Archive | April, 2013

STOCK ACT (enacted April 4, 2012)

29 Apr

Perhaps you missed the news this month about the STOCK Act.

Last year, Congress passed the Stop Trading On Congressional Knowledge Act (STOCK) in an attempt to impede (deter?) members of Congress and thousands of high level public officials from trading stocks using inside information.

Fortunately for Congress, the National Academy of Public Administration completed their analysis of the legislation. This organization trusted to make the right decisions, while being totally funded by Congress, determined that the STOCK Act should be repealed. They were also supported by none other than The Senior Executives Association (SEA). The SEA, representing the career executives of the Federal government, was also pushing for repeal.

To be fair, the reporting of these transactions is still required annually in paper form, as before. (Ethics in Government Act of 1978) The STOCK Act simply would make the information more readily available. It would have been available online. The President signed what would delay the implementation of a searchable system for eight months.

Signed into law:

“S. 716, which eliminates the requirement in the STOCK Act to make available on official websites the financial disclosure forms of employees of the executive and legislative branches other than the President, the Vice President, Members of and candidates for Congress, and several specified Presidentially nominated and Senate-confirmed officers; and delays until January 1, 2014, the date by which systems must be developed that enable public access to financial disclosure forms of covered individuals.”

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Debt to GDP Ratios and Excel

26 Apr

Recently some Harvard economists (Reinhart and Rogoff) were found with an excel error within their paper (“Growth in a Time of Debt”) they had written in 2010. The paper had gained much publicity prior to this revelation as it was often quoted during economic policy discussions. The paper’s conclusion suggested that the higher debt to GDP ratios that countries ran, the less chance they had of economic growth.

Although the error did impact the numbers slightly, the conclusion of the paper remained intact. No real policies were affected in the process and it remains generally accepted that countries that operate with a lower debt to GDP number have a better shot at economic growth.

Robert J. Samuelson summarized the situation quite well in :

“The Reinhart Rogoff Brawl”

Drug Costs and By-Passed Patents

24 Apr

In foreign countries, drugs are usually much less expensive. Recently India passed laws circumventing the patents on cancer treatment drugs entirely in order to mass produce generics for their population.

Some may say that is not fair. After all, how are the pharmaceutical companies going to recoup their R&D?

In a 2008 study published in the PLOS Medical Journal in 2008, drug companies spend twice as much on advertising as they do on research. That process was so successful, when re-looking at the expenses in 2012, that ratio had increased to 19. The BMJ Group (Owned by the British Medical Association) suggests that part of the reason for this, is the lack of successful new product development. A good reference to this topic is found on the Huffington Post.

Pharmaceutical Companies Spent 19 Times More On Self-Promotion Than Basic Research: Report

Direct To Consumer (DTC) Marketing of drugs is only legal in the US and New Zealand.  Any pullback of the advertising budgets from the pharmaceutical companies will affect either the quality, or quantity of original content. Perhaps the advertising revenues can be focused on improving the quality of the existing television content?