Over the past ten years pharma has lost $1 trillion of capitalization. The industry's current doldrums result from an inadequate number of new drugs that its customers feel compelled to purchase. Instead of spending more and spending more wisely to develop such drugs, finance managers at many Big Pharmas have decreed a reduction in R&D spending. In this respect finance managers provide some of the same dysfunctional consequences for pharma that the Tea Party creates for the nation as a whole.
While most academic economists in the current recession call for the government to spend more as a means of stimulating aggregate demand, Tea Partiers rely on an asinine analogy between the government and a family to call for less spending. Their policy leads them to forsake the current need for jobs in favor of long-term debt concerns that the economic growth from spending would otherwise alleviate. Finance managers at pharmas (e.g., Pfizer, GlaxoSmithKline, AstraZeneca, Sanofi) that have reduced R&D spending maintain the underlying intention of pumping up quarterly earnings to make managements look good. In the process they compromise the longer-term prospects for developing new products. So while the Tea Partiers and pharma's finance managers may act from separate goals, their shared spending phobia appears likely to impair long-term economic results in both cases.
Another similarity between pharma's finance departments and the Tea Party derives from the fact that both mask the agendas of other interests. The Tea Party's doctrines hit the middle class's job prospects and seek to weaken the safety net, thereby advancing Wall Street's effort to redistribute income and wealth upward. Possessing more modest ambitions, finance also wants to supplicate Wall Street (euphemistically referred to as "shareholders") to keep current management teams in the saddle.
Of course finance managers, particularly those in the C-suites, and Tea Partiers are not cut from the same cloth. A recent study by two political scientists, one at Notre Dame and the other from Harvard, found that Tea Partiers are older, white, reactionary Christians who maintain "a low regard for immigrants and blacks." To a significantly higher degree than other Americans, Tea Partiers "believe religion should play a strong role in politics" and they are more likely than other Republicans to say that government and the media pay too much attention to the problems of black people and other minorities. Tea Partiers are also more likely than either Democrats or other Republicans to blame the difficulties of minorities on the shortcomings of those groups rather than on a legacy of discrimination.
While no similarly definitive study of pharma's top financial managers has appeared, it seems unlikely that many of them come from the Tea Party's social milieu of small business owners and fundamentalist Christians. Instead they are typically products of the nation's elite business schools and formative backgrounds at establishment settings such as Wall Street. Nevertheless, the mutual abhorrence of spending among Tea Partiers and finance managers represents yet another case where big money has subsidized lower-middle class resentment to advance its own interests.
The Washington Post's Pulitzer Prize-winning business columnist, Stephen Pearlstein, recently took the C-suites of big manufacturing companies to task for doing precisely that. According to Pearlstein the corporate CEOs and CFOs tunneled money through front organizations that financed Tea Party political campaigns to advance traditional corporate demands for less regulation, ever-lower taxes, and slashing safety-net programs.
The Center for Responsive Politics applied Pearlstein's generalized censure of managements to pharma and found it to be "consistently one of the top industries for federal campaign contributions." As a specific example, the campaign finance watchdog, Tristan Learoyd, identified the Centre for Medicines in the Public Interest (CMPI) as a pharma front group whose "two majority funders are Pfizer and the Pharmaceutical Research and Manufacturers of America." The CMPI "sponsored...the Tea Party Patriot protests designed to sink Obama’s healthcare reforms."
Pearlstein claims such corporate support for the Tea Party threatens to backfire in the face of big business. While funding from pharma and other industries helped the Tea Party to take over the Republican Party, this may turn into a Frankenstein's monster because the pseudo-grass roots movement threatens to destroy the government-supplied infrastructure that big business requires. The Tea Party wants to "shut down the regulatory agencies that protect companies from unscrupulous competitors...privatize the public schools that educate workers," cut back on the basic research that provides the foundation for new products and "privatize the public infrastructure that transports supplies and finished goods."
So while the Tea Party used corporate funding to advance big business interests, after a point the goals of the two start to diverge. Perhaps after all, the relationship between pharma's finance managers and the Tea Party is that of occasional bedfellows.
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