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Drug Prices in the USA

Posted on January 8, 2005 by John Hunter

re: Canada mulls end to drugs by mail order, by Colin McClell, Associated Press, 6 Jan 2005,

The discussion of restricting Americans from buying drugs from Canada highlights failures of the current system. Unfortunately the focus in not on health care or the best economic plan but rather monopolistic behavior and economic regulation that is politically motivated to support high drug prices within the United States.

Most articles on reimporting drugs to the USA will mention the idea that the United States FDA does not trust the drugs manufactured by American companies overseas. Why should Americans have to believe the contention of the United States FDA over Canada, Germany or Japan’s drug regulators? If American’s want to trust that the drugs sold in one of those countries by one of the largest drug companies in the World selling drugs is good enough for them why does the USA have to laws to prevent it? The argument that the drugs sold by these companies worldwide are dangerous seems like a poor argument to me.

Second there is the contention that without the ability to overcharge American’s the drug companies won’t invest in Research and Development. This is such a poor argument I can’t believe people can make it without suffering a big blow to any credibility they had. Obviously drug development has a very high cost (creating a high fixed cost) and often drug manufacture has a small marginal cost (though at times the marginal cost is also high). Right now the companies count on the American market to provide funds for much of the research, development, marketing and profits. Then they sell the drugs in other markets only looking to maximize profits looking at marginal costs. Obviously, if they no longer could count on excessive prices in the United States they would have to spread the fixed cost over the rest of the world. The argument that they won’t invest in research and development without excessive costs in America is false. They would adjust their pricing structures around the world based on losing the cash cow of the American consumer. That should be obvious to anyone who even took one economics course.
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Posted in Economics, Health care | 7 Comments

Wikipedia and Anti – Elitism

Posted on January 3, 2005 by John Hunter

re: recent post by by Larry Sanger, co-founder of Wikipedia: Why Wikipedia Must Jettison Its Anti-Elitism

Wikipedia is an awesome example of the power of the internet. Essentially it is a freeware, open source encyclopedia. The results are amazingly good, still it could be improved. Many have knocked the Wikipedia because they can’t believe a project that allows anyone to edit the content could possibly work. I must admit I am amazed how well it does work. Larry’s long post makes some great points about what needs to be improved.

He focuses on “the root problem: anti-elitism, or lack of respect for expertise.” He also points out a serious problem: “So, for any person who can and wants to work politely with well-meaning, rational, reasonably well-informed people–which is to say, to be sure, most people working on Wikipedia–the constant fighting can be so off-putting as to drive them away from the project.” I hope they can find a way to work on improving both these problems. His suggestion of a trusted source releasing “vetted versions of Wikipedia articles” sounds like a good one to me. In any event I hope some solution is found and Wikipedia continues to flourish rather than colapse under its own weight.

The Open Directory project was another useful open source freeware project that had a great begining but now has deteriorated to the point of insignificance. I think Wikipedia will be successful, the question is how successful. I hope Larry’s ideas result in improvements.

Posted in IT | Comments Off

Digital Rights Management

Posted on January 2, 2005 by John Hunter

From Cory sets DRM strawmen ablaze:

“For starters, any market-correction for DRM will surely involve informed customers making good purchase decisions about the DRM in their devices. That’s what this debate is all about. The implicit, “Stop complaining and let the market sort it out” in these comments ignores the fact that complaints about DRM are vital to the market sorting it out.”

This quote cuts to one of the critical issues in the current debate on digital rights management. I believe the market will most often reach the best solution. That does not mean regulators do not have a role to play, they do definitely have such a role. I tend to prefer limited regulation while relying on the market to reward the bestsolutions.

The idea that the marketplace works without debate and comment is fundamentally flawed. The way the marketplace will reach the best solution is through open and honest debate, competition and educated consumers. The emergence of world wide web and blogs do a great deal to make the market more efficient and effective. The invisible hand is more capable with more informed actors in the marketplace.

When consumers are ignorant they make decisions based on incomplete understanding of their interests the effect is to have the market’s invisible hand reinforce the wrong behavior. This is a fundamental shortcoming in the market. The increase in customer knowledge will not only increase the individual’s happiness but the overall performance of the economy.
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Posted in Customer focus, Economics | 2 Comments

The Greatest Wall Street Danger of All: You

Posted on December 31, 2004 by John Hunter

re: Born Suckers [the broken link was removed] – The greatest Wall Street danger of all: you by Henry Blodget.

Henry Blodget mentions two profoundly (though simple) important factors that lead to poor investment decisions: Prospect Theory and Outcome Bias. He lists 7 factors, I find two profound.

Prospect Theory (more details) essentially states people are eager to “lock in gains” (sell positions with profits to realize gains) and hold losses (deffer selling positions in which they have losses so as not to “realize” the loss). Like many profound ideas the simplicity of the idea undermines the importance. This factor can make a huge difference in investment results. Many of the most successful investors understand the importance of this idea. And they repeat the importance of taking action to avoid falling into the patterns prospect theory predicts.

William O’Neil (founder of Investors Business Daily) – “Remember, 7% to 8% is your absolute loss limit. You must sell without hesitation – no waiting a few days to see what might happen or hoping the stock rallies back; no need to wait for the day’s market close” page 90, How to Make Money in Stocks: a winning system in good times or bad, 3rd Edition, 2002.
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Posted in Investing | Tagged curiouscat, Investing | 1 Comment

Google Photo Management Software – Picasa

Posted on December 20, 2004 by John Hunter

Topics: Freeware – Photos

I am a big fan of Google, the search engine, and the company. Google bought Picasa, digital photo management software, a few months ago and decided to give the software away as freeware. I just got around to downloading Picasa. My initial reaction is that this is a wonderful product. I suggest you give it a try. It can automatically inventory all the images on your computer and it does a great job of organizing the photos for you.

The only Google service I would not recommend at this time is their desktop search software. It is amazing powerful and seems like it could be a great help. But it seems to me to the possible security issues warrant holding off using it until they improve the software, which I am confident they will do.

This Blog, is run on Blogger, another Google purchase. Blogger is good but I sure hope they offer some enhancements fairly soon, especially the ability to assign topics to individual posts (like the labels they use in Gmail).

One one final Google not, if you would like an invitation to get a free Gmail account (Google’s email service), just let me know and I can send you an invitation (until I run out of invitations).

Happy Holidays,

Posted in Google, Travel photos | Comments Off

Adventure Capitalist and China Wakes

Posted on December 19, 2004 by John Hunter

I recently read two books that offered perspectives I found worthwhile and were enjoyable to read.

Adventure Capitalist by Jim Rogers tracked his trip around the world by car. Previously he had documented his around the world motorcycle journey in Investment Biker. His views offer a worthwhile perspective that is often missed, in my opinion. That said I wouldn’t accept his views as the final truth they are valuable as one perspective to shed light on areas that are often overlooked.

China Wakes, by Nicholas Kristof and Sheryl Wudunn documents their time as Journalists in China (1988-1993) and again offers valuable insight into China. Obviously even gaining an incredibly oversimplified view of China would take a great deal more than one, or even ten books. Still the authors provide viewpoints that I found added, in a small way, to a picture of what China, was, is and may become. I plan to read their book: Thunder from the East: Portrait of a Rising Asia.

Posted in Books, Economics | Tagged Books, China, Economics, Investing | 1 Comment

Big Cats in America

Posted on December 18, 2004 by John Hunter

I found a recent Washington Post article interesting: Mountain Lions Move East, Breeding Fear on the Prairie. Many new realities are suprising. Some are historically important worldwide like the fall of the Berlin Wall. Others are not as significant but still something I would have thought extremely unlikely such as the return of Cougars to a wide range of the United States. I would have thought big cats would be found only in Zoos and in the remote West and in East Africa, of course.

I suppose I shouldn’t be so suprised since for years I have heard we have far more deer today than ever before. Still I would not have predicted the wide spread return of big cats we seem to have experienced in the last few decades. I don’t recall hearing about this before this year, when I started to read and hear about the increased human and big cat interactions resulting from the increased population of cougars (also known as pumas or mountain lions).

I would imagine we will have people overact when the inevitable problems are covered by the news media. “It is exceedingly rare for a mountain lion to kill a human being. In the past 110 years, the cats have attacked 66 people and killed 18 in the United States and Canada, according to figures compiled by Iowa’s Department of Natural Resources. Fatal attacks are far less common than fatal bee stings or lightning strikes.”

Related Links:
– Big Cat Comeback? 2004
– Cougar Reports on the Rise in Eastern U.S. – National Geographic 2003
– Mountain Lion Foundation
– Mountain Lion Attacks On People in the U.S. and Canada
– Outdoor Hazards – shows the number of human deaths annually in California (100 deaths from automobile collisions with deer, 86 from lightning strikes, 18 from dogs, 1/3 fom mountain lions [1 death every 3 years])

Posted in Fun | 6 Comments

Management Improvement Articles

Posted on December 8, 2004 by John Hunter

Topic: Management – Library Additions

The articles added to our library this month are especially good, in my opinion. Recent additions to the Curious Cat Online Management Improvement Library include:

* A Brief Guide to Interactive Planning and Idealized Design by Russell L. Ackoff
* Improving Problem Solving by Ian Bradbury and Gipsie Ranney
* How To Compare Six Sigma, Lean and the Theory of Constraints by Dave Nave
* In the Beginning by A. Blanton Godfrey
* A Holistic View of Six Sigma by Roger Hoerl and Ronald Snee (this is a chapter from there excellent new book: Six Sigma Beyond the Factory Floor.

Find links to these, and other new additions, on the Curious Cat Management Improvement New Articles Page or search for management improvement articles. Please contact me, if you are interested in having us include your article in the library.

John Hunter

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Economics – America and China

Posted on November 30, 2004 by John Hunter

Business Week has several good articles on the topic of China’s Economic impact including: Shaking up Trade Theory and The China Price.

In Shaking up Trade Theory Aaron Bernstein explores: “The fact that programming, engineering, and other high-skilled jobs are jumping to places such as China and India seems to conflict head-on with the 200-year-old doctrine of comparative advantage.” Over the last few years the white collar job losses in tech US have seemed to cause quite a bit more concern than the manufacturing and other job losses of the 1980s and 1990s. His article does a good job of exploring this issue within the limits of a short magazine article.

He captures the surprise economist (in the US) see because “Conversely, India, where just a fraction of its 400 million-plus workers have gone to college, should grab the low-skilled work and leave higher-end products to the U.S.” That conflicts with the data that many high skilled jobs are going to India (and elsewhere). The US Economists don’t seem to realize India is producing as many college educated engineers as the US. So India also has hundreds of millions of low skill workers that doesn’t mean they don’t also have plenty of high skilled worked (that speak English, which is, of course a huge benefit that is less true of Chinese high skilled workers).

Ok, I need to do better research but here is one source: “I know that US production of engineers declined from about 80K (in ’85) to about 65K – but is back up to about 75K in the latest data. For context, however, the production of engineers is over 200,000/yr in each of China and India.” Wm. A. Wulf, President, National Academy of Engineering (United States) in talk entitled: Out-sourcing/Off-shoring of Engineering Jobs. – Update: see USA Under-counting Engineering Graduates
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Posted in Economics, Science | Tagged China, Economics, engineering, global, India, USA | Comments Off

Hack your way out of writer’s block

Posted on November 18, 2004 by John Hunter

Topic: Miscellaneous

I thought this post, from 43 folders, on writer’s block, had some good ideas. If you are suppose to be witting something and instead are reading this blog perhaps you should take a look at the ideas offered and see if they help you get back on track.