Fixing Your Way Around a Problem
Here's what I think: If there is a problem you care enough about to devote time and attention and maybe even money to fix, then make sure your solution actually fixes the problem. That's not too complicated, is it? You'd think that this concept would be an easy one to embrace.
Well, it's not. Take social security reform, for example. Bush says there is a problem coming in that our Social Security system where current employees pay for the benefits of current retirees (sometimes referred to by the silly sounding name, "Pay-Go"). Because of the coming retirement of the Baby Boomers and the ever-expanding life expectancies of Americans, it is getting harder and harder for the dwindling current employees to pay for the increasing number of retirees. Accept for a moment that this is a real problem. (Some claim it is not.) What solutions jump to mind? If you are logical, you'll think of three. First, increase taxes to cover the shortfall. Second, decrease benefits for retirees. Third, (understanding that the ratio of workers to retirees is subject to periodic fluctuations) create a trust fund for years in which there is a Social Security surplus so that when there are more workers than retirees, we save the extra contributions to cover the times when there are more retirees than workers.
The first and second solutions should sound familiar because they are the two bad alternatives currently being bandied about. Bush has promised not to raise taxes, ruling out the first. (But wait! He is in favor of increasing the amount of wages subject to taxation, thereby increasing taxes. He just isn't in favor of calling a tax hike a tax hike.) Democrats on the Hill frequently mention the second because if Bush won't raise taxes (ahem) the only other option, they say, is decreasing benefits. Neither of these two solutions are very appealing.
The third option should be familiar to anyone who paid attention to the 2000 Presidential election - or even to Saturday Night Live jokes about the 2000 Presidential election. Remember Al Gore's "lockbox?" Of course you do. Well it wasn't just a punchline to an SNL joke. Gore's lockbox idea was solution number three. Gore understood that there is already a Social Security trust fund where surplus revenues are invested in Treasury Bonds to cover the lean years. Gore also understood that Congress kept raiding and emptying the trust fund for other purposes. He suggested making the trust fund more secure. Had we elected Gore (oh wait! The majority of Americans did elect Gore!) we wouldn't be in this Social Security "crisis."
Whether you like them or not, solutions 1, 2, and 3 all address the problem we identified. You might be asking yourself, where's Bush's "personal accounts" idea? Well, I didn't include it on the list because it doesn't address the problem. The idea of "personal accounts" changes the Social Security structure, and it might even create an "ownership" society as Bush seems to want. But it does not address the problem of a gap between funding and benefits. It does the opposite. It creates a larger gap by diverting more money from current workers away from current retirees. It makes the problem worse! We'd have to borrow more money to plug a bigger hole.
This is an example of coming up with a "solution" that doesn't address the problem you've identified. So if the "solution" actually makes the problem worse, what is the "solution" really designed to do? Well, the "solution" would divert billions of dollars from treasury bonds and social security payments to private business stocks. Money now going to fund government programs would instead be invested in private businesses. Who benefits? Big business!
Here's another example. Many in the business and insurance industries (and the Republicans beholden to them) complain about the problem of frivolous lawsuits. Lawyers file claims that they know are without merit. Defendants know it would be more expensive to defend the suit than to pay a quick settlement, so the defendants pay. Then defendants have to raise prices and insurance companies have to raise premiums. Bad for all.
So what is the solution the business and insurance industries propose to solve this problem? Cap attorney contingent fee recoveries at 20% instead of the standard 33%. The reasoning goes that if plaintiff attorneys make less money, they'll be less inclined to bring frivolous lawsuits.
Does the logic track? No! If a plaintiff attorney makes less per case, he/she will file more lawsuits to maintain the same standard of living. What's worse, with lower recoveries, plaintiff lawyers will have more incentive to file frivolous lawsuits because they tend to be cheap and easy. The kinds of lawsuits they will be less inclined to bring are hard lawsuits. If plaintiff attorneys are earning substantially less, they won't want to file cases that are complicated and cost a lot of money to prosecute. So severely injured plaintiffs will suffer while little frivolous cases will thrive. Again, the solution does not address the problem, it makes it worse.
So again, let's ask what a logical solution to the problem would be (again, making the big assumption that the problem actually exists). How about capping the rate defense attorneys can bill? If it is currently cheaper to pay a plaintiff than to defend a frivolous lawsuit, let's even the field. Let's make it cheaper to defend by lowering the rates defense attorney's can charge. If defendants can actually defend themselves, plaintiff attorneys won't be inclined to file frivolous suits because they know a quick easy settlement won't be forthcoming.
And to finish this little exercise, let's ask what the business and insurance industries really want to achieve with their "solution." Again, let's think this through logically. They want to lower the amount of money plaintiff attorneys make. Plaintiff attorneys (commonly called "trial lawyers") contribute lots of money to Democrats. If plaintiff attorneys make less money, they will probably donate less to Democrats. So maybe the real aim behind the "solution" is to help insure a permanent Republican majority. Do Republicans really want to create a permanent majority? Well, here's a link to an article entitled, "The Permanent Republican Majority: The GOP's agenda for America's future," by House Majority Leader Tom DeLay.
Republicans and the special interests they represent have a real problem saying what they mean. So we have to be very careful to find out just what their solutions are really intended to fix.
Well, it's not. Take social security reform, for example. Bush says there is a problem coming in that our Social Security system where current employees pay for the benefits of current retirees (sometimes referred to by the silly sounding name, "Pay-Go"). Because of the coming retirement of the Baby Boomers and the ever-expanding life expectancies of Americans, it is getting harder and harder for the dwindling current employees to pay for the increasing number of retirees. Accept for a moment that this is a real problem. (Some claim it is not.) What solutions jump to mind? If you are logical, you'll think of three. First, increase taxes to cover the shortfall. Second, decrease benefits for retirees. Third, (understanding that the ratio of workers to retirees is subject to periodic fluctuations) create a trust fund for years in which there is a Social Security surplus so that when there are more workers than retirees, we save the extra contributions to cover the times when there are more retirees than workers.
The first and second solutions should sound familiar because they are the two bad alternatives currently being bandied about. Bush has promised not to raise taxes, ruling out the first. (But wait! He is in favor of increasing the amount of wages subject to taxation, thereby increasing taxes. He just isn't in favor of calling a tax hike a tax hike.) Democrats on the Hill frequently mention the second because if Bush won't raise taxes (ahem) the only other option, they say, is decreasing benefits. Neither of these two solutions are very appealing.
The third option should be familiar to anyone who paid attention to the 2000 Presidential election - or even to Saturday Night Live jokes about the 2000 Presidential election. Remember Al Gore's "lockbox?" Of course you do. Well it wasn't just a punchline to an SNL joke. Gore's lockbox idea was solution number three. Gore understood that there is already a Social Security trust fund where surplus revenues are invested in Treasury Bonds to cover the lean years. Gore also understood that Congress kept raiding and emptying the trust fund for other purposes. He suggested making the trust fund more secure. Had we elected Gore (oh wait! The majority of Americans did elect Gore!) we wouldn't be in this Social Security "crisis."
Whether you like them or not, solutions 1, 2, and 3 all address the problem we identified. You might be asking yourself, where's Bush's "personal accounts" idea? Well, I didn't include it on the list because it doesn't address the problem. The idea of "personal accounts" changes the Social Security structure, and it might even create an "ownership" society as Bush seems to want. But it does not address the problem of a gap between funding and benefits. It does the opposite. It creates a larger gap by diverting more money from current workers away from current retirees. It makes the problem worse! We'd have to borrow more money to plug a bigger hole.
This is an example of coming up with a "solution" that doesn't address the problem you've identified. So if the "solution" actually makes the problem worse, what is the "solution" really designed to do? Well, the "solution" would divert billions of dollars from treasury bonds and social security payments to private business stocks. Money now going to fund government programs would instead be invested in private businesses. Who benefits? Big business!
Here's another example. Many in the business and insurance industries (and the Republicans beholden to them) complain about the problem of frivolous lawsuits. Lawyers file claims that they know are without merit. Defendants know it would be more expensive to defend the suit than to pay a quick settlement, so the defendants pay. Then defendants have to raise prices and insurance companies have to raise premiums. Bad for all.
So what is the solution the business and insurance industries propose to solve this problem? Cap attorney contingent fee recoveries at 20% instead of the standard 33%. The reasoning goes that if plaintiff attorneys make less money, they'll be less inclined to bring frivolous lawsuits.
Does the logic track? No! If a plaintiff attorney makes less per case, he/she will file more lawsuits to maintain the same standard of living. What's worse, with lower recoveries, plaintiff lawyers will have more incentive to file frivolous lawsuits because they tend to be cheap and easy. The kinds of lawsuits they will be less inclined to bring are hard lawsuits. If plaintiff attorneys are earning substantially less, they won't want to file cases that are complicated and cost a lot of money to prosecute. So severely injured plaintiffs will suffer while little frivolous cases will thrive. Again, the solution does not address the problem, it makes it worse.
So again, let's ask what a logical solution to the problem would be (again, making the big assumption that the problem actually exists). How about capping the rate defense attorneys can bill? If it is currently cheaper to pay a plaintiff than to defend a frivolous lawsuit, let's even the field. Let's make it cheaper to defend by lowering the rates defense attorney's can charge. If defendants can actually defend themselves, plaintiff attorneys won't be inclined to file frivolous suits because they know a quick easy settlement won't be forthcoming.
And to finish this little exercise, let's ask what the business and insurance industries really want to achieve with their "solution." Again, let's think this through logically. They want to lower the amount of money plaintiff attorneys make. Plaintiff attorneys (commonly called "trial lawyers") contribute lots of money to Democrats. If plaintiff attorneys make less money, they will probably donate less to Democrats. So maybe the real aim behind the "solution" is to help insure a permanent Republican majority. Do Republicans really want to create a permanent majority? Well, here's a link to an article entitled, "The Permanent Republican Majority: The GOP's agenda for America's future," by House Majority Leader Tom DeLay.
Republicans and the special interests they represent have a real problem saying what they mean. So we have to be very careful to find out just what their solutions are really intended to fix.
posted by Charles S. Russell at 2:05 PM
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