Blowing Smoke Where the Sun Don’t Shine

Let’s say that you have got a law suit against some company, the Celluloid Frying Pan Company, Inc. for 20 million dollars  for manufacturing a product that issued noxious gasses and poisons when used, which product caused the death of one of your loved ones. And let’s go further, and say that the government, alarmed by the potential dangers inherent in the products of the Celluloid Frying Pan company, and other companies like it, in an attempt to curb and discourage the use of such products, have passed legislation that such companies can no longer advertise their products on billboards or in magazines or on television anywhere in the United States. Let’s further say that as a result of such campaign of discouragement, less and less people every day are buying and using celluloid fraying pans precisely because of the deleterious effect caused by the use of them.

Now your lawyer tells you that the lawyers for Celluloid Frying Pan have offered to settle your law suit against them for the $20 million you sued them for. BUT, they say, the only way they can pay you this amount of money is if they pay you a million dollars a year over the next 20 or so years (taking into consideration interest at the legal rate for the outstanding amount of the judgment).

You have to decide whether or not this is a good deal. You ask your lawyer what he or she thinks. And the lawyer tells you it’s iffy. For example, your barrister points out, if Celluloid Frying Pan goes belly up as a result of having no business – because of the United States Government’s affirmative discouragement program – next year, or five, or ten years from now, you aren’t going to be able to collect a cent.

And you say to the lawyer, Hey! That’s not fair. And your lawyer says to you, fairness stopped at the threshold of the 3rd , maybe 2nd grade. This is what is called, in legal terms, he says. Welcome to The Real World.

Is there anything that can be done to guarantee the payment, you ask? Yeah, says the lawyer, if they put up securities or cash in escrow in sufficient amount to guarantee the balance. But they’re not offering that. They’re offering their corporate signature on a piece of paper.

What happens if the company goes out of business? you ask. Is there any kind of government guarantee for corporations or businesses that go out of business. Nope!

What do you think, you ask the lawyer. You think such big companies can just go out of business. I never expected Pan American Airways to go out of business. Nor Eastern Airlines. Nor Nabisco. So, could they go out of business? Sure. Will they? Who knows?

But they’re diversifying, you tell your lawyer. They’ll have other interests that can pay, right? If I were advising them as a client, just like I would advise you, if one aspect of your business is going into the toilet, sure as hell, don’t diversify and blend your new, good business to your old, failing corporation. Form a totally independent corporation, one that is totally free of any obligatory liability from the old business.

Hell, that’s not fair – I know, I know, 3rd grade. Screw it, you tell the lawyer, that settlement isn’t worth the paper it’s written on. Get me some cash or don’t settle.

Well, now, let’s translate the above illustration into current day reality. Here we have Our Heros I and II, Pataki and Guiliani, as well as alleged responsible government officials in all kinds of states and cities,  parsing out how they are going to be able to rely upon, spend the reap from, finance our futures as a result of the tobacco companies settling humongous law suits against them, payable over the next 20 or 25 years. In other words, our present political geniuses are planning to support substantial portions of our future budgets bonds that New York State and New York City are going to sell to the public, which bonds, in turn,  are going to be paid off  with the funds paid by the tobacco companies in settlement of the current law suits.

Meanwhile, at and during the same period of time, the U.S. government is going to do all it can to drive these same tobacco companies out of business. Every place you go, now and into the future, is going to discourages smoking;  work in an office, in the middle of winter, you have to go outside and stand in the slush for a puff. Go to a restaurant, and the other customers are aghast if the slightest whiff of cigarette smoke offends their olfactory organs. Go to college, and there’s no smoking in the classes, in the school buildings, in the cafeterias, in the dorms. Go to any government location, fly to anywhere in the world on an American airline – No Smoking! I took a European friend to a game at Yankee stadium; he was dumbfounded, not by the game so much, as by the fact that no one can smoke in an outdoor arena, open to the sky.

And our school budgets for the next 20 years, the re-building of our schools, the hiring and paying for a host of new teachers, and a lot of other future budget items are going to be paid for by bonds that Heroes everywhere are going to try to sell to the public, guaranteed by the tobacco industry settlement money?

Guaranteed??? By money that’s going to come over the next 20 years from businesses that our government is going to do its darnedest to drive right out of business?

Who’s going to buy these bonds? Me? Are you blowing smoke at me, or what?