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Posts Tagged ‘Big business’

This column by Tim Carney in the Washington Examiner should make every honest person nauseous. It explains how the big pharmaceutical companies are Obama’s biggest allies. This is well know inside the beltway, but average Americans don’t understand that Obamacare is largely a giveaway to powerful interest groups. Two observations are worth making. First, the pharmaceutical companies are going to get screwed over once the bill passes. The budget numbers will look terrible and the White House, under pressure to do something (besides just higher taxes), will stab the companies in the back by imposing price controls. Second, even though this will be bad for healthcare since it will undermine research on new drugs, I will take a certain perverse satisfaction in that result. Heck, I think opponents of government-run healthcare should have offered amendments to tax and regulate the industry during debate on the healthcare bills. Companies that climb into bed with government deserve all the bad things that happen to them:

As they whip for the health care bill, Democratic leaders pack a mean one-two punch of populist rhetoric and the hefty financial backing of the drug industry. …drug industry lobbyists, according to Politico, spent the weekend “huddled with Democratic staffers” who needed the drug lobby to “sign off” on proposals before moving ahead. Meanwhile, we learn that the drug lobby is buying millions of dollars of ads in 43 districts where a Democratic candidate stands to suffer for supporting the bill. The doctors’ lobby and the hospitals’ lobby are also on board with the Senate bill. …Of all the single-industry lobbies in Washington, the largest is the Pharmaceutical Researchers and Manufacturers of America. PhRMA spent $26.2 million on lobbying last year — that’s nearly three times as much as the insurance lobby, America’s Health Insurance Plans, which spent $8.9 million. If you include individual companies’ lobbying, pharmaceuticals blow away the competition, beating all other industries by 50 percent, according to data at the Center for Responsive Politics. Given this Big Pharma clout, it’s unsurprising that the bill Obama’s whipping for — Senate bill — has nearly everything the drug companies wanted: prohibiting reimportation of drugs, preserving Medicare’s overpayment for drugs, lengthy exclusivity for biotech drugs, a mandate that states subsidize drugs under Medicaid, hundreds of billions in subsidies for drugs, and more.

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There are many reasons to dislike the statist economic policies emanating from Washington, and high on the list is the way big government lures companies into mooching off taxpayers rather than earning money honestly. If CEOs at least had the dignity to be embarrassed about their plunder, that would provide a bit of solace, but that is rarely the case. The head of General Electric is parroting inaccurate left-wing talking points and trumpeting corporatist policies. It’s not clear whether he believes this nonsense or is merely trying to please his political masters. The FT reports:

Jeffrey Immelt, General Electric’s chief executive, said on Wednesday his generation of business leaders had succumbed to “meanness and greed” that had harmed the US economy and increased the gap between the rich and the poor. …“We are at the end of a difficult generation of business leadership … tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits,” said Mr Immelt… “Rewards became perverted. The richest people made the most mistakes with the least accountability.” …“The bottom 25 per cent of the American population is poorer than they were 25 years ago. That is just wrong,” he said. “Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong.” GE wants to win a large slice of the infrastructure projects funded by governments around the world in an effort to kick-start their economies. Mr Immelt said business should welcome government as “a catalyst for leadership and change”.

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Kudos to David Farr, CEO of Emerson Electric. Speaking recently at a conference, Farr actually told the truth about how big government is crippling American manufacturing. In response, an Obama bureaucrat at the Commerce Department actually had the chutzpah to claim that the White House is trying to help companies by (this is not a joke) creating a multi-trillion dollar healthcare entitlement! With this type of nonsense from Washington, no wonder Mr. Farr is angry. His best line (and one that other business leaders should copy) was “…My job is not to shrink and roll over for the U.S. government.” Here are excerpts from the Bloomberg report:

Emerson Electric Co. Chief Executive Officer David Farr said the U.S. government is hurting manufacturers with regulation and taxes and his company will continue to focus on growth overseas. “Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing,” Farr said today in Chicago at a Baird Industrial Outlook conference. “Cap and trade, medical reform, labor rules.” …Companies will create jobs in India and China, “places where people want the products and where the governments welcome you to actually do something,” Farr said.  …“What do you think I am going to do?” Farr asked. “I’m not going to hire anybody in the United States. I’m moving. They are doing everything possible to destroy jobs.” …“This attack isn’t supported by the facts,” Kevin Griffis, a spokesman for U.S. Commerce Secretary Gary Locke, said today in an e-mail from Singapore, where they are attending the Asia-Pacific Economic Cooperation meetings.  “This administration has made a significant commitment to U.S. manufacturing, including reforming the country’s health insurance system to bring down costs and make American companies more competitive globally,” Griffis said.

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That’s the question posed by the Wall Street Journal’s editorial page, which discusses how companies often get seduced into supporting big government – or, in some cases, are active proponents of bigger government since they’ve learned how to milk the system. In the long run, of course, statism saps an economy’s vitality, which is bad for workers, investors, and consumers:

One lesson that Democrats learned from the failure of HillaryCare in 1994 is that they had to buy the silence, if not the outright support, of the business class. They’ve done this brilliantly by peddling the illusion that ObamaCare will “lower costs” for employers. But slowly as the legislative details become clear, it is dawning on executives of businesses large and small that reform is boiling down to a huge tax increase to finance a gigantic new entitlement. …With only a few exceptions, drug makers and health-care providers have shown that their priority is rent-seeking from government, which means that any last-minute push back will have to come from the other six-sevenths of the economy. The Chamber of Commerce and National Federation of Independent Business have finally figured out they were being taken for a ride. And now even the Business Roundtable, the association of CEOs from the largest companies, is engaged in a furious internal debate about the way forward. The Roundtable has been vaguely supportive but restive. But last week Roundtable president John Castellani was informed in a contentious conference call that many of his members will quit if the organization isn’t more assertive against ObamaCare. …The larger issue for business is the productivity and competitiveness of the U.S. economy. Democrats are about to pass the largest entitlement expansion in more than four decades when federal spending is already at unprecedented levels. The “pay or play” tax on employers and the hike in payroll taxes on top earners in the House and Senate bills are merely teaser rates. The long-term pressures created on the federal fisc would require enormous tax hikes that would depress capital investment and economic growth, to say nothing of the Roundtable’s priority of reducing U.S. corporate tax rates that are among the world’s highest. The tendency among business groups is usually to conciliate and speak the language of consensus—especially with Democrats running all of Washington and able to do great harm to anyone who doesn’t cooperate. And no doubt the Roundtable is hearing from the CEOs of companies like Pfizer, Wal-Mart and General Electric that are deeply invested in more government control of the economy.

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