The Anti-Capitalistic Inquisition

Discussion in 'Economics' started by PoundTheRock, Aug 16, 2005.

  1. Enron wasn't just about accounting engineering:

    Enron energy trader pleads guilty

    The former head of Enron electricity trading has pleaded guilty to a charge of conspiracy to commit fraud for his part in manipulating California's energy market to drive up power prices.

    His conviction is the first since an investigation into power manipulation in the Golden State drove electricity and natural-gas prices sky high during the state's energy crisis in 2000-01.

    Mr Belden faces up to five years in prison plus fines of up to $250,000 (£161,000) and pay restitution of $2.1m (£1.4m), according to the plea deal.

    "These charges answer the question that has long troubled California consumers: Whether the energy crisis was spurred in part by criminal activity," said US Attorney Kevin Ryan in a statement.

    "The answer is a resounding yes."

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    Of course tapes help too:

    Enron Traders Caught On Tape


    Before the 2000 election, Enron employees pondered the possibilities of a Bush win.

    "It'd be great. I'd love to see Ken Lay Secretary of Energy," says one Enron worker.

    That didn't happen, but they were sure President Bush would fight any limits on sky-high energy prices.

    "When this election comes Bush will f------g whack this s--t, man. He won't play this price-cap b------t."

    Crude, but true.

    "We will not take any action that makes California's problems worse and that's why I oppose price caps," said Mr. Bush on May 29, 2001.

    Both the Justice Department and Enron tried to prevent the release of these tapes. Enron's lawyers argued they merely prove "that people at Enron sometimes talked like Barnacle Bill the Sailor."

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    What a story and a need for more regulation and tougher standards.
     
    #51     Aug 22, 2005
  2. T'dog, pretty much all medical knowledge - after a certain level - is "game of probablility". Not just with respect to risks, but with respect to all actions of the drugs. Medical literature is laden with ifs, buts, mays and maybes. Drug companies often only tentatively "know" what effect a certain drug has, and "know" even less about about the mechanism via which that drug works. What matters are the "probablities".

    Insurance companies may "know" (reasonably expect, based on the math) that x% of population-y are going to die before 75, say, but it has nothing to say about any particular individual in population-y. Similarly, with drugs, there's really no way any particular individual can accurately assess the likelihood of any particular drug killing him. All he's got to go on are "probabilities", and even these don't really tell him much. The fact is, he's in medical need. And when you're in medical need, the old "beggars can't be choosers" line comes to mind. Yes, the medication you take may ease your suffering, but it could also increase it (in other ways) or (usually indirectly) lead to your death. Welcome to life. Still better than 18th century medicene, no?

    Playing the blame game with drug companies isn't going to help anything. Sure, you have oversight, you have regulations, and you even punish the individuals responsible. But these "punitive" damages are absolutely ridiculous. Perhaps the direction that needs to be taken with drugs is to start educating people about the nature of drug medication and to stop expecting miracles from drug companies.

    My mother is on Celebrex, a COX-2 inhibitor, which is on the radar for cardiovascular risks. You know what warning is on the labeling? "May affect mental alertness". Not a word about heart complications. I'd bet other "risky" medications are the same. It's got nothing to do with with consumers being "exposed to greater risk than [they think] they are taking on". Consumers, basically, don't decide these things for themselves; the doctor does it for them.


    Good luck trying to reach agreement on a "proper" level of disclosure. Like I said, it's all a game of probablilities, so no matter what you agree on, some reform crusader can always come along and claim impropriety. These types don't care that the drug helped far more people than it "hurt" (the connection is seldom clear), they just tout the good old "if it saves one person..." line that always seems to manage to find currency among some.

    And, as per your recommendation in this thread, I've begun reading "Den of Thieves". (Interestingly, my library had it in the Fiction section. :) ) About a fifth of the way through it, and it's interesting reading, but I'm yet to come across anything particularly heinous.

    The most damning account so far is Posner's attempt to take over Fischbach, where he gets Executive Life, via Milken, to buy 10% of the company and file a 13-D, thus triggering a clause enabling Posner himself to continue buying. Executive Life is an insurance company and should have filed 13-G (instead of D), which, apparently, wouldn't have triggered the clause. To stave off the law suit, Milken gets Boesky to buy his own 10% share, with a guarantee that he (Milken) will cover any losses that may ensue. Boesky does it.

    Pushes the boundaries a little bit, but it's hardly an act of great immorality. Certainly nothing worse than the shenanigans union leaders engage in. (Yet one is an outcast, the other an oppressed working class saint.) I trust I'll be getting to some more 'meat' soon, though.
     
    #52     Aug 24, 2005
  3. spect8or,

    I recognize that there is a sizeable element of uncertainty when dealing with pharmaceuticals. But my prior post to you on the previous page of this thread was about the allegation that the company knew more than it was letting on, and that what they knew was not favorable. These are two very different issues. Again, I do not know if these allegations are sound or even if my understanding of them is correct. I was only making a point about full and proper disclosure to the extent of the manufacturer's knowledge. Only then can a potential defendant legitimately use the defense that all drug usage carries risk and refer to the various "probabilities" that both parties knew going into the deal. That's my opinion, anyway.

    Let me know what you think when you finish Den of Thieves.
     
    #53     Aug 24, 2005
  4. More from the glorious world of capitalism:

    Glaxo agrees to pay $150m in drug-price fraud case

    GlaxoSmithKline PLC will pay $150 million to settle claims it overcharged the government for two antinausea drugs, and prosecutors say they're looking into 150 cases of drug price fraud.

    Glaxo engaged in a scheme to inflate the price of Zofran and Kytril for the Medicare and Medicaid programs, which reimburse healthcare providers based on the manufacturers' prices, the government said.

    The company charged healthcare providers less for the drugs, knowing they would get to keep the difference and would be more likely to prescribe them again, the Justice Department said.

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    How come I don't see this coming from the German drug giant Bayer?
    Why is capitalism rife with fraud ?
     
    #54     Sep 21, 2005
  5. To be fair, I don't think that capitalism per se is rife with fraud. Rather, Fraud often operates under the assumed name of Capitalism. (There is a difference.) Apparently, it does so in some places more than in others, following the path of least resistance. As anything else seeking to thrive, it tends to settle and flourish in reasonably tolerant environments.
     
    #55     Sep 21, 2005
  6. Sorry, forgot about this. I finished. Verdict? Guilty as charged. Can't believe there are people out there defending these guys with a straight face.
     
    #56     Sep 23, 2005
  7. I'm glad you agree. I'm guessing (and hoping) that the people defending these guys don't know the whole story. It is a bit frightening to consider the possibility that they might actually know the full story and still defend them.
     
    #57     Sep 23, 2005
  8. Cheese

    Cheese

    Without arguing the specifics of a particular charge, what has happened is simply that the riches and rewards of capitalism are perceived as so great for corporate leaders that to assuage the masses a few of them must be selected and severely punished. Scapegoating is not new to polities or regimes of the past; it has come to America at last.

    The truth, as always, is that the fortunes of some stock market companies will wane and stumble and they may even do so precipitately. This is when there arises the need for poor dumb Joe Public investor to be served a suitable diet of corporate heads; this way he doesn't have to blame himself for his greed and stupidity and of course there are plenty of hungary office stiffs at the regulatory authorities to make up a corporate headcount to prosecute and then go collect their trophies in the courts of law so they can bask in the adoration of an approving general public.
     
    #58     Sep 25, 2005
  9. Julius

    Julius

    i would say make insider trading legal. then it would make sense for stockholders to take things in their own hands. in my view it would be best if the stockholders are actually the people running the company day to day.
     
    #59     Sep 25, 2005
  10. Elitists and those who fancy themselves as such. The former are avaricious, while the latter are merely delusional and pathetic.
     
    #60     Sep 25, 2005