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Atlas’ Thugs: Profit-Seeking Has Become Rent-Seeking
Townhall.com ^ | June 6, 2016 | Mytheos Holt

Posted on 06/07/2016 11:49:18 AM PDT by Kaslin

Last month, news came down the pike from the Harvard Business Review that should bring despair to the hearts of any honest defender of capitalism.

As reported by American Enterprise Institute (AEI) blogger James Pethokoukis, the Harvard story, authored by Boston University economist James Bessen, found that growing corporate profitability is increasingly coming from investments not in benevolent, market-friendly costs such as research and development, but rather in augmented lobbying to shut out competition. In short, it is now more profitable to use Washington to stop people from building something new than to actually build it yourself.

If a more devastating indictment of the Obama economy and its culture of cronyist favor-seeking exists, it is hard to imagine. A world where well-heeled “men in Washington” dictate which businesses do and don’t get to survive is not one where wealth, opportunity, or a functioning economy can continue to be realities for the vast majority of people. Indeed, it has more in common with a feudal system of patronage than with anything recognizable as capitalist or American. And like feudal patronage, it serves only to protect the already powerful at the expense of everyone else, whether they are entrepreneurs, taxpayers, or the economically vulnerable.

Not that this news should be surprising. One could have deduced it purely by observing the recent behavior of the pharmaceutical industry, which perhaps more than any other has been adept at playing this Washingtonian game of thrones. Some facts:

Between 2009 and 2011, pharma spent enough money to more or less write Obamacare based on their dictates. That figure totaled close to $1 billion on lobbying on the US alone. Meanwhile, the industry’s spending on research and development has become dwarfed by its advertising budget.

Despite widespread discontent with the industry’s price gouging behavior, the salaries of health care CEOs continue to rise. Witness the eight health care CEOs recently listed in a New York Times feature on the 50 highest paid chief executives, all of whom commanded salaries of greater than $20 million per year.

The only regulation that the industry seems interested in fighting is not one that stops them from developing new drugs or improving their services, but rather one that bars them from bleeding health providers and consumers for more money. I refer to the 340B drug discount program signed into law by President George H. W. Bush, which requires all pharmaceutical companies who sell their drugs to Medicaid and Medicare Part B patients to offer discounts to health providers that treat tons of poor people. The drug industry hates that the program generates $4.5 billion annually in savings for providers – even though 340B does demonstrable good helping the underserved get access to medications and clinical services.

In a free market, all of the previous facts would never have become reality. But thanks to the obfuscation, lies, and thuggish tyranny of the “most transparent administration in history,” they are sadly an inevitable outcome. As Republican nominee Donald Trump is fond of observing, businesses that figure out how to manipulate a broken system are simply doing their jobs, and pharma has proven particularly adept at gaming our current system of lobbyist-driven profits. And because they’re so good it, they are unfortunately committed to preserving their advantage.

Therefore, while we may be tempted to savage Big Pharma for their cynicism, really, their predatory behavior is simply a symptom of our broken American politics. Shame on Washington for its spinelessness and stupidity in permitting our free market economy to be so perverted, and let’s hope the hard work of reverting to precisely that free market economy begins soon.


TOPICS: Culture/Society; Editorial
KEYWORDS: cronyism; pharmaceutical

1 posted on 06/07/2016 11:49:18 AM PDT by Kaslin
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To: ADemocratNoMore; Aggie Mama; alarm rider; alexander_busek; AlligatorEyes; AmericanGirlRising; ...
Ping.

Ayn Rand, Atlas Shrugged, Part 1, Chapter 3, titled "The Top and the Bottom."

2 posted on 06/07/2016 11:58:13 AM PDT by Publius ("Who is John Galt?" by Billthedrill and Publius now available at Amazon.)
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To: Kaslin

$100K spent on lobbying on K Street returns an infinitely higher ROI than millions spent on new plants, facilities, research, employees or training. It’s true.


3 posted on 06/07/2016 12:06:18 PM PDT by Buckeye McFrog
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To: Kaslin

anything that eminates from harvard or a harvard grad
is brown and smells bad AND promotes socialism/communism
LIBTARD UNIVERSITY
the problem is NOT the corporations
but the CORRUPT CONGRESS


4 posted on 06/07/2016 12:12:22 PM PDT by zzwhale
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To: zzwhale

Actually when government and business are joined at the hip, it is closer to Socialism/Communism.

Communism is just another form of Capitalism, with the government exercising control over the Capital.


5 posted on 06/07/2016 12:15:00 PM PDT by dfwgator
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To: Kaslin
nothing new about this at all
6 posted on 06/07/2016 12:16:08 PM PDT by pabianice (LINE)
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To: Kaslin

This is why you now see companies jumping on political bandwagons such as rainbow-type coalitions.

They want to appear friendly to gov policies and not make the gold-grantors angry.

So now you see places like Target coming out in support of transgender bathroom law but in the past, you never saw such blogosphere type behavior.


7 posted on 06/07/2016 12:24:12 PM PDT by fruser1
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To: Kaslin

This is the unspoken reason everyone in power is against Trump. He can’t be bought and will not care if he destroys the system of insider priveledges.


8 posted on 06/07/2016 12:31:34 PM PDT by Vince Ferrer
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To: Kaslin

Can we address the 100 billion-plus in endowment funds Harvard is hoarding? Does that count?


9 posted on 06/07/2016 12:43:40 PM PDT by Neoliberalnot (Marxism works well only with the uneducated and the unarme)
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To: zzwhale

the problem is NOT the corporations
but the CORRUPT CONGRESS””

Yes, either businesses kowtow to the politicians or they find themselves out of business. A lawyer of some sort takes a piece of every business and they have completely hijacked healthcare.


10 posted on 06/07/2016 12:45:31 PM PDT by Neoliberalnot (Marxism works well only with the uneducated and the unarme)
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To: Kaslin

No one can possibly be surprised that it’s always worthwhile to have a man in Washington.

On this planet, all capitalism is crony capitalism because we have octopus governments, with tentacles in every crevice of life.


11 posted on 06/07/2016 12:51:07 PM PDT by headsonpikes (Mass murder and cannibalism are the twin sacraments of socialism - "Who-whom?"-Lenin)
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To: Kaslin

A substantial amount of Pfizer’s drug revenue is paid by the government and all of their drugs are regulated by the government. Therefore It is no surprise that they engage in political machinations. If they functioned in free enterprise systems their actions would be risible but they are actually very rational and justified. This article is BS. It is an indictment of our government not Pfizer.


12 posted on 06/07/2016 1:03:16 PM PDT by FreedomNotSafety
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To: Publius

Mr. Wesley Mouch, white courtesy telephone, please.


13 posted on 06/07/2016 1:07:31 PM PDT by Billthedrill
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To: Publius

I wish I had my copy with me so I could re-read that chapter. I got a job out of town and brought 4 books with me:

1) Bible
2) Animal Farm
3) 1984
4) Battle of the Crater (by Newt Gingrich - good book)..

didn’t have room for anything else.


14 posted on 06/07/2016 3:11:41 PM PDT by GeorgiaDawg32 (www.greenhornshooting.com - Professional handgun training.)
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To: Billthedrill

My thought exactly!


15 posted on 06/07/2016 8:18:47 PM PDT by Still Thinking (Freedom is NOT a loophole!)
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To: Publius
My favorite chapter is Part III, Chapter 6, The Concerto of Deliverance.

I prefer listening to John Galt's speech on audiobook, vs reading it. It helps that while I'm out walking, there aren't as many distractions than if I was reading it at home.

During my walk last night, I was listening to the chapter, "My Brother's Keeper." The exchanges between Cheryl & James Taggart were riveting, and chilling. The narrator did a fantastic job of capturing James Taggart.

16 posted on 06/08/2016 10:08:45 AM PDT by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Gonzales! Come and Take It!)
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