JimPinto.com - Connections for Growth & Success™
No. 209 : 5 May 2006

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Rampant drug mongering by big drug-companies

Have you noticed the proliferation of TV ads by the large drug and pharmaceutical companies? The instant do-it-yourself diagnoses of rare illnesses continue to soar because the drug makers are "disease-mongering" to boost sales.

Most doctors agree that treating "the risk of a risk" is completely wrong. The new phenomenon of "disease-mongering" is the creation or exaggeration of illnesses to sell more drugs. And drug-mongering is on the rise. It starts when a drug is developed for some rare condition, and then heavily promoted disease-awareness campaigns are launched, leading to increasing numbers of diagnoses and prescriptions.

The list of "risk of a risk" suspects includes restless legs syndrome, social anxiety disorder, premenstrual dystrophic disorder, irritable bowel syndrome, female sexual dysfunction, pre-hypertension and others. Just watch TV for a few hours and you'll discover more.

Today, the problems of normal life - like sadness, shyness, forgetfulness, and occasional upset stomach are being turned into "medical conditions". Before Viagra was introduced, erectile dysfunction was a medical problem only when associated with an underlying biological cause, such as diabetes or prostate cancer. Now Pfizer claims that half of all men over 40 have problems getting or maintaining an erection.

Shyness is now termed "Social anxiety disorder" and Paxil has been "approved" as a treatment. A "disease-awareness" campaign about "being allergic to people" has jumped estimates of how wide-spread this problem was.

These days, the definition of serious diseases is expanding to cover more and more people. For example, Bipolar disorder, a psychological problem once thought to affect only 0.1% of the population, is now being diagnosed at 5-10% rates through expanded diagnostic criteria. In the US, children as young as 2 are being diagnosed as bipolar, even though classic symptoms are not really diagnosable.

What are the drug makersí responses? Well, here's a sampling:

  • "We're only trying to educate patients who are struggling with serious illnesses."
  • "We realize that not every medicine is for every person."
  • "The labels contain important information about whether it's appropriate, and we're confident that doctors consulting with patients will assess their health-care issues and the risks and rewards and make an appropriate decision."
Now, we all know that the drug-makers operate the deepest, best-financed, most established lobbying programs in government. So, how will their stranglehold on America ever be broken? By who?

Click Drug makers are "disease-mongering" to boost sales

Click Pinto editorial - pill pushing proliferates

Click Economist - Pushing pills

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Gas crisis highlights American Energy Independence

Ron Bengtson has been preaching American energy independence for a long time via his website. Now that gasoline in American has jumped to well over $ 3 a gallon, it's clear that the problem - and the challenges - are getting more attention. And a lot more people are clicking over to Ron Bengtson's AmericanEnergyIndependence.com website (web link below).

I must mention here that gas (petrol) already costs about $6.50 a gallon in Europe. And clearly this is NOT the end. Whatever the pundits predict about ethanol, hydrogen and other energy alternatives, those things are years away. And the emergence of China, India and other growing economies simply exacerbates the problems.

Most people acknowledge that about half of the price of gasoline goes to the primary suppliers of crude oil - which includes Iran. So, while we are concerned that the Iranians are developing nuclear weapons, we continue to fund their growth through escalating oil payments.

At the other end of the chain, oil companies are all declaring record profits and they justify gouging with specious arguments. Exxon's Chairman receives a $400 million retirement package, one of the largest in history. Politicians rant and rave, but nothing happens. And prices and profits continue to move up steadily, along with boosted funding for Iran and others.

There's a good side to all of this - which I covered in a recent "Pinto's Points" in ISA's InTech eNews. Skyrocketing prices are an incentive for developing other fuels. Many new technologies are beginning to tap energy supplies that have nothing at all to do with oil. You can review a lot of these on the American Energy Independence website (weblink below).

Will new energy sources take a long time to emerge? Well, it's hard to see demand for oil surviving long at current costs. Technology breakthroughs are coming quickly, while alternatives like the hybrid car are emerging fast - yielding vastly improved mileage. Have you bought your Toyota Prius yet? You'll notice that there's a long waiting list.

Click Visit the American Energy Independence website

Click ISA InTech eNews - Why high oil prices are good

Click Audio Podcast of ISA eNews - Why high oil prices are good

Click High gas prices pinch Europe

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Moderating CEO compensation

The retirement package of Exxon's CEO generates very little beyond jokes. And America's top bosses continue to receive pay packages that represent wretched excess, not related to real performance. It's an ailment that continues to fester in the blind-spot of American capitalism.

Happily, there's a glimmer of reason. There are at least some examples of moderation. There are some executives who make an effort to gain goodwill through moderating their own compensation.

GE's Jeff Immelt made $3.2M in base pay in 2005, but converted his $6M cash bonus into stock grants that he receives only if he meets cash flow and shareholder-return targets over the next 2 years. He wrote to shareholders in GE's annual report: "I am totally aligned with you."

There are other CEOs too who feel that their recent performance doesn't merit a raise. David Freeman, CEO of Lydall asked that his salary not be raised and his bonus be cut to 60% of his $420K base for 2006. More and more good executives are trying to make a positive statement by accepting results-based pay packages.

Some CEOs forego pay after demanding big sacrifices from workers. Robert Miller Jr. of bankrupt Delphi cut his own salary to $1 after asking for big pay cuts from hourly workers. Doug Parker of US Air declined a $770,000 bonus to reflect the pain of employees.

The "givebacks" indicate a growing sensitivity surrounding executive pay. Compensation committees of increasingly independent boards want to avoid being embarrassed when the SEC begins to demand more disclosures. New SEC rules will start to force more companies to make changes in their executive pay practices.

Cynics suggest that noble gestures may only be publicity stunts, after pay-cuts are actually forced by active boards. Till now though, there haven't really been any boards boasting about enforcing CEO pay cuts. I suppose that's tantamount to getting rid of the problem CEO.

I'll tell you what irks me though - the disgraced CEO who exits with a "golden parachute". I cannot understand why any self-respecting board would allow that.

Click Uproar over CEO pay hits home as some chiefs take less

Click CEOs fail, but only the workers suffer

Click The Best & Worst Bosses

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Book: Confessions of an Economic Hit-man

John Perkins was a respected member of the international banking community, a former chief economist at a strategic-consulting firm in Boston. In his book "Confessions of an Economic Hit Man" (published Nov. 2004) he describes how, as a highly paid professional, he helped the US cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay, to facilitate the take-over of their economies.

The basis was simple: The loans were always on condition that the country would give 90% of the loan back to US companies (like Halliburton and Bechtel) to build dams, airports, electric grids, and other infrastructure they couldn't afford.

Economic hit men (EHMs) are highly paid professionals who negotiate around the globe with trillions of dollars. Perkins explains US ties with Saudi Arabia. You may remember the early 70's when there was an extreme gas shortage, and cars were lined up at gas-stations. America knew Saudi Arabia was the key to oil dependency and EHMs worked a deal whereby the Royal House of Saud agreed to send most of their petro-dollars back to the US, to invest in US govt. securities. The Treasury Department would use the interest from these securities to award US companies with contracts to build Saudi Arabia - new cities, new infrastructure. In return, the House of Saud agreed to maintain the price of oil within acceptable limits, which they've done. And the US also agreed to keep the House of Saud in power as long as they continued to maintain this agreement.

Perkins says that the sequence that is usually followed is this: If the economic hit men fail, the next step is to call in "the jackals" - CIA sanctioned people that try to foment a coup, or revolution. If that doesn't work, they try to perform assassinations. If that fails, then it's War.

According to John Perkins, this sequence was tried with Iraq. The EHMs were sent in, but Saddam Hussein didn't comply. When the jackals were dispatched, there were too many doubles and Saddam Hussein's bodyguards were too good. So the next level of attack was war.

John Perkins says he started and stopped writing "Confessions of an Economic Hit Man" 4 times over the past 20 years. He says he was threatened and bribed to stop. But after 9/11 he finally decided to go through with this exposť of his former life.

This is an extraordinary and gripping tale of intrigue and dark machinations. It's seems like a hit novel - except that John Perkins claims that it's true.

Click Review and Buy "Confessions of an Economic Hit-man" on Amazon.com

Click Confessions of an Economic Hit Man - Interview with John Perkins

Click Website - Confessions of an economic hit-man

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Immigration, the unsolvable problem

Our last discussion on the immigration debate brought a lot of feedback. Amidst all the complex issues is one primary point: How can we continue to allow "undocumented" (illegal) immigrants to stay?

The number of illegal immigrants in the US is estimated at between 12 and 20 million (4-7% of America), including children and families. In some cases, the children are legal US citizens, since they were born in America. There are those who think that law should be changed - children of illegal immigrants should also be illegal.

There are very few solutions that make enough sense to generate broad support. Did I say "very few"? Read none. Wholesale "amnesty" keeps being proposed for anyone who's lived in the US for more than say 5 years. But the basic problem remains; what to do with those who have lived in the US for a shorter time? And how to cope with those who continue to swarm over the border day after day?

Over past decades, the US Congress has passed 7 amnesties for illegal aliens. The Immigration and Reform Control Act of 1986 was a compromise to "wipe the slate clean". But, it only succeeded in providing more hope for those who had not yet arrived, and increased the influx.

The first organized "day without an immigrant" protest was held on May 1, 2006. Record numbers joined (it's estimated that 2 million people stayed away from work and joined the protests in all major US cities) and the economy lost $ 1-2B worth of business. Marchers carried American flags and the parades were as peaceful as any Martin Luther King protest. But most of the country was not as "shut down" as some had hoped. Now more marches and protests are planned, as Congress meets again to propose political compromise that will satisfy nobody and prolong the problem.

Circular arguments proliferate and quickly degrade to the old impasse: "We MUST protect our borders". It seems obvious to me that sophisticated terrorists would not choose to enter the US through the hellish heat of the Arizona and New Mexico desert. Meanwhile, much of the border with Canada remains hospitably open for anyone to cross.

The basic problem is that of rich and poor countries sharing borders. In the new-age global village, how can any government draw an artificial line that cannot be crossed? The Berlin Wall was the last such attempt which fell in 1989, a quarter-century after Jack Kennedy proclaimed "Ich bin ein Berliner!"

We need a Kennedy or a Martin Luther King again today to broadcast to the world, "I am an immigrant!"

Click The Immigration debate

Click U.S. Amnesties for Illegal Aliens

Click In Focus: The Immigration Debate

Click The recurring Immigration debate

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Howie Hoff [Howie.Hoff@gossinternational.com] approaches the seemingly insoluble immigration problem with a different solution:
    "The present discussion on the immigration issue doesn't seem to be heading for a long term solution. I believe its time for a creative approach.

    "The US is in need of low cost manufacturing to better compete with China and others. And it seems that Mexico is in need of jobs and better economic opportunities.

    "A solution could be some sort of merger, where Mexico and the US takes the necessary steps to become a single country. Many details need to be worked out with a solution that respects both countries people, cultures and sovereignty. Perhaps discussion might lead to the addition of many more states, or some other form of government."

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Ronald Sewell [mailto:ris.sigmatic@shaw.ca] from Canada responds to George Morgan's comments about patent trolls:

    "What many patent agents like to ignore is the reality that intellectual property really has become a fraudulent legal quagmire. In this, lawyers outnumber engineers and wreak havoc on people who actually produce something of benefit to society.

    "Morgan says that the true test of a patent's validity is how it stands up in court. Sure, and if and when you get sued by a patent troll you are finished, kaput - regardless of the merits of the case. Who can afford the legal bills?

    "All the presumptions are with the patent holder. Even if the patent office invalidates the very patents it should have never issued in the first place, you get killed in court (ask RIM). Or the troll offers you a license while your customers are targeted, and they in turn sue you while you try in vain to mount a prompt legal defense; talk to Rockwell.

    "At best, patent clerks do a few hours worth of review for each of the escalating mass of patents being churned out, and each of these has the potential of years of legal wrangling.

    "I do not know how a real moral, legal, or social defense can be mounted for a system that allow holders of spurious patents to shake down companies, and ultimately their customers, for incredible sums. And then, after years of this nonsense the patent is invalidated.

    "There are no sanctions against the patent troll. Well, they get no more money. But, as far as the previous settlements go, it's too bad. Such a mentality is more akin to allowing a mobster who extorted from victims for years to go scott-free because they stop. So there is great incentive to abuse the system, little to dissuade.

    "And yet the chime from those who have grown dependent on the expanded fracas of this system is to maintain that all is ok, that high profile cases of abuse are the exception, that no reform is in order. More aggressively, the patent "kleptocracy" counters that critics of the system are the real thieves whose object is to steal the ideas, no, the very real estate of hard working inventive geniuses slaving to build the American dream. Never mind that much of the froth coming out of the patent office is obvious, unoriginal or both, and is abetted by an entrenched interest group.

    "The best argument for reform is not just that the current situation will be ultimately economically debilitating. The best argument is that, as it stands, this is just plain wrong."

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Michael Tsoukias [zibbo@ev1.net] writes regarding the ticking time-bomb of detainee abuse:

    "Sixty years ago the Nazi war crimes trials were under way. These were men who directly caused the devastation of Europe and the slaughter of over 25 million people. The accused were provided with privacy, translators, legal counsel, family visits, medical attention and other amenities. There is no record that any of them were deliberately maltreated during their detention.

    "Contrast this with US detainee abuse today against an enemy that numbers no more than a few thousand fanatics, militarily worthless. It's an utter disgrace to our nation that we should be engaging in debate at all. It is a tribute to Sen. John McCain, himself a former POW, that he is resolutely standing up for decent treatment for all detainees. The conduct of our officials in Guantanamo, Abu-Graib, "rendition flights", secret prisons and so on, is a horrible example that we are giving to the world.

    "Why are these medieval fanatics paraded to us as deserving worse treatment than we gave to Nazis? Those Nazis, mind you, had an avowed policy of enslavement and extermination of entire races, entire nations. They caused more deaths than 9/11, many times a day, every day for six years.

    "There seems to be a vested interest in this country to build up this shadowy enemy as somehow beyond or below human, possessed of incomprehensible motives, deserving of no consideration; to stretch the definition of "enemy" to anyone "we" don't like at the moment. It's so easy to slide into savagery ourselves, all the while clamoring that we fight for civilization."

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