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POLITICS: PennAve

Big Ideas: On Big Tech, expensive drugs and haunted islands

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Jeffrey Gianattasio for the Center for Economic and Policy Research: Silicon Valley has for some time prided itself on a supposedly novel approach to corporate practice. High-tech firms, and the luminaries who lead them, have espoused doctrines pledging to think differently, not be evil, or otherwise changing or breaking with traditional corporate behavior. ...

Recently, however, these Silicon Valley firms have come under criticism. ...

As meticulously detailed by Mark Ames ..., the executives from a number of prominent U.S. technology firms, led by Apple, Intel, Google and others, appear to have made a series of informal agreements in the mid-2000s to refrain from recruiting each other’s employees. The emails seem to indicate that certain Silicon Valley firms kept a list of corporate rivals whose employees were designated as "hands-off." Such a practice would have dramatically reduced the competition in the labor market for tech employees by curtailing workers’ mobility, artificially depressing the wage growth of workers in this sector. Ames notes that these practices potentially affected the salaries of over one million workers.

If these allegations are proven true, the practice is surely condemnable — not to mention illegal. Yet these allegations would not be so especially damning if not for the fact that many of the very executives involved in this cartel-like behavior have been vocally complaining for many years about the skills shortage in the U.S. labor market. Sometimes these complaints were couched in terms of the immigration debate: Silicon Valley firms have been quite vocal about expanding the cap on the U.S.’s H1-B visa for high-skilled tech workers. Other times, these "skill shortage" arguments were deployed as evidence for the view that the U.S. educational system is not producing a sufficient quantity and/or quality of STEM [science, tech, engineering and math) graduates. ...

Given these firms’ apparent campaigns to distort the U.S. high-tech labor market, these concerns about H1-B visas and the U.S.’s STEM education begin to ring false.

 

EXPENSIVE DRUGS PAY OFF

Michael Mandel for the Progressive Policy Institute's Progressive Fix: Insurers and politicians have been complaining that Solvadi -- Gilead's new cure for hepatitis C -- costs too much at $84,000 per treatment.

But that complaint, while accurately reflecting short-term financial incentives, perversely misses the real point. In the long-term, the real budget-buster for the U.S. healthcare system is the cost of managing and treating chronic conditions such as diabetes, Alzheimer’s, and hepatitis C (which is the most common chronic bloodborne infection in the United States, according to the CDC). If pharma companies can produce straightforward cures for these chronic and costly syndromes, the long-term financial picture of the healthcare system looks much better.

Moreover, Solvadi is almost certainly productivity-enhancing, substituting a one-time drug treatment for labor-intensive long-term medical management of a chronic disease. ...

That’s a big deal. The U.S. healthcare system is on a long-term unsustainable path, gobbling up a larger and larger share of the nation’s skilled workforce to care for an aging population. Policymakers should encourage and reward drug companies that come up with innovative and effective cures for chronic diseases, rather than punishing them.

 

TIME FOR UNCLE SAM TO SELL

Marguerite Bowling for the Heritage Foundation's Foundry: An island in the Venice lagoon is part of several properties and assets that the Italian government is selling to slash its public debt and comply with European Union guidelines, according to Reuters.

Italy is selling the island of Poveglia, which has been inhabited for years and is called “the world’s most haunted island,” along with a 15th century castle in Gradisca d’Isonzo, a former monastery on the southern coast, and 40 other assets, Reuters reporter Francesca Landini wrote.

Bids, which are submitted through an online auction, are due by May 6, according to Demanio, the Italian agency in charge of public lands. Demanio, which raised €1.8 billion ($2.486 billion) by selling state-owned properties since 2001, expects to earn €500 million ($690.6 million) by the end of the year from selling the country’s real estate holdings.

The U.S. government takes a similar approach with the General Service Administration’s GovSales.gov, the federal agency’s auction site in which buyers can bid on excess government property and assets.

But Stuart Butler — a distinguished fellow at the Heritage Foundation who has advocated for years that the federal government reduce its asset portfolio — said Washington should go further in its asset divestitures.

“There is a lot more that the government could do, such as selling huge swaths of land (especially out West), mineral rights, power marketing administration generators, more of the electromagnetic spectrum, and underutilized buildings to name a few,” said Butler, director of the think tank’s Center for Policy Innovation.

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