Made in America: Corporate Gall

Attorney Andrew Cohen analyzes legal issues for CBS News and CBSNews.com.
Like the child who kills his parents and then begs for mercy because he is an orphan, the U.S. Chamber of Commerce now is begging President-elect Barack Obama to protect corporate interests in the nation's civil litigation system as a way of restoring jobs and bolstering an economy shattered largely (as we now know) by corporate greed and misfeasance.

Talk about your gall.

Here is what the president of the Chamber's legal arm wrote in an open letter to Obama: "We understand the critical necessity of revitalizing the economy by restoring American jobs, encouraging the growth of U.S. businesses, and protecting the savings and investments of millions of Americans. However, we are concerned that the potential expansion of legal liability significantly impairs these much needed steps toward a national recovery."

The quote may be roughly translated this way: "Now that corporate America has helped screw everything up and led us into the greatest economic crisis since the Depression, we need to make sure that corporate America isn't aggressively punished for its misdeeds or legitimately thwarted from misdoing them again."

This is either an astonishing hypocrisy - Is corporate America unaware that the rest of us are in on the secret of the causes of the recession? - or the clearest indication there can be that Big Business is, always has been, and always will be about protecting Big Business.

The Chamber has been pushing tirelessly for decades to rein in plaintiffs' attorneys (who look to punish corporate negligence or fraud with civil lawsuits), deregulate industry and commerce (we all know how well Wall Street did with its freedom), and nullify important consumer protection laws (like the one in Maine which is allowing smokers to go after tobacco companies for false advertising). The lobbying effort has been national and local, highly-public and super-secret, and devastatingly successful.

Thanks in part to the Chamber and its Orwellian-named Institute for Legal Reform, the Securities and Exchange Commission backed off its scrutiny of screwy deals and schemes, the Congress was lax in its oversight of the mortgage industry, litigators were thwarted or punished, and the White House and Justice Department pushed a legal doctrine ("preemption") that almost always helped employers over employees.

All of these things, and more policies and practices endorsed by the Institute, helped unshackle the savageries of corporate America and left individuals less protected against an ever-freer and more predatory market.

Indeed, aside from the occasional Supreme Court decision that has helped the little guy, and the heroic efforts of states to help protect consumers and the environment, the history of our "litigation system" (as the Institute puts it) over the past 20 years is one of unremitting advances for the Chamber and its fellow travelers in law, politics and governance.

The Environmental Protection Agency has been reduced to a shadow of its former self so that polluters have gone unpunished, the Madoffs of the world have been nurtured and coddled and thus have flourished, and the brutal Savings and Loan crisis of the late 1980s has been made to look like a bake sale compared to the trillions of investment dollars lost and the hundreds of billions soon to be spent by our government.

Even the Web site for the Institute reads like a cruel parody. Not surprisingly, it does not highlight the personal stories of the millions of victims of corporate greed or managerial incompetence. It does not measure the number of lives saved, and fortunes protected, and pollution cleaned through these lawsuits. Instead, under the banner of "lawsuit abuse," it tracks the lives of people who believe for one reason or another that they have been unfairly sued.

[Now, tell me, have you ever known someone who believed that he or she had just been fairly sued?]

Plaintiffs' attorneys aren't responsible for the mortgage-fueled economic meltdown. Class-action litigation isn't, either. And don't blame overzealous regulators or greedy employees who want better pay or conditions in their own factories. The people with whom the Chamber and the Institute do battle are not the people who invented or allowed the great pyramid schemes which brought down Freddie Mac and Fannie Mae. They did not force consumers to spend more than they earned or save less than they should. Corporate America is directly responsible for what has just happened to corporate America, and if you don't believe me, ask the folks at Ford, GM and Chrysler.

The economic meltdown came about because business interests were able to greatly decrease the vital tensions between industry and regulation, between oversell and oversight. And it will take the restoration of those tensions by government leaders not just to help bring us out of our slump but to help ensure that the next downturn doesn't come again for a long time.

So it seems to me that the last things the Obama administration ought to do once it takes over is further shackle lawyers, or stifle well-meaning state laws, or make it easier for businesses to avoid liability and culpability for their actions.

The Chamber and the Institute want us to believe that one of the problems which created our misery also happens to be one of the solutions to it. They call it "reform."

I call it nonsense.
By Andrew Cohen
  • CBSNews

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