EFTA00843868.pdf

From: Gregory Brown To: undisclosed-recipients:; Bcc: [email protected] Subject: Greg Brown's Weekend Reading and Other Things.. 10/11/2015B Date: Sun, 11 Oct 2015 08:29:32 +0000 Attachments: A_crisis_in_student_loans_Brookingsinstitute_Fall_2015.docx; Review,_Trevor_Noah_Keeps2Daily_Showt_DNA_in_Debut_NYT_Sept._29,2015.docx; Nothing We Can Do' and Other_Lies_About_Gun_Violence_Jim_Wallis_Huff_Post_10.0 9.I5.docx Inline-Images: image.png; image(I).png; image(2).png; image(3).png; image(4).png; image(5).png; image(6).png; image(7).png; image(8).png; image(9).png; image(10).png; image(11).png; image(12).png; image(I3).png; image(14).png; image(I5).png; image(16).png; image(17).png; image(I8).png; image(19).png; image(20).png; image(21).png; image(22).png; image(23).png; image(24).png; image(25).png; image(26).png; image(27).png; image(28).png; image(29).png; image(30).png; image(31).png DEAR FRIEND The Crisis of our Student Out-of-Control Debt Inane image 1 Student borrowing has soared in the past several years provoking all lot of hair and ringing and even talk of a crisis. Outstanding student loan balances in the United States total some $1.2 trillion—a figure that's quadrupled in the past 12 years. From 2000 to 2011, the default rate on student loans doubled. In 2000, just one of the top 25 schools whose students owed the most federal debt was a for- profit institution. In 2014, that number rose to 13. Borrowers from those schools alone owed about $109 billion, which amounts to almost in% of all federal student loans. New data on 4 million borrowers has shed some light on who is doing this borrowing and which borrowers are failing to make their loan repayments. The bottom line, the crisis, and there is one is not concentrated on borrower who went to four-year colleges. EFTA00843868  Inline image 2 In "A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and the Institutions they Attend Contributed to Rising Loan Defaults,"Adam Looney of the U.S. Department of the Treasury and Stanford's Constantine Yannelis examine the rise in student loan delinquency and default, drawing on newly available U.S. Department of Education administrative data on federal student borrowing linked to earnings records derived from tax records. The sample includes 4 percent of all federal student borrowers since 1970 — about 46 million annual updates on 4 million borrowers derived from hundreds of millions of individual records — and provides information on the characteristics of students, the institutions they attended, how much they borrowed, and how they fared after entering the job market. Web Link of full report: http://www.hrookings.edui—/media/projects/hpea/fall- 2015 embargoedkonferencedraft loonevvannelis studentloandefaults.pdf Increased enrollment in for-profit schools and increased borrowing rates among community college students account for much of the recent doubling in default rates, with changes in the type of schools attended, debt burdens, and labor market outcomes of non-traditional borrowers explaining the change, Looney and Yannelis find. "(These students) borrowed substantial amounts to attend institutions with low completion rates and, after enrollment, experienced poor labor market outcomes that made their debt burdens difficult to sustain" they write. More than 25 percent of them leaving school during or soon after the recession would default on their loans within three years. Researchers sought to find out what's behind the rising default rates. By studying newly available Department of Education administrative data on federal loan borrowing, they determined that the EFTA00843869 upsurge is due to a shift in where students are studying, with for-profit schools and community colleges as the key culprits. By 2011, almost half of all borrowers who were leaving school and starting to repay loans were from for-profit and two-year institutions and they accounted for 70% of student loan defaults. "Most of the increase in default is associated with the rise in the number of borrowers atfor-profit schools and, to a lesser extent, two-year institutions and certain other non-selective institutions, whose students historically composed only a small share of borrowers,"the study says. Inline image 3 Let's start by looking at who has been borrowing. A bulk of the increased borrowing is by students who went to for for-profit and community colleges. A big change from the pass. And which students him most likely to default the very same students, the ones who went to for-profit schools and community colleges. 21% of students who went to for-profit schools and community colleges defaulted within two years. But only 8% of students at four-year colleges and 2% and 2% a graduate schools. Inline image 4 The report says that students who borrowed to attend for-profit schools selected institutions with sub- par completion rates where graduates met poor labor market outcomes. For instance, the median borrower for a for-profit institution who left school in 2011 and found employment in 2013 earned about $20,900 — but over one in five were not working. In that same time frame, the median loan balances of for-profit borrowers jumped almost 4o%, from $7,500 to $10,500, thanks to greater financial aid eligibility and need, higher loan limits, cuts to state aid, and increased tuition costs. "(The] type of institution students attend matters; default rates have remained lowfor borrowers at EFTA00843870 mostfour-year public and private non-profit institutions, despite the severe recession and relatively high loan balances," the study says. Why is this happening? Well for one thing, borrowers who want to for-profit schools and community colleges in the job fair poorly in the job market. Borrowers from for-profit schools and community colleges tended to borrow less. But they also tended to come from lower income families, were less likely to complete their programs and fair much worse in the job market during the great recession recovery and the ensuing slow recovery. The good news is that through education there are millions of Americans trying to better themselves and we should do everything possible to encourage this trend. President Obama's recent proposal to provide two years of free education at community colleges would go a long way to stem this shackle of debt that many Americans are incurring trying to better themselves. Hopefully this noble scheme won't end up as a casualty of partisan gridlock in Washington. Now the future may not resemble the past. Although there are still a large amount of advertising by Phoenix, DeVry, Capella, Kaplan, Grand Canyon, ITT Tech and many more for-profit schools with promises of scholarships and easy financing, with increased government scrutiny hopefully this predatory borrowing and default trends are not likely to continue. Secondly, the improving economy means more people are going to work rather than school. Between 2010 and 2014 the number of new borrowers at for-profit schools fell by 44% and the number of new borrowers at community colleges by 19%. Fewer borrowers at these schools and a better job market hopefully means fewer defaults Eventually. ****** The Gun Debate Continues Lt line image t I received a lot of response from my piece last week on Gun Violence with the most vocal opposition coming from gun right advocates. But the reality is that according to Mass Shooter Tracker Data, which defines a mass shooting as an incident where four or more people are shot, there now have been 294 mass shootings this year alone; nearly 1,000 since the database was created in the wake of the Sandy Hook shooting in December of 2012. That's more than one a day. The U.S. has a gun homicide rate nearly four times higher than Switzerland's, six times Canada's, 16 times Germany's, 21 EFTA00843871 limes Australia's, and 49 times the rate in France. But the high profile shootings haven't shifted views on gun control. Though 87% of Americans favor expanded background checks, last year for the first time in more than two decades, it's a higher percentage of Americans, 52%, who said it was more important to protect the right of Americans to own guns than to control gun ownership. Today there is an average of 92 gun deaths happen every day in America. As a result, since 197o, more Americans have died from guns than died in all U.S. wars going back to the American Revolution. That's about 1.4 million war deaths since 1775, compared to about 1.45 million gun deaths since 1970 (including murders, accidents, and suicides--which comprise about 6o percent of US gun deaths). Even worse, in America, more preschoolers (defined as newborns through age 4) are shot dead each year (82 in 2013) than police officers are in the line of duty (27 in 2013). In a recent poll this year, it found that "majorities even of gun-ownersfavor universal background checks; tighter regulation of gun dealers; safe storage requirements in homes; and a io-year prohibition on possessing gunsfor anyone convicted of domestic violence, assault or similar offenses." The gun right advocates suggest that if the college had not been a gun free zone and other people had brought guns to the campus there somehow would have been less carnage. What they forget was that the shooter purchase his guns legally and if there had been two of him running around the campus there would definitely have been more carnage. But seriously do we really want our schools, hospitals, movie theaters and shopping malls to become OK Corals, where any disagreement might trigger a shootout? I don't. Haven't you heard the term "going postal"? Imagine how many workplace deaths would there be if everyone came to work armed with a gun -- and by the way how would the police know who is the initial shooter if there are multiple shooters when they arrive? As President Obama pointed out gun violence has become routine and there is a sense of apathy that nothing can be done to stem it or should be done. But 153,00o people have died from gunshots since 9/11. And counting 9/11, up to 214,000. While just over 3,000 people have died from terrorist attack, yet we have spent hundreds of billions of dollars to fight terrorism, made people take off their shoes before getting on a commercial airline flight and you can't even bring a Swiss Army knife on a plane, let alone a gun. Yet gun right advocates claim that nothing can or should be done often pointing to Chicago and Baltimore where there are strict gun laws and high gun violence. As Rich Lowery point out last Sunday on NBC's Meet The Press — "...It is a core responsibility of the government to protect us from foreign enemies. The reason the gun debate is going nowhere and is so sterile is because anything you do at the margins is not going to stop these kind of mass shootings, and anything that you would do that potentially would be much more sweeping is going to run afoul of a fundamental constitutional right to bear arms." But the reality is that as Chuck Todd also pointed out that in all 5o states, you have get a license or a permit to drive a car; 13 states for a gun. All 5o states require some various forms of testing to drive a car; six states require to get a gun permit. And of course, for the car, you register regularly, sometimes on a yearly basis, sometimes bi-yearly; only six states require that. Is that unfair? As Rich pointed out, the Constitution, there is no right to drive a car in the Constitution. Except that the Second Amendment of the United States Constitution reads: "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." It doesn't say that any unregulated individual has a right to keep a gun. EFTA00843872  Inline image 2 Such language has created considerable debate regarding the Amendment's intended scope. On the one hand, some believe that the Amendment's phrase "the right of the people to keep and bear Arms" creates an individual constitutional right for citizens of the United States. Under this "individual right theory," the United States Constitution restricts legislative bodies from prohibiting firearm possession, or at the very least, the Amendment renders prohibitory and restrictive regulation presumptively unconstitutional. On the other hand, some scholars point to the prefatory language "a well regulated Militia" to argue that the Framers intended only to restrict Congress from legislating away a state's right to self-defense. Scholars have come to call this theory "the collective rights theory."A collective rights theory of the Second Amendment asserts that citizens do not have an individual right to possess guns and that local, state, and federal legislative bodies therefore possess the authority to regulate firearms without implicating a constitutional right. In 1939 the U.S. Supreme Court considered the matter in United States v. Miller. 307 U.S. 174. The Court adopted a collective rights approach in this case, determining that Congress could regulate a sawed-off shotgun that had moved in interstate commerce under the National Firearms Act of 1934 because the evidence did not suggest that the shotgun "has some reasonable relationship to the preservation or efficiency of a well regulated milita . ." The Court then explained that the Framers included the Second Amendment to ensure the effectiveness of the military. This precedent stood for nearly 70 years when under pressure of the NRA and its supporters, in 2008 the U.S. Supreme Court revisited the issue in the case of District of Columbia v. Heller (07-290). The plaintiff in Heller challenged the constitutionality of the Washington handgun ban, a statute that had stood for 32 years. Many considered the statute the most stringent in the nation. In a 5-4 decision, the Court, meticulously detailing the history and tradition of the Second Amendment at the time of the Constitutional Convention, proclaimed that the Second Amendment established an individual right for U.S. citizens to possess firearms and struck down the handgun ban as violative of that right. EFTA00843873 The majority carved out Miller as an exception to the general rule that Americans may possess firearms, claiming that law-abiding citizens cannot use sawed-off shotguns for any law-abiding purpose. Similarly, the Court in its dicta found regulations of similar weaponry that cannot be used for law-abiding purposes as laws that would not implicate the Second Amendment. Further, the Court suggested that the United States Constitution would not disallow regulations prohibiting criminals and the mentally ill from firearm possession. Yet we can't get Congress to pass stringent background checks that might deny access to border-line schizophrenics and hotheads. As Ruth Marcus echoed Lowery — "... there is a cruel paradox here which is that the measures that would be most effective are also the most politically unimaginable and the most probably unconstitutional. But I think, Rich, you really misstate the total role of government. It's not simply to protect us from foreign enemies, ifs to make sure that we have a safe and livable environment. And to quote Jeb Bush, Too much stuff is happening on guns." As E.J. Dionne wrote in an op-ed this week in The Washington Post - No law will ever solve every problem or create heaven on Earth. But it is a straight-out lie to assert that stronger gun laws make no difference. Here is the conclusion of a study released in August by National Journal: "The states that impose the most restrictions on gun users also have the lowest rates of gun-related deaths, while states withfewer regulations typically have a much higher death ratefrom guns." State laws could be even more effective if they were matched by federal laws that made it harder for guns to get into the wrong hands. Politicians who go on about American greatness should be ashamed of saying that the United States is the one and only nation that can't act effectively to solve a problem every other free and democratic country has contained. Conservatives might usefully listen to former Australian Prime Minister John Howard, who has noted that he led "a center-right coalition" whose parties represented "virtually every nonurban electoral district in the country." In other words, his party is a lot like our Republicans. After a psychologically disturbed man killed 35 people in Tasmania, Howard championed state bans on the ownership, possession and sale of all automatic and semiautomatic weapons by Australia's states, along with a federal ban on their importation. He also sponsored a gun buyback scheme that got almost 700,00o guns — the statistical equivalent of 4o million in the United States — off the streets and destroyed. "Few Australians would deny that their country is safer today as a consequence of gun control," Howard wrote in the New York Times shortly after the Newtown killings. As for Republican Conservatives favorite president, history shows that Ronald Reagan's track record on guns was a winding road. Yes, he was a strong gun rights supporter who signed legislation easing an earlier gun law. But he also supported legislation for background checks and a waiting period for potential gun owners, as well as supporting an assault-weapons ban and even joined two other former presidents in a letter to a major newspaper urging congressional approval of a ban. "I'm a member of the NRA. And my position on the right to bear arms is well known. But I support the Brady bill and I urge the Congress to enact it without delay. It's just plain common sense that there be a waiting period (7 days) to allow local law enforcement officials to conduct background checks on those who wish to buy a handgun." Ronald Reagan in a speech in 1991 EFTA00843874 We need a sense of urgency about what to do with these angry, misfit malcontents who we are inspired gun culture and follow the news about mass shootings -- especially when we know that mass shootings tend to happen in clusters and are often telegraph and intention to commit this violence advertised. We have to start figuring out some solutions to keep us safe, and being forced to take off our shoes and be subjected to random pat-downs and requiring that children be vaccinated before being allowed to attend public schools, is no more of an infringement than requiring background checks, training and a license to own a gun. Finally, the idea of bringing more guns into play, is like pouring gasoline on a fire, because if you don't feel that 30,000 gun deaths of which two-thirds are suicides and a majority of people killed know their killers means that it is a flawed solution -- then don't complain when it is your family member of friend who is a victim of gun violence. I agree with Senator Marco Rubio and other gun rights supporters who point out that the current gun control legislation being proposed most likely would not have prevented the latest Oregon mass shooting, as such the obvious answer is to do more not less, make gun laws more stringent so that they can be effective in reducing gun deaths. Anything less is an abdication of our civic duty and a blight on our cherish democracy. Once more it is unacceptable to say that there is nothing we can do to reduce the growing number of mass shootings in America -- except get more people to have guns. Unbelievably, that's what conservative spokespersons and Republican presidential candidates said after the latest college massacre in Oregon which killed 10 and wounded 7 others. As for those gun rights supporters who still advocate bringing more guns onto college campuses -- well two days ago, 18-year old freshman Steven Jones shot four male students, killing one and injuring three others, after an altercation in a parking lot on the Northern Arizona University's Flagstaff campus. On the same day there was a shooting on the campus of Texas Southern with on student killed and a second injured. In August two people were shot on the campus, with one fatality. By the way in June, Texas governor Greg Abbott signed into law a bill that allows gun owners to carry concealed handguns on college campuses. We have to ask how many more times do we have to read, "We are shocked and deeply saddened by this incident. Our thoughts are with the victims and theirfamilies, and our entire Lumberjackfamily," (as said by NAU President Rita Cheng in a statement), before even these Neanderthals finally figure out that the availability of more guns leads to more gun assaults and homicides. If this wasn't enough, this week a 8-year-old girl was shot dead allegedly by her n -year-old neighbor after she wouldn't let him see her puppy. We can observed how in other countries without as many guns, fights between children don't end in such tragedies. The same applies to students who argue over bets or basketball games or school rivalries or whatever silly thing sparked Friday's early morning confrontation in Flagstaff. We're all for better mental-health treatment, peer counseling and programs to discourage the misuse of alcohol. But the most obvious way to reduce gun violence is not to have so many guns so readily available when people fight, drink and get angry Finally, as Richard Zombeck wrote Friday in The Huffington Post — GOP Has Gone Completely Off The Rails In Defense OfMass Murder — We live in a country in which gun deaths are more prevalent among preschoolers than they are amongst police. A country in which school children leave for school and parents wonder if they'll see their kids that evening. A country that can't, despite the staggering numbers of people who want to see stricter gun laws, sit down and come up with a reasonable solution to end these indiscriminate and brutal slaughters of people. Gun proponents argue that laws won't do anything. They argue that it would be a waste of time and EFTA00843875 taxpayer money and that the end result will not yield any change. Here's an idea: Let's do it any way and see what happens. And if that doesn't help then lets double down until it does. Ben Carson: Big Bang A Fairy Tale, Theory Of Evolution Encouraged By The Devil And this guy is running for President Inline image 5 "I personally believe that this theory that Darwin came up with was something that was encouraged by the adversary, and it has become what is scientifically, politically correct." Ben Carson View on Evolution: https://youtu.be/oPnwoDM-8xU In a speech delivered in 2012, Ben Carson said the Big Bang Theory was part of the "fairy tales" pushed by "highfaluting scientists" as a story of creation. Similarly, Carson, a noted creationist, said he believed the theory of evolution was encouraged by the devil. "Now what about the big bang theory," said Carson at speech to fellow Seventh-day Adventists titled "Celebration of Creation," about the theory for the origin of the universe. "I find the big bang, really quite fascinating. I mean, here you have all these high-faluting scientists and they're saying it was this gigantic explosion and everything came into perfect order. Now these are the same scientists that go around touting the second law of thermodynamics, which is entropy, which says that things move toward a state of disorganization." "So now you're gonna have this big explosion and everything becomes perfectly organized and when you ask them about it they say, Well we can explain this, based on probability theory because f there's enough big explosions, over a long period of time, billions and billions of years, one of them will be the perfect explosion,"continued Carson. "So I say what you're telling me is if I blow a EFTA00843876 hurricane through a junkyard enough times over billions and billions of years, eventually after one of those hurricanes there will be a 747fully loaded and ready tofly." Carson added that he believed the big bang was "even more ridiculous"because there is order to the universe. "Well, I mean, it's even more ridiculous than that `cause our solar system, not to mention the universe outside of that, is extraordinarily well organized, to the point where we can predict 7) years away when a comet is coming,"he said. "Now that type of organization to just come out of an explosion? I mean, you want to talk aboutfairy tales that is amazing." Later, Carson said he personally believed Charles Darwin's theory of evolution was encouraged by the devil. "I personally believe that this theory that Darwin came up with was something that was encouraged by the adversary, and it has become what is scientifically, politically correct," said Carson. "Amazingly, there are a significant number of scientists who do not believe it but they're afraid to say anything," Carson added, saying he would be writing a book, "The Organ of Species," that shows how the organs of the body refute evolution. Carson, whose views on creation have caused controversy in the past, is outspoken about his beliefs. He even once famously debated leading atheist Richard Dawkins. Let's think about this.... Yes, Ben Carson who is the first neurosurgeon to successfully separate conjoined twins joined at the head... Except that this medical doctor doesn't believe in mainstream science. Yet, he wants the lead the country whose one of its greatest claims is that it is the leading country in scientific innovation. And for those of you say that his comments are to give a wink and a nod to his conservative constitutes, I will counter that this is not leadership. But it appears that Republicans believe that facts don't matter as much as ideology. As this is the case for Carson means.... that he is unfit to be our President. ****** The New Guy in Town Mr. Trevor Noah EFTA00843877  Inline image 6 Web Link: https://youtu.be/00GZMfVQROY Sorry that this is a week late because the above web link is a video of Trevor Noah's humorous and touching opening to The Daily Show'. As the New York Time's review said, "The postJon Stewart version of "The Daily Show" that Trevor Noah and Comedy Central unveiled on Monday night was a bit like a new iPhone. It was sleeker, fresher and redesigned. There were tweaks here and there — look, even a new font! The 31 year-old, South African born Mr. Noah is a new face and voice. Likening Mr. Stewart to a comedic father, he joked: "Now itfeels like thefamily has a new stepdad. And he's black." Assured, handsome and with a crisp delivery, Mr. Noah was a smoother presenter than Mr. Stewart, who made an art form of sputtering and exasperated face-palming. The difference for me is that I think that Noah was really successful as oppose to sort-of "largely" successful as James Poniewozik wrote in his review which is attached to this week's readings. ****** Shame.... Shame Shame bei Inline image 7 EFTA00843878  Kevin McCarthy's admission that the taxpayer-funded Select Committee on Benghazi is fueled by partisan, political motives. The guy most people believed would be the person to replace John Boehner, current Speaker of the House of Representatives, admitted last week that the House Investigation on Benghazi is nothing but a political farce. House Majority Leader Kevin McCarty, "everybody thought that Hillary Clinton was unbeatable, but we put together a Benghazi special committee, a select committee members and what are her numbers today. Her numbers are dropping." This answer was in response to a question about what the Republican Congress had accomplished, and he actually listed their investigation on Hillary Clinton's poll numbers, as one of the GOP's major accomplishments. This is a bid deal because this committee masquerading as an attempt to look into the death of four brave Americans that we lost in Benghazi is actually a tax payer funded sham. Except their focus is only one thing. — The Benghazi Committee's only interested in taking down Hillary Clinton by driving down her poll numbers. Obviously this is a blatant political play using a terrorist attack and last week the House's Benghazi probe broke the record, as the longest congressional investigation ever, with American taxpayer picking up the tab of $4.5 million so far and more every minute. This is not counting seven other investigations on this very same topic. Still Republicans just announced another effort to abuse congressional resources when they launched a special panel to probe Planned Parenthood. Today partisan political attack committees are now just part of the playbook and although Democrats do it as well, it is the favorite for Republicans. With the then presumed next Speaker of the House admitting that this committee is all about a presidential candidates' poll numbers, the GOP can no longer claim that this investigation that they're running is at all serious or credible. The reality is that this Congressional hearing is nothing more than a tax-payer funded Republican hit job.... using the death of four Americans as a front. More importantly, it should be as disturbing as it is disingenuous. Republicans should leave political attacks to the campaign trail and get back to the actual jobs in Congress of tackling the real issues that Americans face. But then this is a political party who no longer believes in the good of government except when it can be used to take down a political adversary. This behavior should no longer be tolerated and this is my rant of the week... WEEK's READINGS The Cost of Doing Business Johnson & Johnson and the Risperdal Scandal EFTA00843879  Inline image 19 Ri The Huffington Post just started a series on big pharma titled — America's Most Admired Lawbreaker — About the ruthless business behind the drugs that save our lives — with the first part American on the giant pharmaceutical company Johnson & Johnson — The Credo Company by Stephen Brill. Johnson & Johnson is an 129 year old company headquartered in New Brunswick, New Jersey that peddles everything from Band-Aids to baby powder, Neutrogena to Rogaine, Listerine to Visine, Aveeno to Tylenol and Sudafed to Splenda, Johnson & Johnson is the biggest and, according to multiple surveys, most admired corporation in the world's most prosperous industry—healthcare. J & J is J&J, America's seventh most valuable public company. With consumer products But the real money—about 8o percent of its revenue and 91 percent of its profit—comes not from those consumer favorites, but from Johnson & Johnson's high-margin medical devices: artificial hips and knees, heart stents, surgical tools and monitoring devices; and from still higher-margin prescription drugs targeting Crohn's disease (Remicade), cancer (Zytiga, Velcade), schizophrenia (Risperdal), diabetes (Invokana), psoriasis (Stela ra), migraines (Topamax), heart disease (Xarelto) and attention deficit disorder (Concerta). As of the start of this summer the company had to new drugs in the pipeline that might achieve more than a billion dollars in annual sales. Ads for many of these products dominate our television screens and magazine pages. Each drug relies on its own elaborate marketing plan and carefully pitched promotional materials, used by hundreds of salespeople whose incomes turn on how much product they can push to the thousands of doctors who write prescriptions. All command increasing portions of our health insurance premiums and our own wallets, as well as our hopes and anxiety when we or our loved ones fall ill. But this first part is the backstage story of how an iconic company marketed a blockbuster drug that raised those hopes and fed on that anxiety. It is a story that in its depiction of strategies, tactics and mindset should make us wonder about the prescription drugs that are so much a part of our lives. 129 years ago Robert Wood Johnson who founded the company with two of his brothers in Brunswick, New Jersey had worked at various jobs in and around America's fledgling patent medicine industry before launching Johnson & Johnson as the world's first supplier of surgical dressings and bandages. His enterprise was propelled by a single, big idea — that English scientist and surgeon Joseph Lister's pioneering adaptation of Louis Pasteur's work in microbiology could be turned into a worldwide market for antiseptic supplies that would ward off infections in wounds and surgery. With sales offices and factories spread across the globe and with annual revenues of $74.3 billion in 2014, his company had come a long way since creating a first aid kit for railroad workers in 1888 or the first prescription contraception product for women in 1931. EFTA00843880 Even before Johnson & Johnson had grown little beyond a single factory with 14 workers in a small New Jersey town, its founder had donated supplies to soldiers in the Spanish-American War and to victims of a series of earthquakes and other natural disasters through the early 20th century. That public service ethic was memorialized in writing by Johnson's son Robert Wood Johnson II, who built the company mightily over a 31-year reign that ended in 1963. The founder's heir wrote what became the company's ubiquitous, even cult-like, "Credo"— a 308-word statement that declares, up front, "We believe ourfirst responsibility is to the doctors, nurses, and patients, to mothers andfathers, and all others who use our products and services." Employees and "the world community" come next. After them, the credo holds, the company's "final responsibility" is to shareholders. Patientsfirst. Profits last. Inline image 18 Robert Wood Johnson H The credo is mentioned seven times in the current chairman and chief executive's latest annual letter to shareholders. As is tradition, it is reprinted in full at the beginning of the annual report. It is also carved in stone in the lobby of J&J headquarters and posted at all significant company events — including that morning's stock analysts' conference. But the world in which Johnson & Johnson thrives today seems to have corroded the credo. Because today thousands of claims involving Risperdal are sitting on dockets across the country and company lawyers had just filed motions appealing a $2.5 million verdict handed down by a jury in a Philadelphia courtroom. The jury found that Risperdal had deformed an Alabama boy after Johnson & Johnson had encouraged his doctor to prescribe it without warning of its risks. Austin Pledger, who suffers from severe autism and is now 21 years old, started growing breasts when he was 12 that eventually measured 46DD. The Food and Drug Administration had prohibited Johnson & Johnson salespeople from trying to promote Risperdal to doctors to treat children because of its feared side effects, including hormonal disorders. The company was also not allowed to promote it to treat the elderly except for the most serious psychotic disorders; it was thought to cause strokes, diabetes and other ailments in that population. But by the time young Austin started growing breasts, Johnson & Johnson was reaping EFTA00843881 more than half of its Risperdal sales from prescriptions written for children to alleviate all kinds of behavior disorders, and for the elderly, who were given the drug for simple symptoms of dementia or restlessness. Inline image 17 Austin Pledger, at 2 years old Johnson & Johnson emails, sales training manuals and business plans produced as evidence in the case revealed that the company organized special sales units illegally targeting doctors who treated the elderly and children. State mental institutions treating children, whose drugs would be paid for by Medicaid, were targeted, too. When it came time to explain their conduct at trials and to federal investigators, Johnson & Johnson executives and salespeople have unwaveringly, even indignantly, defended themselves. One salesman, who otherwise fit the salt-of-the-earth mold that R.W. Johnson had envisioned for his company's employees, gave thousands of Risperdal samples in child-sized doses to Austin Pledger's doctor in Birmingham, Alabama. Yet he insisted under oath in February he didn't recall stepping around kiddie furniture and toys as he walked into an office with a sign that said "pediatric neurologist," and that he had no way of knowing that the doctor wasn't treating adults. More generally, Johnson & Johnson's defense —as in-house litigator Joseph Braunreuther expressed — is that the drug benefits many people, which is true, and that the law governing promotion to prohibited populations, called off-label sales, is vague, unworkable and punishes companies for providing information about the drug to doctors who treat patients who could be helped by it. Johnson & Johnson does not allow anyone to speak on the record about any of the Risperdal litigation or investigations, but as company Vice President for Media Relations Ernie Knewitz put it, "In our opinion, significant ambiguity exists about what is or is not permissible regarding the communication of truthful and non-misleading scientific information about FDA-approved pharmaceutical products. Like doctors, patients, and others in the industry, we share an interest in greater regulatory clarity on the rules for appropriate promotion and scientific exchange, and we are working through industry groups to bring clarity and consistency to the rules that apply to those communications." EFTA00843882  Inline image 16 Johnson & Johnson has already settled thousands of cases involving illicit promotion of Risperdal, including Department of Justice civil and criminal complaints, for a total fast approaching $3 billion. But of today the company is still manning the battle stations with squadrons of lawyers fighting off another 4,200 cases, apparently willing to risk a few more bad verdicts while hoping to weed out the weakest cases and wear the opposition down in order to save on final settlement costs of the strongest claims. Yet all of that meant little to the stock analysts. "Oh, they've already reserved for that stuff," one of them said to Steven Brill. He meant that in Johnson & Johnson's financials, there had been money taken from earnings and put into a column vaguely called "accrued liabilities," in order to account for the expected billions that might still have to be paid out in verdicts or settlements. "It's their cost of doing business," the analyst added, perhaps unintentionally echoing the view of one senior J&J lawyer who said that the cases against his company are the unavoidable price of dealing with a litigation system easily abused by those targeting big corporations. "All the big pharmas"have lawsuits, the analyst concluded. "It's just not a big deal." Indeed, with before-tax profits of $20.6 billion for 2014, putting aside $5oo million or even $1 billion a year over 15 years to cover payouts for boys with 46DD breasts and other claims that might come along doesn't put much of a dent in the company's financials. As Johnson & Johnson declared in a filing with the Securities and Exchange Commission three weeks before the analysts' conference, "In the Company's opinion ... the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's balance sheet, is not expected to have a material adverse effect on the Company's financial position." Thus, as Johnson & Johnson's press materials habitually point out, the company has recorded 51 years of increases in the dividends paid to shareholders. True, eight of the other nine largest pharmaceutical companies in the world have settled federal claims over the last decade related to allegations similar to what Johnson & Johnson was accused of in selling Risperdal, although their conduct was arguably less egregious. They, too, seem to have settled the charges without torpedoing their profit and loss accounts. However, the fact that this illegal conduct is not a "big deal" on Wall Street and only the occasional subject of news coverage should make it a big deal to the rest of the world: The drug companies seem to be able to break the rules with relative impunity, or at least without suffering the kind of punishment that would actually hurt—their stock prices taking a hit or senior executives being held personally responsible. Big Pharma is a big deal. The financial pages are filled almost daily with news of multi-billion dollar mergers and acquisitions among drug companies. Of the deals announced so far this year in the EFTA00843883 United States, eight of the 3o largest involve drug-makers. Other headlines herald breakthroughs of the kind Johnson & Johnson executives were touting in the ballroom in New Brunswick. At the same time, healthcare policy wonks, government budgeters, insurers and patients are becoming increasingly panicked over who is going to pay for the miracle profits demanded by the manufacturers of these miracle products. In terms of fortunes now being made and the industry's impact on our economy, Big Pharma (or a little pharma that develops a miracle drug) is fast becoming today's go-go industry. Profit margins often exceed those of industries, such as software, that we think of as modern gold mines. Only now the products have to do with life or death. Amid the swirl of multi-billion dollar takeover deals generated by the prospects of a promising new drug, can we trust these companies? Can the data from the trials conducted to test their products that they submit to the Food and Drug Administration be trusted? Can we rely on corporations that are looking over their shoulders at Wall Street not to inflate revenue by selling a drug to people that the FDA has walled off as targets or for purposes that have not been sufficiently tested and for which the FDA has not granted approval? Or are the lawsuits like those brought against Johnson & Johnson and other drug companies less about corporate wrongdoing and more about trial lawyers and whistleblowers (who get paid a portion of the winnings) looking for a payoff when drugs that comfort or even save the many result in side effects that afflict the few? These questions are only going to loom larger as miracle drugs and miracle profits increasingly dominate the news, our budgets and our quest to live long, healthy lives. That is what makes the Johnson & Johnson Risperdal story important. It is why an examination of internal company and FDA documents produced in recent Risperdal suits and from Freedom of Information Act requests, supplemented by interviews with those involved in these events, is revealing. The documents also demonstrate that as head of Risperdal sales and then head of the Johnson & Johnson subsidiary that marketed Risperdal, Alex Gorsky, the current Johnson & Johnson chairman and chief executive, had a sustained, hands-on role in what the company has since admitted in a plea bargain (that nonetheless named no individuals) was illegal activity. That raises significant questions about whether our legal system can, and will, ever hold the high-ranking people who run our largest corporations, rather than inert corporate entities, responsible for wrongdoing. The Houdini act that enabled Gorsky, the then-Risperdal sales manager, not only to escape responsibility but also to be promoted to the top of his industry's most admired company raises equally significant questions about the standards of conduct we can expect from those who run what is becoming the world's most powerful industry, and about how much we can rely on the medicines they sell. Through company spokespeople, Gorsky declined repeated requests to be interviewed about Risperdal, though he did testify in a deposition prior to the company's guilty plea, saying, al don't believe that we ... marketed the product in an inappropriate manner." The Johnson & Johnson Risperdal story is a complex, roller coaster tale. The details count. They are important in understanding the people and impulses behind the drugs we take. To tell that story in a way that is digestible but complete, The Huffington Post Highline and Steven Brill are trying something new: a DocuSerial. It's a reconstruction of an old story-telling genre that allows us to deploy the modern tools of digital communication to engage readers in old-fashioned, long-form feature journalism. Every day for the next 15 days, a new chapter of the Johnson & Johnson story will be posted here. Along with the text, we will post not only a rich array of photos and graphics, but also links to every document—court transcripts, internal emails, FDA staff memos—referred to in that day's chapter. That way, you will be able to delve more deeply into the materials that are quoted. (You'll also be able to make sure I held true to the context of the material I quote.) EFTA00843884 Those chapters already posted in prior days will be stored on a readily accessible, expanding file, so that you can catch up on, or review, the unfolding narrative. At the end of the 15 days, the entire story, along with all illustrations, videos and documents—as well as the most important comments on or critiques of the DocuSerial—will be available in a complete package, which will then be updated as events and the ensuing discussion evolve. Well before Risperdal was approved by the FDA and went on sale in February 1994, Johnson & Johnson had made the coming of the drug into something akin today to the launch of an Apple product. The company needed a blockbuster that would replace and surpass its original antipsychotic drug, Haldol, which had gone on sale in the late 1960s. Haldol had been invented in the laboratories of Paul Janssen, a legendary Belgium chemist whose father had founded a small pharmaceutical research lab in the 193os. R.W. Johnson II had purchased the company in 1961 in what became a critical pivot by Johnson & Johnson away from medical supplies and toward the blossoming, high-margin prescription drug business. Haldol and competitors, such as Thorazine, were considered "first-generation" antipsychotics—drugs that could treat symptoms associated with mental disorders such as bipolar disorder (manic depression, usually causing severe mood swings) and schizophrenia (typically defined as a severe brain disorder causing people to interpret reality abnormally, as with hallucinations). In order to hit J&J's projections, Risperdal would have to be used by tens of millions—not simply a portion of the one percent of Americans having the most severe psychotic disorders. But Haldol had come "off-patent" in 1986. That meant that the years