Here in Florida, we have a saying that goes: "Don’t taunt the alligator until after you cross the creek."
Martin Shkreli, former Turing Pharmaceuticals CEO and poster boy for the smarminess of greedy capitalists around the world, must not know this bit of Southern wisdom.
If he did, he probably wouldn’t have appeared in front of a Congressional committee today with a defiant smirk.
The disapproval on his face was bad enough. But it was punctuated by repeated assertions of his Fifth Amendment right against self-incrimination.
And that isn’t even the worst part.
Shkreli has been unabashed in defense of his decision to raise the price of the life-saving AIDS drug Daraprim nearly 5,500%, from $13.50 to $750, virtually overnight.
Yet today, he refused to answer any of the committee’s questions on so-called "price-gouging" in the pharmaceutical industry.
I suspect his "taking of the fifth" is understandable, especially considering he’s also under a federal criminal indictment.
It alleges that he perpetuated a Ponzi scheme on investors in hedge funds and a pharmaceutical company he founded and previously led.
To make matters worse, Shkreli took to social media site Twitter (TWTR) to express his thoughts on those questioning him, sending out a tweet that read:
Hard to accept that these imbeciles represent the people in our government.
— Martin Shkreli (@MartinShkreli) February 4, 2016
This is either a case of obnoxious defiance, or extremely dumb hubris (or both).
Now, I am about to say a few things that might surprise some.
But if you’ve been a reader of the Afternoon Edition for any appreciable amount of time, you’ll know several things about me …
I am a lover of freedom, capitalism and individuals standing up for themselves against big government and other big social institutions.
That’s why, in some bizarre way, a small part of me wants to root for folks who end up in situations like this. Where the strong arm of society tries to bully people in positions to determine a product’s price.
After all, Shkreli’s company owns the patent for Daraprim. After many years and perhaps millions of dollars in research and development, they earned the right to focus on profitability.
And if you were to argue on the law itself, perhaps his company has a right to raise a product’s price by thousands of percent in a matter of weeks.
It’s stupid from a public relations perspective. But it may legally be their right.
Yet because of Shkreli’s abhorrent behavior, insolent demeanor and bizarre high-profile money wasting (he bought the only copy of an album by rap group Wu-Tang Clan for $2 million) …
It’s really, really hard to conjure up any sympathy for this man. At all.
Still, I think it’s important to separate a couple of issues at work here from what I think is a near-unanimous opinion that Shkreli is probably in need of some public shaming.
The issue here is this …
Does a company have the right to price its products … and does that right apply even if the CEO is a repugnant and insolent little brat?
I think the right to the company’s property here trumps any justifiable outrage over a person’s demeanor, misplaced bravado or unusual spending habits.
But the company would certainly need to address any regulations related to product pricing … and the legal ramifications of doing what they did.
Shkreli also has a right to be defiant in front of Congress, and he has the Fifth Amendment guarantee against saying anything that could put him or his company in legal jeopardy.
It’s just sad that Shkreli’s persona is as vile as it is. It’s even sadder that people are quick to conflate this man with "capitalism," as this noble idea couldn’t have a more abhorrent spokesperson.
It would seem that is the issue with quickly painting a face on capitalism, or socialism, when in fact it is probably better to just talk about a person’s or a company’s accomplishments or failures.
And it would seem this is going to go down as a failure.
So, do I think it was right that Shkreli hiked the price of Daraprim so high that most patients couldn’t afford it?
No. I think it’s an outrage.
Yet people have the right to "act a fool," as his favorite rap artists Wu-Tang Clan might say.
Then again, the Wu-Tang Clan thinks he’s pretty foolish. First, because of the price hike. And now, after Shkreli threatened to destroy the only copy of the group’s unreleased "Once Upon a Time in Shaolin" album — for which he paid $2 million.
That is, unless he gets an apology from Wu-Tang member Ghostface Killah.
Again, via Twitter …
As mentioned in my video, I expect a written apology, @GhostfaceKillah. At least 500 words, no grammatical errors and Shaolin stays intact.
— Martin Shkreli (@MartinShkreli) January 28, 2016
I could say a lot more. But I’d like to turn the microphone over to you now …
What are your thoughts on Martin Shkreli and his behavior? Do you think he has the right to hike the price of a product he owns?
The Return of the Sound Dollar Campaign e-letter: Why Here, Why Now?
I’m quite sure you are well-aware that 2016 is a presidential election year. That means we are going to hear a lot of rhetoric about the economy, tax policy, foreign policy and what the proper role of government is in society.
Perhaps now more than ever, this is the time for an informed public to speak out on these issues of critical importance to our personal futures, as well as to the future of the republic.
Now, for the past couple of years I’ve been doing what many hard-working Americans have been doing, and that is concentrating on growing my primary business. That business happens to be helping investors succeed with the best information tools possible. That preoccupation forced me to shelve my regularly scheduled content in the Sound Dollar Campaign.
Yet at this critical juncture for our country, I am convinced that part of that information toolbox involves analyzing the political scene, and assessing what kinds of policies will foster the best results for investors. And while I’ve been doing that in our Uncommon Wisdom Daily Morning and Afternoon Editions more and more of late, I’ve come to the conclusion that we need another place to really dig into the details of what’s going on.
That’s why I’m re-launching our weekly Sound Dollar Campaign e-letter.
Here’s where you will find my thoughts, as well as thoughtful commentary from my outstanding contributors and intellectual brothers-in-arms, about the political, economic, social … even philosophic issues affecting our lives.
Think of the Sound Dollar Campaign newsletter as a rational beacon in a dark sea of political, economic and social nonsense.
If you want a different perspective on all sorts of political, fiscal and societal issues, then the Sound Dollar Campaign is for you.
You can read all of our newest posts at SoundDollarCampaign.com.
And to receive an e-mail as soon as we make a new post (about once a week), you can join the campaign here.
Stocks closed flat today in mixed trade. Oil resumed its decline after Morgan Stanley (MS) cut its year-end price target by 50%. It originally forecast Brent crude would climb to roughly $60 by year-end.
• Earnings report, or damage report? Another oil company saw its profit plummet yet reaffirmed its commitment to its dividend. Today it was Royal Dutch Shell (RDS.A), which said its profits fell more than 56% in Q4. BP and ExxonMobil issued similar reports yesterday.
• As if oil wasn’t under enough pressure already … the White House is reportedly proposing a $10-per-barrel oil fee for its 2017 budget proposal. Oil companies would pay the fee to fund clean transportation projects.
• Credit Suisse (CS) saw its first full-year loss since 2008. The company is planning a big restructuring effort, to shift its focus from investments to wealth management. This will likely result in 4,000 jobs lost. CS saw another loss today — the stock dropped almost 11%.
• Before New Hampshire’s primary, another Democratic debate. Hillary Clinton and Bernie Sanders will face off in a town hall event tonight. Martin O’Malley ended his bid for the White House after the Iowa caucus. On the GOP side, Mike Huckabee, Rick Santorum and Rand Paul have also left the race.
Good Luck and Happy Investing,
Uncommon Wisdom Daily