Sunday, April 27, 2014
How BP's Gulf Settlement Became Its Target
The oil rig fire and the nearly unstoppable fountain of oil that followed at the Macondo Prospect on April 20, 2010, was the largest marine oil spill in the nation’s history. The oil poured into the gulf for 87 days, fouling an estimated 68,000 square miles of waters and almost 500 miles of coastline from Louisiana to Florida.
With complex ripple effects and lingering uncertainty about the health of the gulf, the economic impact remains nearly impossible to quantify. But BP, exceeding its obligations under the federal Oil Pollution Act to compensate victims, set up a multibillion-dollar program and turned to Kenneth R. Feinberg, an expert in administering complicated programs like the Sept. 11 victims compensation fund, to run it. (...)
But in meeting halls and boardrooms along the gulf, Mr. Feinberg’s compensation program was criticized as being confusing and unpredictable.
“I can’t tell you how many times we did our financials,” said Michael Hinojosa, the owner of Midship Marine, a boat building company in Harvey. “They always asked for more documentation. They kept asking for more and more, and we kept giving it to them.”
With anger and criticism mounting, BP and a committee of plaintiffs’ lawyers began to work out, over nearly 150 negotiating sessions, a broad settlement that could help the company limit the scope of any coming litigation. Negotiators envisioned a program very different from Mr. Feinberg’s. The new claims process was intended to be accessible, and the explicitly stated goal was to help claimants get the largest amount for which they qualified.
Both sides agreed on a claims administrator: Patrick Juneau, a laid-back Louisiana lawyer and a veteran administrator of major settlement funds, including the one resulting from lawsuits over the painkilling drug Vioxx.
A central element of the agreement, however, would prove to be a time bomb. Instead of having claims calculators contend with different kinds of arguable evidence to prove that damage was linked to the spill, the negotiators came up with a formula that relied solely on financial data for proof of harm. If a business was in a certain region and could prove that its income dropped and rose again in a specific pattern during 2010, that would be enough to establish a claim.
To David A. Logan, the dean of the law school at Roger Williams University in Rhode Island, this was a creative way to avoid endless minitrials. “The whole idea is to make this proceed without laborious technical findings on causation,” he said.
The deal covered a broad array of businesses in the gulf states, stretching all the way to the Tennessee state line. It offered those claiming damages the potential of maximizing compensation. For BP, it promised to sharply reduce the number of litigants it would face.
The agreement was unusual in another critical way: There was no limit on the overall payout. Aside from a fund for the seafood industry capped at $2.3 billion, BP had agreed not to turn off the spigot as long as there were legitimate claims to pay.
Elizabeth Cabraser, a member of the group of lawyers representing damage claimants, described the deal, which runs to more than a thousand pages including exhibits, as “the most detailed, highly defined settlement agreement that I’ve ever seen.”
“It was a model,” she said. “Up until the day it wasn’t.” (...)
Lawyers all along the Gulf Coast tell the same story: of taking a casual look at the agreement, reading it with increasing disbelief and then immediately encouraging their partners to read it, too. Accountants were hired, chambers of commerce were contacted, and clients — doctors, nonprofit organizations, just about any type of enterprise — were urged to gather financial documents. Law firms, also eligible for claims under the deal, began to look at their own account books.
One lawyer in Tampa, Fla., sent out a mass mailing, later highlighted in court filings by BP, saying that “the craziest thing about the settlement is that you can be compensated for losses that are UNRELATED to the spill.”
With complex ripple effects and lingering uncertainty about the health of the gulf, the economic impact remains nearly impossible to quantify. But BP, exceeding its obligations under the federal Oil Pollution Act to compensate victims, set up a multibillion-dollar program and turned to Kenneth R. Feinberg, an expert in administering complicated programs like the Sept. 11 victims compensation fund, to run it. (...)But in meeting halls and boardrooms along the gulf, Mr. Feinberg’s compensation program was criticized as being confusing and unpredictable.
“I can’t tell you how many times we did our financials,” said Michael Hinojosa, the owner of Midship Marine, a boat building company in Harvey. “They always asked for more documentation. They kept asking for more and more, and we kept giving it to them.”
With anger and criticism mounting, BP and a committee of plaintiffs’ lawyers began to work out, over nearly 150 negotiating sessions, a broad settlement that could help the company limit the scope of any coming litigation. Negotiators envisioned a program very different from Mr. Feinberg’s. The new claims process was intended to be accessible, and the explicitly stated goal was to help claimants get the largest amount for which they qualified.
Both sides agreed on a claims administrator: Patrick Juneau, a laid-back Louisiana lawyer and a veteran administrator of major settlement funds, including the one resulting from lawsuits over the painkilling drug Vioxx.
A central element of the agreement, however, would prove to be a time bomb. Instead of having claims calculators contend with different kinds of arguable evidence to prove that damage was linked to the spill, the negotiators came up with a formula that relied solely on financial data for proof of harm. If a business was in a certain region and could prove that its income dropped and rose again in a specific pattern during 2010, that would be enough to establish a claim.
To David A. Logan, the dean of the law school at Roger Williams University in Rhode Island, this was a creative way to avoid endless minitrials. “The whole idea is to make this proceed without laborious technical findings on causation,” he said.
The deal covered a broad array of businesses in the gulf states, stretching all the way to the Tennessee state line. It offered those claiming damages the potential of maximizing compensation. For BP, it promised to sharply reduce the number of litigants it would face.
The agreement was unusual in another critical way: There was no limit on the overall payout. Aside from a fund for the seafood industry capped at $2.3 billion, BP had agreed not to turn off the spigot as long as there were legitimate claims to pay.
Elizabeth Cabraser, a member of the group of lawyers representing damage claimants, described the deal, which runs to more than a thousand pages including exhibits, as “the most detailed, highly defined settlement agreement that I’ve ever seen.”
“It was a model,” she said. “Up until the day it wasn’t.” (...)
Lawyers all along the Gulf Coast tell the same story: of taking a casual look at the agreement, reading it with increasing disbelief and then immediately encouraging their partners to read it, too. Accountants were hired, chambers of commerce were contacted, and clients — doctors, nonprofit organizations, just about any type of enterprise — were urged to gather financial documents. Law firms, also eligible for claims under the deal, began to look at their own account books.
One lawyer in Tampa, Fla., sent out a mass mailing, later highlighted in court filings by BP, saying that “the craziest thing about the settlement is that you can be compensated for losses that are UNRELATED to the spill.”
by Campbell Robertson and John Schwarz, NY Times | Read more:
Image: U.S. Coast Guard, via Reuters
Saturday, April 26, 2014
The World of Digital Perfume Finders
[ed. It's like another universe.]
Let me begin with a disclaimer: I am not your average fragrance consumer. I have been a beauty editor for 10 years, which has afforded me unprecedented access to hundreds of perfumes, often before they come to market. My fragrance affections being fleeting, however, I still find myself in search of that elusive "signature scent": an early love affair with a cyprus-tinged men's scent from L'Occitane preceded a brief fling with Costume National's Scent Sheer, which I recently followed with a multiparty tryst starring Acqua di Parma's Colonia, Byredo's Seven Veils and Frédéric Malle's Geranium Pour Monsieur.Last March, I'd grown tired of them all. Wandering the streets of Paris while in the city covering fashion shows, I walked into Nose, a newly opened perfume shop in the Second Arrondissement. Intrigued, I sat down at the perfume bar, and a bearded, bow-tied gentleman in jeans assisted me with one of the iPads ranged along the counter. The tablet—and the denim—were signs that a department-store fragrance-buying experience, this wasn't.
That said, it's increasingly less rare to find a digital element in the perfume world. The fragrance-technology industry has been growing steadily, with iPhone apps like reference tool "The Ultimate Perfume Encyclopedia" and personality-driven scent-seeker "Perfumance." Last year, the Japanese company ChatPerf Inc. launched "Scentee," a small atomizer that plugs into a smartphone's headphone jack and mists a preloaded scent to notify you of an email or as an alarm.
At Nose, my affable adviser turned out to be one of the store's founders, Nicolas Cloutier, a former international I.T.-management consultant turned perfume purveyor. "We are geeks who are good at art direction," Mr. Cloutier later said of himself and a few of the seven partners with whom he launched the shop.
Using the iPad's touch screen, I entered the names of my favorite perfumes, allowing the system's algorithm to create a personal "olfactive pyramid," which then produced five personalized recommendations. Key to the Nose experience was a blind sniff test of each scent, intended to de-emphasize packaging, a strategy in line with the store's ethos: to help consumers find fragrances "without the marketing bulls—t," Mr. Cloutier said.
And it worked. I walked out with Etat Libre d'Orange's Fils de Dieu du Riz et des Agrumes, a spicy Oriental with hints of ginger, shiso and leather that snapped me right out of my fragrance rut. Nose's algorithm—currently available online, and soon to debut at a second brick-and-mortar branch in the U.S.—made me ponder the idea of online-dating my way to true perfume love.
by Celia Ellenberg, WSJ | Read more:
Image: Pinrose.com
Real Rothko?
The painting, which features Rothko’s iconic stacked rectangular blocks of color, bears the artist’s signature and the name of the California School of Fine Arts (now the San Francisco Art Institute), where Rothko taught in 1949.
A lifelong collector, Douglas Himmelfarb, spotted the painting at a South Los Angeles auction preview, and immediately did his research. When he made the connection between Rothko and the school, he knew he had to the buy the piece. After the sale, Himmelfarb traced the canvas to the collection of Mollye Teitelbaum, who had owned it since at least 1964. From there, Himmelfarb began the arduous process of finding proof that his auction find was the real deal.
In the years since, Himmelfarb has found little support from the art establishment, while his personal fortunes have taken a dramatic downturn: the government recently foreclosed on his Hawaii home. If his Rothko is real, it could be his salvation, but it seems that no one is willing to issue an opinion.
The authentications business, as another WSJ article recently highlighted, has become particularly fraught, as estate-run committees for artists such as Keith Haring and Andy Warhol have shut down rather than face the threat of litigation as a result of issuing an unpopular or erroneous opinion.
Rothko expert David Anfam, who published the artist’s catalogue raisonné in 1998, has been familiar with Himmelfarb’s painting since the late 1980s. The scholar even discovered a black-and-white photograph of the work in the archives held by Rothko’s family, but still declined to include the work in his book.
by Sarah Cascone, Artnet | Read more:
Image: Mark Rothko?
Judgmental Maps
San Francisco by Dan Steiner via: judgmentalmaps.com
[ed. Now this is a map I could use! Hobo blowjobs, baseball hatted fitness overachivers, commie gymnast figure skaters.... check out Las Vegas and New York.]
h/t Boing Boing
Ten Best Sentences
[ed. I can think of a number of other authors whose works might have been included (eg. Raymond Carver, Reanaldo Arenas, Annie Dillard, Kazuo Ishiguro, Gabrial Garcia Marquez, Virginia Woolf, the list goes on and on), but I guess that's what makes this fun, sort of like a Rolling Stone 10 Greatest Guitar Solos exercise. American Scholar article here.]
With respect and gratitude to American Scholar, I offer brief interpretations below on how and why these sentences work:
Its vanished trees, the trees that had made way for Gatsby’s house, had once pandered in whispers to the last and greatest of all human dreams; for a transitory enchanted moment man must have held his breath in the presence of this continent, compelled into an aesthetic contemplation he neither understood nor desired, face to face for the last time in history with something commensurate to his capacity for wonder.
—F. Scott Fitzgerald, “The Great Gatsby”
This sentence is near the end of the novel, a buildup to its more famous conclusion. It begins with something we can “see,” vanished trees. There is a quick tension between the natural order and the artificial one, a kind of exploitation of the land that is as much part of our cultural heritage as the Myth of the West and Manifest Destiny. “Vanished” is a great word. “The Great Gatsby” sounds like the name of a magician, and he at times vanishes from sight, especially after the narrator sees him for the first time gazing out at Daisy’s dock. What amazes me about this sentence is how abstract it is. Long sentences don’t usually hold together under the weight of abstractions, but this one sets a clear path to the most important phrase, planted firmly at the end, “his capacity for wonder.”
I go to encounter for the millionth time the reality of experience and to forge in the smithy of my soul the uncreated conscience of my race.—James Joyce, “A Portrait of the Artist as a Young Man”
This sentence also comes near the end of the novel, but is not the very end. It has the feel of an anthem, a secular credo, coming from Stephen Dedalus, who, in imitation of Joyce himself, feels the need to leave Ireland to find his true soul. The poet is a maker, of course, like a blacksmith, and the mythological character Dedalus is a craftsman who built the labyrinth and constructed a set of wings for his son Icarus. The wax in those wings melted when Icarus flew too close to the sun. He plunged into the sea to his death. This is where the magic of a single word comes into play: “forge.” For the narrator it means to strengthen metal in fire. But it also means to fake, to counterfeit, perhaps a gentle tug at Stephen’s hubris.
This private estate was far enough away from the explosion so that its bamboos, pines, laurel, and maples were still alive, and the green place invited refugees—partly because they believed that if the Americans came back, they would bomb only buildings; partly because the foliage seemed a center of coolness and life, and the estate’s exquisitely precise rock gardens, with their quiet pools and arching bridges, were very Japanese, normal, secure; and also partly (according to some who were there) because of an irresistible, atavistic urge to hide under leaves.
—John Hersey, “Hiroshima”
Great writers fear not the long sentence, and here is proof. If a short sentence speaks a gospel truth, then a long one takes us on a kind of journey. This is best done when subject and verb come at the beginning, as in this example, with the subordinate elements branching to the right. There is room here for an inventory of Japanese cultural preferences, but the real target is that final phrase, an “atavistic urge to hide under leaves,” even in the shadow of the most destructive technology ever created, the atomic bomb.
by Roy Peter Clark, Poynter | Read more:
Image: Berenice Abbott via:
Capital in the Twenty-First Century
[ed. See also: The Picketty Panic and The Picketty Phenomenon.]
Thomas Piketty just tossed an intellectual hand grenade into the debate over the world’s struggling economy. Before the English translation of the French economist’s new book, Capital in the Twenty-first Century, hit bookstores, it was applauded, attacked and declared a must-read by pundits, left, right and center. For good reason: it challenges the fundamental assumption of American and European politics that economic growth will continue to deflect popular anger over the unequal distribution of income and wealth.
“Abundance”, observed the late sociologist Daniel Bell was “the American surrogate for socialism.” As the economic pie expands, everyone’s slice grew bigger.
The three-decade long boom that followed World War II seemed to prove Bell’s point, tossing Karl Marx’s forecast of capitalism’s collapse into the dustbin of history.
Marx predicted that as markets expand, profits from technological innovation would gradually dry up, depressions would get more severe and capitalists would drive labor’s share of income in the advanced industrial economies so low that revolution was inevitable.
But twentieth-century capitalism proved more resilient than Marx thought. New technologies continued to generate more profits and jobs. Keynesian fiscal and monetary policies prevented cyclical business downturns from triggering depressions. And the investor class, threatened by the specter of communism, agreed, grudgingly, to the New Deal model of strong unions, social insurance and other policies that forced them to share the profits from rising productivity with their workers.
In the United States, the portion of income going to the richest dropped from over 45 percent in the 1920s to under 35 percent by the 1970s. Between 1959 and 1973 the percentage of Americans living in poverty was cut in half. Other industrial countries followed the same pattern.
Ultimately, it was the communist system that collapsed, unable to match capitalism’s performance in providing the proletariat with a house, a car and the other totems of a middle-class life.
The idea that capitalism naturally led to greater equality was codified in a 1955 landmark study by the American economist Simon Kuznets, whose data showed that after an initial period of rising inequality (e.g., our nineteenth-century gilded age) the wealth generated by market economies is distributed between labor and capital more evenly. When workers’ productivity rose, so do their wages. The “Kuznets Curve” quickly became conventional wisdom for both mainstream economists and the politicians they advised. As the nautical John F. Kennedy put it: “A rising tide lifts all boats.”
The central question for Western economists then became how to keep the tide of growth rising. Liberals favored more active government interventions, conservatives more incentives for private investors. Income and wealth distribution—the issue that had preoccupied economists since Adam Smith—was narrowed to studies of the characteristics of the poor (their race, their gender, their sex life, etc.) that prevented them from rising with the tide. Almost no one studied the rich.
Then, in the late 1970s, the trend toward equality reversed. Workers’ output-per-hour continued to rise, but their wages and benefits flattened. Almost all of the gains from the increased productivity of the last three and a half decades went to corporate investors and their top managers. The poverty rate rose by a third. And the pain spread steadily up the socioeconomic ladder. (...)
Over the longer term, the prospects can be downright grim. The venerable Robert Gordon, an economist known for careful analysis, thinks that the innovation that has driven growth for over a century might well slow from its average of 2 percent per year since 1891 to 0.2 percent for the foreseeable future. Add tightening environmental costs and constraints and the good ship Abundance sinks to the sea floor.
The pessimists of course could be wrong. It’s certainly possible, if not plausible, that some unpredicted burst of entrepreneurial energy or a simultaneous reconversion to Keynesianism could propel growth faster than even Obama’s optimistic economists forecast. Couldn’t that be enough to float us back to Kuznets’s curve of rising equality?
Enter Thomas Piketty, whose impressively researched analysis (600 pages plus a detailed 165-page online technical appendix) concludes that Simon Kuznets was wrong. Not only does capitalist growth not reduce inequality; it increases it.
Using data and computer power unavailable to Kuznets, Piketty pored through 200–300 years of the economic history of the largest capitalist economies—principally the United States, Britain, France, Canada, Germany, Sweden and Japan. The numbers show that that since roughly 1700, with one exceptional period, the returns to capital (profits and interest) have exceeded the rate of overall economic growth. Since the rich own most of the re-investable capital, their wealth accumulates faster than the wealth of the vast majority of people whose income depends on wages and salaries.
The exceptions to the historical trend were the years 1914–75 in Europe and 1929–75 in the United States, in which inequality shrunk in almost all western nations. According to Piketty this era was unique: the consequences of two world wars, the Great Depression and the social democratic character of the postwar recovery in Europe, Japan and North America. Once those forces were spent, capitalism returned to its normal function as a machine for producing “inequalities that radically undermine the meritocratic values on which democratic societies are based.”
Moreover—and this is a key point—contrary to what we’re taught in Economics 101, markets appear to have no self-correcting mechanism that can halt the worsening misdistribution of wealth. If allowed to go unchecked, a tiny number of capitalists will own just about everything, with social consequences that Piketty sees as “potentially terrifying.”
Thomas Piketty just tossed an intellectual hand grenade into the debate over the world’s struggling economy. Before the English translation of the French economist’s new book, Capital in the Twenty-first Century, hit bookstores, it was applauded, attacked and declared a must-read by pundits, left, right and center. For good reason: it challenges the fundamental assumption of American and European politics that economic growth will continue to deflect popular anger over the unequal distribution of income and wealth.
“Abundance”, observed the late sociologist Daniel Bell was “the American surrogate for socialism.” As the economic pie expands, everyone’s slice grew bigger.The three-decade long boom that followed World War II seemed to prove Bell’s point, tossing Karl Marx’s forecast of capitalism’s collapse into the dustbin of history.
Marx predicted that as markets expand, profits from technological innovation would gradually dry up, depressions would get more severe and capitalists would drive labor’s share of income in the advanced industrial economies so low that revolution was inevitable.
But twentieth-century capitalism proved more resilient than Marx thought. New technologies continued to generate more profits and jobs. Keynesian fiscal and monetary policies prevented cyclical business downturns from triggering depressions. And the investor class, threatened by the specter of communism, agreed, grudgingly, to the New Deal model of strong unions, social insurance and other policies that forced them to share the profits from rising productivity with their workers.
In the United States, the portion of income going to the richest dropped from over 45 percent in the 1920s to under 35 percent by the 1970s. Between 1959 and 1973 the percentage of Americans living in poverty was cut in half. Other industrial countries followed the same pattern.
Ultimately, it was the communist system that collapsed, unable to match capitalism’s performance in providing the proletariat with a house, a car and the other totems of a middle-class life.
The idea that capitalism naturally led to greater equality was codified in a 1955 landmark study by the American economist Simon Kuznets, whose data showed that after an initial period of rising inequality (e.g., our nineteenth-century gilded age) the wealth generated by market economies is distributed between labor and capital more evenly. When workers’ productivity rose, so do their wages. The “Kuznets Curve” quickly became conventional wisdom for both mainstream economists and the politicians they advised. As the nautical John F. Kennedy put it: “A rising tide lifts all boats.”
The central question for Western economists then became how to keep the tide of growth rising. Liberals favored more active government interventions, conservatives more incentives for private investors. Income and wealth distribution—the issue that had preoccupied economists since Adam Smith—was narrowed to studies of the characteristics of the poor (their race, their gender, their sex life, etc.) that prevented them from rising with the tide. Almost no one studied the rich.
Then, in the late 1970s, the trend toward equality reversed. Workers’ output-per-hour continued to rise, but their wages and benefits flattened. Almost all of the gains from the increased productivity of the last three and a half decades went to corporate investors and their top managers. The poverty rate rose by a third. And the pain spread steadily up the socioeconomic ladder. (...)
Over the longer term, the prospects can be downright grim. The venerable Robert Gordon, an economist known for careful analysis, thinks that the innovation that has driven growth for over a century might well slow from its average of 2 percent per year since 1891 to 0.2 percent for the foreseeable future. Add tightening environmental costs and constraints and the good ship Abundance sinks to the sea floor.
The pessimists of course could be wrong. It’s certainly possible, if not plausible, that some unpredicted burst of entrepreneurial energy or a simultaneous reconversion to Keynesianism could propel growth faster than even Obama’s optimistic economists forecast. Couldn’t that be enough to float us back to Kuznets’s curve of rising equality?
Enter Thomas Piketty, whose impressively researched analysis (600 pages plus a detailed 165-page online technical appendix) concludes that Simon Kuznets was wrong. Not only does capitalist growth not reduce inequality; it increases it.
Using data and computer power unavailable to Kuznets, Piketty pored through 200–300 years of the economic history of the largest capitalist economies—principally the United States, Britain, France, Canada, Germany, Sweden and Japan. The numbers show that that since roughly 1700, with one exceptional period, the returns to capital (profits and interest) have exceeded the rate of overall economic growth. Since the rich own most of the re-investable capital, their wealth accumulates faster than the wealth of the vast majority of people whose income depends on wages and salaries.
The exceptions to the historical trend were the years 1914–75 in Europe and 1929–75 in the United States, in which inequality shrunk in almost all western nations. According to Piketty this era was unique: the consequences of two world wars, the Great Depression and the social democratic character of the postwar recovery in Europe, Japan and North America. Once those forces were spent, capitalism returned to its normal function as a machine for producing “inequalities that radically undermine the meritocratic values on which democratic societies are based.”
Moreover—and this is a key point—contrary to what we’re taught in Economics 101, markets appear to have no self-correcting mechanism that can halt the worsening misdistribution of wealth. If allowed to go unchecked, a tiny number of capitalists will own just about everything, with social consequences that Piketty sees as “potentially terrifying.”
by Jeff Faux, The Nation | Read more:
Image: Reuters/Charles Platiau
Friday, April 25, 2014
Larry Page, The Untold Story
Everyone knows the Steve Jobs story — how he was fired from the company he founded — Apple — only to return from exile decades later to save the business.
What’s less-well understood is that Apple’s board and investors were absolutely right to fire Jobs. Early in his career, he was petulant, mean, and destructive. Only by leaving Apple, humbling himself, and finding a second success (with Pixar) was he able to mature into the leader who would return to Apple and build it into the world’s most-valuable company.
Larry Page is the Steve Jobs of Google.
Like Jobs, Page has a co-founder, Sergey Brin, but Page has always been his company’s true visionary and driving force.
And just as Apple’s investors threw Jobs out of his company, Google’s investors ignored Page’s wishes and forced him to hire a CEO to be adult supervision.
Both then underwent a long period in the wilderness. Steve Jobs’ banishment was more severe, but Page also spent years at a remove from the day-to-day world of Google.
As with Jobs, it was only through this long exile that Page was able to mature into a self-awareness of his strengths and weaknesses.
Then, like Jobs, Page came back with wild ambitions and a new resolve.
What’s less-well understood is that Apple’s board and investors were absolutely right to fire Jobs. Early in his career, he was petulant, mean, and destructive. Only by leaving Apple, humbling himself, and finding a second success (with Pixar) was he able to mature into the leader who would return to Apple and build it into the world’s most-valuable company.Larry Page is the Steve Jobs of Google.
Like Jobs, Page has a co-founder, Sergey Brin, but Page has always been his company’s true visionary and driving force.
And just as Apple’s investors threw Jobs out of his company, Google’s investors ignored Page’s wishes and forced him to hire a CEO to be adult supervision.
Both then underwent a long period in the wilderness. Steve Jobs’ banishment was more severe, but Page also spent years at a remove from the day-to-day world of Google.
As with Jobs, it was only through this long exile that Page was able to mature into a self-awareness of his strengths and weaknesses.
Then, like Jobs, Page came back with wild ambitions and a new resolve.
by Nicholas Carlson, Business Insider | Read more:
Image: uncredited
Fish and Game Weakening Land-Use Regulations for Alaska's Wildlife Refuges, Sanctuaries, Critical Habitat Areas
[ed. Some of Alaska's most important fish and wildlife habitats are being threatened by its current governor and state administration. The Alaska Department of Fish and Game used to be one of the most respected and admired conservation and management agencies in the world, but relentless political meddling over the last 14 years has reduced it to a shadow of its former self.
Habitat Division in particular (which was responsible for fish and wildlife policy, planning and permitting throughout the state) bore the brunt of this manipulation. At one point it was completely dismantled and reconstituted so that it might better align with pro-development interests. Now the governor is going after the state's Special Areas - wildlife refuges, sanctuaries and critical habitats. The department leadership that he's installed will do whatever is necessary to ensure that even after this administration is gone Habitat Division (and the Department of Fish and Game in general) will be permanently crippled in its ability to provide meaningful protection for Alaska's bountiful fish and wildlife resources. Part Two of this article is here, and Alaska Public Media describes the "Battle of Dude Creek".]
Habitat Division in particular (which was responsible for fish and wildlife policy, planning and permitting throughout the state) bore the brunt of this manipulation. At one point it was completely dismantled and reconstituted so that it might better align with pro-development interests. Now the governor is going after the state's Special Areas - wildlife refuges, sanctuaries and critical habitats. The department leadership that he's installed will do whatever is necessary to ensure that even after this administration is gone Habitat Division (and the Department of Fish and Game in general) will be permanently crippled in its ability to provide meaningful protection for Alaska's bountiful fish and wildlife resources. Part Two of this article is here, and Alaska Public Media describes the "Battle of Dude Creek".]
HB 77 was Gov. Sean Parnell’s recent attempt to “streamline” permitting for development proposals, primarily by denying tribes and individuals the ability to reserve enough water in rivers and streams to protect salmon and other fisheries from incompatible development. It also would have excluded project reviews and appeals by the public. That bill may be dead for now; however, it’s likely to be reanimated next year.
Few people are aware of another brazen plan to “streamline” permitting because it is cloaked in secrecy. The Alaska Department of Fish and Game is repealing and rewriting every management plan that regulates development in state wildlife refuges, sanctuaries and critical habitat areas. Because revoking these regulations doesn’t require legislative approval, Parnell’s secret move is more likely to succeed than HB 77. (...)
You’re probably already aware of the Parnell administration’s attempts to repeal regulations intended to conserve fish and wildlife -- or the public’s ability to review, comment on, and appeal permitting decisions by state agencies.
Parnell and his commissioners advocated giving Alaska’s coastal management program back to the feds, which meant that Alaskans now have little or no say in conserving renewable resources, such as salmon, that residents use for commercial, sport, or subsistence activities. The program had required coordinated public and agency reviews of most projects in the coastal zone and had allowed public appeals of agency decisions. Parnell is the only governor to return a state’s coastal authority to federal control.
Parnell supports the Pebble Project, which would auger one of the world’s largest open-pit mines into the world’s most productive salmon habitat. Most Alaskans are opposed to the mine for that reason.
Echoing Parnell’s preference for development at all costs, his commissioner of natural resources, Dan Sullivan, believing his department’s mission statement -- “to develop, conserve, and enhance natural resources” -- was unconstitutional, dropped the words “conserve” and “enhance.”
But the Alaska Department of Natural Resources has always been reluctant to conserve or enhance natural resources. The Alaska Department of Fish and Game has long considered it its mission to conserve wildlife, salmon and other fish. Until now.
by Rick Sinnott, Alaska Dispatch | Read more:
Image: K. Mueller/FWS photo via flickr
Thursday, April 24, 2014
Biotech's Hard Bargain
[ed. Looks like a New Yorker kind of day.]
Few people have done better in the recent stock boom than biotech investors. Biotech was the best-performing market sector last year, and in the past two years its stocks rose a hundred and twenty per cent. But suddenly, in late March, the stocks tanked, some falling more than twenty per cent in a few weeks. The selloff can be explained to some extent as a market correction and part of a wider flight from risk. But the real story concerns a revolutionary new hepatitis-C drug developed by the biotech giant Gilead.
Hepatitis C affects 3.2 million Americans; untreated, it leads to scarring of the liver and to liver cancer. Until now, the best treatments cured only about half of patients and often had debilitating side effects. But in December the F.D.A. approved the first in a new wave of hep-C drugs, Gilead’s Sovaldi. This is huge news—not just in medicine but on Wall Street. Vamil Divan, a drug-industry analyst at Credit Suisse, told me, “Sovaldi and the other new hep-C drugs are great drugs for a tough disease.” Sovaldi can cure ninety per cent of patients in three to six months, with only minor side effects. There’s just one catch: a single dose of the drug costs a thousand dollars, which means that a full, twelve-week course of treatment comes to more than eighty grand.
For Gilead this is great. Take an expensive treatment, multiply by a huge number of hepatitis-C patients, and you get a very lucrative business proposition. It’s also good news for patients. But it’s a big problem for insurers and taxpayers, who—given that hepatitis-C patients have an average annual income of just twenty-three thousand dollars—are going to end up footing much of the bill. There has been an uproar of criticism. Private insurers blasted Gilead’s pricing strategy; the pharmacy-benefit manager Express Scripts said that it wanted its clients to stop using Sovaldi once an alternative appears. Then, on March 20th, three Democratic members of Congress sent Gilead a letter asking it to explain why Sovaldi costs so much. The letter had no force of law, but it spooked investors by raising the spectre of what they most fear—price regulation.
Investors love drug companies in part because they often have tremendous pricing power. Drugs designed to fight rare diseases routinely cost two or three hundred thousand dollars; cancer drugs often cost a hundred grand. And, whereas product prices in most industries drop over time, pharmaceuticals actually get more expensive. The price of the anti-leukemia drug Gleevec, for instance, has tripled since 2001. And, across the board, drug prices rise much faster than inflation. The reason for this is that prices for brand-name, patented drugs aren’t really set in a free market. The people taking the drugs aren’t paying most of the cost, which makes them less price-sensitive, and the bargaining power of those who do foot the bill is limited. Insurers have to cover drugs that work well; the economists Darius Lakdawalla and Wesley Yin recently found that even big insurers had “virtually zero” ability to drive a hard bargain when it comes to drugs with no real equivalents. And the biggest buyer in the drug market—the federal government—is prohibited from bargaining for lower prices for Medicare, and from refusing to pay for drugs on the basis of cost. In short, if you invent a drug that doctors think is necessary, you have enormous leeway to charge what you will.
Few people have done better in the recent stock boom than biotech investors. Biotech was the best-performing market sector last year, and in the past two years its stocks rose a hundred and twenty per cent. But suddenly, in late March, the stocks tanked, some falling more than twenty per cent in a few weeks. The selloff can be explained to some extent as a market correction and part of a wider flight from risk. But the real story concerns a revolutionary new hepatitis-C drug developed by the biotech giant Gilead.
Hepatitis C affects 3.2 million Americans; untreated, it leads to scarring of the liver and to liver cancer. Until now, the best treatments cured only about half of patients and often had debilitating side effects. But in December the F.D.A. approved the first in a new wave of hep-C drugs, Gilead’s Sovaldi. This is huge news—not just in medicine but on Wall Street. Vamil Divan, a drug-industry analyst at Credit Suisse, told me, “Sovaldi and the other new hep-C drugs are great drugs for a tough disease.” Sovaldi can cure ninety per cent of patients in three to six months, with only minor side effects. There’s just one catch: a single dose of the drug costs a thousand dollars, which means that a full, twelve-week course of treatment comes to more than eighty grand.For Gilead this is great. Take an expensive treatment, multiply by a huge number of hepatitis-C patients, and you get a very lucrative business proposition. It’s also good news for patients. But it’s a big problem for insurers and taxpayers, who—given that hepatitis-C patients have an average annual income of just twenty-three thousand dollars—are going to end up footing much of the bill. There has been an uproar of criticism. Private insurers blasted Gilead’s pricing strategy; the pharmacy-benefit manager Express Scripts said that it wanted its clients to stop using Sovaldi once an alternative appears. Then, on March 20th, three Democratic members of Congress sent Gilead a letter asking it to explain why Sovaldi costs so much. The letter had no force of law, but it spooked investors by raising the spectre of what they most fear—price regulation.
Investors love drug companies in part because they often have tremendous pricing power. Drugs designed to fight rare diseases routinely cost two or three hundred thousand dollars; cancer drugs often cost a hundred grand. And, whereas product prices in most industries drop over time, pharmaceuticals actually get more expensive. The price of the anti-leukemia drug Gleevec, for instance, has tripled since 2001. And, across the board, drug prices rise much faster than inflation. The reason for this is that prices for brand-name, patented drugs aren’t really set in a free market. The people taking the drugs aren’t paying most of the cost, which makes them less price-sensitive, and the bargaining power of those who do foot the bill is limited. Insurers have to cover drugs that work well; the economists Darius Lakdawalla and Wesley Yin recently found that even big insurers had “virtually zero” ability to drive a hard bargain when it comes to drugs with no real equivalents. And the biggest buyer in the drug market—the federal government—is prohibited from bargaining for lower prices for Medicare, and from refusing to pay for drugs on the basis of cost. In short, if you invent a drug that doctors think is necessary, you have enormous leeway to charge what you will.
by James Suroweicki, New Yorker | Read more:
Image: Christoph Neiman
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