The Inequality Conundrum

Writing in The Boston Globe, the columnist James Carroll said the current economic system is “eroding democracy”.
As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within new scientific understanding which new energy systems would reveal.

June 10, 2007
NYT: The Way We Live Now
The Inequality Conundrum
By ROGER LOWENSTEIN
In 1976, Richard Freeman wrote a book called “The Overeducated American.” So many Americans had been getting college degrees that the relative wages of white-collar professionals had started to fall. It no longer paid to go to college and, for most of the ’70s, fewer people did. Just so, incomes of the educated began to rise again.
People like Freeman, a labor-market economist, waited for the cycle to turn. They expected that with white-collar types riding high again, more people would stay in school, and incomes at the top would level off once more.
But they never did. Instead, the rich kept getting richer. Across the spectrum of American society, the higher your income category, the more your income continued to grow. And for a quarter-century, albeit with zigs and zags along the way, that rich-get-richer pattern has held. The figures are striking. In 2004, according to the Congressional Budget Office’s latest official analysis, households in the lowest quintile of the country were making only 2 percent more (adjusted for inflation) than they were in 1979. Those in the next quintile managed only an 11 percent rise. And the middle group was up 15 percent. Do you sense a pattern? The income of families in the fourth quintile — upper-middle-class folks with an average yearly income of $82,000 — rose by 23 percent. Only when you get to the top quintile were the gains truly big — 63 percent.
Numbers like that have made inequality a hot topic, not only for liberals but also for Bush administration officials like Henry Paulson, the secretary of the Treasury. The press is full of stories of the outlandish wages of the superrich, like the 25 hedge-fund managers who each earned at least $240 million last year (the top dog took home $1.7 billion). Democrats are giving tougher scrutiny to trade bills and are now thinking the unthinkable: tax hikes for the rich. Inequality “isn’t good as an economic matter,” says Steven Rattner, an investment manager and contributor to Democratic politicians, “and it’s not good as a moral or social matter.” Writing in The Boston Globe, the columnist James Carroll said the current economic system is “eroding democracy” by awarding a larger share of the economic pie to the very rich and “impoverishing more and more human beings.”
The evidence for the last point is rather scant. The millions made by hedge-fund traders, or by entrepreneurs who founded companies like Google, don’t diminish other people’s wages. Indeed, each helps to make the pie bigger. But what puzzled Freeman remains a mystery to this day. Why isn’t prosperity spreading more equally? The leading theory has been that a global, high-tech economy creates big winners and losers. That is surely part of it. But Europe has computers, too, so where are all of its billionaires?
Countries like Sweden are more equal, but to some economists, they are probably too equal. There is a rough trade-off between equality and growth: if you try too hard to make everyone equal, you get fewer entrepreneurs, fewer Silicon Valleys and a lower standard of living. Freeman, who is generally pro-union, says Sweden’s converging pay scales led to unemployment and deficits in the early ’90s, when it belatedly moved to create more incentives. Similarly, Gary Becker, a Nobel-winning economist, recalls visiting factories in Communist China in 1981: the workers were all lazing around. Now China has billionaires and the country is growing like Topsy.
You can boil down most economic policy debates — starting with Hamilton versus Jefferson and moving to Bush versus the Democrats — to this tension: how can you promote equality without killing off the genie of American prosperity? The trade-off is clear at the extremes but fuzzier in the middle. A little redistribution, cleverly designed, doesn’t hurt. One example might have occurred during the late ’90s. The stock market was crowning multimillionaires, but the poor also did a little better. Among households with children, cash earnings of the poorest quintile doubled (though their earnings, at $13,000, remained meager and have tapered off more recently).
Most of the improvement at the bottom was because of people working more hours rather than for higher wages: a red-hot economy provided more jobs. The retooled federal welfare program, however, as well as the expansion of the earned-income tax credit (E.I.T.C.), gave people an added financial incentive to work.
Some redistribution is clearly good for the entire economy — providing public schooling, for instance, so that everyone gets an education. But public education aside, the United States has a pretty high tolerance for inequality. Americans care about “fairness” more than about “equalness.” We boo athletes suspected of taking steroids, but we admire billionaires.
The extreme divergence of American incomes we see today, however, is actually rather new. For most of the 20th century, America was becoming more egalitarian. The United States seemingly conformed to the standard theory of development, which held that industrialization produces fat cats at first (as factory owners rake it in) and then a more general prosperity as workers become more productive. It’s a feel-good theory that says, “Don’t worry if the rich are prospering; the poor will have their day.”
Emmanuel Saez, a French economist at the University of California at Berkeley who studies American inequality, looked more closely and discovered that theory and history didn’t quite mesh. Saez and his colleague, Thomas Piketty (who is based in Paris), plotted income distributions in America back to 1913. The share of income enjoyed by the rich was high in the 1920s, then stable or falling during most of the next half-century. In the ’70s, the cycle seemed to start again — perhaps because “a new industrial revolution” (in technology) inspired a renewed period of inequality.
But Saez noticed some inconsistencies. During the ’40s, the share of those at the top fell very steeply. He doubted that a gradual process like industrialization could have caused it. More likely, the culprit was the combined shock of the Great Depression and World War II, when the United States imposed wage controls. That left a puzzle: Why didn’t top earners recover their shares soon after the war?
Saez hypothesized that the answer lay with various nonmarket factors. Some were institutional, like the strength of postwar labor unions. Some were cultural, like the reluctance of boards to pay their chief executives an unseemly amount. The progressive tax code prevented accumulations by the upper crust and thus reduced how much they could earn in the future.
By the ’70s, the share of income earned by those at the top was far lower than when Woodrow Wilson was president. The social and institutional forces alluded to by Saez, however, were already moving in reverse. This might explain why inequality grew in the United States but not in Europe. In the United States, the marginal tax rate was sharply reduced (during the Reagan years, from 70 percent to 28 percent) and unions gradually lost their clout. Also, beginning in 1979, the minimum wage (in real terms) began to decline.
Before you get too misty-eyed over the ’70s, remember that while the decade may have been a high-water mark for American egalitarianism, the country was also in its worst economic funk since the Great Depression. Unemployment and inflation were raging, growth was tepid and the stock market was depressed. An economist named Alan Greenspan termed it “the Great Malaise.”
You can think of most of what has contributed to rising inequality since then as a reaction against the ’70s. A number of industries — banking, trucking, airlines, energy, telecommunications — were deregulated. Trade barriers were loosened, which had a similar effect on other once-protected industries like autos and steel. Antitrust regulation diminished, permitting more big-time mergers. The elimination of controls and the creation of new financial instruments let risk-takers make bets on everything from interest rates to foreign currencies. The purpose was to unshackle the economy, but it also created a society of multimillionaires.
In one specific case, the link was quite explicit. After the weak stock market of the ’70s, academics like Michael Jensen of Harvard began to promote stock options and other incentives as a means of motivating corporate executives. Boardroom notions of propriety underwent a sea change. Lee Iacocca once told Larry King that no executive was worth $1 million. That wouldn’t cover fringe benefits for C.E.O.’s nowadays.
Indeed, executive pay is probably a glaring example of an overreaction to the ’70s. Executive compensation isn’t set in a pure market; it is administered by (often-friendly) directors. That C.E.O.’s have been very handsomely rewarded for failure, while many more have become exceedingly rich almost irrespective of their performance, violates every conservative piety about designing the right incentives.
It’s harder to make that case against high-income earners generally, because most are claiming market rewards. If Bono sells a lot of CDs, or if a leading cardiologist sets high rates and wealthy patients agree to pay them, it’s difficult to say that they are “wrong.” It’s simply the market.
And the market has helped them prosper. In 1979, the upper 1 percent of the United States collected 9 percent of total income. Now they get 16 percent. That’s an enormous increase. But beneath the very top, the trend toward inequality has been less marked. For instance, those in the middle of the income spectrum used to earn 3.2 times as much as those at the bottom; that ratio has widened, but only to 3.65 times as much. The real action has occurred between folks in the top percentile — those who, in 2004, earned an average of $1.3 million — and everyone else. (A little thought exercise: if the very upper crust were banished to a Caribbean island, the America that remained would be a lot more egalitarian.)
But whether Roger Clemens, who will get something like $10,000 for every pitch that he throws, earns 100 times or 200 times what I earn is kind of irrelevant. My kids still have health care, and they go to decent schools. It’s not the rich people pulling away at the top who are the problem; it’s that so many have been stuck for so long at the bottom and in the middle. This is why one of the really good books on the subject, “Inequality in America,” by the economists James Heckman and Alan Krueger, is all about raising the incomes of people at the bottom. Punishing those at the top doesn’t help.
When it comes to raising the bottom in the short term, Washington basically has two choices: it can try to change market outcomes or it can redistribute after the market results are in. The first method is more intrusive. It includes limiting trade, regulating the workweek or restricting access to certain jobs, through mechanisms like licensing. Since the ’70s, the United States has moved away from such market interventions, but Congress seems to be acting on two of them. It just voted to raise the minimum wage, for the first time in 10 years, and it is seeking a compromise to revise the immigration laws.
And what about redistribution after the fact? The United States does less of it than Europe, and less of it than we used to. Even though the United States is richer than Belgium, a poor person in Belgium is better off than one here. On the other hand, the price for being Belgian is steep: Belgium’s median disposable income — what people have left to spend after they pay taxes and collect welfare-type payments — is only 72 percent as high as ours.
Even in the United States, the rich pay a disproportionate share of the federal income tax, which mildly reduces inequality. Other taxes, however, like Social Security, are regressive: the rich pay a lesser share. Thus, the upper tenth of households pay 70 percent of the income tax, but only 52 percent of all federal taxes. State sales taxes make the system even more regressive, because poorer people spend a higher share of their total income on them. Kevin Hassett, of the American Enterprise Institute, estimates that a family of four earning $50,000 pays exactly the same share of its income (30 percent) on taxes as one earning $150,000.
There is little agreement on how much redistribution is too much. But common sense tells you that a small increase in taxes when rates are relatively low, as they are now, isn’t going to curb people’s animal spirits. Higher taxes in and of themselves, however, won’t cure inequality. The point of taxing, as Becker is quick to point out, isn’t to confiscate: it’s to raise revenue for things that will benefit society, in this case helping those at the bottom. Though such thinking is a good argument for further expanding the E.I.T.C., which rewards people for working, in the long run you want to get folks moving up the skills ladder, so fewer people are in need of wealth redistribution. That this hasn’t happened is rather a conundrum. The incentives are certainly there. College grads make more than 40 percent more than high-school grads. Those with postgraduate degrees earn twice as much.
To Becker, this is a good thing; it offers an incentive for people to pursue education. The trouble is, it hasn’t worked. The Americans that Freeman once called overeducated are plainly undereducated today. Only about a third of the population graduates from college. Among the poor, there has been only a very slight increase in college-graduation rates.
To get more Americans to enroll in and complete college, the theory goes, you can either fix the schools (more teachers, longer school years, more student loans) or fix the students (more nurturing of kids from disadvantaged homes). Both approaches would cost a lot. But if you’re worried about inequality, it’s hard to see any alternative. Hamburger flippers simply don’t command a high wage. We can pass laws to change that — a minimum price for cheeseburgers, maybe — or we can, finally, invest in teaching the flippers to do something else.
Roger Lowenstein is a contributing writer for the magazine.

6/5/07 Joining Russia, China Criticizes U.S. on Missile Defense

Marching in sync to fulfill Nostradamus's prophesies. As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within new scientific understanding which new energy systems would reveal. The new scientific comprehension eliminates the caveman 'club/stick' conflict resolution methods still used in the 21st century. Besides, caveman club/stick methods do not work well with nuclear toys, as they threaten all of humanity

June 5, 2007
China Warns U.S. May Set Off Arms Race
NYT By THE ASSOCIATED PRESS
Filed at 5:58 a.m. ET
BEIJING (AP) -- China joined Russia on Tuesday in criticizing a U.S. plan to build a missile defense system in Europe, saying the system could set off an arms race.
The White House plans to install a radar system in the Czech Republic and interceptor missiles in Poland -- two Eastern European countries that were in the Soviet orbit during the Cold War era.
Chinese Foreign Ministry spokeswoman Jiang Yu said the plan had ''aroused great concern and attention.''
''China believes that the impact of a missile defense system on strategic defense and stability is not conducive to mutual trust of major nations and regional security,'' she said. ''It may also give rise to a proliferation problem.''
Russia perceives the shield as a direct threat and says it has no choice but to boost its own military potential in response. In some of his latest comments on the matter, Russian President Vladimir Putin warned that Moscow could take ''retaliatory steps'' including aiming nuclear weapons at U.S. military bases in Europe.
The U.S. says the network is meant to protect NATO allies against a missile launch from Iran, not Russia.
Once Cold War rivals for the allegiances of the socialist world, China and Russia improved relations dramatically in the 1990s and forged what they call a ''strategic partnership.''

Russia Warns U.S. on Missile Defense

As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within these expanded/holistic/scientific/sustainable/survival parameters which new energy systems would reveal. Unlike Schrödinger's Cat '...is Dead. No, wait. Schrödinger's Cat is Not Dead. No, wait....." our destiny is sure and certain. For the power of the 'forces in motion' as noted by the media headlines in this blog, are of such magnitude, that nothing short of profound scientific revelation and energy breakthroughs can offset and reverse the 'clear and lethal' present danger. http://www.fuel2000.net/

NYT June 3, 2007
Russia Warns U.S. on Missile Defense
Russia's Putin Warns of Retaliatory Steps if U.S. Installs Missile Defense in Europe
By MARIA DANILOVA
The Associated Press MOSCOW
Russian President Vladimir Putin warned that Moscow could take "retaliatory steps" if Washington proceeds with plans to build a missile defense system for Europe, including possibly aiming nuclear weapons at targets on the continent.
Speaking to foreign reporters days before he travels to Germany for the annual summit with President Bush and the other Group of Eight leaders, Putin assailed the White House plan to place a radar system in the Czech Republic and interceptor missiles in neighboring Poland. Washington says the system is needed to counter a potential threat from Iran.
In an interview released Monday, Putin suggested that Russia may respond to the threat by aiming its nuclear weapons at Europe.
"If a part of the strategic nuclear potential of the United States appears in Europe and, in the opinion of our military specialists, will threaten us, then we will have to take appropriate steps in response. What kind of steps? We will have to have new targets in Europe," Putin said, according to a transcript released by the Kremlin. These could be targeted with "ballistic or cruise missiles or maybe a completely new system" he said.
On Monday, Iran's top security official called the U.S. plans for the missile defense shield a "joke," saying Tehran's missiles do not have the capability to reach Europe.
"Claims by U.S. officials that installing a missile defense system in Europe is aimed at confronting Iranian missiles and protecting Europe against Iran is the joke of the year," Ali Larijani told the state-run IRNA news agency.
"The range of Iran's missiles doesn't reach Europe at all," IRNA quoted Larijani as saying in Iran's first public reaction to the plans. Larijani is secretary of Iran's Supreme National Security Council, the country's top security decision-making body.
Iran is known to possess a medium-range ballistic missile called the Shahab-3 that has a range of at least 800 miles, capable of striking Israel. In 2005, Iranian officials said they had improved the range of the Shahab-3 to 1,200 miles.
Although Western experts believe Iran is developing the Shahab-4 missile thought to have a range between 1,200 and 1,900 miles, which would enable it to hit much of Europe Iran has not confirmed such reports.
Iran initially acknowledged in 1999 it was developing the Shahab-4, but claimed it would be used only as a space launch vehicle for commercial satellites.
Putin told reporters that he hoped U.S. officials would change their minds regarding the missile plan, warning that Moscow was preparing a tit-for-tat response.
"If this doesn't happen, then we disclaim responsibility for our retaliatory steps, because it is not we who are the initiators of the new arms race, which is undoubtedly brewing in Europe," he said.
"The strategic balance in the world is being upset and in order to restore this balance without creating an anti-missile defense on our territory we will be creating a system of countering that anti-missile system, which is what we are doing now," Putin said.
Last week, Russia tested a new ballistic missile capable of carrying multiple nuclear warheads and a new cruise missile. While Western analysts said the system has probably been under development for several years, Putin has described the test as part of Moscow's response to the U.S. anti-missile plan.
Putin also suggested that in the absence of a real threat from Iranian and North Korean missiles, the U.S. plan could be an attempt to spoil Russia's relations with Europe.
Relations between Moscow and Washington have soured in the past year. The two former Cold War foes are at odds over Washington's missile plans, over Russia's conflicts with former Soviet nations including Ukraine, Georgia and Estonia and over U.S. concerns of democratic backsliding in Russia.
Associated Press Writer Ali Akbar Dareini in Tehran, Iran contributed to this report

German G-8 Summit Protests Turn Violent

CBS public comment zone at end of article portrays a storm brewing toward the 2% corporate greedy guts spreading freedumbland, a world of war, hunger, social divisions, environmental destruction, everywhere. As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within these expanded/holistic/scientific/sustainable/survival parameters which new energy systems would reveal.

German G-8 Summit Protests Turn Violent
ROSTOCK, Germany, June 2, 2007
(CBS/AP) Protesters with black hoods and bandanas covering their faces showered police with rocks and beer bottles Saturday, before the heavily armored officers drove them back with water cannon and tear gas during a rally against an upcoming Group of Eight summit. Black smoke from burning cars mingled with the sting of tear gas in the harbor-front area of the northern German town of Rostock, where tens of thousands of people had gathered peacefully at the start of the day. The clashes broke out among hundreds of stone-throwing demonstrators and police on the edges of the crowd as the rally progressed. Some 146 police were hurt, 25 of them seriously. Police said they made 17 arrests. It was an unruly start to what is expected to be a week of rallies against the three-day G-8 summit beginning Wednesday in the fenced-off coastal resort of Heiligendamm, 14 miles from Rostock. German Chancellor Angela Merkel will host the leaders of Britain, France, Japan, Italy, Russia, Canada and the U.S. for discussions on global warming, aid to Africa and the global economy. The summit, like past ones, is attracting protesters opposed to capitalism, globalization, the war in Iraq and the G-8 itself. Police have surrounded the summit site with a seven-mile-long fence topped with barbed wire, and closed the surrounding waters and airspace, fearing terrorism or disorderly protests like the ones that marred at 2001 summit in Genoa, Italy, where police and protesters clashed for days and one demonstrator was killed. Protests near the fence have been banned. In Rostock, the officially permitted demonstration began peacefully Saturday with two groups of marchers gathering at the waterfront. Clashes broke out near the end of the scheduled four-hour rally, as some people pried up paving stones and broke them into smaller pieces. Eventually, five large green police trucks with twin water cannons mounted on top moved in to blast the rioters. A police car was destroyed and several parked cars burned, spreading black smoke over the area. Protesters also torched a large blue recycling bin. Police spokesman Frank Scheulen estimated the number of violence-minded demonstrators at about 2,000. Police put the size of the demonstration at 25,000, while organizers said it was 80,000. Werner Raetz, an anti-globalization activist with Attac, one of the organizing groups, distanced himself from the violence: “There is no justification for these attacks.” As for the demonstrations planned over the next few days, Raetz said both sides should try to get the “emotional situation” under control. There are several camps in the area for protesters, and marches and other events are planned. Some protesters say they intend to try to block roads leading to the summit site. Peter Mueller, who was among the demonstrators, had tears streaming from bloodshot eyes after the tear gas was released. “As long as the police were in the background it was OK, but as soon as one took a step closer, it went out of control,” he said. He shrugged. “What can you do? So ends the peaceful protest.” The protest was organized by several dozen groups under the motto “another world is possible.” “The world shaped by the dominance of the G-8 is a world of war, hunger, social divisions, environmental destruction and barriers against migrants and refugees,” organizers said in leaflets handed out on the streets. "For the member nations of the G8 summit, there are so many controversial issues — including the delay in getting agreement on climate change, the war in Iraq and global terror — that the demonstrations against the meeting are a 'perfect storm' of different intersecting protest groups," said CBS News Foreign Affairs Analyst Pamela Falk. "For an organization that relies on consensus, the Germany summit is already complicated because of serious tension this year between the U.S. and Russia on arms development, and differences among the eight nations on how to deal with Iraq and Iran." "President Bush's climate change proposal, going into the summit, is being seen as both good news — an acknowledgment that his administration recognizes the problem — and bad news for getting something done on the already-existing Kyoto Protocol," Falk added. On their Web site, organizers emphasized that they wanted a peaceful protest. “There is no reason to be afraid to come to the big demonstration in Rostock,” they said. “We do not expect major problems with the police.” Anti-globalization protests have plagued similar summits in recent years, especially meetings of the World Trade Organization. In 1999, 50,000 protesters shut down WTO sessions in Seattle as police fired tear gas and rubber bullets. There were some 600 arrests and $3 million in property damage. At subsequent WTO meetings in Cancun, Mexico, and Hong Kong, smaller protests also disrupted meetings.

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alphaa10,Re: "Globalism is not an economic theory but a hard-fought, incremental political process now well underway, thanks to a pliant group of G8 and other governments. These governments, whose principal membership is heavily involved in oversight/enabling bodies for multinationals, pave the way for corporations to do as they please with the rest of the world-- especially in developing nations." Dead on.###It sounds like the demonstrators are defending themselves fairly well. In reaction to the pig riot attack against these demonstrators, nearly 150 officers have already been wounded, and the conference hasn't even started yet. There are already as many as 80,000 demonstrators there.I think they have a very good chance of shutting this Corporate pirate conference down, just like we have seen in the past.www.news.com.au/heraldsun/story/0,21985,21841159-663,00.htmlI wonder if the pigs will kill anyone this time around, as they did in Genoa, in 2001?Best of luck to the demonstrators, and thank you!Be safe!
Posted by FeelFree1 at 01:16 AM : Jun 03, 2007+ report abuse
This truly shows how tired people are of being constantly stepped upon. The rioters here are rioting for us, they are doing this to show the world how the middle and lower class are constantly oppressed and stepped on by the upper class. Constantly being kept down by people who have alot of money, constantly being oppressed by the corrupt upper class. This is our world too people, wake up and attend these violent protests. I applaud loud.
Posted by ndjam at 01:10 AM : Jun 03, 2007+ report abuse
The supposed panacea of globalism is Dr. Pangloss hard at work, depicting multinational corporate capitalism as the best of all possible worlds. In truth, however, globalism is a battle to make the world safe for multinational factory owners. Globalism is not an economic theory but a hard-fought, incremental political process now well underway, thanks to a pliant group of G8 and other governments. These governments, whose principal membership is heavily involved in oversight/enabling bodies for multinationals, pave the way for corporations to do as they please with the rest of the world-- especially in developing nations. An excellent critique of globalist doctrine is "Global Trade and Conflicting National Interests", by Ralph Gomory and William Baumol. Gomory, president of the Alfred P. Sloan Foundation, and a former IBM senior VP, helped make IBM a global presence. Baumol is former president of the American Economic Association. The authors are uniquely positioned to describe a process more threatening to our quality of life than global terror, itself.
Posted by alphaa10 at 12:14 AM : Jun 03, 2007+ report abuse
hopnotoad72 croaked, "Finally, anyone who claims "America's attempt at world domination for oil!!!!!!!!!!!!!!!!!!" is a naive fool. There's more than meets the eye."---Yes, of course, there is always more than meets the eye-- as your comment, itself, demonstrates. Your denials become more interesting as they become more vehement. Clearly, having 35 percent of the world's proven oil reserves, not to mention fields yet to be "fathomed", is sufficient objective to draw many naive fools. But for Bush and Cheney, at least, the combination of a seemingly inexhaustible oil reserve and a secure American force-projection base (ten superbases, to be exact) to protect it ranks as an irresistible bauble for neocons bent on making a "new American century". What the builders of these superbases had not anticipated (of course) was their Iraqi "cakewalk" might fail, and the natives might become restless, instead of pliantly democratic.
Posted by alphaa10 at 11:40 PM : Jun 02, 2007+ report abuse
emhawks,Re: "FeelFree1: Agree completely with your posts!"Thank you, and thank you for the supplemental information.
Posted by FeelFree1 at 09:18 PM : Jun 02, 2007+ report abuse
Posted by emhawks emhawks, thanks for the information. Its a pity we have to find out about if from the comments part of a supposed news service. While this is being ignored CBS is posting stories about an American Idol finalist debuting her first album. The dumbing down of America continues.

After Sanctions, Doctors Get Drug Company Pay

As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within these expanded/holistic/scientific/sustainable/survival parameters which new energy systems would reveal. Unlike Schrödinger's Cat '...is Dead. No, wait. Schrödinger's Cat is Not Dead. No, wait....." our destiny is sure and certain. For the power of the 'forces in motion' as noted by the media headlines in this blog, are of such magnitude, that nothing short of profound scientific revelation and energy breakthroughs can offset and reverse the 'clear and lethal' present danger.

http://www.fuel2000.net/

June 3, 2007
After Sanctions, Doctors Get Drug Company Pay
By GARDINER HARRIS and JANET ROBERTS
A decade ago the Minnesota Board of Medical Practice accused Dr. Faruk Abuzzahab of a “reckless, if not willful, disregard” for the welfare of 46 patients, 5 of whom died in his care or shortly afterward. The board suspended his license for seven months and restricted it for two years after that.
But Dr. Abuzzahab, a Minneapolis psychiatrist, is still overseeing the testing of drugs on patients and is being paid by pharmaceutical companies for the work. At least a dozen have paid him for research or marketing since he was disciplined.
Medical ethicists have long argued that doctors who give experimental medicines should be chosen with care. Indeed, the drug industry’s own guidelines for clinical trials state, “Investigators are selected based on qualifications, training, research or clinical expertise in relevant fields.” Yet Dr. Abuzzahab is far from the only doctor to have been disciplined or criticized by a medical board but later paid by drug makers.
An analysis of state records by The New York Times found more than 100 such doctors in Minnesota, at least two with criminal fraud convictions. While Minnesota is the only state to make its records publicly available, the problem, experts say, is national.
One of Dr. Abuzzahab’s patients was David Olson, whom the psychiatrist tried repeatedly to recruit for clinical trials. Drug makers paid Dr. Abuzzahab thousands of dollars for every patient he recruited. In July 1997, when Mr. Olson again refused to be a test subject, Dr. Abuzzahab discharged him from the hospital even though he was suicidal, records show. Mr. Olson committed suicide two weeks later.
In its disciplinary action against Dr. Abuzzahab, the state medical board referred to Mr. Olson as Patient No. 46.
“Dr. Abuzzahab failed to appreciate the risks of taking Patient No. 46 off Clozaril, failed to respond appropriately to the patient’s rapid deterioration and virtually ignored this patient’s suicidality,” the board found.
In an interview, Dr. Abuzzahab dismissed the findings as “without heft” and said drug makers were aware of his record. He said he had helped study many of the most popular drugs in psychiatry, including Paxil, Prozac, Risperdal, Seroquel, Zoloft and Zyprexa.
The Times’s examination of Minnesota’s trove of records on drug company payments to doctors found that from 1997 to 2005, at least 103 doctors who had been disciplined or criticized by the state medical board received a total of $1.7 million from drug makers. The median payment over that period was $1,250; the largest was $479,000.
The sanctions by the board ranged from reprimands to demands for retraining to suspension of licenses. Of those 103 doctors, 39 had been penalized for inappropriate prescribing practices, 21 for substance abuse, 12 for substandard care and 3 for mismanagement of drug studies. A few cases received national news media coverage, but drug makers hired the doctors anyway.
The Times included in its analysis any doctor who received drug company payments within 10 years of being under medical board sanction. At least 38 doctors received a combined $140,000 while they were still under sanction. Dr. Abuzzahab received more than $55,000 from 1997 to 2005.
Drug makers refused to comment, said they relied on doctors to report disciplinary or criminal cases, or said they were considering changing their hiring systems.
Asked about the Minnesota analysis, the deputy commissioner and chief medical officer of the Food and Drug Administration, Dr. Janet Woodcock, said the federal government needed to overhaul regulations governing clinical trials and the doctors who oversaw them.
“We recognize that we need to modernize the F.D.A. approach in keeping people safe in clinical trials,” Dr. Woodcock said.
Drug makers are not required to inform the agency when they discover that investigators are falsifying data, and indeed some have failed to do so in the past. The F.D.A. plans to require such disclosures, Dr. Woodcock said. The agency inspects at most 1 percent of all clinical trials, she said.
Karl Uhlendorf, a spokesman for the Pharmaceutical Research and Manufacturers of America, said the trade group would not comment on The Times’s findings.
The records most likely understate the extent of the problem because they are incomplete. And the Minnesota Board of Medical Practice disciplines a smaller share of the state’s doctors than almost any other medical board in the country, according to rankings by Public Citizen, an advocacy group based in Washington.
Dr. David Rothman, president of the Institute on Medicine as a Profession at Columbia University, said the Times analysis revealed a national problem. “There’s no reason to think Minnesota is unique,” Dr. Rothman said.
“Clinical trial investigators must be culled from only the finest physicians in the country,” he said, “since they work on the frontiers of new knowledge. That drug makers are scraping the bottom of the medical barrel is an outrage.”
Payments by drug companies to doctors, whether or not the doctors have been disciplined, are a matter of much debate. Drug makers and doctors say the money finances vital research and helps educate doctors about helpful medicines. But others in the medical profession say the payments are thinly disguised incentives for doctors to prescribe more, and more expensive, drugs.
Among the other doctors who were disciplined or criticized by the board and paid by pharmaceutical companies:
¶Dr. Barry Garfinkel, a child psychiatrist from Minneapolis who was convicted in federal court in 1993 of fraud involving a study for Ciba-Geigy. His criminal case made headlines across the state. From 2002 to 2004, Eli Lilly paid him more than $5,500 in honoraria, according to state records.
Dr. Garfinkel said in an interview that he had wondered why drug makers would hire him as a speaker considering his statewide notoriety. He decided that “they’re hiring me to influence my prescribing habits,” so he quit giving sponsored talks and taking money from drug makers, he said.
¶Dr. John Simon, a Minneapolis psychiatrist who for years shared an office with Dr. Abuzzahab and was told by the state medical board in 1994 to complete a clinical training program after it concluded in a report that he “frequently makes abrupt and drastic changes in type and dosage of medication which seem erratic, not well considered and poorly integrated with nonmedication strategies.” He prescribed addictive drugs to addicts and failed to stop giving medicines to patients suffering severe drug side effects, the board concluded.
Dr. Simon earned more than $350,000 from five drug makers from 1998 to 2005 for consulting and giving drug marketing talks. Of this, Eli Lilly paid more than $314,000. Dr. Simon said in an interview that the board’s action was a learning experience, and that drug makers continued to hire him to speak because “I am respected by my peers.”
Asked about Drs. Garfinkel and Simon, Phil Belt, a spokesman for Eli Lilly, said that both doctors were licensed to practice medicine and that the company relied on doctors to report disciplinary actions or criminal convictions against them.
¶Dr. Ronald Hardrict, a psychiatrist from Minneapolis who pleaded guilty in 2003 to Medicaid fraud. In 2004 and 2005, he collected more than $63,000 in marketing payments from seven drug makers. In an interview, Dr. Hardrict said it was “insulting” and “ridiculous” to suggest that income from drug makers might influence doctors’ prescribing habits.
“I bought the Mercedes because it has air bags, and I use Risperdal because it works,” Dr. Hardrict said, referring to an antipsychotic medicine for schizophrenia. Johnson & Johnson, the maker of Risperdal, paid Dr. Hardrict more than $30,000 in 2003 and 2004.
Srikant Ramaswami, a spokesman for Johnson & Johnson, said the company removed Dr. Hardrict as a speaker in 2004 when, as a result of his conviction, his name appeared in a government database.
Asked why other drug makers continue to hire him despite a fraud conviction, Dr. Hardrict responded with an e-mail message stating only, “I will pray for you daily.”
In cases involving Dr. Abuzzahab over 15 years in the 1980s and ’90s, the medical board found that he repeatedly prescribed narcotics and other controlled substances to addicts, renewing one patient’s prescriptions six weeks after the patient was jailed and telling another that his addictive pills should be thought of as “Hamburger Helper.” He prescribed narcotics to pregnant patients, one of whom prematurely delivered a baby who soon died.
In explaining his abrupt discharge of the suicidal Mr. Olson, Dr. Abuzzahab told the medical board that “if a patient is determined to kill himself, he can’t be prevented from doing it and hospitalization postpones the event,” records show.
Mr. Olson’s sister, Susie Olson, said Dr. Abuzzahab “had no time for my brother unless David agreed to get into a drug study. He said, ‘You’re wasting my time and the hospital’s.’ It was all about money.”
Separately, the F.D.A. in 1979 and 1984 concluded that Dr. Abuzzahab had violated the protocols of every study he led that they audited, and reported inaccurate data to drug makers. He routinely oversaw four to eight drug trials simultaneously, often moved patients from one study to another, sometimes gave experimental medicines to patients at their first consultation, and once hospitalized a patient for the sole purpose of enrolling him in a study, the F.D.A. found.
Dr. Abuzzahab, 74, was president of the Minnesota Psychiatric Society and two decades ago was chairman of its continuing education and ethics committees. He would not discuss the specifics of his disciplinary record, saying he did not have the time. But in 1998 he signed an agreement with the board saying that his conduct “constitutes a reasonable basis in law and fact to justify the disciplinary action.”
A simple Google search reveals Dr. Abuzzahab’s 1998 medical board disciplinary file, which was reported at the time by a local newspaper and a TV station. In 1998, The Boston Globe featured Dr. Abuzzahab in a front-page article questioning the safety of psychiatric drug experiments. And in 1999, the NBC program “Dateline” did a segment about a woman who committed suicide while in a drug experiment he supervised.
In June 2006, the medical board criticized Dr. Abuzzahab, this time for writing narcotics prescriptions for patients he knew were using false names, a violation of federal narcotics laws.
Despite all this, drug makers continued to hire him. Dr. Abuzzahab’s résumé lists 11 publications or research presentations since 2000, when the medical board lifted its restrictions on his license.
Takeda, a Japanese drug maker, confirmed that Dr. Abuzzahab was doing a study financed by the company on its sleep medicine, Rozerem. Eisai, another Japanese drug maker, said that although Dr. Abuzzahab had signed a clinical trial agreement with the company to study its Alzheimer’s drug, Aricept, it told him two days after a reporter asked for comment on the case that he was not qualified to be an investigator. And at AstraZeneca, for which Dr. Abuzzahab said he had performed clinical trials and still gave drug marketing lectures, a spokesman said the company was “concerned” about Dr. Abuzzahab’s disciplinary record.
“We have our own internal processes for dealing with these matters, which are under way,” said Jim Minnick, an AstraZeneca spokesman.
The Minnesota records often fail to distinguish between drug company payments to doctors for research and for marketing, so it is sometimes impossible to determine why doctors were paid. Some doctors, like Dr. Abuzzahab, clearly performed both research and marketing.
Gene Carbona, who left Merck on good terms in 2001 as a regional sales manager after 12 years in drug sales, said the only thing the company considered when hiring doctors to give marketing lectures was “the volume or potential volume of prescribing that doctor could do.”
A Merck spokesman declined to comment.
Mr. Carbona, now executive director of sales for The Medical Letter, which reviews drugs, said that had he known that a doctor had a disciplinary record for excessive prescribing, “I would have been more inclined to use them as a speaker.

Rice Clashes With Russian on Kosovo and Missiles

“All they’re saying is, ‘Don’t worry, it’s not aimed at you,’ ” Mr. Lavrov said at a news conference after the meeting. “It’s such answers that are ludicrous.”“We quite agree,” Ms. Rice said with a sly smile, countering that Russian officials themselves have bragged that their strategic defense systems can easily overwhelm any missile defense system that the United States puts up in Europe. Mr. Lavrov was having none of it. “I hope that no one has to prove that Condi is right about that,” he interjected.

Perhaps a tour down the perceptual "illusions, delusions, deceptions and reality" lane may spark interest and action to retrieve and/or redevelop the long past due and suppressed energy systems that are INDISPENSABLE to survival for growing and increasingly complex civilizations: Illusions Delusions Deceptions & reality - The Joker There is an added bonus by-product, that comes with new energy science theory integration, called Wisdom and Approach to Understanding. The new scientific comprehension eliminates the caveman 'club/stick' conflict resolution methods still used in the 21st century. Besides, caveman club/stick methods do not work well with nuclear toys, as they threaten all of humanity

Rice Clashes With Russian on Kosovo and Missiles
By HELENE COOPER
POTSDAM, Germany, May 30 — The United States and Russia, with relations between them at their most contentious since the collapse of the Soviet Union, openly sparred here on Wednesday at a meeting of foreign ministers of the Group of 8 industrialized nations.
The Russian foreign minister, Sergey V. Lavrov, accused the United States of starting a new arms race and implicitly threatened to veto any United Nations Security Council resolution that, like the one proposed by the United States and its European allies, would recognize the independence of Kosovo.
Even as the White House and the Kremlin were announcing plans for a rare kiss-and-make-up meeting between President Bush and President Vladimir V. Putin, their top diplomats were clashing here in the historic castle where Churchill, Truman and Stalin met to decide how to carve up Germany after World War II.
This time, the big issue was the carving up of the former Yugoslavia, where the mostly Albanian-inhabited province of Kosovo wants to secede from Serbia. That, along with the American plan to place antimissile bases in Poland and the Czech Republic, has pitted Russia against the West in a war of words with flashbacks to the cold war.
Mr. Lavrov harshly criticized Washington’s plan to build a missile shield over countries that were once part of the Soviet sphere of influence. And he took issue with Secretary of State Condoleezza Rice for calling Russian concerns about it ludicrous.
“All they’re saying is, ‘Don’t worry, it’s not aimed at you,’ ” Mr. Lavrov said at a news conference after the meeting. “It’s such answers that are ludicrous.”
“We quite agree,” Ms. Rice said with a sly smile, countering that Russian officials themselves have bragged that their strategic defense systems can easily overwhelm any missile defense system that the United States puts up in Europe. Mr. Lavrov was having none of it. “I hope that no one has to prove that Condi is right about that,” he interjected.
Their clashes are indicative of a chill in their countries’ relations. In February, Mr. Putin delivered a blistering speech accusing the United States of undermining international institutions and making the Middle East more unstable through its clumsy handling of the Iraq war.
Russia is also deeply unhappy about the expansion of NATO into the former Soviet republics of Estonia, Latvia and Lithuania, and about the perception in Russia that the West has supported groups that have toppled other governments in Moscow’s former sphere of influence.
Mr. Bush, Ms. Rice and Secretary of Defense Robert M. Gates have tried, without success, to reassure the Russians that the missile system is aimed at preventing attack by the likes of Iran or North Korea.
The tensions have heightened to the point that the two countries have decided to hold a one-on-one session between Mr. Putin and Mr. Bush on July 1 in Kennebunkport, Me. But it is hard to see how that will tone down the sparring, given how far apart the two behemoths are on Kosovo.
The United States and its Western European allies favor a draft United Nations resolution endorsing supervised independence for Kosovo, where a NATO bombing campaign in 1999 helped defeat Serbian forces. Russia is adamantly opposed.
At the meeting on Wednesday, Mr. Lavrov repeatedly questioned why the United States was so intent on resolving Kosovo’s status when other areas of the world were in dispute.
“Lavrov said, ‘Why don’t we solve the case of Western Sahara first?’ ” said a European official who was at the session, speaking on condition of anonymity under customary diplomatic rules. “He even brought up Abkhazia,” the obscure Black Sea region that has been trying to secede from Georgia.
“And every time Lavrov said something, Condi would jump in,” the official said. “It was like tennis.”
Mr. Lavrov did not tone down his ire over the Kosovo plan after the meeting, when the foreign ministers held their news conference and most tried to act cordial. He hinted, as Russian officials have before, that Russia would veto any Security Council resolution seeking to recognize Kosovo as an independent country, unless Serbia agreed first, which diplomats said was very unlikely.
“I can’t imagine a situation where the Security Council will approve such a resolution,” Mr. Lavrov said. “Such a situation will not happen.”
A senior Bush administration official acknowledged that the administration, in more than six years, had not figured out how to manage its relationship with Russia. “There are a lot of things we have that are of common interest, and at the same time, we need to push where necessary,” said the official, speaking anonymously under diplomatic rules. “And to be able to do both things at the same time is hard, particularly for American administrations. We either tend to do one or the other, and for this to work we have to do both.”