More Simple-Minded Populism

Discussion in 'Politics' started by wonderwench, Feb 8, 2004.

  1. wonderwench

    wonderwench Guest

    Now that Kerry has a commanding lead among the Dem candidates, a closer look at his campaign message is in order.

    It all boils down to faux populist claptrap - a great deal of sound and fury signifiying nothing.

    More of the same thing we saw four years ago.

    If this column sounds like one four years ago, that's because Democrats are running against their usual list of "enemy" industries. The party's standard trope is that you're being denied things you need and deserve because enemies are keeping them from you, cheap drugs being today's case in point.

    Let's make sense of the industry once more for a Democratic presidential cadre now reaching a high pitch of populist dudgeon. There's a reason analysts, investors and pharmaceutical reps talk about a "pipeline." In one end goes a bunch of money, and out comes a dribble of products years later. The metaphor is also useful in understanding drug pricing. Whatever comes out the end, whether it's nose drops or a chemotherapy drug, is priced at whatever level will allow its maximum contribution to recouping all the money that went into the front end of the pipe.

    Abbott Labs demonstrated this effect when it recently raised the price of its aging AIDS drug, Norvir, by 400%. Activist groups were outraged, never mind that Abbott froze the old price in place for charity groups and continues to make the drug available at cost in developing countries. Abbott was accused of "greed." But wait? Wasn't it already stipulated that drug companies were maximally greedy? How could a change in Abbott's greed state account for a change in pricing strategy?

    In fact, Abbott was recently saluted by the AIDS Healthcare Foundation for making cheap drugs available in Africa. But Norvir, introduced in 1996, is no longer a drug of choice. Instead it's been relegated to a "booster" role in cocktail therapies consisting of new, higher-priced drugs from rival manufacturers (though much of the therapeutic benefit actually comes from combining their pricey products with cheap Norvir).

    Abbott saw other drug makers generating large revenues from its drug and is attempting to tilt more of the revenue flow from treating AIDS back to itself. Other companies will respond by cutting their own prices a bit to maintain market share and maximize their own revenues. Which goes to show what a competitive market AIDS drugs are, with 12 essential medicines now on the World Health Organization list.

    Drug companies are in the business of funding large R&D establishments, which typically account for a bigger share of total costs than manufacturing and distribution. That's why companies can charge high prices to rich, insured Westerners and next to nothing to poor Africans--because any price that's even a penny above current manufacturing cost produces at least some revenue to support the research bill.

    Now we come to the politics. It's tempting to say in these circumstances, "Hey, we can mandate lower prices for Medicare, treating American retirees the way we treat AIDS sufferers in Africa, because drug companies will keep making and selling drugs even at a much lower price as long as it's higher than current manufacturing costs."

    That's right, and the price of drug company stocks will crash instantly, and no more capital will be available to research new products.

    This is not really hard to understand, and certainly our Ivy League-educated Democratic presidential candidates can understand it. Were any of them to land in office, you can bet their threats against the drug industry would be quickly filed away in a circular keeping place until the next election. President Kerry wouldn't want to bear the political cost of its collapsing stock values, massive layoffs and the media reporting the folding up of research into cures for diseases like Alzheimer's and Parkinson's.

    If this were only Mr. Kerry's problem we might wonder about the IQ behind his campaign rhetoric. Instead we are forced to wonder about the contempt nearly the whole Democratic field seems to feel for the Democratic base.

    No demagogue, left or right, fails to present himself as champion of the great, victimized majority against some tiny and exploitive elite. This argument is convenient for two reasons. Difficult issues like health-care financing, involving real tensions between hard-to-reconcile goals, can be reduced to utmost simplicity: On one side are the legitimate claims of voters who want cheaper drugs or whatever; on the other are the illegitimate claims of those who "stand in the way."

    Populist claptrap serves another purpose, visible on the very persons of the candidates: They swell with confidence and invulnerability when posing as defenders of the "little guy" rather than as champions of the party's own array of special interests and voting blocs (which is what they are).

    The force really at work is fear--fear on the part of Democratic leaders that they have nothing to offer; fear that their party's captivity by groups tied to existing programs forecloses any chance of innovative thinking. Notice that the party did not even wait for eight years of unrivaled Clinton prosperity to expire before Al Gore, in a panic, reverted to what a Washington Post editorial called "primitive business bashing" as a substitute for saying what some Democratic lobby group somewhere wouldn't like. Notice what a miserable disappointment even Howard Dean has been in this regard.

    Notice, too, the wonder of John Kerry, an asterisk six weeks ago, who reached his present eminence based on the repetition of meaningless phrases: "I know something about aircraft carriers for real." "Bring it on." "Don't let the door hit you on the way out."

    There is, literally, nothing else to the Kerry campaign. He's the default option of Democratic voters after the amazing rise and fall of Howard Dean, with the mother of all buyer's remorse coming down the pike about a minute or two behind. That's too bad but as a party they asked for it--and will keep doing so until they stop relying on the mindless naming of "villains" in place of dealing honestly with the voters whom they claim to represent.

    Democratic Enemies List

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