Medical Research Focuses More on Antibiotics Than on Phages Partly Because Antibiotics Are Easier to Patent

(p. 13) While recent events have provided a painful reminder of the very bad viruses that prey on us, Tom Ireland’s “The Good Virus” is a colorful redemption story for the oft-neglected yet incredibly abundant phage, and its potential for quelling the existential threat of antibiotic resistance, which scientists estimate might cause up to 10 million deaths per year by 2050. Ireland, an award-winning science journalist, approaches the subject of his first book with curiosity and passion, delivering a deft narrative that is rich and approachable.

In the hands of d’Herelle and others, the phage became a potent tool in the fight against cholera. But, in the 1940s, when the discovery of the methods to produce penicillin at an industrial scale led to the “antibiotic era,” phage therapy came to be seen as quackery in Europe and America, in part, Ireland suggests, because antibiotics, unlike phages, fit the mold of capitalist society.

Capitalists love patents. A funny quirk of the patent system is that you cannot patent entire natural things, but you can sometimes patent the way you extract their byproducts. The first antibiotics, being the secretions of fungi, were easier to patent in the United States than phages, which were whole viruses.

For the full review, see:

Alex Johnson. “Going Viral.” The New York Times Book Review (Sunday, September 17, 2023): 13.

(Note: the online version of the review has the date Aug. 15, 2023, and has the title “A Reason to Cheer for Cells and the Viruses That Feed on Them.”)

The book under review is:

Ireland, Tom. The Good Virus: The Amazing Story and Forgotten Promise of the Phage. New York: W. W. Norton & Company, 2023.

United Airlines CEO Gave Up on Flying United Airlines

United Airlines had major flight cancellations on Sun., June 25, 2023, on the day we were to fly United through O’Hare airport on our way to a European trip. Stress, exhaustion, chaos. United Airlines chaos continued for days. My brain has not yet totally processed the story quoted below. My gut, on the other hand, wants the CEO of United Airlines to be fired.

(p. B11) United Airlines Chief Executive Scott Kirby apologized for taking a private jet from Teterboro Airport in New Jersey to Denver this week as his airline grappled with widespread weather disruptions.

“Taking a private jet was the wrong decision because it was insensitive to our customers who were waiting to get home,” Kirby said in a statement Friday. “I sincerely apologize to our customers and our team members who have been working around-the-clock for several days—often through severe weather—to take care of our customers.”

A United spokeswoman said Kirby took the flight Wednesday because he was unable to secure a seat on a commercial flight. The company didn’t pay for the private flight, she said.

Wednesday was a hectic day for United: The carrier canceled over 750 mainline flights, according to FlightAware, over a quarter of what it had scheduled. The night before, a long stretch of bad storms in New York led to logjams at the area’s airports, including United’s Newark hub.

Some travelers over the past week have been stranded for days while waiting for space on flights home, in some cases sleeping in the airport. Travelers said they spent hours waiting in line for assistance or to be reunited with checked bags.

For the full story, see:

Alison Sider. “United CEO Apologizes for Flying on Private Jet Amid Airline’s Cancellations.” The Wall Street Journal (Saturday, July 1, 2023): B11.

(Note: the online version of the story was updated June 30, 2023, and has the title “United Airlines CEO Apologizes for Taking Private Jet During Flight Disruptions.”)

Dem Celebrities and Politicians Cultivated Crony Ties to FTX Fraudster Bankman-Fried

(p. B1) About 10 months before he was arrested on fraud charges, the cryptocurrency mogul Sam Bankman-Fried posed for a photograph at the 2022 Super Bowl in Inglewood, Calif.

On one side of him were Orlando Bloom and Katy Perry, the celebrity couple. On the other was the actress Kate Hudson. Standing in the center, with his arm slung over Mr. Bankman-Fried’s shoulder, was a lesser-known figure: Michael Kives.

Mr. Kives, a Hollywood agent turned investor, played an unusual role in Mr. Bankman-Fried’s business empire: super connector. He and his business partner, Bryan Baum, helped the young founder cultivate relationships with Mr. Bloom, Ms. Perry and former President Bill Clinton, and offered introductions to a who’s who of celebrities and business leaders, from Leonardo DiCaprio to the governor of Saudi Arabia’s Public Investment Fund.

The relationship was mutually beneficial. Mr. Bankman-Fried invested $700 million in Mr. Kives’s venture-capital firm, court records show, an extraordinary level of support for a fund with a short track record of start-up investments. Mr. Kives, the founder and face of the firm, and Mr. Baum each received $125 million as part of the deal.

For the full story, see:

David Yaffe-Bellany and Erin Griffith. “The Celebrity Super Connector Who Brought Big Names to FTX.” The New York Times (Saturday, June 24, 2023): B1 & B4.

(Note: the online version of the story has the date June 23, 2023, and has the title “The Super Connector Who Built Sam Bankman-Fried’s Celebrity World.”)

“They Just Invest in How to Navigate This Bureaucracy”

(p. A1) Capella Space, a San Francisco-based start-up, is building a fleet of small, inexpensive satellites that can track enemy troops as they move at night, or under cloud cover that traditional optical satellites cannot see through.

Fortem Technologies, a small aerospace company in Utah, wants to supply the Pentagon with a new type of unmanned aircraft that can disable enemy drones.

HawkEye 360, a Virginia-based firm, has used private equity funds to launch its own satellites that use radio waves emitted by communications equipment and other electronic devices to detect the presence of enemy troop concentrations.

Each of these systems is getting real-world testing in the war in Ukraine, earning praise from top government officials there and validating investors who have been pouring money into the field.

But they are facing a stiff challenge on another field of battle: the Pentagon’s slow-moving, risk-averse military procurement bureaucracy.

When it comes to drones, satellites, artificial intelligence and other fields, start-up companies frequently offer the Pentagon cheaper, faster and more flexible options than the weapons systems produced by the handful of giant contractors the Pentagon normally relies on.

But while the military has provided small grants and short-term contracts to many start-ups, those agreements often expire too quickly and are not large enough for young companies to meet their payrolls — or grow as rapidly as their venture capital investors expect. Several have been forced to lay people off, delaying progress on new technologies and war-fighting tools.

. . .

(p. A8) From the early months of the war, SpaceX’s Starlink, the Elon Musk-founded satellite internet service, had played a critical role for frontline Ukrainian troops. But small drones and a denser collection of satellites are also helping to provide the capacity for pervasive surveillance, allowing Ukraine to identify and track threats and targets constantly.

A new generation of cheaper and more precise attack drones carrying bombs can loiter in the air autonomously until they find their targets. Artificial intelligence-backed computer systems can fuse this collected data and other feeds to make targeting decisions, faster than any human.

The Ukrainians have also innovated a great deal themselves, impressing Pentagon officials as they have converted commercial drones, for example, into mini bombers.

Taken together, said Thomas X. Hammes, who studies war-fighting history at the Pentagon-backed National Defense University, the developments represent a “genuine military revolution,” and one that is happening much more quickly than the shift from infantry that traveled by foot in World War I to the motorized and mechanized armies of World War II.

. . .

(p. A9) Perhaps the most revolutionary use of American technology in Ukraine has been the application of software that uses artificial intelligence, made by Palantir, to help with targeting efforts. The company’s chief executive, Alex Karp, traveled to Ukraine last year to meet with President Volodymyr Zelensky.

“If you go into battle with old school technology,” Mr. Karp said this year at an event to discuss artificial intelligence tools in warfare, “and you have an adversary that knows how to install and implement digitalized targeting in A.I., you obviously are at a massive disadvantage.”

Some experts say that artificial intelligence, which has been used in Ukraine to help sift through the massive loads of data being accumulated from surveillance, will ultimately prove as disruptive to the nature of war-fighting as nuclear weapons.

. . .

For Primer, the small artificial-intelligence firm based in downtown San Francisco, it was a breakthrough moment.

Not long after the war in Ukraine started, its engineers, working with Western allies, tapped into a tidal wave of intercepted Russian radio communications. It used advanced software to clean up the crackly sound, automatically translated the conversations, and most importantly, isolated moments when Russian soldiers in Ukraine were discussing weapons systems, locations and other tactically important information.

This same work would have taken hundreds of intelligence analysts to identify the few relevant clues in the mass of radio traffic. Now it was happening in a matter of minutes.

The findings were quickly matched up with other so-called open source intelligence streams, like geolocation data pulled from social media accounts, giving updates on the location of troops or equipment, that could be matched with surveillance video from drones or images from satellites.

“It’s getting situational awareness,” said Sean Gourley, the founder of Primer.

Yet at the same time, the Pentagon was still deciding when to move ahead with major purchases of its technology. The company was burning through its cash reserves too quickly, so Mr. Gourley laid off engineers and other staff members.

“These engineers are great at creating solutions to solve these problems, which is what matters,” Mr. Gourley said. “But there is the uncertainty: When is this contract going to close? It’s very, very hard to justify that spend.”

Mr. Gourley said he decided instead to invest more money in a government relations push, hiring a former top aide to the Senate Armed Services Committee to help the company promote its business in Washington.

“The big defense companies, they don’t really kind of invest in the tech,” he said. “They just invest in how to navigate this bureaucracy. That kind of sucks, but that’s how you’ve got to play this game.”

In interviews, nearly a dozen top executives of technology-oriented companies shared stories of stalled efforts or frustration.

For the full story, see:

Eric Lipton. “Pentagon Is Slow At Signing Deals With Innovators.” The New York Times (Monday, May 22, 2023): A1 & A8-A9.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date May 21, 2023, and has the title “Start-Ups Bring Silicon Valley Ethos to a Lumbering Military-Industrial Complex.”)

Fuzzy Goals of ESG Firms Challenge Investors to Guess Their Future Success

(p. A13) Some movies not only entertain and inspire but convey broader lessons. “Air” is one of them. The film is about Nike’s efforts in 1984 to secure Michael Jordan’s endorsement of its basketball shoes, which soon after became the iconic Air Jordans. But it also tells anyone who will listen that ESG investing—environmental, social and governance—is a trap.

. . .

The Jordan family’s meeting with Adidas makes it apparent that the company has no clear leader or vision on how it would deal with Mr. Jordan in the future. This sense of confusion helps persuade the Jordans to sign with Nike, where leader Phil Knight is securely ensconced, ensuring against any radical change of direction in Nike’s relationship with Mr. Jordan.

. . .

Michael Jordan wasn’t willing to invest his personal brand in a fluctuating operation.

Investors should be even more wary when considering companies that pursue ESG. At the time of Mr. Jordan’s sponsorship decision, everyone at least agreed that the lone goal of a company was to maximize value for shareholders. Under ESG investing, by contrast, conflicts arise not only over how best to pursue company goals but over what the goals are.

For the full commentary, see:

Donald J. Boudreaux and David R. Henderson. “‘Air’ Is a Cautionary Tale About ESG.” The Wall Street Journal (Friday, April 14, 2023): A13.

[Note: ellipsis and bracketed year added.]

(Note: the online version of the commentary has the date April 13, 2023, and has the same title as the print version.)

The “Affordable” Care Act Gives Huge Drug Subsidies to Rich, Urban “Nonprofit” Hospitals

(p. A1) A decades-old federal program that offered big drug discounts to a small number of hospitals to help low-income patients now benefits some of the most successful nonprofit health systems in the U.S.

Under the program, hospitals buy drugs at reduced prices and sell them to patients and their insurers for much more, often at facilities in affluent communities.

One participant is the Cleveland Clinic’s flagship hospital, which reported $1.35 billion in net income last year. The hospital doesn’t admit enough Medicaid and low-income Medicare patients to qualify for low-cost drugs under the program’s original requirements. But a quirk in federal law allowed the hospital to qualify as a “rural referral center,” despite its location near the center of Cleveland.

Despite the benefits, the program hasn’t resulted in new drug discounts for low-income Cleveland Clinic patients, nor has it caused the hospital to increase the financial assistance it offers to those who can’t afford care. (p. A10) The charity care the main hospital writes off represents less than 2% of its patient revenue, according to a Wall Street Journal analysis of hospital Medicare filings.

. . .

The hospital’s $1.35 billion net income figure for 2021, she said, includes investment returns.

Cleveland Clinic’s adoption of the drug-discount program at its main hospital in April 2020 produced about $136 million in savings on drugs that year, the spokeswoman said.

The federal drug-discount program, known as 340B after the statutory provision that created it, requires pharmaceutical companies to sell drugs to participating hospitals at reduced prices. The program has grown rapidly in recent years. It now includes about 2,600 nonprofit and government hospitals, which spent at least $38 billion on discounted drugs last year, according to the Health Resources and Services Administration, the federal agency known as HRSA that oversees the program.

What the hospitals do with their valuable discounts isn’t always clear.

The program doesn’t require participating hospitals to pass on drug discounts to patients, insurers or Medicare. There is no rule limiting how much they can charge for the drugs. They don’t have to report how much they make from such sales, nor do they have to spend any profits to benefit low-income patients.

. . .

The 2010 Affordable Care Act brought a big expansion of 340B, adding new categories including critical access hospitals, which are small, typically rural facilities, and rural referral centers, which are supposed to be rural hospitals that treat a large volume of patients, including many complicated cases.

Under the federal definition of rural referral centers, hospitals that aren’t in rural locations could still qualify if they meet other criteria—minimally, having at least 275 beds. There is no requirement to serve rural patients.

. . .

“We were trying to help rural hospitals,” said Robert Kocher, an Obama White House health adviser involved in crafting the ACA who is now at venture-capital firm Venrock. “It would not be our intention to have a medical center in Cleveland, Boston or Chicago be included.”

For the full story, see:

Anna Wilde Mathews, Paul Overberg, Joseph Walker and Tom McGinty. “Drug Discounts Aimed at Needy Boost Hospitals.” The Wall Street Journal (Wednesday, Dec. 21, 2022): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date December 20, 2022, and has the title “Many Hospitals Get Big Drug Discounts. That Doesn’t Mean Markdowns for Patients.”)

Government Contractor UNOS Is 15 Times More Likely to Lose or Damage Transplant Organs as Private Airlines Are to Lose or Damage Luggage

(p. A24) Where Tonya lives in California, the wait for a kidney from a deceased donor is up to 10 years. Tonya, like many on dialysis to treat kidney failure, knows the odds of her surviving the wait are slim; the median survival time for patients on dialysis is five years.

. . .

Everyday Americans are doing their part, signing up to be organ donors, but the organizations in charge of organ recovery (known as organ procurement organizations, or O.P.O.s) have been plagued with inefficiencies and abuses, and the contractor that runs the national system — the United Network for Organ Sharing (UNOS) — has been failing to oversee them.

The organ procurement system is made up of 56 organizations, each with a monopoly in its jurisdiction. When someone dies and can donate an organ, O.P.O.s are supposed to go to the hospital, talk to the person’s family and manage the process of transporting donated organs to those in need, but all too often they have failed to show up — literally.

. . .

Tonya asked the government to hold these organizations accountable, and naïvely, we thought it would be that simple. Our efforts would surely get Tonya a kidney.

She did everything she could to push for change, everything that our government asks of concerned citizens: She wrote an opinion essay; appeared in a government video; wrote letters to members of the Biden administration, including the Centers for Medicare and Medicaid Services (C.M.S.) administrator Chiquita Brooks-LaSure and the head of the Health Resources and Services Administration, Carole Johnson; worked with members of Congress, including Representative Katie Porter; and even testified before the House Oversight Subcommittee on Economic and Consumer Policy in May 2021.

There she told the committee she would die without the federal government’s urgent action. A year and a half later, on Dec. 30, 2022, Tonya died of complications from kidney failure.

. . .

After the video Tonya and I made, in 2020 the Trump administration finalized a rule bringing accountability to the forefront, and the Biden administration has inherited it. This is a good start: The new rule changes the metrics by which O.P.O.s are evaluated and requires that they face decertification for failure to perform. But the rule would not replace a single failing organ contractor until 2026, which is not acceptable.

. . .

To make matters worse, in the Biden administration’s 2023 budget, the C.M.S. requested flexibility to recertify failing O.P.O.s so they can keep their contracts even after 2026. If we allow failing O.P.O.s to keep operating, then we essentially nullify the reform we’ve worked so hard for and ensure further delays and more deaths.

. . .

When the Senate Finance Committee finally began investigating, it found that UNOS has systematically failed to provide oversight. At the committee hearing, doctors and transplant professionals testified that they have been afraid to criticize UNOS publicly, for fear it will retaliate against their patients. Also at the hearing, Senators Elizabeth Warren, Charles Grassley and Rob Portman called out another mind-boggling fact: From 2014 to 2019, UNOS was 15 times as likely to lose or damage an organ in transit as an airline is a passenger’s luggage.

For the full commentary, see:

Kendall Ciesemier. “She Feared the Organ Donation System Would Kill Her. It Did..” The New York Times (Wednesday, February 1, 2023): A24.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Jan. 28, 2023, and has the title “Tonya Ingram Feared the Organ Donation System Would Kill Her. It Did.”)

Regulators Are Bad at Monitoring Unhealthy Banks

(p. A26) Silicon Valley Bank’s failure looks a bit like an S.&L. crisis in miniature. Like its 1980s counterparts, S.V.B. grew extremely rapidly, had many assets parked in fixed, long-term bonds, and was done in when inflation caused the Fed to raise interest rates, raising the cost of keeping deposits.

Like the S.&L.s, Silicon Valley Bank was heavily concentrated. It catered to start-ups for whom an S.V.B. account was a matter of status. One tech savant who had recently changed jobs (aren’t they always switching jobs?) told me that in his experience, roughly two thirds of start-ups banked with S.V.B. (the bank claimed that nearly half the country’s venture capital-backed technology and life science companies were customers).

. . .

The regulators clearly failed to monitor S.V.B.’s unhealthy mismatch of assets and liabilities.

. . .

Once you take risk out of a part of a bank’s operations, it is hard to let market principles govern the rest.

. . .

In past bank failures, uninsured depositors did not lose all — 10 to 15 percent was typical. And in this episode, there wasn’t any systemically bad asset à la mortgages in 2008. Given that the risk was contained, and that the Federal Reserve provides liquidity to banks facing runs (and provided emergency liquidity this week), allowing uninsured depositors of banks that fail to suffer a haircut might have been healthier for the system in the long run.

For the full commentary, see:

Roger Lowenstein. “The Bank Rescues Just Changed Capitalism.” The New York Times (Thursday, March 16, 2023): A26.

(Note: ellipses added.)

(Note: the online version of the commentary has the date March 15, 2023, and has the title “The Silicon Valley Bank Rescue Just Changed Capitalism.”)

Chips Act Requirements “Set a Fraught Precedent for Attaching Policy Strings to Federal Funding”

(p. A1) WASHINGTON — Semiconductor manufacturers seeking a slice of nearly $40 billion in new federal subsidies will need to ensure affordable child care for their workers, limit stock buybacks and share certain excess profits with the government, the Biden administration will announce on Tuesday [Feb. 28, 2023].

The new requirements represent an aggressive attempt by the federal government to bend the behavior of corporate America to accomplish its economic and national security objectives. As the Biden administration makes the nation’s first big foray into industrial policy in decades, officials are also using the opportunity to advance policies championed by liberals that seek to empower workers.

While the moves would advance some of the left-behind portions of the president’s agenda, they could also set a fraught precedent for attaching policy strings to federal funding.

. . .

(p. A16) The requirements will join a growing list of administration efforts to expand the reach of President Biden’s economic policies beyond their primary intent. For instance, administration officials have attached stringent labor standards and “Buy American” provisions to money from a bipartisan infrastructure law.

. . .

Some Republican and Democratic lawmakers have also questioned the wisdom of giving any taxpayer money to the chip industry, which is generally profitable.

For the full story, see:

Jim Tankersley and Ana Swanson. “Funds to Bolster U.S. Chip-Making Come With Catch.” The New York Times (Tuesday, February 28, 2023): A1 & A19.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date Feb. 27, 2023, and has the title “Biden’s Semiconductor Plan Flexes the Power of the Federal Government.”)

“Nonprofit” Hospitals “Enjoy Lucrative Tax Exemptions” but Often Pressure Poor to Pay More

(p. 1) More than half the nation’s roughly 5,000 hospitals are nonprofits like Providence. They enjoy lucrative tax exemptions; Providence avoids more than $1 billion a year in taxes. In exchange, the Internal Revenue Service requires them to provide services, such as free care for the poor, that benefit the communities in which they operate.

But in recent decades, many of the hospitals have become virtually indistinguishable from for-profit companies, adopting an unrelenting focus on the bottom line and straying from their traditional charitable missions.

To understand the shift, The Times reviewed thousands of pages of court records, internal hospital financial records and memos, tax filings, and complaints filed with regulators, and interviewed dozens of patients, lawyers, current and former hospital executives, doctors, nurses and consultants.

The Times found that the consequences have been stark. Many nonprofit hospitals were ill equipped for a flood of critically sick Covid-19 patients because they had been operating with skeleton staffs in an effort to cut costs and boost profits. Others lacked intensive care units and other resources to weather a pandemic because the nonprofit chains that owned them had focused on investments in rich communities at the expense of poorer ones.

And, as Providence illustrates, some hospital systems have not only reduced their emphasis on providing free care to the poor but also developed elaborate systems to convert needy patients into sources of revenue. The result, in (p. 22) the case of Providence, is that thousands of poor patients were saddled with debts that they never should have owed, The Times found.

Founded by nuns in the 1850s, Providence says its mission is to be “steadfast in serving all, especially those who are poor and vulnerable.” Today, based in Renton, Wash., Providence is one of the largest nonprofit health systems in the country, with 51 hospitals and more than 900 clinics. Its revenue last year exceeded $27 billion.

Providence is sitting on $10 billion that it invests, Wall Street-style, alongside top private equity firms. It even runs its own venture capital fund.

For the full story, see:

Jessica Silver-Greenberg and Katie Thomas. “Entitled to Free Treatment But Hounded by Hospitals.” The New York Times, First Section (Sunday, September 25, 2022): 1 & 22-23.

(Note: the online version of the story was updated Dec. [sic] 15, 2022, and has the title “They Were Entitled to Free Care. Hospitals Hounded Them to Pay.”)

Flourishing Is the End, Profit Can Be a Means

Glen Hubbard has long been a thoughtful defender of entrepreneurial capitalisms. The article quoted below from The New York Times suggests that he is moving away from that. Is that true, or is The New York Times misrepresenting the development of Hubbard’s thoughts? I suspect the latter, but I have not kept up with Hubbard’s recent articles or lectures. Profits are a key means to enable human flourishing. The two are not inconsistent. Flourishing is the end, profit can be a means.

(p. C1) One zigs, the other zags. One teases the passer-by with bands of translucent glass wrapping a core of clear windows; the other, with floors angled in and out — a gentle architectural mambo. The pair of buildings that comprise Columbia University’s new business school, on its growing Manhattanville campus, exude a nervous off-kilter energy.

. . .

(p. C4) Glenn Hubbard, the former business school dean who brought the project to fruition, saw the need to break free from fealty to the unregulated free market economy that over decades has led to extraordinary wealth concentration. The idea that business should focus only on making money, attributed to the economist Milton Friedman, “was a simple and direct idea that took over business, banking, even corporate law,” Hubbard explained. “We are trying to come up with a framework that can be more about flourishing, not just profit.”

“The vision now is to bring people together and debate issues going on in the world,” said Costis Maglaras, who was on the faculty as the project was being designed and who succeeded Hubbard.

For the full story, see:

James S. Russell. “A Temple of Capitalism Opens Itself Up.” The New York Times (Saturday, January 7, 2023): C1 & C4.

(Note: ellipsis added.)

(Note: the online version of the story was updated Jan. 9, 2023, and has the title “At Columbia’s $600 Million Business School, Time to Rethink Capitalism.”)