At UC Berkeley, Robert Reich with the Mario Savio Memorial Lecture on Class Warfare in America.

This is the story of Bob the businessman.

Suppose a local businessman, let’s call him Bob, went around town raising money from the townspeople to open a car dealership. Dozens and dozens of people in town invested, putting in $1,000, $5,000, and a few putting in as much as $50,000 and $100,000. Bob raised a lot of money for his business.

After a while the investors found out Bob the Businessman was using some of their money to help his brother run for Mayor and several cousins to run for city council, and some of it to make his wife head of the Arts Council for a good salary. Then they learned that he was using some of it to fund a local organization that did nothing but push for tax breaks for . . . businesses just like Bob’s. (And to push for "deregulation" letting Bob use his company's money to do things like ... fund the organization.)

In the election his brother was elected Mayor and his cousins took over the council. Once in charge of the city, they pushed through a big contract for Bob to supply cars to the city (many of which the city didn’t even need.) The city also exempted Bob’s business from taxes, even giving it subsidies.

This all of course made the car dealership very profitable, and the investors started asking when they were going to get a dividend. But they found out that Bob’s business opened a subsidiary based at a post office box in the Cayman Islands. This Cayman Islands subsidiary had been buying cars from the manufacturer at wholesale and turning around and selling them to Bob’s parent company for just under what the dealership sells them to the public for. As a result, all the profits went to the Cayman Islands subsidiary, and Bob wasn’t bringing any of it back to distribute to the shareholders!

Next, the investors learned that Bob had been living really high on the hog, paying himself many millions of dollars.

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via The Uptake -- January 15, 2012: Gov. Dayton Castigates GOP "Gut and Cut" Policies to Protect the 2 Percent

If there's any lesson Democrats should have learned this time around, it's the importance of turnout for gubernatorial races. Thank God we still have some Democratic governors to stand up to the kind of crap ALEC has peddled around the rest of the country:

ST. PAUL, Minn. - Gov. Mark Dayton Friday vetoed four lawsuit liability limit bills, after branding them "partisan political ploys" by the Republican majority in the state legislature.

"The real impact would be to reduce the rights of law abiding citizens and businesses to seek justice from the wrongdoing of others," Gov. Dayton told reporters at the Capitol.

The four pieces of legislation were designed to lower the exposure of businesses to legal actions by consumers, including shortening the statute of limitations, capping interest rates on some judgments and requiring legal fees to be proportionate to the actual amounts paid.

Dayton said the ideas had been rejected by a task force appointed by the Minnesota Supreme Court, and that most of the bills were cookie cutter legislation proposed in several states by a conservative action group.

He also pointed to statistics showing that the number of actual tort cases in Minnesota's civil courts has fallen 40 percent since 1997, and that such lawsuits make up only three percent of the Minnesota court system's case load.

"So exactly who did the Republicans in the legislature listen to?" Dayton asked, as he held up a thick document.

"Three of the four bills come right from this manual. Tort Reform Boot Camp, published by the American Legislative exchange council, or ALEC."

The organization often holds seminars for conservative state legislators across the nation, and provides model legislation that reflects a public policy agenda.

"It is an extremely conservative group funded largely by large corporations, big business associations, insurance companies and very wealthy individuals," Dayton remarked.

Nicole Belle wrote about "Hot Coffee" back in October here at C&L, and I wrote about it on my own blog a year ago.

In case you didn't already know, the movie uses the famous McDonald's hot coffee jury award as a starting point -- you know, the one that was pushed by the media as an example of reckless juries and people not taking responsibility for themselves?

What they didn't tell you was how severely the victim was burned -- and that several other court rulings instructed McDonald's to lower their coffee temperature, which the company ignored.

But that's not all. The documentary illustrates how the tort reform movement has used distortions and lies to convince the public that corporations are inundated with groundless lawsuits. Like this one:

Lisa and Mike Gourley are the parents of twin sons Colin and Connor. Colin was born with cerebral palsy because of medical malpractice during childbirth. A Nebraska jury awarded Colin $5.6 million to cover his medical expenses. But a state-mandated cap reduced his award by 80 percent, to $1.2 million. We speak with the family about how taxpayers are now responsible for paying for Colin’s expensive healthcare costs and how mandated caps in malpractice lawsuits relieve the wrongdoer of responsibility for the damage they cause.

There's even more to the story than that. Corporations are just buying their own justice system through forced arbitration and by pouring huge amounts of money into judicial elections.

I'm not exaggerating when I say that litigators are the last line of defense between us and and complete corporate control, so the more you learn about how this is happening, the better prepared you are to vote for your own interests.

Perfectly timed to the uprising of the We Are 99 Percent protests, filmmaker Susan Saladoff has made the documentary, Hot Coffee, chronicling the systematic and cynical campaign to get people behind the notion of tort reform. In yet another example of how the system is continually rigged against the little guy, astroturfed groups with names like "Citizens Against Lawsuits Abuse" fool regular Americans into thinking that they shouldn't expect remedy from corporations who have damaged them, often permanently.

The eponymous coffee refers to the infamous McDonald's lawsuit where a woman was awarded nearly $3 million in damages after coffee spilled in her lap after going through a McDonald's drive-thru. While the butt of jokes, the plaintiff, 79 year-old Stella Liebeck, received third degree burns on her body and required years and multiple operations to treat her injuries. But McDonald's knew their coffee was too hot to drink and did nothing to change it. So what's the remedy for all us Average Joes? Ron Paul's invisible hand of the free market? Hate to break it to those free market fetishists, but that is exactly what lawsuits are. How else do you force corporations to modify their behavior to make their services/products safe for their consumers? That's why the damage caps and mandatory arbitration that these so-called 'tort reform' groups advocate only weighs to the advantage of corporations.

Hot Coffee is currently available on HBO on Demand and will be released on video November 1, 2011. But you can pre-order a copy and have it sent to the lawmaker of your choice to remind them that the 99% will not stand for more laws to disadvantage them further. From the Hot Coffee website:

Tell Congress and state lawmakers to oppose laws that restrict access to the courts.

◊ Congress: Make your voices heard on two important bills right now!

Stand Up for Patients Rights. Tell your member of Congress to oppose the badly named, badly flawed Help Efficient, Accessible, Low-cost, Timely Healthcare Act of 2011″ (H.R. 5), which would allow for sweeping immunity from accountability for the health industryincluding doctors, nursing home operators, medical device manufacturers, pharmaceutical companies and hospitals.

Stop the Corporate Attack on Our Rights and End Forced Arbitration. Tell your members of Congress to support the Arbitration Fairness Act (S. 987 and H.R. 1873), a good bill that would provide limits on mandatory arbitration by corporations; arbitration should be agreed to by both parties after a dispute arises, not inserted in the fine print of one-sided contracts.

◊ States: Contact your state lawmakers, and tell them to oppose caps and so-called tort reform.

Most of your rights are being taken away at the State level. Find your elected representatives. Tell them to oppose laws that limit your legal rights. And sign up for Action Alerts to be kept informed about whats happening in your state (well need your zip code).

Can you imagine 50 copies of this documentary being sent to Rick Perry and Herman Cain? The mind reels.

Saladoff sat down with Stephen Colbert on Tuesday:

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The obsession Republicans have with lawsuits and the amount of money someone should receive if they win a case is very perplexing and disingenuous to me. I mean, they are the first people to use lawyers and sue you, like Fox News did to Al Franken over a book. But during the Obama health-care summit, I heard more garbage about "tort reform" from the Republicans as if it will cure our ailing health-care system. (Sen. Dick Durbin dispelled that myth perfectly, by the way.)

But that was just a drop in the bucket compared to the garbage we get served up on a daily basis from the media elite pundits who take to our airwaves and say the most insipid things to defend their positions. Fox News' Megyn Kelly earlier this week gave probably the most ludicrous argument against trial lawyers and for tort reform than anyone I've ever seen. She sacrificed her arm for the cause. For some reason, if malpractice cases disappeared, suddenly health care premiums would majestically be reduced.

Kelly was discussing tort reform with Debbie Wassermann-Schultz and dove into the twilight zone by arguing that if her arm was cut off, it really wasn't worth all that much as long as you can still function. And what the hell? It's only an arm. I mean how much of an impact does it have on your life if you lose one arm, because you have a back up, right?

Kelly: this is a CNN poll and thy ask people about tort reform and 66% of those asked said they favor limiting the amount of money patients can get if they win a medical malpractice lawsuit. 66 % want that. 33 % don't want that. Why can't there be an agreement on tort reform?

Schultz: They support that until it's them or their family member that is injured in a medical malpractice suit and then the poll numbers change.

Kelly: You just have to limit the economic damage, in other words you, if a doctor cuts my arm off. I can get the money back from what my life is to live like without this arm so I can function. You can't get punitive damages.

WTF? How does a person figure out how much one of my limbs is worth? And then I'm not allowed to get punitive damages because I don't deserve it? Are you confused?

You know, if some moron of a doctor cut off my arm through incompetence, not only would I want to get enough money to make my life whole, I would want to make sure the doctor paid a price too, just to try to assure it didn't happen to anyone else. It might not put him out of business, but it would take a piece out of his hide that he would never forget.

Maybe we should have Kelly draw up a diagram of a body and then monetize each part as it relates to how a person functions. She could then pass it on to Michael Steele, Sarah Palin and the teabaggers, because I'm sure they would argue that one foot is only worth about thirty three hundred dollars and sixteen cents.

Why would anyone care if I won $10 million dollars from a f*&king doctor if he cut my leg off and I sued his ass because he was supposed to only drain a little fluid out of my knee? This is the kind of crap Republicans argue for on Fox News every day, and conservative pundits on all the channels spew regularly. They really are ethically bankrupt.

I can't say it's a surprise that congressional Republicans think it would be great to start over with health care, or that they're in favor of "incremental" changes. (I'd love to see them get "incremental" health surgery.)

And I can't say it's a surprise that they had virtually nothing useful to offer.

What I realized, though (and maybe this is the driving force behind Obama's puzzling, sometimes infuriating compromises) is that to many Republicans, their illogical fantasies are akin to a child's night terrors. We know there aren't any monsters under the bed, but your child doesn't. So you go through the motions of shooing the monsters away so your child can sleep.

We know that tort reform has such small influence on malpractice premiums that it's virtually meaningless. Any rational person who looks at the research knows this. What you have are a lot of people making what they claim are factual assertions that are nothing more than an intellectual construct to support their emotion-driven conclusion.

We know that selling insurance across state lines doesn't solve the health care crisis, either.

We know that the fastest increases in costly diseases are being driven by environmental pollutants and contaminants, so eating right and exercising doesn't solve the health care crisis, either.

But we're left with a Congress where roughly half of them believe their fairy tales. And since the ideological wars are driven by true believers, we simply don't have the time to convert each of them, one by one, to the realities we face.

Which is simply my long-winded way of saying that Harry Reid needs to shove good healthcare legislation through using reconciliation, right now. No more waiting.

People are dying, every single day. President Obama, we don't need any more to die while you patiently reassure the Republicans about the monsters under the bed.

Get. It. Done. NOW.

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What a week. We've already seen Blue Dogs take women to the back of the bus (or was it the alley?) with Stupak's impressively Stupid Amendment. Now we're hearing that those who supposedly worry about "too much spending" when it comes to health care--you know, the meatloaf-brains who rejected the public option, which would create competition and actually bring down costs--are now blathering on about embracing "tort reform."

Because you'd really want to take away the rights of victims in a democracy to lower the health care costs by...wait for it...wait for it... ".5%" (according to the CBO).

All you really need to know is that Blue Dogs/GOPers (is there any difference?) are those in favor of this counterproductive course of action, yet if you do indeed need more, watch the heart wrenching videos recounting the tragic results of medical malpractice. To learn more about the 98,000 lives lost due to medical error each year--or 268 every day--go to 98,000 reasons, a website set up by the American Association for Justice. Once there send a message to your Senator: Remind them you won't have your rights further stripped away so they can scarf down more caviar with their contributors at Big Insurance.

More videos below the fold:

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In the wake of its shocking assessment that employer-provided health insurance now covers only 54.6% of the American people, Thomson Reuters released a disturbing assessment of wasteful spending in the U.S. health care system. Echoing the estimates of Obama OMB chief Peter Orszag and others, the analysis highlighted by Keith Olbermann Tuesday concluded that the United States wastes up to $700 billion a year - a third of the nation's total $2 trillion health care spending.

As Robert Kelley, vice president of healthcare analytics at Thomson Reuters and author of the white paper, put it:

"The bad news is that an estimated $700 billion is wasted annually. That's one-third of the nation's healthcare bill. The good news is that by attacking waste, healthcare costs can be reduced without adversely affecting the quality of care or access to care. That's the point of this report - to identify areas in the healthcare system that can generate game-changing savings."

Those game-changing savings, TR found, could be found across a broad range of health care spending. Between $600 billion and $850 billion, it estimated, is wasted on:

• Unnecessary Care (40% of healthcare waste): Unwarranted treatment, such as the over-use of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending.
• Fraud (19% of healthcare waste): Healthcare fraud costs $125 billion to $175 billion each year, manifesting itself in everything from fraudulent Medicare claims to kickbacks for referrals for unnecessary services.
• Administrative Inefficiency (17% of healthcare waste): The large volume of redundant paperwork in the U.S healthcare system accounts for $100 billion to $150 billion in spending annually.
• Healthcare Provider Errors (12% of healthcare waste): Medical mistakes account for $75 billion to $100 billion in unnecessary spending each year.
• Preventable Conditions (6% of healthcare waste): Approximately $25 billion to $50 billion is spent annually on hospitalizations to address conditions such as uncontrolled diabetes, which are much less costly to treat when individuals receive timely access to outpatient care.
• Lack of Care Coordination (6% of healthcare waste): Inefficient communication between providers, including lack of access to medical records when specialists intervene, leads to duplication of tests and inappropriate treatments that cost $25 billion to $50 billion annually.

But in its catalog of health care spending horrors, however, Thomson Reuters may have understated potential savings in one area while overstating them in another.

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In recent days, Republican leaders have scored a series of political victories in their eternal quest for tort reform. Last week, the Congressional Budget Office (CBO) told Senator Orrin Hatch (R-UT) that an onerous package of malpractice curbs he championed could save the government an estimated $54 billion over 10 years. That came on the heels of President Obama's latest offer to support limited tort reform as an olive branch to recalcitrant Republicans balking at his health care proposals, including funding for a $25 million pilot program.

But largely overlooked in the heated discussions of damage award caps, special health courts, expert panels and national compensation schedules is the inescapable truth that the medical malpractice system has only a negligible impact on overall American health care costs. Republican horror stories of a torrent of baseless malpractice suits producing "jackpot justice" that fuels rising premiums for physicians and patients alike while driving doctors from practice simply don't comport with reality. The overstated, overblown, over the top and often outright false GOP claims suggest that the Republicans' real target is not the flawed American malpractice system, but instead the nation's trial lawyers whose campaign contributions help bankroll the Democratic Party.

Here, then, is a look at Republican Malpractice Myths:

1. An Explosion of Malpractice Litigation
2. A System Plagued by Frivolous Lawsuits
3. Rising Damage Awards Key to Higher Malpractice Premiums
4. Rising Malpractice Insurance Rates Driving Doctors from Practice
5. Medical Malpractice Reform Would Save U.S. $200 Billion Annually
6. Defensive Medicine Costs $200 Billion a Year

For the details and data behind each, continue reading.

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Health care costs are exploding. A robust public option would create competition that would lower costs, and increase access to life-saving medicine.

But wait! I have an idea! Let's eliminate the public option, and for good measure, take away the rights of the victims of medical malpractice by passing "tort reform." Even though, it um, doesn't work. You know, if by work, you mean lower health-care costs and do anything to help regular people afford health insurance.

But if you've been trained by "Permanent Majority" Rove, and your real purpose is to 1) Keep your corporate slop-providers happy 2) Punish a group that often gives donations to Democrats (lawyers) and 3) Pretend you actually care a whit about people who don't get Yacht Shoe Weekly, then bingo! You have your made up issue.

Thankfully, the American Association for Justice has begun a campaign to tell the truth about this issue, about the 98,000 people who lose their lives each year due to preventable medical error:

The American Association for Justice announced today it is launching what it called the first phase of a nationwide ad campaign "to educate lawmakers about the epidemic of preventable medical errors and how tort law changes won't lower costs or cover the uninsured."

The ads, running in Washington publications and on online news sites, say the estimated 98,000 deaths from preventable medical errors is "like two 737s crashing every day for a whole year."

But the ad concludes:"Would we blame the passengers or the airlines?"

Well, we know who Republicans and Blue Dogs would blame. The passengers. The pilots. The unions. Gay Marriage. Stem-cell research. But never the big corporations who make the planes.

Thankfully, we know better.

Disclosure: I'm damn spankin' proud to be working with the American Association for Justice to protect patients' rights.