Sunday, July 27, 2014

Undocumented Children and the War on Drugs

With children, often quite young, flooding the border with Mexico the media are having a field day with heartrending stories about the little ones coming here unaccompanied by parents or close relatives. But there is little interest in asking why parents are willing to send their children across thousands of miles of dangerous, illegal travel. What happened to make life in Central America, in Honduras, Guatemala and El Salvador so terribly unsafe?
The short answer is: war – the war on drugs.
That war begins with strong and sustained demand for cocaine and other illegal drugs in the United States. Our inability to face up to this national epidemic is where the crisis for small children begins in Central America. Why is drug use so very common? Why are there so many Americans for whom ordinary, everyday life is so abhorrent that they can bear it only when they are high? We not only have no answers to these questions. We are afraid to ask them.
While administrations in Washington come and go and different "experts" advise the different governments, the war on drugs continues unabated and is being fought with progressively more sophisticated weapons and larger outlays of money. America responds to the continuing demand for drugs by buying more helicopters and guns and sending more troops and narco-agents to Central America and Mexico.
Until 2007 or so most drugs were moved by air or by sea. Then the war on drugs became intensified and drugs needed to be moved, often in small quantities, overland through Central America and Mexico.
As a consequence we have brought what amounts to a civil war to several Central American countries and to Mexico. The war on drugs consists of pitched military battles between different governments and their police forces and the heavily armed drug cartels. So far, the battles seems to be a draw at best. Certainly government forces are not winning. Police and military units are often subverted through lavish bribes which far exceed what their governments can afford to pay.
The economies in Central America and in Mexico are feeble at best. There are not nearly enough jobs. Poverty rates are very high. For many, working for the drug cartels seems to be the only or, at least, the best option. They join the army of the drug traffickers. Their job is to kill or be killed. The war on drugs destroys local economies and thus forces more people to join either side in that conflict. They become professional killers.
The continued ability of drug cartels to hold governments and the US financed and supported militaries at bay undermines the legitimacy of governments. Law-enforcement becomes feeble. Murder rates rise precipitously. Citizens hide anxiously in their houses and are afraid to go out at night. At the same time, many of the most notorious drug gang members were at one time members of Central American militaries. As such the United States government trained them to be efficient and cold-blooded killers at the School of the Americas at Fort Benning, GA.
All of this increasing violence is not only planned and financed in large part by our government. But there are persistent reports that American Marines and DEA agents actually conduct raids in Central America. We are a major partner in this civil crusade in Central America and Mexico.
As this war over drugs continues, levels of violence only go up. In recent years, during the presidency of Felipe Calderon, a joint US – Mexico anti-drug effort managed to arrest or kill the heads of several important drug cartels. But what may have appeared to be a success, only resulted in the splintering of drug trafficking organizations and with it a much intensified warring between different groups, each aiming to expand its reach. At the same time, criminal organizations discovered a new source of income: kidnapping and ransoming of the wealthy. The public reacted with the formation of citizen militias aim to protect themselves and violence escalated more.
The children flooding the Mexico – US border need help today. But we need to also consider the larger context of this crisis. It is a clear indication that the war on drugs conducted by the military and the intelligence apparatus of the US government and its industrial suppliers is a colossal failure.
It should be ended immediately.
The money given to Central American militaries should be diverted to services for addicts at home. Many of them, today, who would like help breaking their habits cannot find the services they need. We must do what we can to reduce demand for drugs here here at home and reduce the violence to the war on drugs.

Sunday, July 20, 2014

Americans and Class

Americans do not like to think about class. If you raise a class issue, conservatives will accuse you of preaching class war. The left lumps all different classes together under the label all the "99%". Very important differences between different segments of the American population are thereby being obscured and ignored.
College graduations still being in recent memory, I can draw my illustrations from different college graduates. There are the young men and women whose family have a bit of disposable income. After they graduate college, they could look around for work they really want to do. They can spend a year or two trying to make a documentary, or perhaps traveling widely. They can accept unpaid internships in Washington, D. C. that may pave the way to interesting future employment but leave them, in the present, depending on money from their parents.
Compare them to other college graduates who have been studying and working part-time or even full-time jobs and have always been on the edge of being flat broke. I recall a student who explained his absence from class by saying that payday was still two days away when he ran out of gas money. He didn't have the money to drive to school. These students must get as well-paying a job as possible as soon as they graduate. Whether it is work they like to do is clearly secondary, as long as it pays a decent salary. No unpaid internships for them.
Then there are the students who failed to graduate because halfway through their college years, major illness or unexpected unemployment in the family demanded that they get a full-time job immediately and therefore end their studies.
Different again are the young people who do not only struggle with very limited finances but also confront by racial hostilities and distrust. Many of them have to struggle with family and social challenges unknown to some of the other groups. Their rate of unemployment tends to be much higher than that of more affluent white young people as is the likelihood that they spend time in prison.
These are just a few examples of the distinctions between different class groupings in our population. They grow up with very different ranges of opportunities. Their needs are different from those of the other groups, as are their problems and what they can hope for. The young men and women who aspire to a political career or to work in the public sector can move in that direction if they can afford to work for nothing as interns. Those with more limited finances or those faced by racial prejudices are more likely to advance themselves by entering the military. If they survive, their future may be more stable than that of their parents but "fulfilling work" is still very hard to come by.
Seeing the diversity of the American people clearly is extremely important in many different contexts. It serves to show up the dishonesty of our politicians who constantly talk about "what the American people want" or ho lump all of us together as the "middle class." Different parts of the American people want very different things because their lives are affected by the problems of belonging to different class segments.
Hence also projects to create more jobs, for instance, by cutting taxes on the rich, are badly thought out. These different class segments tend to have different sorts of jobs. Different kinds of jobs are created in different ways. There is no way in which we can simply "create more jobs." We need to be clear for whom jobs are to be created.
Crime rates fluctuate. When they go up, politicians will come up with crime-fighting projects. But those have very different effects on different classes. They tend to come down hardest on the people whose lives are most difficult and leave those whose life prospects are better relatively unaffected. There are no crime-fighting projects that affect all citizens equally.
Yes, there are these small number of Americans who own large chunks of the economy and then they are the rest of us. But the life chances among the rest of us are very different for different groups. The likelihood that we may have some influence on the political process is very different for different groups. The probability that the government will alter institutions in our favor is very different for different class segments. The likelihood that we will have jobs that are satisfying to us, is very different for different class sections. The likelihood that we can live pretty autonomous lives rather than be constantly supervised by parole officers, social workers, and other government employees are much better for some of us than for others.
Lumping the 99% together obscures the many different and very real ways in which different subgroups experience their fiscal and social lives. If justice is your concern, you need to pay close attention to the many divisions in our populace.

Monday, July 14, 2014

What free market?

A significant number of the elderly suffer from macular degeneration, a gradual destruction of the retina of the eye ending in blindness. As persons age, more blood vessels develop in the retina and disturb the eyes' visual functioning.
In some cancers, similarly, new blood vessels develop to enhance the growing cancer. Pharmaceutical researchers have developed some medications that stop this development of blood flow to the growing cancer. Virtually the same drug in much smaller doses, has proved useful to retard the progress of macular degeneration. It inhibits the progressive loss of visual acuity in the patient.
All of this is an encouraging story of the contribution of pharmaceuticals to maintaining the quality of life in the elderly.
This story is also interesting from an economic point of view. It turns out that one of the big Pharma firm, Genentech, sells the drug that is to be injected into the eye at 100 times the price of what they charge for the same drug to be used, in much larger doses, on cancers. Yes, you read that right: for virtually the same medication, this company charges 100 times the price for an application to the eye from what it charges when the drug is used in combating cancer. The anti-blindness injection may cost as much as $2000.
As a consequence, Medicare is said to spend between one and $2 billion a year for this treatment, "roughly 10% of Medicare part B drug expenditures." (JAMA, Journal of the American Medical Association, July 2, 2014).
How can they get away with that?
Here is the story economists tell us about free markets: in a free market everybody competes with everyone else to get a high return on the capital they have invested in their business. If someone has an exorbitantly high rate of profit, someone else will enter this same line of business and so will more entrepreneurs until the profits in this particular business are at just the same level as anywhere else in the economy. Extraordinary profits are temporary phenomena, soon to be cut down to prevailing profit rates through competition.
But pharmaceuticals are not sold in a free market. To begin with you cannot sell medications without government approval. In other words entry into a particular market is restricted by government protections for consumers. You may be the only firm able to sell this drug because no one else has the FDA permit. In that case you can do what Genentech does and charge absolutely outrageous prices.
In addition, medications are protected by patents. Competitors who would like to ride the same gravy train as Genentech, will have to develop a drug that does not violate Genentech's patents. It must be essentially the same drug but enough different to avoid patent problems. In the pharmaceuticals trade that's known as a “me-too” medication.
Both FDA supervision and patent protection are eminently sensible. But they create a situation where medications are not sold in a free market.
None of this has to be a terribly difficult problem. The bulk if not all of the macular degeneration medicines are paid for by Medicare. Medicare is therefore in a very strong position to negotiate a more sensible price for these medicines. After all if Medicare said: these macular degeneration drugs are much too expensive. We we can no longer afford to pay for them, Genentech would lose most if not all of its business. It is very much in their interest to come to an accommodation with Medicare.
Other countries such as Canada or some of the European health services regularly negotiate favorable prices for the medicines they buy in very large quantities.
The problem with that approach is that Congress, in its infinite wisdom, and ignorance of the most basic features of our economy, explicitly forbade Medicare to negotiate drug prices. That, they thought would harm the free market.
That's how much Congress knows, or how much of our representatives were paid to allow the pharmaceutical companies to continue to make sky high profits.
As long as our representatives are, in fact, for sale, large companies, such as drug companies, will be able to rob the taxpayers blind for the sake of their own stockholders.
That's robbery, not the free market.

Saturday, July 5, 2014


About 180 years ago, in the early 1830s, Alexis DeTocqueville, a French aristocrat, came to the United States to watch a democracy being constructed from scratch. A new country was being built by immigrants mostly from western Europe. They were indebted to their home countries but were also much more independent in constructing a new society than were the Europeans who remained behind.
This country, DeTocqueville found, was obsessed with the idea of equality. Because all were equal, everyone's decision had the same weight. Everyone was entitled to participate in collective decision-making. Decision-making was democratic and everyone was busy participating. DeTocqueville keeps commenting on the "hustle and bustle" of American life. Everyone came to meetings; between meetings everyone was talking about local improvement projects or issues of national policy. A new country was being built and everyone participated.
The level of participation in our country has changed a great deal for many different reasons. But obviously equality is still a major concern, witness the struggle for racial equality, for gender equality and now for equal treatment regardless of sexual preferences. Equality is not only a central theme of our national life. It remains a continuing challenge. We all know that.
But equality does not only promote democracy, it also promotes conformism, the strong pressure for everyone to have the same opinion, to live their life along the same patterns, to embrace the same values and opinions. The high value placed on equality producers the tyranny of the majority. Wherever there is a disagreement over policy, over morality, over the rules governing individual behavior, the majority will feel justified in criticizing and rejecting what a minority of citizens believes.
The high value placed on equality therefore moves us in contradictory directions. On the one hand, it encourages everyone to participate in public affairs. On the other hand, it disenfranchises any views which are not those of the majority.
This pressure for conformity in America used to be a topic of public conversation. Sinclair Lewis documented it in novels such as Main Street (12920) and Babbit (1922). During the 1950s a number of widely read books like The Man in the Gray Flannel Suit occasioned much public complaint about the pressures for conformity.
Interestingly enough that concern about the pressure to conform was quite halfhearted. While conformism was a topic of public conversation, conservatives conducted a successful campaign for rooting out Communists and other leftists from government service, academia, the movie industry. No one regarded this campaign to eradicate one kind of political view as an example of the tyranny of the majority.
It is not hard to see why the high value placed on equality produces such contradictory phenomena. Yes, we are all equal and therefore entitled to our own beliefs and values. But the community has a right to not only disapprove of certain values and behaviors but also to prohibit and punish them. While each of us has the right to shape our lives as we see best, our community has the obligation to prohibit certain kinds of behavior. Molesting small children, defrauding unsuspecting investors with securities that are worthless, overworking and underpaying one's employees and many other destructive behaviors are unacceptable and should be punished.
But that only intensifies the internal contradictions of an egalitarian society. As a group we have an obligation to protect our children, or to protect the elderly against fraudulent investment counselors. Is the rooting out of communists a legitimate exercise of community self-government? What about the laws passed in many states which defined marriage as between one man and one woman? When is a community exercising its political rights at legislating acceptable behavior and when is it illegitimately imposing the opinions of the many on smaller groups who have a perfect right to choose for themselves how to act and how to live?
This is the dilemma a country experiences when it values equality above everything. DeTocqueville proved himself very perceptive when he identified this dilemma.
At the same time the problem is not insurmountable. In a democracy public debates not only concern the policy issues of the day, but also the very meaning of equality. Specifically, citizens must decide in what respects we are all equal. The Tocqueville, for instance, speaks in laudatory terms about "universal suffrage" in the United States, oblivious to the fact that, at the time, only white men were allowed to participate in political decision-making. We have since then, after a great deal of conflict,--a good deal of it bloody-- decided that everyone, irrespective of race or gender, should be able to vote and run for political office. Similarly, what areas constitute a person's private domain, and what areas are to be regulated and supervised by public authorities, must be decided by a people which allows everyone equal rights of political participation.
The central task equality imposes on all of us is to define what that equality means which we regard as so important.
Many Americans ranging from ordinary citizens to presidents and their cabinet members do not understand this. High government officials from the United States regularly travel abroad and urge other countries to adopt an electoral democracy like ours. But if we took the idea of equality seriously, surely we would understand that other countries must decide for themselves how they will govern themselves. That is what a democratic stance demands. But we act as if equality meant that everybody must be like us, that we must all be the same.
It is time for us to be serious about equality and to acknowledge that it allows different people to lead their lives in different ways. We can all agree that terrorism is an unacceptable policy choice. But we must recognize that electoral democracy is not for every one. If we value democracy we must allow others to govern themselves, and to do that in ways of their own choosing.