Parasites At The Gate

Copyright 1998 Investor's Business Daily
May 4, 1998

In the '80s, Hollywood had a good belly laugh at the expense of "greedy" tobacco companies. R.J. Reynolds executives were derided as "Barbarians at the Gate" in an HBO movie. Don't expect any sequels poking fun at greedy trial lawyers and politicians.

We've already got the title -"Parasites at the Gate." It would show these great profit-suckers crashing against the barrier that keeps socialism out of the free market.

Their $516 billion tobacco bill threatens to kick it wide open.

Forty states, the president and even the GOP- led Congress have joined with trial lawyers to try to take half a trillion dollars in profits from the tobacco industry over the next 25 years. Washington already takes twice as much in taxes as the tobacco industry makes in profits. Under the Senate bill, it would take 10 times as much.

And if it happens to one politically incorrect industry, it can happen to another and another - until it happens to yours. Where will it stop?

We do not defend smoking. Cigarettes are a health hazard with no redeeming value. But they are legal.

Make no mistake: What we're seeing is not just an attack on the tobacco industry. It's an attack on capitalism - and on the right of individuals to make choices freely in the market. Tobacco is just the easiest target.

But as the government shakes down the tobacco industry, the pocket-picking parasites have already moved on to other hosts.

Booze. A recovering drunk in Florida is suing 500 brewers, distillers and vintners for $100 million in damages. His federal claim is weak by itself. But he may soon be joined by trial lawyers looking for another big class-action kill.

As we reported in our Feb. 12 National Issue, Naderite groups are cooking up ways to sue the alcoholic beverage industry for Medicaid refunds. Toward that end, the Center for Science in the Public Interest has started the Alcohol Policies Project. The center has already demanded that 17 states stop selling spirits - advertised on TV - through their controlled outlets.

And the same Emory University law professor who egged on Mississippi, the first state to sue tobacco makers, is egging on other states to sue alcohol makers. Frank Vandall says he's just "chinking away at the armor" of bad businesses.

Guns . Good citizen that he is, Vandall is also advising states on how to file Medicaid liability suits against gun makers. Philadelphia's mayor wants to sue them for crime-related costs such as washing blood off the streets. Officials in Detroit and Miami also want to sue.

Junk food. As if alcohol, tobacco and firearms weren't enough, the parasites may go after the cholesterol-packaging industry. Alarmists at the Center for Science in the Public Interest don't like Big Macs, enchiladas, sweet-and-sour pork, pizza or fettucine alfredo. So they've tested food at chains like Chili's, Domino's and McDonald's and listed them as verboten.

Will such chains be targeted next? "I can't rule it out," Vandall told us.

Drugs . An Alabama legislator is going after the makers of fen-phen diet pills. His bill aims to extract $2 billion from American Home Products.

Software. It's now clear that federal antitrust lawyers are on a trophy hunt. They won't stop until they get Bill Gates' megarich scalp. And now 13 states have joined in the get- Microsoft safari.

HMOs. Managed- care providers did their job: They brought down health-care costs. Now Clinton's Justice Department is rewarding the $1 trillion industry by tearing it apart limb by limb. That's after Congress wrote all sorts of goodies into law to spur the creation of HMOs.

Sneakers. The same lawyers who got Joe Camel kicked off billboards have just filed a suit in California against Nike Inc. The company's crime? It runs a shoe plant in Vietnam. Oh yeah, Nike's also profitable.

Stocks. It took overriding President Clinton's veto, but Congress passed a law limiting frivolous shareholder claims in federal court. But firms are still vulnerable to class-action suits in state courts.

Economist Joseph Schumpeter once argued that capitalism's excesses would be its demise. They artificially support an industry of parasites -lawyers, professors, policy wonks, bureaucrats and politicians. Schumpeter predicted they will eventually consume their host - the entrepreneurs and risk-takers who actually produce the wealth.

Fact is, Washington doesn't want to ban cigarettes, as much as it decries them. Why? Tobacco companies provide a nice piggy bank for Congress' big spenders - Republicans included.

Yes, tobacco kills. But so does alcohol. And that industry is bigger. But so do artery-clogging salty snacks, fast food and dairy products. And those industries are bigger still.

The parasites have gotten a taste of blood in the tobacco wars. It's time to stop them before they infest the rest of the economy. Joe Camel today, the Pillsbury Doughboy tomorrow.

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