Some people had questions about what I meant last A&A by “Complexity is the harbor for scoundrels.” Take taxes for example. Famous billionaire Warren Buffet stating openly that he is in a lower tax bracket than his admin assistants. Seem fair? Suppose the tax laws are a little complex to allow the wealthy to pay less relatively, and in some cases literally, than most of us? Do you suppose the reason that Trump, a scoundrel in my book, won’t allow us to see his tax records may be because he pays NO taxes?
Has anyone presented to you a “reverse credit default swap” for an investment recently? Sound a little complex? Only a small number of scoundrels on Wall Street even knew what this was and what the risks were in “bundling” these and selling them likely to your 401K investment mgr. who had no idea what they were. Wall Street sold them “high,” quickly, knowing they were going to fail, and then bet against them when they did…taking money out of both our pockets and stuffing theirs… with millions of people losing their jobs, their retirement savings, and their homes, almost collapsing the global economy. Sorry, I’m ranting about this again, but it was very difficult being in the business and watching them pull off the most egregious fraud in history, not being able to do anything about it (except to ensure my clients would not be hurt or destroyed like millions) and watching them get away with it. None of the big scoundrels who were able to use their knowledge, not to help clients, but to steal from them, were ever prosecuted. (If you haven’t, watch the movie “The Big Short” which exposes the fraud quite well…and is a good movie.)
And then the justice system that let them get by with it and puts a user of marijuana away for 20 years and a rapist for 6 months. That’s so complex it should make no frickin sense to anybody.
But, what I now consider, in my, I agree, meager judgement to be the biggest asshole in the U.S. is the pharmaceutical industry. They are part of the same culture. A culture based on greed. Make as much money as you can, amass enormous amount of wealth, or even a nickel, anyway you can without any regard for the earth or the people on it. And when the profit comes from people who are trying to stay alive. That’s a BIG a-hole thing to do…double, triple, absurdly raise prices because people who are dying will pay anything to stay alive. C’mon, that’s a pretty nasty a-hole thing to do. I can’t come up with anything worse…in the United States at least. Our world.
It turns out it’s a common practice for scoundrels to buy up drug companies, then buy up all the patents, in effect creating a monopoly, and jack the prices up astronomically. Of course these price hikes are tied to Wall Street and is part of the same culture…the culture of greed. Anything goes if you get rich. The world of finance is complex. I used my knowledge of the industry to help people. Greed-motivated scoundrels use their knowledge to take advantage of people. The simplest anecdote for this is the big kid who trades an unaware small kid a big nickel for the smaller dime. An angel…or let’s just say a decent, honest, content, happy person… helps people. An a-hole takes advantage. Do they really think they’ve found the meaning of life getting rich off simple people…especially people who’ll pay anything to stay alive? Cool. Real cool. Einstein wrote: “Only a life lived for others is worthwhile.” But what did he know?
If you’ve ever wanted to wipe the smile off somebody’s face, google Martin Shkreli, the CEO of Turing Pharmaceuticals. He is currently free on $5M bail for fraud in his previous drug company and recently purchased a new company raising the price of a life-saving drug he owns the patents on by more than 5,000%...not 5, not 50, not even 500, but 5,000%! In an email to a business cohort he said: “We raised the price from $1,700 per bottle to $75,000. Should be a very handsome investment for all of us.” (For verification, google him and read any of the articles.) So, no pride in owning a company that saves lives, only how rich he could get off dying people. If you watch him smirk as he’s pleading the 5tt in front of congress, you’ll want to start wiping.
An obnoxious irony: one of the reasons for raising prices is to cover the cost of lobbying. The pharmaceutical industry spends more on lobbying than any other industry (TIME, Nov. 12/19th, 2016). The reason for the lobbying is to try to justify the exorbitant prices. Suppose this industry is a little complex? And scoundrels are finding a harbor in the complexity?
Hopefully the Mylan EpiPen case will become the lightning rod to simplify identifying the transgressions and beach the scoundrels rather than provide a harbor. Peter Atwater in a TIME article (Sept. 12/19) wrote: “If Wall street was tone deaf to the plight of Main Street during the housing crisis, the pharmaceutical industry may lack ears altogether." Maybe us Mainstreeters should get fed up with being dumb victims, and make ourselves heard?