Letter: Save the Seaport Museum

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To the Editor:

The permanent closing of the South Street Seaport Museum would be a terrible loss to the cultural landscape — or seascape — of New York City ("Cut Adrift by Its Would-Be Rescuer, Seaport Museum Seeks a Lifeline," Arts pages, June 26).

In a June 25 article, the architect James S. Polshek, of the city's invaluable Public Design Commission, says in relation to finding the money to properly restore Grand Army Plaza at the southeast corner of Central Park, "This is a piddling amount of money — nobody can claim the city is in a slump."

Putting the seaport museum on a firm financial footing would also require what for some today is a piddling amount. Will one, or a consortium, of New York's many billionaires care to step up?

JOHN WILLENBECHER
New York, June 26, 2013

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Letter: Love on the Circle Line

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To the Editor:

Re "A Ship of Love Passing in the Night. By Day, It's the Ferry Again" ("Summer Shorelines" series, front page, June 29):

The Staten Island Ferry is not the only ship of love in New York City.

I, a widow in New York, exchanged e-mails with a widower in Baltimore for three months. I suggested the Circle Line for our second date.

We sat on the deck, with tourists from around the world seated next to us, as the guide made announcements about the Little Red Lighthouse and the George Washington Bridge. When we got off the boat, we bought the photographs that had been taken of us as we started our voyage.

Next week is our fifth wedding anniversary, and to celebrate, we shall once again ride the Circle Line.

PATTY DANN
New York, June 29, 2013

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Opinionator: Let’s Not Braise the Planet

According to a report released by the Carnegie Endowment for International Peace last month, we are not running out of fossil fuels anytime soon. Since the dawn of the industrial revolution we've used around 1.2 trillion barrels of oil; the report estimates that with current technology we can produce roughly five times that much. With future technologies, it may well be that the suffering sky is the limit.

This reduces the issue of conversion to clean energy to one of ethics and intent. Our ability to turn around the rate of carbon emissions and slow the engine that can conflagrate the world is certain. But do we have the will?

The chief economist at the International Energy Agency recommends leaving two-thirds of all fossil fuels in the ground. Makes sense to me, but if you're an oil executive scarcely being charged for the global damage your industry causes (an effective annual subsidy, says the International Monetary Fund, of nearly $2 trillion, money that would be better spent subsidizing nonpolluting energy sources), responsible to your shareholders and making a fortune, would you start erecting windmills?

Here's the answer: According to Rolling Stone, just this spring, BP put its $3.1 billion United States wind farm operation up for sale. Last year, ConocoPhillips divested itself of its alternative-energy activities. Shell, with its "Let's Go" campaign to "broaden the world's energy mix," spends less than 2 percent of its expenditures on "alternatives."Mining oil, gas and coal is making some people rich while braising the planet for all of us. It's difficult to think ahead, especially with climate change deniers sowing doubt and unfounded fears of unemployment, but we owe quick and decisive action on greenhouse gas reduction not only to ourselves but to billions of people not yet born. "People give less weight to the future, but that's a brain bug," the philosopher Peter Singer told me. "We should have equal concern for everyone wherever and whenever they live."

There's reason for optimism thanks to renewable energy standards in most states, California's groundbreaking cap-and-trade law and President Obama's directive to the Environmental Protection Agency last week. But this isn't nearly enough, and you have to hope that the president is now fully engaged in progressive energy policy and isn't merely preparing us for disappointment should he approve of Keystone XL.

Three things worth noting: Most politicians prefer adaptation to mitigation — that is, they'd rather build houses on stilts than reduce emissions; energy independence is in no way synonymous with "clean" energy; and the oft-stated notion that "since gas burns cleaner than coal and oil, we should be moving toward gas" puts us on the highway to hell.

Make no mistake: when it comes to climate change gas isn't "clean," because undetermined amounts of methane — a powerful greenhouse gas — leak into the atmosphere from natural gas production.

The answer is zero emission energy. Even moderate changes can help, but cuts in the use of fossil fuels must be much deeper than the president is directing, and this may not happen unless we rid Congress of friends of Big Energy. (By one count the House's 125 climate-change deniers have taken $30 million in contributions from energy companies.)

Investments in zero-carbon energy are relatively inexpensive and good for the economy, and the cost of business as usual is higher than the cost of even expensive carbon pricing. But it's tough — pointless? — to make these arguments to the energy companies and their Congressional lackeys, who will fight as they have been effectively paid to do.

Unless we quickly put a steep and real price on all carbon emissions, our inaction will doom our not-too-distant descendants. "Really," says Dan Lashof, the director of the Natural Resources Defense Council's climate and clean air program, "we need a comprehensive approach to reduce carbon pollution from all sources. What form that takes — caps, taxes, or standards — is far less important than how soon we get it in place."

Americans and Western Europeans have been the primary beneficiaries of the lifestyle that accelerated climate change, and, of course are among the primary emitters of greenhouse gases. For the first 200-plus years of the fossil fuel age, we could claim ignorance of its lasting harm; we cannot do that now.

With knowledge comes responsibility, and with that responsibility must come action. As the earth's stewards, our individual changes are important, but this is a bigger deal than replacing light bulbs or riding a bike. Let's make working to turn emissions around a litmus test for every politician who asks for our vote.

Imagine a democracy across space, time and class, where legislative bodies represented not only those living in the world's low-lying areas but their great-grandchildren — and ours. Or imagine that our elected representatives were proxies for those people. Imagine those representatives determining our current energy policy. Is there any doubt that things would change more rapidly?

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Taking Note: On Marriage, Holding Back the Tide

Because the Supreme Court's rulings on the Defense of Marriage Act and California's Proposition 8 failed to say whether gay and lesbian Americans have a constitutional right to marry the person of their choosing, the fight over same-sex marriage resumed almost immediately. And opponents of marriage equality made it plain they would keep trying to hold back the tide.

Sponsors of Proposition 8, the anti-gay marriage referendum that was effectively thrown out by the Supreme Court last week, went back to court over the weekend to try to stop that ruling from taking effect. (Justice Anthony Kennedy quickly tossed out their case.)

Rep. Tim Huelskamp, Republican of Kansas, introduced a federal constitutional amendment on Friday that would ban same-sex marriage across the country. Appearing on The Steve Deace Show, Mr. Huelskamp claimed that the Constitution defined marriage as a union between a man and a woman and accused the Supreme Court of trying to "rewrite the Constitution."

The court, of course, didn't even come close to doing that. Proposition 8 had already been overruled by California courts and by the Ninth Circuit Court of Appeals. The justices took the safest and narrowest possible approach by ruling simply that the people who were challenging those lower court decisions had no legal standing to do so.

On D.O.M.A., the court struck down a provision that denied federal benefits to legally married same-sex couples. As I mentioned, the court did not address the larger constitutional question.

Ominously, Mr. Huelskamp likened the right-wing's plans to continue fighting same-sex marriage to its fight against legal abortions after Roe v. Wade — a slow and steady campaign that has continued for 40 years and has had a distressing amount of success. If abortion opponents could not outlaw the procedure, they found they could make it impossible for larger and larger numbers of women to get it.

In Ohio, Gov. John Kasich on Sunday signed a budget bill that, among other things, restricts the ability of workers at rape crisis centers to tell rape victims about their legal rights; requires women to undergo and pay for a medically unnecessary ultra-sound before having an abortion; and requires physicians to read a speech written by politicians to women seeking abortions, whether the doctor agrees with it or not.

It's hard to imagine the right having as much success in preserving discriminatory practices against gay and lesbian adults who want to marry. But they can do a lot of damage along the way.

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Op-Ed Contributor: Justice for Big Business

IRVINE, Calif. — THE Supreme Court's momentous decisions last week on affirmative action, voting rights and same-sex marriage overshadowed a disturbing trend: in the final two weeks of its term, the court ruled in favor of big business and closed the courthouse doors to employees, consumers and small businesses seeking remedy for serious injuries.

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A majority of the justices seem to believe that it is too easy to sue corporations, so they narrowly construed federal laws to limit such suits. These decisions lack the emotional resonance of the cases involving race and sexuality, but they could have a devastating effect on people who have been wronged by companies.

The three cases involved many different areas of law but shared much in common. The five most conservatives justices — Samuel A. Alito Jr., Anthony M. Kennedy, Antonin Scalia, Clarence Thomas and Chief Justice John G. Roberts Jr. — were in the majority in all cases. All strongly favored big business.

First, the court made it much harder for victims of discrimination to sue. The court had previously ruled that, generally, an employer is strictly liable for sexual harassment by a supervisor, but it can be held liable for sexual harassment by a co-worker only if the employer is negligent. On June 24, in, Vance v. Ball State, the court adopted a narrow definition of who is a "supervisor," holding that it must be a person empowered to take tangible, adverse actions against the worker, like demoting or firing her, or cutting her pay.

This is just the most recent of several Roberts court decisions that have narrowed the scope of federal employment discrimination protections. The most infamous was Ledbetter v. Goodyear Tire and Rubber, in 2007, in which the court prevented a woman who had been the victim of years of pay discrimination from recovering back pay for most of the time she was employed there, because she did not learn of the disparity until near the end of her employment. Congress passed, and President Obama signed, a law overturning that decision.

Second, the court affirmed that it consistently favors manufacturers over consumers. Two years ago, in Pliva v. Mensing, it held that those injured by generic drugs couldn't sue manufacturers for failing to adequately warn patients of side effects. This is crucial because nearly 80 percent of all prescriptions in the United States are filled with generic drugs (it would be 90 percent if it were not for drugs for which there is no generic equivalent).

On June 24, the Supreme Court went further. In Mutual Pharmaceutical Company v. Bartlett, it held that makers of generic drugs could not be sued for defects in product design. The case involved a woman who was disfigured after taking a generic pain medication. The court said that federal law pre-empted any recovery under state law for failure to warn of the defects.

Third, the court continued to sharply limit class-action suits against companies. Two years ago, in AT & T Mobility v. Concepcion, the court held that a clause in a consumer contract requiring arbitration of disputes precluded a class-action suit. Vincent and Liza Concepcion were upset when they were charged $30.22 in sales tax after getting "free" cellphones. They wanted to be part of a class action against AT & T for fraud.

The Concepcions, like so many of us, had signed an agreement when they got their phones, and it had a clause that said any dispute with AT & T had to be resolved in arbitration. The California Supreme Court had ruled that such arbitration clauses were not enforceable, because consumers had no realistic choice but to sign. But the United States Supreme Court held, 5 to 4, that the arbitration clause was to be enforced and that since it had to be individual arbitration, it could not be a classwide case. Justice Scalia's majority opinion spoke of the terrorizing effects of class actions, which can force corporations to settle even frivolous suits. But the reality is that class actions are essential when a large number of people suffer damage, especially when the amounts are small: no one will sue, or even go to arbitration, for $30.22.

On June 20, the court again restricted class actions, in American Express v. Italian Colors Restaurant. The restaurant and other small businesses had brought a class-action suit accusing American Express of violating antitrust law in imposing excessive fees on merchants. The individual plaintiffs could have each recovered just $38,000 under the antitrust statute, but proving an antitrust violation would have cost exponentially more. Therefore, denying a class action meant that the suit could not realistically go forward. The result: a company can violate antitrust law yet immunize itself from liability through an arbitration clause.

These cases evince a disquieting theme about the conservative majority of the Roberts court. It obviously believes, and sometimes expressly says, that there is a need to protect big business from litigation. But in discrimination, product liability and arbitration, it has left injured employees, consumers and small businesses without recourse.

Congress could revise these statutes to allow the suits to go forward, and in the discrimination case, Justice Ruth Bader Ginsburg called on Congress to do just that. But deadlock in Washington does not leave much confidence that Congress will reopen the courthouse doors.

Erwin Chemerinsky is a professor and the dean of the law school at the University of California, Irvine.

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Op-Ed Columnist: The Revolt of the Rising Class

ISTANBUL — IN the upscale Istanbul suburb of Bebek, at 9 p.m. sharp, the diners began drumming on the tables or tapping their wineglasses with forks. The traffic passing along the Bosporus chimed in with honking horns and flashing headlights. It was a genteel symphony of solidarity with the protesters who a few days earlier were confronting fire hoses and tear gas in the heart of the city and elsewhere around Turkey.

Those street battles that caught our attention this summer have mostly been policed into submission, and the world's cameras have moved on, but the afterlife is interesting.

What is happening in Turkey is not "Les Miserables," or the Arab Spring. It is not an uprising born in desperation. It is the latest in a series of revolts arising from the middle class — the urban, educated haves who are in some ways the principal beneficiaries of the regimes they now reject.

We saw early versions of it in China in 1989, Venezuela in 2002. We saw it in Iran in 2009, when the cosmopolitan crowds thronged in protest against theocratic hard-liners. We saw it in Russia in 2011, when legions of 30-somethings spilled out of their office cubicles, chanting their scorn for the highhanded rule of Vladimir Putin. While Turkey was still percolating, the discontent bubbled up in Brazil, where yet another ruling party seems to be a victim of its own success.

The vanguard in each case is mostly young, students or relative newcomers to the white-collar work force who have outgrown the fearful conformity of their parents' generation. With their economic wants more or less satisfied, they now crave a voice, and respect. In this social-media century, they are mobilized largely by Facebook and Twitter, networks of tweeps circumventing an intimidated mainstream press.

The igniting grievances vary. Here in Istanbul it was a plan to build a mosque and other developments on a patch of the city's diminishing green space. In Brazil it was bus fares. By the time the protests hit critical mass, they are about something bigger and more inchoate: dignity, the perquisites of citizenship, the obligations of power.

Because these protesters are by definition people with something to lose — and because the autocrats know it — the uprisings are eventually beaten into submission, at least for the short term. The authorities kid themselves that they have solved the problem. It reminds me of that old pirate joke: the floggings will continue until morale improves.

But morale does not improve. There is a new alienation, a new yearning, and eventually this energy will find an outlet. In some way, different in each country, the social contract will be adjusted.

The protesters in these middle-class revolts tend to be political orphans, leaderless, party-less, not particularly ideological. To reach a new equilibrium, either the rising class must get organized, or the ruling class must get the message, or, ideally, both.

In China and Iran and Russia, where the regimes are more established in their ruthlessness, the discontented may have a longer wait. But watch Turkey. How Turkey, as a partner in NATO and a bridge to the tumultuous Islamic world, finds its new balance has both practical and symbolic significance for the rest of the world.

The United States has long embraced Prime Minister Recep Tayyip Erdogan as the model of a modern Muslim reformer. The Turkish prime minister, during his decade in power, has tamed the army of its coup habit, raised the standard of living dramatically, offered an olive branch to the separatist-minded Kurds and demonstrated — alone in the region — that Islam is compatible with both free elections and broad prosperity. When civil war sundered neighboring Syria, Erdogan (braving the disapproval of an electorate that tends to be more isolationist) condemned the brutalities of President Bashar al-Assad and hosted camps for hundreds of thousands of Syrian refugees. Both George W. Bush and Barack Obama have doted on Erdogan. The Islamist prime minister proudly sent three of his four children to universities in the U.S.

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Editorial Observer: Anthony Weiner Doesn’t Care What Everyone Thinks

Anthony Weiner strides onstage at Simon Baruch Middle School and grabs the mic to talk to the good people of the Stuyvesant Town-Peter Cooper Village Tenants Association. He takes his position beside, not behind, the lectern. He has nothing to hide.

He wears a white dress shirt, sleeves rolled up, and pants that brightly violate the boundary between orange and red. "I don't usually dress like this," he says. He explains that he was just at a rally in Greenwich Village, celebrating the Supreme Court rulings on same-sex marriage. Is he really saying he hasn't had time to change out of his gay pants?

It's a deeply puzzling remark, if you think about it. But Mr. Weiner specializes in bafflement these days.

It started with the news that he was running for mayor (really?), only two years after quitting Congress in disgrace after flashing women on Twitter with photos of his crotch. Then it was the revelation in recent polls that he had grabbed the lead (huh?) or was tied for first with two other candidates (what?).

Mr. Weiner groveled briefly when the scandal broke, but today, like the dog with a gun in the "Far Side" cartoon, he's through begging. He has made it clear that he has gotten the forgiveness he needs (his wife's) and doesn't need yours.

There are other things that make Mr. Weiner a curious front-runner — he was a lawmaker who was no good at making laws, who saw his seat as a get-on-TV pass, who infuriated colleagues and abused staff members. It's hard to imagine a Mayor Weiner using tact and diplomacy to guide the city through a crisis, or attracting a cadre of brilliant and committed policy experts and academics into a Weiner administration.

Weiner administration? Mr. Weiner is an administration of one.

And yet.

Is it possible for people of enormous talent and skill to come together and be collectively uninspiring? (Answer: Yes. The Eagles. And New York's mayoral candidates.) As the race wades into the murky depths of summer, a half-dozen solid, serious candidates are struggling to outshine a tabloid-tested opponent whose success is improbable only to people, like me, who don't get it.

I think Mr. Weiner's sexting was creepily assaultive, and made far worse by his lies about it. But I'm surprised by the number of people who don't find it disqualifying. In this Weiner-dominated race, privacy and shame seem like irrelevant, even imaginary concepts. Regret and remorse, showing weakness — Mr. Weiner has learned that these are politically useless, as antique as the engraved 1900s brass knobs on the bathroom doors at Simon Baruch.

Outside the school, I spoke briefly with a young woman collecting petition signatures for Mr. Weiner. She said he was the only candidate who had an affordable-housing plan, and the only one who cared about Harlem, where she lives. She was wrong about both those things. But there was no disputing her enthusiasm, and to her defense of her candidate — he's only human — there was nothing I could say.

There lives on YouTube a world-famous honey badger, who keeps low to the ground and bulls forward in pursuit of what he wants, not caring about poisonous snakes and bees. That's Mr. Weiner. He said the West Bank wasn't occupied by Israel, then shrugged off the ridicule. At Simon Baruch, he was asked about his support for vacancy decontrol — the law allowing landlords to jack up regulated rents after tenants leave. For residents of Stuyvesant Town, beleaguered citadel of rent-stabilized, middle-class living, it could have been a fatal question. Mr. Weiner said cheap rents for rich people made for embarrassing tabloid headlines. Put that way, the audience couldn't help applauding.

After the forum I briefly shared the sidewalk on East 20th Street with an old couple in white, he with a cane, she with his arm, walking in the gathering dark toward the East River. "They were all good," he said of the candidates, his reply leaving plenty of room for one of them, with colorful pants and sharp claws, to brazen his way out of the pack.

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Editorial: Secretary Kerry’s Quest

There is a sense of fatalism in Washington about Secretary of State John Kerry's quest to revive Israeli-Palestinian peace talks. Many experts have concluded that the conditions for peace don't exist and are unlikely to exist anytime soon. So far, White House officials have not begrudged Mr. Kerry's investment of time and energy in the initiative, but there is little expectation that President Obama, bogged down with so many other priorities, will get very involved unless real progress emerges.

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Still, Mr. Kerry keeps doggedly plowing forward. Despite the skeptics, this issue is of such importance that he is right to stay focused on it, at least until it becomes clear that neither side is willing to seriously engage. And while his trip to the region last week — his fifth — produced no breakthrough, he said he had made progress and would return again soon.

On Thursday, he met with Prime Minister Benjamin Netanyahu of Israel, then drove to Amman to confer with the Palestinian president, Mahmoud Abbas, on Friday. He later flew by helicopter back to Jerusalem for another meeting with Mr. Netanyahu, then one with President Shimon Peres of Israel. On Saturday and Sunday, he shuttled between the leaders again.

Whether there is any substantive narrowing of differences between the two sides is unknown. Mr. Kerry's determination to maintain secrecy is frustrating to anyone following his mission but also tactical, since unveiling details prematurely is more likely to back Israelis and Palestinians into opposite corners. The Jerusalem Post reported on Friday that Mr. Kerry proposed a series of meetings between Mr. Netanyahu and Mr. Abbas. The newspaper said Mr. Netanyahu accepted the plan and Mr. Abbas was being pressured to do the same.

The public signals from both sides have been confusing. There is division in Israel's conservative government, where hard-liners have tried to undermine Mr. Kerry's initiative by advocating more West Bank settlements, which are a death knell for any Palestinian state, while moderates have endorsed a two-state solution. The Israeli news site Haaretz.com reported that Mr. Netanyahu has "shifted" and is now serious about the peace process and a two-state solution. One can only hope that is true.

It does not help that the Palestinians are more disorganized than ever since their highly competent prime minister, Salam Fayyad, was ousted and replaced by someone who resigned a few weeks later. Mr. Abbas has insisted that Israel halt all settlement building before negotiations could resume and reportedly also wanted some Palestinian prisoners released from Israeli jails. Israel's government has not initiated new settlements since it was formed in March; even so, it has moved forward on 69 previously approved apartments in East Jerusalem.

There have been no direct Israeli-Palestinian peace talks since 2010. Mr. Kerry has made clear he wants to make headway on negotiations well before September, when the United Nations General Assembly will once again debate the Middle East. If that does not happen, there may come a point when Mr. Kerry and President Obama will have to decide whether it continues to make sense to invest this level of energy in this project indefinitely without a commensurate commitment by Israel and the Palestinians.

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Editorial: Stuck in Purgatory

President Obama's new regulatory agenda on climate change will face inevitable legal and political challenges. But in all fields — not just energy and the environment but health, safety and labor — one of the most formidable obstacles to reform has been the administration's own resistance to finalizing new rules, even when it has expressed support for the causes those rules would address.

Recently, 136 draft rules from executive agencies were under review at the White House's Office of Information and Regulatory Affairs, or OIRA, a branch of the Office of Management and Budget. Of them, 72 have been held up for longer than the 90-day limit set by executive order, and of those, 38 have languished for more than a year, including 24 from 2011 and three from 2010.

The backlog has more to do with politics than economics. In 2012, a presidential election year in which Republicans hammered the administration for its allegedly "job killing" regulations, the number of rules receiving final approval hit a historic low (in data going back to 1993), while the time OIRA took to vet proposals hit new highs.

Even though Mr. Obama won, delays persist. It is as if the White House were still driven by election-year motives: defuse Republican taunts and placate industry. Or worse, its commitment to new rules is suspect.

Since OIRA's creation in 1980, the office has been a force for ensuring that regulations reflect presidential priorities. It can advance rules, with or without change; return them to agencies for reconsideration; or urge agencies to withdraw them. Through most of its history, the office has been used to advance antiregulatory aims, often by emphasizing the burdens rather than the benefits of regulation. Under Mr. Obama, OIRA has largely continued to dwell more on costs than benefits, even as executive agencies have proposed new rules to protect the public.

The result has been an attenuated process that gives administration officials cover for their political reluctance to advance rules or their substantive opposition to them. Faced with such criticism, the White House can point to rules that have been moved along in the process. It can also cite completed rules, like important ones on toxic emissions from power plants, fuel economy and sulfur in gasoline. But that does not excuse stranding dozens of others in the purgatory of OIRA, including:

FOOD SAFETY In January 2011, Mr. Obama signed a major food-safety law. But three rules to implement the law, submitted to OIRA by the Food and Drug Administration in November 2011, are still not completed. Two of them, on produce safety and food-related illness prevention, got preliminary clearance from OIRA in January, which allows the F.D.A. to resume work on them before resubmitting them to OIRA for final review. A third rule, to enhance the safety of imported food, has not budged.

LABOR PROTECTIONS A Labor Department proposal to grant home care workers basic wage-and-hour protections — lauded by Mr. Obama in December 2011 — wasn't submitted to OIRA until January of this year, and has not been heard of since. Another proposal, to impose new standards for exposure to carcinogenic silica dust at construction sites, has been held up since February 2011.

ENERGY AND ENVIRONMENTAL STANDARDS Among the Energy Department proposals bottled up at OIRA is one submitted in September 2011 to substantially reduce harmful emissions from industrial freezers. Among delayed Environmental Protection Agency proposals is one sent to OIRA in February 2012 to improve protections for streams and wetlands.

In April, the Senate confirmed Mr. Obama's nominee to be director of the O.M.B., Sylvia Mathews Burwell, a former executive at the Walmart Foundation. Last week, senators confirmed the next head of OIRA, Howard Shelanski, the top economist at the Federal Trade Commission. Ms. Burwell and Mr. Shelanski have pledged to make regulatory reviews more timely. But that's not enough. OIRA also needs to be more transparent about the changes it makes to agencies' draft rules and why — allowing the public to evaluate whether the White House's involvement has improved or weakened the final rules.

At the end of the day, what the public needs most is not just a more timely and transparent review process but a president unafraid of Republicans or corporate interests and determined to enact his regulatory agenda.

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Opinionator: An Orphan Jackpot

ONE sure sign that federal regulations and policies are out of whack is when companies start making a business model out of gaming them. That's particularly true in two areas of government rule making — drug regulation and corporate taxes.

Consider the success of Jazz Pharmaceuticals.

Just four years ago, this little-known company was struggling: its share price was measured in pennies, and Jazz had missed a string of interest payments on its debt. Today, its stock has levitated to $68 per share.

Jazz accomplished that $4 billion enrichment of its shareholders thanks to well-intentioned federal regulations that deterred competition for its principal product, compliant health insurers, and a Swiss-cheese corporate tax regime.

Don't get me wrong: Jazz's mainstay, Xyrem, which is currently used by about 10,500 Americans, is a good drug. While it doesn't cure any deadly disease or even directly prolong life, it does help those with narcolepsy, a debilitating ailment that causes people to fall asleep unexpectedly during the day, and a related condition, cataplexy.

Xyrem came to Jazz as the centerpiece of its acquisition of Orphan Medical, so named because of its focus on orphan drugs — those intended to treat uncommon disorders (affecting fewer than 200,000 patients in the United States) that are ignored by many big pharmaceutical companies.

To get drug developers to focus on these relatively small pools of patients, the federal government offers inducements like a 50 percent research-and-development tax credit as well as a longer period of market exclusivity (seven years after Food and Drug Administration approval, rather than the typical five). These long monopolies often give orphan drug makers a free hand to raise prices.

That's precisely what Jazz has done, often multiple times each year, at an average annual rate of nearly 40 percent. Today, Xyrem costs more than $65,000 per year for the typical user.

The drug will account for approximately $550 million in revenue this year, making up a majority of Jazz's total sales. Last year, Jazz turned 49 cents of every revenue dollar into net profit, an extraordinary margin even for a pharmaceutical company.

The Orphan Drug Act of 1983 was intended to encourage drug makers to invest in treatments for underserved diseases, for which research-and-development costs can often be high and the markets for the medicines too small to make the expenditure worthwhile. But Xyrem, which is a modification of a long-available compound, was inexpensive to develop, as new drugs go. Indeed, Jazz paid only $146 million for Orphan Medical, just a fraction of what it now earns each year from Xyrem alone. (The company contends that it has spent considerably on its development.)

Central to Jazz's pricing strategy, moreover, has been the willingness of insurance companies to reimburse the cost of Xyrem, even when physicians prescribe the drug for other ailments (like insomnia), as they are permitted to do. Nearly every patient gets the drug pretty cheaply — Jazz subsidizes co-payments above $35 per month — so few users care what Jazz charges.

The corporate tax system, meanwhile, has further sweetened the pot. As profits began to gush, Jazz was able to avoid a heavy United States tax bill by merging with an Irish company that was one-quarter its size and moving to Ireland, where the tax climes are more convivial.

The tax laws didn't require Jazz's senior management to decamp; the company's top four executives are still based in sunny Palo Alto, Calif. And unlike multinationals incorporated in the United States, Jazz can bring unlimited amounts of cash across the Atlantic without paying American tax rates that can reach 40 percent. All told, analysts estimate that Jazz will pay about 18 percent of its earnings in taxes this year.

To be fair, while Jazz's success in mastering the government's web of policies and regulations is notable, the company is hardly alone. For example, Questcor has raised the price of a vial of its flagship drug, Acthar, used in the treatment of multiple sclerosis and other ailments, from around $50 in 2001 to $28,000 today. And using tax havens to shield profits is a hallmark of the pharma industry.

As for Jazz, Wall Street remains bullish. Although Xyrem's orphan status expired at the end of last year, Jazz has erected a small fortress of patents around the product and is actively litigating to defend them. What's more, the company is now pursuing orphan status for two other drugs.

And hey, why not? When Uncle Sam is willing to play Daddy Warbucks, being an orphan is a smart move.

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