Back on the kleptocracy, and it looks like the Chamber of Commerce is working to keep its position at the trough by threatening to go to war with the incoming Obama administration. It seems that the Chamber is concerned about how new or revised regulations that reverse the Bush-era’s kleptocracy may affect the Chamber. The Chamber, of course, opposes the rules, claiming that they will benefit plaintiffs’ trial lawyers.

Classic diversion tactic, as the Chamber fails to take responsibility for its role in the financial meltdown. In fact, the Chamber got paid handsomely to lobby against regulation.  In their rush to demonize trial lawyers, the Chamber always forgets to mention its role in lobbying for failed insurance giant, AIG. I’m going to guess that when and if the real story of the U.S. Chamber of Commerce gets told, trial lawyers will be the least of their concerns.

Meanwhile, let’s be clear about a few things. Americans of all backgrounds, ages, races, and political persuasions voted for change. The kleptocracy is over. No more feeding at the trough. It’s time to put regulations in place because taxpayers–and our children–are going to pay for your greed and the lack of oversight that got us here. It’s time that corporations paid their fair share of taxes. It’s time to make sure that juries decide product safety issues. It’s time for equal pay for the same work, regardless of race or gender. In short, the Chamber of Commerce’s time at the trough is over.

David Sugerman

I try like heck to avoid the media’s scare-of-the-day mentality. But this New York Times mag report leaves me with one of those bad feelings in the gut.  Drugs manufactured in China? Great. After the various lead paint toy problems, I’ll pass.

Part of the problem is the Wal-Mart syndrome that says that lower prices are always better. In pursuing the lowest possible price, sellers move production off shore. Of course, you could make a car cheaper by simply omitting the brakes. That would be a good example of price slashing going too far.

Call me crazy, but I’ll pay more for aspirin if it means that I’m getting aspirin I can rely on to be safe. Unfortunately, recent Chinese manufacturing scandals give consumers reasons to worry.

David Sugerman

At first glance, this prediction bodes well for consumers. As reported here in the Seattle Post-Intelligencer, Congress will move to add Wall Street financiers to the list of those who will be held accountable for funding predatory mortgages.

The technical term is assignee liability. It’s important to understand the underlying concept because it plays a big part of what’s gotten us to the present crisis.  Banks were writing ridiculous and nasty mortgages and lending money to borrowers who had no business taking on mortgage commitments.

The banks and lenders would then group and package the bad loans into large pools, and through a series of sales and transactions, parts of these large groups of stinking bad loans wound up being traded like baseball cards on Wall Street. Actually, that’s a little unfair because for reasons beyond my comprehension, baseball trading cards actually have “value.” But I digress.

For years, the Bush Administration and the Free Marketeers (AKA “The Smartest People in the Room”) opposed rules that would allow asignee liability. To their way of thinking, buyers of the stinking bad loans should never, never, never have to answer to the borrower who may have been duped or otherwise wronged by the predatory loans.

The new rules would allow the borrower to chase the assignee, the Wall Street purchaser of the stinking horrible loans. It makes sense for a number of reasons, not the least of which is that our Wall Street purchasers are the recipients of socialist handouts.  Yes, Senator McCain and Senator Martinez, I used that very word to describe the Wall Street bailout…if you want to accuse your rivals of importing socialism into American life, you best go back and explain that whole bailout thing. Ugh, better have more coffee–or less–as I’m digressing again.

But here’s the real disappointment of the Seattle PI report. This is all about the future and prevention. Not a bad thing to be sure, but it’s a deafening silence about THIS round of problems. The Bush Administration declared class warfare on the middle class when they tried to limit the bailout to Wall Street and banking failures. Consumers were left in the drink without a boat, without a paddle, and without a life jacket.  So you’re talking about assignee liability in the future.  And in the meantime, consumers are supposed to ???

David Sugerman

Justice Rehnquist–not one of my favorites of the Supremes–once observed in an important U.S. Supreme Court opinion that you, “have to take the bitter with the sweet.” I’m reminded of those words as we’re treated to the sight of former free-marketeers engineering profoundly expensive bailouts.  We’re told that taxpayers have to foot the bill to bailout Wall Street to the tune of hundreds of–pinky to the side of the mouth a la Dr. Evil here–billions of dollars.

We “have to” because we can’t afford to let Wall Street fail. That’s the official story.

Okay gang, here’s the deal. Let us be clear that if you’re using our hundreds of billions to bail out the greedy who were gorging at the trough, they’re going to have to take some serious bitterness with their sweets.

Let’s start with regulation. First, let’s resolve from this day forward that every twit who holds forth about the problems caused by regulation, the beauty of the free market, and the need for less regulation gets this loud retort: “Oink!”

“Oink!” As in, the pigs have been feeding at the trough for years and all we got was this hundreds of billions in payments to bail them out.

Second, any bailout sure as heck better give us the profits when the recipients get back to profitability. Because you better take some serious bitter with the sweet that you’re taking from our pockets. And there is nothing so bitter to you as sharing your profits. Put another way, if we’re going to have corporate socialism when you fail, we’re going to have it when you succeed. You’re paying us back.

And finally, let’s be repaying some of those big hordes of cash that led to happy landings for executives who were piloting these ventures. That golden parachute and fat, fat compensation at Bear Stearns, at Lehman, and at all those sinking ships to come contributed to this mess. If we’re bailing you out, it’s time to cough it up. Give us back our money.

David Sugerman

For years, Airborne Health touted Airborne as a cold prevention remedy. This Washington Post article reports on the Federal Trade Commission’s settlement of false advertising claims against the manufacturer. According to the story, the company agreed to refunds of up to $30 million dollars settlement to dispose of the false advertising claims.

Bad enough that Airborne was raking in money by the tanker-load on false claims. But if that wasn’t enough, the CEO blames consumer lawyers for the company’s woes.  From the article: “A class-action lawsuit sparked this matter. We’re just one of many major consumer brands across America that are under assault by class-action lawyers.”

The Post article quotes Stephen Gardner, director of Center for Science in the Public Interest.  Steve is one of the country’s top consumer lawyers, and CSPI has done its usual top-notch job here. Curious that Steve and the FTC and other consumer lawyers would get the blame. Steve Gardner didn’t choose to make false claims in advertising the product. Neither did the FTC.  But let’s not let facts get in the way.

Seems to me that consumers have the right to know that they’re buying something real when they spend money on a product.  If the manufacturer chooses to falsely advertise its products, it’s only fair and proper that they pay the price.

David Sugerman