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June 22, 2006

CIVIL WRONGS

Brad DeLong has referred to the National Review’s archives as the gift that keeps on giving.

Why? Because the searchable archives allow curious readers to learn just how benighted, backward, and, incredibly hostile the magazine was when it came to issues surrounding civil rights in the 1950s and 1960s. Today, of course, the magazine proclaims the need to be utterly color-blind in all matters pertaining to public policy.

This week, there’s been plenty in the magazine about the debate over the renewal of the Voting Rights Act, and the way a handful of House Republicans from southern states have torpedoed it. They've printed an article by Roger Clegg’s piece, and re-posted a piece from John J. Miller that posted in April. And, of course, there's been plenty of commentary in the Corner.

The general tone of these comments? Some components of the Voting Rights Act may have been necessary when it was first passed, but really, the law has long since outlived its usefulness.

Now, have you ever wondered what the National Review thought about the Voting Rights Act when it was first passed? Here’s an unsigned editorial from April 6, 1965. Note the vicious, nasty racism, the utter unconcern for the denial of the basic civil rights of American citizens—all sheathed in the magazine's trademark fancy rhetoric:

The bill’s defenders offer the argument that certain Southern states are perverting their literacy tests to exclude Negroes, and thereby violating the 15th Amendment. That is true, but hardly justifies an additional violation of the Constitution to correct it. The answer would surely seem to be a law enabling the Federal Government to compel those states to administer their own voter qualification tests fairly, without discrimination.

The real giveaway is the fact that to get rid of the poll tax, merely in federal elections, as a voting precondition, it was universally accepted only three years ago that a formal amendment to the Constitution was required.

But Constitution aside, does this Voting Rights Bill really makes sense? Do we really believe—we Americans especially, with our faith in education as the foundation for all progress toward the good society—do we really believe that the Southern states are going to be better governed if every illiterate, every moron even (for that is the implication of the bill), votes? And even if we conceivably did so believe, are these awkward, complicated, confused, in some cases fantastic provisions the way to proceed?

The truth of the matter is that constitutional issues, legal niceties, and coherent political or moral ideals have little to do with the appearance of this Voting Rights Bill at this time. This Bill is the panicky response to the newly rising campaign of civil disobedience and TV-oriented public displays that has culminated, for the moment, in the Selma affair and the White House sit-in. The Administration is trying to appease the demonstrators, and to quiet them down. If we look beneath the surface, the key contemporary method for amending the Constitution has become, precisely, a civil disobedience campaign staged for TV. It’s a method, one might note, that need not at all be forever a monopoly of civil rights movement.

Good or Bad, will this Bill “solve the problem”? How absurd to believe so! Did the “historic” Civil Rights Act of 1964 solve much, or even get the demonstrators out of the streets? It simply set the stage for this year’s civil disobedience. Will all be well on the racial front when, and if, all Negroes are voters? Will we succeed in bringing to the South the tranquility of New York City, Cleveland, Chicago and Philadelphia.

When William F. Buckley passes away, I hope that the obituary writers, in addition to noting his wit, his flair for language, his libertarian instincts, and his immense productivity, will also note this: At a time when a portion of the U.S. maintained a system of racial apartheid, Buckley and his magazine, time and time again, sided with the white supremacists. And in the decades since, I haven’t seen any evidence that he and his many acolytes are sorry, or ashamed—or that they’ve ever engaged in anything like an honest reckoning with their intellectual complicity in segregation.

Posted by dan at 05:26 PM

HYBBRID NATION

It's easy to rag on the Bush administration for not doing much about fuel efficiency. But lets give credit where credit is due. John J. Fialka reports in the Wall Street Journal.

EPA Administrator Steven Johnson said the system could save companies as much as $50,000 over the 10- to 20-year lifetime of a delivery truck.

Hybrid vehicles made by Toyota Motor Corp. and others save energy through "regenerative braking systems" that save braking energy by using it to recharge batteries. The EPA's system is different because it stores the energy in a hydraulic system that compresses nitrogen in a tank. When the compressed nitrogen is released into a second tank, it pushes the hydraulic fluid through a pump motor that turns the truck's rear wheels.

"We estimate that the payback period for this will be about three years," Mr. Johnson said. EPA tests predict the hybrid-hydroelectric systems will add $7,000 to the cost of trucks when they are mass-produced.

He added that the system also reduces brake and engine wear. According to the EPA, the technology, when fully operational, will allow the truck's engine to operate at maximum efficiency and will automatically shut down engines when the hydraulic drive system has enough stored energy to power the truck. The trucks won't have a conventional transmission or drive-train system.

Mr. Johnson said any royalties earned by the EPA's patent will be used for research.


Posted by dan at 04:17 PM

THE WAR ON DRUG PRICES

The Wall Street Journal has two good pieces dealing with pressures on drug prices.

1. Heather Won Tesoriero reports that Merck is going to sell its Zocor cholesterol-fighting drug below the price of generic competitors.

With Merck & Co.'s Zocor facing generic competition tomorrow, the drug maker has decided to sell its cholesterol-fighting drug to some major managed-care companies at what is expected to be a lower price than what it will be available for in generic form.

Merck's pricing strategy could set off a bidding war among generics manufacturers, which likely will have to slash their prices to maintain a foothold in the market for simvastatin, the generic name for Zocor.

WellPoint Inc., of Indianapolis, said it has entered into an arrangement with Merck to sell branded Zocor -- and not competing generic versions -- through its mail-order pharmacy service. "Through mail order, we will exclusively use the Merck Zocor and take a generic co-payment," said Robert Seidman, WellPoint's chief pharmacy officer. Members will pay $10 for 30 days of the drug, the same as they would pay for a generic drug. Mr. Seidman said the company hasn't yet priced the generic versions of the drug, which will be sold by Teva Pharmaceuticals USA, a unit of Teva Pharmaceutical Industries Ltd., of Israel, and Dr. Reddy's Laboratories Ltd., an Indian generic-drug maker.

2. Scott Hessley reports on how big purchasers of drugs are successfully negotiating for lower prices.

Earlier this year, the U.S. Department of Veterans Affairs made Levitra its preferred impotence pill, toppling Viagra from the spot it had held for years. The VA decision boiled down to cold cash.

The provider of health care to more than 5 million veterans pays just $2.58 for each Levitra tablet, compared with the roughly $4.90 it had been shelling out for Pfizer Inc.'s Viagra. Levitra's share of impotence pills dispensed by the VA increased to 89% in April from 1.5% in December, the last month before the change. Viagra's share fell to 11% from 98%.

It's a stark example of how big buyers like the VA are extracting steep price cuts from pharmaceutical companies on some of their brand-name medicines. Competition on prices paid by the biggest customers is now heating up in some categories, like pills for impotence and osteoporosis. Remarkably, that rivalry is often hot even in cases where generics are either unavailable or not used widely.

Consumers generally haven't seen lower brand-name drug prices because neither co-payments nor the tab for uninsured buyers has fallen. For instance, at drugstore.com, Levitra -- co-marketed in the U.S. by Schering-Plough Corp. and GlaxoSmithKline PLC, and manufactured by German chemical giant Bayer AG -- and Viagra still cost about $10 a tablet. Cialis, an impotence pill from Lilly Icos LLC, a joint venture of Eli Lilly & Co. and Icos Corp., commands $11. Also, a recent analysis of popular brand-name drugs found a 6.2% increase in average wholesale prices for them over the year ended in March, according to AARP, an advocacy group for older people.

Still, a slowdown in new medicines, a number of old hits going generic, and the growing clout of bulk buyers, such as pharmacy-benefit managers, are all sparking a fiercer struggle among some makers of brand-name drugs to win business.

Innoviant, a pharmacy-benefits manager in Wisconsin, has negotiated price cuts in blood-pressure pills called angiotensin-receptor blockers. And a handful of large insurers -- including UnitedHealth Group Inc., Humana Inc. and WellPoint Inc. -- that signed up the majority of Medicare beneficiaries for drug plans are now negotiating deals with manufacturers for preferred medicines for 2007.

Note the key graph: individual buyers haven't seen price reductions because they don't buy in bulk. Yet another reason the notion of turning millions of Americans into individual medical-services shoppers won't necessarily bring costs down.

Posted by dan at 04:13 PM

OPTIONS BACKDATING

Earlier this week, we pointed out the absurd Holman Jenkins column in the Wall Street Journal op-ed page, which minimizes the burgeoning options-backdating scandal, which has already forced the resignations of a few CEOs, many investigations by the SEC and the U.S. Attorney, and general outrage among investors.

At the Columbia Journalism Review's website, Felix Gillette writes swallows Jenkins's line, hook, line and sinker. Apparently, he's never read the host of fine articles that the Journal's real reporters have written about the practice, which is corrupt on its face. See, Gillette thinks the options backdating scandal is a dud.

In recent weeks, this supposed national corporate stock options scandal has started to remind us of nothing less than the Duke lacrosse scandal -- perhaps because in both cases the swarm of accusatory press coverage swirling around the developing story seems to have rapidly outpaced any actual proof of criminal wrongdoing.

Gillette is a fellow contributor to Slate, so I'll go easy on him. But really, it would be nice if the CJR had a business press watchdog who actually bothered to read the coverage he so blithely dismisses, and who demonstrated some independent understanding of the issues involved.

Posted by dan at 03:42 PM

June 21, 2006

UNCLEAR ORACLE

Remember Larry Ellison's extravagant $115 million pledge to Harvard? Andrew Jack reports in the Financial Times:

Harvard University has been left in the lurch by Larry Ellison, chairman of software group Oracle, who has failed to make good on a $115m (€91m, £62m) donation 10 months after academics believed they could count on the money.

The Ellison Institute for World Health, which was gearing up to employ 130 staff by the summer of 2007, has been put on hold. Twenty research fellows and five top academics had been all but appointed, while three senior managerial staff who had been hired have now been dismissed.

The delays come amid uncertainty at Harvard following the imminent resignation of Larry Summers, its president, although fund-raising during his leadership fell to a 16-year low in 2005.

The planned Ellison Institute, which was to study and disseminate ways to assess health policies around the world, would have marked a big increase in philanthropic support by Mr Ellison, estimated by Forbes to be the world’s 15th richest man with $16bn in net assets.

It would also have marked Mr Ellison’s second foray into global health, an area of increasing interest to wealthy businessmen led by Bill Gates, the head of Microsoft, who last week said he would step down in 2008 to devote himself principally to philanthropy.

Prof Christopher Murray, head of Harvard’s Global Health Initiative, who was set to run the new institute, confirmed on Tuesday that he was still awaiting $115m first promised by Mr Ellison in March 2005 and set to be paid last September. He said: “I remain hopeful that Ellison will follow through on his commitments.”

Individuals involved in the discussions say Mr Ellison first offered $100m in December 2004 in talks with Prof Murray, and then increased that to $115m after conversations with Mr Summers.

But, after exchanging draft contracts, drafting a press release and saying the money would arrive in days, Mr Ellison’s advisers last autumn began linking payment to final settlement of an insider trading suit brought by Oracle shareholders, which was to include a substantial donation to charity. Mr Summers and others have been unable to discuss the matter with him since November.


Posted by dan at 09:55 AM

SOMEONE HAAS PROBLEMS

Last year, President Bush singled out Haas Automation as a company that would benefit from CAFTA. You would think that a company that receives a favorable shout out from the President would make sure to be on its best behavior. As David Cay Johnston reports in the New York Times, not so much. It's owner, Gene F. Haas, was indicted for tax fraud.

Posted by dan at 09:43 AM

BUS STARTS

Mike Spector reports in the Wall Street Journal that high gas prices are pushing more Americans to ride public transportation.

Alecia McDowra used to drive her gasoline-guzzling Toyota 4Runner 15 miles back and forth each day between her suburban home and downtown Dallas, where she makes $65,000 a year as a law-firm secretary.

Now, she rides the bus, which saves her about $160 a month in gasoline.

"It was getting too expensive," said the 39-year-old Mrs. McDowra. "I could fill the tank once a week, or I could fill it once a month by riding the bus."

Soaring gas prices have led a whole new group of drivers to park their cars and use public transportation. Many are professionals like Mrs. McDowra who never would have considered taking the bus before. But with prices at the pump almost doubling in the past three years, they have started to reconsider.

Nationwide, people took about 9.7 billion trips on light-rail systems, commuter trains and buses last year, a 1.3% increase from the previous year, according to the most recent data compiled by the American Public Transportation Association. In recent months, public-transportation officials across the country say they have seen much bigger surges in riders, as gasoline prices have approached -- and in some places exceeded -- $3 a gallon. . .

In Denver, ridership on buses and trains rose 4% in March 2006, compared with March 2005. In Washington, Metrorail has had six record-setting ridership days in June alone.

Los Angeles, notorious for its traffic-clogged freeways, also has seen substantial ridership gains. The county's Metro Rail served 7.7 million passengers in May, a nearly 17% increase in ridership from the same month a year earlier. Buses carried 10% more customers. . .

In Dallas, a sprawling city that began light-rail service 10 years ago, gasoline prices have contributed to an especially big jump in riders. More than 48 million people used Dallas Area Rapid Transit, or DART, between August and April, a 10% jump from a year earlier. The greatest increases have occurred on longer trips to and from Dallas suburbs like Plano and Garland. And DART is considering adding more buses on those lines.

Posted by dan at 09:39 AM

HYBRID NATION

David Leonhardt has a good column in today's New York Times on the U.S.'s screwy tax policy toward hybrid vehicles.

Posted by dan at 09:31 AM