, oxycodone’s close cousin, have been skyrocketing since 2007 across the country. “Landscapes of Despair” The opium poppy has been part of human history since at least 3,400 B.C. when it was cultivated in Mesopotamia as the “joy plant.” Derivates, such as laudanum and morphine, offered more convenient and, people wrongly believed, safer ways to get the plant’s benefits. Bayer originally touted heroin as a non-addictive substitute for morphine, even for children, until it was outlawed in the U.S. in 1925. Rendering it illegal did not stop it from destroying the lives of many of America’s most celebrated artists, from Billie Holiday to Philip Seymour Hoffman. Drug overdoses now kill more people than gun homicides and car crashes combined. In 2015, nearly two-thirds of all overdoses had one thing in common: opioids. As more and more names appear in the obituaries linked to opioid overdoses, most recently Buddhist teacher Michael Stone, Americans begin to wonder who is next. Syracuse University’s Shannon Monnat, a sociologist focused on rural issues and an INET grantee, has been studying the epidemic and how it impacts various populations. Her research reveals that the rise in drug-induced deaths has been especially sharp among middle-aged people (45-55), with prescription opioid overdoses increasingly impacting both middle-aged and older populations. Heroin, whose sedating and euphoric effects are very similar to prescription opioids, looks to be the culprit in more young adult overdoses. Monnat considers how the opioid crisis points to bigger societal problems impacting the economy, educational institutions, the health care system, political systems, and communities. Her work centers on investigating the characteristics of what she calls “landscapes of despair”—places where people are hurting economically and socially, like Appalachia, the Industrial Midwest, and parts of New England. She points out that persistent disadvantage and long-term poverty are clearly connected to the opioid crisis, noting that many of the areas most impacted were once robust centers of manufacturing before jobs moved to other countries. Opioid addiction seems to thrive in downwardly mobile small cities in rural areas—but not all of them. “What’s fascinating is that some of these areas have very high mortality rates from drug overdose, like Appalachia,” say Monnat.   “But others, like the Southern “Black Belt” [a region which stretches across Alabama and Mississippi], have not seen such rises.” Originally named for its rich, dark, soil - which attracted cotton planters in the 19th century - the Black Belt has a large African American population. The area has a history of unremitting poverty, low incomes, high unemployment, and high mortality. Yet despite many hardships, which are linked the legacy of slavery, Monnat says that the region is also distinct for its “very tight-knit communities, strong kinship networks, and other networks where people can find emotional support.” It seems that when people have somewhere to turn in hard times, they may build up immunity to an epidemic like the opioid scourge. Ironically, another factor that may have protected these communities is prejudice, as Quinones discusses in Dreamland. The low-profile heroin dealers originating from a small municipality on Mexico’s west coast who are associated with the current opioid scourge have tended to fear black Americans, preferring to target white communities. They also avoid big cities where large cartels are already established. So small, predominately white towns are their sweet spot. Appalachia is known for kinship networks, but it also has a legacy of isolation and an outlaw tradition associated with the history of moonshining and bootlegging which can feed into today’s underground selling and distribution of opioid drugs. In this region, much of the struggling white working class has experienced economic distress with little hope of relief from America’s political system. Democrats often openly disdain “rednecks” and “hillbillies” while concentrating on identity politics rather than economic hardship. Republicans promote policies of free trade and deregulation that cast the region further into destitution. Monnat has found that counties with large numbers of people employed in physical labor—especially occupations with higher rates of disability—have higher rates of drug fatalities. These are places where coal miners work in backbreaking positions and military veterans suffer the pain of injuries. She observes that drug companies have besieged these areas with aggressive marketing of pain pills. “In Appalachia, you’d see mining companies with physicians on staff prescribing opioids to keep people in pain working,” she says. “That was happening before OxyContin, but companies like Purdue targeted these communities to push OxyContin as a safer alternative to other pain medications.” The National Institutes of Health (NIH) report that the opioid epidemic, which started as a regional crisis, is now a national crisis. It casts a pall over far more than individual lives; it is now decimating communities and even helping to reshape the American political landscape. Monnat finds a relationship between the landscapes of despair and the 2016 presidential election. Voting patterns show that areas in which President Trump did better than expected, like Pennsylvania and Ohio, were also places where opioid overdoses and deaths from alcohol and suicide occurred at high rates over the past decade. During his campaign, Trump expressed concern for people in regions like Appalachia and flung stinging barbs at the politicians who had failed them. These voters supported him in high numbers, and yet sadly, his policies will likely give more power to the pharmaceutical companies that have turned their suffering into stock windfalls. Profit Trumps People Trump the campaigner shook his fist at Big Pharma for “getting away with murder” - one of those statements that occasionally drops from his lips with atomic accuracy. But Trump the President has done an about-face. As journalist David Dayen has pointed out, a draft of an executive order on drug prices (which never materialized) called for deregulation of the FDA and favors to industry. It was written by none other than a pharmaceutical lobbyist. In March, President Trump issued an executive order creating a commission to study drug addiction and the opioid epidemic. The commission, headed by New Jersey Governor Chris Christie, has so far released recommendations which locate the overprescribing problem “in doctor’s offices and hospitals in every state in our nation,” while making nary a mention of pharmaceutical marketing departments.  The panel suggests insufficient remedies like new treatment facilities and educating schoolchildren on the dangers of opioids, along with ineffective ones like more funds to Homeland Security. Regulation of Big Pharma? Nope. The federal government did announce that it would team up with drug makers to research and generate non-opioid pain medications and additional medication-assisted treatment options. Among the participants? Purdue. Economist William Lazonick of the University of Massachusetts Lowell and an INET grantee, agrees with Berger that the way the pharmaceutical industry operates amounts to a catastrophe for the public. “It’s crazy that each and every drug is not treated like a regulated monopoly,” he says. “Taxpayers fund much of the research that goes into creating these drugs through the NIH and other public research facilities. Moreover, the companies are gifted with a monopoly through patents which last two decades.” Lazonick notes that Big Pharma claims that it needs high profits to keep inventing new drugs, but it spends more of its profits buying back its own stock than increasing investment in R&D on new drugs. Executives running drug companies are incentivized to make profits any way they can because they are rewarded by high stock prices. Lazonick explains that they stoke those stock prices by gouging patients or lying about the safety of products—whatever it takes. He observes that for the past several decades America has undergone a devastating experiment based on the philosophy of economist Milton Friedman, who claimed that the only social responsibility of a company is to make a profit. Untimely deaths from tobacco-related illnesses, auto safety failures, and now, harmful opioid drugs, prove that the experiment is a tragic failure. Lazonick sees the need for nothing less than a new structure of corporate governance that ensures the ethical responsibly of drug makers to do what they are supposed to do: create high-quality, low-cost products that are safe. The current structure, based on the misguided idea that companies should be run for the sole purpose of enriching shareholders, is particularly perverse when it comes to products that are potentially fatal. The problem with this model is that when shareholders are the only people who matter, the rest of us suffer. Since taxpayers support pharmaceutical companies by funding public research and many other things they require to do business, Lazonick says it is only fair and logical that someone representing the public sit on their boards. Berger adds that companies should be required to make drugs widely available at affordable prices in return for their use of publicly-funded, basic research at no cost whatsoever. America, for the time being, stands out among nations in letting pharmaceutical companies run amok to inflate drug prices, advertise and market drugs without proper regulation, and use taxpayer resources while exposing them to egregious harm. “The only thing America’s drug companies are competitive about,” says Lazonick, “is getting people addicted."

10 октября 2017, 04:47

Procrastinating on October 10, 2017

**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **INET**: [Reawakening](https://www.ineteconomics.org/events/reawakening): "This fall, hundreds of leading scholars, policymakers and public officials will gather at the Edinburgh International Conference center for the INET 2017 conference... * **Davide Cantoni, Jeremiah Dittmar, and Noam Yuchtman**: [Religious Competition and Reallocation: The Political Economy of Secularization in the Protestant Reformation](http://www.jeremiahdittmar.com/files/RRR_20170919.pdf): "We document an unintended, first-order consequence of the Protestant Reformation... * **Royal Swedish Academy of Sciences**: [The Prize in Economic Sciences 2017](https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2017/press.html): "Richard H. Thaler... 'for his contributions to behavioural economics'... * **Simon Wren-Lewis**: [ Economics: too much ideology, too little craft](https://mainlymacro.blogspot.ch/2017/10/economics-too-much-ideology-too-little.html): "Paul Krugman argued... that... belief in the need for new economic thinking after the financial crisis was incorrect... * **Chye-Ching Huang and Brendan Duke**: [Vast Majority of Americans Would Likely Lose From Senate GOP’s $1.5 Trillion in Tax Cuts, Once They’re Paid For](https://www.cbpp.org/research/federal-tax/vast-majority-of-americans-would-likely-lose-from-senate-gops-15-trillion-in): "The Senate Budget Committee will vote on a budget resolution that would allow Congress to move forward with tax-cut legislation that adds $1.5 trillion to deficits over ten years... * **Larry Summers**: [America’s tax plan is not worth its name](http://larrysummers.com/2017/10/08/americas-tax-plan-is-not-worth-its-name/): "The US administration’s tax plan... a mélange of ideas put forth without precision or arithmetic.... The claims of Steven Mnuchin, Treasury...

07 августа 2017, 15:44

Dumb - And Dumber - Money Keeps Pouring In

Authored by John Rubino via DollarCollapse.com, Someday, stock, bond and real estate valuations will matter again. And the mechanism by which this return to sanity is achieved will probably be the torrent of money now flowing in from people who, for various reasons, don’t care about (or understand) the prices they’re paying. Millennials, for instance, seem to have reached the “beginners’ mistakes” phase of their financial lives. They’re major buyers of recreational vehicles – see The Perfect Crash Indicator Is Flashing Red — and are now opening stock brokerage accounts at a startling pace: Schwab: “New Accounts Are At Levels We Have Not Seen Since The Dot Com Bubble” As Millennials Rush Into Stocks (Zero Hedge) – In its Q2 earnings results, [stock broker Charles] Schwab reported that after years of avoiding equities, Schwab clients opened the highest number of brokerage accounts in the first half of 2017 since 2000. This is what Schwab said on its Q2 conference call:   New accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year. But maybe more important for the long-term growth of the organization is not so much new accounts, but new-to-firm households, and our new-to-firm retail households were up 50% over that same period from 2016. In total, Schwab clients opened over 350,000 new brokerage accounts during the quarter, with the year-to-date total reaching 719,000, marking the biggest first-half increase in 17 years. Total client assets rose 16% to $3.04 trillion.   Schwab also adds that the net cash level among its clients has only been lower once since the depths of the financial crisis in Q1 2009:   “Now, it’s clear that clients are highly engaged in the markets, we have cash being aggressively invested into the equity market, as the market has climbed. By the end of the second quarter, cash levels for our clients had fallen to about 11.5% of assets overall, now, that’s a level that we’ve only seen one time since the market began its recovery in the spring of 2009.”   But wait, there’s more: throwing in the towel on prudence, according to a quarterly investment survey from E*Trade, nearly a third of millennial investors are planning to move out of cash and into new positions over the coming six months. By comparison, only 19% of Generation X investors (aged 35-54) are planning such a change to their portfolio, while 9% of investors above the age of 55 are planning to buy in.   Furthermore, according to a June survey from Legg Mason, nearly 80% of millennial investors plan to take on more risk this year, with 66% of them expressing an interest in equities. About 45% plan to take on “much more risk” in their portfolios. In other words, little by little, everyone is going “all in.” Here’s a related chart showing margin debt – many investors borrow against existing stock portfolios to buy more shares. Not surprisingly given the above, it’s at record levels and rising. Corporations, meanwhile, continue to hoover up their own shares even as the market averages break records: Big Pharma Spends on Share Buybacks, but R&D? Not So Much (New York Times) – Under fire for skyrocketing drug prices, pharmaceutical companies often offer this response: The high costs of their products are justified because the proceeds generate money for crucial research on new cures and treatments.   It’s a compelling argument, but only partly true. As a revealing new academic study shows, big pharmaceutical companies have spent more on share buybacks and dividends in a recent 10-year period than they did on research and development. The working paper, published on Thursday by the Institute for New Economic Thinking, is entitled “U.S. Pharma’s Financialized Business Model.”   The paper’s five authors concluded that from 2006 through 2015, the 18 drug companies in the Standard & Poor’s 500 index spent a combined $516 billion on buybacks and dividends. This exceeded by 11 percent the companies’ research and development spending of $465 billion during these years.   The authors contend that many big pharmaceutical companies are living off patents that are decades-old and have little to show in the way of new blockbuster drugs. But their share buybacks and dividend payments inoculate them against shareholders who might be concerned about lackluster research and development.   While stock buybacks appear to be particularly troublesome among drugmakers, big companies in other industries — in sectors like banking, retail, technology and consumer goods, among others — are also buying back boatloads of their shares. Through May, some $390 billion in buybacks have been announced this year, $13 billion more than at this time in 2016, according to figures compiled by Jeffrey Yale Rubin at Birinyi Associates, a stock market research firm.   June 28 was the biggest single buyback announcement day in history. That was when 26 banks disclosed buybacks worth $92.8 billion, largely a response to having just passed the stress tests administered by the Federal Reserve Board. That figure blew past the previous record of $56.4 billion announced on July 20, 2006. Note that last sentence: The previous record for corporate share repurchases occurred about a year before stock prices fell off a cliff. But the dumbest money is not in the private sector. It’s sitting around central bank conference tables making clueless bets on equities with taxpayer (i.e., make-believe) money. The Bank of Japan is leading the way: (Japan News) – At its Policy Board meeting on July 28-29, 2016, the BOJ decided to increase its purchases of ETFs, which hold stocks and other assets, at an annual pace of ¥6 trillion from ¥3.3 trillion.   Since then, the benchmark 225-issue Nikkei stock average on the Tokyo Stock Exchange has risen some 20 percent.   The BOJ program “has created a sense of security among investors,” Nobuyuki Hirano, chairman of the Japanese Bankers Association (Zenginkyo), and president of Mitsubishi UFJ Financial Group Inc., one of Japan’s three megabank groups, said at a press conference earlier this month. Last month, BoJ Governor Haruhiko Kuroda told reporters that it is “‘possible in theory’ to reduce the BOJ’s ETF purchases before inflation reaches the target. But it was ‘generally unthinkable’ that the BOJ would remove a part of its easing program, and had no intention of treating ETF purchases differently from the other elements of the program.” It bears repeating that this is all happening with most major equity indexes at or near record levels – that is, levels that have in the past preceded huge crashes. Which is how these guys came to be known as dumb money.

04 июля 2017, 14:30

10 July Fourth Reads

My July Fourth celebratory holiday reads: • The real reason Tesla is worth more than GM (MIT Technology Review) see also Where Stuff Gets Made in the U.S. of A. (Bloomberg) • Kansas or California? (Project-syndicate) • U.S. Jobs Data Aren’t Fake (Barron’s) but see also Jim Chanos: U.S. Economy is Worse Than You Think (Institute for New Economic Thinking) • How… Read More The post 10 July Fourth Reads appeared first on The Big Picture.

13 июня 2017, 22:02

Links for 06-13-17

Their Own Private Pyongyang - Paul Krugman Reagan to the power of ten - Thomas Piketty A President at War With His Fed Chief, 5 Decades Before Trump - NYTimes Can US States Right Trump’s Wrongs? - Barry Eichengreen The...

08 июня 2017, 19:28

Links for 06-08-17

Nobel Laureates Give Advice to Young Economists - YouTube When Trotsky (Temporarily) Embraced Prices and Markets - Tim Taylor Why has the US resisted Trump but the UK acquiesced to Brexit? - mainly macro Why Talk of Bank Capital ‘Floors’...

27 мая 2017, 10:06

Links for 05-27-17

The Future of Education and Lifelong Learning - Brad DeLong The Question Is Why is Wage Growth So High - New York Times Proliferation of hate and intolerance - Understanding Society Algorithmic Pricing and Competition: - Tim Taylor May's groupthink...

21 мая 2017, 12:25

The New Normal: Demand, Secular Stagnation and the Vanishing Middle-Class

Discusses twin diseases stymieing US middle-class-- secular stagnation and the polarization of jobs and incomes-- and potential policy cures.

20 мая 2017, 10:06

Links for 05-20-17

Is big government bad for freedom, society, and happiness? - Lane Kenworthy Economic Forecasting Is Still Broken - Narayana Kocherlakota The Connection Between Finance and Politics - ProMarket Bad Optics: the Fed's Balance Sheet Edition - David Beckworth Assessing the...

19 мая 2017, 18:48

After Piketty panel at the Graduate Center, CUNY (video) | Equitable Growth

**Must-Watch: Heather Boushey et al.**: _"After Piketty" panel at the Graduate Center, CUNY_: "Heather Boushey, Paul Krugman, Branko Milanovic, and Salvatore Morelli discuss After Piketty at the Graduate Center of CUNY on May 11, 2017. _After Piketty: The Agenda for Economics and Inequality_ ---- ---- **Janet Gornick**: Good evening. Welcome to the Graduate Center at the City University of New York. My name is Janet Gornick. I am professor of political science and sociology here at the Graduate Center, and Director of the Stone Center on Socio-Economic Inequality. The Stone Center is a research center here focused on the study of income and wealth disparities. Among our many activities is housing the United States Office of LIS, the cross-national data archive located in Luxembourg. The Stone Center is co-sponsoring this evening's event. In my role as director, I have the pleasure of welcoming all of you. And to those of you watching the livestream, thanks for joining us. We convene this evening for a conversation about a new book titled _After Piketty: The Agenda for Economics and Inequality_. In this volume the authors of 22 essays reflect on the enormously influential book by Thomas Piketty, _Capital in the 21st Century_,...

06 мая 2015, 19:50

Йеллен: ценовые уровни рынка США "довольно высоки"

Председатель ФРС США Джанет Йеллен предупредила о потенциальных рисках, связанных с повышенными ценовыми уровнями американского фондового рынка.

06 мая 2015, 19:50

Йеллен: ценовые уровни рынка США "довольно высоки"

Председатель ФРС США Джанет Йеллен предупредила о потенциальных рисках, связанных с повышенными ценовыми уровнями американского фондового рынка.