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4.
Issues and Bias
4.2
Economic
Eric
Alterman has covered the topic of media bias on Economic Issues in
Chapter 8 of his book (What Liberal Media). I suggest
readers buy his book and read it.
What I would like to do here is go beyond what
Alterman has written about, because I think his chapter significantly
understates the conservative tilt in news reporting in the mainstream
media, when it comes to economic issues.
For the moment let us set aside the fact that the U.S.
media are part of
a corporatist conservative establishment (more on that here). Let us focus,
instead, on the news reporting on several relevant topics.
4.2.1 Free Trade/Globalization
4.2.2 CEOs and Corporations v. Workers/Labor Groups
4.2.3 Taxes
PREFACE: "Millionaire
Pundit Values"
A few ways in which the media
tilts conservative on the issue of taxes
A. Downplaying or ignoring the historical,
bipartisan efforts to use tax increases to cut deficits and the
magnitude of such increases
B. Largely reporting tax issues using fake
Republican spin points
C. Failing to hold George Bush and the
Republican party accountable for their long history of misleading,
mendacity and fake promises on the topic of taxes (and the budget in
general) D. Not reviewing
history to see which party has done better on the economy overall,
regardless of the tax policy used
4.2.4 Social Security
4.2.5 Illegal Immigration
4.2.6 Bankruptcy
4.2.7 Tort Reform
A few ways in which the
media tilts conservative on the issue of "tort reform"
A. Spreading myths about
"frivolous lawsuits"
B. Spreading myths about trends in
the number of filed malpractice lawsuits and their associated costs
C. Exaggerating the size of
malpractice awards
D. Rarely covering a key reason for
malpractice lawsuits, i.e., malpractice
E. Rarely covering two of the main
reasons for high malpractice insurance rates in some area/states -
insurance industry losses/practices and serial malpractice by a small
percentage of doctors
F. Rarely pointing out that
(i) damage caps will act to deter meritorious lawsuits rather than
reduce malpractice premiums, which they rarely do
(ii) there are much better ways to reduce frivolous lawsuits, allow
meritorious lawsuits and reduce malpractice insurance rates
G. Rarely mentioning that businesses
are among the largest filers of actual (and frivolous) lawsuits, and
that the Republican party has no intent of making them accountable for
it
H. Rarely pointing out the hypocrisy
(and fakery) from Republicans about the unreliability of civil juries
compared to criminal juries, when assessing guilt of defendants
I. Rarely, if ever, mentioning that
malpractice cases are not, in general, cases with high
profitability for plaintiffs attorneys
J. Rarely pointing out that the
proponents for malpractice award caps are usually lying through their
teeth (as an experiment in Florida showed, where people was asked to
testify under oath)
4.2.1 Free Trade/Globalization
Alterman
cites a study on this in page 119 of his book that illustrates the
media's pro-free-trade/globalization bias in the U.S.:
While the 1993 NAFTA debate raged in Congress,
for instance, the argument that the accord would undermine the jobs
of America's lowest-paid workers by forcing them to bargain in the
shadow of even worse-paid Mexican laborers garnered little sympathy
among journalists. The only issue that mattered, New York Times
editors insisted, was "America's appetite for global leadership
after the Cold war."6 The Los Angeles Times
declared a pro-NAFTA vote to be "a vote for American foreign
policy continuity."7 The Washington Post
called the vote "a historic test of American intentions toward
the rest of the world." Senator Byron Dorgan, a Democrat from
North Dakota, calculated that the Washington Post had
published sixty-three feet worth of pro-NAFTA editorials and
columns, compared to only eleven feet of anti-NAFTA commentary on
its op-ed page during the same period. Another labor organization
tallied up forty-eight op-ed articles in favor of NAFTA in the Post
and just eight against. Straight news coverage was hardly any more
balanced: 71 percent of expert sources quoted in the Post
were pro-NAFTA, and only 17 percent opposed. The New York Times
followed with 66 percent pro-treaty quotes and only 24 percent for
opponents.8
Alterman goes on to make a pretty much open-and-shut
case for the media's general cheerleading and backing for free trade
and globalization, issues on which they diverged from
liberal groups like labor unions, and grassroots groups protesting the
form of "free trade" that was being implemented across the
globe.
The media's coverage on free
trade/globalization has been significantly slanted to the conservative
viewpoint for quite some time, with particular
contempt for anti-globalization protests. For example,
see this
2001 column by Norman Solomon:
As police
fired rubber bullets through tear gas in Quebec City last weekend,
many reporters echoed the claim that "free trade" promotes
democracy. Meanwhile, protesters struggled to shed light on a key
fact: The proposed hemispheric trade pact would give large
corporations even more power to override laws that have been enacted
– democratically – to protect the environment, labor, and human
rights.
Newsweek responded
to the turmoil at the Summit of the Americas with a column
by Fareed Zakaria, a favorite policy analyst in elite circles. He
declared that "the anti-globalization crowd is antidemocratic
... trying to achieve, through intimidation and scare tactics, what
it has not been able to get through legislation." In recent
decades, of course, the same was said about cutting-edge
demonstrations for such causes as civil rights, peace in Vietnam,
and environmental safeguards.
Protests against the
likes of the World Trade Organization, and now the Free Trade Area
of the Americas, have great impact because they resonate widely.
Foes of global corporatization are speaking and acting on behalf of
huge grassroots constituencies.
Last Sunday the ABC
television program This Week deigned to air a discussion with
a real-live progressive activist, Lori Wallach of Public Citizen's Global
Trade Watch. Journalist Cokie Roberts voiced befuddlement:
"It's gotten to the point where any time there are global
meetings, world leaders meeting, we have a sense that the protesters
are going to be there, and there's not much sense of exactly what
you're protesting." The interview only lasted a couple of
minutes.
Most news outlets showed
little interest in the content of alternative forums in Quebec City
that drew thousands of activists from all over the hemisphere.
Likewise, a big march in the city, with some estimates ranging above
60,000 participants, got underwhelming coverage. For that matter,
most reporters didn't seem very deeply interested in the several
thousand people who bravely engaged in militant, nonviolent direct
action – risking and sometimes sustaining injuries from police
assaults – while confronting the official summit.
What did get plenty of
media attention was noted at the outset of last Tuesday's lead
editorial in the Wall Street Journal, which yearned for
"a world where TV cameras prefer trade agreements to black-clad
anarchists." Some of those few "black-clad
anarchists" call themselves the Black Bloc.
Routinely slipping by
with scant journalistic scrutiny is what we could dub the
"White Bloc" – a nexus of immense media power serving
corporate interests.
The White Bloc is not
monolithic. But on the issue of "free trade," it's
difficult to find a major U.S. publication that does not editorially
support accords like NAFTA, WTO, and the new FTAA.
The Wall Street
Journal's editorial
page, at the right edge of the Bloc, is much honored by the
media establishment. Last year, Journal columnist Paul
Gigot won a Pulitzer
Prize for commentary. This year, a couple of weeks ago, the same
award
went to another very conservative columnist for the newspaper, Dorothy
Rabinowitz. But it's the unheralded daily output of the White
Bloc that can be most breathtaking.
On the day Rabinowitz's
prize was announced, for instance, the editorial page of the Wall
Street Journal featured a freelance article that began this way:
"In the early 1990s, America's major cities were on
life-support, suffocating under socialistic policies that left them
looking like Soviet-bloc relics." (It was not a humor piece, by
the way.) Farther down the page was a column headlined "The
Monarchy Is Worth Saving," written by the Journal's
deputy editorial features editor, who earnestly argued that British
citizens need their monarchy "as a source of authority."
But the White Bloc has a
liberal side too. Several New York Times columnists take
turns condemning those who have the gall to stand in the way of
corporate Progress.
Free-marketeers at the Times
know how to pound away at the same line. While heads of state
prepared to leave the Quebec summit, Paul Krugman ended his column
by writing that the protesters "are doing their best to make
the poor even poorer." Two days later Thomas Friedman concluded
his column
by explaining that "these 'protesters' should be called by
their real name: The Coalition to Keep Poor People Poor."
The White Bloc (which
includes people of all colors if suitably conformist) has its own
forms of hip solidarity. On the Hardball national TV program,
airing on both MSNBC and CNBC, host Chris Matthews closed his April
18 interview with Friedman exactly this way:
Matthews: "You are
the future, my man. Thomas Friedman of the New York Times."
Friedman: "Thanks,
bro."
Matthews: "The
smartest columnist in the world."
Now, I consider myself to be a supporter of free trade
and globalization, but it is blindingly obvious that the media discourse
on this topic is usually tilted to the pro-corporate-conservative
outlook and often reduced to highly superficial pro-free-trade sound bites
(including, by so-called "liberal" columnists, as Alterman
shows) - rather than a proper and thorough examination of the full ramifications of globalization to understand how to do it right (as
in, correctly). Alterman mentions Nobel prize winner Joseph
Stiglitz's largely unsuccessful efforts to bring some more facts and
reality into the policy discussions and media narratives on free
trade. I have read Stiglitz's excellent book The Roaring Nineties
and I'm going to cite a few paragraphs from the book to show some
examples of the kinds of serious issues that media seriously
underplayed or fails to cover (and I see similar failings in the
media's coverage today, especially in their coverage of the ongoing Iraq-privatization
travesty):
[p 21] ...by the summer of 1999, The New York Times
was asking, "Who Lost Russia?"6 And even if
Russia was not ours to lose, the statistics were sobering: with
efficient capitalism replacing moribund and decadent communism, output
was supposed to soar. In fact GDP declined 40 percent and poverty
increased tenfold. And the results were similar in the other economies
making the transition who followed the advice of the U .S. Treasury
and the International Monetary Fund. Meanwhile, China, following its
own course showed that there was an alternative path of transition
which could succeed both in bringing the growth that markets promised
and in markedly reducing poverty.
Clearly, something was amiss in the way we were
leading the world into the new international order.
...
Again, we needed to ask, what were our mistakes and why did we make
them? We failed in what we did, and what we did not do; and we failed
in how we did what we did.
The international agreements, for instance, reflected
our concerns, our interests: we forced those abroad to open up their
capital markets, say, to our derivatives and speculative capital
flows, knowing how destabilizing they could be. But Wall Street wanted
it, and what Wall Street wanted, it more than likely got.
Developing countries were told to open their markets
to every imaginable form of import, including the things Corporate
America was best at, such as financial services and computer software.
Meanwhile, we maintained stiff trade barriers and large subsidies of
our on behalf of U.S. farmers and agribusiness, thereby denying our
market to the farmers of the Third World. To a country fallen on hard
times and facing recession, our standard advice was to slash spending
- even though we had routinely relied on deficit spending to get us
out of economic downturns.
These were not the only examples of what struck those abroad as
blatant hypocrisy. Even in the budget-balancing nineties, we
maintained robust trade deficits even as we preached to others that
they should keep their trade deficits down; evidently, it was
understandable if the rich could not live within their means; what was
not to be forgiven was for the poor to do so.7
We scolded the developing nations about their
disrespect for intellectual property laws that we, too, had scorned in
our days as a developing nation. (The United States didn't get around
to protecting rights of foreign authors until 1891.)
Especially strange was the contrast between the
Clinton administration's palliatives abroad and the battles it waged
at home. At home, we defended our public Social Security against
privatization, lauding its low transactions costs, the income security
which it provided, how it had virtually eliminated poverty among the
elderly. Abroad, we pushed privatization. At home, we argued strongly
that the Fed should keep a focus on growth and unemployment, as well
as inflation - with a president elected on a jobs platform, he could
do nothing less. Abroad, we urged Central Banks to focus exclusively
on inflation.
One of America's great glories had been the growth of
its middle class. Still, we almost completely ignored the equity
implications of the policies we urged on other nations - and the
increasingly inescapable fact that globalization, as it was actually
practiced, tended to make poor societies more rather than less
unequal.
...The policy framework that we pushed abroad was
the one that would help our businesses do well abroad. At home,
there was a check on these policies, caused by our concern for
consumers and workers. Abroad, there was none. At home, we resisted
pressure for changes in the bankruptcy law that would unduly hurt
debtors. Abroad, a primary concern in any foreign crisis seemed the
promptest and fullest repayment of debts to American and other
Western banks, even to the point of supplying billions of dollars to
ensure that that happened. The deregulation mantra that we pushed
too far at home we pushed even further abroad.
Not surprisingly, the policies we pushed and the way
we pushed them generated enormous resentment...
It was too little regulation, not too much, that
caused the economic crises in East Asia in 1997. It was too little
regulation that gave rise to the savings and loan debacle in 1989,
in which American taxpayers paid more than $100 billion bailing out
an important part of the nation's financial system. (The only thing
that could be said in favor of the bailout was that - given the
consequences of excessive deregulation - the costs of not bailing
them out would have been even greater.)
If we in the Clinton administration sometimes lost
that balance, matters have become even worse during the next
administration -....
In many respects, Stiglitz's book sends a very
similar message to what Prof. Amy Chua (another free
trade/globalization supporter) conveyed in her book World on Fire
(2003). The following extract from a review
of Chua's book by Publisher's Weekly provides a high-level summary
of what her book is about:
A professor at Yale Law School, Chua eloquently
fuses expert analysis with personal recollections to assert that
globalization has created a volatile concoction of free markets and
democracy that has incited economic devastation, ethnic hatred and
genocidal violence throughout the developing world. Chua illustrates
the disastrous consequences arising when an accumulation of wealth
by "market dominant minorities" combines with an increase
of political power by a disenfranchised majority. Chua refutes the
"powerful assumption that markets and democracy go hand in
hand" by citing specific examples of the turbulent conditions
within countries such as Indonesia, Russia, Sierra Leone, Bolivia
and in the Middle East. In Indonesia, Chua contends, market
liberalization policies favoring wealthy Chinese elites instigated a
vicious wave of anti-Chinese violence from the suppressed indigenous
majority. Chua describes how "terrified Chinese shop owners
huddled behind locked doors while screaming Muslim mobs smashed
windows, looted shops and gang-raped over 150 women, almost all of
them ethnic Chinese." Chua blames the West for promoting a
version of capitalism and democracy that Westerners have never
adopted themselves. Western capitalism wisely implemented
redistributive mechanisms to offset potential ethnic hostilities, a
practice that has not accompanied the political and economic
transitions in the developing world. As a result, Chua explains, we
will continue to witness violence and bloodshed within the
developing nations struggling to adopt the free markets and
democratic policies exported by the West.
Let me feature an extract from her book that is
directly relevant to the discussion here:
[p 194] ...Despite these variations [between Western
capitalist countries], the bottom line is again the same. Starting
in the late nineteenth century, the explosion of market activity
throughout the West was accompanied by the emergence of
redistributive institutions of unprecedented magnitude, softening
the harshest effects of capitalism. In every developed country these
institutions include not only relief to the extremely poor but also
progressive taxation, social security, minimum wage laws, worker
safety regulation, antitrust laws, and numerous other features of
Western society that we take for granted.6 These
redistributive institutions have almost certainly helped dampen the
conflict between market wealth disparities and democratic politics
in the industrialized West.
By contrast, the version of capitalism being
promoted outside the West today is essentially laissez-faire and
rarely includes any significant redistributive mechanisms. In other
words, the United States is aggressively exporting a model of
capitalism that the Western nations themselves abandoned a century
ago. More broadly, it is critical to recognize that the formula of
free market democracy currently being pressed on non-Western nations
- the simultaneous pursuit of laissez-faire capitalism and universal
suffrage - is one that no Western nation ever adopted at any point
in history.
Is this wise? Almost by definition, in the developing world today
the poor are far more numerous, poverty is far more extreme, and
inequality far more glaring than in the Western countries, either
today or at analogous historical periods. The ongoing population
explosion outside the West only makes things worse.
...
...today's universal policy prescription for
"under-development," shaped and promulgated to a large
extent by the United States, essentially amounts to this. Take the
rawest form of capitalism, slap it together with the rawest form of
democracy, and export the two as a package deal to the poorest, most
frustrated. most unstable, and most desperate countries of the
world. Add market-dominant minorities to the picture, and the
instability inherent in this bareknuckle version of free market
democracy is compounded a thousandfold by the manipulable forces of
ethnic hatred.
When I first started thinking of free trade and
globalization, I must admit I was unaware of the fact that important
policy details were routinely downplayed or ignored in favor of cheerleading, by the
media and influential columnists (a prime example being Tom Friedman at the
New York Times, who was one of the people I initially cited
in my website on this topic). Since then, I have learnt a lot more
about what has been mismanaged in promoting free trade and
globalization across the world and how little publicity any of that
gets in the media when this topic is discussed in news reports. It is a matter of life and death for
many of the world's peoples and it is indeed appalling that important
details are glossed over and the issue reduced to one-sided
sound-bites.
Imposing an unregulated,
laissez-faire mode of capitalism (whether in the non-Western world or
in the U.S., as the Bush administration is driving to) is bound to
cause great turmoil and ensure that the benefits of globalization
are unfairly concentrated at the higher end of the income
spectrum, without expanding the opportunities for a higher quality of life
and wealth creation to a much wider section of the populace,
especially the poor. It's about time the media brought some
balance back into this debate.
4.2.2 CEOs and Corporations v. Workers/Labor Groups
No reasonable person can deny the fawning and largely
uncritical coverage
that businesses and CEOs got in the 1990s at the expense of workers
and ethics. Alterman
covers this in some detail and as he says:
[p 122] An entire money-loving journalistic
structure grew up around the prosperity of the Nineties and the
market boom that inspired it. The boom itself, as we all know, would
prove to be heavily skewed toward the wealthiest Americans.
...
[p 123] Evidently, the media's market-centricity carried with it
important ideological implications for the spin they put on the
news. The single-minded emphasis on "wealth creation"
crowded out concerns for virtually everything that might be
perceived to interfere with it, such as workers' pay, environmental
destruction, equity issues, and, as investors found to their deep
chagrin, honest accounting.
Alterman also traces the incredibly fawning coverage
that Enron got for most of its life and how one of those rare
journalistic pieces (in the WSJ in 1998) by Jonathan Weil, that raised a red
flag about Enron's dubious accounting practices (recording *expected* future
income as current income), was largely ignored in the media.
Warnings by some (on the Left) that skyrocketing energy price increases in
California were likely due to rigging by energy companies like Enron
were repeatedly dismissed by pathologically dishonest conservatives of
the likes of Charles Krauthammer, William Safire and Vice President
Dick Cheney and their enablers in the media. The deep links between
big energy companies (like Enron) and the Bush administration (and its
energy "policy" - which was largely drafted by
the same companies) were barely investigated. And so on...
It is important to note
that the pro-business or pro-CEO tilt is only part of the
equation - even as the tilt softened in recent years due to the
numerous corporate scandals. As Alterman shows,
the voices of labor unions (part of the traditional liberal/Democratic
establishment) are barely heard in media coverage
in comparison to the voices of company representatives and
corporate/conservative front groups (Sec.
4.4 has more data on the media's significant
over-reliance on conservative front-groups and "think-tanks"
in guiding discussion on news coverage.)
CASE STUDY: A recent case study
provides a good example of the media's pro-corporate/ pro-conservative
bent on economic issues. I am referring to a 2004
paper by Christopher J. Kollmeyer at University of California,
Santa Barbara, titled "Corporate Interests: How the News Media
Portray the Economy". The paper looked at the Los Angeles Times'
coverage of economic issues in 201 articles focused on the economy
in 1997 and 1998. (Remember, the LA Times is considered by the Right
to be "liberal".) What is interesting about this study is
that unlike half-baked studies that merely mine databases for "words"
used, "topics" covered, "headlines"
used, or "tone"
of coverage, this study actually included a reading of each
article to assess the detailed nature of the content. Granted, the
study has its flaws - for example, it focused more on the
manufacturing sector of the economy and it doesn't independently
assess the accuracy of the news reports - but the way it was
designed showed far more intelligence than is characteristic of the
usual conservative "studies" that claim to show
"liberal bias". As a result, the study was also able to
extract conclusions that are more credible than the half baked studies
mentioned above.
Kollmeyer first provides a
good review of various papers that discuss media bias on economic
reporting and derived a set of testable hypotheses from those
papers:
Hypothesis 1: Negative accounts of the economy
outnumber positive accounts of the economy.
...
Hypothesis 2: Most negative accounts of the economy focus on
problems affecting the general workforce rather than problems
affecting corporations or investors.
...
Hypothesis 3: The news media rarely run stories about
economic problems affecting workers.
Hypothesis 4: The news media rarely mention
economic reforms designed to improve the material well-being of
workers.
...
Hypothesis 5: When covering the economy, the news media
emphasize events and issues affecting corporations and investors and
downplay events and issues affecting workers.
...
Hypothesis 6: Journalists rarely use union leaders, workers,
or their spokespersons as sources of information about the economy.
...
Hypothesis 7: Articles citing business spokespersons or
government officials will report good news about the economy more
often than articles citing union leaders, workers, or their
spokespersons.
He then set up the study such that its findings are
likely to be quite conservative, by doing two things:
(a) omitting any articles that appeared in the
Business section of the paper, which tends to be business focused,
rather than labor focused
(b) choosing keywords than tend to bias the articles
selected from Lexis-Nexis in the direction of labor or workers (or bad
news), as opposed to business, CEOs or corporations.
He explains his methodology here:
In order to create a representative sample of
articles, I used the Lexis-Nexis archive of electronic databases to
identify all articles about the economy appearing in the Times during
1997 and 1998. Within the specified dates, I used the keyword
function in Lexis-Nexis to obtain all articles with the words “economy,”
“markets,” “labor,” “workers,” or “recession” in the
headline or introductory paragraphs.5 Then I eliminated
articles from the foreign desk, leaving only those articles about
the domestic economy within the data set. The resulting materials
included all topically relevant articles — whether they were hard
news, human-interest stories, or editorials—appearing in the
front, metro, and opinion sections of the paper. These selection
criteria yielded 201 articles—149 from the front section, 37 from
the metro and editorial sections, and 15 from Sunday’s opinion
section.
Articles from the business section were not included
in the data set. At first, this decision might strike some readers
as peculiar, for seemingly an analysis of economic journalism should
include articles from the business section. But this aspect of the
research design, although it undoubtedly excludes many important
articles about the economy, should actually strengthen my primary
argument for two interrelated reasons. First, as Gans (2003:65–6)
notes, nearly all newspapers design their business sections around
the implicit interests of investors and business managers. This
orientation, for instance, manifests in the business section’s
emphasis on the stock market and related aspects of the economy,6
and the fact that nearly all newspapers label this section as the
“business section,” rather than the “economy section” or “labor
section.”7 Given these circumstances, the inclusion of
articles from the business sections in the analysis would hinder my
effort to understand those parts of the newspaper with the greatest
chance of affecting public opinion about the overall performance of
California’s economy. Second, and perhaps more importantly, since
the business section by design appeals to a specific audience,
research that finds a pro-business slant in the business section
provides little sociological insight into important questions about
the news media.
...
Next, I read all of the articles, coding the content of each in
terms of several criteria. First, the story’s date of appearance,
location within the newspaper, and number of words were recorded.
Then, more substantively important factors—such as the story’s
topic, source of information and viewpoints, the appraisal of the
economy’s performance, and discussion of reforms, if any—were
analyzed and coded accordingly.
Let's review the main conclusions.
First about the good news-bad news mix:
These results can be interpreted in two ways. With
only 7.5 percent of the articles reporting exclusively bad news, as
compared to the nearly 40 percent of the articles reporting
exclusively good news, the data do not reveal a pronounced
inclination toward negative accounts of the economy. But when
combining the bad-news and mixed-news articles into one category,
the data indicate that over 60 percent of the articles contain at
least some criticism of the economy’s performance.
...
As Table 2 shows, articles reporting good news appeared on the front
page 77.2 percent of the time, and they had an average length of
1,413 words. Conversely, articles reporting bad news appeared on the
front page only 33.3 percent of the time, and they had an average
length of only 1,232 words. These findings clearly contradict the
assertion that the news media most often emphasize the economy’s
shortcomings.
The emphasis on corporations and investors v.
workers:
As Table 4 shows, articles reporting problems
threatening corporations and investors received front-page attention
73.7 percent of the time, and they had an average length of 1,447
words. But articles reporting problems threatening workers received
front-page attention only 21.1 percent of the time, and they had an
average length of 1,315 words. By comparison, articles about
problems affecting the economy in general, although they had the
smallest average word count, were distributed almost evenly between
the front and back pages of the newspaper. Nonetheless, the overall
findings displayed in Table 4 portray a pattern of journalism that
downplays coverage of economic issues affecting workers.
More:
Taken together, this means that articles discussing
reforms, as compared to articles not discussing reforms, were half
as likely to appear on the front page and almost 9 percent
shorter.
Second, when articles mentioned reforms intended to
help corporations and investors, they were given more prominent
attention, by a considerable margin, than articles mentioning
reforms intended to help workers. As Table 6 indicates, articles
mentioning reforms intended to help corporations and investors
appeared on the front page 83.3 percent of the time, and they had an
average length of 1,569 words. But articles mentioning reforms
designed to help workers appeared on the front page much less
frequently (only 14.3 percent of the time), and they were much
shorter on average (only 1,120 words). Or, stated differently, this
finding means that articles mentioning reforms designed to help
corporations and investors were, on average, almost six times more
likely to appear on the front page and approximately 28 percent
longer than articles mentioning reforms designed to help workers.
Combined, the data presented in Tables 5 and 6 depict a pattern of
journalism that, while not avoiding the subject altogether,
downplays discussions of potential economic reforms, especially when
the proposed reforms address problems affecting workers.
Sources used:
To facilitate a quantitative analysis of the
resulting information, the identified sources were grouped into one
of seven mutually exclusive categories. The results of this coding
process, displayed in row one of Table 7, provide strong support for
the hypothesized outcome. As anticipated, the data show that union
leaders, workers, and their spokespersons were rarely used as
sources of information about the economy. Specifically, these
individuals were used as primary sources for only 7.9 percent of the
articles in the data set. This compares unfavorably with most other
types of sources — the two exceptions being the category
representing Times op-ed writers (used in 5 percent of the
articles) and the category representing three or more sources (also
used in 5 percent of the articles). The most frequently cited source
was “business/government,” a category for articles citing both
business spokespersons and government officials as the primary
sources of information. The next most frequently cited sources were
business spokespersons (21.3 percent), social scientists and
individuals described as authors (19.3 percent), and government
officials (18.8 percent). Consistent with the literature of the
subject, these findings demonstrate that journalists with the Times
rely heavily upon individuals representing the corporate
community and government for much of the information that eventually
becomes news about the economy. In fact, at least 62 percent of the
articles in the data set used some combination of business
spokespersons and government officials as primary sources—a number
nearly 8 times greater than the percentage of articles using union
leaders, workers, or their spokespersons as primary sources.
When used as sources of information about the
economy, business spokespersons and government officials seemingly
received preferential treatment in other ways as well.
According to the data displayed in row two of Table 7, there exists
a moderate association between an article’s source of information
and its likelihood of appearing on the front page. Specifically,
when journalists used business spokespersons as primary sources—either
alone or coupled with government officials—the resulting articles
appeared on the front page more than 83 percent of the time. But
when journalists used union leaders, workers, or their spokespersons
as primary sources, the resulting articles appeared on the front
pages less frequently— approximately 56 percent of the time. The
least prominent attention, however, went to articles citing social
scientists and individuals described as authors. When journalists
cited these sources, only 17.9 percent of the resulting articles
appeared on the front page. Taken together, the data displayed in
rows one and two of Table 7 provide moderate support for the claim
that the news media privilege the corporate community and government
as sources of information on the economy.
As I said earlier, the study here is not without flaws
since article accuracy is not evaluated, which is very important. But
the detailed and conservative approach to the study makes it superior
to most other media bias studies to date and makes it conclusions more
credible. While this study focused only on one paper and for a limited
time period, it so happens that the paper is deemed a (so-called)
"liberal" one and that the broad conclusions are consistent
with other data presented on this page. The bottomline is clear:
the U.S. media's reporting on economic issues tilts conservative and
downplays the voices of workers and labor unions.
There are many reasons why
media coverage might tilt conservative, especially on issues relating
to business or corporations. Steve Kangas has commented on this - here
are some
snippets from one of his older essays:
The fact is that
conservatives have powerful friends in the media: the corporations
that own them, and the corporations that pay for their advertising.
These giant firms have been increasingly successful in bending the
media's message to suit their self-interests, which include a
conservative and pro-corporate agenda. Studies show that the media
are eerily silent on the issues most important to workers, consumers
and other citizens adversely affected by corporate behavior.
...
The Media Monopoly
Easily the most famous book
on media trends in the last 15 years is Ben Bagdikian's 1983 book, The
Media Monopoly. In it, he predicted that deregulation under
President Reagan would allow media ownership to concentrate in fewer
and fewer corporate hands. This, in turn, would result in a more
pro-corporate media. Ridiculed as "alarmist" when it first
came out, it has since been praised as a classic for the accuracy of
its predictions. "I derive no pleasure from having been
correct," writes the former dean of American journalism in his
most recent edition. (3)
To be specific, the number one trend within the media today is that
they are rapidly being monopolized by large corporations.
Technically, the term "monopoly" is incorrect when
describing today's media -- what we actually have is a shrinking
media oligopoly. Most scholars use the term "media
monopoly" only because that's the direction the media are
headed. This essay will also use the term "media monopoly"
to denote the direction, rather than the current status, of the
media.
The dangers of a media monopoly
Before reviewing the statistical evidence of the media monopoly,
which is undisputed even by the media themselves, we should make
certain of its dangers.
The incentives for buying media organizations have long been obvious
to Wall Street, which has seen vicious competition break out to
capture the remaining media markets. These incentives were
articulated in 1986 by Christopher Shaw, a Wall Street expert who
has handled over 120 media mergers. Shaw told investors that media
buy-outs would give them two things: "profitability" and
"influence." (4)
There is nothing inherently wrong with either profitability or
influence, of course -- it's just that in a monopoly, they would be
abused. Consider the abuse of profits. All the usual market failures
would be present in a media monopoly: the captive market, the rise
in prices, the drop in quality, and the exploitation of consumers.
But significantly more troubling is the monopolization of influence.
If one person controls all information, there are no opposing
viewpoints so essential to keeping public and scientific debate
honest. We profoundly condemn the monopoly of information by the
state, as exemplified by Joseph Goebbels' "Ministry of
Propaganda and Enlightenment." But this danger is no less
evident if a single business takes over the control of all
information in society. Then all information would come from a
corporate point of view, silencing the voices of workers, consumers
and other citizens who are affected by corporate behavior. Democracy
is based on the assumption that opposing viewpoints can be heard. If
corporations could somehow eliminate or control populist debate,
then we will not have a true democracy.
The potential for abuse by corporate owners is obvious. Just one
example was General Electric's earlier buyout of NBC News. General
Electric is the 10th largest company in the United States. It is a
major Defense contractor and an international player on the world
market. It is sensitive to the needs of its clients, who come from
all sectors of the economy. It is also a fact that GE has suffered
many a scandal throughout its history. During the Great Depression,
it cut the life of its light bulbs by one-third to drive up profits.
It was convicted of an illegal agreement with a German arms company
during World War II. It has been convicted of fraud, fixing bids,
conspiracy and tax evasion. (5) In all these cases, control of a
major media outlet would have given it undue influence, whether in
the market or before Congress or the courts.
Furthermore, GE has played an active role in conservative politics.
Shortly after the company acquired NBC, a GE executive announced
that NBC should start a political action committee to contribute
money to strengthen the company's influence in Washington. Failure
to cooperate, the executive said, would raise questions about the
employees' "dedication to the company." (6) Later the
President of NBC News clarified that its news employees would be
exempt from contributing, but this hardly removes the larger
conflict of interest.
It should not be surprising that these parent companies, like most
big businesses and all Defense contractors, are extremely
conservative. They have agendas: they desire lower taxes, fewer
lawsuits from the public, fewer environmental restraints, better
public relations (a euphemism for less public exposure to scandals),
higher profits and more effective lobbying power in Washington.
Controlling public opinion would give them all these things.
Ironically, it would not be necessary for a single winner to emerge
from the take-over wars. Shaw maintains that by the year 2000, all
U.S. media will be in the hands of six giant corporations. Most
business analysts agree with him. (7) One can safely assume that
they will all have the same business and political agenda.
The statistical evidence of a media monopoly
That said, let's review the evidence of a media monopoly.
Ownership of all forms of media (newspapers, magazines, radio shows,
network television, cable, journals, books, movies, videos and
cassettes) are quickly being consolidated under a few corporations.
In all, the number of dominant corporations who control any
form of media has shrunk from 46 in 1981 to exactly half in 1992:
23. At the end of World War II, 80 percent of all newspapers were
privately owned. Today, that figure is its exact opposite: 80
percent of all newspapers are owned by corporate chains. From 1960
to today, the number of corporations which own newspapers fell from
27 to 14. (Gannett Company, which publishes USA Today, is the
largest, with 87 other daily newspapers.) From 1981 to 1988, the
number of corporations who owned magazines fell from 20 to a mere three.
Television news is dominated by four major networks, who control up
to three-fourths of the audience share. (8)
One of the most obvious signs of this trend is that cities are
becoming "one-newspaper towns." One of the persons most
responsible for buying out competing newspapers is Rupert Murdoch,
who says that his worldwide strategy is acquisition and takeovers.
(9) Another is Allen Neuharth, chairman of Gannett Company, who told
a group of Wall Street investors that "No Gannett newspaper has
any direct competition." (10)
Since the 1992 edition of The Media Monopoly, media mergers
of unprecedented scale have continued unabated -- but there's no
discussion of the dangers involved, or the controversy it should
represent. Disney has since bought ABC, Westinghouse has bought CBS,
and Time-Warner has bought Turner Broadcasting System. Congress
cleared out the remaining obstacles for still more media mergers by
passing the Telecommunications Act of 1996. Headlines in the media
blared about the bill's attempt to censor pornography on the
Internet, but otherwise remained completely silent about its
deregulation of anti-trust laws for the media. For this bit of
censorship, the Telecom Act was voted the number one censored story
of 1995 by Project Censored.
The cable industry offers a perfect snapshot of media monopolization
and all its dangers. After the cable television industry was
deregulated in 1984, prices soared, quality of programming
plummeted, and cable systems began selling their channels in
indivisible blocs that prevented subscribers from voting with their
dollars. From 1986 to 1990, the cost of basic service rose 56
percent -- twice the rate of inflation. (11) The problem? Growing
monopolization, at several levels. There are now 11,000 cable
systems across the nation, almost all of them exercising a local
monopoly over their municipal region. They in turn are controlled by
a handful of national companies. By far the most dominant is the
phenomenally expanding TCI, which is a gatekeeper over national
programming. Its owner, John Malone, owns all or part of 25 national
or regional cable channels, including Turner Broadcasting. (12)
Because there is little or no competition, cable programmers search
for the cheapest shows to produce. Quality of programming has sunk
to network TV levels. It seems that each year, Congress passes yet
another cable deregulation bill. Every single one has been touted to
"open competition" and "benefit the consumer."
But the concentration of power in the cable industry keeps getting
worse, not better.
Another source of pro-corporate bias: advertising
Owning and monopolizing the media is only one way that
corporations introduce a pro-corporate bias into the media. An
equally pervasive one is advertising.
Most media depend on the sale of corporate advertisements to stay
alive. Without advertisements, a medium would have to charge its
customers a higher up-front price for its product. But that would
kill its circulation, since competitors would offer up-front prices
that were considerably lower or even free. Of course, there's no
such thing as a free lunch. The consumer actually pays a higher
price for the advertiser's products, which then go to the media.
Advertising has been criticized on many grounds: it is inefficient,
wastes time and resources, is terribly unpleasant, stifles free
market competition, helps sustains long-term advantages to giant
corporations, and makes people buy products for psychological
reasons instead of economic ones like cost, quality and demand.
Entire essays could be written on each of these shortcomings, but
what we will address is how advertising injects a pro-corporate bias
into the media.
The media generally cannot run stories that offend corporations,
because sponsors will threaten to pull their advertising dollars. [eRiposte
emphasis] In
1980, the liberal staff at Mother Jones debated over whether
or not to publish a series of articles linking cigarettes to cancer.
The editors knew that the tobacco industry would punish them by
canceling their lucrative advertising contracts, which the young,
struggling magazine desperately needed. Mother Jones stuck to
its principles and printed the articles anyway; and, just as
expected, the tobacco companies angrily pulled their ads.
And whereas a parent corporation like GE has a particular set of
interests that NBC would never report against, advertisers have
general interests that reporters would never tilt against either. A
publisher never knows who the next advertiser might be; therefore
it's good policy not to write offensive things about any
corporation, or even corporate culture in general. No news
organization could attract advertisers if it persistently attacked
the corporate agenda.
Evidence of pro-corporate bias in the media
...Ben Bagdikian writes
that owners let the editors operate freely until a story arises that
affects the company's interest. Then one of two forms of influence
will be exerted. It may be a direct order, as when the Chairman of
General Electric called the President of NBC News after the 1987
stock market crash and told him not to use words in their reporting
that would adversely affect GE stock. (13) (The NBC News president
claimed he did not pass on the order.)
Or it may be an unspoken agreement. Editors and writers know what
their employer's interests are, and they protect them without being
told. Why? Either to demonstrate their dedication to the company,
thus protecting their future promotions, or simply because they fear
being fired. Unfortunately, it is a frequent practice for owners to
fire journalists who, knowingly or not, write against their
particular interests. Just one of many examples is the owner of the Dallas
Morning News, who fired Earl Golz for writing a story about an
imminent bank failure that outraged the owners of the Abilene
National Bank. Golz' story proved true -- the bank crashed a few
weeks later -- but Golz' was not rehired. (14) To be sure, other
journalists witnessing his fate would practice self-censorship
whenever it came to protecting their owner's interests. [eRiposte
emphasis]
Whether owners interfere explicitly or implicitly in the newsroom,
evidence of it continually surfaces. [eRiposte
emphasis] Here are just a few examples:
-
During the debate on
health care reform, the New York Times ran stories
persistently in favor of managed competition, a program which
would have been profitable to major health care corporations.
Other proposals for reform, like the Canadian single-payer
program, were criticized or ignored. Reason: four members of the
Times board of directors are also directors of major
insurance companies, and two are directors of pharmaceutical
companies. (15)
-
Victor Neufeld, the
executive producer of ABC's top-rated news show 20/20,
repeatedly rejected several promising stories on nuclear power
hazards. Reason: His wife is a prominent spokesman for the
nuclear and chemical industries. (16)
-
Walter Annenberg,
owner of the Philadelphia Inquirer, used his paper to
attack a candidate who opposed action that would have benefited
the stockholders of the Pennsylvania Railroad. Reason: he was
the single largest stockholder. (17)
-
Rupert Murdoch's Post
endorsed President Carter in the crucial New York Presidential
primary, contributing to his victory. Reason: two days earlier,
Murdoch had lunch with Carter, convincing him to lean on the
Export-Import Bank of the United States to give him a
taxpayer-subsidized loan of $290 million. The bank had
previously rejected the loan. (18)
-
A four-month study
by FAIR (Fairness and Accuracy In Reporting) analyzed how the New
York Times and Washington Post covered NAFTA. Of the
experts quoted in their articles, pro-NAFTA outnumbered
anti-NAFTA sources by three to one. Not a single labor union
representative was quoted. Reason: these newspapers' boards of
directors are drawn from big business. (19)
-
Journalist Elizabeth
Whelan asked ten major women's magazines to run a series of
articles on the rise of smoking-related diseases in women; all
ten magazines refused. Reason: "I frequently wrote on
health topics for women's magazines," says Whelan,
"and have been told repeatedly by editors to stay away from
the subject of tobacco." (20)
The above stories are
anecdotal, but they show specifically how editors and advertisers
interfere with the objectivity of the media. Now let's look at
broader statistics. All feature the same theme: the power of
editorial selection. Editors play a crucial role in deciding which
stories get covered and which ones don't. This is an important tool
for shaping and influencing the nation's debate. Due to the abuse of
this power, three giant trends have grown within the media as big
business continues to monopolize it:
The first is that pro-labor stories are almost completely absent,
even though blue-collar workers make up the vast majority of this
nation's work force, and indeed the news media's audience. The
majority of stories should include the conditions they work
under, the challenges they face, the wages they earn and the hazards
that maim and kill them. But the media is curiously silent on nearly
all these natural topics. In 1989, researcher John Tasini studied
ABC, NBC and CBS for a year to see how much coverage was devoted to
workers' issues, including the minimum wage, workplace safety and
child care. He found it amounted to a dismal 2.3 percent of all
coverage. In fact, all three networks carried only 13 minutes of
coverage on workplace safety for the entire year! The worst offender
was NBC Nightly News, who devoted a total of 40 seconds to
worker safety. This is not surprising, since its parent corporation,
GE, has an appalling work safety record. (21) Elsewhere, a Los
Angeles Times poll found that 53 percent of the nation's
newspaper editors were pro-management, but only 8 percent were
pro-labor. (22) The pro-corporate bias of our media is one of the
most important reasons for the decline of labor unions in this
country. [eRiposte emphasis]
4.2.3 Taxes
The issue of taxes is another area where the mainstream media
displays its strongly conservative tilt on economic matters, by its
biased, misinformation-laden coverage - to the point that it has become
toxic for Democrats or liberals to
not just advocate tax increases but even oppose tax cuts.
PREFACE:
"Millionaire Pundit Values"
In some respects, it is no surprise why the U.S. media makes the talk
of tax increases a no-no. This
exchange noted by Bob Somerby is notable:
MILLIONAIRE PUNDIT VALUES: And,
of course, there’s always time for this required exchange:
RUSSERT: There are indications that some of the soldiers in Iraq,
because of their low income, will not be beneficiaries of this tax
cut. Would that be acceptable to you?
NOVAK: To me, it’s quite obvious that people who pay the
taxes should get the tax cuts. People like you, for example,
who get so much income, should get the tax cuts.
SAFIRE: And you. And you.
AL HUNT: All of us here, let’s be honest.
Can these harlequins ever discuss the budget without
explaining how rich they all are?
And Somerby's
note on a column by Bill Keller of the New York Times
makes it clearer:
Trust us—scribes who quote their three-year-old children
are trying to tell you how silly they are, and Keller has surely
completed the task with his pandering
piece in this Sunday’s Times magazine. Profiling Bush, Keller
fawns long and hard—and shows off those Millionaire Pundit Values.
We’ve warned you that your millionaire scribes simply don’t care
about normal people. But we don’t know when we’ve seen a pundit
revel so much in that fact:
KELLER: Bush has already surpassed Reagan in advocating a shift of
responsibilities from government to the private sector, and from
the federal governments to the states…You could easily
imagine Reagan’s husky chuckle the other day as Bush
announced plans to outsource up to 850,000 federal jobs—about
half the government’s civilian work force—to private
contractors. This is on top of the 170,000 federal employees who
will lose most of their contract protections when they are folded
into the new Department of Homeland Security.
Nice guy! Keller pictures Reagan
callously chuckling as hundreds of thousands of normal people lose
job protections for which they have bargained. But why should we be
so surprised at this image, when Keller—speaking with an approving
tone, as he does throughout this piece—sketches out Bush’s bold
vision:
KELLER: What Bush is striving for, on the evidence of the choices
he has made so far, is bold in its ambition: markets unleashed,
resources exploited. A progressive tax system leveled, a country
unashamed of wealth. Government entitlements gradually replaced by
thrift, self-reliance and private good will. The safety net strung
closer to the ground.
Finally! Progressive taxation will finally end and wealth
will again dare speak its name! Throughout this profile, Keller
showers praise on this oddball vision, which he fawningly fobs off
on Bush. You’ll have to read the piece yourself to take in
Keller’s pandering tone. But through the course of his 8000 words,
Keller never shows the slightest concern about these remarkable
values.
But then, we’ve warned you about
Millionaire Pundit Values. Like many high-toned modern pundits,
Keller doesn’t seem to spend too much time worrying about normal
people. Insouciance is his all.
...
You’ll have to read this piece for yourself to pick up its
remarkable tone. Why does Keller fawn so fully? Here at THE HOWLER,
we don’t have a clue. But dudes! Would Reagan have laughed at
those laid-off workers? We doubt it. But Bill Keller will!
The media's almost one-sided coverage on taxes
manifests in multiple ways.
Some of these (A, B, C,
D) are:
A. Downplaying or ignoring the historical,
bipartisan efforts to use tax increases to cut deficits and the
magnitude of such increases Who ever hears
this
replayed again and again in our mainstream media? The fact that these
facts hardly come out shows the media's strongly conservative bias on
taxes, since it is established "wisdom" that conservatives
are for tax cuts and that they effectively associate tax increases
with the apocalypse [yes, I'm kidding, but only barely so]:
“Ronald Reagan does hold a special
place in the annals of tax policy, and not just as the patron saint
of tax cuts,” Krugman writes. Krugman notes that Reagan
“followed his huge 1981 tax cut with two large tax increases.”
Here’s the skinny on Reagan Tax Increase number 1:
KRUGMAN: The first Reagan tax increase came in 1982. By then it
was clear that the budget projections used to justify the 1981 tax
cut were wildly optimistic. In response, Mr. Reagan agreed to a
sharp rollback of corporate tax cuts, and a smaller rollback of
individual income tax cuts. Over all, the 1982 tax increase undid
about a third of the 1981 cut; as a share of G.D.P., the
increase was substantially larger than Mr. Clinton’s 1993 tax
increase.
We’ll return to that highlighted
point. For the record, here’s Krugman’s description of Reagan
Tax Increase 2:
KRUGMAN: I’m referring to the Social Security Reform Act of
1983, which followed the recommendations of a commission led by
Alan Greenspan. Its key provision was an increase in the payroll
tax that pays for Social Security and Medicare hospital insurance.
For many middle- and low-income families, this tax increase
more than undid any gains from Mr. Reagan's income tax cuts. In
1980, according to Congressional Budget Office estimates,
middle-income families with children paid 8.2 percent of their
income in income taxes, and 9.5 percent in payroll taxes. By 1988
the income tax share was down to 6.6 percent—but the payroll tax
share was up to 11.8 percent, and the combined burden was up, not
down.
For those who don’t want to do the math, Krugman’s
“middle-income families with children” were paying a combined
burden of 18.4 percent by 1988, up from 17.7 percent in 1980. For
these middle-class families, Reagan—who did reduce taxes
overall—had actually raised their tax burden.
For many American consumers of “news,” these facts might come
as a surprise. As we’ve told you again and again, our modern press
corps is fact-averse, but is very much fable-friendly. We’re fed
simple tales about every topic, including Reagan’s effect on
taxes. With that in mind, let’s return to that point Krugman made
about Reagan’s 1982 tax increase: “[A]s a share of G.D.P., the
increase was substantially larger than Mr. Clinton’s 1993 tax
increase.” Presumably, Krugman included that fact today because
he’s familiar with our spin-driven cable discourse, in which
President Clinton’s 1993 increase is routinely said to have been
“the largest tax increase in American history.”
The spinning began almost instantly,
driven by the foolish—and largely uncorrected—hyperbole which
now defines our discourse. On May 2, 1993, David Rosenbaum quoted a
leading Republican in the New York Times:
ROSENBAUM: “This is the largest tax increase in the history
of the human race, and it is not appealing to us,” said
Representative Bill Archer of Texas, the top Republican on the
[House Ways and Means Committee].
The largest in the history of the
human race! On May 28, 1993, the Times’ Michael Wines captured
more of the clowning:
WINES: “The largest tax increase in the world,” said
Representative Deborah Price, an Ohio Republican.
“The largest tax increase in the history of
civilization,” anted Representative Philip M. Crane, an
Illinois Republican.
Lenin and Mao never taxed so
much! For that matter, Pharoah was off the hook too! On radio, of
course, Rush Limbaugh was peddling such pap every day. In late May,
the Times tried to introduce a few facts in an unsigned
“scorecard” feature:
NEW YORK TIMES (5/28/93): The Congressional Budget Office, the
official scorekeeper in such matters, estimates that the package
will increase taxes by $270 billion over five years. That appears
to make it larger than the 1982 tax increase, which raised $215
billion in new taxes over five years under President Ronald
Reagan.
But if inflation is factored in, the Clinton package raises
taxes less.
Viewed another way, the Clinton package would raise taxes in its
fifth year by slightly more than 0.9 percent of gross domestic
product. The Reagan tax increase ends up being larger because it
increased taxes in its fifth year by 1.3 percent of gross domestic
product.
As everyone knows, it’s pointless to
compare budget costs across the decades without adjusting for
inflation. On August 5, David Rosenbaum also laid out some facts:
ROSENBAUM (8/5/93): When the dollars are adjusted for inflation,
this year’s budget bill is neither the biggest deficit reduction
measure nor the biggest tax increase in recent years...
As for taxes, the 1982 law enacted under Ronald Reagan raised
taxes by $215 billion over five years, which amounts to $286
billion in 1993 dollars, considerably more than this year's
figure.
And, of course, as Krugman notes, the
Reagan increase was followed by Reagan Tax Increase 2. But so what?
Two days before Rosenbaum’s analysis appeared, Bob Dole had
responded to an address by Clinton, saying the Man From Hope’s
budget plan was “not just the largest tax increase in American
history, but the largest tax increase in world history.” And
uh-oh! Someone had penned a Times op-ed that same day. His name was
Ronald Reagan:
REAGAN (8/3/93): [Clinton] knows Americans have always been kind
and generous. In war and peace, they have been willing to make
great sacrifices to serve a greater good. Today, the White House
is trying to appeal to this great quality by getting us to go
along with the largest tax increase in the history of our
country.
Needless to say, Reagan was troubled by all the spinning. “Despite
the slick presentation, talented spin doctors and White House
talking heads all over TV, the simple truth is that this plan is bad
for America,” he good-naturedly said.
This is just a tiny part of the recent
history of tax-increase-spinning. For the record, we’re pretty
sure that we saw Bob Dole, in recent years, acknowledge ruefully
that the GOP may have exaggerated the size of Clinton’s tax hike a
bit. But we’re darned if we can find the statement today. (Anyone
know where he said it? We have an idea, but it won’t be on Nexis.)
So why did Krugman mention the fact that Reagan’s 1982 increase
was actually somewhat larger than Clinton’s? Most likely, because
this silly spinning continues. Clinton’s “biggest tax increase
in human history” is a silly staple of pseudo—con spin. Just
last month, as a matter of fact, Sean Hannity made a comical
adaptation. Here he was on April 16, trashing big-taxing John Kerry:
HANNITY: John Kerry has flipped and flopped on just about every
issue...The only issue he is consistent on is voting for taxes. He
voted for the two largest tax increases in American history,
voted to raise taxes 350 times. And, you know, on every tax issue
he’s wrong.
No, we’re not sure what Hannity
meant; at the time, the official Bush/Cheney talking-point only said
that Kerry had voted for the one biggest increase. Was
Hannity comically accusing Kerry of voting for Reagan’s tax
increase too? Of course, Kerry didn’t happen to be in the Congress
at the time of the Reagan increase, but Hannity didn’t seem to
know that. Here was another exchange from this same laughable
program:
ELAINE KAMARCK: Well, first of all, you’ve got to start with the
fact that John Kerry has been a deficit hawk from the word go. In
the 80s—don’t laugh at me. Do you know that he voted with
President Reagan? In the 80s, he voted for the famous Gramm-Rudman
Act. Not many Democrats did that.
HANNITY: Did he vote for the Reagan tax cuts?
KAMARCK: He voted for—
HANNITY: Did he vote for the Reagan tax cuts? No.
No he didn’t, and neither did you. You weren’t in the Congress
then, and neither was Ol’ Flip-Flip, John Kerry.
This week could be a time for tributes—and beyond that, it
could be a time for learning. But the press corps rarely lays out
facts when clowning clowns make a joke of your discourse. Today,
Krugman offers some information. Expect it to end right there.
(Note: None of this has a thing to do with the merits of
these different tax increases. But our discourse is rarely about the
merits. Our discourse is about pleasing spin.)
VISIT OUR INCOMPARABLE ARCHIVES: In October 2003, conservative
economist Bruce Bartlett wrote a detailed review of Reagan’s tax
increases. For the record, he referred to Reagan’s 1982 hike
as “the largest peacetime tax increase in American history.”
Incomparably, we quoted Bartlett at length. See THE
DAILY HOWLER, 10/31/03.
Meanwhile, one last point on that Clinton increase. By the time
Clinton’s budget plan passed, Americans were deeply misinformed
because of all the silly spinning. In our discourse, spin and
dissembling almost always overwhelm the press corps’ feeble
attempts at clarification. Too see how little the voters knew, see THE
DAILY HOWLER, 11/12/02. As usual, American voters lacked the
first clue. Our discourse tends to be like that.
B. Largely reporting tax issues using fake
Republican spin points
Bob Somerby at the Daily Howler has covered
various "scribes" doing this. Let's start
with Tim Russert, the king of GOP spin, who runs Press
The Meat Meet The Press on MSNBC:
As he interviewed John Kerry on yesterday’s
program, Tim Russert pushed them RNC points rather hard. First,
Kerry said he wouldn’t implement future Bush tax cuts. In other
words, current tax rates would stay where they are. Let’s say it
again: Current tax rates would stay the same. To Tim, of
course, that’s a tax increase:
RUSSERT: So the tax cut that’s scheduled to be implemented in
the coming years, for the—
KERRY: No new tax cut under the Bush plan.
RUSSERT: Immediately.
KERRY: Most of which goes to the wealthiest Americans, because
we simply can’t afford it.
RUSSERT: Effective immediately.
KERRY: It doesn’t make economic sense….I’m saying no new
tax cuts, Tim.
RUSSERT: But would you implement the ones that are now
scheduled to take place?
KERRY: Those are new tax cuts.
RUSSERT: The Bush administration says that is raising taxes
because people—
KERRY: Well, I don’t care what they say, Tim. The average
American understands that a tax cut that you don’t have today is
a new tax cut…
RUSSERT: But the Republicans—
KERRY: And in no way—look, we can’t cower in front of their
silly argument that by not being given a new tax cut it’s an
increase. No average American believes that’s an increase.
Actually, no speaker of English believes that’s an increase
[eRiposte note: Not to mention that the expiry
of the 2001 tax cuts was specifically agreed to by Bush and the GOP
when they pushed it through - which, according to their and
Russert's logic, would mean that Bush and the GOP were for tax
increases in 2001]. But Russert pushes the ludicrous point every time the need
arises. Somebody run and wake up Fred. He’s probably dozing over
Rupert’s best cognac.
And Russert’s point-peddling was
hardly finished. Soon, he read an anonymous quote to Kerry. Was
there anyone watching the show who couldn’t figure who Tim
was quoting?
RUSSERT: There is a big philosophical debate, however, how you
grow the economy. Let me show you one explanation. “An economy
hampered by restrictive tax rates will never produce enough
revenue to balance our budget, just as it will never produce
enough jobs or enough profits. Surely the lesson is that budget
deficits are not caused by wild-eyed spenders, but by slow
economic growth and periodic recessions.” And it goes on: “In
short, it is a paradoxical truth that tax rates are too high today
and tax revenues are too low and the soundest way to raise the
revenues in the long run is to cut its rates now.” Do you agree
with that?
Kerry said he didn’t agree, and Russert dropped the bombshell.
That was John Kennedy he was quoting, all the way back in 1962! And
why was Russert reading this quote? Duh! Because it’s a Rush
Limbaugh spin-point. Never mind the fact that the marginal
tax rate was 91 percent when Kennedy said that “tax rates are
too high today.” Over and over, Rush bullshits his listeners with
this absurdly irrelevant precedent, and Tim was eager to recite it
too. Somebody go wake up Fred!
And that wasn’t all. Eager to
complete the Rule of Three, Russert journeyed back seven years to
peddle a tired old spin-point. He revisited the tired old 1995-96
battle over Medicare funding:
RUSSERT: But the Republicans—
KERRY: And in no way—look, we can’t cower in front of their
silly argument that by not being given a new tax cut it’s an
increase. No average American believes that’s an increase, and
every American—
RUSSERT: So when the Republicans wanted to limit the growth
in Medicare that should not have been called a “cut” by
Democrats?
KERRY: No. If you’re holding something at equal spending, but
inflation is going up at a rate above that, you’re not keeping
up with inflation, that is a cut. That is in fact a cut, Tim.
In 1995, both parties proposed spending less on Medicare in future
years than it would have cost to maintain the existing program. And
that was the kind of budget proposal that had always been
described as a “cut.” But the Gingrich Congress changed the
language, as we’ve incomparably explained in the past (see THE
DAILY HOWLER, 8/20/99). Newt’s effort produced a load of
confusion (see below). And it was Newt who was changing the
language—no one else. But no matter. On this Sunday’s Meet
the Press, Russert was still pushing Newt’s point.
More
on Tim Russert from Somerby:
But let's just say it: When Russert sat down with the Treasury
Sec, O'Neill ate Tim Russert for lunch. Was the big guy even prepared
for the session? Here were a few of the problems:
1) How much will the tax cut cost? Russert asked O'Neill
about Democratic claims that the Bush tax cut would really cost $2.6
trillion. Not one word of O'Neill's reply had anything to do with
what Russert had asked. Seeming not to notice this point, Russert
simply moved on (see THE
DAILY HOWLER, 3/6/01).
2) How much will go to the top one percent? Twice, Russert
asked O'Neill about claims that 43 percent of the tax cut's benefits
go to the top one percent. Both times, O'Neill pulled a
switch—asked about the total plan, he gave an answer about
the income tax provisions. That seemed to be fine with
Russert. O'Neill was never forced to speak to the question which
Russert had asked (see THE
DAILY HOWLER, 3/7/01).
3) What about those White House numbers? On Saturday, both
the Washington Post and the Washington Times reported on
distributional numbers which the White House had released. Each
paper devoted an entire story to the White House numbers (see THE
DAILY HOWLER, 3/5/01). Russert—seeming wholly unaware of the
Saturday stories—asked O'Neill if the White House would ever
release such numbers. O'Neill—who dodged the distribution question
all through the session—didn't mention the Saturday stories
either.
Does performance like this by the press corps matter? Only if
democracy matters. If the Democratic cost analysis is accurate, for
example, then Bush's plan truly doesn't add up. You'd think Russert
would want to examine that question. Sorry—the genial host was far
too busy hashing and rehashing the Clinton pardons, asking again and
again, for the thousandth time, questions which have been hashed and
rehashed long before.
Let's move
to the other mainstream media outlets (including Fox News):
As a candidate, George W. Bush paraded about, vowing to pay down
debt. Like Candidates Bradley, McCain and Gore, Bush pledged to use
Social Security surpluses ($2.4 trillion over ten years) for Social
Security only. During most of the campaign, that seemed to mean that
he’d use those surpluses to pay down federal debt. (Later, he
quietly said that he might use $1 trillion of the $2.4 trillion to
set up private accounts in SS.) And why had Bush set his proposed
tax cut at $1.3 trillion? Because that was all we could afford, he
said, or else we’d have to spend SS dough. Bush had counted every
penny. $1.3 trillion was all we could manage.
But that was then, and this is
hijacking. Bush got his $1.3 trillion in 2001; passed another small
tax cut in 2002; and has just passed another cut which will likely
cost $800 billion over ten years. His agents say more tax cuts are
coming. And everyone knows that the Alternative Minimum Tax will
have to be fixed; that will cost hundreds of billions more.
Meanwhile, what else is happening while these tax cuts proceed?
We’ll let Chait review it:
CHAIT: Although no one talks about it much, this year’s $400
billion (or more) deficit comes on top of the administration
spending the Social Security surplus in its entirety—restraint
has dwindled.
Let’s make sure we understand what this means. Throughout the
campaign, Bush said that none of that SS surplus would be
spent. That’s why his tax cut could only be $1.3 trillion. Now,
the entire SS surplus is being spent (plus an extra $400
billion this year)—and he keeps trying to cut taxes more!
It’s time to go searching for Candidate Bush. Someone else seems
to be in the White House.
“No one talks about it much,” Chait says. And that is surely
an understatement. Bush’s actual program has little to do
with the picture he drew during Campaign 2000. As a candidate, Bush
didn’t say the silly things he says now. He didn’t say that
he’d keep cutting taxes in order to produce increased revenues.
He didn’t say he’d present a new tax cut every single year he
held office. As a candidate, Bush painted a pleasing portrait—one
that fit the press corps’ CW. Now, he’s flip-flopped, and he
clowns in their faces. Cowards, they pretend not to notice.
CHAIT CHAT: Enjoy all four incomparable installments. And
study Jonathan Chait’s helpful article:
CHAIT
CHAT, PART 1: Bush is still lying, TNR’s cover says.
Chait has some prime Grade A groaners.
CHAIT
CHAT, PART 2: Reagan cut taxes and revenues soared! This
foofaw is spread around daily.
CHAIT
CHAT, PART 3: What really happens when tax rates are
cut? Sometimes, cons come out and tell you.
CHAIT CHAT,
PART 4: Whatever happened to Candidate Bush? Your press corps
is too scared to ask.
THEY REPEAT, YOU DECIDE: Who
will ask about Bush’s reinvention? Not that gang at Special
Report. In recent days, their budget “reporting” has been
pure propaganda. On Tuesday night, for example, Major Garrett
reported on current budget battles in congress. Midway, he spoke
with Rick Santorum, who voiced a prime RNC spin-point:
SANTORUM (6/2/03): Democrats play the game of class warfare,
which is trying to take from some to give to others.
Dems are playing class warfare,
he said. But on Fox, you don’t have to wait for Republican
senators if you want to thrill to this GOP spin-point. Here was the
increasingly egregious Brit Hume as he introduced Garrett’s
report:
HUME (6/2/03): There were efforts in the House and Senate today to
offer refundable tax credits to certain low-income
families…Resurrecting the tax credits has become a political
football in Washington’s seamlessly endless class warfare debate
over taxes. Fox News correspondent Major Garrett reports.
Omigod! Brit called it class warfare
too! But then, viewers got to hear the pleasing point last night
too. This time, “reporter” Carl Cameron played Charlie McCarthy,
mouthing the GOP’s spin:
HUME: There’s talk of a new economic stimulus package on Capitol
Hill. For more, chief political correspondent Carl Cameron
reports.
CAMERON: The class warfare is on. And Democrats who
largely opposed the tax cut that president recently signed into
law now want a tax break for working Americans who don't even pay
income taxes.
“The class warfare is on,” Cameron instantly said, repeating
prime spin of his net’s masters. We’re sure Cameron gets a nice
pay-check from Fox. How much does the RNC pay him?
A last
example to wrap up this sub-section:
We began our review with that Culture of Lying—the culture that
now surrounds Bush (see THE
DAILY HOWLER, 6/2/03). But Jonathan Chait had a different idea;
in his
TNR cover piece, he started with Reagan’s tax cuts. As
the talk-show right has come to rule our deeply troubled public
discourse, a Culture of Foolishness has taken hold; absurd accounts
of Reagan’s work now play a key role in that discourse. Turn on
talk radio and you will hear them—iconic accounts of his budget
achievements. Reagan cut taxes and revenues soared—this
well-spun tale is bruited daily. But this silly account has gone
unchallenged by “good guy” pundits who snore inside logs. Many
conservatives believe these stories, and indeed, why
wouldn’t they do so? After all, Sean and Rush keep reciting the
tales—and Big Mainstream Pundits just sit on the side, too effete
to engage the real discourse.
That’s why we were mightily pleased
to see Chait’s useful opening. It’s a very rare day when
American citizens are asked to consider these facts:
CHAIT (from pgh 1): [I]n truth, Reagan reacted to the
consequences of his 1981 tax cuts in a way that would have put him
far out of step with Bush’s Republican Party. When the scope of
the budget deficit [caused by his tax cut] became apparent, Reagan
acceded to a series of tax increases in 1982 (in the midst of
a severe recession, no less), 1983, and 1984. In 1986, reacting to
complaints that his 1981 tax cuts opened too many loopholes for
the rich, Reagan enacted a sweeping tax reform that liberals,
including this magazine, hailed for making the tax code more
progressive. Reagan’s record on taxes, in short, consisted of
one year of unvarnished conservative ideological warfare followed
by seven years of retreat and consolidation.
Those are facts which talk-show listeners never hear. For
that reason, those are facts which you must learn—and recite,
applying as needed.
Reagan cut taxes—and revenues soared. This silly tale is
spun many ways. Fantasists like to ignore basic facts—that federal
revenues almost always go up because of population growth and
inflation. And they like to look at all federal
revenues—adding in those payroll taxes, which Reagan actually raised.
(Duh! We wonder why those “revenues soared.”)
Meanwhile, snoring “liberals” don’t dirty their hands engaging
in this crucial discourse. Sean and Rush keep pounding the piffle.
Richard and William sleep in their logs. At THE HOWLER, we’re sick
of this inane, corrupt culture. We were pleased to see Chait’s
basic facts.
C. Failing to hold George Bush and the
Republican party accountable for their long history of misleading,
mendacity and fake promises on the topic of taxes (and the budget in
general)
How many people are told day in and day out that
leading Republicans and conservative "experts" and
"commentators" were featured repeatedly in the mainstream
media predicting gloom and doom if Clinton's tax increases were passed
and they were all full of s*** considering the exact opposite
occurred?
How many people are told day in and day out that
leading Republicans and conservative "experts" and
"commentators" were featured repeatedly in the mainstream
media predicting fabulous job growth if Bush's tax cuts passed, and
that they were all full of s*** considering that the job creation promised by Bush,
repeatedly, when he sold his 2003 tax cuts spectacularly
failed to materialize?
How many people are told day in and day out about
the serial
misleading and lying by Bush and his administration on the topic of tax
cuts (among other things)? (More here.)
The data is too vast to reproduce here, so I will
just highlight a couple of examples to show you the tip of the
iceberg. Bob
Somerby:
As a candidate, George W. Bush paraded about, vowing to pay down
debt. Like Candidates Bradley, McCain and Gore, Bush pledged to use
Social Security surpluses ($2.4 trillion over ten years) for Social
Security only. During most of the campaign, that seemed to mean that
he’d use those surpluses to pay down federal debt. (Later, he
quietly said that he might use $1 trillion of the $2.4 trillion to
set up private accounts in SS.) And why had Bush set his proposed
tax cut at $1.3 trillion? Because that was all we could afford, he
said, or else we’d have to spend SS dough. Bush had counted every
penny. $1.3 trillion was all we could manage.
But that was then, and this is
hijacking. Bush got his $1.3 trillion in 2001; passed another small
tax cut in 2002; and has just passed another cut which will likely
cost $800 billion over ten years. His agents say more tax cuts are
coming. And everyone knows that the Alternative Minimum Tax will
have to be fixed; that will cost hundreds of billions more.
Meanwhile, what else is happening while these tax cuts proceed?
We’ll let Chait review it:
CHAIT: Although no one talks about it much, this year’s $400
billion (or more) deficit comes on top of the administration
spending the Social Security surplus in its entirety—restraint
has dwindled.
Let’s make sure we understand what this means. Throughout the
campaign, Bush said that none of that SS surplus would be
spent. That’s why his tax cut could only be $1.3 trillion. Now,
the entire SS surplus is being spent (plus an extra $400
billion this year)—and he keeps trying to cut taxes more!
It’s time to go searching for Candidate Bush. Someone else seems
to be in the White House.
“No one talks about it much,” Chait says. And that is surely
an understatement. Bush’s actual program has little to do
with the picture he drew during Campaign 2000. As a candidate, Bush
didn’t say the silly things he says now. He didn’t say that
he’d keep cutting taxes in order to produce increased revenues.
He didn’t say he’d present a new tax cut every single year he
held office. As a candidate, Bush painted a pleasing portrait—one
that fit the press corps’ CW. Now, he’s flip-flopped, and he
clowns in their faces. Cowards, they pretend not to notice.
CHAIT CHAT: Enjoy all four
incomparable installments. And study Jonathan Chait’s helpful
article:
CHAIT
CHAT, PART 1: Bush is still lying, TNR’s cover says.
Chait has some prime Grade A groaners.
CHAIT
CHAT, PART 2: Reagan cut taxes and revenues soared! This
foofaw is spread around daily.
CHAIT
CHAT, PART 3: What really happens when tax rates are
cut? Sometimes, cons come out and tell you.
CHAIT CHAT,
PART 4: Whatever happened to Candidate Bush? Your press corps
is too scared to ask.
Another note:
What happens when the federal
government cuts taxes? Duh! In almost all instances, revenues
decline from where they would have been if tax rates had stayed the
same. But over the course of the past quarter-century, the talk-show
right has been fed some pure cant—cutting taxes increases
revenues! This dogma makes little sense on its face. After all,
if cutting the top rate to 33 percent increases revenue, why
not cut it to 30 instead? But our discourse thrives on spin, lies
and fable. And Bush likes to tell this tale too:
CHAIT: Bush and his allies have three responses to critics who
point to the negative effects of long-term structural deficits.
The first is that tax cuts will, over the long run, boost economic
growth to such a degree that tax revenue actually rises. This is
the most extreme claim of supply-side economics, and Bush makes
some reference to it in nearly every speech he delivers. “The
way to deal with the deficit is not to be timid on the growth
package; the way to deal with the deficit is to have a robust
enough growth package so we get more revenues coming into the
federal Treasury,” he asserted earlier this month in
California.
In recent weeks, top spinners have begun adding prime
weasel-words—“eventually” is one—when they make this iconic
presentation. This suggests that the government will lose revenue in
the short run, but “eventually” it will come out ahead.
But as
Chait points out in his TNR piece, conservatives
sometimes speak more frankly, offering a completely different
rationale. Sometimes they drop all the cant:
CHAIT (continuing directly): A second defense, put forward
by Bush’s defenders but not by Bush himself, is that tax cuts
will starve the government of revenue, thereby holding down
spending and perhaps even leading to balanced budgets. (One
notable thing about this justification is that it contradicts
justification number one—either tax cuts cause revenue to rise,
or they cause it to shrink; both cannot be true.)
As Chait notes, this contradicts the Bush rationale. Bush said he
would cut taxes to bring in more revenue. Others recommend
cutting taxes in order to bring in less.
Two weeks ago, a good example of this
second school appeared on Andrew Sullivan’s eponymous dotcom. The
blogger had criticized Bush’s deficits. A
reader called Sully a chump:
E-MAILER: I’ve said this to you on more than one
occasion—there is a singularly good reason for MASSIVE
deficits...GW’s real job, like Reagan before him, is to
ensure that all the money is spent, that when a Dem takes
office, 33 percent or more is paying off debt. This is called
preemptive handcuffs. [Sullivan’s deletion]
This e-mailer suggests that Bush is lying when he says he’s trying
to increase federal revenues. And he suggests that Bush is
lying when he says that he’s trying to get back in balance.
Indeed, if this e-mailer’s understanding is accurate, Candidate
Bush was probably faking when he promised to pay down trillions in
debt. Indeed, if this e-mailer’s understanding is accurate, then
the Bush Admin is probably trying to produce a train wreck—a
fiscal train wreck which would curtail future spending, and lead to
the changes in Social Security which Bush proposed in the 2000
campaign.
What makes this e-mailer’s outlook so intriguing? This
e-mail—from a Bush supporter—implies that Paul Krugman is right
on the money when he says that Bush is seeking that train wreck. Of
course, when Krugman wrote such a column last week, conservative
bootblacks flew into action, insisting the pundit was out of his
mind. He was spinning “conspiracy theories,” they said. (The
herd must always be fed.) But right there on Sullivan’s
widely-read web site, an e-mailer showed how conservatives talk when
they aren’t throwing feed to the herd. Chait’s TNR piece
has a good many merits, but the strange dichotomy noted above is a
valuable part of his primer. For our money, Chait is really too
polite when he says the two tax-cut claims “contradict” one
another. These explanations are in mortal combat—and as we’ve
noted, the explanation given by Bush seems to fly in the face of all
logic.
Does Bush really think that tax cuts increase revenue?
Timorous pundits in DC’s inner circles will rarely address this
claim’s absurdity; don’t expect to see the president asked about
this in a press conference. But the next time you hear conservative
bootblacks trashing Krugman for conspiracy theories, remember that
mailer to Andrew Sullivan. On special occasions, conservatives have
voiced this rationale for years. So which is it, cons—the lady or
the tiger? It’s a simple question, lodged in Chait’s piece.
It’s time that we all learned to ask.
D.
Not reviewing history to see which party has done better on the
economy overall, regardless of the tax policy used
As I
have shown separately, the historical data shows no evidence
that Republicans (and their tax cuts) are any better for the economy
(jobs included) than Democrats. If anything, the
data suggests that Democrats hold an advantage in almost every
aspect of economic policy. The almost complete media blackout on
this demonstrates unequivocally that the media tilts conservative on
economic issues, including taxes. The mantra of "tax cuts to help businesses create
jobs" has become fairly entrenched with little or no critical
analysis of whether such tax cuts are really helping create jobs more
effectively than other approaches. Not to mention, a lot of the coverage
focuses on how things are great if they are "pro-business"
and less so on whether they are "pro-worker".
4.2.4 Social Security
Bob
Somerby's note is a good place to begin on social security
because it reveals, once again, the "Millionaire Pundit
Values" (Somerby's term) prevalent among prominent mainstream
media types:
We’re sure [the New York Times']
Bill Keller’s a very nice guy. But we tried to warn you about his
work when he penned that ludicrous column last summer—the one
where he quoted his three-year-old daughter saying how boring Gore
is. (Links below. Keller also trashed all other Dem hopefuls,
complaining, for example, that John Kerry took home movies when he
served in Vietnam.) Trust us—scribes who quote their
three-year-old children are trying to tell you how silly they are,
and Keller has surely completed the task with his pandering
piece in this Sunday’s Times magazine [Jan 2003]. Profiling
Bush, Keller fawns long and hard—and shows off those Millionaire
Pundit Values. We’ve warned you that your millionaire scribes
simply don’t care about normal people. But we don’t know when
we’ve seen a pundit revel so much in that fact:
KELLER: Bush has already surpassed Reagan in advocating a shift of
responsibilities from government to the private sector, and from
the federal governments to the states…You could easily
imagine Reagan’s husky chuckle the other day as Bush
announced plans to outsource up to 850,000 federal jobs—about
half the government’s civilian work force—to private
contractors. This is on top of the 170,000 federal employees who
will lose most of their contract protections when they are folded
into the new Department of Homeland Security.
Nice guy! Keller pictures Reagan
callously chuckling as hundreds of thousands of normal people lose
job protections for which they have bargained. But why should we be
so surprised at this image, when Keller—speaking with an approving
tone, as he does throughout this piece—sketches out Bush’s bold
vision:
KELLER: What Bush is striving for, on the evidence of the choices
he has made so far, is bold in its ambition: markets unleashed,
resources exploited. A progressive tax system leveled, a country
unashamed of wealth. Government entitlements gradually replaced by
thrift, self-reliance and private good will. The safety net strung
closer to the ground.
Finally! Progressive taxation will finally end and wealth
will again dare speak its name! Throughout this profile, Keller
showers praise on this oddball vision, which he fawningly fobs off
on Bush. You’ll have to read the piece yourself to take in
Keller’s pandering tone. But through the course of his 8000 words,
Keller never shows the slightest concern about these remarkable
values.
But then, we’ve warned you about
Millionaire Pundit Values. Like many high-toned modern pundits,
Keller doesn’t seem to spend too much time worrying about normal
people. Insouciance is his all. “There is little prospect…Bush
will actually shrink the government,” he says at one point.
“Reagan asked Americans to dream heroic dreams, but he rarely
asked them to give up anything. President Bush, even with a war on,
shows no greater desire to bet on sacrifice.” But is that true? A
few paragraphs earlier, Keller discussed Bush on Social Security:
KELLER: Martin Feldstein, who was chairman of Reagan’s Council
of Economic Advisers, said they couldn’t figure out a way to
[privatize Social Security] without arousing a panicky backlash
among elderly voters. When Feldstein worked with candidate Bush on
the design of his tax and Social Security proposals, though, he
was impressed that Bush had discerned a new political opportunity
that may outweigh the fears of the elderly. Polls showed that
younger and middle-aged voters were comfortable with individual
retirement instruments like 401(k) programs. Moreover, the anxiety
about whether Social Security will be around when they retire,
which has always been seen as an argument for shoring up the
status quo, is in Bush’s mind an argument for inventing
something new.
Thus while the administration is still debating the timing of
an assault on Social Security—are voters ready for it before
2004? How big a setback was the implosion of Enron’s retirement
plan?—the president no longer regards Social Security as the
lethal “third rail” of American politics. It is likely to be
one of the big bets of his presidency.
But what kinds of “sacrifices” might privatization involve?
Keller shows no sign of knowing or caring. As pundits did throughout
Campaign 2000, Keller skims the surface of Bush’s ideas.
Meanwhile, he assures us that Bush will require no “sacrifice.”
We doubt that he has the slightest idea whether or not this is
accurate.
Why is Keller so free-and-easy? Here at
THE HOWLER, we don’t really know. But during Campaign 2000, pundit
opinion strongly favored Bush’s ideas on Social Security (links
below); the likely explanation had already been limned by Julie
Kosterlitz in the National Journal. Kosterlitz wrote on
January 9, 1999, before Bush’s ideas became an issue:
KOSTERLITZ: Social Security increasingly strikes the affluent as a
bad financial deal. When the program was newer, it could offer
generous benefit increases by increasing taxes on a fast-growing
crop of young workers—creating large windfalls for rich as well
as poor retirees. But as the program ages and demographics change,
it’s not feasible to raise taxes enough to sustain such
windfalls. For new retirees, particularly the affluent, the
benefits of Social Security are fading in relative importance to
other retirement income; this may diminish political support for
the program among wealthy elites and opinion makers.
As Kosterlitz suggested, “wealthy elites and opinion makers”
like privatization because it’s a good deal for them. And
by the time Bush proposed his ideas in May 2000, the pundit class
was clearly behind them. On the Beltway Boys, Fred Barnes
laid it out for Mort. “Elite opinion—in other words, the
bigwigs, the opinion-makers, people like you, Mort—have changed
their mind, and are now, I think, sympathetic to the Bush
plan and think that Gore is just being a reactionary liberal” for
opposing privatization. On Capital Gang, Al Hunt said much
the same thing. “Bush is winning among the elites, and I
think in the press coverage” of his proposal, Hunt said. Now
Keller seems to say that there’s no risk in the plan. And it’s
quite true—there’s no risk for him.
You’ll have to read this piece for yourself to pick up its
remarkable tone. Why does Keller fawn so fully? Here at THE HOWLER,
we don’t have a clue. But dudes! Would Reagan have laughed at
those laid-off workers? We doubt it. But Bill Keller will!
The fact that George Bush faked his way through Election 2000 on
social security, as the mainstream Press Corps slept and bashed Gore
instead, itself reveals the media's conservative tilt on social
security reporting. As usual, Bob Somerby has chronicled this extensively. This summary
is a good place to start:
Was May 2000 a season for spinning? Social Security proved it. On
May 15, Candidate Bush delivered a major speech laying out his ideas
for reform of the program. His proposal? Younger workers should be
allowed to use roughly sixteen percent of their payroll taxes—the
taxes that normally fund Social Security—to set up personal
investment accounts. The money accrued in these accounts would be
used for the individual’s retirement. One key point: As was widely
noted in the press, Bush didn’t offer a fully-formed plan.
"Bush offered few specifics about how his ideas would
work," Judy Keen wrote in USA Today. The hopeful had only
"outlined broad principles." But everyone agreed that Bush
had endorsed the most sweeping reform in Social Security’s long
history. In a rebuttal speech given two hours later, Gore opposed
the use of personal accounts; he said the risks involved in private
investment would "take the ‘security’ out of Social
Security." Puffing and posturing as is its wont, your press
corps swore that a "great debate" was surely going to
follow.
That "great debate" never happened. Reporters did
present the general outlines of Bush’s historic proposal. Bush
pledged not to reduce Social Security benefits for current retirees
or for those near retirement. He said that use of personal accounts
would be voluntary for younger workers. He promised to keep Social
Security surpluses "locked away" for the program’s sole
use. And he wouldn’t increase payroll taxes, he said. Bush also
explained what he did want to do. He would let workers put
part of their payroll taxes into "steady, reliable"
investments—investments that could be used "only for
retirement or passed along as inheritance."
As such, the general outlines of the proposal were known. And why
was this reform now needed? According to Bush, "We are nearing
Social Security’s greatest test…If we do nothing to
reform the system, the year 2037 will be the moment of financial
collapse." His reforms would somehow address this problem (how,
he didn’t specifically say). Meanwhile, the reforms would be great
for younger workers. "The reforms I have in mind will actually
increase their retirement income," he said. Indeed, workers
would end up with substantially more money because of the personal
accounts. "Right now, the real return
people get from what they put into Social Security is a dismal 2
percent a year. Over the long term, sound investments yield about a
6 percent return…A worker who invests even a limited portion of
his or her paycheck could, over a career, end up with hundreds of
thousands of dollars for retirement." There was one last bonus
in Bush’s speech; as noted, the money could be left to the
worker’s heirs. Nothing like that was allowed under Social
Security.
One thing was clear about Bush’s ideas; as presented, they were
hard to dislike. Individuals would gain hundreds of thousands of
dollars. They could pass the money along to their heirs. Meanwhile,
the personal accounts would somehow extend the solvency of Social
Security itself. Indeed, in the weeks which followed Bush’s
speech, enthusiasts wrote paeans to his brilliant proposal. In a
column in U. S. News, for example, David Gergen pictured a
25-year-old worker earning $30,000 a year. Under the current Social
Security system, the money at question in Bush’s plan would earn
that worker $153,000, Gergen said. Under Bush’s plan, the same
money would earn $297,000—about twice as much. Unless Americans
hated free money, it was hard to see what was wrong with this plan.
"There is a good reason why Governor Bush is forging
ahead," Gergen wrote. "He is becoming the candidate of
fresh ideas."
But was anything suspect about those ideas? To be honest,
not since the Music Man hit River City had anyone offered so much
for so little. Indeed, Bush’s budget plan seemed to be nothing but
gain. Individuals would gain large sums from Social Security reform;
meanwhile, his across-the-board tax cuts meant that every worker
would have to pay fewer taxes. Given this pair of rosy scenarios,
the press would surely want to examine Bush’s Social Security
proposal—especially since, in unveiling his plan, he had
"offered few specifics about how [it] would work." It may
have been that Bush’s ideas would work out just as he had
described. But any press corps worth its salt would surely want to
look at them closely. Surely, the Washington press corps began
working hard to examine this key Bush proposal.
In fact, nothing of the sort occurred. How thoroughly did the
press corps nap? Because Bush’s proposal lacked key details, it
was hard to know just how it would work. But twenty-one countries
around the world had experience with similar retirement plans;
examination of the foreign experience could have been a source of
valuable perspective. More significantly, six plans involving
personal accounts had already been presented in Congress. Unlike
Bush’s hazy offering, these congressional plans were fully formed.
If the corps had examined these real-world proposals, voters could
surely have gotten a better idea of how Bush’s "broad
principles" might work.
How did the press corps handle the matter? For starters, no
newspaper or magazine ever presented an article on the foreign
experience. How had personal accounts worked in Chile? How had the
system worked in Great Britain? There was simply no way to find out.
For the record, in the few cases where some slight reporting was
done, the foreign experience didn’t sound reassuring.
"Chile’s plan thrived for a decade or more through an
economic boom," the Chicago Tribune said in a brief May 7
report, "but has since suffered with a downturn in the
economy." (On May 28, the Tribune interviewed Kenneth Apfel,
U.S. Commissioner of Social Security. Apfel said that the Chilean
government "had to urge workers nearing retirement to delay
retiring because of the drop.") Meanwhile, a few scribes noted
a significant problem with use of personal accounts in Great
Britain; administrative fees had burned up roughly forty percent of
individuals’ profits. But reporting on the foreign experience was
extremely hard to find. The press corps simply took a pass on this
possible source of information and perspective.
Much more remarkably, no one ever did a report on those
real-world congressional plans. Rep. John Kasich (R-OH) had authored
one plan; almost no one ever mentioned it. Democratic senators
Moynihan and Kerrey had offered a plan; no paper or magazine ever
explained it. How might personal accounts really work? There
was simply no way for a voter to know. The simplest information was
missing in action as the press corps yawned, napped, snored and
slumbered.
Without question, the press corps’ refusal to examine these
plans robbed voters of valuable insights. Indeed, as in the case of
the foreign experience, some of the bloom came off the rose when one
looked at these real-world proposals. When Kasich and others
developed real plans, they were forced to deal with
real-world concerns which Bush had ignored in his cheerful speech.
And alas! Though the Texan painted a pleasing picture of younger
workers raking in dough, the actual picture was substantially
different when one looked at the real-world proposals.
On September 28, 2000, for example, Glenn Kessler penned one of
the only reports on the Kasich proposal. Kessler, the Washington
Post’s budget reporter, offered a mordant assessment. "The
fine print of the [Kasich plan] might temper public enthusiasm for
Bush’s Social Security approach," he wrote. "[A]ccording
to the deputy chief actuary of Social Security, which evaluated the
Kasich plan last year, some baby boomers would see little or no
advantage from individual accounts, and workers who invested
conservatively in bonds would fare relatively poorly." Another
sobering assessment followed. "[T]he actuary’s report
suggests the Kasich plan would bring relatively little gain in
benefits compared with the current system, while adding a new
element of risk," Kessler said. This picture, of course, was
vastly different from the cheerful portrait painted by Bush. Kessler
noted another fact; none of the six congressional plans had been
able to honor all of Bush’s pledges against tax increases and
benefit cuts. It was, of course, those very pledges which made his
ideas seem so "fresh" in the first place.
One other paper mentioned Kasich’s plan; on October 26, the
Chicago Tribune’s William Neikirk offered a bit more detail. Why
would individuals gain so little? According to Neikirk’s brief
report, the plan "would reduce the [guaranteed] Social Security
benefits of future retirees by a total of about 45 percent." Ouch!
But would income from the personal accounts replace the loss in
guaranteed benefits? "[T]he accounts would for the most part
earn back the cuts for workers and in some cases put them
ahead," Neikirk wrote, citing Kasich staffers as his source.
"In general, younger workers came out even or slightly ahead,
while middle-age workers still did not earn back all their benefit
cuts." And even this unexciting result was based on "an
assumption open to challenge," Neikirk noted—the assumption
that workers would earn a seven percent return on their investments.
Need one other obvious point be made? Those who fared poorly on
their investments could be faced with serious losses. These were
some of the actual facts of one actual, high-profile
plan.
Somerby also chronicled
how Bush misled citizens repeatedly and the Press Corps decided
not to notice:
For the record, Bush’s presentation was built on two claims;
each claim was perfectly accurate. It’s true—an individual
worker might well earn a six percent return on investments.
And a second fact was true as well; the average worker is expected
to receive SS benefits which represent the equivalent of a two
percent return on the payroll taxes he has paid through his
lifetime. Deroy Murdock limned it in Wednesday’s Washington Times:
“A typical, two-earner couple born in 1970 can anticipate a 2.24
percent return on their payroll taxes, the Social Security
Administration estimates.” Throughout the election, Bush conjoined
this pair of facts to make a pleasing presentation. He compared the
six percent you could get from investments to the two percent
you’d get from SS, and he implied that free money was there to be
had if you’d just use them personal accounts.
But why is Social Security so stingy? Why will Murdock’s couple
receive the equivalent of a 2.24 percent return from SS? Presumably,
the country’s budget reporters all knew the answer: In effect,
this is all the program can afford to pay, because the program has
past debts and responsibilities for which it has to account. Under
Bush’s plan, personal investments might yield nice returns—but
those outstanding debts would still exist, and they would have to be
paid by the very same citizens who were getting six percent on
investments. That six percent would dwindle back down when they had
to make good on the outstanding debts. Bush’s “six percent
versus two percent” was a comparison of apples to kumquats.
Campaign reporters were surely aware of the problem with Bush’s
presentation. In May and June, the point was discussed three
separate times by award-winning economist Paul Krugman; his columns
appeared on the New York Times’ op-ed page, American
journalism’s highest-profile bit of real estate. Krugman explained
the point on May 28, then again on May 31. (Krugman: “[L]et
me assure you that I too would have no trouble devising a painless
plan to save Social Security, if you let me assume that a large part
of the system’s obligations would magically disappear.”) The
third time allegedly being the charm, he even explained it again on
June 21. (Krugman: “[T]he salesmanship surrounding George
W. Bush’s Social Security plan is all about the meaningless
contrast between the returns that an unburdened individual can get
on investments and the implicit return that a very-much-burdened
Social Security system can offer.”) Though Krugman never found the
perfect way to explain the somewhat confusing conceptual point,
every reporter must have known that something was shaky about
Bush’s key pitch. For the record, this basic point was also made
in a May 29 New York Times editorial. Bush’s key comparison was
“highly misleading,” the editorial said; “the [six-versus-two]
advantage that proponents cite on behalf of private accounts is an
optical illusion.”
In an actual “great debate,” this would have called for
discussion. Bush had proposed an historic change in what he himself
called “the single most successful government program in American
history.” And an honored economist had said, three times, that his
key pitch on the matter was hokum. (Krugman: “Mr. Bush’s
advisers understand [that] very well, even if the governor does
not.”) But so far as a NEXIS search can determine, Krugman’s
columns were completely ignored by the rest of the press corps. No
reporters questioned Bush about his “six-versus-two”
presentation. And no campaign reporter raised this point in
dispatches from the road—even as Bush’s claim was being quoted.
Free money, anyone? Enabled by the press corps’ indifference, Bush
kept telling voters that they could get six percent on their
retirement dollar instead of the current “dismal” two. And
little effort was ever made to conduct a debate about this great
claim. Instead, pundits recited pleasing spin-points about the Texas
governor’s bold plan.
With Bush's push for social security privatization
ongoing (as of the time of this writing in March 2005) using a mix
of misleading and outright fraudulent statements, the mainstream
media coverage on Social Security has continued to extensively
recite the GOP spin points and fakery, often without fact-checking.
(Even the fact-checking that is being done would probably not have
occurred if Democrats and a few Republicans had not opposed Bush's
plans). I captured a sample of the media misinformation favoring
Bush in my page, Myths
v. Realities on Social Security in the United States:
The links below
highlight some of the cases where the coverage was distorted
or free of fact-checking or propagandizing in favor of the Bush
administration.
- CBS
- ABC
- New York Times
- NBC
- MSNBC
- Chris Matthews: Link
1, Link
2, Link
3, Link
4, Link
5
- Tim Russert: Link
1, Link
2, Link
3, Link
4, Link
5, Link
6, Link
7, Link
8, Link
9, Link
10
- Monica
Crowley
- CNN
- Fox News
- Brit Hume: Link
1, Link
2, Link
3, Link
4
- Fred Barnes: Link
1, Link
2, Link
3, Link
4
- Juan
Williams, NPR/Fox News
- Charles
Krauthammer, Washington Post/Fox News
- Jeffrey Birnbaum, Washington
Post/Fox News: Link
1; Link
2
- Bill O'Reilly: Link
1, Link
2, Link
3
- Carl Cameron: Link
1, Link
2
- Sean Hannity: Link
1, Link
2
- Jim Angle: Link
1, Link
2
- Washington Post
- USA Today
- Associated Press
- Wall Street Journal
Reporters would be well advised to
heed Columbia
Journalism Review's CJR Daily's call not to fall for the Bush
administration's propagandizing on the topic of "personal"
v. "private" accounts - but it does
not appear that they take such advice very well. More here,
here,
here,
here
and here.
Let's just say that there's a vast amount of
evidence showing that the mainstream media also reports on social
security with a conservative tilt.
4.2.5 Illegal Immigration
I have long been against illegal immigration (on
principle), but it is not difficult to notice that media coverage of
this topic tends to be in the direction of ignoring or downplaying
an entire aspect of the illegal immigrant problem - the role played
by corporations that hire them and how a solution to this problem
has to involve stringent penalties for those corporations. Rather,
reports focusing on the welfare and crime aspects of illegal
immigration, a favorite point of contention from conservatives, tend to dominate the so-called debate.
I have commented on this in my
post on illegal immigration:
As stated earlier, the fiscal impact estimates, based as they are
on taxes paid and Government spending, do not account for seemingly
intangible monetary benefits that illegal immigrants may bring to
residents/citizens by way of lower commodity prices. While this may
seem small comfort for critics of illegal immigrants, understanding
the reasons why illegal immigrants lower costs for consumers reveals
why they end up being disproportionate burdens on local and state
governments. One of the books that partly covers this issue is
Eric Schlosser's superlative tome (if you will) Fast
Food Nation, which is one of the eRiposte
Recommended Books.
A fact often ignored by critics of illegal immigrants is that
illegal immigrants come to this country because there is history of
people - usually corporations (including agribusinesses) - hiring
them. I am willing to bet that the supply of illegal immigrants
into the U.S. would abate significantly (of course it won't
disappear entirely) if they were not really needed and used.
Expressed in another way, it is a matter of supply and demand.
There will be little in the way of supply if real demand did
not exist.
Clearly, if one believes that illegal immigration has to be
stopped, merely penalizing those who enter the country illegally
will not solve the problem - penalizing those who hire them all
the time (mostly businesses/companies) is also a must. This is
not simply a matter of punishing companies/businesses for committing
an illegal act. Rather, it has more to do with the fact that such
companies boost their profit margins by paying illegal immigrants
egregiously low salaries with limited or no benefits, thereby
forcing the state or local governments to bear much of the costs of
living (including education) of the immigrants and their families.
As Schlosser points out in his book, some of these (e.g.,
meatpacking) companies have been brazen enough in the past that they
assume that the localities that these immigrants are brought into
for work will automatically cover their welfare costs. This is
obviously problematic for several reasons, that go well beyond the
illegal immigration debate.
If a worker is paid a pittance and yet expected to work with
minimal or no healthcare benefits, whose responsibility is it to
ensure the worker remains in good enough health to continue working?
If the worker's pay is insufficient to pay enough in local/state
taxes to support the education of his or her child(ren), whose
responsibility is it to ensure that the families of the kids get
educated and turn into tax-paying, productive workers that benefit
the country in the future? If the living conditions of the
worker are below par and he or she is forced to consider crime as
a way to meet their basic food or health needs, then who is
responsible for preventing or reducing this tendency and to minimize
crime? Now, I certainly concede that illegal immigrants come to
the U.S. at their own risk/peril and should therefore have no RIGHT
to expect a JOB, let alone decent pay or benefits. But, at the same
time, even if you ignore the unfairness in the way the illegal
immigrant is treated by his or her employer, it would be foolish and
irresponsible for legal residents/citizens to ignore the unfairness
that this treatment inflicts on *themselves*. "How?", you
ask. If the answer is not obvious from the above comments, I will
explain it again.
When companies employ, but refuse to pay decent wages to, illegal
immigrants, this is a multiple-whammy to legal residents and
citizens.
(i) They have less jobs available as a result.
(ii) Companies are able to depress wages overall, reducing the
bargaining power of legal employees - thereby gradually lowering the
latter's quality of life.
(iii) By paying illegal immigrants poor wages, they create a poor
quality of life for illegal immigrants. This has cascading effects.
Local/State Governments may be forced to pay for the welfare or
education (usually the latter dominates) of the immigrants' families
using taxpayer funds that are disproportionately from legal
residents/citizens. In cases where the illegal immigrants'
localities are subject to high crime driven by sheer poverty, the
State Government is also forced to use taxpayer money
(disproportionately from legal residents/citizens) to build more
prisons.
All of the above just because some corporate executives or
business owners can reap in the big bucks and because the consumer
may see somewhat lower costs (assuming the consumer still has his or
her job). Get the picture?
The most-recent case involving
Wal-Mart's hiring of illegal immigrants as essentially slave labor
is a case in point.
Since 1998, federal authorities have uncovered the
cases of at least 250 illegal immigrants who were employed by janitor
contracting services and hired by the giant retailing chain in 21
states. Many of the janitors — from Mexico, Russia, Mongolia, Poland
and a host of other nations — worked seven days or nights a week
without overtime pay or injury compensation, said attorney James L.
Linsey. Those who worked nights were often locked in the store until
the morning, Linsey said.
Eric Schlosser has covered the abuses of corporations that
hire illegal immigrants by the dozens or hundreds and also pointed out
how Congress as a whole had given short shrift to holding them
accountable (by making the penalties harsher). Since neither political party wants to screw with their
corporate donors on this, and the media downplays this angle, important
facts rarely come into public view. Schlosser, using the case study of
the California strawberry industry, made a number of important
points in his book Reefer Madness, which I had previously summarized/paraphrased
(brown text is taken directly from Schlosser's
book):
A. Illegal immigrants subsidize an
important sector of California's economy, but drive down wages for
almost all farmworkers
Agriculture is still California's largest
industry. Since the late 1940s California has led America in
agricultural output; it now produces more than half the fruits,
nuts, and vegetables consumed in the United States. Hundreds of
commodities, from the mundane to the exotic, are grown in
California, primarily in the Central Valley, an area that contains
some of the world's most productive farmland.
...
Meanwhile, the fastest-growing and most profitable segment of
California's farm economy - the cultivation of high-value
specialty crops - has also become the one most dependent on the
availability of cheap labor. Nearly every fruit and vegetable
found in the diet of health-conscious, often high-minded consumers
is still picked by hand...As the demand for these foods has risen,
so has the number of workers necessary to harvest them. Of
the migrants in California today, anywhere from 30 to 60 percent,
depending on the crop, are illegal immigrants. Their willingness
to work long hours for low wages has enabled California to sustain
its agricultural production, despite the loss since 1964 of more
than nine million acres of farmland. Fruit and vegetable growers
now rely on a thriving black market in labor - and without it even
more farms would disappear. Illegal immigrants, widely reviled and
often depicted as welfare cheats, are in effect subsidizing the
most important sector of the California economy.
...
Not only are there far more migrants today, but they are being
paid far less. The hourly wages of some California farmworkers,
adjusted for inflation, have dropped more than 50 percent since
1980. Migrants are among the poorest workers in the United States.
The average migrant is a twenty-nine-year-old male, born in
Mexico, who earns less than $7500 a year for twenty-five weeks of
farmwork. According to one estimate, his life expectancy is
forty-nine years.
B. The inherent risks in strawberry
cultivation are hedged by the growers using ultra-cheap laborers
(illegal immigrants) who are unlikely to complain about their
abysmal pay, lack of benefits or unpleasant working conditions
The strawberry has become the focus of a
California industry whose annual sales are about $840 million.
American farmers now receive more money for fresh strawberries
each year than for any other fresh fruit grown in the United
States, except apples. And strawberry pickers are not only the
poorest migrants but also the ones most likely to be illegal
immigrants.
...
As in most fruit and vegetable production, the steady profits are
usually earned by the middlemen - processors, cooling houses,
supermarket chains - and not by the growers. In the strawberry
industry, a grower's annual losses can be huge...The only cost
over which a grower has any real control is the cost of labor.
...
Since labor costs constitute between 50 and 70 percent of the
total cost in strawberry production, cutting labor costs can
sometimes mean the difference between a profit and a loss, or
between a bad year and a disastrous one.
...
The growers are often obligated to pay unemployment taxes and
workers' compensation premiums for each of their employees, in
addition to Social Security and Medicare taxes. Paying an
"invisible worker" in cash lowers the cost of that
worker by at least 20 percent. Ignoring California's rules about
overtime effectively cuts those wages by 50 percent. And failing
to pay any wages brings the greatest savings of all. The vast
number of illegal immigrants in the migrant work force is an
invitation to break the law. They are unlikely to approach
authorities about a violation of the labor code.
Sharecropping is the most insidious means
by which growers avoid responsibility for their workers. The sharecropper
is a straw man, an intermediary, usually a middle-aged farmworker,
to whom the grower shifts many of the legal and financial risks.
...
The sharecropper became the employer of record, responsible for
hiring strawberry pickers, paying their wages, withholding their
taxes, and checking their green cards. The grower was responsible
for all other production costs and for the overall management of
the farm. By setting up farmworkers as supposedly independent
operators, growers shielded themselves from labor and immigration
laws - and from heavy losses. The sharecropper assumed a large
part of the risk. He or she had no way of knowing whether there
would be profits in a given year or whether the grower would share
them fairly.
...
Instead of paying the operating costs of a strawberry farm, these
growers - now called commission merchants - lend sharecroppers the
money for operating costs at interest rates as high as 19 percent.
Under the old arrangements if things went wrong, sharecroppers
simply would not be paid for their hard work; under the new one,
they are being saddled with thousands of dollars in debt.
...
Some of the worst violations of state and federal labor laws
are being committed by sharecroppers overwhelmed by the pressure
to repay their debts.
...
C. Over the decades, California's
lawmakers (especially Republicans) have played a key role in gutting
labor rights and tacitly encouraging the increasing use of illegal
immigrants in the agriculture industry
Illegal immigrants from Mexico have long
been a mainstay of California's rural economy. Anglo migrant
workers, the "Okies" immortalized by John Steinbeck in The
Grapes of Wrath, were a historical anomaly. For almost a
century, the vast majority of California's migrant workers have
been Mexican immigrants, legal and illegal.
...
During the 1970s, the United Farm Workers (UFW) achieved great
success organizing migrants in the California grape and lettuce
industries. The influence of the UFW extended far beyond these
crops; simply the threat of unionization persuaded many
growers to raise wages, offer benefits, and improve working
conditions. At about the same time, California adopted some of the
most pro-union legislation in the country, guaranteeing
farmworkers the right to collective bargaining, a minimum wage,
and unemployment compensation. As labor costs increased,
mechanization became a top priority for California growers. But
successive Republican governors, George Deukmejian and Pete
Wilson, gutted the Agricultural Labor Relations Board and relaxed
enforcement of the state's tough labor laws. Union worsens were
fired; illegal immigrants replaced them; and growers avoided
prosecution for workplace violations by hiding behind legal
fiction that labor contractors and sharecroppers were the actual
employers of migrants. Hard-won benefits such as sick leave,
vacation pay, family housing, and health insurance were
eliminated. The living and working conditions of migrants steadily
declined.
...
Harvest work in the strawberry fields, like most seasonal farmwork
in California, is considered "at will." There is no
contract, no seniority, no obligation beyond the day-to-day. A
grower hires and fires workers as necessary, without need for
explanation. It makes no difference whether the migrant has been
an employee for six days or for six years. The terms of employment
are laid down on a daily basis.
...
This system did not arise because growers are innately mean and
heartless. Harvests are unpredictable from beginning to end.
...
D. Illegal immigrants are not just
underpaid; they are very likely to suffer work-related disabilities
which are not covered by insurance. They often do not have a place
to live. Since they usually do not get any benefits, their care
increasingly has become the responsibility of the state government.
The strawberry has long been known to
migrants as la fruta del diablo - the fruit of the devil.
Picking strawberries is some of the lowest-paid, most difficult,
and therefore least desirable farmwork in California. Strawberries
are fragile and bruise easily. They must be picked with great
care, especially the berries that will be sold fresh at the
market.
...
You must bend at the waist to pick the fruit, which explains
why the job is so difficult. Bending over that way for an hour can
cause a stiff back; doing so for ten to twelve hours a day, weeks
at a time, can cause excruciating pain and lifelong disabilities.
Most strawberry pickers suffer back pain.
...
Another constant worry is finding a place to sleep.
...
The determination to preserve agricultural land has not, however,
extended to providing shelter for agricultural worriers. Since
1980 the acreage around Watsonville and Salinas devoted to
strawberries has more than doubled and the tonnage of strawberries
produced there has nearly quadrupled. But the huge influx of
migrant workers required to pick these berries has been forced to
compete for a supply of low-income housing that been inadequate
for decades.
...
Migrants routinely pay $100 to $200 a month to sleep in a garage
with anywhere from four to ten other people. A survey of garages
in Soledad found 1,500 inhabitants - a number roughly equal to
one-eighth of the town's official population. At the peak of the
harvest the housing shortage becomes acute. Migrants at the labor
camps sometimes pay to sleep in parked cars. The newest migrant
workers, who lack family in the area and haven't yet learned she
ropes, often sleep outdoors in the wooded sections of Prunedale,
trespassing, moving to a different hiding place each night. On
hillsides above the Salinas Valley, hundreds of strawberry pickers
have been found living in caves.
...
By relying on poor migrants from Mexico, California growers
established a wage structure that discouraged American citizens
from seeking farmwork. The wages offered at harvest were too low
to sustain a family in the United States, but they were up to ten
times as high as any wages Mexican peasants could earn in their
native villages. A system evolved in which the cheap labor of
Mexican migrants subsidized California agriculture, while
remittances from that farmwork preserved rural communities in
Mexico that otherwise might have collapsed. For decades the men of
Mexican villages have traveled north to the fields of California,
leaving behind women, children, and the elderly to look after
their small farms. Migrant work in California has long
absorbed Mexican surplus labor, while Mexico has in effect paid
for the education, health care and retirement of California's
farmworkers.
Whenever migrants decided to settle in
California, however, they interrupted the smooth workings of this
system, by imposing higher costs on the state - especially if they
married and raised children. That is why the Immigration and
Naturalization Service (INS) used to round up and deport illegal
immigrants in California immediately after the harvest.
...
E. In spite of a Presidential
Commission's recommendation that employers using illegal immigrants
be penalized heavily, Congress and past Presidents have largely
ignored this part of the Commission's recommendations, and through
such inaction (and other actions) set the stage for the use of
illegal immigrants to flourish
In 1951 THE PRESIDENT'S
COMMISSION on Migratory Labor condemned the abysmal living
conditions of illegal immigrants employed as migrant workers
in the United States. At the time, workers were found living in
orchards and irrigation ditches. They lived in constant fear of
apprehension, like fugitives, and were routinely exploited by
their employers, who could maintain unsafe working conditions, cut
wages, or abruptly dismiss them with little worry of reprisal. In
many cases, the life of these migrants was, according to the
commission, "virtually peonage." The commission
estimated that 40 percent of the migrants in the United States -
at least 400,000 people - were illegal immigrants. Their
presence in such large numbers depressed wages for all
farmworkers; that fact was "unquestionable." Indeed,
illegal immigrants had begun to displace native-born workers not
only in agriculture but in nonfarm occupations such as
construction. The commission argued that the only way to stop the
flow of illegals was to impose harsh punishments on growers who
employed and exploited them. It suggested fines, imprisonments and
a strict prohibition on the shipment in interstate commerce of any
goods harvested by illegal immigrants. "We depend on
misfortune to build up our force of migratory workers,'' the
commission concluded, "and when the supply is low because
there is not enough misfortune at home, we rely on misfortune
abroad to replenish the supply."
Congress ignored the commission's
recommendations, and for the next two decades it was a crime to be
an illegal immigrant in the United States but not a crime to
employ one. In 1986, Congress passed the Immigration Reform and
Control Act (IRCA), which demanded broad sanctions against the
employers of illegal immigrants. But these sanctions have rarely
been applied. There are about a minion private employers in
California - and about 200 federal inspectors to investigate
workplace violations of the immigration code. Moreover, the
federal penalties for employing an illegal immigrant are rather
mild. A first offense may result in a fine of $250, a third
offense, in a fine of $3,000.
Instead of stemming illegal
immigration, IRCA actually encouraged it. In response to growers'
fears that the new sanctions on employers would create a shortage
of farmworkers, Congress included in the bill a special amnesty
for illegal immigrants who could prove they had done farm work in
the previous year. It did not demand much proof.
Backed by Congressman Leon Panetta and Senator Pete Wilson, both
from California, the Special Agricultural Worker (SAW) program was
expected to grant legal status to 350,000 illegal immigrants.
Instead, almost 1.3 million illegal immigrants - a number roughly
equivalent at the time to one-sixth of the adult male population
of rural Mexico - applied for this amnesty, most of them using
phony documents in what has been called one of the greatest
immigration frauds in American history. More than a million
illegal immigrants were eventually granted legal status; many were
soon joined illegally by their wives and children.
...
F. Is this problem going to be solved?
Not without significant changes in the kind of people we elect to
power.
At the moment an estimated 7 to 8 million
illegal immigrants live in the United States. About half of them
are Mexican. While some advocates of immigration reform call for
another large amnesty, granting green cards or full citizenship to
millions, California growers prefer a new guest-worker program. It
would recruit migrant workers through an international agreement
and would guarantee their wages, their living conditions - and
their return to Mexico at the end of the harvest.
...
Opponents of guest-worker programs have long based their
objections on principle. More than two decades ago, Sidney
Weintraub and Stanley R. Ross, then at the University of Texas,
suggested that "guest worker" is simply a modern
euphemism for an indentured laborer. A guest-worker program
legally embraces the concept of second-class citizenship in the
United States. It creates a group of people who have limited
rights. Aside from the philosophical objections that can be
raised, many argue that such programs just don't work.
"There's nothing more permanent," one economist said,
"than temporary workers."
...
Mexican farmworkers have long dominated the agricultural labor
force in California and the Southwest, but only recently have they
begun to migrate throughout the United States... Moreover, the
same methods long used to employ illegal immigrants in California
agriculture - the reliance on intermediaries, such as labor
contractors - are being used to employ them in the meatpacking
industry, construction work, janitorial service, and the garment
industry. The majority of illegal immigrants in California now
work in nonfarm occupations and come from regions throughout
Mexico, including urban areas such as Mexico City.
...
Despite the many policy options regarding farmworkers, the most
likely scenario is that, at the federal level, nothing will be
done...Except for a flurry of attention every few decades, the
American people have greeted the whole subject with indifference.
The nation's fresh produce is less expensive as a result - but not
much. Maintaining the current level of poverty among migrant
farmworkers saves the average American household about $50 a year.
...
The suburbanites do not like living beside Mexican farmworkers.
Instead of providing low-income housing, local authorities have
declared states of emergency, passed laws to forbid curbside
hiring, and bulldozed many of the large encampments. San Diego
growers appalled by the living conditions of their migrants have
tried to build farmworker housing near the fields - only to
encounter fierce resistance from neighboring homeowners. Although
the shantytowns lower nearby property values, permanent farmworker
housing might reduce property values even more. "When people
find out you want to build housing for your migrants," one
grower told me, "they just go ballistic."
...
We have been told for years to bow down before "the
market." We have placed our faith in the laws of supply and
demand. What has been forgotten, or ignored, is that the market
rewards only efficiency. Every other human value gets in its way.
The market will drive wages down like water, until they reach the
lowest possible level.
Corporations in the U.S. routinely hire illegal
immigrants and get off with slaps on their wrist. This has been going
on for so long and the full facts are so well hidden that most people I
talk to about illegal immigration are barely aware of these things. How likely is it that
all the facts will be reported on this every time, rather than a
pro-corporate /conservative tilt in the
reporting that largely hypes the welfare and crime aspects of illegal
immigration? Not very. On the whole, there is no
evidence that the media's coverage on illegal immigration is
"liberal biased" overall. The positive coverage given to the
Minutemen (recently) epitomizes this. There is enough evidence to
suggest that the media's coverage tilts conservative.
4.2.6 Bankruptcy
All we need to know here is the weak-to-poor
publicity that the recent, egregious Bankruptcy Bill received in the
media - the Bill that severely gutted protections for consumers
(many of whom file for bankruptcy because of unforeseeable medical
costs) while continuing to drastically favor big business. The Special
Bankruptcy Edition of TPM provides the gory details and points
out that many rank-and-file conservatives were themselves against
this Bill, not just liberals. Having said that, the Bill was pushed
through by a Republican majority with a few conscience-free
Democrats supporting it.
If the media were indeed liberal, it would have
mounted a crusade to get information out on this Bill to the public,
considering how deeply unpopular it was. That it did not, showed yet
again that our media is no liberal media.
4.2.7
Tort Reform This is another classic
case where the media's reporting is dramatically skewed to the
conservative viewpoint. Time and again, leading mainstream media
outlets spread irrational fears about trial lawyers, plaintiffs and
jury awards, mentioning precious little about one of the main reasons
for lawsuits - actual malpractice - or about the key reasons for rises
in malpractice insurance rates - insurance industry practices and
serial malpractice by a small percentage of doctors. On top of this,
media outlets continue to spread myths about "frivolous
lawsuits" and barely mention that the Republican proposal to cap
malpractice awards will do next to nothing to solve the problem of
high malpractice insurance rates, while having the effect of curbing
meritorious lawsuits - which is what the GOP and its medical/corporate
contributors are after. It is easy to write an entire book on the media
malpractice on this subject, but due to space considerations I
will highlight some aspects and provide a few links for those who want
to read more about the actual facts. The U.S. media
tilts strongly conservative on its "tort reform" coverage in
multiple ways. Some of them (A, B,
C, D, E,
F, G, H,
I, J) are as follows:
A.
Spreading myths about "frivolous lawsuits" Long
Story Short Pier pointed to a circulating email containing fake
"frivolous lawsuits" (nominated for "Stella
Awards") while noting how the Stella Liebeck (McDonald's coffee)
case is anything but frivolous (as even the creator of the
"Stella awards" admitted). Off
the Kuff has more on the real facts on Liebeck v. McDonald's.
Stephanie Mencimer mentions
some examples in the Washington Monthly:
Unfortunately, Newsweek's one-sided coverage of the civil
justice system is the rule, not the exception. Every few months, one
or another newspaper, magazine, or television show does a story just
like it. They all hew to a standard line, starting with a juicy but
misleading--or even fictitious--lawsuit horror story typically
describing an irresponsible plaintiff, followed by
"studies" on the economic damage of the tort system
published by corporate front groups, finally ending with calls for
"reforms" to rein in mushy-headed juries and greedy trial
lawyers. Such skewed coverage represents a victory in a sustained,
50-year public relations assault on the civil justice system by the
insurance industry, tobacco companies, and other corporate giants.
It's helped fuel political support for curtailing Americans' right
to hold corporations and individuals accountable for negligence,
fraud, and other malfeasance in court. Perhaps more serious,
journalists' willingness to perpetuate anti-lawsuit propaganda has
gravely jeopardized Americans' unique democratic right to
participate on civil juries.
Runaway hedge-clippers
The current PR campaign by the insurance industry and other big
corporations is just the latest iteration of a long fight tracing
back to the 1950s. That was when plaintiffs' lawyers started
breaking down some of the legal barriers that had long protected
industry from responsibility for injuries to workers and consumers
and opened up jury pools to make them more representative of the
general public. The blood bath on the nation's highways during the
post-war auto boom also created a whole new arena of litigation over
who should pay for the injuries and deaths caused in car accidents.
Auto insurance companies were frequently in the middle of these
disputes (as they are today; insurance companies are the defendants
in 90 percent of all auto-accident lawsuits).
With their profits threatened by unfavorable jury verdicts, the
insurance industry started running anti-lawsuit ads targeted at
jurors. For instance, in 1953, the industry ran ads in Life
magazine and The Saturday Evening Post that declared,
"ruled by emotion rather than facts, [jurors] arrive at
unfounded or excessive awards--verdicts occasionally even higher
than requested!" The ads implored potential jurors to remember
that "you pay for liability and damage suit verdicts whether
you are insured or not."
The industry also successfully planted articles in national
magazines and TV shows that were designed to look like investigative
reporting. In 1962, CBS broadcast "Smash-Up," a
fictionalized docudrama that portrayed sleazy lawyers faking auto
accident cases. The Insurance Information Institute, the industry's
public relations arm, helped write the script. In 1977, the
venerable insurance company Crum & Forester sponsored one of the
first print ads that included what would become a staple of
anti-lawsuit rhetoric: the fictional lawsuit horror story. The ad
told the story of a guy who collected a $500,000 jury verdict after
he was injured using a lawnmower as a hedge clipper. The agency
later conceded that it had no factual basis for the story, but that
didn't keep it from circulating widely in the media and in
conservative political speeches.
The industry knew what it was doing. In 1979, Elizabeth Loftus,
the famous memory researcher and University of California
psychologist, tested the effects of this kind of advertising on
potential jurors and their decision making in the jury box. At the
time, the industry was spending $10 million on a series of ads in a
host of national magazines. In an article in The American Bar
Association Journal, Loftus reported that potential jurors who
were exposed to even one insurance ad awarded much less for pain and
suffering than those who weren't.
In the mid-1980s, with insurance companies hitting a slump, the
insurance industry's "tort reform" movement, as it became
known, broadened its emphasis. Instead of limiting itself to
targeting individual jurors through mass media advertising, the
industry began to heavily lobby legislators to restrict citizens'
ability to sue. The movement pursued strict caps on damage awards,
tougher standards for proving liability, and caps on plaintiffs'
attorney fees. The industry's crusade was taken up by small
government conservatives, who believed that tort reform paralleled
their own efforts to fill the federal bench with pro-business
jurists and roll back government regulations. They were also upset
by changes in the 1960s and 1970s that broadened legal protections
for women and minorities, such as the 1964 Civil Rights Act, and the
expansion of product liability doctrines that made it easier for
injured consumers to force companies to compensate them for faulty
products. Politically, it was a lot easier to attack juries and
trial lawyers than the popular consumer, civil rights, and
environmental protection laws they enforced--or the injured victims
they represented.
Advertising was a key component of those efforts. In 1986, Newsweek
ran a series of ads sponsored by the insurance industry under the
heading, "We all pay the price." The ads warned that
lawsuits were driving ob/gyns out of business, shuttering local
school sports programs, and scaring the clergy out of counseling
their flocks--though few of these assertions turned out to be true.
That same year, 1,600 tort reform measures were introduced in 44
state legislatures, 21 of which passed significant restrictions on
lawsuits and jury awards before adjourning.
...
One of the most influential of those groups is the Manhattan
Institute, founded by the late CIA director William Casey.
...
Over the next decade, the institute produced a blizzard of reports,
conferences, op-eds, books, and mailings all decrying the
"litigation explosion" and greedy trial lawyers. They
cultivated sympathetic and influential journalists such as
"20/20"'s John Stossel, then-New Republic editor
Michael Kinsley, and TNR columnist Fred Barnes, and more
recently, Stuart Taylor, who frequently cites their work in his
columns for Newsweek, The National Journal, and The
Atlantic Monthly. The "research" conducted by the
institute usually purported to show how lawsuits impact the average
consumer's daily life by raising the cost of groceries or auto
insurance or driving their favorite physicians out of business. But
some of the institute's "scholars" played a little fast
and loose with the facts.
...
[In another case involving CBS's broadcast
of a hit piece]....Those facts weren't included in the story.
Meanwhile, the florist, Beau Strittman, retracted his comments about
the payoffs, telling the AP, "I just said it as a joking
statement." CBS spokesman Kevin Tedesco said the network could
not comment on the segment because several jurors have sued CBS for
libel over the broadcast.
It wasn't the first time "60 Minutes" got duped in an
anti-lawsuit segment. Back in 1986, the show profiled the owner of a
ladder manufacturing company who claimed his company had been hit
with a $300,000 jury verdict in a suit by a man who fell off a
ladder because he set it in a pile of manure. The business owner
claimed the lawsuit alleged the company should have warned buyers of
the dangers of setting ladders in dung. The real lawsuit had nothing
to do with manure; the ladder had broken with less than 450 pounds
on it, even though it had a safety rating that said it could support
up to 1,000. Tedesco says the show never ran a correction.
The print media, mostly opinion columnists, have proven even more
gullible in publishing stories about lawsuits that are simply
fictional. For instance, in June 2003, in a column entitled,
"Welcome to Sue City, U.S.A.," U.S. News & World
Report owner Mort Zuckerman claimed that "litigation has
become our national pastime." As proof, he offered several
examples of lawsuits that illustrated the nation's "enormous
inflation of rights over responsibilities." Zuckerman wrote,
"A woman throws a soft drink at her boyfriend at a restaurant,
then slips on the floor she wet and breaks her tailbone. She sues.
Bingo--a jury says the restaurant owes her $100,000! A woman tries
to sneak through a restroom window at a nightclub to avoid paying
the $3.50 cover charge. She falls, knocks out two front teeth, and
sues. A jury awards her $12,000 for dental expenses."
The anecdotes were catchy. Unfortunately, they weren't true. The
stories had been circulating in an email for two years and had made
it into several mainstream news outlets, including another Zuckerman
property, The New York Daily News, which had published an
email containing one of the fake lawsuits in the sports section a
year earlier (with no correction). When The Washington Post's
Howard Kurtz called him on the U.S. News error, Zuckerman was
unapologetic. The magazine only published a brief clarification
about the fictional suits, which ended by saying, "Mr.
Zuckerman continues to believe, and most Americans agree, that we
live in a country where far too many frivolous lawsuits are filed
each year." When contacted by The Washington Monthly, a
spokesperson for Zuckerman refused to disclose the source of the
lawsuit anecdotes or to offer an explanation as to why Zuckerman
would publish anything from a spam email without checking it out
first.
Small-town papers seem even more vulnerable to such fabrications
than the national media, yet their impact is substantial, as battles
over most tort reform laws are fought in state legislatures, and
juries are drawn from local pools.
...
As Dwight Meredith also
notes:
Zuckerman choose those examples for his column
because the cases, if real, are obviously ridiculous. No one could
possibly think that either of the plaintiffs cited by Zuckerman
deserves to be compensated in any way.
Indeed, Zuckerman is quite sure that the examples will be viewed as
ridiculous by all of his readers. I wonder, then, why he thinks a
jury would view the case any differently? Juries are made up from a
cross section of the community. I have selected many juries. I have
never had a jury that did not include at least a few people who are
readers of U.S. News and World Report or similar publicatons.
I also can not help but wonder why so many examples of alleged
ridiculous jury verdicts turn out to be false. Zuckerman’s
spokesman contends that there were dozens of examples that could
have been used. If that is true why do we so often hear about the
McDonald’s coffee case (which was real but not frivolous), the
mythical driver of the RV who set the cruise control and left the
wheel and sued when a wreck occurred and many other bogus examples
of frivolous suits. See Kip's
post for a listing and a debunking of those mythical suits.
Perhaps obviously ridiculous jury verdicts providing huge judgments
for undeserving plaintiffs are sort of like UFO’s. Many people
know many people who claim to have seen them but it is hard to find
a person who can deliver the proof.
Myths about frivolous lawsuits are spread more
commonly in the mainstream media than one would imagine - even
today. Take, for example, Newsweek's terrible cover story (and joint
effort with NBC), which was analyzed by Public
Citizen:
Newsweek’s Dec. 15 cover story entitled “Lawsuit
Hell/Civil Wars” is a one-sided diatribe masquerading as
investigative journalism. The editor wrote of the issue, “we hope
you’ll find our report provocative but fair.” Provocative?
Incendiary is more like it. Fair? Not at all.
The article reads like tabloid journalism –
designed to excite and sell magazines rather than inform. It pushes
readers’ emotional buttons rather than providing balanced analysis
that informs the public about a critical policy issue.
Moreover, by declining to present a more balanced
picture of the legal system other than including a pro forma acknowledgment
that some lawsuits have benefit and a three-sentence quote from
Ralph Nader secured just before deadline, Newsweek piles on
to such an extent that it fails to meet the test of fairness and
objectivity.
In adding a partnership with NBC for week- long
broadcast tie-ins and on-line chats, including one with the lead
author and lawsuit “victims” described in the article, Newsweek
has gone beyond advocacy journalism to crusade against consumers’
access to the courts – a crusade without precedent even among news
outlets with overt conservative leanings.
From a journalistic point of view, the article
suffers from major reporting deficiencies, including an extreme lack
of due diligence. The article includes:
-
Many false and exaggerated anecdotes that
present an unbalanced and negative caricature of the legal
system.
-
Major factual inaccuracies about the legal
system and lawsuits.
-
Proposed solutions that have no basis in
experience.
Finally, the article’s lead author, Stuart Taylor
Jr., a commentator rather than a news reporter, is heavily biased
towards business interests on tort issues and has a history of
advocacy on this issue. His viewpoints, which rely largely on
corporate lawyer Philip K. Howard and his book, “The Collapse of
the Common Good,” should have been relegated to a column. Instead,
Taylor hijacked all but 10 sentences in an eight-page article to
present a narrowly sourced story espousing an extreme and biased
political viewpoint.
Newsweek has fallen hook, line and sinker
for the myths and distortions spread by a well organized campaign
funded by the American Medical Association, insurers, tobacco
companies, auto manufacturers and others to strip consumers – but,
notably, not businesses – of their legal rights. Since big
business dominates the political system, the civil justice system is
the one branch of government in which ordinary citizens can hope to
get a fair shake. That’s why these entities are hell-bent on
slamming the courthouse door shut. [eRiposte
emphasis]
[eRiposte note: Read the
entire piece and you'll see example after example after example of
false or erroneous reporting dramatically skewed towards the
conservative viewpoint]
Stephanie Mencimer also wrote
about this in the Washington Monthly about "How the GOP
milks a bogus doctors' insurance crisis" and another
article, covering the Newsweek cover story. This
link provides a rebuttal from Stuart Taylor Jr. and Mencimer's
response to Taylor's rebuttal showing how misleading Taylor's claims
were.
B.
Spreading myths about trends in the number of filed malpractice
lawsuits and their associated costs
Public Citizen's report
provides an example:
Newsweek’s
Article Contains Major Factual Inaccuracies About the Legal
System and Lawsuits
The article made numerous factual assertions that portrayed the
legal system in a very negative light and added credibility to the
outrageous claims being made by the authors. No sources were given
for the claims. For good reason – they are erroneous.
Tort filings in
state courts were down from 1992-2001:
The National Center for State Courts has done a study of
filings in state courts from 1992-2001, which found:
-
In the 30
states that keep track of such data, whose populations
comprise 74 percent of the U.S. total, tort filings were down
9 percent.8
-
In the 17
states that keep track of such data, whose populations
comprise 53 percent of the U.S. total, automobile filings were
down 14 percent.9
-
Automobile
filings comprised 60 percent of the tort filings in 2001.10
- In the nine states that kept track of such data from 1992
and the 17 that kept track since 1997, medical malpractice
filings were down 1 percent adjusted for population growth
(there are increases without adjusting for population growth).11
Tort filings in
federal courts are down:
The Federal Judicial Caseload Statistics, kept by the
Administrative Office of the U.S. Courts, show downward trends in
both personal injury and civil filings from 1998-2002.
-
[NEWSWEEK] "The
cost to society cannot be measured just in money, though the
bill is enormous, an estimated $200 billion a year, more than
half of it for legal fees and costs that could be used to hire
more police or firefighters or teachers…" [p. 45]
This estimate comes
from a study by an insurance industry consulting firm,
Tillinghast-Towers Perrin, which estimated that in 2001 the
"cost" of the U.S. tort system was $205 billion. 14
Such an analysis is highly misleading for several reasons. First,
35 percent of this study’s puffed-up cost estimate are for
insurance industry overhead (21 percent) and defense costs (14
percent). Much of this insurance overhead would exist anyway
because it is unrelated to lawsuits (setting rates, administering
policies, marketing, profit taking, etc.) or is a result of
negligence by insurance companies’ clients.
Second, 46 percent of the "costs" are for payments made
to injured plaintiffs for lost wages, medical care, and pain and
suffering. These costs are the result of injuries caused by
defendants and would be borne by society anyway either through
government programs, charities or absorbed by the victims and
their families and friends. Recently, the Congressional Budget
Office (CBO) suggested that these "transfer payments" to
compensate victims are not in fact "costs" because they
"do not involve any use of resources to produce goods or
services."15 By mischaracterizing compensation as
costs, Tillinghast inflated by nearly double its sensational $205
billion estimate, providing the raw material for a misleading
public relations campaign on a so-called "tort tax."
Finally, Tillinghast acknowledges that the tort system provides
indirect benefits to society that are not measured in the study.
These include acting as a deterrent to unsafe practices and
products.16 While we don’t encourage a monetaristic
view of this issue, it’s quite likely that the benefits of
lawsuits – in terms of forcing changes to defective products and
making professionals alter their harmful actions – result in
much larger savings (in terms of lives saved and injuries
prevented) than the tort system costs. This prevention argument is
best illustrated by a recent study by the Bush White House
examining the costs and benefits of 107 federal regulations –
primarily health, safety and environmental protections –
covering a 10-year period. The analysis found that: "The
estimated total annual quantified benefits of these rules range
from $146 billion to $230 billion, while the estimated total
annual quantified costs range from $36 billion to $42
billion."17
The source of this
research was a 1996 study by Mark McClellan – a Bush
administration economic advisor in 2001 and now head of the U.S.
Food and Drug Administration. Both the General Accounting Office
(GAO) and the Congressional Budget Office have derided his
assertions. Although the study found that tort law changes could
deliver 5 to 9 percent in savings on defensive medicine, the GAO
noted that "this study did not control for other factors that
can affect hospital costs, such as the extent of managed care
penetration in different areas. When controlling for managed care
penetration in a 2000 follow-up study, the same researchers found
that the reductions in hospital expenditures attributable to
direct tort law changes dropped to about 4 percent. Moreover,
preliminary findings from a 2003 study [by CBO] that replicated
and expanded the scope of these studies to include Medicare
patients treated for a broader set of conditions failed to find
any impact of state tort laws on medical spending."18
When CBO replicated and expanded the study in 2003, its results
contradicted McClellan’s 1996 study: "CBO found no effect
of tort controls on medical spending in an analysis that
considered a broader set of ailments. Moreover, using a different
data set, CBO could find no statistically significant difference
in per capita health care spending between states with and without
malpractice tort limits. …A few studies have observed reductions
in health care spending correlated with changes in tort law, but
that research was based largely on a narrow part of the population
and considered only spending for a small number of ailments."19
"Malpractice costs account for a very small fraction of total
health care spending; even a very large reduction in malpractice
costs would have a relatively small effect on total health plan
premiums. In addition, some of the savings leading to lower
medical malpractice premiums – those savings arising from
changes in the treatment of collateral-source benefits – would
represent a shift in costs from medical malpractice insurance to
health insurance."20
-
[NEWSWEEK] "Various
studies have shown that the vast majority of medical errors go
undetected by patients and that nine out of 10 are
never compensated. (And when patients do sue, their malpractice
allegations are unfounded in as many as 80 percent of the cases,
other studies suggest; [medical malpractice] insurance companies
pay to settle the vast majority of claims anyway, rather than
risk a big hit.)" [p. 48]
We agree that most
medical errors go undetected by patients and that too few patients
are ever compensated. If anything, such conditions require
strengthening the civil justice system, not taking away
patients’ legal rights as Howard proposes.
With regard to whether malpractice allegations are unfounded, in a
study of closed medical malpractice claims, University of
Washington Medical School researchers found no settlements
paid or damages awarded in "cases in which there were no
significant deviations from prevailing standards of care. For
those cases in which payments were made, there was general
consensus among insurance company staff, medical experts, defense
attorneys and the physician defendants that some lapse in the
standard of care contributed to the outcome."21
With regard to the claim that insurance companies pay to settle
the vast majority of claims, insurance industry data refute such a
claim. According to the Physician Insurers Association of America
(PIAA), which through 60 member insurance companies covers 60
percent of America’s private practice physicians,22
only 33 percent of claims are paid. This figure is readily
ascertainable by reading PIAA’s testimony before Congress
earlier this year.23
When Professor Neal Vidmar, who is at the North Carolina Medical
Malpractice Project at Duke University Law School, performed a
study of medical malpractice lawsuits he found that, "In
interviews with liability insurers that I undertook, the most
consistent theme from them was: ‘We do not settle frivolous
cases!’ . . . [Insurers’] policy on frivolous cases is based
on the belief that if they ever begin to settle cases just to make
them go away, their credibility will be destroyed and this will
encourage more litigation."24
C.
Exaggerating the size of malpractice awards
Kevin
Drum, writing at Calpundit, pointed out a prominent example:
And while we're on the subject of
torts, remember that $28
billion verdict in a local Orange County smoking suit against Philip
Morris? That was only two months ago and the award has already
been slashed
to $28 million. That's a 99.9% cut.
This is pretty typical of "runaway jury" awards and
highlights one of the problems with media coverage of court cases.
The original verdict was widely covered and got front page
treatment, but the reduction is likely to be either completely
ignored or else buried on an inside page. And so the urban legend of
the $28 billion smoking award will take on the status of urban fact.
The appeal, of course, is yet to come, and will probably see the
award either thrown out or else reduced yet again. But that probably
won't even rate a wire service dispatch, let alone the front page.
Off the Kuff has more:
Oh, and if you think that there are plenty of
other cases that show abuse of the system even if this one isn't so
bad, think
again:
Huge punitive damage awards, for example, have become everyday
events, right? Actually, a study of courts in the nation's 75
largest counties conducted by the National Center for State Courts
found that only 364 of 762,000 cases ended in punitive damages, or
0.047 percent.
OK, but isn't it true that more and more liability claims are
filed every year? Actually, a study of 16 states by the same
center showed that the number of liability suits has declined by 9
percent since 1986.
As with many things, the facts often belie the
hype. Don't you believe it.
Dwight Meredith noted
the following (at Wampum):
In Scare
Tactics, I argued that the media and the tort reform lobby had
used scare tactics to blow the issue of tort reform way out of
perspective. Those tactics include the use of inaccurate anecdotes
and outright misrepresentation to present a picture of the tort
system that is downright scary. It is little wonder that many people
think the civil justice system is out of control when they are
constantly bombarded with inaccurate information about the results
of that system.
In comments, Jane Galt of Asymmetrical
Information took exception to my post...
When discussing tort reform, and particularly
medical malpractice reform, it is helpful to know the size of the
problem. How much money is paid out each year in medical malpractice
judgments and settlements? That would seem to be a basic fact that
needs to be established at the beginning of a public policy debate.
After all, if we do not know the size of a problem, how can we ever
decide on a solution?
The tort reform lobby and the scare tactic media
almost never report that basic fact. If you do not believe me, go to
Google News or
Google and try
to find the answer...
In my post, I noted that medical malpractice
payments total a little over $4.2 billion per year. As I have
previously noted,
the total of all sums paid out in medical malpractice settlements
and judgments is approximately the same as Estee
Lauder’s sales of makeup. The total of payments in 2002 would
have paid interest on the national debt for about eight
days.
Jane Galt thought that I was spinning that number
by including payments made pursuant to judgments but not including
settlements. Jane wrote:
It's much like, for example, choosing a dollar
figure for litigation costs that includes only verdicts, when
something like 95% of cases settle out of court.
Jane, apparently, thinks that $4.2 billion per year
is the amount paid out in medical malpractice judgments and that
additional amounts are paid out in settlements.
The amount of money paid out in medical malpractice cases is not a
matter of opinion. It is a fact. Was my figure of $4.2 billion
accurate or is Jane correct that I was just trying to spin the
debate by failing to include the amounts paid in settlements?
Federal law requires that payments in medical
malpractice cases be reported to the National
Practitioners Data Bank. Let me emphasis that the NPDB collects
data on all payments in medical malpractice cases including both
judgments and settlements.
Last summer, Kevin
Drum posted the NPDB information on payments for the period from
1990 through 2002. (Thanks Kevin). That data can be found here.
For the year 2002, the total of all payments (in
2002 dollars) made pursuant to medical malpractice judgments
was $228,726,987. Jane thought that number was approximately $4
billion. She was off in her reckoning by more than a factor of
sixteen.
The total of all payments made in 2002 pursuant to
med mal settlements was $3,981,304,551. The total of both
judgments and settlements was $4,210,031,538 which, of course, is
where the reference in my post to “a little over $4 billion per
year” came from...
If the public knew that the payouts in medical
malpractice suits is about one tenth of the cost to the public of farm
subsidies (including both direct payments and higher food
prices), the tort reform movement could lose a lot of steam...
See Public Citizen's report
for more data.
D.
Rarely covering a key reason for malpractice lawsuits, i.e.,
malpractice Dwight
Meredith (P.L.A.):
...A 1999 study by the Institute of Medicine, an arm
of the National Academy of Sciences, blamed medical mistakes for the
deaths of 44,000 to 98,000 hospitalized Americans each year...
Kevin
Drum (Washington Monthly):
MALPRACTICE....William
Falk highlights a new report on medical care in America:
A new survey of data from 50 states concluded that medical
errors are killing 195,000 people a year in American hospitals —
double the previous estimate. HealthGrades, a private company that
rates hospitals for insurers and health plans, said that if
hospital errors were included on the nation's list of the leading
causes of death, they would show up as No. 6 — ahead of
diabetes, pneumonia and Alzheimer's.
Over at Aspasia, Jonathan, who is four weeks into his surgery
clerkship, responds
to this news:
This is curious, because just last night I was telling a friend
how there's "no way" malpractice is as uncommon as
popularly imagined. Four weeks of surgery and I've seen shit
that's turned me white. Now if someone did a study looking at
non-lethal complications, just imagine what that number would be.
So maybe ambulance chasing lawyers aren't the biggest cause of
malpractice suits after all. Maybe malpractice is.
Kevin
Drum (Washington Monthly):
Here's an interesting tidbit in the debate about medical
malpractice: a new
study that suggests one of the causes of malpractice lawsuits is
— surprise! — malpractice.
David Phillips of UC San Diego examined all deaths from
medication errors between 1979 and 2000 and discovered that deaths
spike around the beginning of the month:
“Government assistance payments to the old, the sick and the
poor are typically received at the beginning of each month.
Because of this, there is a beginning of the month spike in
purchases of prescription medicines,” Phillips says. “Pharmacy
workloads go up and — in line with both evidence and experience
— error rates go up as well. Our data suggest that the mortality
spike occurs at least partly because of this phenomenon.”
....The beginning of the month mortality spike was particularly
pronounced in people for whom the mistakes proved rapidly fatal
— those who were dead on arrival at a hospital, died in the
emergency department or as outpatients. In this category, deaths
jumped by 25 percent above normal.
In other words, part of the reason for the increased death rate
is that when workloads increase at the beginning of each months,
many pharmacies react by rushing orders instead of increasing
staffing levels.
This is far from the whole story, of course, but it's definitely
part of it: one way to cut down on medical malpractice suits is to cut
down on medical malpractice. And the sad fact is that we have
some pretty good ideas about how to do this, too. If only it got as
much attention and lobbying as the insurance industry brings to bear
on tort reform, we could cut down on both malpractice and
malpractice suits. Quite a concept, eh?
Stephanie Mencimer has also pointed
out in Washington Monthly how some of the prominent spokespersons
against malpractice lawsuits have a personal history of serial
malpractice:
When he went out on strike last January, Dr. Robert
Zaleski had his 15 minutes of fame. The Wheeling, W. Va., orthopedic
surgeon was one of two dozen surgeons to walk off the job in January
to protest his state's high costs of malpractice insurance. Arguing
that "frivolous lawsuits" were driving up insurance
premiums and forcing physicians to leave the state, Zaleski and his
colleagues threatened to stay out for 30 days unless the legislature
passed a bill that would cap non-economic damages in such suits at
$250,000. As the walkout turned into a national story, Zaleski
became one of its most visible faces, making the rounds of TV news
shows and telling CNN, "I would certainly jump in front of a
bus if I could to continue to serve my patients as I have for 23
years." Just a few weeks later, Zaleski's mug shot appeared
with those of five other doctors in The New York Times Magazine,
where he claimed to be "on the brink" of moving out of
state because of high insurance rates and lawsuits.
Zaleski and his colleagues are the leading edge of a
much broader movement. All across the country, doctors like him are
telling reporters, legislators, and even their patients that
frivolous lawsuits are driving up insurance costs and driving
doctors out of practice and out of state, threatening access to
care. They've mobilized around state legislation to limit
malpractice lawsuits and linked arms with President Bush and
Republicans in Congress who have been pushing similar bills in
Washington. Indeed, Zaleski himself was even personally invited to
attend a speech President Bush delivered in Scranton, Pa., where he
railed against the threat to patient care posed by out-of-control
lawsuits.
Upon closer inspection, however, it appears that Zaleski may be
more a source of the problem than a victim of it. Between 1987 and
2002, according to the West Virginia Board of Medicine, patients
filed 14 lawsuits against Zaleski, eight of which resulted in
payouts that together came to $1.7 million. By contrast, according
to a Public Citizen study, only 1 percent of the state's doctors
made five or more malpractice payouts over the past decade. And
while Zaleski says the settlement figures are misleading because
they also include defense costs, his record is hardly squeaky clean.
In a 1985 lawsuit (one not among the 14 reported to the Board of
Medicine), he admitted in a deposition to being addicted to
prescription painkillers for a substantial part of the time that he
was operating on people in the early 1980s. Not only was he a drug
addict, but to maintain his Percodan habit, Zaleski allegedly wrote
prescriptions for other local addicts, who filled them and kicked
back some pills to the doctor, according to court documents that
include copies of the prescriptions and depositions from some of the
addicts.
Yet even though a suspicious police officer reported him to the
state medical board, Zaleski was never disciplined by his fellow
physicians. (He says he does not remember the specifics of the case,
and while he acknowledges a past substance-abuse problem, insists
that he has been clean and sober for 21 years.) Given this history,
the real scandal may not be how high Zaleski's insurance premiums
are, but the fact that he can get insurance at all. Zaleski's
malpractice record may have been extreme, but it was not unusual
among the doctors who walked out of West Virginia hospitals in
January. According to a Charleston Gazette report, nine of the 18
doctors striking at Wheeling Hospital, including Zaleski, had cost
their insurers more than $6 million in malpractice settlements and
judgments. At least some of the suits don't seem to merit the
adjective "frivolous." In one case, a doctor had left a
clip on an artery, eventually forcing the patient to have a liver
transplant. In another, a surgeon cut into his patient's stomach
wall during surgery, causing a massive, fatal infection. Indeed, a
number of those doctors leading the protest movement include former
drug addicts, felons, doctors whose licenses have been revoked, and
many, many others who get sued a lot--and far more than most of
their colleagues.
Not all the physicians angry about malpractice lawsuits and high
insurance rates have such checkered histories as Dr. Zaleski. Many
ethical and responsible doctors say the system invites frivolous
litigation, subjecting them to considerable hassle and anxiety. One
result, they argue, is an increase in "defensive
medicine"--when doctors schedule too many tests, just to be
safe--which contributes to higher health care costs for everybody.
But even the respected General Accounting Office (GAO) has recently
concluded that there's little evidence to back the striking doctors'
main claim, which is that lawsuits are forcing many of them to
abandon the practice of medicine or to avoid high-risk procedures.
And while there's no doubt that malpractice insurance is getting
more expensive across the board--about 30 to 40 percent, on average,
during the last three years--this increase is largely due to the
ailing stock market and poor business practices in a virtually
unregulated industry. As a result, there's no reason to think that
capping jury awards would bring premiums down, a fact the insurance
industry itself acknowledges. Robert E. White Jr., president of
First Professional Insurance Company, the leading medical
malpractice insurer in Florida, told the Palm Beach Post in January,
"No responsible insurer can cut its rates after a [medical
malpractice] bill passes." The one surefire way to bring down
the number of big-payout lawsuits is to reduce the number of those
doctors who inspire most of them. But state medical boards--which
are run by doctors--have been notoriously reluctant to aggressively
police their own.
...
While the jury verdicts aren't nearly as outrageous as the
doctors make them out to be, there have been a few whoppers in Ohio
County--albeit usually in cases involving egregious malpractice--and
these seem to be what really riled the doctors. The case that really
sticks in their craw is that of Dr. Fred Payne. Like his colleague
Robert Zaleski, Payne had been sued a dozen times over the past
decade, and had paid out settlements of at least $7.3 million,
according to the Charleston Gazette. In 1998, Payne operated
to repair a minor spine injury on a spry 76-year-old World War II
veteran who had fallen out of a tree. On his way to the operating
room, he ran into a medical-equipment salesman who encouraged him to
try out a new type of clamp. The patient hadn't consented to the
procedure, nor had Payne ever even seen the tool used or studied its
use; but he tried it out anyway. After Payne left the hospital, a
nurse paged him to let him know that the patient wasn't doing well
in recovery. An examination found that the clamp had slipped into
the spinal canal and paralyzed the man from the neck down--a
hideously worse injury than he had initially sustained. He died a
year later. A lawsuit over the case, which charged that the man
didn't even need surgery in the first place, was settled for $4.6
million.
The Ohio Valley Medical Center agreed to pay $3.5 million of the
settlement, but insisted that Payne was responsible for the rest.
But Payne's minimal insurance didn't cover the balance, so the judge
on the case, Fred Risovich II, insisted that he use his personal
assets to pay his share of the settlement, a rare move in a
malpractice case. "The negligence was so gross, and the injury
so bad that justice required that he pay something," says
Risovich. Payne has not practiced medicine since.
Doctors in Wheeling had not been particularly politically active
before this, but they were outraged by the case--not by Payne's
behavior, but by Risovich's. The doctors organized to oust him in a
nasty campaign that would foreshadow the tenor of the battle over
malpractice suit caps two years later. According to Risovich and
people in the local medical community, during the 2000 judicial
race, anonymous flyers appeared on the windshields of cars at the
local supermarket, accusing Risovich of beating his wife and being a
racist. Risovich says one night someone set fire to his campaign
materials in his front yard and urinated on his stoop. "Someone
sent investigators to call my children at college, asked my
stepchildren if they'd ever been molested. It was horrible,"
says Risovich. Dozens of Republican physicians changed their party
affiliation so they could vote against Risovich in the Democratic
primary, and many today take credit for his crushing defeat.
Dwight Meredith has more
examples at P.L.A. of doctors committing serial malpractice.
E.
Rarely covering two of the main reasons for high malpractice
insurance rates in some area/states - insurance industry
losses/practices and serial malpractice by a small percentage of
doctors Public
Citizen:
Most malpractice is caused by just a small number of doctors.
Public Citizen has learned by analyzing data in the National
Practitioner Data Bank that in Washington, just 3.5 percent of the
state’s doctors, all of whom have made two or more malpractice
payouts, have been responsible for 43 percent of all payouts since
September 1990.
In Public Citizen’s annual ranking of state medical boards,
Washington state’s medical board came in 41st – one of the
worst. That reflects the rate of serious disciplinary actions (such
as license revocations, surrenders, suspensions and probation or
restrictions) per 1,000 doctors in the state.
Mencimer:
Not all the physicians angry about malpractice
lawsuits and high insurance rates have such checkered histories as
Dr. Zaleski. Many ethical and responsible doctors say the system
invites frivolous litigation, subjecting them to considerable hassle
and anxiety. One result, they argue, is an increase in
"defensive medicine"--when doctors schedule too many
tests, just to be safe--which contributes to higher health care
costs for everybody. But even the respected General Accounting
Office (GAO) has recently concluded that there's little evidence to
back the striking doctors' main claim, which is that lawsuits are
forcing many of them to abandon the practice of medicine or to avoid
high-risk procedures. And while there's no doubt that malpractice
insurance is getting more expensive across the board--about 30 to 40
percent, on average, during the last three years--this increase is
largely due to the ailing stock market and poor business practices
in a virtually unregulated industry. As a result, there's no reason
to think that capping jury awards would bring premiums down, a fact
the insurance industry itself acknowledges. Robert E. White Jr.,
president of First Professional Insurance Company, the leading
medical malpractice insurer in Florida, told the Palm Beach Post in
January, "No responsible insurer can cut its rates after a
[medical malpractice] bill passes." The one surefire way to
bring down the number of big-payout lawsuits is to reduce the number
of those doctors who inspire most of them. But state medical
boards--which are run by doctors--have been notoriously reluctant to
aggressively police their own.
More here,
here,
here,
here
and here. F.
Rarely pointing out that
(i) damage caps will act to deter meritorious lawsuits rather than
reduce malpractice premiums, which they rarely do
(ii) there are much better ways to reduce frivolous lawsuits, allow
meritorious lawsuits and reduce malpractice insurance rates
Off the Kuff's post
on Texas is a good place to start:
This
would be funny if it weren't so utterly pathetic.
House lawmakers sent a stern message to insurance companies
Thursday: Medical malpractice lawsuit reforms passed last year
were meant to help doctors -- not boost profits.
Republicans and Democrats who supported the legislation
suggested that lawmakers might consider mandatory rate rollbacks
if doctors don't get significant rate relief soon.
Lawmakers nearly approved a rate rollback last year but stopped
short when insurance companies promised reductions.
"Some of us put ourselves way out on the line for our
doctors," said Rep. Joe Nixon, R-Houston, author of the bill
and the constitutional amendment that allows a cap on jury awards
and limits insurance companies' liability.
"Profits for (the companies) is not what we
intended."
Imagine that. The Lege passed a law that reduced the costs of a
bunch of profit-maximizing firms, and they had the gall to go and
use it to maximize their profits. Maybe next time, the legislation
ought to match the intent, you know?
This
is even more precious.
The House Civil Practices Committee on Thursday heard updates on
the fallout from a sweeping lawsuit reform bill enacted after a
bitter legislative struggle last year.
[...]
At the hearing, [State Rep. Patrick] Rose sharply challenged
[State Insurnce Commissioner Jose] Montemayor over a letter the
commissioner wrote to the committee in March 2003, when emotions
over the reforms were approaching white heat.
Montemayor wrote that if the reforms were enacted, "this
would translate to a 17 percent to 19 percent reduction in
rates."
Montemayor's projections were cited by many lawmakers and
reform supporters, especially during the campaign that persuaded
voters to approve damage-award caps.
But Montemayor testified Thursday that his letter was not meant
to promise that rates actually would go down by that or any
amount. The numbers were theoretical and did not allow for a surge
in malpractice lawsuits filed before the new laws took effect,
Montemayor said.
Yo, Jose: The "bad intelligence" defense works best if you
aren't the actual source of that intelligence. You said rates would
go down. They haven't. Maybe they will eventually - and
"eventually", I remind you, is not what you promised - and
maybe if they do this ridiculous piece of legislation will be partly
responsible for it. But the bottom line is, you were wrong. Now
admit it.
Dwight Meredith's post
at P.L.A. provides additional perspective:
In this post,
we noted that medical malpractice premiums for Doctors were about 3%
of revenue. On average, Doctors pay less for malpractice coverage
than rent on their offices.
In comments, PLA reader GP took issue with our post. GP raised two
issues that need to be addressed. The first issue involves Doctors
leaving practice because of high malpractice premiums. As GP wrote:
If you live in Las Vegas and you can't find an OB because they've
all left town, will you wave these stats around when you are in
labor in a crowded ER? If you have a severe head injury, will your
economic figures be of any comfort to your family when the ER
physician tells them they need to fly you somewhere else because
the last neurosurgeon moved away a month ago?
GP is correct that a bunch of statistics will be cold comfort if one
cannot find an Emergency Room Doctor when one is needed. He (or she)
is also correct that Nevada is experiencing difficulty finding
general surgeons to man the ERs.
Via, the Bloviator,
we noted this article
in the Las Vegas Review Journal.
Desert Springs Hospital has not had general surgeons available to
care for emergency room patients this week and doctors who operate
at the facility say it's a blow to the quality of health care in
the Las Vegas Valley.
Hospital administrators said Monday the facility still had enough
general surgeons to operate normally, but Tuesday in a written
statement acknowledged that the hospital lacks surgeons to provide
immediate care to emergency room patients.
An emergency room schedule from the hospital also indicates that
there have been no general surgeons on call since Sunday. No
surgeons are scheduled to be on call for the remainder of this
month and all of April, according to the hospital's schedule…
Currently, the emergency department at Desert Springs is closed to
patients with broken bones because the hospital lost nearly all of
its orthopedic surgeons in January.
We agree with GP that the Nevada situation is terrible and needs to
be addressed. The problem with GP’s argument, however, is that Nevada
has already passed tort reform capping non-economic damages.
Last summer, Nevada passed a tort
reform measure. That law:
Places a $350,000 cap on noneconomic damages in medical
malpractice cases, creates a shorter statute of limitations and
establishes a standard that holds physicians liable only for the
damages for which they are responsible.
The law also puts a $50,000 limit on damages for hospitals and
physicians who treat trauma patients, creates a medical error
reporting system, requires more training for judges handling
medical malpractice cases and holds lawyers responsible for costs
of frivolous lawsuits.
If a cap of $50,000 on damages against doctors treating trauma
patients still leaves Nevada hospitals without general surgeons to
staff the Emergency Rooms, why does anyone think that the
President’s proposed cap of $250,000 will solve the problem?
Our post also noted that some specialties such as obstetricians paid
higher premiums for malpractice coverage. That may make sense in
that a mistake by an OB can cause permanent damage to a newborn
resulting in very expensive life long disability. On average, we
noted, OB/GNYs nationwide pay 6.7% of their revenue for coverage.
GP took exception to that statistic as well:
although OB-GYN's nationwide may have a malpractice % of revenue
rate of 6.7%, in Florida, even if they are pulling in a million
dollars a year, their % of revenue rate is 20%.
Many media reports note that in South Florida, OBs are charged
$200,000 for malpractice coverage. The problem with that argument is
that Florida has already enacted tort reform for injuries caused
by negligence in the birth process.
Under Florida law,
non-economic damages are already capped at $100,000 in any instance
in which, during birth, an infant sustains a brain or spinal cord
injury caused by oxygen deprivation or mechanical injury and the
infant is rendered permanently and substantially mentally or
physically impaired.
If a damages cap would reduce the medical malpractice premiums for
OBs in Florida, they would not now be paying $200,000 premiums.
The President’s proposal will not keep Doctors from leaving
Emergency Rooms. It will not lower malpractice premiums for OBs.
Exactly what is the purpose of his proposal?
Kevin
Drum (Washington Monthly) notes:
A few days ago I wrote a post about a
study on medical malpractice premiums done by Weiss Ratings. You
should read that post before you go any further in this one.
...
-
The statistic you want to look at is average malpractice
payout per doctor, and to take into account the possible effect
of a small number of very large payouts, you want to use the
mean, not the median. Has that number gone up faster or slower
in states with payout caps?
-
Answer: in states with caps, it's gone up 24% and in states
without caps it's gone up 54%. So caps appear to have had some
effect on keeping down payouts. [eRiposte
note: As I have stated before, such caps make it possible to
suppress meritorious lawsuits.]
-
OK, but how about the cost of premiums compared to the
average payout per doctor? You'd expect that the higher the
average payout, the higher the premium. So let's take a look at
the ratio of premiums to payouts.
-
It's just the opposite of what you'd expect: in states with
caps, premiums are higher, and the ratio is increasing faster
than in states without caps.
The following links/posts provide more details and
proposals: Dwight
Meredith (P.L.A.), Dwight
Meredith (P.L.A.), Dwight
Meredith (P.L.A.), Charles
Kuffner (Off The Kuff), Stephanie
Mencimer (Washington Monthly), Dwight
Meredith (P.L.A.)
G.
Rarely mentioning that businesses are among the largest filers of
actual (and frivolous) lawsuits, and that the Republican party has
no intent of making them accountable for it
Public
Citizen:
American businesses file four times as many lawsuits
as do individuals represented by trial attorneys, and they are
penalized by judges much more often for pursuing frivolous
litigation, according to a report issued today by Public Citizen.
The survey of case filings in two states (Arkansas
and Mississippi) and two local jurisdictions (Cook County, Ill., and
Philadelphia, Pa.) in 2001 found that businesses were 3.3 to 5.8
times more likely to file lawsuits than were individuals. This
comes as businesses and politicians are campaigning to limit
citizens’ rights to sue over everything from medical malpractice
damages to defective products. By way of comparison, the number of
American consumers (281 million) outnumbers the number of businesses
in America (7 million) by 40 times.
The report also found that businesses and their
attorneys were 69 percent more likely than individual tort
plaintiffs and their attorneys to be sanctioned by federal judges
for filing frivolous claims or defenses. The report, Frequent
Filers: Corporate Hypocrisy in Accessing the Courts, is
available by clicking
here.
“Corporations think America is too litigious
only when they are on the receiving end of a lawsuit,” said Joan
Claybrook, president of Public Citizen. “But when they feel
aggrieved, businesses are far more likely to take their beef to
court than are consumers.”
Dwight
Meredith:
I have previously commented that the popular notion that plaintiffs
receive large judgments and settlements as a result of frivolous
suits is largely myth.
That is not to say that frivolous suits are not filed. Many are
filed. My point is that overwhelming majority of frivolous suits
just lose. They lose on motions to dismiss. They lose at summary
judgment. They suffer directed verdicts. They lose before juries and
they lose on appeal.
There is one circumstance in which frivolous suits can lose and the
plaintiff still win. That circumstance is when the objective of the
suit is other than actually prevailing on the merits in court.
For instance, pharmaceutical companies have a monopoly on patented
drugs for a specified period of time. One quirk in the law is that
if a company sues a generic manufacturer for patent infringement,
the patent holder gets an automatic 30 month extension of the patent
by simply filing suit regardless of whether or not the suit has
merit. See this NY Times editorial:
Some brand-name manufacturers have been extending the effective
lives of their patents by tactics that are underhanded at best and
appear fraudulent at worst.
Ordinarily manufacturers are granted patents that give them a
monopoly for 20 years, which is ample time to recover development
costs and make a profit before generic competitors are allowed on
the market. But through loopholes in current law, the companies
can get an automatic 30-month extension simply by filing suit
against a generic manufacturer asserting that the generic product
will infringe secondary patents on packaging and other minor
items.
In some cases, manufacturers have been able to get even longer
extensions by filing multiple patent-infringement suits. A study
by the Federal Trade Commission issued in July cited eight cases
since 1982 where brand-name companies got additional delays,
beyond the first 30-day stay, ranging from 4 to 40 months. In the
four cases that have reached a court decision, the brand-name
manufacturers lost each time, suggesting that their suits were
little more than legal ploys to gain additional time to reap
monopoly profits, not serious litigation.
The purpose of those suits is not to win the patent infringement
case but rather to extend the life of the patent on profitable
drugs. As long as the litigation costs are lower than the profits
earned by the extension of the monopoly, the suit makes economic
sense regardless of whether it has legal or factual merit.
Via Ampersand
I learned of another suit that may be frivolous legally but might
succeed in accomplishing other objectives.
Oakhurst Dairy of Portland, Maine chooses not to sell milk from cows
that have been given artificial hormones.
Oakhurst requires
each of its milk suppliers to sign an affidavit swearing that they
do not give their cattle artificial hormones. The affidavit must be
updated every six months. Oakhurst pays a premium for milk from cows
that are not given hormones. Last year, the premium amounted to
about half a million dollars.
Oakhurst advertises the fact that its milk comes from cows that are
not given artificial hormones. Oakhurst’s milk has a label
proclaiming “"Our Farmers' Pledge: No Artificial Growth
Hormones."
Oakhurst’s policy was implemented in reaction to consumer
preference. Oakhurst’s President is quoted
as follows:
Consumers have let us know since the advent of these artificial
growth hormones that they don't want to have to worry about
(them). If consumers tell us they don't want anything added to the
milk, or if they have a concern about something, we're going to
respond to them as a company.
Oakhurst had revenues of about $85 million in 2002. It employs 240
people. It is not a large company.
Monsanto
is a large company. According to its 2002 Annual
Report, Monsanto had revenue in excess of $4.6 billion.
Among Monsanto’s products is an artificial hormone given to cattle
to help increase milk production.
Monsanto took exception to Oakhurst’s “no artificial hormone”
policy and filed suit against Oakhurst. According to one report:
The suit against Oakhurst claims unfair competition, unfair
business practices and interference with advantageous business
relationships. According to the suit, the business relationships
between Monsanto and dairy producers who use the artificial growth
hormone have suffered because the farmers will stop using the
treatments.
Another report notes:
Monsanto claims that Oakhurst is misleading customers with labels
and a marketing effort that includes the statement, "Our
farmers' pledge: No artificial growth hormones."
Monsanto said Oakhurst's slogan implies there's something wrong
with milk produced by cows that have been injected with the growth
hormones, even though the federal Food and Drug Administration has
found that the milk is not affected by the hormones.
Does giving dairy cows Bovine Growth Hormone make their milk any
less safe? I do not have a clue. The FDA approved the use of BGH
here but it is banned in Canada and Europe.
An Oakhurst spokesman makes clear that he doesn’t know either:
"We have said from the beginning that we make no claims to
understand the science involved with artificial growth
hormones," he said. "We're in the business of marketing
milk, not Monsanto's drugs."
I think that Monsanto’s claim is frivolous. First, it has not been
alleged that Oakhurst’s claim that its milk is from dairy cows not
injected with artificial hormones is false. Thus, the statement on
its milk jugs is perfectly accurate. Secondly, Oakhurst makes no
claims that its milk is safer than milk from cattle treated with BGH.
It makes no mention of Monsanto or any Monsanto product.
Oakhurst is simply responding to customer preference. It is using
advertising to accurately state the nature of its product. It is
doing so in an effort to distinguish its product from other, similar
products. That is what advertising is supposed to do. It is hard for
me to see how Oakhurst did anything other than promote its product
through truthful advertising.
I predict that Monsanto’s suit will go down in flames if Oakhurst
chooses to fight.
The amount of additional revenue Monsanto would earn if Oakhurst
accepted milk from dairy cows treated with BGH is tiny. The effect
of such revenue on the bottom line of a company the size of Monsanto
is infinitesimal. Why would Monsanto incur the costs of suing to
stop one small dairy in Maine from advertising artificial hormone
free milk?
One report
suggests an answer:
To some Maine dairy farmers, there's clear reason why Monsanto
Corp. sued Oakhurst Dairy last week over its marketing of milk
produced without artificial hormones: Monsanto is staging a
last-ditch effort to save a product that seems to be losing favor
among New England farmers and consumers alike.
"They're doing this out of desperation," said John
Nutting, a dairy farmer from Leeds and former state legislator.
"Most of us farmers don't want to do anything to cause
concerns among consumers." ...
The chemical industry as a whole, though, worries that resistance
to bioengineered food products - rampant in Europe and some other
regions - could spread to the United States. American consumers
have been buying more products that are marketed as organic or
all-natural in recent years.
It appears that Monsanto may be using litigation not to vindicate
its rights but rather to intimidate. Monsanto may hope to gain not
from the success of the suit but rather from the costs such a suit
will impose on Oakhurst. The cost of winning the suit may be more
than Oakhurst can afford.
Monsanto may be trying to send a message not only to Oakhurst, but
also to many other small dairies. The message might be “If you
advertise that your milk is from hormone free cows, you will have to
spend a lot of money on lawyers instead of your business.” If that
is in fact Monsanto’s intent, the suit was brought for an improper
purpose.
Will Oakhurst spend the money to fight Monsanto? Oakhurst is clearly
concerned about litigation
costs:
Yet Bennett (President of Oakhurst) noted … what could be an
expensive legal battle with a much larger company.
"That's a $4 billion company and one that's losing a lot of
money," he said. "When a company that size brings a
lawsuit against a little company like ours, sure I'm concerned,
because who knows how much it will cost to litigate. But we feel
very strongly that we're doing the right thing."…
Frivolous litigation is often discussed only in the context of
personal injuries claims. Some frivolous and abusive litigation
arises in completely different contexts. To close, I would like to
pose one question.
Will a cap on damages for pain and suffering do anything whatsoever
to prevent the type of frivolous litigation exemplified by suits
designed only to extend drug patents or intimidate small dairies?
H.
Rarely pointing out the hypocrisy (and fakery) from Republicans
about the unreliability of civil juries compared to criminal juries,
when assessing guilt of defendants
Dwight
Meredith:
George W. Bush has a perverse view of juries. Some people think that
juries make essentially random decisions and have no trust in the
accuracy of jury verdicts. Others, myself included, think that
juries generally find the truth. George W. Bush is firmly in both
camps.
While Governor of Texas, Mr. Bush showed an abiding faith in the
unerring accuracy of jury decisions in death penalty cases. While
Governor more than 130 death penalty cases came before the Governor.
He granted a reprieve in exactly one case. Mr. Bush has said
that he is:
confident that every case that has come across my desk -- I'm
confident of the guilt of the person who committed the crime.
Salon reports
that Mr. Bush was so confident of the accuracy of jury decisions in
death penalty cases that as Governor he spent less than 30 minutes
reviewing each such case.
Mr. Bush has much less confidence in the accuracy of the verdicts of
civil juries. Mr. Bush has proposed that politicians and not jurors
decide the amount of non-economic damages due to the most seriously
injured victims of negligence.
Mr. Bush has said
that poor jury decisions are “devastating the practice of
medicine” and ruining many an “honest business.”
Mr. Bush’s belief in an almost Biblical inerrancy of death penalty
juries but his complete lack of faith in civil juries is exactly
backwards.
It is obvious, of course, that juries do not make perfect decisions.
One of the most important factors leading to jury error is imperfect
information. Like any decision-maker, jurors must rely on the
information available to them. Since jurors are prohibited from
performing independent investigations, they must rely on the
information presented by the parties through the lawyers.
If a teacher does not cover a subject included on a test, the
failure of the students to know the material is the fault of the
teacher and not the students. If lawyers do a poor job of
discovering and presenting information needed by a jury, it is the
fault of the lawyers and not the fault of the jury.
We often hear that persons convicted of crimes are later exonerated
by DNA evidence. Does anyone think that those convictions would have
occurred had the juries been provided with the exculpatory DNA
evidence at trial? The failure in those cases is in the quality of
the information presented to the jury and not in the jury’s
decision-making process.
The chances of a jury reaching a just result increase when both
sides have highly skilled lawyers with the resources needed to
investigate, prepare and present their side of the case. Conversely,
when one side has experienced, highly skilled lawyers with plenty of
resources and the other side has overworked lawyers of lesser skill
operating without needed resources, the chances of a just verdict
diminish.
The chances of both sides having highly skilled advocates with
adequate resources is far higher in big money civil cases than in
criminal cases. Thus, the chances that juries will make wrong
decisions as a result of having incomplete information is much
higher in the criminal arena than on the civil side.
Mr. Bush is concerned that juries are unfair to medical malpractice
and other civil defendants. The defense of big money civil cases
usually falls to insurance companies. Insurance companies have an
army of investigators, adjusters, jury selection consultants and
expert witnesses at their disposal. They have the resources to
conduct mock trials, focus groups and polling. They have a stable of
highly skilled, experienced trial counsel. It is highly improbable
that juries make incorrect decisions because civil defendants do a
poor job of investigating, preparing and presenting their side of
the case.
The situation in criminal cases is quite different. Criminal
defendants do not have the resources of huge insurance companies
supporting their case. The defense in criminal cases usually falls
either to overworked and underpaid public defenders or to less
experienced and less skilled lawyers willing to take low paying
criminal appointments.
In one Texas murder case, the defense attorney slept
through portions of the trial.
Some advocates point
out that the defense lawyers in Gary Graham’s Texas murder
trial failed to even question a number of witnesses. That simply
would not happen in a large civil case.
In Odell Barnes’ Texas
capital case, defense lawyers neglected to conduct any
scientific tests on crucial blood and semen evidence that allegedly
linked him to the crime. That would not happen in an important civil
trial.
Andrew Cantu was executed by the State of Texas despite the fact
that, as Salon
reports:
(He) ended up representing himself after two lawyers assigned to
his case withdrew and a third never even interviewed the
defendant, claiming he didn't know where to find him. (He
apparently didn't try death row.) Cantu was executed without
either state or federal habeas corpus review of his claims.
My experience is with civil juries. That experience convinces me
that juries almost always make good decisions. I have yet to try an
important civil case in which the defense lawyer slept through the
trial, failed to interview witnesses or failed to present crucial
evidence.
A person whose experience is only on the criminal side could feel
differently. Overworked and underpaid lawyers without the resources
to investigate, prepare and present a case may not give juries the
information needed to make an accurate decision. That increases the
likelihood of jury error.
George Bush’s blind faith in the inerrancy of death penalty juries
combined with his distrust of civil juries is perverse.
Public Citizens' response to Newsweek is also
appropriate:
Newsweek’s Proposed Solutions to the Problems It Claims
Exist Have no Basis in Experience
Newsweek not only has subscribed to Howard’s fallacious
claims about the state of the civil justice system, but Taylor’s
praise also extends to the "solution" for medical
malpractice claims proposed by Howard. Those proposals include
removing most claims "to a special court of medical
experts" where "expert judges" rather than juries
would review doctors’ decisions. This prescription is pushed by
Howard with no evidence to demonstrate that juries are not capable
of fairly deciding medical malpractice cases and with no real-world
experience to show that his "solutions" will work.
Physicians may not
be any more expert than juries when it comes to assessing
accountability. This idea was tested a decade ago, with
disappointing results. The American Society of Anesthesiologists
conducted an experiment, giving closed malpractice claim files to
pairs of neutral medical experts, to see if they agreed on whether
the standard of care was violated. These pairs of doctors
disagreed 38 percent of the time, eve n though the experts were
not the "hired guns" who typically testify at trials.25
The researchers concluded: "These observations indicate that
neutral experts (the reviews were conducted in a situation that
did not involve advocacy or financial compensation) commonly
disagree in their assessments when using the accepted standard of
reasonable and prudent care."
Jury Competence.
With regard to jury competence, empirical analysis of jury
verdicts suggests that juries take care in assessing pain and
suffering damages in medical malpractice cases by arriving at
awards that bear a reasonable relationship to the severity of the
harm suffered. This finding comes from a comprehensive study of
California jury verdicts in medical malpractice cases from 1993 to
1999. 26
The authors
examined jury verdicts in medical malpractice cases in California.
The authors reviewed 1,283 medical malpractice cases dating from
January 1, 1993, to March 10, 1999. These cases were drawn from
the Westlaw database for the California Jury Verdict Reporter. The
analysis showed a consistent relationship between the amount of
the verdict awards and the seriousness of the injury suffered by
the plaintiff. The authors concluded, "The results
reported above do not appear to support the contention that juries
are systematically over-compensating plaintiffs for pain and
suffering or emotional distress in medical malpractice
cases."27
Similar results were
obtained in a study by Neil Vidmar, a nationally recognized expert
on jury competence.28 His Medical Malpractice Project at
Duke University attempted to review every malpractice suit filed in
North Carolina between July 1, 1984, and June 30, 1987 – 895
cases. In compiling and analyzing these cases, Vidmar viewed court
files, conducted attorney interviews, and arranged to view the
closed file claims of three insurers. Information was also gathered
on an additional 300 cases between 1987 and 1990. The project
concluded that, "empirical evidence from multiple sources does
not support claims that medical malpractice juries are consistently
pro-plaintiff, incompetent, or unjustifiably generous in determining
awards."29
The results in
California and North Carolina are consistent with later research by
Professors Vidmar, Gross & Rose on medical malpractice verdicts
in New York and Florida that also documented a consistent
relationship between the amount of non-economic damages awarded and
the seriousness of the injury suffered by the plaintiff.30
In a study of jury
verdicts from New York City and the surrounding metropolitan areas,
jury verdicts increased with severity of injury except when death
occurred, which resulted in a substantially lower award.31
In death cases, it’s not surprising that the size of the award is
less than in a case of grave injury. In those who sustain grave
injuries, economic costs of medical treatment for that life-altering
injury are likely to be greater, and the pain and suffering would
exist over a longer time period than in the case of death. 32
Like New York,
Florida law requires juries to render a verdict that specifies the
individual amounts of special (economic) and general (non-economic)
damages. The authors reviewed 525 medical malpractice verdicts
reported by judges and their law clerks to the Florida Jury Verdict
Reporter that is archived in Westlaw. The period covered was 1987
through 1996. According to the authors, it seems plausible that the
judges and law clerks were likely to report plaintiff wins rather
than losses, because the wins were associated with damage awards.
Nevertheless, the amount of these awards, like New York (and North
Carolina and California), were positively related to the severity of
injury assessed on the National Association of Insurance
Commissioners (NAIC) scale.33
In a recent Iowa Law
Review article entitled, "The Role of the Jury in Modern
Malpractice Law," by Philip G. Peters, Jr., claims about jury
competence were carefully considered.34 The criticisms
included several related threads, two of which are summarized here.
First, lay jurors lack the capacity and training needed to evaluate
complex medical treatment decisions. Second, juries are more
sympathetic to injured plaintiffs and biased against wealthy
defendants.
Jurors have the
capacity to decide medical malpractice cases. Those who question
jury capacity fear juries will be confused by scientific evidence
and, in their confusion, will be vulnerable to manipulation by
plaintiffs’ attorneys and their experts, who will elicit sympathy
for injured plaintiffs. One common method used to evaluate jury
capacity is to compare the outcomes reached by juries with those
reached by judges. Researchers have repeatedly found that juries and
judges reach extremely similar conclusions about tort liability. As
a consequence, these studies provide support to the contention that
juries have the capacity to understand and decide complex medical
malpractice cases. In one famous study, 4,000 civil trials were
reviewed and the reactions of judges and juries were compared. In
nearly four out of five cases (78 percent), the judge and jury
agreed, thus refuting fears about unpredictability and incompetence.35
According to the authors, "this agreement rate is better than
the rate of agreement between scientists doing peer review,
employment interviewers ranking applicants, and psychiatrists and
physicians diagnosing patients."36 In another
interesting study the outcomes reached by juries were compared with
those reached by physician reviewers. The researchers found a
surprising agreement between physician reviewers and juries. Where
juries differed from the physicians, juries were consistently more
lenient toward malpractice defendants than were the physician
reviewers.37
Jurors are not
biased against physicians. An expanding body of evidence
suggests that rather than being biased against physicians, jurors
begin their deliberations favoring physician-defendants and doubting
the motives of plaintiffs in medical malpractice cases. Findings
reveal that jurors are even more distrustful of plaintiffs’
lawyers and believe medical malpractice suits ruin the health care
system by driving up costs. This may be due in part to the constant
media bombardment by the corporate interests that attack and
ridicule plaintiffs and their lawyers, as in the Newsweek article.
Peters concluded after reviewing the available studies that there is
simply no evidence that juries are prejudiced against physician
defendants or that their verdicts are distorted by their sympathy
for injured plaintiffs. Instead, the existing evidence strongly
indicates that jurors begin their task harboring sympathy for the
defendant physician and skepticism about the plaintiff.38
These studies
demonstrate that juries are fulfilling their intended role in our
civil justice system. Juries are not wildly and irrationally
over-compensating injured plaintiffs with huge non-economic damage
awards. Juries do bring community wisdom, experience, values and
common sense to their deliberations...
As Dwight Meredith also
notes:
Zuckerman choose those examples for his column
because the cases, if real, are obviously ridiculous. No one could
possibly think that either of the plaintiffs cited by Zuckerman
deserves to be compensated in any way.
Indeed, Zuckerman is quite sure that the examples will be viewed as
ridiculous by all of his readers. I wonder, then, why he thinks a
jury would view the case any differently? Juries are made up from a
cross section of the community. I have selected many juries. I have
never had a jury that did not include at least a few people who are
readers of U.S. News and World Report or similar publicatons.
I also can not help but wonder why so many examples of alleged
ridiculous jury verdicts turn out to be false. Zuckerman’s
spokesman contends that there were dozens of examples that could
have been used. If that is true why do we so often hear about the
McDonald’s coffee case (which was real but not frivolous), the
mythical driver of the RV who set the cruise control and left the
wheel and sued when a wreck occurred and many other bogus examples
of frivolous suits. See Kip's
post for a listing and a debunking of those mythical suits.
Perhaps obviously ridiculous jury verdicts providing huge judgments
for undeserving plaintiffs are sort of like UFO’s. Many people
know many people who claim to have seen them but it is hard to find
a person who can deliver the proof.
I.
Rarely, if ever, mentioning that malpractice cases are not, in
general, cases with high profitability for plaintiffs attorneys
Dwight
Meredith:
Zuckerman becomes even more absurd when he discusses the economics
of contingency fees:
The right to sue has been exploited by lawyers. They can gamble on
taking cases on a contingency basis because they need only 1 win
in 10 to score that big judgment that will make up for the other
losses.
The only “big judgment” in a frivolous suit that he cites is the
$100,000 for the lady who threw her drink and slipped in the spill.
Even putting aside the fact that that story was made up, the
economics are simply wrong.
It would be difficult for a lawyer, working by himself, to handle
more than twenty such suits at a time. Assume first that the lawyer
took all twenty such cases to trial in a year. That is a very a
dubious assumption because 1) the time from filing to trial, at
least in this jurisdiction, is closer to 2 years and 2) the lawyer
would never get such a case before a jury as the judge would grant
the defendant’s summary judgment motion. Next assume that the
lawyer had a 33% contingency fee.
If the lawyer succeeded in one case in ten, he would have total
revenue for the year of $67,000 out of which he would get to pay for
all of the expenses of his practice. It is unlikely that such a
lawyer would net $50,000 for his effort.
If the lawyer, however, could discern which of the twenty cases was
the winner, he could accept that case and reject the rest. With 20
such winning cases, he would have earnings of $667,000 of which he
would net more than $600,000 for the same amount of work. The
contingency fee lawyer, therefore, has every incentive to make sure
that each and every case he accepts is a winner.
I know of no plaintiff’s attorneys who take cases in which they
estimate a 10% chance of success. A lawyer taking contingency fee
cases that have a 10% chance of success is much more likely to face
a bankruptcy judge than a civil jury.
The use of contingency fees arrangements gives the lawyer every
incentive to only take cases that are sure winners. The only lawyers
who make money from frivolous personal injury cases are lawyers for
the insurance companies.
The conventional wisdom is exactly backwards with regard to
contingency fees. The use of such arrangements acts as a filter to
prevent frivolous cases from being filed. A lawyer being paid on a
hourly rate for every hour worked on a case may be willing to take a
chance with a small probability of success but a lawyer who assumes
the risk of losing must be more selective. [eRiposte
emphasis]
What, you say, you do not believe me? Then try a little experiment.
Call a plaintiff’s lawyer and tell him that you suffered a
fractured tailbone when you slipped in a restaurant on a drink that
you threw at your boyfriend. Tell him that you know the case has
only a 10% chance of winning and that, if successful, the case will
generate an award of $100,000. Tell the lawyer that you are
unwilling to risk any of your money for the suit but that you want
him to risk his time and money and that he can have 1/3 of any
settlement he secures. If you are not listening to a dial tone
pretty quickly I will be greatly surprised.
Next, call up a lawyer who bills by the hour. Tell him the story and
add that you know the case has little chance for success but that
you are willing to pay $250 per hour for every hour worked. I expect
that your reception will be a bit friendlier.
J.
Rarely pointing out that the proponents for malpractice award caps are
usually lying through their teeth (as an experiment in Florida showed,
where people was asked to testify under oath)
Dwight
Meredith:
Kevin Drum has often
remarked at how difficult it has been for him to get solid data on
the issue of tort reform in the context of medical malpractice
suits.
Via the Bloviator,
I learned that Kevin’s frustration was shared by certain
legislators in Florida.
Florida Governor Jeb Bush, like his brother, is pushing for
legislation that would establish a $250,000 cap on awards for
non-economic damages as a “solution” for the medical malpractice
insurance “crisis.”
Jeb Bush called a Special Session of the Florida Legislature to
consider the measure. A number of Florida State Senators felt that
they were having a difficult time getting straight answers to their
questions.
They then took an obvious but rare step. They required the witnesses
to swear an oath to tell the truth before testifying.
In Florida, witnesses before the Legislature rarely have to swear to
tell the truth. According to this report,
it was only the “third time in the past decade that witnesses were
sworn, other than cases in which agency heads testify at
confirmation hearings.”
According to one columnist:
What happened after that "was pretty scary," said Sen.
Ron Klein, D-Boca Raton, the Senate minority leader.
"People who had testified before us on previous occasions got
up there and told us different things."
Among the revelations (culled from various
articles
and columns)
that occurred after the lobbyists were faced with possible penalties
for perjury:
* "I am not aware of any instance where we said the problem
was the enormous amount of frivolous lawsuits," said Jeff
Scott, legal counsel for the FMA (Florida Medical Association).
* When Sandra Mortham of the Florida Medical Association
testified, Campbell demanded to know why Mortham had blamed
"frivolous lawsuits" for the rise in malpractice rates.
"Certainly, I've never said that," replied Mortham, a
former House member from Largo and the FMA chief executive
officer. "I don't feel I have the information to say whether
or not there are frivolous lawsuits in the state of Florida."
* A state regulator said no, there hasn't been an explosion of
frivolous lawsuits.
*Witness after witness denied a crush of frivolous lawsuits has
crippled the state's medical malpractice tort system.
* We fixed the frivolous lawsuit problem" in past legislative
sessions, testified Bob White, president of First Professionals
Insurance.
* Insurers didn't need a cap on jury awards to be profitable.
* State data shows malpractice claims have not skyrocketed and
that Florida has more physicians than ever.
* There has been no sharp rise in medical malpractice settlements
made by insurance companies.
* A state insurance regulator surprised senators by saying he
often depended on insurance companies' information when deciding
whether to raise rates.
*Contrary to stories of doctors quitting the business, the number
of licensed doctors is increasing. A Health Department official
said new applications for new medical licenses in Florida rose
from 2,261 in fiscal 2000 to 2,658 in fiscal 2003.
*Bob White, president of First Professionals Insurance Co., the
state's largest malpractice insurer, surprised senators by blaming
rising premiums mainly on new medical technologies and
procedures...
*The hearings also revealed that White's company pays $500,000 a
year as an "endorsement fee" to the Florida Medical
Association, the doctors group that rallied for the cap.
*First Professionals was lobbying for the damages cap at the same
time it has “boasted to stockholders of its profits in
Florida.”
* The Florida Medical Association received $4.5 million in
endorsements from insurance companies to lobby for tort reform.
That represents about 10% of the FMA budget.
It seems that the prospect of spending a few years incarcerated in
the Florida penal system for perjury tends to focus the minds of the
lobbyists/witnesses on the truth.
Update: I notice that Kevin
Drum is also writing about the Florida revelations.
It is probably appropriate to end this section with
a reference to the latest tripe to appear in a mainstream media
publication. The March 14, 2005 issue of Business Week displays the
general conservative tilt in the media reporting on tort reform, in
their cover story "How
to fix the tort system". Here's their "four-point
plan"?
Pay for Performance
Plaintiffs' lawyers sometimes earn millions while clients get
pennies. Attorneys should make money only to the extent that their
clients do.
Punishment That Stings
Lawyers who file frivolous suits usually get wrist slaps. Judges
need to make them pay fines or some of the other side's expenses.
Curb the Duplication
When regulators bust companies for wrong-doing, plaintiffs' lawyers
often get easy money filing redundant lawsuits. That needs to end.
Exiting the Tort System
When all else fails, problems can be kicked from the courts into
specialized tribunals with less cumbersome procedural rules.
Wow! Notice how actual malpractice and how
to deal with it doesn't actually figure in this "four-point
plan" (among other things)? What a piece of nonsense!
Illiberal Conservative Media (ICM) - or is it
Insidious Corporatist Media?
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