Capitalism: Fix it, Make it Better or Keep Shooting Yourself in the Foot

 

by Craig Willms

Part 1

Since I became aware of how the world works to whatever degree it's possible the system, the American system, has been under attack. The constant consternation of the discontented and their antics has been on display since I could absorb the news of the day. By the time I was old enough to participate in the workings of the world I was well aware of the disenchanted. I could either join them or I could just get on with the business of carving out my own place in this life. I could be angry about everything that's wrong with the world or I could put my head down and get to work on my own life. I chose the later.

I'm not saying either course is right or wrong. We all want the world, the system, our lot to be better than it is, the question is what can we do about it? I was and still am, I suppose, absorbed in my own little world. I suspect we all are. Early on my beliefs and politics was an extension of my parent's worldview. There's nothing odd in that, most people start there. My blue-collar parents, factory workers, were both union Democrats. They had a work ethic that was beyond reproach, but they had a narrow worldview that never strayed far from the boundaries of the union or in my mother's case, beyond the Church. They never desired to tear down the world, but they knew who their allies were and who  the nefarious kleptocrats were (hint: Republicans). 

I remember my father-in-law telling the story of his awakening - his partial awakening. He was also a union Democrat and in fact was working for 'the union' as an enforcer (whatever that entails). When he saw that the union bosses were two-faced kleptocrats in their own right he was so disillusioned he quit. He never lost his faith in his us against them view of the world, but he could not be a part of such deception. He had something called personal integrity.

What my father-in-law encountered was human nature. We are ruled by our self-interest, it's an integral part of our will to survive. Yes, of course we care about our clan, our group, our causes, but we care mostly about ourselves. His union bosses cared mostly about themselves and pilfered their union members coffers to feather their own nests. They were no different than the businessman who takes his employees productivity and then mercilessly flaunts his wealth. 

By now in the early part 21st century we have plenty of evidence of what happens when humans pretend to deny human nature by forcing, at the point of a gun, a system of economics on a nation that purports to be fair and equitable. What happens? Disaster is what happens. 

There's no need to chronicle point by point these disasters. Short of Cuba and North Korea most of the communist and socialist experiments dissolve into quasi-capitalist realities. In each of these cases despite the high-minded drive to create classless equality, human nature expressed itself in thriving black markets where certain high achievers prospered. As well, the kleptocrats within the ruling class also prospered. This while the average citizen continued to be mired in poverty, disillusionment and death.

In the United States and Western Europe on average the citizenship prospered despite the unhidden inequality and unfairness. All the things that the communists declared about the capitalism was true, to a degree, however, rarely are the abundant positive attributes of the capitalistic system ever cited. Enough people, a majority, raised their lot in life to pass on a better existence to their descendants. It was not, and is not perfect, but it works for the majority. It works well, for now.

Today in the West the kleptocracy is an alliance of the ruling class and consolidated business interests taking a lion's share of the wealth. More and more people fall through the cracks, more and more people cannot afford to live well. This current generation will not pass on a better life to their kids (if they have any kids).

Free market-based capitalism does exploit people, but enough people live really well and prosper so that all in all it works. There has always been enough money in this type of system to scrape off the top to care for those struggling or those who are victims of circumstance. That's changing. Historically private and faith-based organizations cared for those living in the shadows. Today governments have absorbed this responsibility. With the gap between those who have enough, more than enough, and those who just scrape by getting wider, governments are failing to keep up. Everyone sees this, and most people see this as an intractable problem. In truth very, very poor local government policy plays the largest role in this failure. In some cities the streets are filling up with the homeless and the hopeless. The aforementioned disillusioned and discontented seeking answers keep returning to collectivism, via communism or more likely socialism despite the abhorrent track record. It makes no sense to go down that road again, it won't work - again. Maybe it's time to do something different. Maybe we should try to embrace capitalism, maybe we should fix it, make it better, make it fairer or we can just keep shooting ourselves in the foot.

Why can't the richest, most innovative, most expansible economic system be fixed?

Entrenched special interests might have something to say about that. They like things the way they are. But even they have to see the writing on the wall. The system will crumble when all that's left are a select few rich folks and the rest of us living hand to mouth.

We can all see that there are countless things wrong with American capitalism. How wonderful if we could snap our fingers and fix them all. Fairy tales are also wonderful. We need to focus on a few things that can be clearly explained and resonate with the most people. Since we are a people that need a figurehead to rally around, we need someone brave, charismatic, likable and able to reach people from all walks of life. 

                                               _________________

Part 2

In my eyes the number one issue with American capitalism is the rampant cronyism. Lawmakers have become paid operatives of business interests far and wide. This is well known and fully entrenched into the business of office holding. Many have talked about this cancer but rarely do they actually do anything to fix it. 

Why call it a cancer? Free market capitalism is potentially as clean and clear as mathematics. The inputs and outputs on one end is essentially pure math. The marketing and follow through on the other end is used to the measure success. It's all pretty straight forward. With a level playing field everyone has the same chance at succeeding. Cronyism stacks the system in favor of some and throws stumbling blocks out for the rest. Low paid politicians, and public sector leaders use their decision making powers to do the bidding of the powerful for a 'taste' of the green. There is no appetite among law makers to end the gravy train. This is a cancer in as much as any cancer eats the body from the inside out. It weakens the body politic so that insidious infections like socialism or communism can ravage it.

Most people understand the sort of deals where politicians obtain knowledge, let's say like land purchase deal where a large public infrastructure project is going to be proposed. Not only do they gain the fore knowledge and have the connections they magically get access to sweetheart loans with which to purchase said land. This is the classic grift. The senator makes a pile of money and his "associates" gain access to government largess.

You might ask why can't 'they' just change this, stop this? The structure of the power dynamic in most governmental organizations is so stacked in the leadership that any newcomer proposing sweeping changes would be ousted in the next cycle or otherwise fired. Since the pay for office holders is so low all of them soon realize they stand to lose their big pay day if they try to buck this system. Therein lies the problem. Short of doing the right thing, there is no incentive to change this. Capitalism is built on incentives. 

If then it seems impossible that this brick wall of cronyism could ever be knocked down, sadly that's probably right, it poses this challenge: how to make this esoteric, complicated and entrenched practice easy to understand and rallying call to the voters. Those who can see and understand the grift have yet to form a strategy to defeat it, again, there are no incentives to fight it. Have I mentioned that we need someone brave, charismatic, likable and able to reach people from all walks of life. 

If there was such a plan what would it be? 

First, I'd propose a non-compete clause of sorts. It wouldn't be a traditional business non-complete per se but would prevent former office holders and high officials from being hired for a period of 5 years by any company or interest-group that they had business with during their time in office. No more cushy jobs opening doors and pedaling influence. The revolving door between special interests and the government bureaucracy has got to be closed. By allowing private companies and organizations to craft legislation on behalf of narrow special interests our actual elected officials are destroying the fundamental beauty of free market capitalism. This has also got to stop.

Next, I'd strengthen whistleblowers protection. This is where the rubber hits the road. None of this grift happens in a vacuum, but lower-level staff has little protection if they were to allege wrongdoing. Most people are afraid of the powerful, imagining the trouble they could cause. This is not some kind of crazy at all. Does anyone doubt that squeakers and leakers (or their families) have died mysterious deaths? With that, standard audits of all public institutions should be automatic, and results published with fanfare. Rats do not like the spotlight. By putting the screws to obvious cronyism other misappropriations and corruption will be uncovered.

If this ever was to happen we'd have to be okay with paying office holders and high government officials a real competitive wage. Many of them come into office or an important position wanting to do good and do what's right, but are soon dazzled and or threatened into toeing the line and learning to play the game. It's nearly irresistible, it's so much money, and everyone else is doing it. Join in or wither away. As well, political campaigns are expensive, deep pockets are needed to fund them, and deep pockets want something in return. Some sort of real campaign finance reform needs to be considered, not the pretend reform they instituted decades ago. Maybe even consider publicly financed campaigns... Reasonable term limits as well. There is no reason someone should be a representative or a senator for 40+ years.

There needs to be faith in the public institutions we all pay for to be on the up and up. The grift has got to stop. The public, the rank and file public employee want to see the end of this corruption. 

As for the private sector, I'd incentivize the idea of profit sharing or creating stakeholders out of employees. Another three-legged stool analogy coming. For a publicly traded company you have management, shareholders, and employees. Remove any one of these legs and the stool falls over. Only management and shareholders are ever considered, employees are treated as commodities, interchangeable, expendable, less human. If the employee can also benefit richly from a company's success they will work harder, work smarter and identify inefficient and wasteful practices. The idea of a yearly 'pay off' is a powerful incentive. Tax incentives would entice companies to create shareholders and stakeholders out of their employees. 

If America can begin to tamp down cronyism the rest of the world will follow. Billionaires will find ways to get what they want. Corrupting governments will be less and less fruitful if the governments resist and reject them for the good of the public at large. It's a tall order and it isn't likely to happen without a real movement. In the early 2000's the so-called Tea Party was a glimmer of hope, but it was easily defeated because there was no titular head of the movement, no one to rally around. I may have mentioned that we need someone brave, charismatic, likable and able to reach people from all walks of life. 

The drive to tear down the system, the capitalistic system is also an insidious cancer. In every instance where socialism or communism is propped up as an alternative to free market systems it's because the unfairness and inequality is completely lopsided in favor of the rich and privileged. In the countries that succeeded in tipping it over abject disaster always follows. The low-level workers and peasants suffer while the rich and privileged get richer or flee. Nothing is solved, no one is really better off. 

Free market systems became the rising tide that lifted all boats. If the public can sense that the tide is actually rising it resonates. So, when we see what has become of LA, San Francisco and Chicago and rough inner-city neighborhoods all over we get the picture that capitalism has failed. It has not. These places fell because public leaders have failed. In the case of California, the elected officials enacted laws and rules that forced companies to leave. Others gave up when the business and industries they supported left for greener pastures. The reasons these corporations left the state, shutdown or set up business in Asia are obvious, California created incentives for the capital to leave. What really mattered is what the local leaders did after that. They dropped the ball.

All of this merely scratches the surface of this complicated world. There is no perfection, everything is a series of trade-offs. There are successful economic systems and there are the disasters. Capitalism has delivered progress and wealth to more people than could have been imagined. Its imperfection is held up for all to see while all the collectivist failures, and they all fail, are swept under the rug. There's no reason that our Western culture should be teetering on the brink. With an emphasis on ending blatant cronyism and bolstering employees by giving them a fundamental stake in the enterprise we can pull it back.

Turmoil Amid the Chaos: a corrupt world

The international headlines are horrific. The national headlines are just depressing. It's enough to make you want to bury your head in the sand. I can only thank God I haven't become gadgetized to a point where I understand the "twitterverse" or what "trending" means. If I was that superficial I may not actually care what was going on in Iraq or Ukraine or the conditions for Latin American children on our border.

Or maybe I'd care too much...

The world - the human world -  has always been messy. Most of us can't imagine what it must have been like to be a Jew or a Gypsy in 1930-40s Germany. Being herded into train cars to be carried off the a gas chamber and a mass grave had to be equally as abhorrent as the crimes the butchers of ISIS  are committing in Iraq today. Back then it took years before it was common knowledge, now it's damn near being broadcast live. Or how you say, tweeted live?

The horrors of  the 20th century's two world wars and the communist expansion throughout Asia and Europe are clear because we have pictures and actual participants still alive that can tells us about it. The rest of human history was just as brutal. There never really was the good 'ol days.

What makes it all so depressing is that our modern technological world has created a basis to end so much human suffering. Poverty has decreased massively in the last 30 years worldwide. As of 2008 that progress has stopped.  As well, we have the know how to be good stewards of the Earth, using, not abusing the riches the planet has to offer. The West has cleaned-up it's environment remarkably since the ecological awakening of the 1960's. The rest of the world no so much. Going further we have the ability to reach out from this tiny planet and explore the great expanse of the galaxy and even the universe. America is now handing over access to space to private business - for better of for worse.


Instead of seeing the progress our human abilities demand here in the year 2014 the world is unraveling before our eyes? Why is this happening? Why such turmoil, why such misery? Two words: Special Interests.

By special interests I don't necessary want to conjure images of corporate fat cats or greasy lobbyists - only. Special interests come in every stripe and color, motivated by greed, pride, gluttony, lust, envy, sloth and wrath. Hmmm, where have we seen these seven words strung together like that?

The least respected people in America are politicians and criminals, but then I risk being redundant with statements like that. We used to believe or at least we've read that like the priesthood going into politics to serve was a higher calling. Consider how that all turned out, one serves God and the other is celibate. OK, I joke, this would be true if "money" is God and buggering children didn't count as sexually active.

 My guess is that both politicians and priests enter their respective worlds with good intentions, wanting to serve, to make a difference, but quickly become corrupted by the system. To some degree this happens to all of us. It's human nature to self-serve, we are all individuals after all.

It's the capacity to harm that takes corruption, institutional or personal, to the next level. Cronyism and stacking the deck is the MO of politicians. To be sure there are always two sides to cronyism so don't think I'm singling out our beleaguered public servants. Big business can make political corruption look like a petty crime. Protected by their benefactors mega corporations plow ahead, in many cases destroying as much as they create, all perfectly on the up and up legally, of course. Since we don't vote for corporations - directly - we tend not to vent our anger at them as much. If you are supposed to rely on mass media to alert us to truth about corruption you are in for a long wait. Corruption to the media often comes with gigantic blinders.

Still this is America, we're the good guys, right? Because the so-called rule of law applies to most of us regular folk we tend to think we live in a less corrupt society than most. I'm not so sure.

The U.S. ranks 19th of 175 countries on the "corruption" scale. The Arab world, Latin America and Africa are way down there at the bottom - not surprising. This is seriously misleading when you consider that the American economy at 16 trillion dollars a year absolutely dwarfs everything else on the planet. The corruption scale is simply apples to oranges. Like I said it's the capacity to do harm and money magnifies this ability exponentially.

On the other end of the scale often the people with the least are looking hardest for every angle to game the system. This mentality of something for nothing starts at the top and washes all the way down to the poorest. The demotivating character of handouts and programs (all offered with the best of intentions) corrupts millions of Americans who then never even try for something better. It's beyond sad.

Corruption chokes the very progress we seek. Constantly gnawing away at the very heart of positive development. It undercuts everything that's been set up to promote the good. It leads to turmoil among the chaos as everyone rationalizes (or hides) their own corrupt behavior. Government corruption leads to higher taxes, robs average people of their wealth as it covers for corporate corruption who continue the thievery. The one/two punch of government regulation and corporate protection discourages investment in new enterprises, encourages the disenfranchised into dealings with the 'black market', thereby promoting conflict and destroying confidence in all institutions.

So much for the Captain Obvious portion of show. Solutions?

Defeat evil, simple...




Ugh

Occupy Wall Street/Tea Party:Two sides of the same coin?

Occupy Wall Street hasn't been in the news lately, but I've been thinking about it a lot lately. The meeting of the ultra rich and powerful in Davos Switzerland last week brought it to the top of mind again. I am convinced Occupy Wall Street was motivated by the same underlying substrate that motivated it's nemesis the Tea Party. Hear me out on this.

The Tea Party set it's sights squarely on government, specifically the unconstitutional overreach of the Federal government. Occupy Wall Street rallied against the 1% - the rich few they believe controls the world just to hold the rest of us down. I'm increasingly convinced they are one in the same, since nothing else explains how the events of the past 60 or 70 years could have played out as they did.

[ To be perfectly clear being rich is not a crime, when talking about the 1% we're really talking about 1/100th of 1%. Essentially the super rich that play with 100 of millions like it was Monopoly money. ]

Occupy Wall Street (OWS) are the sons and daughters of the middle class facing dimming prospects for a future as bright as the one their parents had. The Tea Party is made up of mostly their middle class parents who are watching the country they knew (and loved) morph into something unrecognizable. Both of these movements are purely reactionary. There is a deep sense in the western world that there is an unrecoverable erosion taking place. Both sides see remedies in polar opposite extremes based on where they are in life. The mostly young of the OWS tend toward the utopian idealism of a more communist system, while the older more seasoned in the Tea Party see the solution in going back toward the original intent of America's constitutional framers. Both cant be right...

Some say that the Soviet Union was the inevitable result of communism, a system that lasted barely 70 years. It was clearly a failed system that caused untold suffering and doomed many generations to a dreary life even to this day. Others will say that the U.S. is the inevitable result of a capitalist free market system. Exploitative and unfair. Of this I'm not so sure. There is a perversion of the system that is denuding the middle class and weakening the core of the most successful social and economic system the world has ever known. The answer can be found by determining who is benefiting the most from the turmoil. Is it the 1%? Clearly it is.

I've written before on these pages as to why I believe the middle class in America is slowly being destroyed. By the 1960's and 70's the middle class had become too powerful a force. It was a collective force, powerful indeed, but with no head thus easier to defeat. Rallied by radical journalism in the 1960's it brought it's power to bear on the war machine and forced Washington to abandon the South Vietnamese. Whether this was right or not, or spurred by socialist/communist elements I'm not speculating, I'm just saying the power of the vast middle was evident in these events.

This had to be stopped. There has been, in my mind, a concerted multi-decade domestic and international effort to squelch the middle class dominating all the Western nations.

Who has benefited the most from moving a vast portion of American manufacturing to Asia? Who has benefited the most from NAFTA and free trade in general? Who has benefited the most from the Fed's quantitative easing program? Certainly not the middle class. Could it be the 1%? Of course it is. Arguments can be made that capital will always chase the cheapest labor and that free trade is ultimately good for consumers and cheap interest rates and easy money helps build equity. True, but it doesn't erase the fact that the American middle class is shrinking and these costs are outweighing the benefits across the board for the 99%.

The corporatization of the major media and the stranglehold the corporate political parties have on the levers of government ensure that the cronies in the 1% class (regardless of nationality) get what they need. With the Roman paradigm of Bread and Circuses alive and well in America and the West the 1% have little fear from the what's left of the middle class. Liberal platitudes and outright lies serve to ingratiate big government solutions to the destruction of the American dream among a large portion of the population who can't pull themselves away from American Idol, Facebook or their smart phones long enough to realize the pot is boiling. The conservatives unfortunately can't speak with enough articulation to wrestle themselves out of a wet paper bag. What difference, in the end they are as beholden to the 1% as the other guys.

There is an element lurking around the Internet known as reactionaries that have taken to calling this cabal the "Cathedral". The Cathedral is essentially untouchable. If any politician or any other entity steps out of line they are soon scandalized or marginalized, discredited or ruined. That said it's no surprise there is no fealty to any political party or their ideologies among the reactionaries. It goes without saying there is certainly no trust for the mainstream media. While I tend to agree with this assessment in truth the reactionary movement is tiny and toothless.

So in reality the Tea Party and the OWS movements are battling the same enemy. Ultimately they have demonstrated they both are toothless as well. The OWS has some allies in government carrying their rally cry of income disparity, but the movement itself is seen as a disorganized and smelly public spectacle. The Tea Party having had some success early on challenging some squishy Republicans have also been targeted and marginalized by the power of the Cathedral.

You begin to wonder where this will all end. The U.S. government can't continue to print money forever and there has to come a time when the destruction of the middle class starts to affect the hangers on of the 1%. What then?



Ugh  

Darlings of Devolution and Destruction

Our Political and Corporate "leaders" have Driven Us to the Brink of Destruction

As a person who tends to list center-right politically it has been a frustrating and depressing century. There was a short time early on, after the attacks of 9/11, that it seemed that America as a nation, as a people, was going to pull together. It didn't last. The leftists who pollute the discourse in every conceivable walk of life saw to that. Perhaps the saddest, most frustrating aspect of the unraveling of a great nation is the sheer apathy of the people. Who can blame them?

As it turns out it really doesn't matter who or what you support politically any more (I think it used to, many years ago) simply because while our so-called leaders may not be cut from the same cloth they all end up dyed same the color, the color of money. Regardless of their party affiliation, regardless of how much they pledge to fight for you, regardless of how much they say they love their country, or of how sincere and pure they are during the acceptance speech on the eve of their first election they really only care about themselves - eventually.

We accept less of corporations and business, and we should, because they have not pledged to serve us the way politicians have. It's the people we've elected and involuntarily forfeit our tax dollars to that sell us down the river for their own personal gain - and it happens at all levels of government. Oh yeah there may be outliers, men like Obama, Reagan and the few dedicated public servants - even people like Ron Paul who actually believe in something. These men are either demonized, laughed at or in Obama's case, worshiped. And, amazingly, we the people take it, or rather just shrug it off. If anyone objects and starts a real grassroots movement, say like the Tea Party bent on opposing exactly the kind of policies that make $300 elected suits millionaires after two terms, the boot-licking lapdogs in the media will beat them down with charges of racism or any other negative narrative that will stick. Is it any wonder there is mass apathy?

Unless the people who believe themselves to be good liberals are purposely deluding themselves, then they cannot honestly say things are going well for the United States. They can't continue to blame George W Bush or the the feckless Republican party since the Democrats have held congressional power since 2006 and the presidency since 2008 - it will soon be 2014. Even the life long liberals have to see we are running off the rails. I'm not deluded enough to think they will ever change, but something has to.

To be perfectly fair apathy is a coping mechanism for most people. This is a complicated world made all the more complicated by liberal sensibilities turned in law and policy that runs counter to human nature and legendary conservative belligerence. These policies destroy lives - the lives of an entire race of people in 40 short years. The African American population has been devastated by the welfare state and corporate, government and union action that deprives black men the jobs needed to raise families. While some continue to pour on the soul-killing compassion the others look the other way and pretend it doesn't exist. The black man has been replaced by a government check and food stamps, leaving young boys to grow up without fathers. What happens to them when they become men? Prison - or death.

Yet every four years it is these same people who support the purveyors of the very poverty they can't escape. The Democrats skillfully poison any notion that there could possibly be a better way. Dopey ass Republicans can't get out of there own way and articulate a return to sanity - if they even care. Now the country is at a tipping point where half the population does nothing but collect a subsistence check from one government agency or another. Seriously how can anyone say this is good?

Nearly every large city and state that has been completely controlled by liberals and liberal policies for decades is bankrupt and in tatters physically and spiritually. Yeah they'll argue that capitalism and big business left them abandoned and the liberals are compassionately picking up the pieces - but wasn't it also big taxes, onerous regulation and inflexible unions that set the stage? Yes, probably both. The liberal answer then is to double-down until the economy is choked off completely -
and continue writing hot checks. Republicans don't even bother themselves to offer an alternative in these locales. Yet the elected officials and their benefactors in corporate world responsible for driving the economy into the ground do pretty well.

The corporations, particularly the largest ones could really care less about the U.S. They prove it everyday. Now that they've moved a huge share of manufacturing jobs overseas they are petitioning congress to hurry to enact aggressive immigration laws. This is a double slap in the face for native born American's in the wake of mass layoffs. They want H1B visas for the skilled workers because they can pay immigrants less than skilled Americans. They want cheap Mexican labor for unskilled work, leaving the rest of the working class high and dry. It's both Democrats and Republicans that support this kick in the head. Their arguments - their lies - that it's all in our best interest fall on deaf ears when we can see the evidence before our eyes. Twenty-five million people already here can't find decent work. The labor participation rate is reaching 40 - 50 year lows. In some counties in the south 1 in 4 collects a disability check, no doubt many of them fraudulent because they can't find any work. This while Wall Street racks up new highs month over month. And the 7 counties in Virgina and Maryland that surround Washington DC are the richest in the country.

It seems the game is rigged. The corporate/government cabal wring everything they can out of the American people. We are reaching a tipping point. The progressives or liberals if you will, have helped usher in better days a hundred years ago with their fair labor laws. Unfortunately it is genetically impossible for them to leave well enough alone. The continue to tear down the very fabric of the free market capitalist system, the foundation of America's success. Those who caucus with Republicans, the champions of free market capitalism, unfortunately are surrounded by imbeciles or flim flam men like congressional leader Eric Cantor. Who in the hell would follow that guy? If Cantor and dullards like John McCain are the alternative to liberals (who at least act like they care) it's no wonder there is such voter apathy.

There is a nascent, unorganized reactionary movement of highly intelligent people who understand things can't continue this way for America and frankly for the rest of the world either. Using the Internet as a platform they easily identify the culprits, their tactics and their motivations (power and money, of course), but they've yet to offer much in the way of solutions. It's early for the reactionaries - but it's late for the rest of us. Is societal collapse and anarchy close at hand? I don't know. I think there is still time.



I could be thinking wrong...



Ugh

The Game is Rigged: Episode 1

I read with great interest an April 25, 2013 Time Magazine article describing an incredible discovery that might, just might spell the end of insulin injections for the treatment of diabetes. From the halls of Harvard's Stem Cell Institute Doug Melton and postdoctoral fellow Peng Yi have discovered the hormone betatrophin, which quite simply has the potential to improve by leaps and bounds ongoing treatment for type 2 diabetics.

There's a catch of course. More on that later...

Diabetes is a horrible disease. It is insidious and devastating in it's potential to reek havoc on the sufferer. It is a stealth disease that often lurks undetected and with no outward signs or ill feelings. It can, if left untreated, lead to stroke, heart disease, blindness, kidney failure, coma and vascular disease which often ends in foot or leg amputation  - a horrible affliction indeed. It has been known about for 3500 years and until 1923 it was literally a death sentence. This discovery could be the biggest break for diabetics since the invention of animal insulin.

This hormone, called betatrophin, was observed to cause laboratory mice to produce insulin-secreting pancreatic beta cells at up to 30 times the normal rate. The beauty of it is these new beta cells only produce insulin when called for by the body, mimicking the pancreas' natural regulation of insulin with the potential for great reductions in the complications associated with diabetes. Such exciting news, right?

The catch is that politics and big business are so involved with the multi, muti-billion dollar diabetes maintenance industry that no one is just going to stand by while this, this discovery spoils that party.

To understand just how despicable and evil this is consider first the brief description offered earlier of the nature of this disease and then multiply that by millions. Today 25.8 million people in the United States have been diagnosed diabetic and nearly 350 million world wide suffer from this disease - and the numbers are increasing exponentially. These are epidemic proportions yet because it kills slowly it is the perfect disease to profit from. The blood testing supply business alone is a multi-billion dollar industry. Imagine if this new treatment reduces the need for testing to a fraction of what it is today.

In fact the history of manufactured insulin is fascinating and instructive. In 1921 Canadian scientist Fredrick Banting and grad student Charles Best labored many months on experiments that brought them closer to a solution to the treatment of diabetes than ever before. In December of that year Banting, Best and John Macleod had produced an extract from whole beef pancreas mixed with alcohol that successfully lowered the blood glucose levels in a dog whose pancreas had been removed.

It was James Collip who helped the team to purify its insulin extract. This purified version would prove successful in the first clinical trials conducted on human patients with diabetes at Toronto General Hospital. After publishing their results they set about mass producing their "insulin" but the encountered so many problems they were forced turn to the Eli Lilly Company. Banting and Best traveled to Indianapolis to work with company chemists to produce the revolutionary extract insulin.

 On Jan. 23, 1923, Banting, Collip and Best were awarded U.S. patents on insulin and the method used to make it. Later that same year, Banting and Macleod were awarded the Nobel Prize in medicine for the discovery of insulin. Now here's the key part of the story that contrasts with the extreme greed of today... Banting, Collip and Best all sold these patents to the University of Toronto for $1 each. Absorb that for a minute.

Animal derived insulin was cheap and readily available for decades. It saved countless lives and allowed diabetics not only to live but live well. Fast forward to 1970's when the first fully synthetic insulin was created by Ciba-Gieigy. It was in 1982 that Eli Lilly licensed Genentech's process for creating recombinant human insulin after it was proven effective in controlling diabetes. By then the "health insurance model" was well entrenched and the cost of the new synthetic insulin was exorbitant compared to the porcine variety.

This story is well told by my good friend who went on a failed quest to find the cheap animal derived insulin.
http://tbirdblog.blogspot.com/2012/01/where-has-all-animal-insulin-gone.html

As the patents run out on synthetic insulin we expect as we do with all other drugs that generic manufacturers will soon be flooding the market and prices will fall. Fat chance. You see the game is rigged...

Synthetic insulin is known as a “biologic” drug and unlike for instance aspirin which is an assortment of chemicals that anyone can manufacture biologics are regulated differently. Therefore generic makers aren't allowed to "piggyback" on the original pharmacological trials. Since this would cost too much the generics pass on it. There is no reason that generics couldn't produce safe, cheap synthetic insulin it's just the FDA won't let them. Nice win for big pharma.

So here we are possibly on the cusp of the next big thing in diabetes treatment. So excuse me when I sigh after reading that big pharma is all over the betatrophin story. Potentially diabetics may be able to reduce their need for insulin altogether and get by with one betatrophin injection a week or even one a month. Considering the potential for crumbling such a huge profit industry I envision these injections costing $400 -$1000 a pop or maybe more. Surely the government will intercede, right? Call me cynical, but I see the government stepping in not to help end the suffering of millions of people rather to stop the suffering of shareholders.


But I could be wrong...



Ugh