I don't want to hear one more Brit proclaiming that what they speak is "Proper English" and what we speak is that debased tongue, "American English".
We speak American English. Brits speak British English. On what basis do the Brits claim superiority? They spoke it first? You're only allowed to make that claim if you speak Shakespearean English, that being the last rev. before Plymouth Rock. Population? Umm. . . well, I guess if you include people who learn it in school and speak it about as well as I speak French. Avez-vous la plume de ma tante?
Besides which, I've been informed that the closest thing to a Shakespearean London accent can be found in -- North Jersey. North New Jersey, that is. Still want to cling to those roots?
A Con Ed transformer blew downtown; there's no power south of 14th street. They're saying it's not a terrorist thing, though of course we're all a little jittery since they don't really know how it happened.
Anyway. One of the guys gave me a ride to Penn Station, since there are no trains running downtown. There are no traffic lights.
Now, it's common for anarcho-capitalists to argue that systems will spontaneously arise to deal with such voids in a stateless society. And I saw it happen.
The large arteries running uptown/downtown had completely blocked off traffic running East/West on some large streets; the sheer number of cars on big streets like Broadway meant that there was always a sufficient number of selfish drivers to prevent a space from opening up to let traffic flow East/West. And suddenly, people started appearing at the corners. These were not cops, but ordinary people who'd seen what was going on and jumped in to help. One guy I saw was carrying a starbucks and a bag from Virgin Records; clearly, he'd just decided to help out on the spur of the moment. Another guy was wearing his Navy uniform, but looked too old to be in active service; I presume he went and got it out of the closet to give him some authority. All of these people had started directing traffic, stopping the big arteries so traffic could flow on the side streets. People, presumably knowing that they had been acting like selfish bastards, obeyed them. And as we moved uptown, they got better, coordinating with the guy on the next corner with hand signals in order to let the traffic flow smoothly. It was absolutely extraordinary.
Now, I'm not a convert to anarcho-capitalism; I like traffic lights, and I'm well aware that one of the reasons there weren't more traffic cops out is that they'll be needed tonight to stop the looting; there are now no burglar alarms south of 14th street. Nonetheless, it was an extraordinary example of self-organizing phenomenon. We're a resilient country, we are.
John Ellis says short the New York Times. I tend to agree. Particularly, I think that Punch Salzberger suffers from a misconception common to those who inherit empires: that the rule of the emperor is a law of nature.
Salzberger and Raines think that they can use the New York Times as a platform for their political views without degrading the value of the platform. They are, I imagine, encouraged in this by the fact that everyone they socialize with is either liberal, or has a lot of experience not riling liberals with their political opinions. They thus believe that the Times can move significantly to the left without alienating readers or losing its reputation.
But while the Times has a large bank of goodwill and respect built up, that is not an inexhaustible well. I've already subsituted the Sun for local news, the Washington Post for national, and while of course I am remarkably conservative for Manhattan, I know more and more people who feel that they can skip the morning ritual of reading the Times. Their business coverage is uneven. Their political coverage is nearly editorial in tone and content. And their editorial pages are only readable if you occupy the same political space as the editors. Contrast this with the outstanding mix at the Washington Post. Hell, even the Wall Street Journal does a better job of giving space to the opposition, and their news reporters actually lean liberal.
I think that unless this course is reversed, the Times will end up as the voice of the middle-left still mourning the demise of the Big Government Democrats; a high-end Village Voice. At this, Raines and Salzberger will no doubt do a good job. But it will no longer be The Paper of Record. And the platform will be useful only for preaching to the converted.
Well, I'm back, and spoiling for a good argument, and here's one ready made: Andrew Sullivan is talking about prescription drug reimportation, as is Glenn Reynolds. Reynolds thinks that reimportation promotes competition. This is true, but in the same way that stealing cars and chopping them up for the parts puts downward pressure on the prices for auto parts in your area. Not having to actually manufacture the parts cuts down on a lot of overhead.
But a common belief, particularly in communities whose focus on Intellectual Property law centers around media content providers, where the incentive and pricing structures are really quite different, although the pricing model is superficially the same.
For now, I am going to ask you to stipulate that, plus or minus 10%, drug prices represent about what the drug companies need to make in order to recover the costs of developing the drugs they made, and get the capital to research more drugs. If this were not the case, my friends, the pharmaceutical industry would be swarming with new entrants. So let's argue about profits another time and cede me the point that, given that pharmaceutical companies sell drugs to Canada for close to what it costs to make and distribute the pills, without including the R&D costs, they cannot sell everyone in the entire world their drugs at this price without ceasing to invent new drugs. Since we all want new drugs, I think most of us can agree that it would be a bad thing if this happened.
So: Pharmaceutical reimportation -- yea or nay?
Let's look at pricing in the two markets. Right now, pharmaceutical companies sell into the Canadian market at a price far below the average cost of each unit of the drugs: the cost you get by taking the total costs of, say, Pfizer, and dividing it by the number of pills Pfizer sells. (I am going to assume that Pfizer sells the same mix of drugs in every country so that we don't have to start doing complicated overhead allocations, 'kay?) In fact, they sell to pretty much every major country in the world at below the average cost of making the drugs; they price very near marginal cost, which is the cost of making one additional pill. Because major pharmaceutical companies do a lot of research and such, the marginal cost of a drug is far, far below the average cost; that's how you can get such a steep discount by buying drugs over the internet from Canadian pharmacies.
Why do they do this? Because they like moose-hunting and Molson? Tee-hee, no; it's because they are dealing with a single buyer for their product in that market; the Canadian government. They can either price low, or forgoe all sales to Our Neighbors to the North. Since they're still making more than the actual cost of making the drug, it's pretty much gravy for them. They sell at the low price.
Can you spot the problem with this arrangement? Yes, that's right -- someone has to pay for all the capital that was tied up in the R&D. And guess who that someone is? Got a mirror handy?
In America, the drugs are priced far higher than average cost -- higher, probably, than they would be if all the other countries allowed prices to float. Not in the short term, of course. But over the long term, the profits would attract other entrants into the market, and prices would fall. You're subsidizing some neurotic Canadian woman with 50 cats every time she pops a Valium and drives to the pharmacy for more Prozac.
This is what's known as the Free Rider Problem. We have a free market that pays for drugs to be developed. Other countries use their legal and economic power to force the price of the drugs their citizens consume down below the average cost of producing the drug, thus appropriating the benefits of the research without paying for it.
The Free Rider Problem is all around us. Take, for example, this web site. Every so often, someone puts money in the tip jar in order to keep the site going. Yet, the other 1599 of you who read this site each day do not. You have chosen to enjoy the many benefits of Live from The WTC without paying for them, secure in the knowlege that someone else, someone with a conscience who cares enough to ensure that they get the finest in political, economic, and bullmastiff-related commentary seven days a week, will do it for you. So you can see how tempting it must be for Canada to do the same thing to us.
Now, let us assume that Senator Wellstone's little foray into Fabian Socialism is actually passed by the house, and drug reimportation becomes legal. (It's not right now, and you'd better hide those Viagra pills before your friend the Sheriff comes over for dinner.) What happens?
Well, first of all, people could start purchasing their drugs from Canada in droves, or they could pay extra for the Made in the USA label. Which will they do?
The difference between prices is large; the price for shipping them is very low. And people hate the pharmaceutical firms, whose products are not only outrageously expensive but often come with nasty side effects, and who have no desperate unions to make commercials touting the "Made in the USA" label. The reason that there is not currently widespread transshipping is that it's illegal; an operation of any size would be noticed and shut down. Economics tells us that arbitrage opportunities, otherwise known as "Free money", do not last long in the absence of government intervention. I think it is likely that prices would, to a large extent, equalize between the two countries over the medium term.
Assuming that they do, in fact, equalize, there are two ways the prices could go: Canada's prices could drift upwards towards ours, as one of Sullivan's readers thinks they will, because drug companies are unwilling to sell at a low price in order to secure the paltry Canadian market. Canadian consumers will be forced to pay the same price we do, and all those people who have been screaming about the wonders of single payer health care are going to find that their fact sheets suddenly look a lot less attractive.
Or our prices could be forced down to Canadian levels, which is what Wellstone hopes.
Which do I think? Well, from a competitive strategy standpoint, Sullivan's reader is absolutely correct; the pharma companies will not underprice themselves in the Canadian market if it threatens their US profits. In a model, the company would do just what he predicts: charge the Canadian government what it charges US citizens, with the same sort of volume discount they offer all large health insurers. (A health care analyst once told me that the Canadian government insures fewer people than Aetna. So in a sense, we have a single payer system. We have dozens of them. ;-)
Only there's one little problem with the model: the government is not a normal market. Aetna may be bigger, but Canada can beat it even fighting out of its weight class. Why? Not, thank you my little lefties, because the government is efficient or just or thrifty or just a better negotiator. But because Canada has an unbeatable hand.
It can break the patent.
If drug companies try to charge the Canadian government what they charge Aetna, the Canadian government can do what Aetna can't: authorize companies to legally produce generic substitutes. All the instructions are on file in our patent office and with our FDA; it wouldn't be hard. This is, in fact, what many third world countries do.
And actually, the companies don't really mind. Contrary to propaganda, Pfizer et al. would be happy to sell into the Indian market at below average cost -- it's gravy to them. What prevents them is not The Evil Corporate Overlords Trying to Make All the Third World People Die, it's the US government. Drug companies used to, in fact, do exactly this, but this gave grandstanding Democratic politicians a platform to decry the drug companies who were Profiteering Off the Backs of Hard Working American Citizens. Now the drug companies don't sell many drugs to the third world, and less developed nations get crappy generics made in often questionable conditions. Everyone wins.
Now, Canada doesn't want to break the patents; among other things, it would put a damper on business growth, as the risk premium on R&D goes up and cutting edge firms seek other locations where their property rights are assured. But I think that it would be politically impossible for the Canadian government to pay full freight on drugs; their health service is already hemorrhaging money. They would simply have to break the patents, or be forced out of office.
In other words, drug reimportation, by my analysis, puts the pharma companies between a rock and a hard place. They can sell to Canada at close to marginal cost and cannibalize profitable sales in the US; or they can let Canadian generic manufacturers do it for them. Companies are not suicidal. They will sell into the US market at the Canadian price plus whatever it costs to ship drugs from Canada, thus making a small premium, but nowhere near enough to cover R&D.
Now, it is possible that the Canadian government, recognizing that we all have an interest in new drugs being developed, will allow the price to rise, or forbid shipping to the US. I think the former is infinitely unlikely, given that allowing prices to float would be political suicide now in exchange for an unrealized public good ten or twenty years down the line. The latter seems slightly more likely, but only slightly; the citizens of Canada who elect them will perceive it as sacrificing a Canadian interest (the generics manufacturers) for an American one (the drug companies).
In the end, I think that reimportation would kill the last profitable large drug market. R&D would, for all intents and purposes, stop. Now, advocates will say that the government can pick up the slack. Come again? First of all, you're talking about a massive budget increase; each drug, remember, takes an average of $800 million dollars to bring to market. (That's just R&D, not sales or what have you.) Second of all, the government does not efficiently allocate research priorities. Pharmaceutical companies look at the size of the market; the government looks at how loud it is. Thus the government spends 10 times as much per victim on breast cancer research as colon cancer, even though the latter is far more likely to kill you; breasts, thank God, are expendable and easy to examine.
Yes, there are all those lifestyle drugs. Like. . . Rogaine and Viagra and . . . oh, shut up, you Nazi, I'm sure there are more.
We can all probably agree that curing baldness is not as pressing a need as, say, curing cancer. But when you start talking about "lifestyle drugs", watch out -- you might find out that your idea of a crippling illness is someone else's idea of a "lifestyle" -- probably the taxpayer who's picking up the check, which is why in Canada heart bypass surgery is "elective". And in fact, political factors already sway pricing -- if you look at drug prices, you'll see that the more optional a drug is, the higher its price over its average cost. Pharma companies have no fear that a coalition headed by Jason Alexander is going to descend on Washington to demand that the Senate do something about the high price of Monoxidil.
The point being, we are not going to save an enormous amount of money by getting rid of those useless "lifestyle" drugs; if they really are inessential, they're subsidizing the drugs that save lives. And if they aren't, a loud group somewhere is going to demand that we do something about the problem, double quick -- and we're right back where we started.
So I think that reimporation would, yes, pretty much eliminate the development of new drugs. And I think that that would be a bad thing. And I hope to God that we elect a Senate with some sense come November, before they can legislate away my chances for a healthy old age.
I just got this little treasure via email. I have no idea whether it's real or not, but it is entertaining:
1943 Guide to Hiring Women:
The following is an excerpt from the July 1943 issue of Transportation Magazine. This was written for male supervisors of women in the work force during World War II.
Eleven Tips on Getting More Efficiency Out of Women Employees
There's no longer any question whether transit companies should hire women for jobs formerly held by men. The draft and manpower shortage has settled that point. The important things now are to select the most efficient women available and how to use them to the best advantage. Here are eleven helpful tips on the subject from western properties:
1. If you can get them, pick young married women. They have these advantages, according to the reports of western companies: they usually have more of a sense of responsibility than do their unmarried sisters; they're less likely to be flirtatious; as a rule, they need the work or they wouldn't be doing it -- maybe a sick husband or one who's in the army; they still have the pep and interest to work hard and to deal with the public efficiently.
2. When you have to use older women, try to get ones who have worked outside the home at some time in their lives. Most transportation companies have found that older women who have never contacted the public, have a hard time adapting themselves, are inclined to be cantankerous and fussy. It's always well to impress upon older women the importance of friendliness and courtesy.
3. While there are exceptions, of course, to this rule, general experience indicates that "husky" girls - those who are just a little on the heavy side - are likely to be more even-tempered and efficient than their underweight sisters.
4. Retain a physician to give each woman you hire a special physical examination - one covering female conditions. This step not only protects the property against the possibilities of lawsuit but also reveals whether the employee-to-be has any female weaknesses which would make her mentally or physically unfit for the job. Transit companies that follow this practice report a surprising number of women turned down for nervous disorders.
5. In breaking in women who haven't previously done outside work, stress at the outset the importance of time -- the fact that a minute or two lost here and there makes serious inroads on schedules. Until this point is gotten across, service is likely to be slowed up.
6. Give the female employe in garage or office a definite day-long schedule of duties so that she'll keep busy without bothering the management for instructions every few minutes. Numerous properties say that women make excellent workers when they have their jobs cut out for them but that they lack initiative in finding work themselves.
7. Whenever possible, let the inside employe change from one job to another at some time during the day. Women are inclined to be nervous and they're happier with change.
8. Give every girl an adequate number of rest periods during the day. Companies that are already using large numbers of women stress the fact that you have to make some allowances for feminine psychology. A girl has more confidence and consequently is more efficient if she can keep her hair tidied, apply fresh lipstick and wash her hands several times a day.
9. Be tactful in issuing instructions or in making criticisms. Women are often sensitive; they can't shrug off harsh words the way that men do. Never ridicule a woman - it breaks her spirit and cuts her efficiency.
10. Be reasonably considerate about using strong language around women. Even though a girl's husband or father may swear vociferously, she'll grow to dislike a place of business where she hears too much of this.
11. Get enough size variety in operator uniforms that each girl can have a proper fit. This point can't be stressed too strongly as a means of keeping women happy, according to western properties.
Well, I'm one of those flightly singletons and unfortunately not husky (or at least, so I devoutly hope), so this may be why I'm having a hard time finding a job. But if anyone's hiring, consider the fact that with me you won't need to buy all new uniforms -- as long as you've got something that fits a really skinny 6'2 guy, I'm your man.
Eric Raymond asks an interesting question: why don't the best of regional foods percolate across the country?
In some cases, I think that what one region considers superb may be too much of an acquired taste. For example, having gone to school in Philadelphia, I am aware that the provolone cheesesteak with fried onions, mushrooms, and salt and pepper is one of the finest foods known to man, especially if it is accompanied by an order of cross-cut spicy fries with cheese whiz, and a bite of your companion's Italian Hoagie with mayonnaise and oil and vinegar. Yet some of you are already blanching at the thought, and not just heart surgeons, who are in fact probably enthusiastically figuring me into their plans for early retirement. It has been suggested to me more than once by people who were not fortunate enough spend their college years in the City of Brotherly Love that there may be an age beyond which a taste for such cuisine cannot be successfully acquired, and that this age is the same one which marks the end of a taste for drinking one's own weight in tequila.
And though my mother hails from the midwest, and I was raised on such delights as Jello Molds and Ham Salad, I am pretty confident that a taste for salads composed of three disparate ingredients and enough Miracle Whip to drown one of those small towns that's always getting flooded and rebuilt is not going to catch on outside the Land of the Ladies Aid Potluck. And no one is ever going to like Ambrosia.
Then there are the differences in natural resources. For example, you cannot get a good bagel outside of New York. People who think that they have access to good bagels merely because they happen to have a couple of Jewish professors at the local college who support a bagelry that is one step above the dietary atrocities committed at Einstein Bros. and its ilk, are wrong. If they will come to New York, I will direct them to H&H bagels, with a stern warning that after they eat there, they will never be able to consume one of those round pieces of stale bread that passes for a bagel outside of New York. However, even in places with a large Jewish population that would support some good bagelries, such as LA, the bagels are not as good as New York's. This is not local prejudice; it's the mineral content in the water. For some reason, it's ideal for making bagels.
You can't get San Francisco sourdough bread outside of San Francisco because nowhere else has the humidity, temperature, and barometric conditions to produce ideal San Francisco sourdough bread. You can't have good clam chowder outside New England because clams don't age well, and the kind they get elsewhere aren't right for New England Clam Chowder.
Some things are simply differences in taste. People who were born in New York, and are thus actually allowed to call themselves New Yorkers, know that good pizza has a thick, floppy bottom crust with a nice big hunk of soft crust to grab onto at the wide end. It does not have a thin, crispy crust that tastes like matzoh. It is not eight inches thick and drowned in tomato sauce sweet enough to rot your teeth, either. And it does not have barbequed chicken or arugula on it, thank you very much Mr. Puck. Yet unaccountably, people in other cities continue to do these bizarre things to their pizza, and actually seem to prefer it to the Real Thing. And I have only scratched the surface of the regional variations -- not to mention such unholy national creations such as Dominos, the Pit of Ersatz.
But then there are things you would think would translate. Philly Soft Pretzels. Texas Barbeque. Carolina Barbeque (yes, I swing both ways.). The outstanding pie you can get in every Iowa diner, and nowhere else. Why don't they percolate? I don't know. But I think someone should find out. I wouldn't mind a slice of pie right about now.
Moral question of the day: do I feel bad because the nuthatch alleged terrorist is probably sentencing himself to death by insisting upon being his own attorney?
I'm sorry that posting has been nonexistant for the past three days; the dog has been sick, and the constant pacing all night has rather sapped my will to do anything but stare blearily ahead and pray. They've diagnosed some sort of a back problem and we're on steroids -- whee! -- so hopefully we'll all be back to normal tomorrow. Thank you for bearing with me.
