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Monday, August 16, 2010

“I’ve got 1,100 lawyers standing by and they’re looking for someone to sue.”

AGs gone wild:

Unfortunately, many state attorneys general now ignore these constraints. Over the past 15 years, many state AGs have increasingly usurped the roles of state legislatures and Congress by using lawsuits to impose interstate and national regulations and extract money from out-of- state defendants who have little voice in a state’s political processes. A classic example is the 1998 tobacco Master Settlement Agreement (MSA). It settled lawsuits against the big tobacco companies by creating what is effectively a national tax on cigarettes, giving at least $15 billion of the resulting revenue to politically connected trial lawyers hired by some of the state attorneys general. The MSA’s costs are borne by smokers—the very people the state AGs claim were victimized and defrauded by the tobacco companies.

Government by legislative fiat was bad enough, government by lawsuit and executive degree is worse. One of the main benefits of the legislative process is its relative transparency. Bills had to be introduced, debated and voted upon, with a record of who voted for what usually being kept. Citizens had time to petition or lobby government, if they disliked a proposed piece of legislation. Legislators who backed unpopular bills could be targeted at the next election. It was never a perfect system of accountability, but it was a system. How do you hold government backed trial lawyers to account? Or obscure government bureaucrats? Many of whom are charged with interpreting or enforcing laws, with sometimes terrifyingly wide discretion.

Frederic Bastiat observed that the difference between a good economist, and a bad one, was the ability to distinguish between what is seen, and what is not seen. In other words, a talent for grasping the unintended consequences, or causes, of government action. One of the consequences of the nanny state is the slow, but steady, subversion of the traditional democratic means of keeping government accountable. What is seen is the growth of government, what is unseen is the myriad of regulations and controls that strangle our daily life. The regulatory state, and AG activism is simply a type of regulatory state, is perhaps just as bad as the welfare state. 

Posted by Richard Anderson on August 16, 2010 | Permalink


It is indeed much worse, Publius. In some fields, such as certain types of medicine, the amount the practitioner spends every year in malpractice insurance, legal fees, settlements, et cetera, exceeds the actual cost of producing the product or providing the service. It is the main reason health care costs are so insanely stratospheric and why, unless your name is Donald Trump, you need health insurance in the States.

One of my greatest regrets about the Bush presidency is that other issues sidetracked his plan to reform tort law to put the reins to this kind of madness. But we'll see no changes that curb the income or power of trial lawyers so long as the Democrats are in power.

Posted by: Shane Matthews | 2010-08-16 6:19:32 AM

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