Asymmetrical Information

my heart thrills to the Ben Franklin aphorism that "Those who sacrifice liberty for security will get--and deserve--neither."

Another person getting the aphorism incorrect.

Sigh.

Tradeoffs. Exactly.

Two very good posts in a row. I work in the pharma industry and often find myself defending it in places. It certainly has its share of corporate dysfunction, to be sure, but despite the large potential payoffs, it's still a risky proposition to start with some basic science (often funded by the government) and develop that, winding through the discovery, development, and regulatory processes, into a marketable drug. A lot of new drug ideas these days are coming out of the small pharamas, which would have a much tougher time raising the capital to do drug discovery if the profit incentive disappears from the market.

I don't think we'd have just a minor reduction in new drugs if they pushed price closer to marginal cost, I think it would be a substantial reduction. Even under the current conditions, anemic pipelines are a problem at many of the large pharmas.

What about universal single-payer catastrophic insurance coupled with removal of all tax deductions for employer-provided medical benefits? If deductibles on the state-provided policy are sufficiently high, wouldn't that encourage competition in medical industry and reduce most of the administrative overhead but still provide the safety net?

I think I've run across this idea numerous times and personally can't see much downside to it, except if numbers don't work out very well: for example, if most of the cost of a typical medical policy is concentrated in the high-dollar low-probability portion of the risk... Any insights?

You'll notice that the vast majority of people who claim that we only need one drug for any given disease have no knowledge of, nor training in, organic chemistry. Chirality means nothing to them.

To those at home, organic chemistry is hard. Really, really hard. This is because not only does the chemistry matter, but the actual shape of the molecule is very important. With complex molecules like drugs, a simple difference in shape can create a substantial change in the effect of the molecule in a chemical reaction, especially in biological systems. Chirality is usually explained in terms of handedness, with the caveat that there can be very many lines of symmetry depending on the molecule.

So even the same molecule, what we would generally think of being the same drug, can have very different effects (especially secondary effects). Now think about what that implies for drugs in the same family, which tend to have similar critical shapes. Opium, heroin, morphine, codeine... they are all from the same family of drugs, and all are or have been used for pain treatment. They each have very different secondary effects, and different people respond differently to each. Do we need all of these? Or should we have stopped with opium (laudanum) and have gone no farther?

Heck, people respond differently to different methods of using the same drug: injection, ingestion, and inhalation can produce very different secondary effects. Myself I find it difficult if not impossible to ingest most opiates but I have much fewer negative side effects when using an IV (far too many trips to the ER for serious physical trauma, rather than an attempt to relive Trainspotting). Then there are the different formulations that enable you to take fewer pills, through extended release or higher concentrations for short dosages.

As always, lefties want to control your life and have no real concern for the comfort or preferences of the masses they love. Ask them about fashion someday, or look at the vast numbers of cars and rubber boots available in the USSR. Lovely people, but they really truly are concerned about the proles! Right.

What a great post! It's amazing how some people simply pretend that trade-offs don't exist, and expect others to believe it as well. I've seen the same type of argument regarding steps to reduce greenhouse gas emissions - some argue that drastic restrictions will spur innovation, leading to a big economic bonanza.

And with a higher minimum wage - it will make employers value their employees so much more, and so they'll hire more of them and give them more and better training, which will actually help the employer because the workers will be more efficient, so everyone will end up better off!

The idea of tradeoffs is one of the first things to go by the wayside when political beliefs become a substitute for religion. The desire for the world to be somehow more fundamentally hospitable to us makes people think that gee, there really ought to be a way to have our cake and eat it too, and if it isn't that way right now, well, it must be because those bad people over there are obscuring the simple path to a solution.
I remember when the prescription drug benefit wrangle was playing out (it is a disaster, of course), wondering why people couldn't just say, "Well, we can decide whether we're a rich enough country to do this, and whether we want to do this, and then if so, we need to figure out how to pay for it." But we had to demonize the people getting paid, because it was more than we wanted to pay. Some of that was just simple selfishness, but some of it comes from a belief that it just shouldn't be that tough to have it both ways.
Tom Sowell (others, too) in "A Conflict of Visions" and elsewhere, writes of the tragic view of human nature as opposed to the idea of the perfectible man or society. Belief that tradeoffs are always involved, that the universe isn't doing anything to help us help ourselves, doesn't mean we can't also believe in all the good, caring, sensitive things good leftists do. It just means we have to acknowledge that these things come with associated costs, just like the things that conservatives want. It also means we have to bid farewell to reassuring, self-congratulatory nonsense that says to ourselves, that we are on the side of right and good, and to others, that they must be evil if they can't see how easily everything could be so wonderful.

Also, once we acknowledge that those good, lefty things come with associated costs, we have to decide whether they are worth doing after all, or at least to what extent. What we have in the West is a constant grappling with those questions, a constantly readjusted veneer of social programs grafted onto the basic framework of free-market democracy. When people ignore the tradeoffs altogether, we wind up with the Heaven on Earth that is full-on socialism, or communism. Tradeoffs are a bitch, yo.

Also, unlike other markets, competition between different providers is bad: we should have just one pill for every condition.

Different providers of what? Insurance or pills? Unless I've misread it, it looks like his argument is that you'll have competition from drug researchers even with a single payer system.

My question is, how do we prevent countries in Europe from becoming free riders? Why should Americans pay all the costs of drug development? What do we get for that? If Canada can collectively bargain with drug companies and reduce drug costs (provide it for x price or we don't want it), Why shouldn't the US do the same?
At least allow us to purchase drugs in Canada and get whatever deal they do.

JG,

I think you are in danger of straying from your policy of only writing about things you have a comparative advantage in. With that in mind, can you please cite anything to support your assertion that torture works? Every opinion I've heard or read about on the subject from knowledgeble people (working in defense or security jobs) said that information gained from torture is unreliable. Torture works only if you are trying to extract a confession.

The main problem with admitting that there is a tradeoff to a particular policy (and there is a tradeoff to *every* policy worth debating) occurs when you are attempting to influence a third party.

As soon as you admit *any* downside to your position, it simply becomes a matter of your opponent stridently denying *any* tradeoff in their position, and hammering that you've already admitted that there's a cost to yours. And it works. I've seen it happen more than once in a debate where the opponent more or less ends up saying "you've already admitted your policy fails", to which you have a weak "no, that's not failure, that's a cost. You're policy has tradeoffs as well."

So, if you see your job as education, it's all very well to admit tradeoffs. But if you see your job as promoting the policy, then you've got to admit nothing.

It's why I prefer to educate than to win.

The most recent example I came across is talking about a withdrawal from Iraq. Rumsfeld was castigated for never admitting to the possibility of an insurgency before the war. I brought up the possibility to that a withdrawal *might* (emphasis on might) allow for a quasi-genocide of the Sunni's. The only reply was to attack the cost of staying (which is horrendously high), but an absolute refusal to countenance a possible cost of leaving.

Why not admit the possible cost? Because admission would make the possibility of withdrawal impossible, just as admission of a 10 year insurgency would have made the possibility of invasion impossible.

My only beef is that it seems a bit cheap to attack Rumsfeld for employing exactly the same tactic that you're going to have to use. (Go ahead, attack him for anything else, but why attack him for tactics you *have* to use to get policy passed.)

"Security" is just one type of liberty. I would define it as the freedom not to be maimed or killed, or to live in fear that I or others I care about will be maimed or killed. Of course, many parties can violate this freedom: criminals, terrorists, foreign governments, my own government. Balance that against my freedom to generally do what I want as long as I'm not hurting anyone else (yes, define that too), my freedom to earn and keep my own money, my freedom to spend my time as I wish, etc. If we suppose that post-9/11 airport security saves an expected 2.7 lives per year, is it worth an aggregate 15,000 additional man-years spent by 100 million travelers waiting in line to go through humiliating procedures, plus the reduction in economic freedom because of the additional cost? Even if I had some idea, I don't think my conclusion would be any better than anyone else's. And I'm just going on basic, 18th century freedoms here. I'm sure some of the other panel participants believe that "liberty" includes the right to aqueducts, education, sanitation, roads, viniculture, public health, etc. This will always be an incredibly complex balancing problem with dozens of variables and 300 million different utility functions.

You mis-paraphrased what Laffer said in a post that's about being realistic and not dramatic.

"My question is, how do we prevent countries in Europe from becoming free riders? Why should Americans pay all the costs of drug development? What do we get for that? If Canada can collectively bargain with drug companies and reduce drug costs (provide it for x price or we don't want it), Why shouldn't the US do the same?"

First, they are already free riders.

What do we get for that? We get excellent drug discoveries. That is worth a lot.

As for Canada, the solution to the free rider problem is NOT to say that since some people free ride the system is must not really have any costs.

Why shouldn't the US do the same? Because it is good to have drug innovations.

You know Viginia Postrel really gets annoyed when people use "Yes, Virginia..." in their headlines (or post titles).

http://www.vpostrel.com/weblog/archives/2002/dec02.html

http://www.vpostrel.com/weblog/archives/2002/dec02.html

> Every opinion I've heard or read about on the subject from knowledgeble people (working in defense or security jobs) said that information gained from torture is unreliable.

Everything is unreliable.

The relevant question is how much useful information can be gathered and at what cost.

The problem with your analysis is that you assume all reserach is equal. But that is not the case. In the case of drugs and medical
products the simplist approach is to divide research into two steps. Early research where nobody knows if there will be a payoff and final product research where there is signinficant evidence that there will be a payoff. What we have is a system wth public financing of the extremely risky early resarch in universities and thank tank type institutions. But once the research starts to have commercially potential it shifts from the public sector to the private aector.

We have a half century or more of evidence of evidence that this system works very well.

What do you propose to replace it? Since there is little evidence that the drug companies are willing to finance the early stage, high risk research.

If you go through the entire history of US economic development from the first large scale investments in canals this pragmatic combination of public and private financing has proved higly successful. Can you provide me a single piece of evidence that your theory would produce better results then two centuries of higly sucessful joint private-public results.

I don't know how much usefull information we could have got out of Ken Lay. Would you believe anything we got a waterboarded Ken Lay to say about Bush Jr.?

Max asks about the feasibility of a single-payer catastrophic health insurance program, with the non-poor then on a pay-as-you-go basis for everything else. Milton Friedman proposed just such a plan in the Public Interest back in around 2002. He said that it would pencil out. Made sense me. The key is to make patients and their families the dominant source of money in the system. Funding health care almost entirely with "other peoples' money" is ridiculous.

Yes, Jane -- there is a Santa Claus.

Jane wrote: ,But ultimately it falls into the same category as "Torture doesn't work anyway", "cutting taxes increases tax revenues", and "that miniskirt isn't too young for you" . . . things that I ardently wish were true, but know that I will be punished by reality for actually believing.

From the Wall Street Journal The main cause of the deficit decline -- 90% of it, says White House budget director Rob Portman -- is a tidal wave of tax revenue. Tax collections have increased by $521 billion in the last two fiscal years, the largest two-year revenue increase -- even after adjusting for inflation -- in American history. If you're surprised to hear that, it's probably because inside Washington this is treated as the only secret no one wants to print.

Coercive interrogation works. Crossing the line into "true torture" is tricky unless done by an expert interrogator, and then it is still only one tool in the bag.

There are two problems with torture. (1) When done by untrained or poorly trained people, it is very unreliable. This, BTW, is why the Supreme Court outlawed torture to gain confessions for use in criminal trials--there just aren't that many well trained people who can gain reliable information. (2) In our society, there is a personal cost incurred by the torturer; one that I personally don't want to pay (but I have no problem with coercive interrogation).

So, with the caveat that torture works only when used by a well trained person, I agree with Megan.

MT, if you don't believe that torture (using the threat and application of violence to coerce information from people) works, can you explain the existence of mugging (using the threat and application of violence to coerce money from people)?

wkwillis, if Ken Lay said Enron was defrauding its investors while he was being waterboarded, I guess I'd have to conclude that the company wasn't doing anything wrong. Because, you see, torture never produces any useful information.

The greatest threat to peoples lives is from police state governments, followed closly by no government and civil war. Tens perhaps hundreds of millions have died at the hands of their own government or lack of one, while terrorist have killed in the tens of thousands. We are lucky to live in a time and place with a stable government with institutional protections of our rights and lives. The trade off is between protection from terrorist and giving up some of our institutional protections. I think my childern and grandchildern will be safer if I endure a little extra danger now and hold on to the institutions protections.

bgates,

There is a reason muggers ask people for cash, not their bank number. Coercing people into providing information is different than immediate, visible, verifiable behavior. Also if the situation comes to the point where you are considering torture, the captive probably has a much higher stake in not revealing the information (if he indeed has it) than a random person giving up a small amount of cash.

MS,

In Israel, in 1984 (I think) the PLO kidnapped a bus full of people, and planted two bombs on board. After a short fire-fight, Israeli security captured two of the terrorists, and beat the (actual) location of the bombs out of them.

Torture as a MO would work much worse, but you asked when has it ever produced good results...

Also wanted to comment on something JG said during the debate at B&N and on this blog, namely:
who does the average American fear more--the FBI or the IRS?

While the threat of FBI is, admittedly, more remote and unlikely, if it were to materialize, it could potentially be far more dangerous than anything IRS could ever do. IRS, at most, could take away a portion of your money - you cut back on some luxury goods, tighten your belt a little. Hardly the worst thing in the world. It would be nothing compared to "descending into a dark night of fascism", to use JG's words. Islamic terrorism can be bad as we have witnessed 5 years ago; terrorism by the government aimed at it's own people is much much worse, even if unlikely.

Also it is worth pointing out that any limits on economic freedom by the government can be fairly easily reversed in a free society - all that would be needed is public a change in public opinion. Rolling back a police state, once you have one, will be much harder.

Lasly, while the US (and anglophone countries in general) have been mostly stable and avoided sliding into a fascist state, as Jane likes to point out, much of rest of the world hasnt been as fortunate. There are many examples of relatively free societies becoming authoritarian or dicatorial. So while I agree we shouldnt be hysterical when our freedoms are rolled back to increase security, neither should we be complacent and think only terrorists and criminals have anything to fear. If you are taking living in a free society for granted, you may not realize how fragile is it until it stops being one.

MS, I don't envision coercive interrogation taking place in a vaccuum - the interrogators must have good reason to pursue a line of questioning with a detainee. By asking the detainee questions with known answers, they can elicit immediate verification. You are right that the captive would have a high stake in not disclosing certain bits of information. Does that fact mean that interrogation in general is useless, or does it only have implications for certain techniques?

I wouldnt say torture never works. I could definitely see it useful and even justifiable in certain specific situations (hypothetical ticking time bomb). However my guess is those situations are relatively rare and using them to justify legalizing torture as a routine proceedure (or modus operand as you said) would be a mistake.

IRS, at most, could take away a portion of your money - you cut back on some luxury goods, tighten your belt a little. Tell it to Al Capone.

Look, for torture to have any chance of success, several conditions first have to be met:
1. The detainee has to know the info
2. The interrogator has to know that he knows.
3. The interrogator has to be able to verify the info.

Even after all that you have problems. What if the detainee is a tough one and starts giving you mulitple versions? Or maybe the pain drives him to hallucinate? At what point are you not looking for any new info and just tring to corroborate info you already have? And if you are doing that, it becomes a confession, not interrogation.

There is a reason Israel (which has a much bigger problem with terrorism) banned torture in 1999.

If Canada can collectively bargain with drug companies and reduce drug costs (provide it for x price or we don't want it), Why shouldn't the US do the same?

As I understand it, this representation is a little bit off. Canada's bargaining chip is, provide it for 'x' or we'll break your patent and allow local industry to produce it.

That's not a battle worth fighting for a country with a population smaller than that of many US states, especially since the flood of broken-patent drugs will readily find paths into non-Canadian markets. (Enough Canadian-market drugs already do so anyway.) Canada gets a free ride of sorts, and for the sake of keeping the peace the pharmas go along with the ruse and accept the Canadian profits as a thin gravy, while the US market continues to actually pay for new innovations.

As for why the US shouldn't do the same, the obvious answer is, it would be an odd thing for the driver to negotiate with himself for hitchhiking rights.

joan,

With this: "...with institutional protections of our rights and lives."

I think you'd do well to read the news of some of the bills recently passed in Congress.

If you'd need some pointers as to which ones, just let it be known.

To paraphrase another favorite: "Those that want to be Ignorant and Free, Want what never Was, and never Will Be."

Even without the threat of patent breaking, the social medicine free-riders can get pills below true cost. Consider this model example.

Imaging Pils-R-Us has a new wonder drug Yummy. Yummy is one of 10 drugs they tried to get through the pipeline, the only one that made it. Factoring all the costs of R&D for Yummy, including the speculative cost of it's peers that didn't make it, Pills-R-Us needs to sell Yummy at $1 a pill selling a billion pills a year to break even. Imagine however that it costs $0.05 a pill to manufacture a Yummy pill.

In comes Canada and basically says: 'We will give you $0.50 a pill for Yummy, take it or leave it'. Canada is expected to buy 200 million Yummy pills, while the US is expected to buy 800 million Yummy pills. So Pills-R-Us can either leave the money on the table in Canada, and charge it's 800 million US customers $1.25 a pill, or it can sell those 200 million pills to Canada, and charge it's US customers $1.12 a pill. Which do you think Pills-R-Us is going to do? Which of the two choices is better for US consumers?

Did the government give or grant us insight into Thermodynamics? I always thought, this was the product of famous individuals, scientist? I can't imagine that a federal beaurocrat found the first three principles of thermodynamic while filling out some A-52 forms ;)

I always thought it were people like Claude, Linde, Nicolas Carnot, Nikolaus Otto etc. who brought us technical thermodynamics ;)

Mark E Hoffer:
I am not unaware of the new bills, just more optimistic than you. I think the courts are going to stop all or most of them. It will take more than eight years to tear down what it took centuries to build. What worries me is the change in public opinion since I was young. Many and even some people posting here seem to be unwilling to risk any personal danger for our principles or our rights. Where would we be now if previous generation had felt this way. Where will our grandchildren be if they become the ruling majority for a generation.

There's a tradeoff between liberty and security only within a limited range of government power. Outside that range, on the one hand you have a tipping point into "anarchy", which won't really be anarchy but will very quickly become a situation like Beirut or Somalia. There's no liberty without the rule of law, and obviously no security either.

On the other hand, you have a tipping point where government becomes unresponsive to the people and effectively uncontrollable by law. Then you not only lose liberty, but you lose security too - unrestrained governments inflict terror on their own people far more effectively than any unofficial terrorist organization ever has.

The argument should be about just where we are now in relation to that second tipping point.

> it is very unreliable. This, BTW, is why the Supreme Court outlawed torture to gain confessions for use in criminal trials

Nice, but irrelevant. We'd like to think that confessions are "beyond a reasonable doubt". Individual pieces of information in intelligence gathering are almost never that good. Instead, we support conclusions with lots of less unreliable evidence.

> Look, for torture to have any chance of success, several conditions first have to be met:
1. The detainee has to know the info

Yes

> 2. The interrogator has to know that he knows.

No

> 3. The interrogator has to be able to verify the info.

Not really.

> At what point are you not looking for any new info and just tring to corroborate info you already have? And if you are doing that, it becomes a confession, not interrogation.

Wrong. Suppose, as is usually the case in security work, you've got evidence supporting different possibilities. You need to figure out which ones are true enough to act on. That doesn't require a confession or even "beyond a reasonable doubt".

Do "torture opponents" actually think that other information gathering methods meet the standards that they place on torture?

Megan/Jane -

I was at that panel on the liberty/security question (my friend and I being very impressed with your presentation - you may have heard his only somewhat stifled "she's AWESOME" coming from the audience while you were speaking). While I appreciate your post, I thought it necessary, as a lefty libertarian, to point out that your co-panelist was far from representative of those who argue for greater liberty.

Her argument was unusual and, I think, confused - primarily because she was conflating or confusing the concepts of "free will" and "liberty." You may have missed the first minute or so of her presentation when she talked about how "liberty/free will" - she seemed to use the terms interchangeably - were what made humans distinct from other animals, which made me guess that what she really was having a conversation about was free will, not liberty. So when she said life would not be worth living without "liberty" (which you correctly critique as being disingenuous), again, I think she really was saying life was not worth living without free will (something that you might agree with more, as I do).

Which is all to say - her logic was seriously flawed, yes, but her arguments (I hope!) are not ones that sensible advocates of liberty are putting forth.

There is a reason Israel (which has a much bigger problem with terrorism) banned torture in 1999.

Would that happen to be: Because Israel hosts a fully modernized westernesque civil society and has chosen to ban torture on principle, regardless of its uses?

joan,

By "eight years", I'm assuming you are referring to two 4-year terms of GWB's administration. What makes you think that the trend, of the dimunition of our Liberty, only started with GWB?

Mark E Hoffer
Governments try to restrict liberty but people push back. But, to quote Bush, 9/11 changed everything and the majority of the people no longer seem to be pushing back.

mark thoma is a one who hides behind NYT pieces he posts to make foolish points that no econ student could make in class without getting a C. His logic on a single payor health system is flawed. Mark fails to comprehend the simple fact that there is no such thing as a free lunch.

joan,

I hear you re: B43/ 9/11, but I wonder, with the USA Patriot Act passed, shortly thereafter, why you maintain such Faith, in the face of their inaction, that the SCOTUS will roll back these, latest, patently Un-Constitutional Bills/Laws?

Also, I'm unsure why it is that you see me as less than "optimistic"?

ms
Israel adopted a policy of torturing enemy soldiers to death as a punishment. They got suicide bombers as a logical consequence. Life is Calvinball. Get used to it, and plan for what you are going to do in response for what they are going to do in response for what you are going to do.
Try this as a thought experiment. Israel adopted a policy of destroying civilian vehicles in Lebanon to prevent evacuation of civilians from a combat zone to increase civilian casualties in a war. What are the Lebanese going to do next time? Consider the cost of cheap FPGAs and the problem of targetting Israeli civilian vehicles (moving rectangular objects on stationary rectangular objects) with something that will fit into a cheap model airplane and cost less than one thousand dollars each.
Remember, those model airplanes are going to be available on a one destroyed Lebanese vehicle, one destroyed Israeli vehicle basis.
People fight back. Get used to it. Plan ahead.

Uh, there are a growing number of economists who think that all tax rates over 20% produce is avoidance.

So lowering taxes could increase revenue in two ways. Short term as people take advantage of lower rates to cash out of positions. Second: increased growth due to lower drag.

Just as the New Socialist Man is a no show so is the New Libertarian Man.

wkwillis,

Suicide bombing was designed to destroy the palestinian economy.

The Palestinian economy and Israeli economy were integrating. In the 4 years before 2000 the Palestinian economy unemplyment went from ~35% to ~15%.

An Arafat henchman at the time said people who are eating well are not interested in war.

I might add people independent of government funds are harder to coerce.

joan,

It is tradition for people to give up liberties in war time if it makes them feel more secure.

Hell, look at all we have given up for the drug war and drugs never declared war on us unlike the Islamofascists.

Where is the hue and cry against the drug war losses. And yet the much milder losses from the Patriot Act have people all up in arms.

I don't get it. Especially since the drug war losses were a prototype for a lot of the Patriot Act.

You lost this battle when you let them have the Drug War exceptions to the Constitution.

Let me rephrase my rhetorical questions as statements;

If Europe and Canada are producing patent drugs for sub-patent prices for their populations, it will be difficult to ensure that Americans pay the higher prices. Most people see this setup as inherantly unfair and they're right to do so.

People have reiterated why we have a free rider problem, and noted why the US paying while Canada does not is still beneficial to the US.

However, models aside, it's going to be very hard for people to stomach paying twice as much as folks north of the border for the same drugs at the same time. It reeks of unfairness. And unless you restrict trade, it'll take some doing to maintain high US drug prices while Canada and Europe have lower prices.

If the US raises steel tarrifs to protect the local steel industry, Europe would counter by raising tarrifs on US products. In this way, countries negotiate the domestic affairs of other nations. In line with this, the US should offer some disincentive to countries which violate its patents. Does it?

"Incidentally, torture works. I'm against it anyway."

For the point of clarity (or maybe just for the hell of it) you might want to clarify. Torture works when the information you gain can be verified against other sources (e.g., "Where did you hide your bomb making material?"). The Battle of Algiers demonstrated this clearly. Torture does not work so well for the purpose of extracting a confession. People will confess to anything to stop the pain.

The drawback, as the battle of Algiers also demonstrated, is bad PR. But bad PR presupposes a free press. No free press, no bad PR - as the supression of a free press among the Algerian insurgents demonstrates.

So what I'm reading here about the lower costs of drugs to canada is that they are threatening to break patents and manufacture drugs anyway. I find this difficult to believe as they are a member of the WTC(?) and stiff penalties should be able to be applied in that case. But if so, then let it be so, the drug companies will have to deal with it, either politically or in the market.

I have no problem with drug companies making as much money on a drug as humanly possible. I DO however quite strongly object to providing Canada with subsidized drugs out of my pocket.

That is indefensible, it reeks of a captive, monopolistic market that needs to be corrected. It also reeks of politcal corruption in some form or fashion, I don't know who is carrying the political water for the drug companies on this but someone is.

I do not really want to tell the drug companies how much they can charge but I dang sure want to be able to import those same drugs where it's in my best interests.

If canada breaks the patent laws and nothing is done so be it, it will be up to the drug companies to deal with that market reality. I don't see it as the responsibility of someone making

In other words, we'll still get just as many good drugs under single-payer as we do with the free market.

These must be the other words that take a premise beyond anything stated. He cites some mitigating factors, that isn't the same thing as saying that mitigating factors will entirely eliminate the problem. The prescription drug bill altered incentives in such a way that pharma companies would recieve more than they would otherwise. I see nothing wrong with using government bargaining power to reach a new balance. It is entirely possible and I think probabable that less innovation in pharmacueticals is the optimal equilibrium. If we desired we could invest ever more money into pharmacuetical research and we would recieve less and less benefit for every dollar we could stop growing food and making cars and focus all our efforts on curing ever trivial ailments. We don't do that becuase it would be silly.

m. simon
I don't follow you. The Palestinian suicide bombers always targetted Israelis. Why would blowing up Israelis hurt the Palestine economy?

bgate
In answer to your question, I do not believe anything that anybody says under torture without corrobating evidence. If you torture an enemy soldier and he tells you where an ammo dump is, and you bomb it and get secondary explosions, that means you got good information. If you torture someone and he tells you where an ammo dump is, and you blow it up, and you get sixty dead children, it means you got bad information.
Torturing Ken Lay till he tells you where the Swiss bank accounts are might give you good information, or might not. Torturing him till he tells you that he is George Bush's secret lover is probably not going to be good information.

Michael F
With the rapid development of DNA array chips, we are about to fall through another phase change in medical technology. Bush has increased US government funding of medical technolgy with his pharmaceutical bill. Sure, it looks like a subsidy to big business to offset the free ride that small business is getting of health insurance for employees, and that might even be why he pushed the bill, but in the real world more money for medicine equals more money for biotech.
Biotech has military uses. More than those silly JSFs do, anyway.
You know, I dislike Bush when I see him on TV, but it seems the guy is determined to do damn near everything I want. Well, other than those Diebold elections. That makes me nervous. Like he seems to think that he can rig elections without the whole system breaking down. But other than that, he's my man.

BTW, can anyone provide a source saying that Canada has actually broken any (100% legitimate) US patents based on pricing?

I know there were some threats regarding zidovudine for instance, however those were based on contestation of the legality of Glaxo's patents IIRC.

I don't follow you. The Palestinian suicide bombers always targetted Israelis. Why would blowing up Israelis hurt the Palestine economy?

Because the suicide bombings led to the checkpoints -- it may be hard for those unfamiliar with the Middle East to realize, but there weren't any before the intifadas and the attacks; there was essentially no border between Israel and the territories, and you could travel freely. And the checkpoints have drastically stifled traffic and commerce.

At least allow us to purchase drugs in Canada and get whatever deal they do.

You can't. Regardless of what the U.S. government "allows."

There are two ways Canadian citizens could buy drugs more cheaply than market price:

1) The Canadian government could buy the drugs at market price and then re-sell them to the public at the lower price. In other words, the Canadian government would simply subsidize everyone's purchases. (This isn't what happens, but it could.) If the Canadian government found out that it was subsidizing Americans' pharmaceutical costs, it would surely put a stop to that, before the much larger American population bankrupted the Canadian treasury.

2) The Canadian government could order the pharmaceutical companies to charge less in Canada. (This is what happens.) The pharmaceutical companies tolerate this. But they tolerate it because Canada is a relatively small market. They're not going to tolerate it if the entire American population also buys at these prices, since that would erase most of their profits. How can they stop it? Simple: restrict the number of pills they sell to Canada at these lower prices, to the actual size of the Canadian demand. If Americans buy some drugs for reimportation, that will reduce the availability to actual Canadians. The Canadian government will put a stop to this, so that Canadians aren't crowded out by American tourists.

LCDR Swift, the legal representation for OBL's driver at the Supreme Court was passed over by the Navy and is being forced to retire. Good laws of a good land can be rapidly corrupted by bad leaders. Good people can be turned out quickly by bad people in power.
Who really wins or loses with excessively easy lending terms
or excessively low interest rates?

In the late 1920's buying on credit became widespread. Automobiles,
radios, washing machines - all became available to the American wage
earner - on credit. And they consumed.... and consumed in bolus mass.
On the stock exchange ten percent margin was available for
speculators. Borrowing became rampant. Stock valuation become
overvalued and assets relatively over consumed. The population of
consumers in need of a radio, washing machine, automobile, et. al.,
was rapidly depleted. Ongoing consumption at the median
credit-dependent bolus rate was impossible. Inventories accumulated
and workers were laid off, with the resulting inability to pay for
their own assets acquired on credit. The assets were then repossessed
increasing the already over supply. The deflationary macroeconomic
negative feedback system proceeded in a necessary and mechanistic
fashion.

Lenders were left with repossessed assets whose worth was less than
purchase value - with a falling population of potential consumers.
With less product demand factory owners with capital debt for
machinery and buildings were unable to maintain payments. Stock on ten
percent margin became more than just worthless, it became a liability,
as obligations to pay the entire purchase amount remained even as the
stock valuation decreased by 25, then 50, then 75 percent. As the
macroeconomic system unwound into a deflationary collapse in 1932; the
debtor of last resort, a debtor whose balance sheet was quite good,
became also the employer of last resort. And so as the US GDP
collapsed by 40-45 percent, the US government began its work projects
program creating some of the public infrastructure that still serves
its citizen to this day.

Fast forward three generations. The marvels of the late 1920's were
replaced by the computer, its software, and the new information age of
the nineties. Over borrowing and over investment in this arena left
warehouses full of enough fiberopic cable for a generation and an 80
percent collapse of the NASDAQ over the exact same time frame as the
DJIA top to bottom period from 29 to 32. 'Replaying 1929' - US's, not
the United States', but Urban Survival's insightful recognition of
what was transpiring, i.e., 1858's second subfractal's Groundhog's Day
to 1929 was an instant attractor to the website for all who
qualitatively, and for fractalists, quantitatively, appreciated the
nature of cyclical events.

1932 was not 2002. The internet collapse, while wiping out more than 6
trillion dollars of paper value, had little effect on the GDP. Times
were different. A strange set of world circumstances existed in 2000.
Emerged was both a single superpower with an unparalleled military and
nuclear arsenal and a rapidly evolving, highly capable and rising
manufacturing giant with a massive population willing to work 60-80
hours a week at 1/10-1/20th the cost of the superpower's worker. Even
with oceanic transportation of goods, the American consumer reaped the
benefits of these low cost items. American industry could not compete
and jumped in, closing their own manuafacturing plants, and began
marketing and enhancing the distribution system of foreign made
goods.

At the same time the Federal Reserve and Financial Big Business
synergistically created the last 'great' American industry. This
powerful industry increased the money supply faster than at any other
time in US history. That industry could be labelled 'US Lending
Unlimited.' In the 21st century, that industry has shoehorned the
average American citizen into the role of debtor of last resort. The
citizen-wage earner has been enticed into a speculative housing asset
bubble greater in proportion and magnitude than any prior historical
bubbles.

The new lending parameters have made initial house ownership less
expensive on a monthly basis than rental. They have divorced the
value of homes from traditional savings and wages. The new rules have
artificially inflated the purchase price of homes. Wages have not
proportionally increased, leaving the interest and principle debt to
wage ratio and long term debt burden significantly higher. Equity from
that 'artificially' inflated price has been extracted in record
amounts by home owners who have gone on a consumption spending spree,
bolus consuming items in a two-three years that might otherwise have
been consumed over a decade. Home values soared eventually pricing out
the entry population. Building continued and oversupply resulted.

Now to this mix comes higher property taxes, higher insurance rates
especially in eastern and southern coastal states, and a large
population of readjusting ARM's with higher monthly payments. The
inflationary true debt burden and costs become too many straws for
the camel's back. The oversupply of washing machines and automobiles
in 1929 and fiberoptic cable in 2000 now resonates with the incipient
cateclysm in the over supplied housing market in 2006. The money made
by the builders which was no longer being invested in the housing
markets found its way into the equity market, the last game in town -
for one last blow-off. The composite Wilshire nominally is still 1100
billion or so below its March 2000 value and using housing prices as
dollar-denominated purchasing power is valued at perhaps 60 percent of
its March 2000 worth.

Meanwhile there is very little the US can exchange with its Eastern
'trading' partners except its paper currency and a promise to pay
interest on that paper. This strange symbiotic relationship has
provided 'the glut of world dollar savings' that has serviced the US
federal debt and maintained low interest rates. The US dollar, because
of America's superpower stature, continues and will continue to have
value in its purchasing ability of dollar-denominated oil. As
commodity assets, equity assets, and real estate assets deflate, the
value of the dollar will increase in its purchasing power. Friday's
breakout of the dollar is occurring as an expected coupled event with
the collapsing US housing market and incipient uS equity collapse.

So who wins when credit is so unregulated and made so easy that not to
borrow is to lose money? Who wins when real ongoing inflation creates
a disincentive to saving? As the economy collapses; and folks are
unable to repay their loans; and lenders acquire assets that cannot be
sold; and the world becomes a much more dangerous place - the answer
becomes apparent: no one.

Gary Lammert

Mike's post seems right to me. Tradeoffs are no fun for a politician, because they make the rhetoric less effective. This is why every politician on Earth promises to decrease waste, fraud, and abuse. That's a claim that you're going to get free money into your budget. (Sometimes it even happens, but not too often, and many times the "waste-reduction" amounts to putting off maintenance or consuming capital in some disguised way.)

This fits a broader pattern of simplifying reality to eliminate the unwelcome bits, because painting a rosy picture (or a really dark one) is an easy message to get across to voters. Thus, you get things like talking about a grand clash of cultures between a monolithic West and monolithic Islam. Or between the workers and the owners.

And one part of that is a willingness to really attack people on your own side who call that beautiful, simple view into question. How dare you say that the Iraqis won't really be supporting a liberal, pro-Western democracy by 2012. How dare you say that affirmative action programs mostly help minorities who were going to do very well anyway pad their resumes a bit more?

How dare you say that the Iraqis aren't fit for a democracy. How dare you say that affirmative action programs are deserved by minorities because of infractions committed against them before I was born and because they're parents were too lazy to move out of the inner city and into the country?

Interesting, in both cases your hypotheticals are insulting and demeaning toward the individual-- Iraq's can't make a stable democracy in a decade and blacks are incapable of getting into college/workforce unless we lower the bar for them while mine call for increased accountability on the indvidual. Hmm, I wonder where you stand on welfare, abortion, etc. etc. no that's right I got it. It's always someone elses fault. That damn bush. If only him and his ilk weren't around everything would be better.

Had to comment about the last line that torture works but you oppose it anyway.

Torture does work, the problem is that it works too well. What does this mean? You will probably get the following from a guilty subject. One or more attempts to give misleading information followed by the truth. How do you tell which one is the truth? You probably have some idea what the truth is. So you continue torture until the story fits what you know. This is perfect if you are right, if you are wrong, the subject will change his story until he has one that you will accept and thus stop the torture...even if this is dead wrong. The effect is magnified if you apply this to people who you suspect of knowing more than they really do and the occasional innocent that may be caught in the net.

This hubris loop is possibly in any sort of interrogation, but is particularly bad in instances of torture. Since the subject has a clear self interest in providing you the story you want to hear, you are less likely to experience that clarifying moment of doubt when a subject sticks tothe "wrong" story.

1To me, this is like believing that because the government has given us excellent research into thermodynamics, it will also build us a good car.

Yes; "What about the Manhattan Project" is the response of an astonishingly large number of liberals when confronted with, say, the fact that there's no technology out there that can (say) allow us to reduce carbon emissions as much as they think is needed without taking a huge hit to the economy.

"What about the Manhattan Project." IIRC, it consumed enormous amounts of manpower, money, and various materials, and electricity for 3 or 4 years to build 3 small atomic bombs, of two different models. We tested one in New Mexico, dropped the other two on Japan, and then started looking for more efficient ways of producing the bombs.

Fortunately, Truman's bluff (dropping the last two bombs on small Japanese cities) worked, because it would be at least a year before we had a follow-up. Unfortunately, Stalin couldn't be bluffed this way...