Month: February 2010

Bottlenecking Generics

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You’d think that if someone seriously wanted to reduce health care costs in the U.S., he would want to streamline the approval process for generic drugs.

Just the opposite seems to have occurred.

Whereas five years ago the FDA typically approved a new generic drug within 16 months of the manufacturer’s application, the typical delay is now more than 26 months. The budget for the FDA’s generics office is only $51 million for 2010: up from 2009, but still clearly insufficient to meet the need. It’s hard to think of many ways that an additional $30 million or so could be invested with better near-term payoff on the nation’s collective medical bill.

Executives at a generics meeting joked that the government spends less on reviewing applications for new generic drugs than the New York Yankees spend on the payroll for the left side of their infield.

A rapacious and greedy Technocracy

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technocracy

Obama health care plan online. (Relax. It’s a joke. Or, is it?)

The image is by editorial cartoonist Winsor McCay and I came across the image at the wonderful art blog linesandcolors.

Update: In the comments, Michael Kennedy adds: “CBO says there are not enough details to score the new “bill.” What else is new?”

Yes. What else is new? Also, this via Drudge: “An unapologetic Danny Williams says he was aware his trip to the United States for heart surgery earlier this month would spark outcry, but he concluded his personal health trumped any public fallout over the controversial decision….This was my heart, my choice and my health,” Williams said late Monday from his condominium in Sarasota, Fla.”

Be aware: If the health care plans don’t work as smoothly as gamed by the white paper crowd, the connected will exempt themselves from the worst of it. They always do. Do Senators tend to fly coach?

Munger on China

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Charlie Munger
Charlie Munger

From Charlie Munger in a speech at UC Santa Barbara:

Another example of not thinking through the consequences of the consequences is the standard reaction in economics to Ricardo’s law of comparative advantage giving benefit on both sides of trade. Ricardo came up with a wonderful, non-obvious explanation that was so powerful that people were charmed with it, and they still are, because it’s a very useful idea. Everybody in economics understands that comparative advantage is a big deal, when one considers first order advantages in trade from the Ricardo effect. But suppose you’ve got a very talented ethnic group, like the Chinese, and they’re very poor and backward, and you’re an advanced nation, and you create free trade with China, and it goes on for a long time.
 
Now let’s follow and second and third order consequences: You are more prosperous than you would have been if you hadn’t traded with China in terms of average well-being in the United States, right? Ricardo proved it. But which nation is going to be growing faster in economic terms? It’s obviously China. They’re absorbing all the modern technology of the world through this great facilitator in free trade, and, like the Asian Tigers have proved, they will get ahead fast. Look at Hong Kong. Look at Taiwan. Look at early Japan. So, you start in a place where you’ve got a weak nation of backward peasants, a billion and a quarter of them, and in the end they’re going to be a much bigger, stronger nation than you are, maybe even having more and better atomic bombs. Well, Ricardo did not prove that that’s a wonderful outcome for the former leading nation. He didn’t try to determine second order and higher order effects.
 
If you try and talk like this to an economics professor, and I’ve done this three times, they shrink in horror and offense because they don’t like this kind of talk. It really gums up this nice discipline of theirs, which is so much simpler when you ignore second and third order consequences. The best answer I ever got on that subject – in three tries – was from George Schultz. He said, “Charlie, the way I figure it is if we stop trading with China, the other advanced nations will do it anyway, and we wouldn’t stop the ascent of China compared to us, and we’d lose the Ricardo-diagnosed advantages of trade.” Which is obviously correct. And I said, “Well George, you’ve just invented a new form of the tragedy of the commons. You’re locked in this system and you can’t fix it. You’re going to go to a tragic hell in a handbasket, if going to hell involves being once the great leader of the world and finally going to the shallows in terms of leadership.” And he said, “Charlie, I do not want to think about this.” I think he’s wise. He’s even older than I am, and maybe I should learn from him.

Originally posted on the Committee of Public Safety.

Razzia III: The Finel Solution

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Kitty!
Kitty!

J.C. Wylie provides this classic definition of military strategy in his sadly neglected 1969 classic Military Strategy: A Theory of Power Control:

The primary aim of the strategist in the conduct of war is some selected degree of control of the enemy for the strategist’s own purpose; this is achieved by control of the pattern of war; and this control of the pattern of war is had by manipulation of the center of gravity of war to the advantage of the strategist and the disadvantage of the opponent.
 
The successful strategist is the one who controls the nature and the placement and the timing and the weight of the centers of gravity of the war, and who exploits the resulting control of the pattern of war toward his own ends.

The “strategist’s own purpose” in war is dictated by politics since “war is merely the continuation of politics by other means”. This Carl von Clausewitz quotation, however, is frequently taken out of context, as Christopher Bassford demonstrates in correcting John Keegan’s portrayal of Clausewitz in his A History of Warfare:

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Situational Awareness

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This morning, my spouse intercepts me coming out of the bathroom ask, “I’m going to the store, do you need anything?”

“Yes,” I replied, “I need some [blank] and some [blank] because I have [insert graphic and colorful description of a minor but disgusting personal problem].”

My spouse looked startled. Confused, I looked around.

“Oh,” I said, “You might have informed me we have company.”

Every day I grow more convinced the universe is a cosmic conspiracy to rob me of my dignity.