(TEDGlobal 2014 transcript)
Why privacy matters
Glenn Greenwald was one of the first reporters to see — and write about — the Edward Snowden files, with their revelations about the United States' extensive surveillance of private citizens. In…
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Four years ago, the United States entered the Covid-19 pandemic. Forbes published its 34th annual billionaire survey shortly after with data keyed to March 18, 2020. On that day, the United States had 614 billionaires who owned a combined wealth of $2.947 trillion.
Four years later, on March 18, 2024, the country has 737 billionaires with a combined wealth of $5.529 trillion, an 87.6 percent increase of $2.58 trillion, according to Institute for Policy Studies calculations of Forbes Real Time Billionaire Data. (Thank you, Forbes!)
The last four years have been great for particular billionaires:
On March 18, 2020, Tesla CEO Elon Musk had wealth valued just under $25 billion. By May 2022, his wealth had surged to $255 billion. As of March 18, 2024, Musk is at $188.5 billion, more than a seven-fold increase in four years.
Over four years, Amazon founder Jeff Bezos has seen his wealth increase from $113 billion to 192.8 billion, even after paying out tens of billions in a divorce settlement and donating tens of billions to charity.
Three Walton family members — Jim, Alice, and Rob — are the principal heirs to the Walmart fortune. They saw their combined assets rise from $161.1 billion to $229.6 billion.
In 2020, only one billionaire — Jeff Bezos — had $100 billion or more. Today, the entire top ten are centi-billionaires, bringing their collective wealth to a staggering $1.4 trillion.
The only billionaire on the 2020 top 15 wealthiest Americans list to see their wealth decline in four years was MacKenzie Scott. Four years ago, on March 18, 2020, the ex-wife of Jeff Bezos had a net worth of $36 billion. It has declined to $35.4 billion due to her aggressive giving to charity.
For more details on how America’s billionaires have fared since the onset of the pandemic, check out our updates page.
It’s no secret: Americans are getting fleeced on prescription drugs. We fork over three times more than folks in other countries for the same meds while Big Pharma makes massive profits.
Yet President Biden’s modest attempt to address this travesty with a list of 10 drugs up for Medicare price negotiations through the Inflation Reduction Act (IRA) has the drug industry seething. Lobbyists are sparing no effort or expense to convince the public that price negotiations will crush innovation and keep us from getting the new medicines we need. The standard line: lower prices mean lower profits, hindering the ability of drug companies to invest in researching and developing new products.
Big drug companies rake in enormous profits without prioritizing investments in medication development or innovation.
Big Pharma has been spouting this argument for a long time. Does it hold any water? Two experts who closely study the pharmaceutical industry explain why it doesn’t. Fred Ledley and colleagues show how much taxpayers pony up through agencies like the National Institutes of Health (NIH), which fund research and provide resources for promising projects to the drug industry. William Lazonick exposes how the Wall Street-focused business models of contemporary pharmaceutical giants inhibit innovation and depend on exorbitant prices.
Bottom line: big drug companies rake in enormous profits without prioritizing investments in medication development or innovation. They simply snap up drug rights that the federal government paid for (us, in other words), focus on boosting their stock prices, and overcharge the public. Surely, Americans deserve better.
Big Pharma’s Focus on Innovation Changed Decades Ago
Fred Ledley, director of Bentley University’s Center for Integration of Science and Industry, is the senior author of a recent study of drug pricing that reveals how much taxpayer money went into research and development for the 10 drugs currently up for negotiation. Public investment, the researchers found, totaled an eye-popping $11.7 billion in NIH funding. This largesse from taxpayers saved drug the industry $1,485 million per drug.
Ledley and his colleagues are unimpressed by the argument that the IRA will have a negative impact on innovation. Why? Because the biggest drug companies haven’t been doing much innovation in a long time.
“This is a very centralized industry with the top 25 companies accounting for well over 70% of all the sales,” notes Ledley. “That’s not where the innovation is happening.” He points out that since major companies prioritize marketing and selling drugs rather than developing them, a revenue dip will hardly make a dent in innovation.
Ledley gives the example of Imbruvica, a cancer drug developed first by a small biotech company called Pharmacyclics in 2015. He points out that Pharmacyclics’ primary focus wasn’t product development but rather investing in pure innovation. “They hit on a great drug, and then they were acquired by AbbVie, which is a very large, very successful company,” says Ledley.
He explains that while AbbVie is marketing the drug, it was never the innovator, stressing that much of today’s innovation reaches Big Pharma through acquisitions. “It’s not happening organically,” he explains. “The small companies are better positioned to innovate because they aren’t as dependent upon revenues as the large ones.”
Ledley’s study shows that Imbruvica received $566 million of NIH funding as it was developed.
“It’s these little companies where the investment in innovation is happening,” underscores Ledley. “We don’t think they’re going to be adversely affected by the types of fair pricing that’s likely to come out of the Inflation Reduction Act.”
More Wall Street Schemes, Less Innovation
Economist and business historian William Lazonick argues that Big Pharma is more focused on Wall Street games to enrich executives and shareholders than making medicines.
The name of the game is stock buybacks.
Few practices have generated as much controversy and debate in recent years as that of companies inflating their stock prices by repurchasing shares of their own stock from the open market – stock buybacks, as they are called. Lazonick, who has been at the forefront of the debate, has long warned that buybacks come at a significant cost to innovation and long-term growth. He warns that resources diverted to buybacks come at the expense of productive investments like research and development, employee training, and capital expenditures. As he sees it, this myopic focus on stock manipulation tactics in the name of immediate shareholder returns and stock-based executive compensation is what really stifles long-term innovation.
Surprise! Big Pharma is a big fan of buybacks.
Lazonick delves into the case of pharmaceutical giant Merck, a company extensively examined by him and colleague Öner Tulum. He highlights that Merck’s shift away from investing in new drugs was influenced by the biotechnology revolution of the 1980s, a period when startups began attracting venture capital and going public on the stock market, often yielding substantial returns for investors even before product development. “The startups basically became the research entities,” explains Lazonick, “attracting both the university knowledge and the scientists – the people who once might have worked for Big Pharma.”
Commencing in the late 1990s, the pharmaceutical landscape witnessed a significant consolidation trend, with mergers of Big Pharma companies: “The goal was for one Big Pharma company to merge with another one that had blockbuster drugs that could mean a billion dollars a year or more in sales, with lots of patent rights left on them,” says Lazonick.
According to him, Big Pharma’s strategy boils down to this: big companies demand high prices on blockbuster patented drugs and then use profits to pay dividends and do stock buybacks rather than their own innovation. “That’s what shoots down the argument that the big companies need high drug prices for innovation,” he says. “They need high drug prices to keep up stock prices to further enrich the executives and Wall Street.”
He cites Merck’s cancer drug Keytruda as an example of Big Pharma’s reliance on a small number of blockbuster drugs for revenue. Keytruda was first developed by a company called Organon, which was acquired by Schering-Plough in 2007, itself acquired by Merck two years later. “Merck got a hold of it not by developing the drug, but by acquiring Schering-Plough in 2009,” says Lazonick. He notes that Keytruda now represents 47% of Merck’s total sales, but its original patent expires in 2028.
The problem with this business model is that when the patents on the blockbuster drugs expire, the big profits disappear. Moreover, as the consolidation of the industry has evolved, the availability of big companies with blockbuster drugs has declined, and the remaining behemoths have had to turn to investing in their own pipeline or acquiring small biotech companies to survive. The question is whether, after decades of focusing on boosting their stock prices, companies like Merck and Pfizer possess the organizational capabilities to be successful in internal drug development.
Lazonick observes that some of the major pharmaceutical firms have begun to rethink stock buybacks, realizing their situation’s precariousness. Exploring alternative revenue streams, some are considering that redirecting buyback funds to internal drug development might actually be a smart move—if they can pull it off.
Political Money Talks, Loudly
If the industry’s longstanding assertion that exorbitant drug prices are necessary for innovation is unfounded, how do they get away with exploiting the public with price-gouging?
Political scientist Thomas Ferguson, a leading expert on money and politics, explains that the main thing preventing the taxpayers from getting fair drug prices and a return on their investment is the enormous sums Big Pharma has invested in buying the favor of politicians.
“Getting fair drug prices is not a technical problem at all,” says Ferguson. “It is almost entirely a question of political will, and that is a question of political money to the leadership of both major parties.”During a typically rambling and incoherent interview last week, Trump admitted he would cut Social Security and Medicare if reelected. “There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements.”
Trump has tried to walk back the remarks, saying that when he used the word “cutting” he didn’t actually mean “cutting,” and that Social Security has a lot of waste. (In fact, Social Security is well managed, and theft or fraud is rare.)
But there’s no question Trump and his Republican allies want to cut Social Security and Medicare.
Here’s why. At the heart of their economic agenda — at least the portion they’re sharing with their super-wealthy backers — is another giant tax cut for the super-wealthy and big corporations.
The problem is that this tax cut would cause the federal budget deficit to explode — as did their last tax cut for the wealthy — unless Social Security and Medicare are cut. (Remember that as president, Trump repeatedly included cuts to Social Security and Medicare in his official budget proposals.)
This is why Trumpers have been ramping up calls for cuts in Social Security (or raising the age of eligibility, which is the same thing).
Last week, Daily Wire founder and professional bloviator Ben Shapiro — oblivious to the fact that millions of Americans do hard work that takes a toll on their bodies — urged that the retirement age be raised. “No one in the United States should be retiring at 65 years old. Frankly, I think retirement itself is a stupid idea unless you have some sort of health problem.” Turning Points USA founder Charlie Kirk echoed Shapiro: “I’m not a fan of retirement. I don’t think retirement is biblical.”
I want to be clear with you about Social Security. (I was once a trustee of the Social Security Trust Fund, so I know about this issue.)
Even without another Trump Republican tax cut for the rich, America still faces a pending problem financing Social Security. (Medicare is less problematic because the rise in health care costs has slowed, probably due to the Affordable Care Act.)
That’s because the American population is aging, with a rising ratio of retirees receiving Social Security benefits to workers paying into Social Security.
The Congressional Budget Office expects that over the next 20 years, spending on Social Security and Medicare will rise by about 3 percentage points of GDP.
In their annual report, the trustees of the Social Security Trust Fund said that Social Security will be able to pay full benefits for another decade but thereafter faces a significant funding shortfall. Unless something changes, after 2034 it will be able to pay only about 80 percent of scheduled benefits.
But this pending problem in no way requires cuts to Social Security benefits or increases in the retirement age.
In sharp contrast to Trump, Biden correctly asserts in his new budget that Social Security (and Medicare) can remain solvent by raising taxes on high incomes rather than by cutting benefits.
The problem isn’t that the giant baby-boom generation is sucking up too many Social Security benefits. The Social Security trustees anticipated the boom in boomer retirements. This is why Social Security was amended back in 1983, to gradually increase the age for collecting full retirement benefits from 65 to 67. That change is helping finance the retirements of boomers (like me).
So what did the trustees fail to anticipate in 1983 when they raised the retirement age for collecting full benefits? Answer: the degree of income inequality in 21st century America.
Put simply, a big part of the American working population is earning less than the Social Security trustees (including me) anticipated decades ago — and therefore paying less in Social Security payroll tax.
Had the pay of American workers kept up with what had been the trend decades ago — and kept up with their own increasing productivity — their Social Security payroll tax payments would have been enough to keep the program flush.
At the same time, a much larger chunk of the nation’s total income is going to the top than was expected decades ago.
Here’s the thing: Income subject to the payroll tax is capped. Not a single dollar of earnings in excess of the cap is subject to Social Security payroll taxes. This year’s cap is $168,600.
Which means, for example, that Jeff Bezos finished paying all his Social Security payroll taxes due this year at around 7 minutes into January 1.
The Social Security cap is adjusted every year for inflation, but the adjustment is tiny compared to what’s happened to incomes at the top.
As the rich have become far richer, more and more of the total income earned by Americans has become concentrated at the top. Therefore, more and more total income escapes the Social Security payroll tax.
The obvious solution to Social Security’s funding shortfall, therefore, is to lift the cap on income subject to the Social Security payroll tax, so the super-rich pay more in Social Security taxes.
To make sure it’s the super-rich — and not the upper-middle class — who pay, it makes sense to eliminate the cap altogether on earnings in excess of, say, $400,000.
As it happens, Biden’s plan does exactly this.
So there you have it: Trump and his regressive mouthpieces want to cut Social Security so they can give another giant tax cut to the super-rich.
Biden wants to save Social Security by having the super-rich — who have become far richer over the past several decades — pay more Social Security taxes.
The contrast couldn’t be more obvious or more important. Please help get the word out.
While speaking about the potential loss of U.S. auto manufacturing jobs to foreign countries, former President Donald Trump said if he isn't elected, "it’s going to be a bloodbath for the country."
The post Trump’s ‘Bloodbath’ Comment appeared first on FactCheck.org.
President Joe Biden said he has caught former President Donald Trump admitting that he wants to cut Social Security and Medicare. The Trump campaign said, in context, Trump was talking about cutting waste and fraud in those programs – not benefits.
The post Trump’s Comments About ‘Cutting’ Entitlements in Context appeared first on FactCheck.org.
Q: Is one day isolation sufficient to stop forward transmission of COVID-19?
A: People with COVID-19 could potentially transmit it to others well beyond a day after developing symptoms or testing positive. New guidance from the CDC advises people to isolate until they have been fever-free and with symptoms improving for at least 24 hours, and then take precautions for five days, which covers the period when “most people are still infectious.”
FULL ANSWER
The Centers for Disease Control and Prevention on March 1 updated its guidance on preventing the spread of respiratory viruses,
The post Explaining the New CDC Guidance on What To Do if You Have COVID-19 appeared first on FactCheck.org.
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(TEDGlobal 2014 transcript)
Why privacy matters
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