In the WSJ, there’s an interesting piece by Kim Strassel; a case study of private industry getting in the sack with the socialists Democrats. A lot of non-Democrats have been wondering how it came to be that private industry, once reliable supporters of free markets, came to be seduced by their blood enemies.
Fortune 500 execs could stand up for a free market that benefits consumers and shareholders, or hitch their cart to the new Democratic majority. Pfizer’s Mr. Kindler is a case study in the hitch-and-hope mentality—a CEO who became the motivating force behind Big Pharma’s $80 billion “deal” on reform, and industry support of ObamaCare. With that health agenda burning, the choice isn’t looking so grand.
It seems the first ingredient is an executive with moonbat tendencies. That is beyond my comprehension, but they do seem to exist:
Already known as a Democrat and political junkie, Mr. Kindler was primed for the Obama ascendancy. Like many big CEOs, he started playing footsie with groups that had long despised business but would now have the president’s ear. Pfizer quietly created a board of “notables” to advise it on policy. A top recruit: Andy Stern, fiery head of the Service Employees International Union. (It also includes Newt Gingrich.)
Despite every rational reason to fear getting in bed with people with the economic equivalent of AIDS:
Pfizer was long a company that zealously guarded against government interference. Prior CEOs had seen how European governments had ruined its industry and recognized the threat. When the board made Mr. Kindler CEO in 2006—picking a relative newbie over insiders—it was a vote for shakeup. Mr. Kindler changed a lot more than the business.
I guess the directors hoped for change. They got it.
With these gestures, Mr. Kindler surely believed Democrats would treat his industry gently. The strategy: The industry would pledge $80 billion to reform. In return it would get greater volume and a requirement that people buy brand-name drugs. Democrats would also fight against drug reimportation and forgo price controls.
No one pushed harder than Mr. Kindler. The CEO made no fewer than five trips to the White House last year. He was the man prodding Pharmaceutical Researchers and Manufacturers of America head Billy Tauzin every step. He wrote an op-ed with the SEIU’s Mr. Stern demanding reform. He pressed the industry’s $150 million ad campaign promoting ObamaCare, rolled out with liberal activist groups.
Critics warned the legislation would lead to a government takeover and price controls. They warned Democrats would take the money and double-cross them. None of it fazed the industry, right up until ObamaCare imploded.
Brilliant plan there, Mr. Kindler! Just like the Kapo strategy: cooperate with the crocodile, and maybe he’ll eat you last.
Mr. Kindler and Co. are left with the ashes. Having got this far (with Big Pharma’s help), Democrats are more desperate than ever to pass “something.” It won’t include any upside for drug companies. There is talk instead of “popular” stand-alone legislation, including reimportation, Medicare price controls, and slashing the industry’s 12-year exclusivity on biologics.
Big Pharma can’t count on former conservative protectors. Republicans were sympathetic to its decision to “sit at the table,” but grew furious when it engaged in active advocacy of the Democratic agenda. One House Republican staffer predicts the next time drug companies “ask us to stand in front of the train,” the answer will be: “Since you were so happy to work with Democrats, call them. Go on, go: Call Rahm [Emanuel]. Call [Henry] Waxman.”
Public anger over ObamaCare doesn’t help the industry’s reputation. Many Americans now view drug companies in the same light as “crony capitalist” banks or energy firms that turn to government to bolster the temporary bottom line. Pfizer’s stock price has been decent (due mostly to Mr. Kindler’s business restructuring), but the industry faces threats from a slowdown in innovation.
D’oh! Maybe the Kapo plan wasn’t such a smart idea. Maybe socialists Democrats really are the sworn blood enemy of the private sector.
Mr. Kindler might take solace that he’s not alone. Insurers, hospitals, utilities—many chose to accommodate a president whose health-care and climate agendas are now comatose. There’s a lesson here for corporate America. Try standing up for the free markets and limited government that have always been the foundation of U.S. business. It might work out better.
And there’s a lesson here for people who want to sit down and reason with crooks and fanatics. Whether a fanatic such as Mahmoud Ahmadinejad or a fanatic such as Barney Frank, you lay down with dogs and you wake up with fleas, but you lay down with crocodiles, and you get eaten. Time for boards of directors to understand this, and stop hoping for change, because the change that they seek is your complete demise.
Tags: WSJ
