President Obama suppresses First Amendment rights at Political Event

Posted by PITHOCRATES - July 28th, 2013

Week in Review

When George W. Bush was president he faced a lot of heckling.  Heck, he even had someone throw a shoe at him.  Tough crowds.  But President Obama doesn’t seem to be suffering these tough crowds like Bush.  Guess that means President Obama is just more loved than George W. Bush (see College Republicans Denied Admittance to Obama Speech by Nathan Harden posted 7/25/2013 on the National Review).

Christopher White of The College Fix reports that students wearing “Tea Party T-Shirts and others who wore patriotic or Republican-inspired clothing” were turned away at the door under the guise of security concerns, despite the fact that they held tickets to the event.

Or it could mean they only allow enthusiastic supporters of the president into these rooms when he speaks.  Suppressing the First Amendment right of free speech.  Sort of like they do in North Korea.  The former Soviet Union.  China under Mao.  Nazi Germany.  Cuba.  And any other nation led by a cult of personality.  Where they use a massive propaganda machine and state oppression to make sure people only cheer at their dear leader.  No matter how much the people may hate him.  Or her.

Love him or hate him George W. Bush was the real deal.  What you saw was what you got.  Unlike with President Obama.  Where his handlers, friends in the mainstream media, Hollywood, television, the music industry, etc., work tirelessly to show their love of the dear leader.  To encourage others to love him, too.  To sustain the cult of personality.  But if you dare criticize him you’ll find yourself getting a colonoscopy from the IRS before you can say “Tea Party.”  Sure, not as unpleasant as it was in Nazi Germany or the Soviet Union, but unpleasant enough.  Enough to make people think twice about criticizing the dear leader.

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Unfunded Pension and Retire Health Care Liabilities are a Problem for more Cities than just Detroit

Posted by PITHOCRATES - July 28th, 2013

Week in Review

The problem all our big cities are having is the cost of pension and retiree health care for their public sectors.  These cities made ridiculous promises during their contract negotiations with their public sector unions.  Promising them generous pension and health care benefits for life for retirees.  Benefits a later generation would have to pay for.  Which is why these cities are imploding under these costs.  And why Detroit filed bankruptcy.  These cities never put away the money for these future benefits because they were just too costly.  Besides, they no doubt thought, when the bill comes due it will be someone else’s problem.  And that’s where we are today.

How bad is it?  Really bad.  Especially in Detroit.  A city that has about half the population it had when it entered into those agreements.  And nowhere near the automotive industry it had back then.  A race riot in 1967 caused a white flight.  And the black middle class would follow years later.  As the jobs left Detroit for the suburbs.  And the people followed those jobs out of the city.  Just decimating the tax base that has to pay those unfunded benefits (see The Retirement Surprise In Detroit’s Bankruptcy by Robert C. Pozen posted 7/25/2013 on Brookings).

When Detroit recently filed for bankruptcy, one number surprised a lot of observers–$6.4 billion in other post-employment benefits (OPEB). OPEB is primarily comprised of unfunded obligations to pay health care costs for municipal employees.

By contrast, the unfunded pension obligations of Detroit were $3 billion–less than half the size of its OPEB…

The Pew Charitable Trust did a study in 2013 of both pension and OPEB shortfalls in the 30 largest cities in the United States. The three cities other than Detroit with the largest pension shortfalls were:

$14,302 per city household in New York City;
$12,170 per city household in Philadelphia; and
$11,389 per city household in Portland, Oregon.

But the shortfalls for OPEB, primarily healthcare obligations, were significantly larger. According to Pew, the three cities other than Detroit with the largest OPEB shortfalls were:

$22,857 per city household in New York City,
$18,962 per city household in Boston
$13,487 per city household in San Francisco.

These numbers are staggering.  Based on the U.S. Census, there are about 264,209 households in Detroit.  If you divide the total unfunded pension and health care costs by the number of households you get $35,578.  That is, to pay this outstanding debt it will cost each household in the city of Detroit $35,578.  Which will be very difficult to do when the median household income in Detroit is $27, 862.

Those in the union say these people are owed their retirement and health care benefits.  Because they made a deal.  But they didn’t make a deal with the people currently paying the taxes.  What this amounts to is generational theft.  Like all those municipal pensions and health care benefits.  For when they made those generous agreements the people who ultimately had to pay them weren’t in the room when they signed those contracts.  In fact they weren’t even born yet.  The people demanding their benefits now and their union representation apparently had no problem sticking it to future generations.  They were the ones in the room when they signed those contracts.  And didn’t give the people stuck paying for their benefits a second thought.

All big cities with big public sectors have the same problem.  They may not be ‘Detroit’ bad but they have bills that they won’t be able to pay.  There are about 100 U.S. cities with a population of a quarter million or more.  If each one of them had this problem that’s about $1 trillion in unfunded benefits just in these cities alone.  With trillion dollar deficits already, Obamacare coming on line and Social Security and Medicare projected to go broke the federal government just won’t be able to bail these cities out.  Perhaps bringing the days of generational theft to an end.  Which may be the only good thing to come from a wave of municipal bankruptcies.

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One Pharmaceutical Company spent on Average $12 Billion per new Drug they brought to Market

Posted by PITHOCRATES - July 28th, 2013

Week in Review

People hate pharmaceutical companies.  They think they’re gouging them on the price of their medication.  If the people only knew what it cost to bring a new drug to market (see The Truly Staggering Cost Of Inventing New Drugs by Matthew Herper posted 2/10/2012 on Forbes).

The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion…

Bernard Munos of the InnoThink Center for Research In Biomedical Innovation…divided each drug company’s R&D budget by the average number of drugs approved…

The range of money spent is stunning. AstraZeneca has spent $12 billion in research money for every new drug approved, as much as the top-selling medicine ever generated in annual sales; Amgen spent just $3.7 billion. At $12 billion per drug, inventing medicines is a pretty unsustainable business. At $3.7 billion, you might just be able to make money (a new medicine can probably keep generating revenue for ten years; invent one a year at that rate and you’ll do well).

…the main expense is failure.

Why include failure in the cost? Right now, fewer than 1 in 10 medicines that start being tested in human clinical trials succeed…

It really does cost billions of dollars to invent new medicines for heart disease, cancer, or diabetes. The reality is that the pharmaceutical business is in the grip of rising failure rates and rising costs. We can all only hope that new technologies and a better understanding of biology will turn things around.

This is why our medicines are so expensive.  And why we have to wait for patents to run out before cheap generics hit the market.  Because whoever will manufacture those cheap generics didn’t have to spend $12 billion to bring the drug to market.

If drug companies can’t recover these massive costs they may do something worse than charge us an arm and a leg for a drug that will save our life.  They may stop bringing drugs that can save our life to market.

People say the profit incentive shouldn’t guide something as important as health care and medicine.  But what is the alternative?  Have the government spend $12 billion to develop a life-saving drug?  Because they’re so smart and motivated by social responsibility?  Instead of profit?  Yeah, they sure can pick winners in the private sector.  Like Solyndra.  If you’re not familiar with the name it’s because Solyndra filed bankruptcy.  Because their solar panels were the wrong solar panels to bet on in the private sector.  But the federal government bet $535 million in loan guarantees because they were so sure that Solyndra was a winner.  And their bankruptcy shows why we don’t want the government spending $12 billion to develop a life-saving drug.  For the federal government is just not good at bringing things to market.

So if we want these life-saving drugs we have to let these drug companies recoup the $12 billion they spent to bring a new drug to market.  For the sad reality is that $12 billion is a bargain compared to what the government would spend.

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Dirigibles may do the Heavy Lifting in Alaska

Posted by PITHOCRATES - July 28th, 2013

Week in Review

If you’ve watched Ice Road Truckers you’ve learned that it isn’t easy to move freight in Arctic regions.  Like Alaska.  Because there aren’t a lot of roads or bridges in Arctic regions.  Hence the ice roads.  Crossing rivers, lakes and oceans in the winter when they’re frozen over.  But even these roads cover only a fraction of Alaska’s sprawling country.  Which is why the airplane dominates in Alaska.  To move freight.  And people.  Making for some really high transportation costs.  Raising the costs of everything the good people of Alaska buy (see Hometown U: Could blimps find a place in Alaska skies? by Kathleen McCoy, Hometown U, posted 7/27/2013 on Anchorage Daily News).

Rob Harper at AUTC [Alaska University Transportation Center] pointed me to a new study the Center and UAA’s Institute for Social and Economic Research (ISER) partnered on, looking at the effect of higher transportation fuel prices. He called it a true eye-opener on the ever-rising cost of moving goods to and around Alaska. Every household and business is affected. No one thinks fuel prices will go down again.

ISER economists have often looked at spiking heat and electricity costs, but this was a first attempt to document higher transportation costs rippling through Alaska’s economy. In 2010, economist Ginny Fay and her study colleagues reported, Alaska’s per capita energy consumption was triple the national average.

Alaska fuel prices increased more than 25 percent between 2009 and 2010. Consumers responded by buying fewer cars and airplane tickets. They also paid higher prices for everything they did buy, from food to clothing…

Industries that use the most fuel are the hardest hit. In Alaska, that’s aviation, which uses 90 percent of it, Fay wrote.

And this in a state that exports oil.  But while they may be rich in oil reserves they have no refinery capacity.  Which means refined aviation fuel, diesel and gasoline has to be brought into Alaska.  And unlike the lower 48, that get their refined petroleum products via pipelines, Alaska must rely on more costly modes of transportation.  Shipping it over land or over water in smaller batches at greater prices.

Here’s where those slow, graceful dirigibles wedge their way back into our conversation. Being lighter than air thanks to nonflammable helium, and moving much slower than planes, they consume a lot less fuel. One research study for the military in 2009 compared an hour of flight time in an F-16 ($8,000) to an hour of flight time in a dirigible (less than $500).

Traditional air cargo is the most expensive way to move freight on a fuel-cost-per-ton-mile basis. Fay’s analysis showed that rail is cheapest, followed by trucks, then barge, ships and ferries. But Alaska only has 500 miles of rail. Our ships and barges often leave the state less than full, raising the cost per ton-mile. And we only have two roads, one north and one south. Most of Alaska is nowhere near a road or a coastline. So we’re back to air cargo.

Rail is the cheapest way to move heavy freight because of steel wheels on steel rails.  There’s very little friction so locomotives can pull a very long train consist full of heavy freight.  And they move fast.  Day or night.  In any kind of weather.  So they can quickly carry revenue-producing freight nearly around the clock.  Trucks are fast like trains but carry far less per load.  And whereas railroads change out train crews to keep trains rolling around the clock most long-haul trucks are privately owned.  And when the driver reaches his legal limit of driving time per day he or she has to park their rig and rest for a mandatory rest period.  Thus reducing the revenue-miles of trucks compared to trains.

Barges, ships and ferries can carry larger loads than trucks but loading and unloading takes time.  Time they can’t earn revenue.  Also, they travel slower than trains or trucks.  Limiting the amount of revenue-earning trips they can make.  Whereas air cargo is the fastest way to move cargo.  Allowing many revenue-earning trips.  But the planes flying in Alaska carry a fraction of the cargo trains, trucks, barges, ships and ferries can carry.  Greatly increasing the fuel-cost-per-ton-mile.  Which makes the dirigible such an attractive alternative in Arctic regions like Alaska.

The dirigible doesn’t need a road or waterway.  It can travel year round weather permitting.  It’s slow but because it burns so little fuel the cost per trip is nothing compared to an airplane.  It can’t carry as much as a train, barge or ship but it can go where a train, barge or ship can’t.  And it can travel as the crow flies.  A straight line between two points.  Something that only an airplane can do.  But it can do it for a far lower fuel-cost-per-ton-mile than an airplane.

There is little downside of using a dirigible to ship freight in these inhospitable Arctic regions.  Unless you’re a fan of Ice Road Trucking.  For a dirigible could probably carry anything a truck can carry.  And without a road, paved or ice, to boot.  Putting the ice road truckers out of business.

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Decriminalize Marijuana and the Kids will Smoke more and Eventually Vote Democrat

Posted by PITHOCRATES - July 28th, 2013

Week in Review

Teenagers typically vote Democrat.  In part because of the liberal bias in our public schools.  And in our colleges.  As well as in the mainstream media.  In Hollywood.  In television.  And the music industry.  These things do a lot to shape the way our kids think.  But there is another reason why our kids become Democrat voters.  Because it is the left that is handing out free birth control.  While their parents say ‘no’ the left says ‘go ahead.  Have fun.’  And then there is the push by the left to decriminalize marijuana.  Something else these kids’ parents say ‘no’ to.  While the left says ‘go ahead.  Have fun.’  Even if it may be harmful to them.  For what’s a few burnt brain cells in exchange for the youth vote (see Pot’s march toward mainstream by Alicia A. Caldwell And Nancy Benac, The Associated Press, posted 7/27/2013 on The Vancouver Sun)?

It is a moment in the U.S. that is rife with contradictions: People are looking more kindly on marijuana even as science reveals more about the drug’s potential dangers, particularly for young people…

Exploration of the potential medical benefit is limited by high U.S. government hurdles to research. Washington policy-makers seem reluctant to deal with any of it.

So we know it’s bad for the children.  But we really don’t know how bad.  For it is the only medicine (medical marijuana) ever allowed without proving the drug through clinical trials.  To make sure the drug works.  And it doesn’t cause irrevocable harm.  No pharmaceutical is allowed this luxury when bringing a new drug to market.  And we know how dangerous cigarettes and alcohol are.  But not marijuana.  No.  That drug we just accept on faith that it will cure us.  Besides just giving us a great high.

Opponents of pot are particularly worried that legalization will result in increased use by young people.

“There’s no real win on this from a political perspective,” says Sabet. “Do you want to be the president that stops a popular cause, especially a cause that’s popular within your own party? Or do you want to be the president that enables youth drug use that will have ramifications down the road?”

If anyone legalizes it will be the left.  Who are always attacking the right for hating children whenever they say we can’t afford to spend any more money.  But smoking pot harms kids.  And the left is okay with that.

“Having a regulated system is the only way to ensure that we’re not ceding control of this popular substance to the criminal market and to black marketeers,” says Aaron Smith, executive director of the National Cannabis Industry Association, a trade group for legal pot businesses in the U.S. See Change Research, which analyzes the marijuana business, has estimated the national U.S. market for medical marijuana alone at $1.7 billion for 2011 and has projected it could reach $8.9 billion in five years. Overall, marijuana users spend tens of billions of dollars a year on pot, experts believe…

In Washington state, the Liquor Control Board is drawing up rules covering everything from how plants will be grown to how many stores will be allowed. It expects to issue licences for growers and processors in December, and impose 25 per cent taxes three times over – when pot is grown, processed and sold to consumers…

Marijuana advocates in Washington state…have projected the legal pot market could bring the state a half-billion a year in revenue…

Decriminalizing marijuana will make it easier for kids to smoke it.  Because it’s easier to get things that are only illegal for people under a legal age.  As opposed to being completely illegal.  Kids aren’t legally allowed to smoke cigarettes but they do.  In fact, it is fair to say kids smoke more cigarettes than marijuana.  Because cigarettes aren’t completely illegal.  They’re only illegal for kids.

So cities suffering under the crushing costs of their public sectors are looking at a windfall of tax revenue by decriminalizing marijuana.  And don’t seem to have a problem of people spending more of their money on getting high instead of saving for their retirement.  Paying for their kids’ education.  Or putting food on the table.  It was the same thing when cities scrambled to legalize gambling.  Because they wanted the tax revenue.  Despite people gambling away money that they should have spent on their family.  No doubt these cities would be disappointed if more kids didn’t start smoking marijuana.  So that when they grew into adults they would already have a healthy drug habit the city could tax.  To help pay for the crushing costs of their public sectors.

Of course, the states and cities will never see those rosy projections of tax revenue.  Because when they “impose 25 per cent taxes three times over” they will raise the price of legal marijuana so much that it will benefit, not hurt, the black market for marijuana.  Even if the black market price is below the official taxed price.  Why?  Because people smuggling cigarettes from a low-tax state to a high-tax state don’t do the time drug dealers do when caught.  Encouraging more people to sell a legal substance illegally.  To cheat the state out of that tax revenue.  And pot smokers, especially the kids, will turn to the black market for their pot.  Where it will be even more readily available when the growing, transporting and selling of marijuana is no longer illegal.  Like cigarettes.  Which kids have no problem buying.

California steps back California’s experience with medical marijuana offers a window into pitfalls that can come with wider availability of pot.

Dispensaries for medical marijuana have proliferated in the state, and regulation has been lax, prompting a number of cities in the state to ban dispensaries…

In May, the California Supreme Court ruled that cities and counties can ban medical marijuana dispensaries.

A few weeks later, Los Angeles voters approved a ballot measure that limits the number of pot shops in the city to 135, down from an estimated high of about 1,000. By contrast, whitepages. com lists 112 Starbucks in the city…

In 2010, California voters opted against legalizing marijuana for recreational use, drawing the line at medical use.

But Jeffrey Dunn, a Southern California lawyer who has represented cities in pot cases, says that in reality the state’s dispensaries have been operating so loosely that already “it’s really all-access.”

“What we’ve learned is, it is very difficult if not impossible to regulate these facilities,” he said.

The people may have voted for marijuana in California.  But the people didn’t like living in a Cheech and Chong movie surrounded by stoners.  And seeing a pot shop every time they turned around.  Which is the last thing a parent wants.  To have it so much easier for their kids to smoke pot.  Or eat it.

A Denver-area hospital, for example, saw children getting sick after eating treats and other foods made with marijuana in the two years after a 2009 federal policy change led to a surge in medical marijuana use, according to a study in JAMA Pediatrics in May. In the preceding four years, the hospital had no such cases.

The Colorado Education Department reported a sharp rise in drugrelated suspensions and expulsions after medical marijuana took off.

“What we’re doing is not working,” says Dr. Christian Thurstone, a psychiatrist whose Denver youth substance abuse treatment centre has seen referrals for marijuana double since September. In addition, he sees young people becoming increasingly reluctant to be treated, arguing that it can’t be bad for them if it’s legal.

You decriminalize marijuana and, of course, kids will see that as an admission from the state that smoking pot can’t be bad for you.  So more kids use the drug.  Ending up in the hospital.  Getting suspended or expelled from school.  Or in drug rehab for a pot addiction.  But the left is okay with this.  Because, after all, it is the right that hates kids.  Whereas the left is the cool uncle that will let their niece and/or nephew smoke a joint.  Which is why the kids love the left.  They are always helping them do things their parents won’t let them do.

Legalization foes Opponents counter with a 2012 study finding that regular use of marijuana during teen years can lead to a long-term drop in IQ, and another study indicating marijuana use can induce and exacerbate psychotic illness in susceptible people. They question the notion that regulating pot will bring in big money, saying revenue estimates are grossly exaggerated…

They warn that baby boomers who draw on their own innocuous experiences with pot are overlooking the much higher potency of today’s marijuana.

In 2009, concentrations of THC, the psychoactive ingredient in pot, averaged close to 10 per cent in marijuana, compared with about four per cent in the 1980s, according to the National Institute on Drug Abuse.

So the left will sacrifice our children for money.  So they can pay for those costly public sectors breaking their budgets.  They won’t take on the public sector unions.  But they will sacrifice our kids.  Because kids don’t pay taxes.  Or vote.  Yet.  But when they do they hope they will remember their cool uncle when in the voting booth.

The baby boomers, who filled the theaters watching Cheech and Chong movies, look back to their days of pot smoking with nostalgia.  Thinking they turned out all right.  And so will the younger generation.  As they anxiously wait for the decriminalization of marijuana so they can buy more.  And smoke more.  Loving the high potency of the new stuff.  Not at all like the stuff they grew up smoking.  Which still fried their brains.  Providing a head start to what dementia will do to them as they reach their golden years.

Kids will on average start smoking at an earlier age.  More of them will smoke because if it’s legal it can’t be bad for you.  And they will be smoking a more potent marijuana than their parents smoked.  Accelerating the damage pot smoking will do to them compared to what it did to their parents.  But the left is okay with that.  Because it is the right that hates the children.  Not the cool uncle.  At least that’s how the youth vote will see it.  Which is all that matters to the left.

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