Martin Shkreli is the former hedge fund money manager whom everyone loves to hate because his strategy is to buy up the licenses for out-of-patent drugs and immediately hikes their prices. The one that brought him the most infamy was when he abruptly raised the price per pill of the drug Darapim from $13.50 to $700. He was arrested recently by the federal authorities on charges of securities fraud. And there was much cheering in the land because, yea verily, Shkreli is an abominable excuse for a human being.
What was unusual about the arrest was that the police must have tipped off the media about it because they were there to capture his perp walk from his apartment into a police vehicle.
Early this morning, FBI agents arrested pharma-hedge-douche Martin Shkreli for securities fraud at his apartment in NYC; Reuters photographers were on-hand at the arrest to photograph his “perp-walk” in handcuffs.
Ken White wants to know how they got there? That is, were the Reuters reporters lucky enough to be on a morning Manhattan ramble and got the lucky shot? Had they staked out Shkreli because they’d done investigative work and concluded that he was dirty?
Or did a law enforcement officer breach his duty — and the law — by putting in a sly call to Reuters to tip them that the arrest would be underway?
Shkreli argues that he was singled out for being treated this way, and even arrested, because of his high profile and low public standing, and that the government went out of its way to find something on him.
Cory Doctorow largely agrees with Shkreli on this point and says that the big mistake he made was behaving publicly in the way that the oligarchs normally behave in private.
His crime wasn’t financial fraud, in other words: it was bringing capitalism into disrepute.
That’s why the cops tipped off the press to catch his perpwalk, too: as a lesson to the rest of the one percent sociopaths: keep a low profile. Destroy people’s lives, yes. But don’t gloat about it in public. That’s what we have private parties and secret societies.
Shkreli committed his frauds years ago, to little official notice. But once Shkreli started to behave in public as millionaires behave behind closed doors, the authorities started to dig for the excuse to bust him that they knew they’d find, because something like that lurks in every hedge-douche’s past.
The Obama administration has rightly been accused of being too friendly to the financial sector and excusing their worst crimes. Remember that not a single high-level bank executive has gone to jail, or even been threatened with charges that carry jail time, for all their misdeeds that led to the massive collapse in 2008 and which caused immense misery for so many people.
It must be a relief for the feds to throw the book at a low-life like Shkreli so that they can act like they are tough on white-collar crime too. I am glad to see that smirk wiped off the face of the odious Shkreli and hope he gets a stiff prison sentence for pricing poor people who needed their medication out of the market. But the feds will have to do something similar to people like Jamie Dimon of JP Morgan Chase or Lloyd Blankfein of Goldman Sachs before I take these efforts as a serious attempt to attack crime in the financial sector.
Also: The lesson of Rod Blagojevich: Don’t expose the private behavior of elected officials re: money and politics.
Shkreli also didn’t have a lobbying organization behind him or was part of a larger organization with more power. So he couldn’t defend himself politically when he makes his douchebaggery public.
He’s essentially an easy target for authorities to go after.
It’s not the first time the FBI intentionally leaked information to the media. But unlike what they did to Richard Jewell, attempting to create public animosity against him, Shkreli’s own actions did that.
Just because Shkreli has been dumped at CEO of the company does not mean the company isn’t still run by scumbags. I did a quick search, and the price of Darapim still has not been lowered to what is was prior to Shkreli’s price gouging. If it has, it wasn’t in the search results.
How are the new CEOs justifying this? “Don’t blame us! WE didn’t raise the price!”?
Unfortunately for everyone the fact is that 40 years of deregulation, regulatory capture, largely rooted and excused by the myth that the market will self-regulate and cleans itself of bad actors has given the oligarchs the ability to wreck the economy and society in addition to the to-be-expected great wealth. Imagine a ship, barely afloat, loaded with explosives. A two-year-old has a loaded shotgun. How do you get the shotgun away from the child without the ship exploding and/or sinking.
In the long run the oligarchs are as dependent upon the general health of the society and economy as the rest of us. They have the resources to avoid unpleasant consequences for a good long time but not indefinitely. Many of them like to think that that they are not dependent, and they imagine that their wealth, ease, and power will last forever.
The myth favored by the oligarchs is that the New Deal was a gracious give away by the wealthy to counter the threat of rampant communism by keeping labor complacent. With communism dead after the fall of the USSR this gracious gift to the working class can be withdrawn and the proper order of things restored. This flatters the oligarchs by telling them they are long term thinkers, that they were never pushed around, that their wealth and power are due to increase. It is good to be king.
This overlooks the more persuasive argument that the New Deal was imposed upon the wealthy as an alternative to mass confiscation of their wealth and that, in the end, they have greatly benefited from the New Deal and the great Society because their fortunes benefit from widespread prosperity and closure of the wealth gap. As much as they might object the oligarchs are indeed dependent upon the surrounding society.
Approximately 2/3s of the economy is consumer spending and more than half of that is spending by people below the median income.
There is money to be made shearing the sheep. Shearing too often , or too closely, harms the flock and eventually reduces profits. Consumers and labor have been shorn until they bleed and yet the oligarchs want more.
I’m confused by this statement: “his strategy is to buy up the licenses for out-of-patent drugs”. If a drug (or anything) is out-of-patent, from my understanding anybody can then produce the item, without even paying a royalty. So why would buying some sort of license do anything?
Lorn, I’m curious what you think of the pendulum theory of political trends in the US. I’ve been seeing analysis claiming that the long rightward swing has either slowed or stopped (for the majority of the public, not the Tea Party dead-enders). It seems to me that we’re seeing more pushback against the worst of conservatism’s excesses in the US than in recent years. What do you think?
ahcuah,
Yes, as I understand it someone else can make the drug and apply for a license to sell it. But he chooses drugs that are produced by only one manufacturer because they have a niche market and he gambles that no one else wants to go through the expense of setting up a competing production facility for a drug that cannot be sold in large quantities.
For once, a political cartoon that actually has a point.
Your main point is well taken, but I don’t follow you in the quote above. How can more than half of consumer spending be by those with below median income? THat would be half the population -- and the poorer half, so surely spending less per head. Did you mean below mean income (which is a lot higher)?
Numenaster @7:
There is something to the apparent pattern of political trends with the classical, Burkian, conservatism alternating with the more open liberal trend with one side seeking change and the other resisting it. That said the concept of the Overton window seems to hold sway.
I’m old enough to remember Nixon actually favoring national healthcare, but, he never pushed very hard for it. Nixon, the arch conservative, the man who learned insider politics from McCarthy. Nixon, the worse thing Eisenhower ever did, the creator of the Southern Strategy, the man so corrupt is was said ‘he was so twisted he needed a private valet to screw his pants on in the morning’. A lot of things that are wrong today can be tracked back to Nixon. Nixon would be called a liberal, socialist, Californian usurper if he was still around.
The pendulum swings left to right but is constrained by both the Overton window and the divide between rich and poor. As long as the economic divide was small there was no need for it to swing that way.
The Tea Party can be seen as an expression of frustration over the fact that the pendulum swings along the axis Conservative to Liberal but is insensitive to rich versus poor issues. Most of issues and passion that drives the Tea Party are consequence of the wealth divide but they have no language to express their concerns. Except for the Liberal label, and the fact that the Tea party has a deeply racist undercurrent, presently focused on immigration and ‘give-away’ groups who are ‘undeserving’, pronounced urban and brown, the Tea Party would be solid working-class Democrats.
@ahcuah(#5):
The trick is that he buys up the sole producer of a medication.
Anyone else who wants to produce that one has to go to the FDA and show that their version works the same (or better) as the current ones on the market.
So as sole producer you write a few clauses into your contract that basically restrict the flow of your medication to patients only and your would be competitor would have to commit fraud to get a large enough sample to do comparison testing.
Even if this competitor would manage to get their hands on this test batch it takes 3+ years for the FDA to approve.
And that all for a drug that even with the jacked up prices Shkreli was demanding bring in a revenue of several millions to several tens of millions a year.
For most commercial manufacturers the costs and effort don’t justify entering the market.
And the bloody sad thing is that Shkreli was right when he said he should have jacked up the price more. That kind pathological short term thinking is standard in corporations that live from quarterly report to quarterly report. It usually isn’t that blatant and most of the time a sufficiently strong CEO can at least do longer term planning but every corporation is basically by law obliged to behave as a sociopath.