Some Hope for Insulin Users, Courtesy of the Revived U.S. Antitrust Division

Excerpt from Matt Stoller's website:

[O]n Thursday, the FTC voted to resurrect the Robinson-Patman Act, a bill prohibiting corporate bribery and price discrimination by middlemen that hasn’t been meaningfully enforced since the 1970s. I wrote several chapters in my book on the titanic fight in the 1930s to tame chain stores with this law, and the equally vicious conflict in the 1970s to stop enforcing it. The end of RPA enforcement is why chain stores like Walmart and Amazon took over our retail space, and why dominant middlemen control every area of our economy at this point. It’s worth noting that Robert Bork’s most hated statute was the Robinson-Patman Act, and he considered it a tremendous victory that he helped end the enforcement of the law.

So what happened at the FTC? All five commissioners voted on a policy statement saying that the use of rebates by dominant middlemen in the insulin market were a potential violation of different laws under the jurisdiction of the FTC, including the Robinson-Patman Act. This vote is a signal to every private antitrust lawyer, state attorney general, and judge, that the Robinson-Patman Act can once again be dusted off and used.

Insulin is a great test case for this law, because everyone knows how unfair and inefficient the insulin market truly is. It’s a medication that has been around since 1922, and yet it has been increasing in cost every year for decades. And while the three main producers engage in all sorts of schemes to push up cost, most of the high cost of insulin is actually a result the middlemen named pharmacy benefits managers - CVS Caremark, Cigna (Express Scripts), and United Healthcare (OptumRx) - who manage and control how medicine is priced and sold. PBMs demand rebates of up to 70% for the right to have an insulin company sell their product to patients. These rebates in turn massively drive up the price of insulin.

Continue ReadingSome Hope for Insulin Users, Courtesy of the Revived U.S. Antitrust Division

Misdirected Vax Anger Loses Sight of Unmistakable Corporate Looting

Matt Taibbi points out that we are too busy arguing with each other about masks and vaccinations to notice major league corporate theft. His Substack article at TK is titled "Vaccine Aristocrats Strike Again: As yokel-bashing reaches impressive new heights, reports of yet another year of record profits and a widening wealth gap go unnoticed." Here's an excerpt:

[W]ithout constant drumbeats about the treacherous stupidity of anti-vaxxers and “domestic terrorists,” at whom would the bulk of Americans’ anger be directed now?

A good guess would be people like the Fed-fattened private equity takeover artists who were just reported to have swallowed a trillion dollars in companies last year. These are people who force conquered companies to issue reams of new debt to pay them bonuses (taking advantage of a massive public bond-buying program intended as emergency aid) while doing things like cutting shifts for E.R. doctors and nurses in the middle of a pandemic. Even grandfatherly billionaire Warren Buffett’s company Special Metals is currently asking 450 striking steelworkers to accept pay cuts and take on $725 more a month in health premiums, while Buffett himself just floated on our increasingly phony stock market to increase his personal wealth by $1.6 billion in a single day.

. . . “Banks so far have been using profits to invest in technology, pay bonuses and buy back their own stock,” the FT wrote. Meaning, the bulk of this new wealth — most fueled by roughly $5 trillion in Fed spending since the beginning of the pandemic — is being converted into compensation for a handful of executives. Buybacks have also been rampant in defense, pharmaceuticals, and oil & gas, all of which also just finished their second straight year of record, skyrocketing profits. We’re now up to about 745 billionaires in the U.S., who’ve collectively seen their net worth grow about $2.1 trillion to $5 trillion since March 2020, with almost all that wealth increase tied to the Fed’s ballooning balance sheet.

Continue ReadingMisdirected Vax Anger Loses Sight of Unmistakable Corporate Looting

The Challenges of Using Money to “Solve” Hunger

Michael Shellenberger comments in "Why $6 Billion Won't Solve World Hunger: Elon Musk was right to question United Nations World Food Program Claims."

In 2002, Michael Maren, a former food aid monitor for the United States Agency for International Development (USAID) in Somalia published a book called “The Road to Hell,” documenting how food aid prolonged that nation’s civil war in three ways.

First, much of the food aid was stolen and sold to buy arms, furthering the conflict.

Second, the food aid helped destroy the centuries-old credit system that allowed pastoral farmers to borrow money during droughts to pay for food, which they repaid later during good times. By undermining the credit system, foreign food aid had helped undermine the social ties that had kept the nation together.

And third, the food aid undermined the very incentive to farm.

. . . .

We have known for more than two centuries that almost every nation escapes hunger and famine in the same way. First, there is sufficient stability to allow farmers to produce and transport their crops to the cities, and for businesses in the cities to operate without being bombed or shelled. The ugly truth is that such stability is often won the hard way, after years or decades of war and even genocide.

Stability allows farmers to become more productive, and cities to develop new industries, such as manufacturing. Rising farm productivity means fewer people are required to work in farms, and many of them move to the city for work in factories and other industries. In the cities, the workers spend their money buying food, clothing and other consumer products and services, resulting in a workforce and society that is wealthier and engaged in a greater variety of jobs.

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The Relevant Divide is Mostly About Economic Class, not Race

Newsweek's Batya Ungar-Sargon, author of Bad News: How Woke Media Is Undermining Democracy, speaks with CNN's "Reliable Sources" about how the media covered the Virginia gubernatorial election.

We are hiding a class divide in America," she said. "We are hiding disgusting levels of income inequality in America. We are hiding the total dispossession of the working class of all races by focusing on a very highly specialized academic language about race.

Louis Gates, writing at the NYT in 2016:

The Harvard sociologist William Julius Wilson calls the remarkable gains in black income “the most significant change” since Dr. King’s passing. When adjusted for inflation to 2014 dollars, the percentage of African-Americans making at least $75,000 more than doubled from 1970 to 2014, to 21 percent. Those making $100,000 or more nearly quadrupled, to 13 percent (in contrast, white Americans saw a less impressive increase, from 11 to 26 percent). Du Bois’s “talented 10th” has become the “prosperous 13 percent.”

But, Dr. Wilson is quick to note, the percentage of Black America with income below $15,000 declined by only four percentage points, to 22 percent.

In other words, there are really two nations within Black America. The problem of income inequality, Dr. Wilson concludes, is not between Black America and White America but between black haves and have-nots, something we don’t often discuss in public in an era dominated by a narrative of fear and failure and the claim that racism impacts 42 million people in all the same ways.

More statistics from a 2016 NYT article: "Class Is Now a Stronger Predictor of Well-Being Than Race"

Here’s a true statement: America’s historical mistreatment of blacks was uniquely evil and continues to depress the fortunes of African-Americans. Here’s another true statement: Class has become a stronger predictor of wellbeing than race. . . .

Social class “is the single factor with the most influence on how ready" a child is to learn when they start kindergarten, according to the liberal Economic Policy Institute. Low-income white kids score considerably lower in reading and math skills than middle-class white kids. Add race to the mix, and class still remains the Great Divide when it comes to school readiness.

America has hurt blacks grievously; their progress remains dismally slow. But working-class whites are in free fall. The educational achievement gap is now almost two times higher between lower and higher income students than it is between black and white students. That’s a big change from the past: In 1970, the race gap in achievement was more than one and a half times higher than the class gap. Since then, says Stanford University’s Sean Reardon, the class gap has grown by 30 to 40 percent, and become the most potent predictor of school success.

While single parent families are far more common among African-Americans than whites, less educated whites — who also tend to be lower income — are seeing an unprecedented dissolution of their families. Seventy percent of whites without a high school degree were part of an intact nuclear family in 1972; that number plummeted to 36 percent by 2008. (The comparable numbers for blacks were 54 percent and 21 percent.)

One more set of statistics regarding income of blacks (from Wikipedia).

27.3% of black households earned an income between $25,000 and $50,000, 15.2% earned between $50,000 and $75,000, 7.6% earned between $75,000 and $100,000, and 9.4% earned more than $100,000.

Continue ReadingThe Relevant Divide is Mostly About Economic Class, not Race