Propaganda For Sale

Megan McArdle, having failed abysmally in her attempt to engage Elizabeth Warren intellectually, has decided to breitbart her instead. It is a wise choice, if not a wise action, since McArdle approaches an intellectual battle armed only with a spatula and a wide-eyed look of innocence, relying on propaganda courage and pluck to win the day for her. It is much easier and even more lucrative to put negative words next to Elizabeth Warren's name and wait for authoritarian drives to work their magic. McArdle is Lucianne Goldberg in a bra.

Here at the Snark we concentrate on the small details but it is necessary to take a step back and look at the big picture. Megan McArdle campaigned tirelessly to help the elite and harm the poor financially. Her side won. The middle class has become poorer and the rich have become richer. Because of her actions and the actions of her masters, it is inevitable that we all will suffer more chaos, poverty and violence.

Why? The money, sure. But for McArdle it's personal as well. Political theory is a thin disguise for personal issues. On one of her many attacks on Warren, McArdle was pressed to an unusual degree to give proof of her assertions. Warren couldn't be right about medical bankruptcies; it had to be an increase in consumption that drove people to bankruptcy. Why was she so sure?

When my boyfriend lost his job, we stopped going out to dinner, cut back our grocery bills, turned down the thermostat, etc. If we had needed to, we would have broken our lease and moved. What didn't we cut? The payments on our cars and student loans. Had those been a higher percentage of our income, or if we had had a mortgage that needed both our incomes, things would have been a lot scarier.

This is not proof that people who were driven to bankruptcy spent their way into it bankruptcy but  Megan McArdle paid her debts and so will you. And she doesn't want to hear any nonsense about failure or poverty. She succeeded out of personal superiority and if you want to succeed you should just do what she tells you to do.

But in the mean time McArdle has a living to earn churning out propaganda.

Big Pharma Is A Pointless Target For Elizabeth Warren

Elizabeth Warren is not targeting Big Pharma, she is suggesting that its fines should help finance the NIH. Propagandists play on conservatives' feelings of victimization, a by-product of authoritarian control.

Senator Elizabeth Warren has a modest proposal for pharmaceutical companies that get fined by the Food and Drug Administration for rule violations: a sort of "swear jar" that will require them to give money to the National Institutes of Health every time they break the FDA's rules:

We are meant to call to mind Jonathan Swift's modest proposal and see Warren's actions as modest on the surface but horrific underneath. Propagandists try to use their enemies' weapons against them to both make use of them and undermine them.

Warren's bill, the Medical Innovation Act, would require large drug companies that reach a settlement with the government for breaking the law to pay a "small portion" of their profits over five years into a fund for research at the National Institutes of Health, and the Food and Drug Administration. 

... "Fines for big drug companies have increasingly just become another cost of doing business," she said. 

The provisions in her bill would only apply to companies that reach a settlement with the federal government for breaking the law and that sell "blockbuster drugs" with more than $1 billion in annual sales.

She claims that this would result in roughly a $6 billion increase in the NIH's annual funding, or about 20 percent. 

What's not to like about sticking it to big, rich pharmaceutical firms in order to fund more of the government research that makes them rich? Who could be against that?

Propagandists pretend to engage the other side while having no intention of making an honest argument. They attempt to portray their enemies' strengths as weaknesses in order to attack those supposed weaknesses; here McArdle pretends that liberals want to stick it to rich corporations, implying that their motives are spiteful because they hate the rich. McArdle depends on the propaganda machine that she is part of to reassure her victims that liberals want regulation because they envy the successful since they are failures, not because corporations do anything wrong.

Her victims will suffer from the consequences but authoritarian wanna-be leaders are deluded as well; the poor and middle class think they can become rich despite the stacked deck but the rich delude themselves that they can become hedge-fund rich, rich enough to avoid the chaos they worked so diligently to create. So McArdle blathers on, confident in the everlasting protection of her masters.

So glad you asked.

There are a few problems with Warren's proposal, starting with the fact that it seems to assume that the NIH is the ultimate source of all those Big Pharma profits, which is why some of those profits should be transferred to the NIH to fund "the next generation of medical research."

Propagandists use weasel words to evade responsibility for their slick insinuations. Warren:

"It’s like a swear jar: Whenever a huge drug company that is generating enormous profits as a result of federal research investments gets caught breaking the law — and wants off the hook — it has to put some money in the jar to help fund the next generation of medical research," Warren said.

Of course Warren is saying that when companies that made enormous profits off of federal research break the law to make more money, part of that money should go to federal research. McArdle does not say "some of its fines." She says "some of its profits," hoping to encourage her readers to feel sympathy towards the poor businessmen whose profits were confiscated by that commie Elizabeth Warren. "Corporate profits" are a much more positive thing than "criminal fines."

 Warren's bill, the Medical Innovation Act, would require large drug companies that reach a settlement with the government for breaking the law to pay a "small portion" of their profits over five years into a fund for research at the National Institutes of Health, and the Food and Drug Administration.

In fact, academic research -- most of it presumably NIH-funded -- accounts for only about a quarter of new drugs. The majority are discovered by pharma or biotech firms.

Those drugs probably depend on government research.

 The Role of Federal Research and Development 

The federal government spent more than $25 billion on health-related R&D in 2005. Only some of that spending is explicitly related to the development of new pharmaceuticals. 

However, much of it is devoted to basic research on the mechanisms of disease, which underpins the pharmaceutical industry’s search for new drugs. The primary rationale for the government to play a role in basic research is that private companies perform too little such research themselves (relative to what is best for society). In general, the information generated by basic research can be readily replicated at low cost. Thus, many of the benefits of that research accrue not to the company that performs it but to the public and to other firms. With pharmaceuticals, those spillover benefits can be significant because the development of new drugs depends on scientific advances. Federal funding of basic research directly stimulates the drug industry’s spending on applied research and development by making scientific discoveries that expand the industry’s opportunities for R&D.

Pharma says it invests about 20% of sales in R&D domestically. The government spends a lot on R&D and much less producing new drugs. Pharma does the opposite. McArdle conveniently leaves out half of the equation because propagandists need dishonest arguments  to persuade their victims. McArdle doesn't want her victims to think about the government's contribution so she minimizes it in any way she can.

However, there are also technical problems with Warren's proposal:

A highly variable funding source is not the best way to go about paying for basic research. You don't want the dollar value of grants to swing wildly every few years, which could end up choking useful products just as they're starting to bear fruit.

McArdle dishonestly insinuates government research will depend on drug company fines instead of appropriations.

It's not all that likely that Congress would let that money stay with the NIH. A more likely outcome is that it will simply reduce NIH appropriations to offset the new fines.

You can't use funds from corrupt drug companies because of corrupt Republican politicians.

If fines should be higher on pharma violations -- and maybe they should be -- then we already have two very good ways of achieving that: Congress can mandate them, or regulators can impose them. A percentage-of-profits surcharge is not a good alternative. For one thing, you're going to end up fining companies based on how profitable they are, not how serious violation was -- you could easily have a situation in which an unprofitable company that committed grave violations ends up paying nothing, while a profitable one that's guilty of less serious offenses contributes a great deal to the NIH coffers. This is neither just nor efficient.

 She just said Congress won't let the NIH have the fines. Why would they mandate higher ones?

A fine is not a "percentage of profits surcharge."

Only billion dollar companies are targeted.

Nearly every word she says is a lie or elision.

If you make pharmaceutical companies pay a hefty surcharge in exchange for settling with the government, then fewer companies are going to settle with the government.Cases will drag out, costing the government money, and the government may ultimately lose some of them. You have to net this out of any gain you project for the NIH.

Nobody can do anything ever.

Why just big companies with blockbuster drugs? Are rule violations somehow less upsetting at generics manufacturers or ones that make specialty drugs?

 

Now she's just punting.

This strikes me as less of a serious proposal and more of a populist gesture aimed at tickling the fancy of people who think that large corporations are all leeches and that all good things come out of government-sponsored research. It's hard to blame a politician for playing to her base. But we shouldn't join the performance, either.

Of course it does. She's a lying propagandist. And she wants her victims to spend all their time and energy hating on their political enemies instead of realizing that they are handing over their money to the rich.