On the Rocky Road to Globalization

More than 250 tech companies have signed a letter demanding greater transparency from Congress and decrying the broad regulatory language in leaked parts of the controversial Trans-Pacific Partnership trade bill.

“TPP’s trade secrets provisions could make it a crime for people to reveal corporate wrongdoing ‘through a computer system’,” says the letter. “The language is dangerously vague, and enables signatory countries to enact rules that would ban reporting on timely, critical issues affecting the public.”

If TPP’s backers truly believed that they were doing the people’s work, they’d have invited the people into the room. The fact that they went to extreme, unprecedented measures to stop anyone from finding out what was going on  tells you that this is something being done *to* Americans, not *for* Americans.

There was a notable absence from the letter of big, international tech companies like Apple, Google and Facebook. Apple and AT&T are part of the president’s International Trade Advisory Committee (which advises the Oval Office on matters relating to industry.

Several companies and industry trade groups sent statements to Congress in support of the legislation, among them Cisco and the Consumer Electronics Association. The Seminconductor Industry Association (SIA) said: “SIA strongly supports trade promotion authority (TPA) and applauds the introduction of this bipartisan legislation. TPA paves the way for free trade by empowering US negotiators to reach final trade agreements consistent with negotiating objectives laid out by Congress. Free trade is especially critical to the US semiconductor industry, which designs and manufactures the chips that enable virtually all electronics.”

Of particular concern to the tech community is an “Investment Chapter” of the TPP drafted in 2010 and leaked by Wikileaks. The letter’s signatories argue the provisions would allow corporations to use an international legal system to override national sovereignty.“

“The future of the internet is simply too important to be decided behind closed doors,” said Evan Greer, campaign director of Fight for the Future.

, it is odd to claim that a crisis caused by a 10-year infusion of excessive cash can be cured by means of further stimulus. The theory that it can assumes that Greece lacks sufficient “effective demand,” or the capacity of consumers to purchase goods and services at current prices. Restore this and a virtuous circle of growth will follow.

A single statistic should suffice to cast doubt on this assumption. Greece’s gross domestic product was similar in 2001 and 2014, measured in constant 2005 prices, meaning that “effective demand” in these two years before and after the debt crisis was approximately equal. And yet unemployment in 2014 was almost triple the 2001 level. The key to resolving Greece’s economic woes must, therefore, lie in something other than demand.

Equally telling is that during the five years since the crisis began, Greek imports have exceeded exports by almost 60 percent. Although Greeks are certainly buying fewer foreign goods than in 2007, it is clear that insufficient “effective demand” is not the root problem here. What has been lacking is “effective supply” — the ability of the Greek economy to produce enough competitively priced goods to sell and grow.

So why has the recession been so deep and so lasting, if not because of austerity? The answer lies in what happened between 2001 and the start of the financial crisis.

After the euro was introduced in 1999, Greece received more in credit than it needed every year, between 5 percent and 10 percent of gross domestic product. Populist politicians funneled this excess money to their political clients, explaining the windfall as a “development dividend” that resulted from “structural convergence” with the core euro area countries. This was a fantasy, because there was no such convergence. Yet, it was natural for the recipients of this largesse to see it as real and permanent income.  Greece Reconsidered

Elizabeth Richardson writes: For the last several years, the US government has been negotiating a free-trade agreement known as the Trans-Pacific Partnership (TPP) with 11 other countries across the Asia-Pacific and Latin American regions, which could have major impact on the pharmaceutical market.

When finalized it will be the largest free-trade agreement in history, impacting up to one-third of world trade and roughly 40 percent of the global gross domestic product. The deal has attracted a fair share of criticism from a wide range of groups, including concerns over proposed regulations for biologic drugs in participating countries. Specifically, critics are concerned about the length of data exclusivity granted to the companies that hold the patents on these drugs. Below is a primer on biologics and how they are being addressed in the TPP.

Biologic drugs include any therapy derived from a biological source; a group which includes vaccines, anti-toxins, proteins, and monoclonal antibodies. Because they are typically much larger and more structurally complex than traditional ‘small-molecule’ drugs, they are also more difficult—and much more costly—to develop and manufacture. Biologics are also among the most expensive drugs on the market, costing an average of 22 times more than nonbiologic drugs. The recently approved hepatitis C drugs Harvoni and Sovaldi, for example, range from $63,000 to $150,000 for a full course.

Given these high costs, there is substantial interest in encouraging the development of biosimilars, a term used to describe follow-on versions of an original biologic.

After the Affordable Care Act (ACA) was passed in 2010, the US Food and Drug Administration (FDA) developed an accelerated approval pathway for biosimilars, modeled after the pathway used for the approval of small-molecule generics.

Under current FDA regulations, biologic drugs are granted 12 years of data exclusivity following approval.

For the 11 countries besides the U.S. that are involved in the TPP, current data exclusivity protections range from zero (Brunei) to eight years (Japan). Under the Obama Administration’s current proposal, participating countries would increase those periods to match the US standard of 12 years.

It is unclear whether the US will be successful in its efforts. There have been reports that the issue of data exclusivity has become a significant point of contention, and the US delegation may seek to compromise on its demands. The US Trade Representative (which is leading the US negotiations) is balancing the need to ensure adequate incentives for innovation with the need to control drug costs and facilitate patient access to potentially life-saving therapies.

DIgital Gold by Nathaniel Popper.  The New York Public Library had a very interesting discussion of the book with the author, a Bitcoin technology expert and an investor.  It is available as a livestream.

Even the experts have a difficult time describing the blockchain technology, which is a record of all the transactions that take place.  It is this technology that will probably survice even if the currency does not.  It provides the cheapest and safest way for credit card and similar transactions to be recorded and paid.

Michelle Kaske writes: Puerto Rico and its agencies have amassed $72 billion of debt as the junk-rated island’s economy has shrunk every year but one since 2006. Investors bought the securities, which are tax-exempt in all U.S. states, for their relatively higher yields. There are fewer residents to help repay the obligations: The island’s population has declined 7 percent in the past decade as residents moved to the U.S. mainland.That combination of rising debt, sluggish economy, and falling population has pushed yields on Puerto Rico debt above those of Greece. The securities have been trading at distressed levels for nearly two years as investors doubted the commonwealth’s ability to repay its debt on time and in full. Puerto Rico warned in its latest quarterly filing that it may place a moratorium on debt payments in fiscal year 2016 if the government can’t cut spending or raise enough revenue.

David Zucchino writes: Duke Energy may have been hauled into federal court and smacked with a $102-million penalty for polluting North Carolina rivers with potentially toxic coal ash, but that didn’t do much for the tainted well water at Barbara Morales’ house.

Morales is one of at least 123 North Carolina residents who have received letters from state health and environmental officials warning them that their well water is contaminated and unsafe for drinking or cooking.

Duke pleaded guilty Thursday to nine misdemeanor violations of the Clean Water Act, but environmentalists say the conviction does not require the utility to clean up coal ash ponds that still threaten waterways, wetlands and groundwater.

Duke would consider extending municipal water lines to affected residents if testing shows neighbors’ wells have been influenced by plant operations..

The state is testing wells for about 30 substances and heavy metals associated with coal ash, including arsenic, chromium, lead, mercury and hexavalent chromium. Some of the substances can cause cancer or serious health complications at certain levels of exposure.

Duke Energy had revenue of $23.9 billion and profit of $1.9 billion last year.

The Dan River spill also prompted North Carolina legislators to pass a law that requires Duke to close four of its most vulnerable coal ash ponds by 2019 and the rest by 2029. The ash must be stored in dry, lined pits that are regularly monitored. The law also requires the testing of wells near coal ash ponds.

But in addition to the potential coal ash threat to wells, Duke has reported nearly 200 seeps of coal ash in the state. Environmentalists said the plea deal does not require the company to stop the seeps, which release 3 million gallons of coal ash water a day.

Over a nine-day period, said Suttles, the environmental lawyer, the amount released by the 200 seeps would equal the amount of coal ash released during the Dan River spill. Pete Harrison, an attorney with Waterkeeper Alliance, a national environmental group, said Duke “is trying to legalize those leaks.”

A 62-page plea agreement, known as a joint factual statement, said seeps are common in the earthen dams used to contain Duke’s coal ash. The seeps contain “dissolved chemical constituents” and “may transport pollutants,” the federal court document said.