Tuesday, December 2, 2008

The Kabuki Dance of Congressional Hearings

We witnessed two weeks ago the leaders of GM, Ford, and Chrysler sitting before Congressional panels posing as zombies, following the earlier lead of tobacco execs, oil execs, and probably drug industry execs.

The execs sit in the well below the Senators and Representatives, acting stunned and stupefied as they respond to a barrage of questions by the brilliant, omniscient Senators and Representatives. Harvard, Wharton, Chicago, Duke and Michigan MBA’s are reduced to flaming incompetence.

These execs are extremely competent, have survived vicious corporate battles to rise to the top, have personal skills, charisma, and highly competent assistants. They are well briefed on the issues and questions to be asked. So why do they appear as red meat, indeed political human sacrifices, for our elected representatives?

The answer is simple. The rules of the Kabuki Dance before Congress are laid out to the execs in advance. They are to swallow their pride, suck it up, follow the script, and accept whatever verbal abuse is dealt out. Humility and ignorance are the orders of the day. Above all else, they are not to show up Congress.

Congress has the power to do a lot worse than talk. They can legislate, and if they do, it will not be to the advantage of the affected industry. Talk is cheap, and will pass in time whereas legislation and regulation are eternal.

Just once, wouldn’t you like to see the President of a major oil company respond to the Congressional interlocutors:

“While I am sitting here answering your questions, my company is
producing 500,000 barrels of oil to supply the American people. On the
other hand, all you are producing in Congress is hot air and balderdash.
When is the last time you actually produced oil? When did you explore in
120 degree weather, alligator infested swamps, or five miles out at sea
in treacherous waters? When did you devise innovative secondary and
tertiary methods of oil production, or safer ways of exploration and

It will not happen.

Neither will a pharmaceutical executive state:

“If we do not earn a profit producing the drugs that save lives and improve
the quality of life of Americans, then we cannot discover new miracles that
fight cancer, diabetes, ALS and all the other diseases that kill
Americans. Our research saves lives. Earnings pay for R & D. For every
successful drug we produce, we have to write off scores of what initially
seemed promising pharmaceuticals, often at a cost up to a billion dollars.
In addition, we pay billions in damages when claims are made that our
drugs are not perfectly safe or efficacious. One lawsuit in front of a jury of
six can wipe out the company and all our products that help Americans.

If the country does not wish to protect the intellectual property rights of our
great pharmaceutical companies, then we will end up with the health care of
third world countries. The industry has already reduced industry
employment by 25,000 chemists between 2003 and 2006. Ph.D’s do not
come cheap. Neither do clinical trials.

Once again, it will not happen.

Similarly, a tobacco exec could say, but won’t: “You revile us as a health hazard, but the reason you don’t ban us is because you are addicted to the taxes generated by our cigarette sales.”

Instead we are offered the sacrificial heads of industry for our enjoyment with Congress having a thumbs up or down vote.

No comments: