Thomas Friedman did his usual Sunday morning stretch, waxing eloquently on a new era in:

"in which to be a president, a governor, a mayor or a college president will be, on balance, to take things away from people."

It's not clear why this would be the case. After all, productivity is growing at a rate of 2.0-2.5 percent annually. This should mean that we are getting richer, not poorer, through time. But Thomas Friedmanland bears little resemblance to the world of gravity and arithmetic that the rest of us inhabit.

It's also not clear how he thinks the future will be different from the past in this respect. In 1980, non-defense government spending at all levels was 14.3 percent of GDP. It was the exact same share in 2007 before the recession hit. There have been no big government give-aways for the last three decades.

Friedman begins by celebrating the developments in technology that are allowing individuals to produce books, music, videos and other creative work and directly distribute them without the mediation of publishers, the recording industry or movie companies. He then comments:

"The leading companies driving this trend — Amazon, Facebook, Microsoft, Google, Apple, LinkedIn, Zynga and Twitter — are all headquartered and listed in America. Facebook, which didn’t exist nine years ago, just went public at a valuation of nearly $105 billion — two weeks after buying a company for $1 billion, Instagram, which didn’t exist 18 months ago."

The rest of the piece then warns us that such companies may not be headquartered in the United States in the future. It's a bit hard to follow the story line here.

First, it is not entirely clear how much U.S. companies have driven this trend. Important innovations such a Skype and Linux have been developed elsewhere.

And, the success of several of these companies does not necessarily stem from being innovative. For example, most of Amazon's profits have been attributable to its effective lobbyists. They have managed to exempt most of its sales from state and local sales tax in most of the country. This enormous subsidy, at the expense of traditional retailers, has often exceeded its profit margin.

The Washington Post showed that it clearly does not believe in free market fundamentalism. It ran an article on a bill proposed by Vermont Senator Bernie Sanders to replace patent monopolies for prescription drugs to treat AIDS with a prize system. The headline and second sentence of the piece described the system as "radical."

Under this proposal, the government would pay to buy the patents for successful drugs. These drugs would then be placed in the public domain so that the drug could be produced as a generic in a free market. In most cases eliminating the patent monopoly would reduce the price of the drug by more than 99 percent. Drugs that would sell for tens of thousands of dollars a year with patent protection would sell for a few hundred dollars in a free market.

It is not clear why this idea would be viewed as "radical." Usually the Post and other pillars of the political establishment are major proponents of free market economics. (There are other mechanisms that can be used to replace the funding that comes from patent monopolies. For example, the government could increase the $30 billion that it already spends each year on biomedical research through the National Institutes of Health.)

The article included some peculiar comments that may have misled readers. For example, it noted that an AIDS drug that sells for $25,000 a year here can be purchased for $200 a year in sub-Saharan Africa. It then told readers:

"The huge price gap is a result of a deal struck with brand-name U.S. drugmakers under the President’s Emergency Plan for AIDS Relief, which provides anti-retroviral drugs to 3.9 million people in developing countries. In 2003, to reach more patients, brand-name drugmakers agreed to let overseas drugmakers sell generic, low-cost versions of their patented AIDS drugs outside the United States."

Actually, the price gap is due to patent protection in the United States. Generic manufacturers have the right to produce drugs without patent protection in large parts of the developing world. They don't need permission from U.S. drug companies. (They are losing this right in the next decade.)

Mayo 2012, Rebecca Ray y Sara Kozameh

Mark WeisbrotThe Guardian Unlimited, May 18, 2012En Español

Matt Miller is the perfect embodiment of the Washington punditry. In his weekly column in the Washington Post he complains about being a victim of the "False Equivalency Police." These would be the people who point out that many of the assertions that he and other professional centrists make about the Democratic and Republican parties being taken over by extremists are not true.

It is only the Republican Party that has moved to the extreme right, the Democratic Party has actually moved towards the center. Apparently the people who have the gall to call attention to this fact and undermine the story of the professional centrists, have sufficiently angered Miller that he now thinks of them as a type of police force. Life is tough for WAPO columnists.

I will always have fond memories of Matt Miller as the one person who left me completely speechless in a debate. The year was 1996 or 1997. Miller and I were on a public radio show debating the proposal, which was then popular in Washington, of reducing the annual cost of living adjustment for Social Security by roughly 1 percentage point.

Their argument was that the consumer price index (CPI), which is the basis of the indexation, overstated the true rate of increase in the cost of living. I was pointing out that the evidence for this claim was actually quite weak. Furthermore, such cuts would be a substantial hit to an elderly population that was already not doing very well.

One of the other guests on the show was Wyoming Senator Alan Simpson. In his usual tactful way, Simpson went on a tirade saying that the estimate that the CPI overstated inflation by 1.0 percentage point was way low. He said that it was more like 1.5 percentage points and that he has economists who say that it is more than 2.0 percentage points. He concluded by saying that pretty soon our grandchildren will all be living in chicken coops.

Jake Johnston
Caribbean Journal, May 17, 2012