June 1, 2012

What Crony Capitalism Looks Like

I have spent a lot of typing defending Big Pharma from those who do not understand innovation nor property rights.

But they can pretty much go to hell!

Newly released emails give an inside look at how the White House struck a deal with the pharmaceutical industry in 2009 to get support for the health bill that ultimately passed the next year.

Drug makers and their lobbyists believed they got a good bargain, the emails show. As The Wall Street Journal and others reported at the time, the companies escaped price controls and forced the president to back down on his 2008 campaign promise to allow the reimportation of cheaper drugs from other countries.

In May 2009, after the administration was hit by negative stories about the rising costs of its proposed health care overhaul, a drug industry lobbyist emailed colleagues, "Perfect timing to cut our deal w the White House as this is swirling."

Adam Smith nailed it in 1776.
[Interest] in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public...The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.

And Milton Friedman -- centuries later -- reminds that the interest of the corporation is to increase its asset value. And yet, this deal with the devil seems rather short-sighted. Even wicked guitar skills last a lifetime once bestowed. Government regulation will pull this "industry benefit" away the first chance it gets.

Health Care Posted by John Kranz at June 1, 2012 8:31 AM

James Taggart, call your office.

Posted by: johngalt at June 1, 2012 1:10 PM

A Mr. Mouch on line one. . .

Posted by: jk at June 1, 2012 1:25 PM | What do you think? [2]