4 ms·

> as much as 90% of the cost of a new drug is meeting FDA requirements It's easy (and convenient) to blame this on the government. I'm somewhat familiar with t

> as much as 90% of the cost of a new drug is meeting FDA requirements It's easy (and convenient) to blame this on the government. I'm somewhat familiar with the pharma industry (payed for my house), and I can tell you that at least some of these "regulatory" costs are things like flying doctors to expensive shindigs, to coordinate the research they're doing for you. On this note, if a govt. agency throws a multi-thousand dollar party, it's a scandal, but those kinds of costs are built into the way (privatized) pharma operates. It's easy to waste millions when you're making billions, and you don't have to answer to taxpayers. This "government is wasteful" meme ignores the fact that there are powerful non-government actors milking the government.

CWuestefeld 16y ago
It's easy to waste millions when you're making billions, and you don't have to answer to taxpayers. Quite the opposite. The taxpayers only wake up once every 4 years, and even then they buy the crap that's shoveled at them, and the fearmongering ("OK, we may have made a few mistakes, but you still have to vote for us because the other side is evil"). Anything that happens between now and the next election will be largely forgotten, and anyone who tries to remind the electorate will be shouted down for "negative campaigning". On the other hand, the shareholders are watching the actions of the corporations every day of the year. I'm not personally doing so, but I pay a variety of mutual fund managers to do it. If they can't maximize my return by steering clear of corporations that are flushing money away, I'm going to fire the fund manager and put my money elsewhere. And that's why you'll never see a private organization as poorly run as a government agency, at least for any period of time. The quality of education we get is absurd for the money thrown at it. The amount of time it takes for a highway construction project to be completed (not to mention the number of workers I see loafing around when the town is filling potholes) would never be tolerated in industry. I could go on all day... This "government is wasteful" meme ignores the fact that there are powerful non-government actors milking the government. This is certainly true. But it doesn't absolve government of its responsibility as stewards of our money. The fact that government is just so huge that this is impossible is just another symptom of the root problems.
- evgen 16y ago
  On the other hand, the shareholders are watching the actions of the corporations every day of the year. I'm not personally doing so, but I pay a variety of mutual fund managers to do it. If they can't maximize my return by steering clear of corporations that are flushing money away, I'm going to fire the fund manager and put my money elsewhere. The recent financial meltdown should have made it abundantly clear that the "watchers" were in fact not watching and at times were colluding with those they were supposed to be watching to get a cut of the take. Shareholders do not watch companies for waste, they just watch the stock price (and maybe the bottom line if they are particularly dilligent.) In many cases government agencies are better managed than corporations of an equivalent size; there are usually better internal auditing and fraud controls in place and if you get caught trying to defraud a government agency you are more likely to go to jail than if you were to perform a similar fraud against a corporation.
  - CWuestefeld 16y ago
    The recent financial meltdown should have made it abundantly clear that the "watchers" were in fact not watching That's true, but it's a very specific example that has a clear explanation in two parts, those being the government and the private sector together creating the problem. First, there was the government (e.g., Barney Frank's efforts) that was forcing industry to accept risks that industry would have avoided under more natural market conditions. Second, forced to absorb those risks, industry experimented with ways to mitigate and dissipate that risk -- but the experiment failed badly. It showed that nobody knew how to properly model the situation -- neither the regulators nor the industry. And for that reason, it's not really an instructive lesson to draw conclusions about industry. We've learned those particular lessons now, so you shouldn't see this repeated again. Shareholders do not watch companies for waste, they just watch the stock price That is patently absurd. It's not even true for any responsible individual investor, but for any fund manager that would be outright negligence -- and then the yields of his funds would tumble, and even the stupidest of individual investors would throw him out on his ear. By contrast, I offer government idiocy, programs that have blatantly failed by any objective measure, yet continue to be money black holes. Consider public education, and the war on (some) drugs. Both actively damage society, and waste uncountable sums of money in doing so. In many cases government agencies are better managed than corporations of an equivalent size; there are usually better internal auditing and fraud controls in place Citations, please? Here are some counters: Aside from my examples above, consider Medicare, a well-known money pit that politicians have said they'll clean up for years if not decades. Indeed, government does all it can to prevent us from seeing the depths of its waste. I have a friend here in NJ who works tirelessly to uncover government waste, and the reason it's such a big job is the constant resistance to the use of open public records laws. And the military (the remainder quoted from http://www.wanttoknow.info/corruptiongovernmentmilitary http://www.wanttoknow.info/corruptiongovernmentmilitary ): "'According to some estimates we cannot track $2.3 trillion in transactions,' Rumsfeld admitted. $2.3 trillion -- that's $8,000 for every man, woman and child in America." -- CBS News, 1/29/02, U.S. Secretary of Defense raises evidence of government, military corruption "A GAO report found Defense inventory systems so lax that the U.S. Army lost track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. When military leaders were scrambling to find enough chemical and biological warfare suits to protect U.S. troops, the department was caught selling these suits as surplus on the Internet 'for pennies on the dollar.'" -- San Francisco Chronicle, 5/18/03 "The Defense Department spent an estimated $100 million for airline tickets that were not used over a six-year period and failed to seek refunds even though the tickets were reimbursable." -- New York Times, 6/9/04

CWuestefeld 16y ago

It's easy to waste millions when you're making billions, and you don't have to answer to taxpayers. Quite the opposite. The taxpayers only wake up once every 4 years, and even then they buy the crap that's shoveled at them, and the fearmongering ("OK, we may have made a few mistakes, but you still have to vote for us because the other side is evil"). Anything that happens between now and the next election will be largely forgotten, and anyone who tries to remind the electorate will be shouted down for "negative campaigning". On the other hand, the shareholders are watching the actions of the corporations every day of the year. I'm not personally doing so, but I pay a variety of mutual fund managers to do it. If they can't maximize my return by steering clear of corporations that are flushing money away, I'm going to fire the fund manager and put my money elsewhere. And that's why you'll never see a private organization as poorly run as a government agency, at least for any period of time. The quality of education we get is absurd for the money thrown at it. The amount of time it takes for a highway construction project to be completed (not to mention the number of workers I see loafing around when the town is filling potholes) would never be tolerated in industry. I could go on all day... This "government is wasteful" meme ignores the fact that there are powerful non-government actors milking the government. This is certainly true. But it doesn't absolve government of its responsibility as stewards of our money. The fact that government is just so huge that this is impossible is just another symptom of the root problems.

evgen 16y ago
On the other hand, the shareholders are watching the actions of the corporations every day of the year. I'm not personally doing so, but I pay a variety of mutual fund managers to do it. If they can't maximize my return by steering clear of corporations that are flushing money away, I'm going to fire the fund manager and put my money elsewhere. The recent financial meltdown should have made it abundantly clear that the "watchers" were in fact not watching and at times were colluding with those they were supposed to be watching to get a cut of the take. Shareholders do not watch companies for waste, they just watch the stock price (and maybe the bottom line if they are particularly dilligent.) In many cases government agencies are better managed than corporations of an equivalent size; there are usually better internal auditing and fraud controls in place and if you get caught trying to defraud a government agency you are more likely to go to jail than if you were to perform a similar fraud against a corporation.
- CWuestefeld 16y ago
  The recent financial meltdown should have made it abundantly clear that the "watchers" were in fact not watching That's true, but it's a very specific example that has a clear explanation in two parts, those being the government and the private sector together creating the problem. First, there was the government (e.g., Barney Frank's efforts) that was forcing industry to accept risks that industry would have avoided under more natural market conditions. Second, forced to absorb those risks, industry experimented with ways to mitigate and dissipate that risk -- but the experiment failed badly. It showed that nobody knew how to properly model the situation -- neither the regulators nor the industry. And for that reason, it's not really an instructive lesson to draw conclusions about industry. We've learned those particular lessons now, so you shouldn't see this repeated again. Shareholders do not watch companies for waste, they just watch the stock price That is patently absurd. It's not even true for any responsible individual investor, but for any fund manager that would be outright negligence -- and then the yields of his funds would tumble, and even the stupidest of individual investors would throw him out on his ear. By contrast, I offer government idiocy, programs that have blatantly failed by any objective measure, yet continue to be money black holes. Consider public education, and the war on (some) drugs. Both actively damage society, and waste uncountable sums of money in doing so. In many cases government agencies are better managed than corporations of an equivalent size; there are usually better internal auditing and fraud controls in place Citations, please? Here are some counters: Aside from my examples above, consider Medicare, a well-known money pit that politicians have said they'll clean up for years if not decades. Indeed, government does all it can to prevent us from seeing the depths of its waste. I have a friend here in NJ who works tirelessly to uncover government waste, and the reason it's such a big job is the constant resistance to the use of open public records laws. And the military (the remainder quoted from http://www.wanttoknow.info/corruptiongovernmentmilitary http://www.wanttoknow.info/corruptiongovernmentmilitary ): "'According to some estimates we cannot track $2.3 trillion in transactions,' Rumsfeld admitted. $2.3 trillion -- that's $8,000 for every man, woman and child in America." -- CBS News, 1/29/02, U.S. Secretary of Defense raises evidence of government, military corruption "A GAO report found Defense inventory systems so lax that the U.S. Army lost track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. When military leaders were scrambling to find enough chemical and biological warfare suits to protect U.S. troops, the department was caught selling these suits as surplus on the Internet 'for pennies on the dollar.'" -- San Francisco Chronicle, 5/18/03 "The Defense Department spent an estimated $100 million for airline tickets that were not used over a six-year period and failed to seek refunds even though the tickets were reimbursable." -- New York Times, 6/9/04