Tort Reform Has Been Great for Missouri

The governor gave a series of speeches yesterday about the results of tort reform legislation that was passed in 2005. Combest has links to several articles about it. In my opinion, that legislation was the most important reform the state has made during the past 20 years, which luckily corresponds with my basic frame of reference.

Not surprisingly, the trial lawyers they quote in the article (actually, it’s the same one in each) don’t agree. And, even less surprisingly, the trial lawyers respond to facts and economics with a plea to the heart. From the article Southeast Missourian (all emphasis below is added):

Blunt said 2007 numbers were not available, but that from 2005 to 2006, average settlement costs fell nearly 14 percent, and total claims against Missouri doctors dropped by 61 percent.

Costs and claims falling is a good thing for our economy and health care system.  Let’s remember that, can we please? From the Columbia Daily-Tribune:

Dr. Jeff Thomasson, who spoke at the news conference, said that before the new law, his radiology group’s premiums rose 88 percent one year and 94 percent another year. Over the past two years, the premiums declined slightly, Thomasson said. As a result, he believes recruiting and retaining good doctors is easier.

That is extremely important. I specifically remember that during arguments I had about tort reform with trial lawyers (generally either my dad or my stepdad), they claimed doctors’ premiums would never actually go down because the entire reform was just a scam by the insurance companies, etc. (They probably said it much better than that, but that was the gist of it.) So, here we have specific evidence that tort reform legislation has lead to a decrease in insurance premiums, just as basic economics indicated it would.

From the MATA people, we get this:

Vuylsteke said the number of cases are declining because the elderly, the poor and parents of young children "can’t find lawyers to handle their cases because the lawyers can’t afford to represent them." For many lawyers, who must invest substantial costs in expert witnesses and in hours preparing for the trial, the risk simply isn’t worth it, he said.

If someone has a good case, they will find a lawyer to take that case. Guaranteed. What is being admitted to above, unintentionally, is that before tort reform many bad cases went forward because the system so favored the plaintiffs. Even in less-than-stellar cases, a St. Louis city venue alone was good enough to scare at least some type of settlement out of the defense. So now we have lower costs, lower premiums, and fewer meritless lawsuits moving forward. As I said, it’s been great for Missouri.

Charter Reform Moving Forward in Jefferson County

I attended a meeting of the Jefferson County Charter Commission last night and testified before the committee about my thoughts on charter government, which we’ll put up on our website shortly. But that is not the point of this post. I just want to commend the members of the Charter Commission and the others in attendance for their dedication to their community. It was great to see people who cared deeply about their home working together to move Jefferson County forward.

Joe Ortwerth, the former county executive of St. Charles, gave an outstanding presentation about how his county went through the same process almost 20 years ago. Seeing him there gave me an opportunity to hand deliver him a copy of this op-ed about St. Charles, which he had to enjoy.

Coming From a Proud Product of Public School Education …

This is a worthwhile read: “They love the city, but not the schools.”

People want to move into the city. Urban renewal is obvious. But the schools have to get better. Young families are moving to the suburbs because they can’t afford to pay private school tuition equal to their monthly mortgage payment. St. Louis and Kansas City must fix their public school districts. Otherwise, all their efforts at urban renewal are useless.

Not an Example of “Pro-Business” or “Pro-Market”

Centene Corp. is in the news again. After the collapse of the Saint Louis ballpark village incentive proposal (which, in addition to $78 million in direct tax incentives, also included their very own “Centene” sales tax district), Clayton has attempted to renegotiate its own incentive package to entice the company to expand its world headquarters in Clayton’s business district (apparently everyone’s forgotten about Claytons attempt to confiscate property for Centene in 2005 through eminent domain).

One sentence in the Post-Dispatch’s coverage is worth highlighting:

State and St. Louis County officials have joined Clayton in discussions with Centene over incentives for its world headquarters expansion.

We cover corporate welfare extensively, so I won’t dwell on this issue (though you should read Dr. Joe Haslag’s recent op-ed on the topic). But I would like to make a point. I suspect that these kinds of government “incentive” shenanigans are what most people think of when they hear that someone — a politician, political party, or even a Clayton-based think-tank — is “pro-business” or "pro-market."

Enticing business through governmental handouts is not pro-business. This is crony capitalism and one of the most debased political ideologies in the world. Being “pro-business” means that you believe in creating a business environment in which property rights are well-protected, people are free to contract with one another freely and without governmental interference, and competition is encouraged. Pro-business does not mean using the government to reward or punish favored companies or industries. It does not mean using tax dollars to reward the rich and the powerful at the expense of the poor. There’s nothing "market-based" about that.

We Don’t Need No Stinkin’ Badges

As I am writing this post on Thursday afternoon, I am not officially licensed to practice law in the state of Missouri. Tomorrow, when many of you will be reading this post, I will officially be licensed to practice law in this state. In order to convince the powers that be to give me their blessing to use my lawyering skills, in February I had to take and pass an arduous and mostly useless ritual called a bar exam. The test is insanely difficult, in no small part because it requires each examinee to demonstrate memorization of a range of legal concepts that they will likely never use in their practice. For example, even though my expertise is in constitutional litigation, I had to be prepared to answer — from memory — detailed questions related to wills and estates, family law, secured transactions, and commercial paper.

As with most people who have passed a bar exam, now that a couple of months have passed, I probably couldn’t tell you much at all about those subjects without first doing some research about the question asked — which is, in fact, what attorneys tend to do in the real world! In short, my ability to earn a living in the profession for which I am trained depended on my developing a (short-lived) command of information that would be thoroughly useless to me after the exam.

All of that is to say that the idea of licensing attorneys is little more than a convoluted way of restricting the services available to consumers and bolstering the rates we are allowed to charge clients, all under the guise of "protecting the public." Well, that’s just silly and patronizing. People recognize the difference between gourmet restaurants and street hot dog vendors, and they can also recognize the difference between a white-shoe law firm whose attorneys graduated from Ivy League schools and a small-time local lawyer who went to night school so he could learn just enough to hang out his own shingle.

I’ll happily admit that there are some bad attorneys out there already, and that there would likely be more if you didn’t have to get permission from the state in order to practice. But academic credentials and a license from the state is no guarantee of quality, just as many fine, smart lawyers might have trouble passing the bar exam. In fact, the people most likely to hire a lawyer with questionable credentials are those who otherwise wouldn’t be able to afford legal representation at all. So the issue really boils down to why the state should be in a position to tell citizens that they are not permitted to choose who could best fulfill their need for legal representation.

The Post-Dispatch carried a story today that touches on this question. Attorneys from Missouri’s Office of Chief Disciplinary Counsel are trying to strip Mark Belz — an attorney with a distinguished 30-year career — of his law license because several years ago he used $175,000 of his clients’ funds for his own purposes. This is serious business, as attorneys are ethically bound never to breach their clients’ trust in this way, and those who do are almost always disbarred. But several facts make Mr. Belz’s case unique.

First off, he recognized that what he had done was wrong without being caught. He confessed, apologized, and made restitution for the funds used. Second, at the time of his wrongdoing he was suffering from bipolar disorder — an illness for which he is now being treated — and his psychiatrist has testified that he is unlikely ever to repeat such behavior. Finally, and most importantly, his clients forgave him and continued to use Mr. Belz as their attorney. To the best of my knowledge, no one is interested in pressing criminal charges.

No one, not even Mr. Belz, is contending that he is without fault. But the market provides a ready solution for situations like this, without depriving someone of their right to earn a livelihood. When any service provider, regardless of their profession, breaches the trust of a client or customer, word gets around. Potential clients or customers can discover these sorts of transgressions by exercising a little bit of diligence on their own part. Armed with such information, it should be up to the consumer rather than the government to decide whether they value the provider’s services enough to risk similar experiences.

Removing the state’s authority to exclude people from the legal profession is a market solution that would address a number of issues. Aspiring attorneys could apprentice under practicing attorneys, and thereby would not have to waste thousands of dollars and years of their lives in law schools whose courses are heavy on theory, but do little to teach students how to be lawyers. This would lower the costs of entry to the profession, relieving young attorneys of the pressure to charge high rates in order to pay off student debt. The larger pool of service providers would also result in lower-cost legal service, meaning that more people would be able to afford representation. And, most importantly, it would move us that much closer to being a society in which ordinary people are free to seek their own happiness and prosperity without first obtaining the government’s permission.

What’s $67 Million Dollars Among Friends?

The Kansas City School District has lowered its demand for compensation from the Independence School District from $157 million to about $90 million, for the facilities being transferred as part of a boundary shuffle. The reason for the lowered demand? Kansas City School District officials realized they counted the lost tax revenue totals twice in their computation. All you need to know about why parents fought so long and hard to switch from Kansas City public schools to the Independence School District is right there.

Education Reform Isn’t Easy, but It’s Worthwhile

The video from a recent Cato event, "Markets vs. Standards: Debating the Future of American Education," is online here. I especially enjoyed listening to Andrew Coulson, who presents evidence from around the world that the private sector improves education. He also addresses Sol Stern’s contention that market-based reforms have been ineffective and that reformers should redirect their attention toward imposing standards.

Coulson points out that the difficulty of replacing the education monopoly with a free market is no reason to give up. None of our country’s previous policy victories would have been achieved had people redirected their efforts to easier alternatives — such as, to take Coulson’s example, improving their local grocery stores.

So, take a look. If you want to skip right to Coulson’s remarks, they begin about 40 minutes into the program.

Book Club Plug

Last night I attended, along with little Nathaniel, my first meeting of the Show-Me Institute Book Club. The book was Barry Goldwater’s "The Conscience of a Conservative." As one of the only conservative staffers here at SMI (most of our staff really are libertarians), there was no way I could miss a disucssion about Barry Goldwater. The point of this post is not politics, though, it is to let people know how enjoyable the book club discussion was and to encourage college-age people in our area to consider participating in it. Here is the rundown on the club, and I recommend it very highly!

Happy Tax Freedom Day!

April 23rd is this year’s “Tax Freedom Day” — the day you stop working for the government and start working for yourself.

The Tax Foundation, a Washington, D.C.-based think tank, estimates the annual measure each year. Today is the day that Americans, on average, stop working to pay their total federal, state, and local tax bill and start working for themselves.

Think about that for a moment. Every second you’ve worked so far this year has been worked solely to pay off your total 2008 tax bill. You have yet to earn a single dollar for yourself. How free do you feel?

If the idea of “Tax Freedom Day” interests you, then I would encourage you to check out our new tax estimator, where we calculate your personal tax freedom day for just Missouri state and local taxes. Because this calculation is personal, rather than an average, it can really help to drive the point home. I hope yours is sooner than mine.

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