The Economy Hub
With Michael Hiltzik
Conflicts of interest pervasive on California stem cell board

There's no good time for a public agency to be embroiled in a conflict-of-interest scandal, but this is an especially delicate time for California's stem cell agency. The California Institute for Regenerative Medicine, as the program is known formally, is on track to finish doling out its $3 billion in funding from the state's voters as soon as 2017. Its original sponsor, Northern California real estate developer Robert Klein II, has been quoted talking about another $5-billion infusion, perhaps via the 2016 ballot. Any such effort will refocus attention on the program board's inherent conflicts of interest, which were baked in by the terms of Proposition 71, Klein's 2004 ballot initiative that created CIRM and funded it through a bond issue. The prestigious Institute of Medicine in a 2012 report found these conflicts to lead to questions about "the integrity and independence of some of CIRM's decisions." And now here comes another case. This one involves CIRM former President Alan...

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Who is taking California's water?

As California's drought really starts to bite--the mandatory water use restrictions approved by the state Tuesday are just the beginning--questions are bound to be raised about the indescribably wasteful use of water to retail bottlers.  The sale of bottled water to most Americans, who have access to cheap and safe tap water from municipal systems, is a marketing scam, and environmentally devastating besides. As Peter H. Gleick of the Oakland-based Pacific Institute showed in 2007, it took the equivalent of 17 million barrels of oil to produce the plastic bottles for American buyers in 2006. That would be enough to fuel 1 million American cars and light trucks for a year.  "Bottled water requires energy throughout its life cycle," Gleick has written. "Energy is required to capture, treat, and send water to the bottling plant; fill, package, transport, and cool the bottled water; and recycle or dispose of the empty containers." Consider the unnecessary energy usage in shipping, say,...

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Hobby Lobby's harvest: A religious exemption for LGBT discrimination?

Events in the real world continue to mock the assertion by Supreme Court Justice Samuel Alito that his majority opinion in the Hobby Lobby case is a "narrow" one. Alito maintained that his June 30 decision concerned only the contraceptive mandate of the Affordable Care Act and, practically speaking, exempted only closely held family companies from its enforcement. But Hobby Lobby's children keep proliferating. The big issue at the moment is a pending executive order from the White House barring discrimination by federal contractors against LGBT (that is, lesbian, gay, bisexual and transgender) people. In recent days, President Obama has received letters from more than 70 civil rights groups, including the NAACP and ACLU, asking him to resist calls to soften the order by including a religious exemption. A similar letter came from 54 law professors and legal scholars.  The trigger for all this was a letter sent to Obama on July 1 -- the very day after the Hobby Lobby ruling came down --...

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The Supreme Court and the flow of history

The Supreme Court doesn't only make history. Sometimes it's swept along by historical waves, and sometimes it's caught up trying to resist them. During the last few months, the justices recognized the centrality in our private lives of the smartphone by requiring that police obtain warrants to search the phones of people in their custody, but turned away the claim of the owner of another new technology, Aereo, that using its own antennas to deliver broadcasters' content didn't infringe copyrights. As often happens, the justices issued decisions that couldn't be pigeonholed as liberal or conservative, or that confounded the expectations of both political blocs — unanimously overturning a Massachusetts law establishing buffer zones around abortion clinics, for example, on the grounds that barring protesters violated the 1st Amendment. And three conservative justices joined with the liberal minority to preserve the government's authority to impose controls on greenhouse-gas emissions from...

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The grim warning for the gambling industry in Atlantic City's implosion

The news from the casino industry in Atlantic City, N.J., has been implacably, relentlessly horrific. Over the weekend the owners of Trump Plaza, formerly a signature property on the boardwalk, said they expected it to close in September; the resort's founder and namesake, Donald Trump, couldn't run from the wreckage fast enough: "I got out seven years ago; my timing was tremendous," he said, or bragged, or whatever it is he does when his lips are moving. (Trump still owned 9.8% of the ownership company as of February 2013, according to public filings.)  Meanwhile, the Revel Casino, a $2.4-billion tower that was supposed to herald yet another rebirth of Atlantic City when it opened in 2012, has filed for bankruptcy for the second time in just over a year, and also may close. That will throw 3,140 workers out of work, adding to a toll that has driven the city's unemployment rate above 10%. In total, 7,000 casino workers, or 25% of the Atlantic City casino workforce, could be losing...

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Proof that the point of the IRS 'scandal' was to cut the IRS budget

It was obvious almost from the inception of the ginned-up IRS "scandal" that its goal was to intimidate the agency into allowing bogus nonprofits to funnel cash into election campaigns. That's exactly what happened, as is shown by an exhaustive study by the Center for Public Integrity. Nonprofit tax-exempt "social welfare" organizations, known as C4s from their description in section 501(c)4 of the tax code, aren't permitted to claim a tax exemption for election activities--in fact, they're not supposed to engage in campaign activities at all.  But with the connivance of Congress, they've been crossing the line with impunity. That's a threat to the electoral process, because C4's are permitted to keep their donors secret. Money plus secrecy--the politician's dream. We reported on the C4 dodge as early as 2012. When the IRS began trying to rein in C4s, something had to be done. Presto: the IRS "scandal," based on assertions from conservatives in Congress that the agency had targeted...

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Listen: Is this the all-time most horrible cable service call, ever?

Last week Ryan Block, the former editor of Engadget, called Comcast to disconnect his cable and Internet service. His intention was to shift to

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Who gains from those drug discount deals? (Spoiler: Drug companies)

The pharmaceutical industry has been bragging for nearly a decade now about its efforts to help cash-strapped patients pay for expensive prescription drugs.  "An important safety net," the industry says, that has "already helped millions of Americans get free or reduced-cost prescription medicines." It's all about good works and helping the patients, Big Pharma says of these patient assistance programs.  "America’s pharmaceutical and biotech companies have been among the first in line to help struggling Americans," goes a typical industry pitch. "That’s not government regulation at work; that’s our sense of duty." Well, no.  "Assistance programs are a triple boon for manufacturers," writes David Howard of Emory University in the latest New England Journal of Medicine. "They increase demand, allow companies to charge higher prices, and provide public-relations benefits." Among those PR benefits, he might have specified, is that these programs blunt efforts in Congress to rein in...

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Is literature dead? Or, how to read books in the digital age

Several recent articles appearing online have pointed to a couple of burning questions about book-reading in this overstuffed era: Why do people buy books they have no intention of reading? And, how can one ever find the time to read a book at all?  The first question is raised by Jordan Ellenberg, a mathematician at the University of Wisconsin, who claims to have come up with a metric for "the summer non-read, the book that you pick up, all full of ambition, at the beginning of June and put away, the bookmark now and forever halfway through chapter 1, on Labor Day." The emerging winner and probably the permanent champion in this category is Thomas Piketty's "Capital in the Twenty-First Century." Ellenberg says his measure, if I read it right, suggests that the average reader has made it through 2.8% of the book. That handily beats the previous holder of the most-unread trophy, Stephen Hawking's "A Brief History of Time." Ellenberg's index is based on the most-highlighted passages in...

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Why are 600 brain scientists protesting a huge brain research study?

You don't often see scientific researchers turning up their noses at nearly a billion and a half dollars in government funding. Still more rarely will the elite of a research field threaten to boycott a huge international project in their field en masse. But that seems to be happening with the Human Brain Project, an ambitious project to map the activity of the brain using new -- and thus far uninvented -- technologies. The project was the topic of an extraordinary "open message" to the European Commission, its sponsor, signed by 580 prominent neuroscientists. "The HBP is not on course," they wrote. "We strongly question whether the goals and implementation of the HBP are adequate to form the nucleus of the collaborative effort in Europe that will further our understanding of the brain." Unless its management and goals are restructured, they said, they would refuse to apply for HBP grants. The HBP is being funded by the European Union and its member nations to the tune of 1 billion...

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How Tea Party tax cuts are turning Kansas into a smoking ruin

Sam Brownback, the Republican governor of Kansas, doesn't just believe in whistling past the graveyard--he's willing to stroll past it in full-throated song. The graveyard is where the economy of Kansas has been buried since 2012, when Brownback and his Republican state legislature enacted a slew of deep tax cuts in a tea party-esque quest for economic "freedom." "Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy," he promised then. Brownback's tax consultant, the supply-side guru Art Laffer, promised Kansans that the cuts would pay for themselves in supercharged economic growth. Instead, job growth in Kansas trails the nation. The state's rainy-day fund is dwindling to zero. Month after month, revenue comes in even lower than fiscal officials' most dire expectations. In the rest of the country, school budgets are finally beginning to recover from the toll of the last recession; in Kansas, they're still falling. Healthcare, assistance...

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A fraud accusation like nothing you've seen before

It can be hard to keep up with the latest examples of fraud rings and other organized wrongdoing, but here's one that takes the cake: the scientific monthly Journal of Vibration and Control is retracting 60 articles "implicated in a peer review and citation ring." In the words of Retraction Watch, which tracks the comings and goings of peer-reviewed scientific papers, "This one deserves a 'wow.'" The acoustics journal's publisher, London-based SAGE, says it busted the ring following a 14-month investigation. It points the finger of accusation at Peter Chen, a researcher formerly of the National Pingtung University of Education of Taiwan, who resigned in February. SAGE contends that Chen and possible collaborators may have set up as many as 130 fake email accounts that they used to fabricate identities as peer reviewers to help clear articles for publication. On at least one occasion, SAGE alleges, Chen "reviewed his own paper under one of the aliases he had created." Peer-review fraud...

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