Links 3/28/10

Security Watch: Beware the NSA’s Geek-Spy Complex Wired. Huh? Did anyone ever think the NSA was trustworthy?

The Rage Is Not About Health Care Frank Rich, New York Times

Palin Rejoins McCain on Campaign Trail Wall Street Journal. You must look at the picture. First Glenn Beck in jackboots, now Palin dressed like a domme.

Does Unemployment Insurance Necessarily Raise the Unemployment Rate and Decrease Employment? Menzie Chinn

David Rosenberg: The Stars Are Aligning For “Something Really Big To Happen” Clusterstock

Ambac & the Safe Harbors Credit Slips

Pfizer Told to Pay $142.1 Million for Neurontin Marketing Fraud BusinessWeek (hat tip reader Francois T)

The global financial crisis: Why were some countries hit harder? VoxEU

MPs say time to reconsider ‘the special relationship’ Telegraph (hat tip reader Swedish Lex)

Fed’s Sack Says Financial System Needs Leverage Bloomberg

Also, Corrente is hosting a chat on ECONNED on Sunday (meaning tomorrow) between 2:00 and 4:00 PM EDT. I’ll be there. Hope you come visit!

Antidote du jour:


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  1. attempter

    Since the American system has chosen so many gratuitous foreign entanglements, and needs all the help it can get, in theory Britain should be able to act like Israel. It should be able to be as demanding, parasitic, loutish, and obnoxious as its pleasure dictates. Especially since unlike Israel Britain has actually returned some “value” (especially serving as flunkey in Iraq and Afghanistan).

    The fact that Britain is completely economically dependent upon US power, and will become far more so as Peak Oil sets in (even before the financial crash nobody could figure out how the UK is going to be able to pay for its escalating natural gas imports by mid-decade), shouldn’t make a difference, since Israel is far more dependent, but that doesn’t stop it from acting as if America owes it a living.

    So I’d say to aspiring British louts, go for it. Especially with this spineless wuss in the White House. For now, at least, America is committed to being as un-self-reliant as possible; to becoming as globally quagmired as possible, because only in this way can it keep its elite propped up.

    So as much as you need America, this system’s actions demonstrate that they think they need you more than you need them.

    (I of course exclude anyone in Britain who actually wants British self-reliance, who wants to actually break the British dependency upon the US and globalization, from this tirade.)

    1. NotTimothyGeithner

      Considering the Israeli economy would collapse without U.S. largess and the resulting Israeli appreciation, we should be worried about the people of the Duchy of Grand Fenwick coming over here and messing up our stuff.

      1. Remember Samuel Morison

        Woe woe to those who would sunder the Atlantic Alliance!

        Apparently some have forgotten ( or have failed to appreciate at its true value) the role which the control of the seas has played ( and which role yet continues although apparently un-noticed and all-but-forgotten) in America’s rise to, and maintenance of, its economic and military pre-eminence amongst the nations.

        Great Britain is necessary as an ally to the USA for it to maintain this control. Israel is not, and never has been.

        Peak oil? How much would oil cost today, if there had been no wars at all in the Mid-east (and such was IMHO the reasonable prospect in say 1947) over the past 65 years, and had a pipeline been built from Iraq through Palestine to oil shipping terminals built on the eastern Mediterranean coast?

        Oil’s price is high IMHO because of the 1972-1973 oil shock, the Iranian Revolution of 1979, the decade-long US- supported war between Iraq and Iran, and the ongoing American War in Iraq.

        personally, I’ll use Occam;s razor: the simplest hypothesis which fits the facts, wins (for now). Disruption of present supplies affecting the price of oil, I understand. The price of oil going up now because perhaps they won’t find anough in the future, I do not.

        Does the possible state of the harvest in three years determine the price of corn now?
        Why should oil markets be different?

        1. MyLessThanPrimeBeef

          Occam’s razor is under-utilized these days, in my opinion, not so much in logic but in writing.

          There was a saying in ancient Japan – a samurai can’t live without his swords, just like a haiku poet can’t live without his Occam’s razor.

  2. Jason

    “You must look at the picture. First Glen Beck in jackboots, now Palin dressed like a domme.”

    That is the most disturbing mental image I’ve ever had.


    Now…I need to find some way to get that out of my head.

  3. craazyman

    On Unemployment Insurance —

    Can’t believe the soul-dead madness that parades under the obscure symbols of basic algebra seeking redemption through obfuscation.

    Can’t believe that any economist who’s never been unemployed knows the first damn thing about unemployment.

    Can’t believe that any mainstream economist has ever been out of the womb of a library or an office.

    Can’t believe anyone with a spirit can conceive of a “disincentive” effect of a two-bit chump change food stamp check each week.

    Can’t believe that people seriously argue about this. Can’t believe they don’t see the disincentive in the humiliation, rejection, emptiness, abandonment, purposelessness and hopelessness of unemployment.

    Can’t belive these tender coddled assholes are writing academic papers and making up policies based on such blindness.

    Can’t belive the madness of it all, the darkness of it all, the shallow soul-less garbage of it all.

    Yes, if you want to try to understand unemployment. Then go get fired and look fruitlessly for a job for a year or so — outside of a convenience store or digging ditches with the Mexicans.

    Then write a paper about it. It might be worth reading.

    1. craazyman

      by that way, that second to last line opener was “Yes” as in the word that is opposite of “No”, not a typo version of “Yves”. I rarely respond ad-hominem to anyone — least of all our generous hostess in any situation. It was a generic comment about research economists.

    2. Peripheral Visionary

      The reality is that unemployment means very different things to very different people. For most people living in “respectable” society, unemployment is, as you described, a nightmare scenario, something to be avoided at all costs.

      On the other hand, within certain communities, work is the exception, not the rule, and unemployment (both the condition and the government benefit associated with it) are taken very much as a matter-of-fact. I have met people who actually plan their lives around unemployment benefits–work a year, take unemployment for six months until it runs out, repeat. That’s inconceivable in a part of society where people define themselves by their careers, but in parts of society where people do not, it happens.

      Hence, the question of if unemployment benefits lead to higher rates of unemployment is a serious question–it applies a certain rigor to an issue that would otherwise be understood only by our cultural biases. It may seem heartless, but, well, nobody’s making that argument over the countless studies involving cancer, child abuse, teen pregnancy, etc.

    3. Mike Vronsky

      I have a friend, we played little league baseball together. Friends through high school and after, but went different directions later in life. He has been unemployed for 2.5 years. Won’t look for another job – he says he ‘makes’ (air quotes mine) more on unemployment, so why bother. I don’t know where he fits in the log approximation of the unemployment rate, but he is a data point.

      1. craazyman

        Those are both very valid points — periph. visionary’s included — that my strident rhetoric implicitly accepts as being true.

        I tend to think that “most” humans are by nature creative and social beings, whose first choice would be gainful employment that feeds their own creativity and that benefits society. Very abstract to be sure. The lack of that leads to many emotional and pyschological pressures and maladies, which we can see in the epidemics of depression, anxiety and violence in societies.

        The coasters, criminals and con men are subset of humanity that must be contended with in any social policy construct. No doubt. I also believe that subsets of society can become so depressed and despondent at lack of real opportunity that they embrace otherwise self-destructive behavior patterns out of rebellion and exhaustion. I think this is the case in many inner city and impoverished communities.

        I don’t believe these constitue the majority of unemployed or stand as a proxy for the unemployment experience. And I believe — partly from my own experience and from direct observation — that most unemployed would dearly love a paying job and that benefits aren’t a systemic disincentive applied to the population at large.

        I also believe that the notion that folks who won’t “take a lesser job” to get off unemployment are a cost to society is absurd on its face. Many jobs totally and completely suck — soul killing, life killing misery. And it’s an inversion of the other economic nostrum that societies advance through productivity gains through increasingly knowledge-oriented labor. Totally inconsistent theories.

        I would challenge any economist who believes that to abandon their search for a six-figure gig or a University Professorship — and go work at a car wash or the desk at Motel 6, which deprives them of the time to send out resumes and go on interviews. We’ll see how fast their theory of unemployment changes. I bet it would happen in one day. Ha ha ha. yeah, what’s good for the goose is good for the gander.

    4. Frank

      Hey crazyman, it seems you know. I have always said a job provides a lot more than a paycheck. People lose self worth, which if you’ve lost it you realize how important it is. Without a reason to get up and produce something, direction is lost, I for one would gladly work, I actually like it, it also gives me adult conversation, many things.

  4. Paydreaux

    Re: antidote du jour

    Anything image containing starlings, an imported scourge that is decimating the populations of certain native birds, doesn’t qualify as being any type of antidote, unless you had shown that poor ground squirrel eating one for lunch.

  5. Cynthia

    “Pfizer Told to Pay $142.1 Million for Neurontin Marketing Fraud”

    As I’ve said before, I find it puzzling why federal drug enforcers slapped Pfizer with a multi-billion dollar fine for promoting off-label uses for drugs, while they still allow physicians to prescribe drugs for off-label uses. If off-label using is such a crime, meaning it’s endangering patients’ lives, why aren’t physicians also being slapped with fines for prescribing drugs for off-label uses? I realize that the FDA is doing this because they are allowing physicians to exercise their so-called “best judgment” when prescribing drugs. But why won’t the FDA allow pharmaceuticals to also exercise their best judgment when promoting drugs? To me, the FDA is wrongly assuming that: 1) prescribing drugs have nothing to do with promoting them and 2) physicians, like banksters, are so damn God-like that they should be treated as if they are above the law! So I definitely see an unsettling double standard at work here in that pharmaceuticals, unlike physicians, must base what they do on sound science. In other words, I find it deeply unsettling that physicians are free to use their judgment when prescribing drugs, while pharmaceuticals are forbidden from using their judgment when promoting drugs. In fact, it’s my opinion that if physicians continue this practice of putting their so-called “best judgment” over sound science, their profession will soon fall into the hands of quacks!

    Let me also mention that there is too much money to be made in the off-label market for pharmaceuticals to stop the illegal practice of promoting their drugs for off-label uses. So instead of having their drug salesmen promote off-label uses of their drugs, pharmaceutical companies will simply pay prominent physicians under the table to do this. They’ll pay physicians to do this because they know that physicians, unlike themselves, are immune from prosecution for promoting drugs for off-label uses.

    1. Yves Smith Post author


      The big issue is that that the FDA is federal, while doctors are licensed by states. So the Feds can’t do/say anything re the ways doctors practice medicine.

      And some off label uses are legit. For instance, rheumatoid arthritis is the most common auto immune disease. So studies focus on that and drug approvals are based on RA. Doctors will use the drugs that treat RA for much more obscure ailments. Some auto immune diseases are so rare that only one person in a million. No one will research or investigate treatments for rare diseases. So if you rule out off label use, you are effectively saying you can’t use drugs to treat any comparatively rare ailment.

      1. psychohistorian

        So what is to be the rule and which the exception? I would support Cynthia’s claim on abusive prescription of Neurontin from personal experience with it and talking with a half dozen others with personal experience.

        How do we allow pharma drugs for non designed uses but don’t support herbal medicine at all basically?

  6. Hugh

    Sack’s championing a return to leverage (hasn’t this already happened?) makes a good case for why the top management of the Fed should be fired across the board. It also brings up again the perennial question of why we even need a Fed. It is just another tentacle of the bankster dominated financial system.

    Re Pfizer, it’s not like they didn’t know the law. They could have taken some of their profits from neurontin, run the studies, and gotten an on-label certification. It looks like they were wanting to do this on the cheap. That said, the whole area of off-label use needs review. Take the anti-convulsants (epilepsy drugs). Neurontin started out its life as one. That is that was its on-label use, but it wasn’t particularly go at it. It was found to be useful in chronic pain and that became its major use, an off-label one. Anti-convulsants have also found extensive off-label use in areas such as migraine and mood stabilization. I have not kept up to know if any of them have ever bothered to get official certification for any of this.

    Another kind of off-label use is when you prescribe a drug for its stated purpose but to an unstudied population. We are seeing a lot of this in the prescribing of adult drugs, like SSRIs (anti-depressants), to children.

  7. eric anderson

    Frank Rich writes: “As no less a conservative authority than The Wall Street Journal editorial page observed last week, the bill’s prototype is the health care legislation Mitt Romney signed into law in Massachusetts. It contains what used to be considered Republican ideas.”

    RINO ideas, not Republican ideas. This is how the conservative base looks at it.

    No need for hystrionics and threats. Just vote in November. Re-elect no one is my motto.

  8. shargash

    I don’t think the “thought leaders” in the Democratic party (e.g. Frank Rich) get it. The mandate is going to be very unpopular. Most people who don’t have health insurance either can’t afford it, or don’t want it because they don’t think they need it and aren’t willing to pay for it. Most of the former are still not going to be able to afford it, and the latter are going to be royally pissed off that they’re forced to buy it.

    Even worse will be when corporations start gutting the healthcare the majority of middle class America already has. AT&T is taking a 1 billion dollar write off this quarter because of the plan. Their comment:

    “As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company,” AT&T said in a brief filing with the Securities and Exchange Commission.

    Good luck getting re-elected when people see their existing health insurance skyrocket in price at the same time that it shrivels away.

  9. kevinearick

    Surfing the Fulcrum Apparatus

    Balance the short into the imploding gravity with a load just beyond the discernable recognition of gravity, to get the output gap, engage the motor, and charge the capacitor, with a resonant feedback mechanism, a market vortex, as a guide into orbit, and to adjust / maintain the necessary output gap, to replace the vortex that cannot pull the necessary amps without blowing the gate.

    The difference between capitalism, socialism, and communism is negligible, relative to the difference between any of the three and democracy. The next orbit is the next orbit, but there are an infinite number of choice combinations possible. Symbiotic systems are naturally self-adjusting. Asymmetric systems load the black hole.

    Greed is like desire without love, an effective means of replication. It has its uses, but it’s not a value system. It’s the short to ground. A number of unique choices must be made, and the number determines the size of the population that may be sustained.

    America has all kinds of desire, but little love for its work, and the symptoms are everywhere.

    Machines are machines. Tools are tools. They have their uses.

    A distribution of meteors sitting in a bullpen is a good place to start.

    The Bob Dole healthcare Bill?

  10. justaslakker

    I think Sarah Palin looks like a biker in that black leather jacket. And that is the crowd she appeals to, the rebels without a cause.

  11. KFritz

    Re: The ‘Special Relationship’

    This one cuts both ways. If GB has sucked up to the US, it was at least in part to experience a feeling of power they haven’t been able to feel on their own since the sun set on The Empire. Also, the US would do well to abandon the relationship. We need good relations with the EU and Euroskeptics in the UK harm relations while the special relationship exists. The US would do its public relations in the Hemisphere a world of good by opposing the British oil exploitation of the Malvinas/Falklands Islands. Not to mention economic justice and the Monroe Doctrine. If the Brits want to sponsor some pet shepherds in the South Atlantic that’s fine, but the petroleum is Argentina’s.

  12. MyLessThanPrimeBeef

    I am still waiting for my Monday antidote…

    By the way, can you please double the dosage whenever you can? It’s a dangerours world out there and getting more so all the time.

  13. MyLessThanPrimeBeef

    The Pfizer article makes one reflect on the state of Scinece as it is practiced today.

    A huge organization like Kaiser didn’t know a drug was not an effective treatment for some medical conditions. Their product review experts were led into false beliefs. It was impossible or impractical for them to independently verify the claims.

    Basically, one specialist in one sub-sub-sub-sub-sub-sub field can not comprehend what another one in another sub-sub-sub-sub-sub-sub-sub-sub field is doing. All that one can do to get by is to trust and believe. It’s not much different from a cult.

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