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| Paulson & Nace

I’ve posted twice (here and here) on the Bush Administration’s efforts to curtail liability for corporations through so-called "Midnight Regulations." This issue was recently picked up and discussed on Countdown with Keith Olberman.

Pay attention to the discussion about "outsourcing" government regulation:


The point is that for those who say that there is a tort tax or that lawsuits hamper the economy, consider that the alternative is bigger government and more regulation.

For instance, if you own a construction company you can either have all sorts of government intervention and regulation or you can face the threat of being held responsible by a jury of your peers in a court of law. Now the honest and safe business person would prefer to have less government intervention knowing that he or she runs a safe business and that his or her business will not face any lawsuits, so long as they act responsibly.

So we can either have government regulate everyone–including the safe companies who then have to deal with government intervention–or we keep the court house door open so that reckless companies are held accountable.

A strong civil justice system thus makes government intervention less necessary. Of course, the purpose of these midnight regulations is to remove both safety checks, government regulation and access to the court house. Such midnight regulations put American families at risk.

A strong civil justice system, on the other hand, strikes a balance between less regulation and an incentive to act responsibly.

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