WASHINGTON — Sen. John Edwards is a sign of the times. When listening to the election returns on that November morning in 1998, while I was not pleased to hear that the multimillionaire personal injury lawyer had won the North Carolina Senate race, I was not surprised. After all, it was mainly during the 1990s that a new class of the super-rich had come into being: those who made their money not by wealth creation, but by wealth coercion.
There are two principal ways to get rich: by getting other people to voluntarily transfer their money to you, or by having them do it against their will. The first method usually consists of wealth creation, where you produce something that other people consider valuable enough to exchange their assets for. Wealth coercion, by contrast, typically involves taking things from other people by force or threat, either legally or illegally.
Some wealth coercion is necessary. Having no other way to finance itself, the government needs to raise money through taxation. And when people break the law, or when contracts are not abided by, or in instances of egregious negligence, there has to be some penalty in the form of a fine.
It is when these institutions get abused that society is harmed. The all-powerful lure of money is why governments are so prone to raise taxes over time, or why some people are content to get fabulously wealthy by using the courts to take away what other people have produced.
Even the best legal system is full of imperfections. A defendant may be innocent but be punished anyway if all the stops are pulled out to sway a gullible jury or judge. Or laws can be unethically changed or manipulated to help ensure that defendants pay out millions or billions of dollars against their will. These practices have proliferated in recent years.
By the 1990s, "negligence" had come to mean the failure to prevent practically any conceivable injury, even to people in the act of committing a crime. It had become easier for lawyers to have "expert" witnesses testify, even though they may not be experts or may have a vested interest in the outcome of the trial. "Forum shopping" also had become easier, enabling trial lawyers to pick a judge who they deem will likely take their side. And lawyers can now sue with no real clients, thanks to the rise of class action lawsuits.
The $246 billion tobacco settlement was a watershed win for trial lawyers, not just in billions of dollars in fees but also in new legal precedents that further stack the deck in their favor. State governments made sweetheart deals with lawyers, writing new laws and applying them retroactively in order ensure a win against an industry operating within the law. In Florida, rules were changed to prevent defendants from presenting certain evidence or arguments. And multi-billion-dollar bonds were required before defendants could appeal, making it all but impossible to appeal.
All the while, trial lawyers' influence in writing and shaping laws was growing. They gave generous campaign contributions not only to legislators, but also to judges and state attorneys general. A vicious circle developed: government officials who are recipients of trial-lawyer money enact measures that help enrich the lawyers, who in turn recycle much of that money into political campaigns, and so on. In addition to producing a new class of multimillionaires, the result is ever-absurd lawsuits, such as the suing of innocents by the non-injured.
Some ill effects of this are highly visible, such as the exodus of doctors out of places like West Virginia or Pennsylvania because of unaffordable malpractice insurance. Most effects are less visible, such as goods and services that simply do not come into existence because of the oppressive legal climate, or higher prices for goods and services to cover legal bills or insurance costs.
And now, members of the new trial-lawyer multimillionaire class are tightening their iron grip on the polity by becoming lawmakers themselves, as the case of John Edwards shows. Flush with tens of millions of dollars he obtained from accident cases, Edwards spent $3.2 million on his Senate campaign in 1998. And he is not wasting any time, already running for president.
He says he is a helper of the little guy, but tell that to the Arizona woman who gave birth in her car because the legal climate forced her local hospital to no longer deliver babies. Or tell that to the kids who have no diving board at the local pool because of lawsuit fears. Or tell that to all the little guys out there paying higher prices and insurance rates because of out-of-control lawyers.
It would be a sad day in America if a champion of wealth coercion ever became president.