Cory Booker, Tom Price & Big Pharma

For decades now I have been saying that there was no difference between Republicans and Democrats and with the election of Donald Trump, no time since now has this even more clear. Sure folk will say that Trump is a Republican, but I dare anyone to show any ideological bent he has toward either party.  If he is a Republican, then Bernie Sanders is a Democrat.  But a more articulate example of this can be observed when one tries to make a distinction between the actions and policies of traditional partisans like Cory Booker and Tom Price.

For cats attentive to history, we must recall we have Thomas Jefferson and James Madison to thank for our modern day derivative of what are now considered Republicans and Democrats. Both these men founded the Democratic-Republican Party. It was founded by these men to serve as a challenge to the Federalist Party which was run by Alexander Hamilton in 1791.  Hamilton at the time was Secretary of the Treasury and a significant player in the administration in America’s first President George Washington.

Madison and Jefferson questioned Hamilton’s interest in truly wanting America to be a republic since he sided with the concept of federalism and disapproved of the manner in which the Constitution was written to limit the government and not the people. In contrast, Jefferson and Madison claimed the Constitution gave the federal government too much power such that it might place the citizenry at risk of being oppressed if there was no Bill of Rights to guarantee individual liberty. As an outcome of this, the first two U.S. political parties were formed – the Federalist Party (Hamilton) and the Democratic-Republican Party (Jefferson).

These two parties did not last too long and by the twentieth century, there was just one party divided in half – the Democratic Party and the Republican Party. Both of which have decided their main objective is not to serve on behalf of the unalienable individual rights of the citizen but rather the mechanical apparatus of the national government . Moreover, instead of the business of the people, their goals, motivated by political avarice motioned toward personal enrichment by becoming a professional class – something the founding fathers feared when they desired citizen merchants to serve and eventually return to the community.

Seeing this truism in modern day partisan politics, there is no better example than the relationship between Tom Price and Cory Booker with big pharma. The record is clear on both these politicians and their relationship with large U.S. pharmaceutical giants. Price was the benefactor of large campaign contributions from a CEO whose company manufactured a drug with the shelf name of BiDil - A treatment for African Americans suffering from heart failure, although one study raised problems about its safety and effectiveness. Add to this, the recent.  Kaiser Health report that Price invested in an Australian biotech company named Zimmer Biomet which resulted for him a profit gain of more than 400 percent and may be even more profitable for the company with the enacting of the 21st Century Cures legislation Price supported. Likewise Sen. Cory Booker and 12 other democrat senators supported the same legislation which serves to lower drug safety standards. Booker also votedagainst the Sanders/Klobuchar amendment which would have allowed for the importation of pharmaceuticals from Canada and aided sugificantly in reducing the unreasonable and exploitive price gauging currently practiced by U.S. Pharmaceutical giants. Booker did this while remaining one of the biggest recipients of pharma, receiving contributions in excess of with $260,000.  Is there a difference between these two politicians although one is a republican and the other a democrat?

Well to answer this we have to beat the bushes a little more. Tom Price, the Georgia Republican nominated by Donald Trump to become head of the Department of Health and Human Services, received additional contributions from the CEO of Atlanta based Arbor Pharmaceuticals LLC who bought the rights to BiDil.  In return he sought to have the aforementioned study questioning the drug safety and effectiveness removed from the federal government website.   It was effective.  Emails show that an assistant to Price contacted the federal Agency for Healthcare Research and Quality multiple times regarding having the study taken off their website according to documents obtained by ProPublica. It should be noted that Arbor is headquartered in Price’s district.

Similar to Price, Booker too seems to be in the pocket of big Pharma. He demonstrated his true colors (green and white) when he visibly stood in opposition to a Senate amendment allowing for the importation of pharmaceuticals into the U.S. that would have lowered the absurd cost for drugs that is a major economic burden on millions in the U.S. Considered to be a potential 2020 presidential contender, Booker’s office issued a statement saying that he was in favor of the importation of prescription drugs but that “any plan to allow the importation of prescription medications should also include consumer protections that ensure foreign drugs meet American safety standards. I opposed an amendment put forward last night that didn’t meet this test.” This alone is questionable and goes against attempting to aid the tens of millions of U.S. Citizens struggling to deal with the exorbitant cost of prescription drugs because it is the same argument made by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Obama Administration prior. Not to mention that Democratic Sen. Ron Wyden amendment to the Sanders/Klobuchar legislation included a clause for verified safety certification.

So is there a difference between Republicans and Democrats on ideology?  Would say no and that the Democratic-Republican Party established by Thomas Jefferson and James Madison are mirror images of each other and represent a professional class that have the singular objective to enrich themselves at the expense of the American people. 

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Notes on the Greenspan Culture

Most Americans are ignorant to the history and impact of central bank policy in the US on the problems we are experiencing and have experienced before regarding our economy.  The first failure came when Alexander Hamilton introduced the concept of having a Central Bank in America right after the revolutionary war. His idea was to place the US in a positon to be able to get loans or credit from lenders and be able to borrow great sums of money. To get the bank started, he proposal to fund a national debt via several bills in 1790 including the Debt-Assumption and Debt Funding Bills. With this concept would come massive speculation and fractional reserve banking. Many were against this idea. Thomas Jefferson wrote about this when his cousin Chief Justice John Marshall used the views of Hamilton to uphold the constitutionality of a national bank in his McCulloch v Maryland decision, in essence putting the nation on a dependency of credit. Jefferson noted that the constitution had not delegated to the congress to be able to incorporate a bank (10th amendment) nor to borrow or regulate commerce and that the establishment of a national bank was not necessary, merely a convenience and congress had the constitutional duty to do what was necessary only (pps. 502-574).

Failures of Federal Reserve policy since then and over the years have been too numerous to cite.  The issue is that the Federal Reserve and the concept of central banks in general act as if they are independent institutions when the truth is they are never independent. This was understood by both Andrew Jackson and FDR, and to a lesser extent Abraham Lincoln. Central banks seem to operate in a vacuum that is isolated from the public and even worse, the public angst and disdain regarding their policy efforts. 

Central banks are failing and have been failing for a long time since their most recent establishment under the Woodrow Wilson administration under the cloak of darkness. These chronic problems keep rearing their ugly head because the models that they employ are broken for they fail to connect monetary policy with the real economy (aggregate demand). This has become more problematic since the reign on Alan Greenspan. This Greenspan culture operates on constructs that don’t exist in the real world and even seems to suggest central bankers of the current batch have no idea of what is going on in the rest of the world outside of Jackson Hole. No matter what they do it always fails and never accomplishes the goals or objectives that said monetary policy was supposed to accomplish. 

Take the example of quantitative easing and keeping interest rates artificially low and constant.  This was supposed to put more loot into the coffers of business and to some extent the people and spur consumption - the assumption being that if you give folk more loot they will spend it, or at least consume more. But we see just by looking at consumption behavior, business are not spending by either investing or buying equipment and regular folks are saving instead of spending. Even with mortgage rates at 3.5 percent, people are not buying homes.  It begs the question what world are central bankers living in because all they talk about (if Janet Yellen can be taken at her word) is raising interest rates. On the one hand the public is being told the Central bank can control economic outcomes but can’t control inflation – a concept that anyone can see is not only problematic but also ridiculous.

Why would they slow the economy down by raising interest rates when it is growing at a staggering and paltry pace already? This makes no sense in particular when the average citizen is confronting real economic hardship and despair and all the evidence (weak fundamentals) indicates this. If this is the path the US central banks takes, it will only prove what many already believe, that the central bank is for the wealth plutocratic class only and it only implements policy on their behalf that presents modern capitalism as merely socialism for the rich. If this is the case then maybe, just maybe, central banks shouldn’t take on fiscal policy. In all honesty, maybe fiscal policy should be only implemented by folks the citizens vote on, or maybe we should vote for central bankers for that matter.

If I was given the authority first step I would take to destroy this Greenspan culture of hybrid fiscal/monetary policy would be to get rid of the Volcker rule in its entirety.  Maybe this way we won’t have to hear dumb azz Janet Yellen cite David Reifschneider anymore. Reifschneider for the record seems to be Yellen’s go to guy. Whatever he says she holds on to like it was the word of God. Reifschneider is a Senior Economist for the Federal Reserve Bank and posits (really guesses without evidence) that bond purchases and low-rate promises should be enough for the Fed to deal with severe recession if such were to occur. This is why I think she has not been out into the real world for she is always saying the same thing, or rather something to the effect that US GDP growth to lift labor markets. Again, an observation I don’t see even looking at BLS data, for there is no known value for potential economic output whether one is taking about labor or GDP – all of this is just speculative talk.

Simply put, central banks, in particular the US Federal Reserve should not be involved in developing, formulating or implementing fiscal policy. This should be left in the hands of the Treasury department in my opinion. One should ask what is their policy and where would we be if they couldn’t buy assets? Since 2008, the US Federal Reserve bank has amassed $2.5 trillion in Treasury securities and $1.8 trillion of mortgage-backed securities (maybe even more) through its asset-purchase programs, yet we still have deplorable growth and horrific levels of unemployment if you read between the lines. What will be next? Will we follow the lead of Japan and start to buy exchange-traded funds (ETFs), or the ECB and begin to purchase corporate debt? Or even worse follow the path of Prime Minister Modi in India and remove cash from circulation?  It is even easier to do in The US with electronic/digital money.  More so given that today, money has no real value in and of itself due to separation of them from the original sources of money – gold and silver. Used to be a time when paper money just represented how much gold and silver we had, but not anymore. Add this to the massive depreciation and devaluation of money over past decades, a cashless society could be a real manifestation. But I regress.

All I am saying is that the philosophical acceptance of Greenspan economics has shown the ineffective, foolish and disconnection from reality that Fed policy is, and that we need to move beyond the make believe boundaries of Central bank policy (guessing) before it is too late.  It is impossible to look at all economic activity in a contrived environment, under a contrived lens in which all stating points begin with full employment, inflation at 2 percent, and interest rates atnormal longer-run levels.  Honestly, like the Euro, the Federal Reserve Bank was flawed from birth.

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