On Martin Shkreli

Obviously the arrest for securities fraud of Martin Shkreli, whose company raised the price of an AIDS drug from $13.50 per pill to $750, has an air of poetic justice about it. But there are a couple ways in which that air is misleading. It's not so much a matter of karma as of one kind of ugly behavior leading to another. Corporate fraud is not simply something that accompanies corporate greed; it's an inextricable part of the process. High finance deals in amounts of money so large they have no real meaning, which makes for a system that's easy to game in a variety of ways. There is no  sense in which any drug is worth $750 per pill, and forcing hospitals to pay that much is no less fraudulent in essence than the Ponzi scheme Shkreli allegedly set up at two of his previous corporations. It's simply an acceptable fraud.

And here's the thing: Shkreli made headlines not because he's a big part of these problems but because he isn't. The Daraprim hike was an eye-catching story, but it's not as if Shkreli invented inflated medical pricing. His quote about "charging Toyota prices for an Aston Martin" was callous-- we're not talking about cars but about lives. And yet that attitude toward healthcare is an inevitable result of leaving so much of it to private enterprise. And while $11 million, the amount of the alleged fraud, is big money by my standards and probably by yours, in the world of high finance it's a drop in the bucket. The people who should be arrested for playing games with others' money won't be, because they're too big to jail. Shkreli's arrest is a sideshow, something that will create the impression that the government is tough on corporate fraud without actually inconveniencing anyone who might be a big donor in an upcoming election. Meanwhile, pharmaceutical companies will continue to charge inflated amounts for drugs, and much of that cost will be borne by taxpayers. A system in which governments buy vital services but have limited control over their prices may not seem to make sense, but for the people who profit from it, the logic is all too clear.