Government By and For January 31, 2012March 26, 2017 CAMPAIGN FINANCE REFORM Try to find 20 minutes to watch this compelling presentation to members of the House Democratic Caucus. In it, Lawrence Lessig calls for public financing of campaigns and a Constitutional Amendment to overturn Citizens United – both needed to restore government by the people, for the people. He holds neither to be impossible. (Thanks, Eric Haglund, for the link.) LIFE AFTER DEATH – II Karen Tiede: “You don’t even have to die to donate: Register as a bone marrow donor, and save a life before you die. They will only take you until you’re 60, so don’t linger! MASSIVE need for other-than-Caucasian donors. Here’s the FAQ.” Mark C.: “There’s another option that remains largely ignored: donating one’s body to medical science. My mom had joked about it for years and then discovered that she could do it – and did – to the University of Medicine and Dentistry of New Jersey. The university department that handles these donations is available 24/7. In my case, it required a single phone call after she passed; cremated remains were returned to the family a year or so later. I’d recommend contacting your nearest medical school directly for more information. A donation needs to be set up in advance, obviously. Any objection coming from a family will most certainly result in a donation being declined. The above was my experience. Policies and laws will likely differ among institutions. My mom would not have been able to be an organ donor but still qualified for whole-body donation. I don’t know specifically how her body was utilized. I assume student instruction, which can mean much more than basic anatomy class. I know this is a hard topic, but the squeamishness factor needs to come down many notches.” SELL KERX, VVUS, SUPG/ASTX Fifteen months ago, I posted: A NEW SPECULATIVE BASKET Needless to say, you could lose every penny. But let’s say you put $1,400 into each of ALXA ($1); KERX ($5.25), NPSP ($6.65), EMIS ($1.70, up 35% since suggested this past summer), OSIR ($7.35), VVUS ($7.25), and SUPG ($2.75). That’s $10,000 with the seven $8 commissions a deep discount broker would charge. A year from now, my guru’s guess is that you’d be ahead of where’d you have been in a savings bank. And even if you just broke even, you could take $3,000 in losses on the losers, lowering your taxable income by that much; and then wait until 2012 to take your (by then lightly taxed) long-term capital gains on the winners. Only with money you can truly afford to lose! ☞ As of last night, you would have taken a 25% loss on ALXA, a 40% loss on KERX, a 13% gain on NPSP, an 86% loss on EMIS, a 23% loss on OSIR, a 64% gain on VVUS, and a 3% loss on SUPG (which has changed its symbol to ASTX). You would have had about $2,500 in losses and $1,000 in gains. Not a great way to get rich, at least so far: your initial $10,000 would have shrunk to $8,500. But this is why it’s important to speculate only with money you can truly afford to lose. Guru had actually suggested selling ALXA when it was up 40%, so you might not have taken the 25% loss on that one; but that same day he might also have shaken you out of VVUS, so you might not have had that 64% gain, either. He thinks KERX may approach 4 in the coming weeks, in anticipation of good news; but he would sell into that strength, having lost his enthusiasm for the company’s prospects. (I sold half mine Friday a little over $3 and have an order in to sell the rest at $3.40.) He expects SUPG (now ASTX) not to fare well at a February 8 meeting of the FDA, and so would sell this week. I did, yesterday. He’s less sure how VVUS will fare over the long run, but sees enough risk to suggest selling now, so I did.
Up January 30, 2012March 26, 2017 LIFE AFTER DEATH Whitney Tilson: “My favorite sportswriter, Rick Reilly, with a very powerful, emotional story about organ donors: . . . But Rudy wasn’t there anymore. He was all over America. He had checked the donor box on his driver’s license, so his lungs went here, his kidneys there, and his pancreas somewhere else. His heart stayed close, though. It went to a man named Sammy Robinson, 44, in nearby Hughes, Ark., who’d been waiting for eight months. “Rudy saved my life,” Sammy says. “I told his mom, ‘I know you lost a son. But I want you to know you’ve gained another.'” …There were 65 million registered donors in the U.S. in 2006. Now there are 102 million. That’s still only 42 percent of 18-and-over Americans, but people are starting to get it: Death can mean life. This is the easiest thing you can do to get the new year off to a great start – become an organ donor. Just go to http://donatelife.net/register-now/ and select your state. UP I certainly hope you’re not up at seven on Saturday mornings or eight on Sundays, but Chris Hayes is, and you should set your DVR to record him both days every week on MSNBC. It’s smart and substantive. Here he was yesterday with a segment on the newly-launched effort to investigate wrong-doing that led to the housing collapse, as explained by one of the key figures, New York Attorney General Eric Schneiderman, leading the charge. SUBTITLES AND SUBTLETIES If you’re interested in family complexities, justice, morality, religion . . . well, I like to know as little as possible about movies before I see them, so (in case that’s how you like to experience them, too) let me just leave it at this: “A Separation” absorbing, engrossing, enlightening. It matters not a whit that you don’t speak Farsi (do you?). Just sit close enough to read the subtitles. FUNDRAISING ANECDOTE – II Peg: “Although I hope people don’t give you fifty cents, much less $100K, I loved Friday’s anecdote. I remember once being at my attorney’s and for some reason we were discussing money and levels of comfort. He said he had a client who felt uncomfortable any time his net worth dropped below $100 million – and would cut spending. Needless to say, I feel exactly the same way – minus some zeros!!! Still, despite being a struggling Realtor and feeling like hurling myself off the nearest highway ramp some days, I know I have much more than many of my friends. So – for that I am grateful. I am waiting for the party that represents MY beliefs: fiscal conservatism, regulation – but lean, friendly to free and open markets … and … SOCIALLY liberal.” ☞ I think the party of Clinton and Obama is pretty close to what you have in mind. We would like nothing more than to get back to the surpluses Clinton left us. (Remember his admonition, as he was leaving, not to cut taxes but, rather, to “save Social Security first?” It was his popularized way of saying we should shore up our national balance sheet.) Yet the Republican Congress of 2001-2006, paired with the Republican President, handed our party back such a horrendous, collapsing, deficit-engorged economy in January, 2009, that the only smart thing to do in the short run was to fill the gaping hole in private demand with gargantuan public demand. Which we should have done even bigger than we did (“you can’t fill a $3 trillion hole with a $787 billion stimulus”) and that we still need to do, setting idle construction workers about the task not of building more McMansions (private spending) but the task of fixing 154,000 failing bridges, modernizing 35,000 dilapidated schools, smartening our power grid (public spending) and, thereby, jumpstart our economy, watch tax revenue grow and unemployment costs shrink, and begin to get our infrastructure in shape for the Twenty-First Century.
A Fundraising Anecdote January 27, 2012March 26, 2017 It was at lunch years ago, before campaign finance limits were lowered and before the Supreme Court made a mockery of those limits with their 5-4 Citizens United decision. The key lime pie had been vanquished and I was poised to get $100,000 that a friend had more or less promised when we scheduled the lunch. So when the waiter came with the check, and we both reached for our wallets, I said, “Let me get this; you get the $100,000.” And then, to keep the mood light, I added, “Think of the frequent flier miles!” His wife, whom I had not met before, looked at me coldly. “We don’t fly commercial,” she said. And that was that. We got not a dime, but we did get George W. Bush by 534 votes. I don’t blame my friend’s wife for this; I simply failed to make the case. (If I blame anyone, I blame Ralph Nader.) And in fairness to all of us: who could have imagined in 2000 just HOW awful the repercussions of getting Bush v. Gore would turn out to be? Anyway, that botched fundraising attempt was a long time ago – and not the one I want to tell you about. The one I want to tell you about just occurred. It was a lay-up. Specifically: A college friend, hugely successful, who, when I reached him by phone, was all but irrepressible in his expression of affection for me, admiration for our President, and appreciation of the importance of funding our effort – NOW. He was basically doing all the work for me – even quoting one of my fundraising emails. I live for such moments. “But,” he concluded, “I can’t give you any money.” “Why NOT?” I whimpered, completely off guard. This guy is SUCH a mensch, and SO rich . . . his rejection SO unexpected . . . the question just popped out. “Well, I know it’s not rational – I really can’t explain it,” he said, “but I lost so much money three years ago, I just can’t bring myself to do it. It’s a psychological thing.” Normally, I would leave it at that. (No: really!) But I just couldn’t. “You lost TWENTY million dollars” – I took a wild guess – “but you still have TEN million” – another wild guess, purposely on the low side – “and the whole WORLD is at stake. Just DO it,” I said. “I lost FIFTY million dollars,” he shot back, “and I still have EIGHTY million, so I know it’s completely nuts, it makes no rational sense – I really want to help, but I just can’t right now.” And he didn’t. I tell this story because, as I’ve argued previously, I think what we are called upon to do at this time of national difficulty is not to spend the coldest winter on record shoeless in Valley Forge. Or be shot at in 130-degree heat in Iraq. I think what we are called on to do is to be rational. First, to decide if it really matters to us whether the country goes all Scalia, Rove, Koch Brothers, Limbaugh. And then, if it does, to make the rational choices that will in fact lead to our holding the White House and Senate, taking back the House, and moving the country forward in a more thoughtful way. The rational thing to do is to help now, because money now is several times more powerful than the exact same money in the Fall. That’s because of the “snowball” effect of each organizer we are able to hire now. Given 10 months of a full-time field organizer – which is basically what one max-out contribution buys us – that organizer can recruit, train, and motivate volunteers who then have 9 months to recruit, train, and motivate MORE volunteers who have 8 months to . . . and so on. Each organizer we’re able to hire now snowballs into HUNDREDS of volunteers who will have months to help register millions of new voters (many of whom were 15 or 16 or 17 in 2008) and RE-register millions of existing voters whom the Republicans are working hard to disenfranchise. It’s a huge job that simply can’t be done in the last few weeks of the campaign. NOW is the time to get the snowball rolling. It’s just not rational to say, “no, I want to wait and give the snowball only 3 months to build, so that we have far fewer volunteers, with far less time to tackle this massive job of registering and re-registering millions of voters.” A woman with whom I share a mutual friend runs a large enterprise and would be a perfect donor. I’ve reached out to her several times, but she won’t help, she says, until the President endorses marriage equality. THIS IS NOT RATIONAL. It is like voting for Nader in 2000. It can make you feel good, perhaps even morally superior . . . yet have catastrophic consequences. I am, needless to say, totally with this woman and her would-be wife on the issue of marriage. And I note – as they acknowledge – that far more progress has been made toward LGBT equality under this president than under all prior presidents combined – and that he has from the get-go called for the full repeal of DOMA (his principal opponent in 2008, whom we also adore, called for repealing only half of it) and that he has instructed his Justice Department to stop defending it. Huge things. But, no, he has not yet gone that last step. (Nor would it make any immediate difference if he did: Justice Scalia would not suddenly slap his forehead and say, “Oh, NOW I get it.”) For those who favor marriage equality, NOTHING is less rational than failing to help reelect the President to keep the Republicans from appointing the next justices of the Supreme Court. So if you know folks who – with best intentions – are not being coldly rational in their very legitimate angst over the state of affairs . . . whether their biggest concern be the environment or the economy or civil liberties or campaign rhetoric or some indignity they suffered at the hands of an inept fundraiser . . . please ask them what they would give to be able to turn back time and replace Bush with Gore. Fifty bucks? Five hundred? Five thousand? Because although they can’t change the past, they can, for sure, affect the future. They can help keep all three branches of government from slipping into the grip of people who think very differently from the way many of us do. If they do help, we will see it immediately and jump thru the Internet to say thanks. Monday: Life After Death
The State of the World January 26, 2012March 26, 2017 Tuesday, the President made the case for investing in education, energy independence, research, and infrastructure to get our economy moving again. Our future can really be bright – not least because of the amazing technological advances on the horizon. But for us to succeed, we will need to learn to spread the wealth those technological advances will create (not by going overboard with confiscatory taxation, but by finding a balance that recognizes both the need for rewards and incentives and the need for shared prosperity and a vibrant, healthy, well educated middle class). And for us to succeed, the next couple of decades need to be somewhat more about public consumption (renewing our infrastructure) and less about private consumption (getting a new TV for the guest bedroom). We fund public consumption via taxes; private consumption via credit and debit cards. Private consumption is hard to resist, as it offers immediate ‘One-Click™” satisfaction. Which reminds me: I want a little coffee maker for the guest room. Hang on a second. . . . Okay, I’m back. It will be there Friday, free shipping. (Seriously; it took just a few seconds; all done. I have to do these things when I think of them or I’ll forget.) . . . Public consumption is all about delayed gratification. It requires far more patience and vision on the part of the buyer. (Think Aesop’s ants and grasshoppers, sort of, vaguely.) Every week your paycheck is lower than you’d like. But years from now the bridge you drive across to work doesn’t collapse and the power that runs your home arrives through a more efficient grid and your sewage doesn’t back up – and your paycheck is higher (or at least you still get one) because by modernizing our infrastructure and better educating our kids, we got the pie growing again. Think of all the money Somalia has saved by not investing in infrastructure! And there are no taxes! And yet . . . THE STATE OF THE WORLD A report from Davos by Peter S. Goodman, Business Editor of the Huffington Post. In part: . . . [H]ere at the annual World Economic Forum in Davos . . . a common-sense view prevails among the economists, government officials and international business executives gathered here, albeit one that can only be described as dispiriting: When things are bad in many places, pain spreads without respect to national boundaries. The world’s economy is indeed global. There is no getting off this ride. Dennis Nally, chairman of auditory and tax advisory giant PricewaterhouseCoopers International, laid out the details of a global survey of chief executives on Tuesday evening, describing a broad view of trouble laying in wait on nearly every shore, from continued anxiety over the fate of the eurozone, to weak growth prospects in the United States and a cooling economy in China. Only 15 percent of the roughly 1,200 chief executives surveyed in some 60 countries expect the global economy to improve this year. “CEOs, bottom line see the year ahead as being very challenging,” Nally said. “Confidence levels are down.” (Though not, apparently, at PricewaterhouseCoopers, which poured Laurent-Perrier champagne to journalists gathered in a room garlanded with orchids at the Belvedere Hotel, the Romanesque fortress that stands guard over the town’s main promenade.) “It really points to the issue of how interconnected the global economy really is,” Nally said. But just as one form of decoupling has been laid to rest, another form is quietly emerging, one that ought to be capturing primary attention among policymakers: In many of the world’s major economies, growth and unemployment are no longer connected. The world’s most successful companies have proven adept at wringing profits out of lean growth prospects, and they have mastered the art of boosting revenues without adding workers. Indeed, even as the CEOs in the PwC were fretting over the fate of the global economy, 40 percent were anticipating growth in their own revenues in the coming year, a testament to what is becoming the defining business skill of the age: How to make money even while billions of people don’t have any. This is worrying in the extreme, and not only for people who depend upon paychecks. If this disconnect continues unchecked, the globe will increasingly be divided into haves and have-nots, each inhabiting starkly different realms. In the United States alone, millions of people unable to earn their way will essentially find themselves tossed out of the economy, and rendered dependent upon handouts and luck in place of decent jobs. People of means will increasingly take refuge in gated communities and exclusive clubs where they are able protect themselves from the resulting social upheaval. How are businesses supposed to succeed in such a climate? For now, many are prospering by aiming their goods and services at consumers with spending power, while cutting costs. But unless every company plans to transform itself in Luis Vuitton and BMW — brands that capture premiums from the slice of the world that can shell out for luxury — firms will eventually run out of customers able to absorb their wares. In the end, the ability to consume depends upon the ability to work. For now, however, companies are busily putting off that reckoning . . . . . . Many of the discussions at this year’s global gathering are about the supposed breakdown of capitalism, the rise of economic inequality, and the need for new models that can broaden the benefits of what prosperity can be delivered. . . . Over lunch with a room full of journalists on Wednesday, George Soros described the enduring crisis in Europe in terms unlikely to provoke good cheer in Brussels, with members of the eurozone refusing to marshal the resources necessary to dispel worries about their shared currency. The only policy so far capable of garnering consensus has been the perpetual embrace of growth-killing austerity. “This outlook is truly dismal,” Soros said. “Without a clear game plan, Europe will remain mired in a larger vicious circle, in which economic decline and political deterioration continue to reinforce one another.” All of this grief is unavoidably global in scope. If Europe remains weak, so presumably will orders from Europe for Chinese goods. If Chinese factories slow further, so will demand for steel, which spells less demand for iron ore harvested in Brazil, Australia and India, and less need for heavy equipment forged by Caterpillar at its factories in Illinois and around the globe. And yet the best companies have already mastered this dynamic, stockpiling cash, holding back on hiring, squeezing greater production out of fewer hands. It is an equation that is working well for successful corporations and their shareholders, and badly for everyone else. ☞ I remember going around to wealthy liberal donors trying to raise money for the 2000 election. One of my lines was inspired by Bush’s promise of lowering taxes on the rich: “I don’t want to live in a world of gated communities where people like us are protected by machine guns.” Well, that’s how the rich live in some parts of the world, and that’s the direction President Bush wound up taking us and in which Mitt – who pays an effective federal tax rate of 14% on his $20 million a year – and Newt – who would cut Mitt’s rate on long-term capital gains to zero – would take us further. Let’s squeeze education for our children, squeeze our elderly, and – at all costs – keep from taxing investment income at the rates it was taxed under Ronald Reagan (second greatest man who ever lived), let alone Nixon or Eisenhower. I am an optimist. I think that with leadership from far-sighted rationalists like Barack Obama and other heads of state – most of whom wildly outclass the George W. Bushes and Sarah Palins and Donald Trumps of the world in their depth of knowledge, processing power, and seriousness of purpose – we just may chart a constructive course, even if it means the best off have to pay a lot more taxes (and, once the recovery takes hold, everyone else has to pay a bit more, too). The happy irony is that – kicking and screaming though the Koch brothers and their team will be to avoid it – this is ultimately and enormously in their interest. A thriving global economy with relatively happy, hope-filled citizens is a much better environment for all of us, including the Koch brothers, than a world in decline, despair, turmoil, fear, and suffering. Vote Democrat, and let’s get to work. (We can start with 154,000 bridges in need of repair and 35,000 schools we need to modernize. Right there, you’d end the unemployment crisis in the construction field – with ripple effects buoying millions more whose goods and services those well-paid construction workers could once again afford to enjoy. As President Obama said in September, we need to pass The American Jobs Act “right now.”)
Up Is Down, Fat Is Lean January 25, 2012March 26, 2017 Thanks to James Musters for these first two items: Click here to see how long it takes Mitt to earn what you earn in a year. If you enter $45,000, the answer is “18 hours, 11 minutes and 53 seconds.” Which is some combination of his skill and hard work, on the one hand, and – possibly – a system that rewards people who do what he does more heavily than it should . . . and taxes them more lightly than it should. Click here to read about a governor (Democrat, I’m sorry to say), who cut funding for education to preserve tax breaks for a creationist theme park. It’s from Forbes, and includes a fascinating 4th Century passage from St. Augustine. Turns out, vaguely similar mistakes were being made 1700 years ago. GIVE . . . ME . . . A . . . BREAK John Boehner on NBC Nightly News before the President’s speech: “Well, you know, the big problem is this: The President’s policies have failed. And I’m afraid based on everything I’m hearing about tonight’s speech that he’s going to offer more of the same: higher taxes, more spending, more regulation. His policies have not helped the economy; I’d argue they’ve made it worse.” Let me break that down: << The President’s policies have failed. >> No, the President’s policies, to the extent the Republicans allowed any of them to take effect, did not fail. We are not in a Depression, the auto industry did not collapse, 3 million private sector jobs have been created over 22 straight months, manufacturing is up. (Morale in the military was not disrupted by allowing gays and lesbians to serve openly; the effort in Libya worked at minimal cost in lives and treasure; we’re significantly importing less oil. And on and on.) << And I’m afraid based on everything I’m hearing about tonight’s speech that he’s going to offer more of the same: higher taxes, more spending, more regulation. >> Higher taxes would be more of the same? Hardly! He cut taxes on 98% of working Americans; he cut taxes 17 or 18 different ways on small business. More regulation would be more of the same? Hardly! He enacted fewer regulations in his his first 3 years than Bush did in his first three; and has, as noted here, moved to cut dumb regulations. More spending would, I suppose, be “more of the same” – but it’s exactly what we need now: spending on infrastructure and research and education and alternative energy to put people back to work, get the economy growing again, and renew our economy to succeed in the 21st Century. << His policies have not helped the economy; I’d argue they’ve made it worse. >> In the year before Obama’s policies went into effect (which naturally did not happen the day he was sworn in), we lost about 8 million jobs. In the years since, we have not only stopped losing jobs, we’ve gained about 3 million private sector jobs. How is that worse? Up is down, fat is lean – “by far the vast majority” of George W. Bush’s tax cuts went to “people at the bottom end of the economic ladder.” It’s hard to see how John Boehner and his party do the country any good by saying these ridiculous things.
The Myth of Japan’s Failure And: Nobody Called It FDR's Depression January 24, 2012March 26, 2017 CAPITAL GAINS In last night’s Republican debate the point was made that a zero capital gains tax would be a powerful way to create new jobs. But can you think of a single scenario where having such a rate would lead to new jobs? I can’t. Seriously: this is ridiculous. And went unchallenged. People invest in new ventures and in expanding existing ones whether they expect to keep 100% of the profit or 75% of it. Sure beats the (fully taxed) return from a savings account or government bonds. No? As I’ve long suggested, if we were to zero out the tax on capital gains, then for heaven’s sake let’s do so only on gains from newly issued securities – not for the 98% of gains (or whatever the accurate figure) from gains in secondary trading. That would cost just 2% as much in lost tax revenue (and tilt incentives slightly toward funding more financings). JAPAN A point made in passing last night was that Japan has still not recovered from ITS terrible recession. That’s certainly the perception. I’ve been waiting to post this illuminating opinion piece from the New York Times – “The Myth of Japan’s Failure” by Eamonn Fingleton – since it appeared January 6. Here now, in part: By many measures, the Japanese economy has done very well during the so-called lost decades, which started with a stock market crash in January 1990. By some of the most important measures, it has done a lot better than the United States. Japan has succeeded in delivering an increasingly affluent lifestyle to its people despite the financial crash. In the fullness of time, it is likely that this era will be viewed as an outstanding success story. How can the reality and the image be so different? And can the United States learn from Japan’s experience? It is true that Japanese housing prices have never returned to the ludicrous highs they briefly touched in the wild final stage of the boom. Neither has the Tokyo stock market. But the strength of Japan’s economy and its people is evident in many ways. There are a number of facts and figures that don’t quite square with Japan’s image as the laughingstock of the business pages: • Japan’s average life expectancy at birth grew by 4.2 years — to 83 years from 78.8 years — between 1989 and 2009. This means the Japanese now typically live 4.8 years longer than Americans. The progress, moreover, was achieved in spite of, rather than because of, diet. The Japanese people are eating more Western food than ever. The key driver has been better health care. • Japan has made remarkable strides in Internet infrastructure. Although as late as the mid-1990s it was ridiculed as lagging, it has now turned the tables. In a recent survey by Akamai Technologies, of the 50 cities in the world with the fastest Internet service, 38 were in Japan, compared to only 3 in the United States. • Measured from the end of 1989, the yen has risen 87 percent against the U.S. dollar and 94 percent against the British pound. It has even risen against that traditional icon of monetary rectitude, the Swiss franc. • The unemployment rate is 4.2 percent, about half of that in the United States. • . . . Japan has increased its exports to China more than 14-fold since 1989 and Chinese-Japanese bilateral trade remains in broad balance. • . . . Tokyo, according to the Michelin Guide, boasts 16 of the world’s top-ranked restaurants, versus a mere 10 for the runner-up, Paris. Similarly Japan as a whole beats France in the Michelin ratings. But how do you express this in G.D.P. terms? . . . Japan should be held up as a model, not an admonition. If a nation can summon the will to pull together, it can turn even the most unpromising circumstances to advantage. Here Japan’s constant upgrading of its infrastructure is surely an inspiration. . . . WHOM WILL THEY NOMINATE? Peter Kaczowka: “Michael Steele now gives my prediction of a brokered Republican convention a 50:50 chance. If it happens, I expect credit in your column, because I CALLED IT FIRST! 🙂 No one in the media has proposed this, not even on the Huffington Post before this article. The media has zero imagination. . . . I have no idea who would emerge. Jeb Bush, Mitch Daniels, Marco Rubio, Chris Christie, or maybe even Tim ‘Good and’ Pawlenty :-). It won’t be easy for them. The split in the Republican Party is deep, I’m not sure how they’ll agree on a candidate. And their smart candidates did not run, because they knew they couldn’t beat Obama, particularly after appeasing the Right. . . . I look at it simply: Obama beat McCain fairly easily. McCain had the Bush legacy as an albatross, but so will this one. My parents grew up in the Depression, and nobody called it FDR’s. The shanty towns were called Hooverville even five years after FDR took over. And the economy was much worse under FDR than now, yet FDR was reelected in ’36. The idea that voters will blame Obama for this recession is an insult to US voters, as is the implication that that big money controls their votes.”
Are You a Pregnant Conservative Jewish Small Businesswoman? January 23, 2012March 26, 2017 OWN OR WORK FOR A SMALL BUSINESS? A friend has launched BestVendor, to help small businesses decide what software to purchase (and, one day, what everything-else to purchase). ‘I use Amazon to figure out what book to read,’ he says, ‘I use Yelp to figure out what restaurants to go to, but there’s no go-to place if I need new project management software. And yet peer recommendations are the number-one driver of purchasing decisions.’ So if you’re willing to share your opinions of the software you own, you’ll have access to the opinions/ratings of thousands of others. Free. JEWISH? If you doubt that the Obama Administration has been and will remain a great friend of Israel – a charge Republican opponents have leveled – watch this 7-minute video, and/or forward it to friends you think may have bought the Republican line. CONSERVATIVE? Rick: ‘The Andrew Sullivan column you posted Friday summed up my thoughts really well, my being a conservative frustrated with the GOP and an Obama supporter in 2008 (as well as 2012). Many of my conservative friends can’t figure me out. I forwarded Sullivan to one such thinking friend and received the following response today: ‘Congratulations, you’re starting to make me a believer.’ I just wanted to let you know, ‘got another one!’ LOL!’ Mark Laurel: ‘Mr. Sullivan repeats a common error when he states that hospitals must ‘accept all emergency room cases requiring treatment…’ By federal law, hospitals only need to treat emergency conditions, and then only until the patient is stabilized. Show up at an ER for prenatal care, and it’s not likely you will get it. Getting basic health care through the Emergency Room is inefficient, as Mr. Sullivan writes, but not guaranteed.’ CBRX One savvy reader: ‘The FDA voted 13-4 ‘no’ on efficacy. These guys were supposed to be statistically significant at a p of .01, as they are attempting to get approval on a single trial, as the FDA did not consider the Fonseca trial as evidence. I can’t believe Guru fooled himself like this. If this company had cash to fund a second trial, this would ultimately get approved. But they don’t.’ Guru: ‘First time I’ve ever seen a panel vote down data that met its prespecified statistical plan. Introduces an entirely new level of risk in my assessments going forward. The FDA guideline for p < 0.01 is a guideline, not a requirement, and in fact, DNDN was approved under the ‘single trial guideline’ (as can be seen on the FDA’s website) with a p of 0.034. I spoke to a Harvard doctor and an ex-FDA reviewer before this meeting and both expected the vote would be positive. Stock should open near 0.50/share, but then bounce. The product is actually on the market, doctors are using it (Duke, Harvard, UCLA, etc.) sales are accruing. CBRX has 0.25/share in cash and is profitable. So it could rally back to 1.00/share or so. . . . What is also interesting–and disturbing–is that CBRX represents a continuing trend in which products that met the standard scientific criteria for success are being rejected by panels and the FDA. From 1998 to 2008, I made good money betting against stocks whose products truly had not met their primary endpoints, but were advertised as being effective anyway. Now, I must think through studies that HAVE met their pre-specified endpoints, have prior studies that are supportive, and have reasonable mechanisms of action and STILL get rejected because – it seems – ‘the data just aren’t good enough.’ New standard for ‘good enough.” Savvy reader (again): ‘Guru’s right about that last part for sure. I watched the webcast today thinking the FDA is just absolutely broken. The four people on the committee who voted for approval were people I would want making these sorts of decisions. A couple of the people on the panel who voted against seemed embarrassingly stupid. One of them made a remark about how, given how well-powered the trials were, the drug must not work, and he bet that if they repeated the trial again, it would show ‘the same result.’ Of course, the same result would be a big reduction in preterm birth with a p-value of .02, but somehow he thought that meant the drug didn’t work. The drug almost certainly works; it just didn’t stand a chance against these guys.’ Guru again: ‘Given the extreme safety of the drug, the seriousness of the condition, and the already widespread use of the product AND given the Fonseca study which used a different version of the same product, it seemed to me an easy vote for ‘yes’ for a clinician and that the clinicians would win the day. That analysis turned out to be wrong. I expect the company will give a conference call on Monday. There is currently about 0.28/share in cash. I expect the stock will open in the 0.50-0.60 range (2 x cash) and trade up, perhaps to near 1.00. The question is whether WPI will decide to undertake another study or whether they will continue to market Crinone for its approved uses and allow it to be used off label. The FDA deadline for a decision is Feb 26. The FDA did approve Xarelto despite a negative panel vote. Likewise, the FDA approved OSI Pharmaceutical’s drug for lung cancer despite a negative panel vote. Of course, the FDA team was quite negative on Friday, so it is not obvious the FDA will approve CBRX on Feb 26. Still, CBRX’s product is already on the market, it is exceptionally safe, there is a move at the American College of Obstetrics and Gynecology to make use of vaginal progesterone the standard of care for women with first time pregnancy and short cervix, and the FDA could potentially satisfy the need for additional confirmatory data by asking the companies for an additional post-marketing study, rather than a pre-market study. I spoke to people at the Cleveland Clinic and at Harvard’s Brigham and Women’s Hospital and they said it would unethical for them to run placebo-controlled trials for women with short cervix. Professors at Duke and UCLA testifying for CBRX (without payment) on Friday said the same thing. The NIH ran the most recent CBRX trial and the Division head, Roberto Romero, likewise indicated at the meeting the NIH would not be able to justify a placebo controlled trial either. Up to 10% of pregnant women have a short cervix. That’s 400,000 births a year likely to be pre-term. The cost of treating a pre-term infant can easily exceed $50,000. If we could reduce this number by any meaningful amount without putting either the mother or baby at risk, it would be a huge cost savings to the system not to mention the benefit to the infant’s health and long-term development. . . . I can’t handicap the chances of an approval next month given the panel’s recommendation, but it could be 10% or more. Under the assumption that there is a 10% chance the stock will be 4/share if they do approve it and 90% that it will be $0.60 if they require another trial (i.e. about 2 x cash for this cash flow positive, profitable company with a growing revenue stream), you get a fair value of $0.94.’
The Long Game January 20, 2012March 26, 2017 Conservative Andrew Sullivan writes in Newsweek/The Daily Beast: “How Obama’s Long Game Will Outsmart His Critics.” It’s well worth reading in full. Here it is in part: On health care . . . The great conservative bugaboo, Obamacare, is far more moderate than its critics have claimed. The Congressional Budget Office has projected it will reduce the deficit, not increase it dramatically, as Bush’s unfunded Medicare Prescription Drug benefit did. It is based on the individual mandate, an idea pioneered by the archconservative Heritage Foundation, Newt Gingrich, and, of course, Mitt Romney, in the past. It does not have a public option; it gives a huge new client base to the drug and insurance companies; its health-insurance exchanges were also pioneered by the right. It’s to the right of the Clintons’ monstrosity in 1993, and remarkably similar to Nixon’s 1974 proposal. Its passage did not preempt recovery efforts; it followed them. It needs improvement in many ways, but the administration is open to further reform and has agreed to allow states to experiment in different ways to achieve the same result. It is not, as Romney insists, a one-model, top-down prescription. Like Obama’s Race to the Top education initiative, it sets standards, grants incentives, and then allows individual states to experiment. Embedded in it are also a slew of cost-reduction pilot schemes to slow health-care spending. Yes, it crosses the Rubicon of universal access to private health care. But since federal law mandates that hospitals accept all emergency-room cases requiring treatment anyway, we already obey that socialist principle—but in the most inefficient way possible. Making 44 million current free-riders pay into the system is not fiscally reckless; it is fiscally prudent. It is, dare I say it, conservative. On foreign policy . . . On foreign policy, the right-wing critiques have been the most unhinged. Romney accuses the president of apologizing for America, and others all but accuse him of treason and appeasement. Instead, Obama reversed Bush’s policy of ignoring Osama bin Laden, immediately setting a course that eventually led to his capture and death. And when the moment for decision came, the president overruled both his secretary of state and vice president in ordering the riskiest—but most ambitious—plan on the table. He even personally ordered the extra helicopters that saved the mission. It was a triumph, not only in killing America’s primary global enemy, but in getting a massive trove of intelligence to undermine al Qaeda even further. If George Bush had taken out bin Laden, wiped out al Qaeda’s leadership, and gathered a treasure trove of real intelligence by a daring raid, he’d be on Mount Rushmore by now. But where Bush talked tough and acted counterproductively, Obama has simply, quietly, relentlessly decimated our real enemies, while winning the broader propaganda war. Since he took office, al Qaeda’s popularity in the Muslim world has plummeted. Obama’s foreign policy, like Dwight Eisenhower’s or George H.W. Bush’s, eschews short-term political hits for long-term strategic advantage. It is forged by someone interested in advancing American interests—not asserting an ideology and enforcing it regardless of the consequences by force of arms. By hanging back a little, by “leading from behind” in Libya and elsewhere, Obama has made other countries actively seek America’s help and reappreciate our role. As an antidote to the bad feelings of the Iraq War, it has worked close to perfectly. Sullivan goes on to say . . . What liberals have never understood about Obama is that he practices a show-don’t-tell, long-game form of domestic politics. What matters to him is what he can get done, not what he can immediately take credit for. And so I railed against him for the better part of two years for dragging his feet on gay issues. But what he was doing was getting his Republican defense secretary and the chairman of the Joint Chiefs to move before he did. The man who made the case for repeal of “don’t ask, don’t tell” was, in the end, Adm. Mike Mullen. This took time—as did his painstaking change in the rule barring HIV-positive immigrants and tourists—but the slow and deliberate and unprovocative manner in which it was accomplished made the changes more durable. Not for the first time, I realized that to understand Obama, you have to take the long view. Because he does. He concludes . . . And it is this Republican intransigence—from the 2009 declaration by Rush Limbaugh that he wants Obama “to fail” to the Senate Majority Leader Mitch McConnell’s admission that his primary objective is denying Obama a second term—that has been truly responsible for the deadlock. And the only way out of that deadlock is an electoral rout of the GOP, since the language of victory and defeat seems to be the only thing it understands. If I sound biased, that’s because I am. Biased toward the actual record, not the spin; biased toward a president who has conducted himself with grace and calm under incredible pressure, who has had to manage crises not seen since the Second World War and the Depression, and who as yet has not had a single significant scandal to his name. “To see what is in front of one’s nose needs a constant struggle,” George Orwell once wrote. What I see in front of my nose is a president whose character, record, and promise remain as grotesquely underappreciated now as they were absurdly hyped in 2008. And I feel confident that sooner rather than later, the American people will come to see his first term from the same calm, sane perspective. And decide to finish what they started. ☞ Yup.
Not Disappointed January 19, 2012March 28, 2017 “NOT DISAPPOINTED” This short video by Bronx-born novelist Jake Lamar is just . . . well, lovely. No shouting, no ominous music – or soaring music, for that matter – just quiet common sense. Post it on your Facebook page? Retweet me? (Retweet, Suh? Never!) (Sorry; new to Twitter, still amused by the puns. But seriously: watch the clip.) VOLUNTEER Looking for something great to do? On serve.gov, enter your zip code and areas of interest and up come the nearest volunteer opportunities. Very neat. IF YOU OWN CBRX Almost a year ago, I posted: Guru thinks it could be $5 within a year, so I bought a bunch yesterday at $2.55. Guru is often but not always right. So only with money you can truly afford to lose. Two months later: With CBRX closing at $4.10 in after-hours trading, Guru writes: “The data they presented look great.” PROCHIEVE, he thinks, will cut health care costs for some premature births. And it “reduced the incidence of respiratory distress syndrome by 60% – a huge finding, as this is a major source of morbidity and mortality among pre-term babies.” So despite the allure of a 60% two-month gain, I’m in no rush to sell. I was – with the stock having dipped to $1.10 Tuesday – an idiot. Guru: “It’s a good buy again! Tuesday, the FDA released its analysis of CBRX’s Phase III data for Prochieve to prevent pre-term births. In the documents, the FDA acknowledges that in April 2010 (before the study was unblinded), they met with CBRX and agreed on the statistical analysis plan. The study was then unblinded and the study met its primary endpoint with a p value of 0.02 using the pre-defined statistical test agreed to with the FDA in April 2010. (Less than 0.05 is the threshold for success.) Using a different statistical test that was also pre-defined at the April 2010 meeting and deemed a ‘secondary analysis,’ the data were also a success (just barely) at p = 0.044. The FDA acknowledged all of this yesterday. . . . However, yesterday, the FDA went on to do a secondary analysis, comparing the US patients (about 50%) and the non-US (about 50%) and again, using the predefined primary statistical test, the p was 0.033. However, the FDA’s statistical reviewer said that given how the study turned out, there were not enough people in various strata to make this test the best one to use. (Perhaps this point is correct, but the FDA very well knows that the rules of the game must be specified in advance and that we can’t change the rules once the game is over.) Instead, the statistical reviewer decided that the second statistical test was the better one and produced a p value of 0.056 – just missing technical statistical significance. The FDA’s report then went on to break down the study by regions within the US and by different countries and to show that there was a disparity in how the drug worked. In one of the four regions of the US, the placebo actually worked better than the drug. In one of the four hospitals in India, the placebo worked better than the drug. In some countries, the drug worked much better than in other countries. . . . The problem with this analysis is that the study was not designed for it to be done: You can’t start looking through small subgroups and still make valid conclusions. In any given hospital, only a few patients participate in the study and there may be factors NOT affected by Prochieve that overwhelm the effects of Prochieve’s efficacy. It is true that the drug appeared to perform better outside the US than inside the US, but the centers outside the US were widespread (India, Ukraine, Chile, South Africa, Czech Republic), so there is no obvious systematic factor that would bias in favor of Prochieve. The women in the US, on average, were older and much heavier (both independent risk factors for pre-term birth), which may have biased against efficacy, though overall, in the US, the treated patients always did numerically better than the placebo patients. The FDA had no safety concerns. . . . I have seen this situation several times: The FDA agrees on an analysis plan in advance with the company, then the study is performed and then an FDA reviewer does additional non-planned analyses and questions are raised. For example, in HGSI’s Benlysta trials for lupus, an analysis of the US population alone also showed no evidence of statistical significance. In DYAX’s pivotal trial, which succeeded, the FDA reviewer pointed out that the product worked from 0 to 2 hours, but not from 2-4 hours (where the primary endpoint was 0 to 4 hours). In ACOR’s phase III trials, the agreed-upon analysis was a responder analysis, but the FDA chose to do an analysis of averages and reported no statistical significance. In all three cases (and there are others), the FDA panel voted ‘yes’ and the FDA approved the products in the end. . . . In my experience, the panel always votes what is the primary prospective data, not the post-hoc subgroup analysis. In the case of CBRX, the primary prospective data met its endpoint. I expect the panel to vote ‘yes.’ I also expect that in the end, the FDA will give Prochieve approval. If so, the stock should rally back close to 3/share.” ☞ Which will be good, if it happens, but I was still an idiot not to sell with a two-month 60% gain.
We Could Save A Lot More On Defense January 18, 2012March 26, 2017 FOLLOW ME! Arriving at some venue only to encounter Inspector Clouseau, one of his suspects asks: “How is it that you are here?” The good Inspector replies, “Because I am following yeu.” Suspect: “But Inspector, you got here first!” Clouseau, after a moment’s consideration (and unaccountably missing from these 485 memorable Clouseau lines): “I am following yeu . . . very fast.” All of which is to say, in more than 140 characters and with considerable trepidation: You can follow me now on twitter @AndrewTobias. MISLEADING DEFENSE STATS Some are saying defense spending has been reduced to historic lows, as a percentage of the budget. Yet this from the libertarian Cato Institute shows that, adjusted for inflation, defense outlays are way higher than they were during Vietnam and at the height of the Cold War. It’s time to rein them in (me speaking here) and invest some of that money in strengthening our infrastructure, which – along with the prosperity that a domestic Marshall Plan would bring – is another way to enhance national security. CATHERINE HAS A THING OR TWO TO SAY Catherine: “I have to say I too am getting tired of gay people being blamed for the downfall of marriage. I was listening to NPR last night and some candidate was talking about the welfare of children and that it is best that a child has a mother and a father. Well I had a mother and a father and father was alcoholic and a pedophile, so personally I would much rather have had two gay dads or moms. I think I would’ve been much safer. There are so many people that are not safe in their own heterosexual homes . . . The other thing that bothered me was how we use language, or phrases. One person on NPR was talking about the State of Washington raising the minimum wage and how that was a financial burden to small business owners. While I appreciate the plight of the small business owner, why is no one talking about the financial burden on the person making minimum wage? . . . Finally, re your occasional tips for “Cooking Like a Guy” – I finally figured out that I don’t have to mix an entire frozen juice can – I can open the can, spoon out what I need for one glass of juice, put the lid back on and put the can back in the freezer. I like to think I’m brilliant!” ☞ Brilliant for sure.