“The White House’s Deal With Big Pharma Undermines Democracy”

Robert Reich says the administration's promise not to use the government's purchasing power to lower the price of drugs in return for a large, pharmaceutical industry sponsored ad campaign in support of health care reform undercuts and threatens the democratic process:

How the White House's Deal With Big Pharma Undermines Democracy, by Robert Reich: I'm a strong supporter of universal health insurance, and a fan of the Obama administration. But I'm appalled by the deal the White House has made with the pharmaceutical industry's lobbying arm to buy their support.

Last week,... the White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That's basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it's proven a bonanza for the drug industry. ... Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us...

In return, Big Pharma isn't just supporting universal health care. It's also spending a lots of money on TV and radio advertising... Big Pharma has budgeted $150 million for TV ads promoting universal health insurance, starting this August (that's more money than John McCain spent on TV advertising in last year's presidential campaign), after having already spent a bundle through advocacy groups like Healthy Economies Now and Families USA.

I want universal health insurance. And having had a front-row seat in 1994 when Big Pharma and the rest of the health-industry complex went to battle against it, I can tell you first hand how big and effective the onslaught can be. So I appreciate Big Pharma's support this time around...

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It's bad enough when industry lobbyists extract concessions from members of Congress, which happens all the time. But... [a]n industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit ... at the highest reaches of our government, in the office of the President.

When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise...

I don't want to be puritanical about all this. Politics is a rough game... Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that's the case, our democracy is in terrible shape. How soon until big industries ... have become so politically powerful that secret White House-industry deals ... are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public...? (Any Democrats and progressives ... should ask themselves how they'll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

We're on a precarious road -- and wherever it leads, it's not toward democracy.

European Stocks Weak; Heidelberger Falls

European real estate firms declined on weak rents and falling property values. Banks in Italy edged higher. Bourbon SA, the offshore marine service first half revenues increased 11.2%. Heidelberger Druckmaschinen AG finalized its €1.4 billion credit agreement.

When the recovery comes, it will hurt

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The unemployment rate fell from 9.4% to 9.5% last month, with the number of positions cut falling almost by half -- from 442,000 in June to 247,000 in July. This was the first dip in the unemployment rate in 15 months.

So, it's starting to look like the economy is turning the corner ... or at least trying. But, when you look at what a recovery will have to entail, only one word comes to mind: painful.

An estimated 7 million workers have been booted from their desks during this recession. In total, 15 million people are without jobs right now. Of this number, 4.4 million (29%) have been unemployed for more than six months, a jump from 2.6 million in February. An estimated 540,000 will run out of unemployment benefits by the end of September, with 1.5 million reaching that point by the end of the year.

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When the recovery comes, it will hurt originally appeared on BloggingStocks on Sun, 09 Aug 2009 16:10:00 EST. Please see our terms for use of feeds.

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Symwave Raises $4 Million from SMSC

Symwave Inc., a Laguna Nigel, Calif.-based chipmaker focused on “sync-and-go” applications, has raised $4 million from SMSC (Nasdaq: SMSC), as part of a strategic partnership. The company previously raised around $25 million in VC funding, including a $10.18 million Series C extension late last year at a pre-money valuation of around $27.6 million. Participants on that deal included CMEA Capital and Kodiak Venture Partners.

Sunday links: data mining disasters

How to stop yourself from falling into the trap of dating mining.  (WSJ)

“So soon after the gargantuan losses of 2008, of course, it’s not certain that buying and holding will continue to be a viable long-term strategy. It may take many years to know.”  (NYTimes)

The holding period for stocks continues to plummet.  In short, don’t confuse your trading with investing.  (Clusterstock earlier Abnormal Returns)

The James Montier attack on the EMH is the post of the weekend.  (Frontline Thoughts also The Reformed Broker, Clusterstock)

Timber is one of those overhyped investments whose supposed virtues don’t hold up well under closer scrutiny.”    (Barron’s)

Global ETF assets are pushing $900 billion.  (InvestmentNews)

Equity sentiment is getting stretched.  (The Technical Take, Trader’s Narrative)

Has the frenzy in China reached a peak yet?  (ROI)

“Can’t wee all just agree that Goldman has way too much influence for a firm happy to trade around that influence and leave it at that?”  (Infectious Greed)

Conspiracy theorists take heart.  Hank Paulson was in frequent contact with Goldman Sachs (GS) during the crisis.  (NYTimes)

Some pushback against the breathless coverage of Zero Hedge.  (Across the Curve contra Zero Hedge)

The Baltic Dry Index had a bad week.  (naked capitalism, Fund My Mutual Fund)

So party if you feel like it. The popular meme that the recession is now over could ultimately prove to be correct.  But it’s by no means guaranteed.”  (Econbrowser)

Did the band of (economic) rivals in the Obama administration get it right after all?  (NYTimes also Clusterstock)

The economy won’t be on a sound footing until debt levels fall, and that won’t happen as long as the Fed stands in the way.”  (Rolfe Winkler)

How to develop a “prediction function.”  (GigaOM)

In venture capital sometimes it is appropriate to ‘double down’ on an investment.  (A VC)

Apple (AAPL) is, for now, unstoppable.  Fade it at your own risk.  (Howard Lindzon)

Reviews of In Fed We Trust by David Wessel and The Myth of the Rational Market by Justin Fox.  (NYTimes, ibid also Falkenblog)

How Bernie Madoff got away with it.  An excerpt from Too Good To Be True by Erin Arvedlund.  (Barron’s)

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Versata Acquires Everest Software

Versata Enterprises Inc., an enterprise software subsidiary of Trilogy Inc., has acquired Everest Software Inc., a Dulles, Va.-based provider of a business operating system for small and mid-sized businesses. No financial terms were disclosed. Everest Software has raised around $20 million in VC funding, from firms like Boulder Ventures, New Vantage Group, Updata Partners and Sierra Ventures.

Steve White Joins Sigma Partners

Steve White has joined Sigma Partners as an entrepreneur-in-residence, working out of the VC firm’s Menlo Park office. He is the founder of two former Sigma portfolio companies — Logic Modeling and 0-in Design Automation — is a limited partner in four Sigma funds. Here is Steve’s official bio, from the Sigma site: Prior to joining Sigma [...]

Consumer debt headed in the right direction, spending hampered

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For the fifth month in a row, consumers paid down their credit cards and other debt, as the worldwide recession continues to drive conservative financial behavior.

According to the Federal Reserve, outstanding consumer debt fell $10.3 billion (4.9%) to $2.5 trillion in June. Analysts expected a decline of only $4.7 billion, making the plunge unexpected -- and nearly twice the $5.4 billion by which consumer debt fell in May.

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Resolution Lifts Friends Provident Bid

Resolutions revised offer for Friends Provident values the insurer at £1.85 billion. Lloyds is exploring to raise up to £15 billion. Morgan Sindall profit slides 28%. Geong International surged 28% after it won new business in China.

Merge Healthcare Buying VC-Backed Confirma

(Reuters) - Merge Healthcare Inc (MRGE.O) said it has agreed to acquire Confirma Inc, a privately held developer of computer assisted detection software for medical imaging, in an all-stock deal valued at about $22 million. Confirma investors will own about 8.5 percent in Merge Healthcare upon closing of the deal, expected to occur in September. Shares of [...]

Economic Growth From Outer Space

Loved this new NBER paper, albeit in part because it’s just such a cool idea: Measuring economic growth using satellite data on lights visible at night from space.

Measuring Economic Growth from Outer Space

J. Vernon Henderson, Adam Storeygard, David N. Weil

GDP growth is often measured poorly for countries and rarely measured at all for cities. We propose a readily available proxy: satellite data on lights at night. Our statistical framework uses light growth to supplement existing income growth measures. The framework is applied to countries with the lowest quality income data, resulting in estimates of growth that differ substantially from established estimates. We then consider a longstanding debate: do increases in local agricultural productivity increase city incomes? For African cities, we find that exogenous agricultural productivity shocks (high rainfall years) have substantial effects on local urban economic activity.

Paymetric Raises $8 Million

Paymetric Inc., an Atlanta-based provider of enterprise payment acceptance solutions, has raised $8 million in Series B funding. Palomar Ventures led the deal with a $5 million investment, and was joined by return backer Austin Ventures.

Excellere Partners To Acquire MTS Medication Technologies

Excellere Partners has agreed to acquire MTS Medication Technologies Inc. (Nasdaq: MTSI), a -based provider of medication adherence packaging systems. The deal is valued at approximately $37 million, or $5.75 per share. Raymond James & Associates is serving as MTS' financial advisor.

Tesla Motors Says That It Is Profitable

Tesla Motors, a -San Carlos, Calif.-based maker of electric sports cars, said Friday that it achieved overall profitablity in July, with approximately $1 million of earnings on $20 million of revenue. The company has raised over $90 million in VC funding since 2006, from firms like DFJ, Compass Technology Partners, JPMorgan Partners, Technology Partners, Valor Equity Partners, Westly Group and VantagePoint Venture Partners.

Lions Gate Entertainment: What to expect in the Q1 report

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I watch Lions Gate Entertainment (NYSE: LGF) pretty regularly. I've written extensively about the company. I keep switching opinions on the stock. Is it a buy or a sell?

At this time, it definitely doesn't appear to be a great long-term investment. It's a bit too speculative for that. If you're looking for exposure to the media content industry, going with a Disney (NYSE: DIS) or a Time Warner (NYSE: TWX) might be safer. Those two entities are big conglomerates, of course, so if you want something safer than Lions Gate but would like a closer alliance with the movie sector, you might consider a business like Marvel Entertainment (NYSE: MVL).

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Lions Gate Entertainment: What to expect in the Q1 report originally appeared on BloggingStocks on Sun, 09 Aug 2009 14:10:00 EST. Please see our terms for use of feeds.

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ConocoPhillips Q2 Earnings Call Transcript

ConocoPhillips second quarter earnings dropped nearly 50% to $35.4 billion and profits plunged 76% to $1.3 billion as heavy fuel supplies and weak demand hurt margins. Earnings per share were 87 cents as against $3.50 in the year-ago quarter.