Category: Business and Society

Blog author: jballor
posted by on Tuesday, July 19, 2005

An article in today’s New York Times confirms the trend in Hollywood to make movies that are faith and family friendly. Sharon Waxman reports that

producers, directors, studio executives and marketing specialists have been looking to either mollify or entice an audience that made its power felt with last year’s “Passion of the Christ.” That film, directed by Mel Gibson, took in an astonishing $370 million at the domestic box office when released by Newmarket Films in February 2004 and – along with the empowerment of a Christian conservative bloc after the last presidential election – helped change attitudes and practices in an industry usually known for its secularism.

Rev. Sirico recently wrote a commentary on this topic, referencing a newly released report by the Dove Foundation on the profitability of various ratings. The Dove study found that G-rated films are 11 times more profitable than R-rated features.

Here’s an illustration that when there is a market for morally upright products, the marketplace responds, despite whatever disagreements vendors may have with such morality. As Taylor Hackford, director of “Ray,” says, “It’s impossible for Hollywood not to reflect the nature of the country, and Bush has made his religion clear…. People in Hollywood aren’t stupid. It flies in the face of what I believe, but you’re still working in the movie industry, not the movie art form.” The purchasing power of moral consumers is where the real strength is in the marketplace.

Blog author: jballor
posted by on Monday, July 18, 2005

Cigar Jack passes along this story about “faith leaders” soliciting the government to place tobacco regulation under the auspices of the FDA. The proposed legislation, which has twice been left languishing in the U.S. House of Representatives, “would give the FDA authority over the manufacturing, marketing and sale of tobacco products.”

These faith leaders, like Rev. T. Randall Smith, pastor of Deer Park United Methodist Church and president of Texas Conference of Churches, represent a faction of Christianity that is radically different than that is historically ensconced in European culture. I have remarked on this before, specifically with reference to the “the Dutch-American culture of West Michigan.”

Moments like these seem to show that public opinion is generally in favor of the government restriction and prohibition of smoking. Even something as traditionally suspect as poker has succumbed to the cultural sanitization, as at the 2005 World Series of Poker completed last week, “There’s no cursing, no smoking and no mercy at the tables in a windowless hangar-like room,” though there is “a choking haze of cigarette and cigar smoke in the hallway.”

And to think that government is an impartial arbiter of justice in cases like this, as the aforementioned “faith leaders” seem to think, is to be more than a bit naive. A case in point: Despite bitter and contentious debate about the state’s budget woes, Republicans and Democrats in Michigan can at least agree on one thing–there’s a consensus to “sell off part of the state’s future tobacco settlement for a $3 billion upfront payment.”

Blog author: mvandermaas
posted by on Thursday, July 14, 2005
Trial by Fury, by Ronald Rychlak

The Wall Street Journal editorializes today (subscription required) on a rare bit of good news from the world of tort law:

If the criminal investigation of class-action titan Milberg Weiss is anything to go by, prosecutors may finally be starting to hold the trial bar accountable for its legal abuses. Another good sign is that a separate federal grand jury, this one in New York, is investigating the ringleaders of the latest tort scam, silicosis.

Much of the credit for pointing the grand jury toward this corruption goes to Texas federal Judge Janis Graham Jack, who last month put the brakes on the silicosis machine with an extraordinary 249-page decision. Judge Jack not only blasted nearly every one of the 10,000 silicosis claims in front of her court, she documented the fraudulent means by which lawyers, doctors and screening companies had manufactured the claims. “These diagnoses were about litigation rather than health care,” wrote Judge Jack. “These diagnoses were manufactured for money.”

The facts of this case would be comical if they didn’t represent a gigantic effort to pervert the legal system into a cash cow for unscrupulous lawyers:

A former nurse, [Judge Jack] couldn’t understand how a disease that causes on average fewer than 200 deaths annually in the U.S. had suddenly resulted in more than 20,000 claims from Mississippi and surrounding states. To get to the bottom of the suits against some 250 companies, the Clinton appointee held 20 months of pretrial proceedings. What she found was a gigantic attempted swindle.

Her first discovery was that, of the more than 9,000 plaintiffs who supplied more information about their “disease,” 99% had been diagnosed with silicosis by the same nine doctors. These physicians had been retained by law firms or by “screening companies” that do mass X-rays on behalf of law firms searching for plaintiffs. When these physicians were deposed, they all but admitted they took their orders from the lawyers and screening firms…

…Another shocker was that more than 65% of the silica plaintiffs had previously been plaintiffs in an asbestos suit, even though it is close to clinically impossible to have both asbestosis and silicosis. Digging deeper, the judge found that many of the same doctors had ginned up the same patients for both asbestos and silicosis cases. One doctor, Ray Harron, received nearly $5 million from 1996-2004 from a leading screening company, N&M, and has supplied thousands of silicosis diagnoses, and at least 52,000 asbestos-related diagnoses.

Representatives from N&M admitted in court that they had no medical training and that their company has never had a medical director. They confirmed that law firms often set the criteria for the silicosis screening process, and that the screening companies were paid by the volume of people who ultimately joined a lawsuit. As N&M owner Heath Mason testified, his business depended on doing “large numbers.”

Thankfully, in this case a conscientious judge stopped the fraud in its tracks, and now a Manhattan grand jury is examining the conduct of the individuals who so recklessly tried to abuse the system. That investigation will be worth keeping an eye on.

Be sure to visit Acton.org’s special section on tort reform, where you will find a wealth of resources dealing with the important legal, societal, and moral issues that arise from the abuse of tort law, including the most recent addition to Acton’s Christian Social Teaching series: Trial by Fury: Restoring the Common Good in Tort Litigation.

Blog author: jballor
posted by on Thursday, July 14, 2005

Apparently Europe is buying in to the concept. Here are two key paragraphs from today’s Washington Post, in this article from Robert J. Samuelson, “The End of Europe”:

It’s hard to be a great power if your population is shriveling. Europe’s birthrates have dropped well below the replacement rate of 2.1 children for each woman of childbearing age. For Western Europe as a whole, the rate is 1.5. It’s 1.4 in Germany and 1.3 in Italy. In a century — if these rates continue — there won’t be many Germans in Germany or Italians in Italy. Even assuming some increase in birthrates and continued immigration, Western Europe’s population grows dramatically grayer, projects the U.S. Census Bureau. Now about one-sixth of the population is 65 and older. By 2030 that would be one-fourth, and by 2050 almost one-third.

No one knows how well modern economies will perform with so many elderly people, heavily dependent on government benefits (read: higher taxes). But Europe’s economy is already faltering. In the 1970s annual growth for the 12 countries now using the euro averaged almost 3 percent; from 2001 to 2004 the annual average was 1.2 percent. In 1974 those countries had unemployment of 2.4 percent; in 2004 the rate was 8.9 percent.

Blog author: jcouretas
posted by on Wednesday, July 13, 2005

Bernie Ebbers got 25 years in the cooler for his role in the demise of WorldCom. If he serves the full sentence, he’ll be 85 years old when they let him out. Here’s how AP described his reaction when the verdict came down:

Ebbers sniffled audibly and dabbed at his eyes with a white tissue as he was sentenced. He did not address the court. His wife, Kristie Ebbers, cried quietly. Later, the two embraced as the courtroom emptied.

Now, set that picture against these remarks:

At the sentencing hearing, Henry J. Bruen Jr., 37, a former WorldCom salesman, told the court the company’s collapse caused “untold human carnage” and put him through “sheer hell.” He lost all of his savings and couldn’t get another sales job.

There are many thousands more who have been severely battered by the WorldCom collapse. Ebbers also had to cough up nearly $40 million of his own fortune as partial restitution for investors and employees whose retirement accounts were wiped out by the $11 billion accounting fraud. No doubt, many tears were shed by these unfortunates, too. Recently, The New York Times offered this summary of what Mr. and Mrs. Ebbers had to give up:

The assets that Mr. Ebbers has promised to turn over include $5 million in cash, 300,000 acres of timberlands in Mississippi, a prospective multimillion-dollar income tax refund, and interests in a major trucking business, a marina, a golf course, a rice farm, a hotel, a grain elevator company and other real estate ventures. He and his wife will also be required to vacate their multimillion-dollar home in Clinton, Miss., by October; it will be put up for sale. In addition, Mr. Ebbers has agreed to pay $450,000 to former WorldCom employees who sued him over losses they incurred in their retirement accounts.

So what’s the cure for this, and other corporate wrongdoings? Rev. Robert Sirico points to the solution in “The Ethical Challenge for Business,” a commentary written in 2002, that scandal plagued year:

If we are to learn anything from the ethical lapses of business this year, it should be that the Judeo-Christian moral code needs to be retrieved, not reformulated, much less wholesale politicization. Old truths need to be spoken into new contexts, remembering that the basic principles of right and wrong are discovered, not invented. Nor do they change based on circumstance or popularity. If this lesson is not learned from the corporate scandals, we cannot expect the moral standing of business, that activity that most people spend much of their time occupied with, to achieve a level worthy of human beings and a civilized culture.

Blog author: jballor
posted by on Wednesday, July 13, 2005

The Melbourne Herald Sun reports, “Fast food could be subject to a new tax of up to 50 per cent under a plan to fight Australia’s worsening obesity epidemic. The proposed fat tax would, hopefully, steer consumers away from calorie and sugar-laden foods and force them to choose cheaper, healthier options.”

Blog author: jballor
posted by on Monday, July 11, 2005

Following last month’s Supreme Court decision in No. 04-277, National Cable & Telecommunications Assn. v. Brand X Internet Services, which denied the use of established cable lines to high-speed ISP competitors, there might be a new addition to the broadband internet market.

High-speed internet access is now available in three main ways: via a cable modem, a DSL line, or satellite (this being by far the least common). There are advantages and disadvantages to each, but the Brand X decision solidified a cable company’s sovereignty to it’s own cable lines. This effectively reduces the pool of possible competitive vendors, since even if all three methods are available to you in your particular location (which very often one or more is not available), typically you have the option of only one vender per method.

But today’s Houston Chroncle reports on the possibility of high-speed internet access being made available through powerlines (called BPL, or broadband over power lines), perhaps adding a whole new set of competitors to the game.

And on a related note, check out the possibility that the Brand X decision confers the regulatory powers of the FCC in a radically new way to IP services.

Blog author: jballor
posted by on Monday, July 11, 2005

In a recent commentary criticizing the fast food tax, I wrote,

the fast food industry is really too easy a target for the government. Besieged by the media and public opinion (consider the popularity of the film Super Size Me), quickservice restaurants have gotten the reputation for being extremely unhealthy.

But the truth of the matter is more complex. The National Restaurant Association reports that two-thirds of quickservice restaurants have added low-carb options to their menus. As usual, the service industry responds quickly and efficiently to customer demands.

Here’s some more proof: “NEW MENU CHOICES: Fast food changes quickly,” by Caron Alarab, The Detroit Free Press, July 8, 2005

Blog author: jballor
posted by on Friday, July 8, 2005

As the jobless levels across the nation continues to decline, Michigan continues to lag behind. The nationwide unemployment rate decreased to 5.0% in June, to the lowest levels since September, 2001 according to reports. Meanwhile, Michigan remains at the bottom of the list with the worst unemployment levels, upwards of 7%.

But the key to understanding why these improving numbers have not translated into job gains in Michigan appears in the same report: “Factory payrolls shrank for the fourth straight month as auto assembly and parts plants cut back on production. A glut of inventories has prompted many automakers to slow production lines until demand can catch up. Some 96,000 manufacturing jobs have been lost since August 2004.”

Michigan’s manufacturing-centered economy has simply been unable to compete in the global marketplace, and state policies have tended to restrict rather than promote new business enterprise. An op-ed piece in yesterday’s Wall Street Journal argues that Gov. Granholm’s proposed tax plan

does nothing to reduce the excessive overall tax burden on job providers. The governor’s $2 billion bond proposal places taxpayer dollars under the control of “independent job creation experts” (the administration’s term; in the real world, we call them entrepreneurs) and instructs them to invest directly into the perceived industries of tomorrow.

This additional debt does nothing to improve Michigan’s attractiveness to investors, but instead hopes the administration’s handpicked experts will invest “other peoples’ money” effectively. And the governor’s $40.5 billion budget increases spending $1.6 billion above last year’s level and includes $300 million in tax increases. History and basic economics teaches us that Gov. Granholm’s attempt to tax-spend-and-borrow Michigan to prosperity will fail.

The answer to increasing economic growth, creating jobs and raising incomes in Michigan is simple and works whenever tried: Reduce taxes.

Blog author: jballor
posted by on Thursday, July 7, 2005

ARMAVIRUMQUE passes along an excerpt from an article posted yesterday by The New Republic, “The Killing Machine,” by Alvaro Vargas Llosa. The article is about Che Guevara, and the famous photograph that “thirty-eight years after his death, is still the logo of revolutionary (or is it capitalist?) chic.”

Llosa interviews Javier Arzuaga, a former Catholic priest, self-described as “closer to Leonardo Boff and Liberation Theology than to the former Cardinal Ratzinger.” Arzuaga’s relates the following:

there were about eight hundred prisoners in a space fit for no more than three hundred: former Batista military and police personnel, some journalists, a few businessmen and merchants. The revolutionary tribunal was made of militiamen. Che Guevara presided over the appellate court. He never overturned a sentence…. I pleaded many times with Che on behalf of prisoners. I remember especially the case of Ariel Lima, a young boy. Che did not budge.

For more about Guevara, check out ARMAVIRUMQUE for a link to a story in The New Criterion, “The real Che,” by Anthony Daniels.

You may also recall the recent Hollywood release, The Motorcycle Diaries, examined in part in an Acton Commentary by Bruce Edward Walker, “Scary Movie: Hollywood Humanizes the Despot.” Walker writes that the film is “frightening in its attempts to humanize the South American ideologue and revolutionary Ernesto ‘Che’ Guevara. The film is an attempt to validate the Communist ideology as a cure for the diseases of poverty and illness and as a substitute for the religion that is, in the film’s depiction, petty and ineffective.”

So we see the irony of a rabid Communist like Che Guevara becoming a pop culture icon, so that, in the words of Llosa, “His likeness adorns mugs, hoodies, lighters, key chains, wallets, baseball caps, toques, bandannas, tank tops, club shirts, couture bags, denim jeans, herbal tea,” and more. Whence comes this contradiction?

As I commented in a relevant blog post over at Brad Warthen’s Blog, some of the contemporary appeal can be linked to the popularization and idolization of Guevara by Zack de la Rocha and the group Rage Against the Machine. Their music is featured in The Matrix movies, and they are perhaps most famous for their subversive politics and revolutionary ideology. The group was formed in 1990 and broke up in 2000, a decade in which their popularity peaked, influencing a generation of pop culture.