Corp Reform - Not Tort Reform

The Credit Mess

I'm in a battle to remove false and inaccurate information from my credit reports. I've also been digging into just how badly screwed up the credit system is. One thing I found very interesting was this report that contains some very alarming statistics about just how common errors in credit reports are.

For example:

"Twenty-nine percent (29%) of the credit reports contained serious errors - false delinquencies or accounts that did not belong to the consumer - that could result in the denial of credit."

"Twenty percent (20%) of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that demonstrate the creditworthiness of the consumer."

The second quote is what irritates me so much. These accounts weren't missing - the creditor probably just didn't report them. After all, the credit reporting system is completely punitive in nature, and companies couldn't care less about making sure they help keep your score high. Instead, they want to keep your score low, so you're stuck with higher interest rates.

Capital One is a great example of this. Most creditors report two numbers relating to your account: What your credit limit is, and how much of it you've used. Capital One, on the other hand, only reports what your balance is. This way, it appears you have higher balances than you really do. This keeps your score low, and you're not able to get a better credit card with a better rate. It's Capital One's little customer retention scheme.

Offshoring, Math, and H1B Visas

It's no secret that I'm not a numbers guy, and I'm the last guy in the world you'd want trying to solve complex equations. With that disclaimer, someone please explain to me where my math errors are in this article about outsourcing jobs to India, China, etc.

One claim that sounds exceedingly spurious to me is that by sending jobs overseas, we're actually creating more jobs in the U.S. Here's a quote:

"Savings from outsourcing allowed companies to create 90,000 new jobs in 2003, with more than one in 10 of them in Silicon Valley or elsewhere in California, researchers said. The report predicts that in 2008, outsourcing will create 317,000 jobs -- 34,000 in California"

OK, so in 4 years, we'll have created 317,000 jobs in the U.S. This next quote is what confuses me:

"Investment banker Goldman Sachs last year estimated "offshoring" accounted for 1 million of the 2.7 million manufacturing jobs lost since summer 2000."

OK, so we lose 1,000,000 jobs and create 317,000 jobs. I come up with a net loss of 683,000 jobs. Somehow, this is good for the economy?

It must be, because according to the article, 86% of companies surveyed plan to outsource positions overseas.

Reading articles like these really make me think about the story of the Emperor's New Clothes. Really, are we supposed to believe that shipping jobs overseas will create jobs here? My bet is that any jobs created will be filled by H1B immigrants.

Speaking of H1B visas, check out this story about a guy who's suing Sun Microsystems for laying him off but keeping all the younger, cheaper H1B workers. Interesting.

The RIAA - Full of It!

As you may have guessed, I'm opposed to the oppressive lawsuits the RIAA has been filing against such "criminals" as 12-year-old girls. The RIAA claims that services such as Napster and Kazaa have been lowering music sales. I'll rebut this in two ways:

1st: I recently came into some money, and in a two-week period, I spent nearly $200.00 on CD's. The point here is that the sales of music are dependent upon disposable income, and a fortiori, on the state of the economy in general. When people have money, they buy luxury items like CD's. When people don't have money, they don't buy them.

2nd: Harvard just released a study which shows that file sharing isn't killing music sales. Here are a few quotes:

"Big record labels have seen their sales slide precipitously in the past several years, and have blamed the falling revenue in large part on rampant free music downloads online. Others have pointed to additional factors, such as lower household spending during the recession, and increased competition from other entertainment forms such as DVDs and video games, each of which have grown over the same time period." (Emphasis added.)

As important as the quote above is, my favorite is this one:

"While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing." (Emphasis added.)

This is the point I've been yelling about for years. When I hear one song on the radio, I'm not likely to rush out and buy an entire CD to discover that, lo and behold, the rest of the CD is garbage. I'm not alone, according to Harvard's study. The problem here is that record labels don't like to release singles of popular songs, and when they do, the singles are often seven to ten dollars; why not spend a few dollars more and get the whole CD?

Here's another good quote:

"Moreover, their data seemed to show that downloads could even have a slight positive effect on the sales of the top albums, the researchers said."

This is very true in my case. I've downloaded many songs by artists I've never heard of, liked them, and then spent money buying their CD's. The lesson to be learned is that when people can listen to music for free, they're more likely to go outside their comfort zone and discover artists that they like.

When I was younger, I used to go to Blockbuster Music all the time. You could take any CD in the store up to a listening station and try it out. I listened to hundreds of CD's I had never heard of, and bought probably 10% of the CD's I listened to. By being able to try it before I bought it, I was willing to take the risk of an unknown artist, or lesser-known CD from a popular artist. Of course, Blockbuster Music closed. I believe it ran into pressure from the record labels, who for some reason, didn't want consumers to be able to hear a whole CD before they committed to purchasing it.

With today's MP3 technology, a reiteration of Blockbuster Music could open back up and not have the hassle of having to return open CD's to the shelves: hard drives are cheap enough that each store could have a music server with a terabyte of drive space, which would be enough to store roughly 250,000 songs in MP3 format at 128k. Going to WMA or a lower quality MP3 could mean each store could have 500,000 songs on the network. With a nice touchscreen interface, and a music recommendation system similar to that of Amazon.com, people could browse through hundreds of CD's and make immediate purchases of music they like.

Of course, this short-circuit's the industry's model of signing new artists into oppressive contracts, hyping the hell out of that new artist, and manufacturing mega-stars that generate enormous profits for everyone involved except the actual artist. The industry certainly wouldn't want people to buy from artists that receive larger royalties, or worse yet, the dreaded indie labels.

My prediction is that the record labels will begin to heavily push either Super Audio CD's or DVD audio discs very heavily in an attempt to eliminate the standard compact disc, since SACD's and DVD audio discs have copy protection that CD's can't touch, and laws prevent manufacturers from developing devices or software that circumvents those protections.

Calling All Doctors...

I'm working on a piece about medical malpractice that I think will be very informative, and I'd like to hear from some doctors to get some feedback on the following issues:

1: Why don't doctors lobby for caps on insurance premiums, instead of caps on damages to victims?

2: Why is there a "wall of silence" in the medical industry that means most doctors won't testify against another doctor, no matter how obvious or egregious the malpractice?

3: Would you, as a doctor, file a malpractice suit against another doctor if you believed malpractice was committed?

4: What changes, besides caps on damages, do you believe would benefit the medical malpractice system as it is today?

5: For those doctors who have been sued for malpractice, what was your experience like?

Any responses will be confidential, unless you give me permission to publish your name. Please e-mail me at justinian at corpreform dotcom.

Who needs an independent judiciary, anyway?

Yahoo reports about a proposed bill in Florida that would severely limit the right of lawyers to advertise. Let's take a look:

"After proposing that the Florida Legislature assume responsibility for writing court procedural rules, some lawmakers now want to take over another judicial branch function by setting dramatic new limits on lawyer advertising."

Why does the thought of politicians writing court rules scare the hell out of me? Seriously, it's frightening to think that politicians seriously want to run the court system in Florida. My memory is a little hazy when it comes to civics class, but don't we have three branches of the government to act as checks and balances? It would seem to me that the Florida legislature wants to limit the power of the judiciary. But, let's go further into the article.

"As part of a wide-ranging medical malpractice bill introduced Monday in the House Insurance Committee, Republican House Speaker Johnnie Byrd has inserted a provision calling for unprecedented limits on advertising by lawyers in the medical negligence area."

Doctors, yet again, are used as pawns in the political process. Tort reformers have realized the fact that the public, in general, loves doctors and hates lawyers. Therefore, tort reform measures are often sold to the public as a way to stop "greedy lawyers" from running doctors out of business. Of course, the doctors are purportedly run out of business because of spiraling insurance rates. Yet again, no one questions the insurance cartel. The article has more:

"The measure comes on the heels of the House Judiciary Committee unanimously approving a bill last week that would apply to all attorney advertising. Both bills contend that attorney advertising has "created a crisis in this state's judicial system," though the sponsors offer no empirical evidence for that controversial claim."

Who needs empirical evidence when your argument involves taking actions against lawyers? After all, look at what those damned lawyers have done to this country: They've brought civil rights lawsuits that let those pesky blacks into white schools. They've held corporations like Johns Manville accountable for knowingly killing people with asbestos. And those horrible lawyers even have the audacity to sue doctors when they amputate wrong body parts.

"The legislation passed by the House Judiciary Committee last week would make it illegal to advertise in "a manner that solicits legal business for a profit by urging a person to consider bringing legal action against another." It proposes a civil penalty of $1,000 for the initial offense and $2,000 for each subsequent offense."

I'm not sure if I even have words to express how ridiculous this is. I think that Andrew S. Berman, a partner at Young Berman Karpf & Gonzalez, came close when he said that the bill "would get laughed out of federal court." Considering that this bill wouldn't - as lawyers put it - "withstand constitutional scrutiny," why the push for it? The article explains that, too:

"The moves to limit lawyer advertising come as the Republican-dominated Legislature increasingly seeks to exercise control over the Florida Supreme Court and the state judiciary, whose rulings at times have incurred the wrath of Gov. Jeb Bush and legislative Republicans."

Jeb and his pals seem to think that the best way to run a government is to erase the system of checks and balances between the three branches of government, and instead have a hierarchy which puts the executive branch at the top with the legislative and judiciary branches of the government subservient to the whims of the executive branch. I'm sure Jeb's brother couldn't agree more.

Simmons' proposed statute reads that the Legislature "has determined" that legal advertising that incites a person to file suit "destroys the personal responsibility of individuals, fosters frivolous litigation, and demeans the judiciary and the practice of law."

Personal responsibility? Why don't doctors who commit malpractice take personal responsibility and pay up? Why don't corporations make their employees take personal responsibility and refuse to release defective products. Why don't legislators take personal responsibility and quit passing laws that protect wrongdoers and prevent the injured from seeking redress?

There are many groups who believe that tort reform isn't even about protecting big business, but it's about taking money away from trial lawyers, who are the largest contributors to the Democratic party. News stories like this make me wonder if that's not really the case.

Obesity Lawsuits and Slippery Slopes

It's old news now, but the House has passed a bill that bans lawsuits against the food industry for obesity.

Now, I'm about as liberal as they come, and without a doubt I would be the worst juror in the world for a defense lawyer, but I'd be the first juror to find McDonald's "not guilty" in any obesity lawsuit. And apparently, I'm not alone.

For example, Reuters reported that, "There's not a single pending lawsuit now that hasn't been dismissed." This would seem to indicate that there's no need to worry about the food industry being put out of business by obesity lawsuits. This bill is supposedly about "personal responsibility."

However, the Washington Post quotes Connecticut Representative Rosa DeLauro as saying, "Only with this Republican leadership would an effort to promote personal responsibility begin with allowing companies to be irresponsible without accountability." Well said, Rosa.

Tort reformers know that a bill like this is an easy sell to the American public. Very few people - including trial lawyers - think that these lawsuits should succeed. But by demonizing trial lawyers, and by slowly acclimating the public to the concept of protectionary laws, tort reformers will be able to push more tort reform down America's throat.

In The People vs. Larry Flynt, Flynt's character made the statement, "If the First Amendment will protect a scumbag like me, then it'll protect all of you -- 'cause I'm the worst." I would agree that this obesity lawsuit (note that it's a singular lawsuit) is the legal equivalent of a scumbag. But, the Supreme Court allowed Larry Flynt to continue being a scumbag because, inter alia, once you start down the slippery slope of banning speech - no matter how offensive - it becomes easier to ban speech slightly less offensive, and the pattern will continue until we live in a land with as much tolerance as Nazi Germany.

That's why it's a bad idea to grant immunity to any industry. So far, judges have thrown these obesity lawsuits out of court, and there's no reason to think that judges will stop doing so. Even if they do, the average juror won't rule in favor of plaintiffs in such cases. This bill is just the first of many frivolous attacks upon the rights of citizens to hold corporations accountable for misdeeds.

Of course, there's one industry that never seems to be held accountable for its misdeeds; the CNN article I lead off with has this quote:

"The National Restaurant Association said the bill is its top priority this year. While only one such lawsuit has been filed -- a case involving New York children against McDonald's that was dismissed -- the industry said it is facing higher insurance costs because of the potential liability."

Ever notice that trial lawyers "hold industries hostage", "terrorize businesses", and "run rampant" like a "plague of locusts", but that the insurance industry can do no wrong? Let's analyze the obesity lawsuit "epedemic" for a minute: One lawsuit is thrown out of court twice. Insurance companies raise their rates and threaten the livelihood of the restaurant industry, but somehow, lawyers are to blame.

You know, I wonder if Dawn of the Dead will cause some insurance companies to raise their rates for shoping malls because of the potential liability in case zombies invade.

FreeCreditReport.com Update

I'd been away on vacation and just got back to notice several comments about my experience with freecreditreport.com. I'm filing my suit against them this week, and I'll post a copy of it for anyone who would like to see how it's done. Here are my observations regarding Freecreditreport.com:

The service is offered in order to sucker people into one-year memberships into a CreditCheck service that Experian offers. This service basically lets you have free access to your own credit report at any time. The yearly fee is $79.95. Once you view your credit report, you are supposed to be given a free 30-day membership into CreditCheck. If you don't cancel your membership within 30 days, your card is billed $79.95.

In my case, I wasn't able to view my credit report at all because I didn't answer an ID-check question properly. According to their web site, I shouldn't have ever been charged $79.95. However, even if I was supposed to be charged, the charge wasn't supposed to occur until the expiration of my 30-day trial period. Of course, the problem for me was that I was never given a 30-day trial membership to the service, and my card was charged the same day.

I'm forced to wonder just how much money Experian (who owns and operates freecreditreport.com) makes by charging people for the service and then issuing partial refunds.

If anyone has any other questions or experiences regarding freecreditreport.com, please let me know via e-mail or comments.