The Fifth Risk(25)
As the USDA’s loans were usually made through local banks, the people on the receiving end of them were often unaware of where the money was coming from. There were many stories very like the one Tom Vilsack told, about a loan they had made, in Minnesota, to a government-shade-throwing, Fox News–watching, small-town businessman. The bank held a ceremony and the guy wound up being interviewed by the local paper. “He’s telling the reporter how proud he is to have done it on his own,” said Vilsack. “The USDA person goes to introduce herself, and he says,‘So, who are you?’ She says,” I’m the USDA person.’ He asks,‘What are you doing here?’ She says,” Well, sir, we supplied the money you are announcing.’ He was white as a sheet.”
Salerno saw this sort of thing all the time. “We’d have this check,” said Salerno. “We’d blow it up and try to have a picture taken with it. It said UNITED STATES GOVERNMENT in great big letters. That was something that Vilsack wanted—to be right out in front so people knew the federal government had helped them. In the red southern states the mayor sometimes would say,” Can you not mention that the government gave this?’” Even when it was saving lives, or preserving communities, the government remained oddly invisible. “It’s just a misunderstanding of the system,” said Salerno. “We don’t teach people what government actually does.”
She herself hadn’t learned until very late. She’d grown up in a family with no money, and nine children, and Republican sympathies, in a small farming town in Texas called Little Elm. Her graduating high school class had eighteen people in it. She was both student council president and head cheerleader. (“The reason I’m not very good at math is you had to choose: cheerleading or math. And I chose cheerleading.”) Few of her school’s graduates ever went to college, but she was admitted to the University of Texas, on a Pell grant. She paid for what the grant didn’t by waiting tables.
She was waiting tables in Little Elm in the late 1980s when friends started getting sick, and dying, from AIDS. She went to Dallas to visit them. There, at a hospital, she saw that men condemned to death were going without care: the nurses were frightened to interact with them. They had a particular fear of being infected by the needles that delivered medication to the patients. “At that time everyone died,” said Salerno. “And they are told,” The nurses aren’t coming.’ I said,” That’s about as fucked as anything I ever saw.’” She had a raw sense of injustice, and a desire to see life be made fair. “Small town, big family, no resources: you look at the world in a certain way.” She also had a roll-up-your-sleeves-and-fix-it attitude. After seeing the needless suffering, she came up with an idea: the retractable needle. It worked like a ballpoint pen. A friend of hers, an engineer, designed it. She applied to the local community bank for a loan and got it. It wasn’t until much later that she discovered that the loan had ultimately come from the Small Business Administration, and that the federal government had simply used the local bank as a delivery system. She didn’t know enough to know that no bank was going to lend money to a first-time entrepreneur on the strength of a new invention—in part because banks didn’t value willpower. “All good inventions come from something personal,” she said. “People create things because it’s personal.”
Salerno and her partner built and ran the new company in Little Elm and called it Retractable Technologies. They received their first patent in the early 1990s and FDA approval in 1997. The first year in business they sold one million syringes, the next year three million. By the third year her company employed 140 people in Little Elm. She repaid the bank her government loan—and she still didn’t realize it was a government loan. For the first time in her life she had money.
She also now had a view of the inner workings of the health care industry. The company that had made the old syringes, Becton, Dickinson & Co., controlled more than 80 percent of the market and felt threatened. It wasn’t long before Becton started to require hospital systems to buy its clumsy new version of a safe syringe, by bundling it with other products. Salerno assumed Becton was counting on her inability to pay for the lawsuits required to fight them. But she did and wound up with a settlement of $100 million in 2004.
Even then, Becton found ways to keep her new product from gaining full access to the market. Her company survived but didn’t become what it might have. It now employs 130 people, instead of the 200 at its peak. Salerno concluded that increased corporate power was one of the forces that had reduced the opportunity available in rural America. The rapacity of companies with monopolistic power, and their ability to have their way with the government, got her thinking about the big American systems. “The entire health industry lies about what things cost to make,” she said. “I know what things cost because I made them.”
Her outrage led her to support Hillary Clinton’s presidential campaign in 2007, but she soon switched to Obama. (“I switched because I got so angry at how they were beating him up.”) After Obama won, Salerno was a natural candidate for a job she had no idea existed: helping people in rural America to help themselves. “Someone said,‘Why don’t you become an administrator in rural America, at the Department of Agriculture?’ I said,‘There’s an administrator in rural America?’”
She’d come to her job inside the little box marked “Rural Development” without any particular ambition to be there. The sums of money at her disposal were incredible: the little box gave out or guaranteed $30 billion in loans and grants a year. But people who should have known about it hadn’t the first clue what it was up to. “I had this conversation with elected and state officials almost everywhere in the South,” said Salerno. “Them: We hate the government and you suck. Me: My mission alone put $1 billion into your economy this year, so are you sure about that? Me thinking: We are the only reason your shitty state is standing.”