“We’re only just getting started” — OxyContin goes global

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❝ OxyContin is a dying business in America.

With the nation in the grip of an opioid epidemic that has claimed more than 200,000 lives, the U.S. medical establishment is turning away from painkillers. Top health officials are discouraging primary care doctors from prescribing them for chronic pain, saying there is no proof they work long-term and substantial evidence they put patients at risk.

❝ Prescriptions for OxyContin have fallen nearly 40% since 2010, meaning billions in lost revenue for its Connecticut manufacturer, Purdue Pharma.

So the company’s owners, the Sackler family, are pursuing a new strategy: Put the painkiller that set off the U.S. opioid crisis into medicine cabinets around the world.

A network of international companies owned by the family is moving rapidly into Latin America, Asia, the Middle East, Africa and other regions, and pushing for broad use of painkillers in places ill-prepared to deal with the ravages of opioid abuse and addiction.

Profits above all else as your standard, greed supersedes need in the 19th Century capitalist minds ruling Big Pharma.

RTFA for all the details. There’s much in the article. Nothing to make it smell better.

Trump’s trade team bases their analysis on an ignoranus mistake

❝ Donald Trump gives every indication of wanting to govern like a conventional conservative Republican on the vast majority of domestic issues. One big potential exception is trade, where he campaigned in an unorthodox manner and is setting the stage for a shake-up of how federal trade policy is normally conducted.

One part of that is Trump has stated his intention to make Commerce Secretary (and billionaire investor) Wilbur Ross the lead authority on trade negotiations. The other is that he is tapping University of California economist Peter Navarro for a brand new White House job, heading up something Trump is calling the National Trade Council…

❝ This makes sense, since Ross and Navarro were the co-authors of an important policy paper the Trump campaign put out during the election season that mostly focused on trade issues.

Unfortunately, the paper’s discussion of trade was incredibly shoddy. George Mason University’s Scott Sumner describes as “a complete mess,” which, if anything, is too kind. When Adam Davidson profiled Navarro for the New Yorker, he wrote that even when he asked Navarro to help him out, he couldn’t find a single other economist who fully agreed with him on trade and China. Which is about what you would expect, since the Ross/Navarro trade policy analysis is based on a mistake that would get you flunked out of an AP economics class.

❝ “When net exports are negative,” Ross and Navarro write, “that is, when a country runs a trade deficit by importing more than it exports, this subtracts from growth.”

They believe that, therefore, we can boost growth by curtailing imports…

❝ Reading this, you might wonder why it is that in the real world, economists actually do try to develop complex computer models of the economy. The answer is that the alternative method Ross and Navarro are proposing doesn’t even remotely work…

❝ According to Ross and Navarro, if the United States made it illegal to import oil, thus wiping $180 billion off the trade deficit, our GDP would rise by $180 billion. With labor constituting 44 percent of GDP, that would mean about $80 billion worth of higher wages for American workers. So why doesn’t Congress take this simple, easy step to boost growth and create jobs?

Well, because it’s ridiculous.

What would actually happen is that gasoline would become much more expensive, consumers would need to cut back spending on non-gasoline items, businesses would face a higher cost structure, and the overall economy would slow down with inflation-adjusted incomes falling. Modeling the precise impact of a total shutdown of oil imports is hard (hence the computer models). But we know from experience the directional impact of sharp disruptions in the supply of imported oil, and it’s not at all what Ross and Navarro say it would be.

❝ [These clowns use] an accounting procedure, not a causal theory. The accounting procedure says that government purchases are an element of GDP — higher G means higher GDP, and absolutely everyone agrees on that. But whether increasing government spending will boost or harm the economy is obviously a hot topic of political debate. A sensible high-level take would be “it depends.” It matters what you spend the money on; it matters how you raise the revenue and what the larger economic situation is.

The net exports situation is just the same. If America’s net exports grow because America becomes a fashionable tourist destination and sales of Boeing airplanes surge, then that will boost the economy. But if America’s net exports grow because new Trump-imposed taxes cause the price of imported goods to surge, then the economy is going to shrink.

It is reasonably common for people to make the kind of mistake that Ross and Navarro are making here, which is why professors generally make it a point of emphasis when introducing the GDP concept to students. Why a credentialed economist would do it in a policy paper for a presidential candidate is another matter.

Trump’s trade message is total nonsense.

If you’re only speaking to populist, uneducated, dispirited voters it works pretty well. You don’t have to deliver on anything more than bullshit ideology. Drag this silliness into the arena of trade and commerce, markets and macro economics – and we’re all screwed.

Pic of the day — Sahara snow!


Click to enlargeGeoff Robinson

More photos over here.

Doesn’t happen often. Almost four decades since the last time. The screwed-up dynamics of climate change may make this s more frequent occurrence. Or not.

Just like recent frigid visits of the polar vortex to North America caused by unusually warm air at the North Pole pushing cooler air South. Instability rules, so far.

How long will it be before you lose your job to a robot?


ReshoringMatt Blease

❝ How long will it be before you, too, lose your job to a computer? This question is taken up by a number of recent books, with titles that read like variations on a theme: “The Industries of the Future,” “The Future of the Professions,” “Inventing the Future.” Although the authors of these works are employed in disparate fields — law, finance, political theory — they arrive at more or less the same conclusion. How long? Not long.

❝ “Could another person learn to do your job by studying a detailed record of everything you’ve done in the past?” Martin Ford, a software developer, asks early on in “Rise of the Robots: Technology and the Threat of a Jobless Future”…“Or could someone become proficient by repeating the tasks you’ve already completed, in the way that a student might take practice tests to prepare for an exam? If so, then there’s a good chance that an algorithm may someday be able to learn to do much, or all, of your job.”

Later, Ford notes, “A computer doesn’t need to replicate the entire spectrum of your intellectual capability in order to displace you from your job; it only needs to do the specific things you are paid to do.”…

❝ The “threat of a jobless future” is, of course, an old one, almost as old as technology…Each new technology displaced a new cast of workers: first knitters, then farmers, then machinists. The world as we know it today is a product of these successive waves of displacement, and of the social and artistic movements they inspired: Romanticism, socialism, progressivism, Communism.

Meanwhile, the global economy kept growing, in large part because of the new machines. As one occupation vanished, another came into being. Employment migrated from farms and mills to factories and offices to cubicles and call centers.

❝ Economic history suggests that this basic pattern will continue, and that the jobs eliminated by Watson and his ilk will be balanced by those created in enterprises yet to be imagined — but not without a good deal of suffering. If nearly half the occupations in the U.S. are “potentially automatable,” and if this could play out within “a decade or two,” then we are looking at economic disruption on an unparalleled scale. Picture the entire Industrial Revolution compressed into the life span of a beagle.

And that’s assuming history repeats itself. What if it doesn’t? What if the jobs of the future are also potentially automatable?

RTFA. Sooner or later this will be key to a national election. In every nation in the industrial world. Probably every nation, industrial or otherwise. Mechanizing most agricultural work doesn’t even require AI.

Cynic that I am I expect the United States to drift into a tidy, tightly-class-structured version of Dicken’s 19th Century industrial England. It will take Socialist-led Scandinavian nations or a later version of China’s morphing Communist-led economy to build inclusive models. American capitalism and American workers will probably continue to elect variations of Trump or Hillary depending more on ad campaigns, sloganeering, than competent economics.