How companies make millions off lead-poisoned, poor blacks(washingtonpost.com)
washingtonpost.com
How companies make millions off lead-poisoned, poor blacks
http://www.washingtonpost.com/local/social-issues/how-companies-make-millions-off-lead-poisoned-poor-blacks/2015/08/25/7460c1de-0d8c-11e5-9726-49d6fa26a8c6_story.html
263 comments
It would be helpful to know at what interest rate they are discounting future payments. When you're looking 50 years in the future, even a few points makes an enormous difference.
"She remembered a nice, white man. He had called her one day on the telephone months after she’d squeaked through high school with a “one-point something” grade-point average."
#Nottheonion
If the users here on HN can't see that this article is heavily biased and racist, there's something wrong.
It's this sort of thing that leads me to believe that 'smart' people aren't all that smart and can easily be manipulated by the media and people that power-hungry politicians.
cough Global Warming cough
This article is trash and shouldn't even be here on HN.
#Nottheonion
If the users here on HN can't see that this article is heavily biased and racist, there's something wrong.
It's this sort of thing that leads me to believe that 'smart' people aren't all that smart and can easily be manipulated by the media and people that power-hungry politicians.
cough Global Warming cough
This article is trash and shouldn't even be here on HN.
Can you point out a biased sentence?
I'm going to ignore your global warming comment. At some point you're going to have to accept that the vast majority of scientists accept that climate change is real and that the vast majority of people who deny the reality of climate change are not scientists and have misunderstood the science.
I'm going to ignore your global warming comment. At some point you're going to have to accept that the vast majority of scientists accept that climate change is real and that the vast majority of people who deny the reality of climate change are not scientists and have misunderstood the science.
"At some point you're going to have to accept that the vast majority of scientists accept that climate change is real and that the vast majority of people who deny the reality of climate change are not scientists and have misunderstood the science."
Like I said, I never said Climate change isn't 'real'. The dispute is how much the climate is changing and what is causing it.
The vast majority of climate scientists:
1) It would be career-suicide to express any other opinion about climate change besides the current narrative. Many have already been fired for doing so. I was in Academia for many years and pretty much everything has to do with politics.
2) Rely on the same sets of data. Confirmation bias is a real thing. If you even bothered to look at the website I mentioned, you would see that some of the main studies used for climate change proof are not peer-reviewed.
If 'science' means research without peer-review, completely invalid studies, the refusal to admit studies that are wrong, silencing opposition, and using politics to bully the opposition, I will agree.
However, this isn't science and if it was just science as you say, we wouldn't have politics, lying, and outright fraud involved in so many instances.
Al Gore, for instance, is now a wealthy man for essentially getting laws passed to force companies to buy carbon credits from his own companies. He pushed 'Global Warming' as 'Settled science' and the science community accepted it.
The pope came out a few months back and backed climate change. Everyone pointed to this as some sort of proof. They ignored the fact that the pope also talked about how trans-gender people are not seen as human in the eyes of god.
If you can't see the problem here, you don't really understand science yourself.
Like I said, I never said Climate change isn't 'real'. The dispute is how much the climate is changing and what is causing it.
The vast majority of climate scientists:
1) It would be career-suicide to express any other opinion about climate change besides the current narrative. Many have already been fired for doing so. I was in Academia for many years and pretty much everything has to do with politics.
2) Rely on the same sets of data. Confirmation bias is a real thing. If you even bothered to look at the website I mentioned, you would see that some of the main studies used for climate change proof are not peer-reviewed.
If 'science' means research without peer-review, completely invalid studies, the refusal to admit studies that are wrong, silencing opposition, and using politics to bully the opposition, I will agree.
However, this isn't science and if it was just science as you say, we wouldn't have politics, lying, and outright fraud involved in so many instances.
Al Gore, for instance, is now a wealthy man for essentially getting laws passed to force companies to buy carbon credits from his own companies. He pushed 'Global Warming' as 'Settled science' and the science community accepted it.
The pope came out a few months back and backed climate change. Everyone pointed to this as some sort of proof. They ignored the fact that the pope also talked about how trans-gender people are not seen as human in the eyes of god.
If you can't see the problem here, you don't really understand science yourself.
Implying that there are more intelligent people on HN than somewhere else.
No one would be telling sob stories if they thought that they might pull a Warren Buffet w/ their payout. $60k was more than enough to get buffet to billions. Maybe the company used the wrong discount?
Really roughly those discounts seem pretty generous, they're approximately stock market investment rates. Meaning if the poor recipients put the money in the "market" (maybe not this week) they'd average the same amount of total payout.
Really roughly those discounts seem pretty generous, they're approximately stock market investment rates. Meaning if the poor recipients put the money in the "market" (maybe not this week) they'd average the same amount of total payout.
Not at all. Try doing 60k at a 7% market rate (which is optimistic by the way). You get to about 600k. Now value the monthly payments invested in a similar manner, you get to around $2m. It's a gigantic difference. And no not even Buffet had the returns necessary to make money out of this (which is an average of > 23% annual returns for 35 years).
This isn't some government agency giving you the approximate lifetime value upfront as a way to offer choice. It's a for-profit business looking to cash in on the difference, not a charity, not a break-even operation. They're there to make as much money as possible. Doesn't take much to assume they're not going to be 'approximately stock market investment rates', and if you look at the numbers, surprise surprise they aren't anywhere near it because it wouldn't make them any money.
This isn't some government agency giving you the approximate lifetime value upfront as a way to offer choice. It's a for-profit business looking to cash in on the difference, not a charity, not a break-even operation. They're there to make as much money as possible. Doesn't take much to assume they're not going to be 'approximately stock market investment rates', and if you look at the numbers, surprise surprise they aren't anywhere near it because it wouldn't make them any money.
> It's a for-profit business looking to cash in on the difference, not a charity, not a break-even operation. They're there to make as much money as possible.
Like most/all businesses?
They're selling a product, whats being disagreed upon is the price. My back of envelope calcs suggested they were getting about market rates (7-8%) but i also admit that I am not well versed in those maths.
Like most/all businesses?
They're selling a product, whats being disagreed upon is the price. My back of envelope calcs suggested they were getting about market rates (7-8%) but i also admit that I am not well versed in those maths.
I think you're missing a subtle but important point here - namely, that Warren Buffet can read.
This is really sad. Isn't "competence" a necessary prerequisite for entering into legal contracts?
Pretty much. Entering into a contract with a brain damaged individual who was not at all educated would get the contract thrown out of court pretty quickly.
That sounds, maybe ironically in this context, like a class-action lawsuit opportunity. Or maybe individual litigation on contingency (to void the contract for lack of capacity to contract, or another theory).
Maybe I'm an ignorant jackass for asking this, but how can someone who lacks competence to enter contracts ever litigate on a contingency basis?
In the article the same woman falls for a different company to sell her settlement to, and it gets thrown out of court because she already sold it to the first company.
If someone has brain damage and struggled with an education, usually a custodian is assigned to take care of their finances and make financial and legal decisions for them. In this case it didn't happen, and her name and phone number is on a list of people who got settlements that these companies buy and then call and scam out of their settles for pennies on the dollar.
If someone has brain damage and struggled with an education, usually a custodian is assigned to take care of their finances and make financial and legal decisions for them. In this case it didn't happen, and her name and phone number is on a list of people who got settlements that these companies buy and then call and scam out of their settles for pennies on the dollar.
[deleted]
That line of reasoning is a double-edged sword.
Could there be a more inflammatory click baity title for this?
Inflammatory?
Unfortunately, some things will incite a rise within any reasonable person, regardless of title. This is definitely one of those articles.
Not to mention the title is concise and accurate, while summarizing the article well.
Unfortunately, some things will incite a rise within any reasonable person, regardless of title. This is definitely one of those articles.
Not to mention the title is concise and accurate, while summarizing the article well.
Are they targeting blacks or poor people with settlements? I didn't see anything in the article to support the claim that its racial.
Does it matter? It's black people who are affected by it.
Exactly.
It stands to reason that inner cities have the most problem with brain damage from lead poisoning. Inner cities often have high percentages (in the case of Baltimore a majority) of black people.
If more black people live where more people have lead caused brain damage and this business model has sprung up to exploit them, it's a perfectly valid title for the article.
It stands to reason that inner cities have the most problem with brain damage from lead poisoning. Inner cities often have high percentages (in the case of Baltimore a majority) of black people.
If more black people live where more people have lead caused brain damage and this business model has sprung up to exploit them, it's a perfectly valid title for the article.
Yes, it matters. It's poor practice for a journalist to include the race, sexual orientation, religion, etc... of someone if it has nothing to do with the story.
It does have to do with the story. Part of the article discusses Freddie Gray, who is inextricably linked with the recent stories of police shooting black men. Baltimore is also quite famous for its racial problems.
It's a surreal place to visit: you can go from the shiny Inner Harbor full of white hipsters and convention-goers shopping at the flagship Under Armour store to an area that looks like it suffered a recent civil war -- roofs collapsing, infrastructure crumbling, sudden change in what stores are open and whether they have bars on the windows -- in about 20 minutes. If you're me, someone will be kind enough to tell you that someone got shot at this bus stop last week (implication: maybe you'd better turn around). Poverty and lead paint in Baltimore are deeply entwined with (though not at all synonymous with) race.
It's a surreal place to visit: you can go from the shiny Inner Harbor full of white hipsters and convention-goers shopping at the flagship Under Armour store to an area that looks like it suffered a recent civil war -- roofs collapsing, infrastructure crumbling, sudden change in what stores are open and whether they have bars on the windows -- in about 20 minutes. If you're me, someone will be kind enough to tell you that someone got shot at this bus stop last week (implication: maybe you'd better turn around). Poverty and lead paint in Baltimore are deeply entwined with (though not at all synonymous with) race.
Except that the article is about brain-damaged people selling their settlements.
The whole grey area here is about the brain-damaged people not being able to correctly evaluate the value of the document they are signing.
Even if 100% of the brain-damaged people were black, that still wouldn't make it OK to include their race in the title, because the article is not about that. It's about brain-damaged people.
Now, it would be different if the article was directly about blacks, about how they were specifically selected, but it's not.
Here's an example headline to show the difference:
"An individual robbed a bank this afternoon"
VS
"A black man robbed a bank this afternoon"
The important event here is the bank robbery, not the race of the person who did it.
You could have a study that showed that 90% (or 10%...) of all bank robbery were caused by black men and THEN including the race in the title would be warranted, because that's what the study is about.
The whole grey area here is about the brain-damaged people not being able to correctly evaluate the value of the document they are signing.
Even if 100% of the brain-damaged people were black, that still wouldn't make it OK to include their race in the title, because the article is not about that. It's about brain-damaged people.
Now, it would be different if the article was directly about blacks, about how they were specifically selected, but it's not.
Here's an example headline to show the difference:
"An individual robbed a bank this afternoon"
VS
"A black man robbed a bank this afternoon"
The important event here is the bank robbery, not the race of the person who did it.
You could have a study that showed that 90% (or 10%...) of all bank robbery were caused by black men and THEN including the race in the title would be warranted, because that's what the study is about.
Whether it's "about that" or not you can bet the residents will perceive it that way; one note in the article you didn't mention is that these companies are generally based in Bethesda and their customers are generally in the impoverished black neighborhoods of Baltimore. The symbolism is, frankly, too obvious not to notice, even if it wasn't in the headline.
Are you more bothered by the fact that the title might not be perfect, or by the fact that a bunch of sleazy lawyers are ripping off disabled people?
It would be unfair of me to attribute this to the person you're replying to, but I've noticed that on sites like HN and reddit there seems to be a strange desire by some people to try to make things not about race, gender or sexual preference as much as possible. It's as if they are somehow lessened or hurt by it but I'm not sure how. Perhaps a feeling of guilt and wanting to deflect it drives that behavior. But it is present in the comments of a lot of articles that bring up or imply race, gender or sexual orientation is a factor.
I recognize the tendency that you are referring to.
But in this case, it seems to me that race is more of a correlation than a causation. Yes, urban poverty is very entwined with blackness but, unlike things such as police brutality or criminal sentencing, it's not clear that a white person in the same position wouldn't be victimized in the same way.
I don't object to the inclusion of "Black" in the headline, but it did strike me as odd in the same way that an article I recently saw elsewhere did. The headline was something like "This female chemist... yada yada". The article itself was about her work and didn't particularly mention her gender or any of the inequities she may have encountered. It seemed odd not to just call her a chemist, since you wouldn't specify a 'male chemist' unless there was a reason.
In the greater cultural context it's clear why this extra information was included and it's interesting to think about what's implicitly being communicated. But since superfluously mentioning race or gender would be quite unacceptable in so many other contexts it's a little surprising to see it included in the headline.
But in this case, it seems to me that race is more of a correlation than a causation. Yes, urban poverty is very entwined with blackness but, unlike things such as police brutality or criminal sentencing, it's not clear that a white person in the same position wouldn't be victimized in the same way.
I don't object to the inclusion of "Black" in the headline, but it did strike me as odd in the same way that an article I recently saw elsewhere did. The headline was something like "This female chemist... yada yada". The article itself was about her work and didn't particularly mention her gender or any of the inequities she may have encountered. It seemed odd not to just call her a chemist, since you wouldn't specify a 'male chemist' unless there was a reason.
In the greater cultural context it's clear why this extra information was included and it's interesting to think about what's implicitly being communicated. But since superfluously mentioning race or gender would be quite unacceptable in so many other contexts it's a little surprising to see it included in the headline.
I think in the context of institutional racism (what some snidely call the "academic definition" of racism) it's not as striking to see it in the headline. The issue of race in our country is much more complex than individuals and their interactions with each other. Both are important, but the assumption seems to be by the people doing the objecting that the only one of consequence is personal/individual racism between people.
As far as the chemist goes, I think that despite the polite societal norm to refrain from mentioning it when it's irrelevant (which shouldn't go anywhere in my opinion) in the context of a news story we should mention it more. There's a serious issue with getting women into STEM fields and surfacing it even if it's irrelevant might deter the perception by young women and girls that they should avoid those fields. But that's my ignorant opinion without any studies to back it or anything. I could be entirely wrong.
As far as the chemist goes, I think that despite the polite societal norm to refrain from mentioning it when it's irrelevant (which shouldn't go anywhere in my opinion) in the context of a news story we should mention it more. There's a serious issue with getting women into STEM fields and surfacing it even if it's irrelevant might deter the perception by young women and girls that they should avoid those fields. But that's my ignorant opinion without any studies to back it or anything. I could be entirely wrong.
I don't know if you'll see this (does HN have a reply-notification feature?) but I really appreciated your response and (I presume, since I was at -1 when the thread settled down) the upvote that sent my comment back to "0 points"
This comment thread was really discouraging and it meant a lot to me that you were willing to just talk about a small point we have different perspectives on.
This comment thread was really discouraging and it meant a lot to me that you were willing to just talk about a small point we have different perspectives on.
No built-in notification unfortunately but I do check for them once a day or so. I wouldn't be surprised if it actually helps decrease vitriolic slap fights since we aren't instantly notified a la reddit.
But yes, that was me that brought you back. I hate seeing calm discourse get downvoted simply because of disagreement. I actually like that I don't have that ability. Kind of refreshing. I'd like to think the karma requirement would help deter abusive voting but I see enough of it that I'm not so sure it's as effective as it could be. Better than nothing though, I suppose. But anyway, you're welcome. It's kind of funny but I felt the same way about the comments and your reply was really encouraging.
But yes, that was me that brought you back. I hate seeing calm discourse get downvoted simply because of disagreement. I actually like that I don't have that ability. Kind of refreshing. I'd like to think the karma requirement would help deter abusive voting but I see enough of it that I'm not so sure it's as effective as it could be. Better than nothing though, I suppose. But anyway, you're welcome. It's kind of funny but I felt the same way about the comments and your reply was really encouraging.
>seems to be a strange desire by some people to try to make things not about race, gender or sexual preference as much as possible.
This is something that Western Civilization has been working towards for well over a century now.
This is something that Western Civilization has been working towards for well over a century now.
It's interesting how much a quote can change when taken out of context.
[deleted]
so the fact that someone is semantically wrong on the internet is more important than the story it portrays?
Guess we have to agree to disagree there.
Guess we have to agree to disagree there.
What?
First off, this has nothing to do with semantics. The meaning of the words or the title is not the issue here, it's the inclusion of information that isn't related.
Second, the fact that I disagree with the title has nothing to do with my opinion of the story.
If you see "The cancer kill her yesterday" as a title, you won't say anything about the verb tense because that would imply you love cancer?
Well then, "guess we have to agree to disagree there".
First off, this has nothing to do with semantics. The meaning of the words or the title is not the issue here, it's the inclusion of information that isn't related.
Second, the fact that I disagree with the title has nothing to do with my opinion of the story.
If you see "The cancer kill her yesterday" as a title, you won't say anything about the verb tense because that would imply you love cancer?
Well then, "guess we have to agree to disagree there".
I am still not clear on why you think it matters? Poor practice is more important than the story? Ok. Again guess we have to agree to disagree.
He already said "Second, the fact that I disagree with the title has nothing to do with my opinion of the story."
Why do you keep accusing him of dismissing the importance of the story? If he takes a moment to let you know that he was outraged, then may he comment on the fact that he thinks "it's poor practice to include the race, sexual orientation, or religion" if it's not directly relevant to the story?
Why do you keep accusing him of dismissing the importance of the story? If he takes a moment to let you know that he was outraged, then may he comment on the fact that he thinks "it's poor practice to include the race, sexual orientation, or religion" if it's not directly relevant to the story?
Because he think it matters which has nothing to do with whether he thinks the story is more important.
Ugh, sorry Frozenlock. I can't believe you attracted TWO commenters who used the increasingly common "How dare you bring up a minor point, WHEN THERE ARE GRAND INJUSTICES?!?!" tactic.
I thought the title was odd too.
Is this comment supposed to be sarcasm? I can't tell if you are making fun of the type of person who say that, or if you actually are saying that.
Indeed. Your parent comment is a classic example of general misconceptions about how racism and racial disparity work. It's not just about feelings and intent. It's as much about systems and institutions.
The scum who are ripping off these people may not be doing it for racial reasons. But, the fact that blacks are disproportionately affected is certainly rooted in racial history.
The scum who are ripping off these people may not be doing it for racial reasons. But, the fact that blacks are disproportionately affected is certainly rooted in racial history.
[deleted]
The headline intentionally conceals key information, and uses the word "how" a tease to bait the reader. This is clickbait 101. A journalistic headline would be:
"Swindlers take poor brain-damage victims' lead-poisoning compensation"
"Swindlers take poor brain-damage victims' lead-poisoning compensation"
"Swindlers" is probably not a word the newspaper would use unless they wanted to get sued.
I can think of lots, yes.
Fascinating businesses. I bet some smart hacker could totally improve this process, though.
Maybe they could bring in Bitcoin somehow.
Is this a joke?
And this is why we should always remember that "the marke" should serve as our servant, not our master".
If the logic of the market become more important than the people it's supposed to serve then why have it in the first place?
Im exaggerating of course but wow.
If the logic of the market become more important than the people it's supposed to serve then why have it in the first place?
Im exaggerating of course but wow.
This isn't a market. Markets operate between consenting adults; these people lack the mental faculties to count as consenting adults. The buyers here are actually violating the rights of the sellers.
"these people lack the mental faculties" is inherently difficult to define in a mutually agreeable way. Mental faculty is special in that way.
Sure. But there are many legal jurisdictions with fairly workable definitions.
Unless it's criminal it is indeed the market and what the market allow to happen.
It is - or at least, ought to be in any civilised country - impossible to enter into a legally binding contract with someone who is not capable of providing informed consent.
That includes minors, and people of limited mental faculty.
To describe what's going on here (theft from the mentally retarded) as a market transaction is like describing a mugging in market terms. The fact that something was exchanged (my wallet in exchange for my life) does not make the exchange a market transaction.
That includes minors, and people of limited mental faculty.
To describe what's going on here (theft from the mentally retarded) as a market transaction is like describing a mugging in market terms. The fact that something was exchanged (my wallet in exchange for my life) does not make the exchange a market transaction.
Yet here we are and they did.
Sure, but to blame 'the market' for this is, as I've pointed out, equivalent to blaming 'the market' for someone getting mugged.
Just because an exchange took place doesn't mean the exchange took place in a market.
Just because an exchange took place doesn't mean the exchange took place in a market.
It's illegal to mug someone, this is apparently not illegal regardless of how you define the relationship between the two parts. So yes it is the market that allow for this kind of business to exist and be profitable. It has supply and demand logic at the very core of it.
No one is asking the market to be perfect but in this case it's an example of how the market is imperfect.
So the natural discussion of course should be whether this should be regulated more.
No one is asking the market to be perfect but in this case it's an example of how the market is imperfect.
So the natural discussion of course should be whether this should be regulated more.
I think we're engaged in argument around semantics. I think we both think that the action is immoral, is or ought to be illegal, and would properly be the subject of legislation.
It does look like all we are disagreeing on is whether or not an individual incapable of giving informed consent can be said to be participating in a market or not.
It does look like all we are disagreeing on is whether or not an individual incapable of giving informed consent can be said to be participating in a market or not.
As far as I understand the victim of this story haven't had the right to make agreements taken away from her which means she is legally allowed to participate in the market and they are legally allowed to screw her.
Sure. I don't think either of us thinks that's a good thing, though.
Thats besides the point. The market isn't distinguishing between whether the person is capable of making informed decisions or not. It assumes they are and therein is one of it's flaws which is then exemplified in this example.
Of course not; that's not what markets are for. The purpose of a market is to determine prices and facilitate exchange, nothing more.
There are (or at least should be) laws atop that to determine who is eligible to participate (e.g. minors, the mentally impaired, etc.).
There are (or at least should be) laws atop that to determine who is eligible to participate (e.g. minors, the mentally impaired, etc.).
Meanwhile, governments specifically target the poor with lottery advertising. There will always be scumbags who prey on the weak; at least when they're in the private sector they can be sued or arrested.
Lottery laws can be changed too, of course. And our government has a regularly scheduled changing of the people in power. I know of no corporation where the citizenry regularly votes on senior management.
> Im exaggerating of course but wow
Why pull back like that? This is exactly what the US is driven towards. 'The Market' is more important than any person in the country. Taking advantage of people is big business and because 'The Market' has spoken it is left to operate.
Why pull back like that? This is exactly what the US is driven towards. 'The Market' is more important than any person in the country. Taking advantage of people is big business and because 'The Market' has spoken it is left to operate.
Nothing is black or white.
I am not pulling back, but whether this example is enough to claim that the market has failed is another question.
I am not pulling back, but whether this example is enough to claim that the market has failed is another question.
They can sue to get the contract voided, just like anyone with a mental disability that prevents them from understanding a contract.
The article mentions this, but says that they often aren't incapacitated enough to void the agreements -- which puts them in a strange gray area. It's similar to scams that prey on the elderly.
The article mentions this, but says that they often aren't incapacitated enough to void the agreements -- which puts them in a strange gray area. It's similar to scams that prey on the elderly.
I would suspect that they would have to argue their case for incapacitation in court, which comes with legal fees, which they likely cannot afford.
Perhaps a class action lawsuit with many such victims assembled will be compelling enough in size that a law firm will take the case on a contingency basis.
Perhaps a class action lawsuit with many such victims assembled will be compelling enough in size that a law firm will take the case on a contingency basis.
And the result would be, at best, another structured settlement... and then what prevents the same outcome again?
Part of the settlement would include a requirement that any change of benefit payments be approved only after a court review of the proposed change and an order to that effect. I think this would greatly reduce this kind of exploitation.
Well, again, if you read the article... a judge does approve these settlement changes, they're accompanied by signed statements from the victims stating what they need the upfront money for, and yes there is legal forum shopping to get judges and courts that don't require in-person appearances, and are more likely to approve.
Also in the article, the victims often have large debts, and one of the main reasons in their signed statement is to get out from under their burden of debt. In some cases they feel like they need $50k now no matter the long-term cost.
> That’s how 42-year-old Tarsha Simms recently reconciled her decision to sell a portion of her daughter’s settlement to Access Funding. “I do regret it,” Simms said. “But if it wasn’t for this deal, we would be on the street right now.”
So what's the fix? Take away all freedom regarding management and spending of their money?
Also in the article, the victims often have large debts, and one of the main reasons in their signed statement is to get out from under their burden of debt. In some cases they feel like they need $50k now no matter the long-term cost.
> That’s how 42-year-old Tarsha Simms recently reconciled her decision to sell a portion of her daughter’s settlement to Access Funding. “I do regret it,” Simms said. “But if it wasn’t for this deal, we would be on the street right now.”
So what's the fix? Take away all freedom regarding management and spending of their money?
It is the same issue with pay day loans. What is the alternative when someone needs the money now: to tell them no and that they just have to face the consequences of not having the money now?
The result of such a class action lawsuit would be a lawyer (or a bunch of lawyers) making a ton of money and the victims getting a coupon for a happy meal at the local fast food chain.
That's not really true as these are cases with a relatively small number of plaintiff's each with a relatively high value claim.
The kinds of cases where you see plaintiffs getting coupons and lawyers making bank are those with a lot of plaintiffs who were each harmed a very small amount.
The kinds of cases where you see plaintiffs getting coupons and lawyers making bank are those with a lot of plaintiffs who were each harmed a very small amount.
... which is the purpose of class-action law. When you have a small number of plaintiffs with large claims it's not really the right way to go.
Yes, that is a very good point. Are there any contingency contracts for these class action suits where the lawyers agree to a fixed percentage of the settlement, which would hopefully leave a decent amount for the victims?
Perhaps there can be a "bidding" system if the victims can self organize and then look for a law firm to represent them -- kind of like how architecture firms win contracts?
Perhaps there can be a "bidding" system if the victims can self organize and then look for a law firm to represent them -- kind of like how architecture firms win contracts?
These people unfortunately have a hard time with basic reading/cognitive skills. Unless the government or a non-profit helps them out they are going to have a hard time self organizing and pull off the best possible deal.
Besides ethical reasons, it's in everyone's best interest to make sure that poor people don't get abused in this way because when they end up needing social services (shelter, food, medical aid, etc.) that help comes from every tax payer's money.
Besides ethical reasons, it's in everyone's best interest to make sure that poor people don't get abused in this way because when they end up needing social services (shelter, food, medical aid, etc.) that help comes from every tax payer's money.
Who would approve the percentage? This seems to be very similar to the deal they are suing about right now. Next up they file suit against the lawyer for taking too big a cut?
Half-baked thought: What about a free, opt-in service requiring a second reading of a contract by volunteers? So, nothing can be enacted/fulfilled from a contract with someone registered with that system until the deal has been reviewed. Or even just a service that someone can use to double-check something.
I get countless emails/calls from clients checking whether the domain registration letter they've got is legit. They're smart people but they're not familiar with domains. I'd hate to think of how many people fall for those things.
I get countless emails/calls from clients checking whether the domain registration letter they've got is legit. They're smart people but they're not familiar with domains. I'd hate to think of how many people fall for those things.
Half-baked response: I like the goal, but I worry that an opt-in system would be too easy to ignore. I imagine the exploiters working for Access Funding could come up with a pretty convincing pitch as to why their client should bypass such a service.
Personally, I wish that there was more due process around this sort of thing. So, for instance, as part of the settlement a lawyer had to be there to advise the recipient throughout the process.
Personally, I wish that there was more due process around this sort of thing. So, for instance, as part of the settlement a lawyer had to be there to advise the recipient throughout the process.
Yeah, I think that action from the exploiters would be inevitable. But it pains me to think that there's not a decent solution to this.
I get phone calls from people representing businesses that claim to represent major phone providers, or use names very similar to mainstream providers. Must fool a lot of people. If/when a lot are overseas, there's no recourse against them.
I get phone calls from people representing businesses that claim to represent major phone providers, or use names very similar to mainstream providers. Must fool a lot of people. If/when a lot are overseas, there's no recourse against them.
Who provides the lawyer? The company? They'll shop around til they find one in their favor. The individual? Good luck being able to find a lawyer, but here are some brochures from the company with lawyers we recommend. A government regulations entity? Now let's add regulatory capture to the mix.
Are these actually bad deals? If the payments stop at death of the seller, the buyer is taking on legitimate risk. Plus all "present value" calculations are of course uncertain. Ignoring the race drama the author apparently needed to drive clicks, a different interpretation is that these companies are providing value to these people in converting slow streams of cash payments into lump sums of cash.
Whether or not they are good deals is a secondary question to whether or not the people signing the contracts have any idea what is going on. The article makes it pretty clear: the legal protections are too weak, and severely impaired people are signing documents they don't understand.
It's easy to construct scenarios where the closing prices are fair - even generous. It's also totally irrelevant.
It's easy to construct scenarios where the closing prices are fair - even generous. It's also totally irrelevant.
Fair enough. I am not familiar enough with lead poisoning to understand the degree of mental impairment, but you are getting to a gray area where you're saying people with lead poisoning shouldn't be allowed to handle their own finances nor enter contracts etc.
It is both the degree of mental impairment, and the legal protections put in place. These people ostensibly have an "independent advisor" who makes sure they understand the settlement. That should be enough, even for an impaired person who can't read but is capable of basic decision making. But there are judges who accept a sixty second phone call as sufficient. Even if the seller is an illiterate person being asked if they understand the ramifications of a 12 page legal document. And even if the "independent advisor" has done dozens of deals with the buyer before, and has no other clients.
This is a local article. Many of the problems it points out are specific to the weak legal protections in Maryland. It calls out specific people and companies, and specific conflict of interest issues. Talking about structured settlement pricing or mental impairment in the abstract really isn't relevant. Also, maybe read the whole article before commenting.
This is a local article. Many of the problems it points out are specific to the weak legal protections in Maryland. It calls out specific people and companies, and specific conflict of interest issues. Talking about structured settlement pricing or mental impairment in the abstract really isn't relevant. Also, maybe read the whole article before commenting.
reader5000(2)
The article said structured settlements are preferred over lump sums specifically because these individuals wouldn't do well with a lump sum. I think it would be really interesting to compare what the lump sum value would have been against the structured settlement buyout value, and that could be a reasonable approximation for whether or not the price is fair.
No need, you can just value it. It's pretty basic discounted cash flow analysis you learn on your first day of college if you study finance or something like that. And if you apply it you can see you lose almost $1.4m by forgoing the settlement payments for $63k in a typical investment context.
Without an investment context (i.e. comparing investing $63k for 35 years, to investing the settlement payments for 35 years, which is the valuation for the company that ripped her off), the nominal amounts are such that she sold $573k of payments for $63k. And that $573k in today's dollars is worth about $340k. She didn't even get 20c on the dollar.
It'd literally be like you forgoing your $70k annual salary for the next 35 years, for a one-time payment of $250k. And I'm referring to a unique type of salary of $70k that is guaranteed and requires 0 hours of work. She sold it off for $250k because of a combination of a normal person's ignorance of finance and the fact she's mentally handicapped, too. It's an absolute disgrace and the fact her lawyer didn't have alarm bells going off is quite sad.
I'd have easily given her double and I'd still make hundreds of thousands of profit, without any real effort. Hell I could just resell the contract the next day to lines of investors willing to pay even more, including the company that ripped her off. That's how bad the deal was she got.
Without an investment context (i.e. comparing investing $63k for 35 years, to investing the settlement payments for 35 years, which is the valuation for the company that ripped her off), the nominal amounts are such that she sold $573k of payments for $63k. And that $573k in today's dollars is worth about $340k. She didn't even get 20c on the dollar.
It'd literally be like you forgoing your $70k annual salary for the next 35 years, for a one-time payment of $250k. And I'm referring to a unique type of salary of $70k that is guaranteed and requires 0 hours of work. She sold it off for $250k because of a combination of a normal person's ignorance of finance and the fact she's mentally handicapped, too. It's an absolute disgrace and the fact her lawyer didn't have alarm bells going off is quite sad.
I'd have easily given her double and I'd still make hundreds of thousands of profit, without any real effort. Hell I could just resell the contract the next day to lines of investors willing to pay even more, including the company that ripped her off. That's how bad the deal was she got.
>and severely impaired people are signing documents they don't understand.
How many people understand their cell phone contract? The ToS for Facebook? Their work contract?
If we voided contracts that aren't understood well enough by both parties, we would fundamentally alter our society. (Though maybe that is a good thing in the long run.)
How many people understand their cell phone contract? The ToS for Facebook? Their work contract?
If we voided contracts that aren't understood well enough by both parties, we would fundamentally alter our society. (Though maybe that is a good thing in the long run.)
A lot of the value of the settlement can't be transferred to the new owner, so it's unlikely that the deals would happen if someone wasn't getting screwed.
In particular, structured settlements are usually protected from bankruptcy, and usually are enough to keep the beneficiary off public assistance (so it transfers the cost from the taxpayer to whoever caused the harm). Allowing the payments to be sold off into a non-protected lump-sum at the discounted present value defeats the entire purpose of the lawsuit that generated the settlement.
In particular, structured settlements are usually protected from bankruptcy, and usually are enough to keep the beneficiary off public assistance (so it transfers the cost from the taxpayer to whoever caused the harm). Allowing the payments to be sold off into a non-protected lump-sum at the discounted present value defeats the entire purpose of the lawsuit that generated the settlement.
> Are these actually bad deals?
Yes.
Yes.
So how much would you pay for 350 monthly payments of $1000 on the contingency the payments stop at death of the seller?
I'd easily pay double. An exact amount would require a proper analysis I can't be bothered with right now, but I'm sure investors would line up to pay more than double.
Look just to give you a quick sense... The payments started at $1k but they go up. The average payment over 35 years is actually closer to $17k per year, and if you quadruple that (and the $60k or so she got in return) you get to amounts that make sense to many of us.
You get to a salary of $70k per year, a salary that is totally 100% guaranteed for 35 years (until death, and she's 20 years old so run the actuarial tables), and requires 0 hours of work.
Imagine you have that, $70k per year, guaranteed, can't be fired, and you put in 0 hours of work. It's independent of whether the market does well or not. And someone offers you $250k for you to forgo that for the rest of your life (well 35 years).
It's a total joke. You'd want at least upwards of $1m - $2m for it to come close to financially interesting. She got pennies on the dollar.
Look just to give you a quick sense... The payments started at $1k but they go up. The average payment over 35 years is actually closer to $17k per year, and if you quadruple that (and the $60k or so she got in return) you get to amounts that make sense to many of us.
You get to a salary of $70k per year, a salary that is totally 100% guaranteed for 35 years (until death, and she's 20 years old so run the actuarial tables), and requires 0 hours of work.
Imagine you have that, $70k per year, guaranteed, can't be fired, and you put in 0 hours of work. It's independent of whether the market does well or not. And someone offers you $250k for you to forgo that for the rest of your life (well 35 years).
It's a total joke. You'd want at least upwards of $1m - $2m for it to come close to financially interesting. She got pennies on the dollar.
As little as I could. And that's the problem. When the seller has the mental capacity of a 10 year old with no guardian, it is almost literally stealing from children.
Yet she has rights that a child does not. Perhaps we should base childhood, both the protections and restrictions on rights, on mental ability instead of age.
I don't have time to do more detailed analysis but, from the article, "In 2052, ...Rose would be approaching her 60s." So lets assume that Rose would be exactly 60 in 2052. So she was born in 1992.
According to projections (http://www.census.gov/compendia/statab/2011/tables/11s0103.p...), a black woman who was 15 in 2007 would be expected to live to 63. So there is a significant risk that Rose would not live to the end of her payout period. But if the expected payout is >>18% of the present value of her payments (which it almost certainly is) then she got a bad deal.
Someone with time could use the annual mortality probabilities (http://www.ssa.gov/oact/STATS/table4c6.html) to calculate the expected payout. I'm bad at analysis so I'd probably use a Monte Carlo simulation.
According to projections (http://www.census.gov/compendia/statab/2011/tables/11s0103.p...), a black woman who was 15 in 2007 would be expected to live to 63. So there is a significant risk that Rose would not live to the end of her payout period. But if the expected payout is >>18% of the present value of her payments (which it almost certainly is) then she got a bad deal.
Someone with time could use the annual mortality probabilities (http://www.ssa.gov/oact/STATS/table4c6.html) to calculate the expected payout. I'm bad at analysis so I'd probably use a Monte Carlo simulation.
> a black woman who was 15 in 2007 would be expected to live to 63
People with lead poisoning probably live substantially shorter on average.
People with lead poisoning probably live substantially shorter on average.
It says she's 20 and it's a 35 year period, or 55 years. That means she's born around 1995 and the life expectancy for a black female was 74 years, almost 20 years longer than the end of her payouts.
I don't think the risk of death is anywhere near significant enough for her to sign away half a million dollars in payments for $60k. She barely got more than 10 cents on the dollar in nominal amounts, and still less than 20c on the dollar in present dollar terms. I'd gladly pay double what she got and I'd still make a ton of money all things considered.
The number you were quoting (63) by the way is 'years of life remaining', not life expectancy as in 'age of death'. For example for a 100 year old the number is 2 years, which doesn't mean she'll live to 2 years old, obviously :)
I don't think the risk of death is anywhere near significant enough for her to sign away half a million dollars in payments for $60k. She barely got more than 10 cents on the dollar in nominal amounts, and still less than 20c on the dollar in present dollar terms. I'd gladly pay double what she got and I'd still make a ton of money all things considered.
The number you were quoting (63) by the way is 'years of life remaining', not life expectancy as in 'age of death'. For example for a 100 year old the number is 2 years, which doesn't mean she'll live to 2 years old, obviously :)
That isn't really an answerable question without filling in a lot of demographic information. In addition, I'm guessing these companies typically have more than one "client" and get to amortize their risk across all of them and I can't help but imagine this is an extremely profitable enterprise (certainly from the article that seems to be true of Access).
Regarding risk, I'd say they're being more than compensated for their risk:
> Taken together, the sample shows Access Funding petitioned to buy roughly $6.9 million worth of future payments — which had a present value of $5.3 million — for around $1.7 million.
This is particularly true when you consider that the only real risk is the annuitant dying before you recoup the money you paid them and that most of the one-time payouts seem to be in the range of $16,000, while many of the monthly payouts seem to be around $1000/mo. Given those numbers, in two years (padding a bit for extra costs to close the deal) you've recouped your initial cost and the rest is just gravy until the annuitant dies.
Payday loans (which are also extremely exploitative, frankly) at least have the more likely risk of the borrower being unable to pay you back to justify the raw deal.
> Taken together, the sample shows Access Funding petitioned to buy roughly $6.9 million worth of future payments — which had a present value of $5.3 million — for around $1.7 million.
This is particularly true when you consider that the only real risk is the annuitant dying before you recoup the money you paid them and that most of the one-time payouts seem to be in the range of $16,000, while many of the monthly payouts seem to be around $1000/mo. Given those numbers, in two years (padding a bit for extra costs to close the deal) you've recouped your initial cost and the rest is just gravy until the annuitant dies.
Payday loans (which are also extremely exploitative, frankly) at least have the more likely risk of the borrower being unable to pay you back to justify the raw deal.
Risk? The fact that these are legal settlements is exactly why this leaps directly into a distinct category from stuff like pay-day loans.
It's is actually pretty easy. You just you use a life table. The entire actuarial field is built on this understanding this stuff. https://en.wikipedia.org/wiki/Actuarial_present_value
Well, yes, and I'd guess the exposure on these is probably better than on traditional life insurance. The article does make reference to present values of the things several times and the prices these guys are paying are much less. Nonetheless, the question, as posed, doesn't give enough information to really answer it.
I assume that's a solved problem in the sense that you can find the cost of a (dissipating) term life insurance policy on that person.
The value to the buyer isn't the issue.
Yes, it's a very bad deal. She's 20 years old, figuring the chances of death and the valuation, she's lost the vast majority of the actual value, and the guys who bought the settlement from her can make upwards of $1m of profit over the next 35 years, above and beyond what they paid for it.
It's not 'value'. If you have $3k annual income for the next 50 years and I offer you $100k for it, it's not value, it's total bs. It becomes value ones the valuations are close. Plenty of investors will give you value, and if put on an open market, you'd get that value. But this happened due to predatory business, calling people who are mentally challenged and offering an awful rate. I'd have given her double and I'd still make a profit of more than half a million dollars, investors would line up to give her even more than that.
If she'd been given a market rate, then yes it'd be good value to an ordinary person who has this preference. Although the whole point is that she wasn't because she's a vulnerable person with no financial sense who's better off receiving $1k for the next 35 years, than receiving pennies on the dollar in a lumpsum $60k which lasts her for 5 years if she'd be frugal, and likely won't last because shitty friends/family will exploit a mentally damaged person who's known to have just received $60k.
Even for an ordinary person, this just makes no sense. After all, you can apply this type of discounting to any payment stream. Take your salary for example.
I mean let's scale the numbers to a salary that makes sense to some of you. The average payment the woman in the article was getting in those 35 years is about $1.4k or say $17k per year, and she's forgoing them for $63k.
Now let's quadruple those numbers to get to a salary some of you might get, about $70k per year, forgone for a one-time $250k. Imagine that $70k is your salary.
Now who here is willing to sell/forgo their GUARANTEED, 0 hours of work, $70k annual salary for the next 35 years, for $250k? Absolutely nobody, not a single soul.
There's no way you can call that 'value', until someone offers you a few million dollars at least. And if you had such a salary, guaranteed, without any hours of work, because someone poisoned you with lead and you're brain damaged... it's NOT okay for someone to convince you to forgo it for $250k over steak. That's predatory, unethical, harmful business. Especially when that person is DEPENDENT on that money. Yeah stealing $50 billion from Buffet is one thing, or even $1m from you or me. We can actually work and still live and thrive and enjoy life even if all our wealth is stolen. But she's brain damaged, can't work and can't live alone. She's the type of person that without $1k a month will end up homeless or on welfare or a combination of both, 20 years down the line.
It's not 'value'. If you have $3k annual income for the next 50 years and I offer you $100k for it, it's not value, it's total bs. It becomes value ones the valuations are close. Plenty of investors will give you value, and if put on an open market, you'd get that value. But this happened due to predatory business, calling people who are mentally challenged and offering an awful rate. I'd have given her double and I'd still make a profit of more than half a million dollars, investors would line up to give her even more than that.
If she'd been given a market rate, then yes it'd be good value to an ordinary person who has this preference. Although the whole point is that she wasn't because she's a vulnerable person with no financial sense who's better off receiving $1k for the next 35 years, than receiving pennies on the dollar in a lumpsum $60k which lasts her for 5 years if she'd be frugal, and likely won't last because shitty friends/family will exploit a mentally damaged person who's known to have just received $60k.
Even for an ordinary person, this just makes no sense. After all, you can apply this type of discounting to any payment stream. Take your salary for example.
I mean let's scale the numbers to a salary that makes sense to some of you. The average payment the woman in the article was getting in those 35 years is about $1.4k or say $17k per year, and she's forgoing them for $63k.
Now let's quadruple those numbers to get to a salary some of you might get, about $70k per year, forgone for a one-time $250k. Imagine that $70k is your salary.
Now who here is willing to sell/forgo their GUARANTEED, 0 hours of work, $70k annual salary for the next 35 years, for $250k? Absolutely nobody, not a single soul.
There's no way you can call that 'value', until someone offers you a few million dollars at least. And if you had such a salary, guaranteed, without any hours of work, because someone poisoned you with lead and you're brain damaged... it's NOT okay for someone to convince you to forgo it for $250k over steak. That's predatory, unethical, harmful business. Especially when that person is DEPENDENT on that money. Yeah stealing $50 billion from Buffet is one thing, or even $1m from you or me. We can actually work and still live and thrive and enjoy life even if all our wealth is stolen. But she's brain damaged, can't work and can't live alone. She's the type of person that without $1k a month will end up homeless or on welfare or a combination of both, 20 years down the line.
>It's not 'value'. If you have $3k annual income for the next 50 years and I offer you $100k for it, it's not value, it's total bs.
Did you mean 3k monthly? Because if you meant annual, I'd take your offer.
Did you mean 3k monthly? Because if you meant annual, I'd take your offer.
There's a special place in Hell for people whose job is to trick brain-damaged people out of their settlements.
One would think that eventually the unfortunate neighbors, erstwhile friends, and shamed families of Michael Borkowski, Charles E. Smith, and Brendan Franks would help them see the error of their ways.
That 'hell' is a firm place in the American upper class, free of worldy consequences and troubles that affect honest and hard working people.
[deleted](3)
Oh come on. The majority of people involved in this deception are not leisure-class millionaires.
Yeah, really.
Unfortunately, there is no Hell, so we'd better do something about the issue in this world.
I think it's a useful rhetorical device and I'm not really so confident anything will be done.
Agreed, except I would replace "unfortunately" with "fortunately".
Nice to see that atheists can also be humorless and overly-literal.
Edit: Honest question to downvoters: You are aware that "a special place in Hell" is a figure of speech, yes? That emodendroket was not actually saying "no need to fix this problem, God will take care of it"? Or are you perhaps interpreting my post as a knee-jerk dig at all atheists, as opposed to just at eli_gottlieb for being overly pedantic?
Edit: Honest question to downvoters: You are aware that "a special place in Hell" is a figure of speech, yes? That emodendroket was not actually saying "no need to fix this problem, God will take care of it"? Or are you perhaps interpreting my post as a knee-jerk dig at all atheists, as opposed to just at eli_gottlieb for being overly pedantic?
I think it's good to remind people that if we really don't approve of a behavior or crime, we should seek to reconcile the crime accordingly here and now, and not write it off with a passing phrase (it's a phrase, not meant literally), or with possible religious connotations (kind of mean it literally)
I think there's value in the comment. Pushes a discussion towards a realistic solution to this sort of thing.
Replace "figure of speech" with "platitude".
Well, some say that Hell is other people. Others say that Hell is in your mind. Me, I agree with both emodendroket and eli_gottlieb.
I wanted to say the same thing but didn't because I was worried I'd be downvoted.
> Still, Borkowski urged stricter legislation and more oversight. “These questions you raise touch on fundamental things we are going to be doing differently now,” he said. “We want to secure ourselves in the future from any potential questions like this again, so we can say, ‘No, that’s not us.’ ”
Isn't this an admission of guilt?
Isn't this an admission of guilt?
Not necessarily... In any business there's such a thing as "headline risk," distinct from legal or compliance risk. It's where the mere perception of wrongdoing can be almost as damaging to your business as actual wrongdoing/noncompliance; anything can be spun as sinister by an unsympathetic press. So to mitigate headline risk you might actually make your compliance controls much stronger than legally necessary. I think Borkowski is trying to say something like his business is fundamentally honest, but the reporter has raised some serious points of possible misperception about it, and they're going to make some compliance changes to clarify themselves against possible misperceptions of wrongdoing.
Of course it's kind of too late if you're finding out about your headline risk from a reporter. And not to defend these bozos.
Of course it's kind of too late if you're finding out about your headline risk from a reporter. And not to defend these bozos.
No, there is wide gulf between "guilty" and "best way to do it"
Sometimes, the easiest person to fool is yourself.
This is where your libertarian "unrestricted right to contract" turns sour.
That's a strawman - at least, in the case of minarchist-Libertarians. We explicitly advocate for restricted right to contract.
Some examples of proscribed contracts include those involving minors, or slavery (see 'unalienable rights').
Some examples of proscribed contracts include those involving minors, or slavery (see 'unalienable rights').
Who is going to uphold that?
The justice system, administered by the State.
(I think you may be confusing market-anarchism with minarchist-Libertarianism).
(I think you may be confusing market-anarchism with minarchist-Libertarianism).
That's something I have been wondering about for a long time. Wouldn't pure libertarianism require a huge justice system and give a lot of power to courts? In absence of regulation every dispute would have to go to court.
Firstly, minarchist-Libertarianism doesn't preclude legislation.
We only support legislation that is rights-respecting (e.g. no forcing people to do business with customers they don't want), reality-based (e.g. no environmental legislation without provable harm), and consistently administered (e.g. no free passes for particularly rich criminals).
Secondly, even in an hypothetical absence of regulation, mediation would be preferable to court action in a lot of cases. That's true even now; private mediation is frequently used to resolve disputes before they ever see a courtroom.
Edited to add: Also, in a rights-respecting State, the list of criminal acts would be a lot, lot smaller than it is now. No censorship (obscenity, blasphemy, etc.), no war on drugs, etc. etc. It's likely that justice system workloads would drop significantly.
We only support legislation that is rights-respecting (e.g. no forcing people to do business with customers they don't want), reality-based (e.g. no environmental legislation without provable harm), and consistently administered (e.g. no free passes for particularly rich criminals).
Secondly, even in an hypothetical absence of regulation, mediation would be preferable to court action in a lot of cases. That's true even now; private mediation is frequently used to resolve disputes before they ever see a courtroom.
Edited to add: Also, in a rights-respecting State, the list of criminal acts would be a lot, lot smaller than it is now. No censorship (obscenity, blasphemy, etc.), no war on drugs, etc. etc. It's likely that justice system workloads would drop significantly.
I really would like to see a set of laws and government regulations that libertarians would support. Has anybody ever created such a thing?
Would there be regulations on cigarettes, selling alcohol to 10 year olds or lead paint? Who would prove the harm if there is no EPA? Who has the money to go against big corporations and their paid experts? It took forever to get a shared understanding that smoking is really harmful.
I don't want to be dismissive but most libertarians I talk to seem to live in a dream world and avoid real-world scenarios.
Would there be regulations on cigarettes, selling alcohol to 10 year olds or lead paint? Who would prove the harm if there is no EPA? Who has the money to go against big corporations and their paid experts? It took forever to get a shared understanding that smoking is really harmful.
I don't want to be dismissive but most libertarians I talk to seem to live in a dream world and avoid real-world scenarios.
I really would like to see a set of laws and government regulations that libertarians would support. Has anybody ever created such a thing?
Not to my knowledge :) But that has more to do with a combination of factionalism, incorrect philosophy (e.g. religious 'Libertarians' who'd like to ban gay marriage), and utopianism.
Would there be regulations on cigarettes
Other than prohibitions on fraud ("cigarettes are healthy!") or selling to minors, no.
selling alcohol to 10 year olds
Yes.
lead paint
Depends. Perhaps there would be cases where lead paint would be okay; I don't know that much about it.
Who would prove the harm if there is no EPA? Who has the money to go against big corporations and their paid experts?
Lawyers working on behalf of those bringing class-action suits against the manufacturers.
And why do you presume there would be no EPA (or an equivalent)? (Some) environmental laws are valid. I'm not American, but I'm pretty sure the Constitution doesn't grant the Federal Government the power to create something like the EPA. But the States surely do have that power.
It took forever to get a shared understanding that smoking is really harmful.
Not at all. It took forever for the justice system to overcome the massive lobbying and corruption that was protecting the tobacco industry from lawsuits over their fraudulent advertising.
Not to my knowledge :) But that has more to do with a combination of factionalism, incorrect philosophy (e.g. religious 'Libertarians' who'd like to ban gay marriage), and utopianism.
Would there be regulations on cigarettes
Other than prohibitions on fraud ("cigarettes are healthy!") or selling to minors, no.
selling alcohol to 10 year olds
Yes.
lead paint
Depends. Perhaps there would be cases where lead paint would be okay; I don't know that much about it.
Who would prove the harm if there is no EPA? Who has the money to go against big corporations and their paid experts?
Lawyers working on behalf of those bringing class-action suits against the manufacturers.
And why do you presume there would be no EPA (or an equivalent)? (Some) environmental laws are valid. I'm not American, but I'm pretty sure the Constitution doesn't grant the Federal Government the power to create something like the EPA. But the States surely do have that power.
It took forever to get a shared understanding that smoking is really harmful.
Not at all. It took forever for the justice system to overcome the massive lobbying and corruption that was protecting the tobacco industry from lawsuits over their fraudulent advertising.
"prohibitions on fraud"? You mean have a group of people who decide what is true? Isn't that better known as Not-Libertarianism?
That's the question I always ask and never get an answer.
Maybe you're asking anarchists ;)
(much) stronger reverence for the 1st Amendment != Anarchy.
You mean have a group of people who decide what is true?
Yes. That's the way society works; in a civilised country, that decision is made through the courts, based on laws created by a democratic Government[1].
Isn't that better known as Not-Libertarianism?
No, it's better known as Not-Anarchism. Please stop conflating anarchism with Libertarianism.
[1] Not necessarily an elected one. There's more than one way to achieve democracy; selecting the Government by random ballot from the citizenry, a.k.a. sortition, is one alternative to voting. It also happens to be my preferred one.
Yes. That's the way society works; in a civilised country, that decision is made through the courts, based on laws created by a democratic Government[1].
Isn't that better known as Not-Libertarianism?
No, it's better known as Not-Anarchism. Please stop conflating anarchism with Libertarianism.
[1] Not necessarily an elected one. There's more than one way to achieve democracy; selecting the Government by random ballot from the citizenry, a.k.a. sortition, is one alternative to voting. It also happens to be my preferred one.
"Lawyers working on behalf of those bringing class-action suits against the manufacturers."
Who can afford that? You will always be outmatched be by big corporations.
"Not at all. It took forever for the justice system to overcome the massive lobbying and corruption that was protecting the tobacco industry from lawsuits over their fraudulent advertising. "
In what way would the situation improve if there was no regulation? There would be even more corruption. Just look at the ratings agencies during the 2008 crisis. They were supposed to be a market based information source but in reality they were paid off.
There is a lot that's wrong with agencies like the EPA but abolishing them and dreaming up market based solutions that are corruption free doesn't seem to be realistic to me.
Who can afford that? You will always be outmatched be by big corporations.
"Not at all. It took forever for the justice system to overcome the massive lobbying and corruption that was protecting the tobacco industry from lawsuits over their fraudulent advertising. "
In what way would the situation improve if there was no regulation? There would be even more corruption. Just look at the ratings agencies during the 2008 crisis. They were supposed to be a market based information source but in reality they were paid off.
There is a lot that's wrong with agencies like the EPA but abolishing them and dreaming up market based solutions that are corruption free doesn't seem to be realistic to me.
Who can afford that? You will always be outmatched be by big corporations.
That's clearly untrue; class-action lawsuits are regularly successful against big corporations without Government intervention (other than the provision of the justice system itself).
Just look at the ratings agencies during the 2008 crisis. They were supposed to be a market based information source but in reality they were paid off.
Sure. And many people who relied on them got burned. The moral hazard arose when the Government decided to bail out people and organisations who'd depended upon them, with money extracted from taxpayers by threat of force. I'd also point out that a lot of the corruption you mention is Governmental; many of those subprime loans only existed because of market intervention in the first place.
There is a lot that's wrong with agencies like the EPA but abolishing them and dreaming up market based solutions that are corruption free doesn't seem to be realistic to me.
Me neither. As I've said before, I think it's entirely reasonable for a Libertarian Government to regulate polluting activities. The caveat is that such legislation must be rights-protecting, rational, and uniformly enforced. Also, in the case of the USA, there's no Constitutional mandate for a Federal EPA so it ought to be dissolved and its responsibilities taken up by the States.
That's clearly untrue; class-action lawsuits are regularly successful against big corporations without Government intervention (other than the provision of the justice system itself).
Just look at the ratings agencies during the 2008 crisis. They were supposed to be a market based information source but in reality they were paid off.
Sure. And many people who relied on them got burned. The moral hazard arose when the Government decided to bail out people and organisations who'd depended upon them, with money extracted from taxpayers by threat of force. I'd also point out that a lot of the corruption you mention is Governmental; many of those subprime loans only existed because of market intervention in the first place.
There is a lot that's wrong with agencies like the EPA but abolishing them and dreaming up market based solutions that are corruption free doesn't seem to be realistic to me.
Me neither. As I've said before, I think it's entirely reasonable for a Libertarian Government to regulate polluting activities. The caveat is that such legislation must be rights-protecting, rational, and uniformly enforced. Also, in the case of the USA, there's no Constitutional mandate for a Federal EPA so it ought to be dissolved and its responsibilities taken up by the States.
> Not at all. It took forever for the justice system to overcome the massive lobbying and corruption that was protecting the tobacco industry from lawsuits over their fraudulent advertising.
Isn't that the point? Tobacco companies had vast sums of money to spend buying scientists and spreading FUD. Individuals had no hope of picking out the truth of this and we only saw real change in rates of smoking when government intervened to stop the manipulation.
And the FUD wasn't all simple plain fraud. It's a consistant drip-feed of messages like "we all die, you might get hit by a bus" or "smoking isn't that addictive" (because physically, it isn' that addictive).
Isn't that the point? Tobacco companies had vast sums of money to spend buying scientists and spreading FUD. Individuals had no hope of picking out the truth of this and we only saw real change in rates of smoking when government intervened to stop the manipulation.
And the FUD wasn't all simple plain fraud. It's a consistant drip-feed of messages like "we all die, you might get hit by a bus" or "smoking isn't that addictive" (because physically, it isn' that addictive).
You're rolling up several issues here.
1) It's none of the Government's business what smoking rates are. All that should matter to the Government is whether smokers are being lied to about cigarettes, i.e., whether their rights are being violated.
2) Some of the FUD was fraud, and thus should be the subject of a) lawsuits, and b) criminal charges.
3) The rest of it wasn't fraud, as you correctly point out, and therefore ought to be legal.
4) Individuals had no hope of picking out the truth of this is patently untrue. Many individuals did.
1) It's none of the Government's business what smoking rates are. All that should matter to the Government is whether smokers are being lied to about cigarettes, i.e., whether their rights are being violated.
2) Some of the FUD was fraud, and thus should be the subject of a) lawsuits, and b) criminal charges.
3) The rest of it wasn't fraud, as you correctly point out, and therefore ought to be legal.
4) Individuals had no hope of picking out the truth of this is patently untrue. Many individuals did.
> Who would prove the harm if there is no EPA? Who has the money to go against big corporations and their paid experts? It took forever to get a shared understanding that smoking is really harmful.
The EPA is a horrible example to use against libertarianism. As you note it took much longer for the EPA to figure this out that virtually any other expert in the area. This is because governmental organizations have poorly aligned incentives which almost necessarily result in regulatory capture.
To answer your questions:
Who would prove the harm if there is no EPA? The same experts who the EPA uses, or hopefully better ones. I would happily subscribe to a consumer reports for heath information, for example. This would create a market where accurate and timely information was actually incentivized.
Would there be regulations on cigarettes, selling alcohol to 10 year olds or lead paint? Sure. These regulations would happen on a city-by-city basis or better yet on a neighborhood-by-neighborhood basis.
As for references, check out the work of Rothbard (a full anarcho-capitalist), and/or Hayek (a minarchist). Economics in One Lesson is also a great introductory book to get your footing thinking through these things.
The EPA is a horrible example to use against libertarianism. As you note it took much longer for the EPA to figure this out that virtually any other expert in the area. This is because governmental organizations have poorly aligned incentives which almost necessarily result in regulatory capture.
To answer your questions:
Who would prove the harm if there is no EPA? The same experts who the EPA uses, or hopefully better ones. I would happily subscribe to a consumer reports for heath information, for example. This would create a market where accurate and timely information was actually incentivized.
Would there be regulations on cigarettes, selling alcohol to 10 year olds or lead paint? Sure. These regulations would happen on a city-by-city basis or better yet on a neighborhood-by-neighborhood basis.
As for references, check out the work of Rothbard (a full anarcho-capitalist), and/or Hayek (a minarchist). Economics in One Lesson is also a great introductory book to get your footing thinking through these things.
"Who would prove the harm if there is no EPA? The same experts who the EPA uses, or hopefully better ones. I would happily subscribe to a consumer reports for heath information, for example. This would create a market where accurate and timely information was actually incentivized."
How do you make sure that your consumer reports aren't corrupt? And how do they get financed? Research into things that cause long-term effects (like lead or mercury or tobacco) is very expensive and not really viable for a company that needs to produce a profit short-term.
In my mind, if you want a functioning libertarian state you need to strengthen public research and make sure it's not corrupted. So strengthen the EPA instead of abolishing it.
That way courts and citizens have accurate information to determine if harm has been done or not.
How do you make sure that your consumer reports aren't corrupt? And how do they get financed? Research into things that cause long-term effects (like lead or mercury or tobacco) is very expensive and not really viable for a company that needs to produce a profit short-term.
In my mind, if you want a functioning libertarian state you need to strengthen public research and make sure it's not corrupted. So strengthen the EPA instead of abolishing it.
That way courts and citizens have accurate information to determine if harm has been done or not.
> How do you make sure that your consumer reports aren't corrupt? And how do they get financed? Research into things that cause long-term effects (like lead or mercury or tobacco) is very expensive and not really viable for a company that needs to produce a profit short-term.
1. The methods used to figure out that mercury/cigarettes are harmful is some combination of animal testing and running reports over medical records. These are expensive largely because of regulation.
2. Short term profit goals don't actually destroy the incentive to do research, even expensive research. Consumer reports does tests on cars, requiring facilities and specialists. The major banks spend insane amounts of money doing analysis of companies. Intel, google, etc all invest heavily in R&D.
3. Re: corruption, there's a very strong financial incentive for corporations to not be corrupt. Most of them offer satisfaction guarantees for example, and corporate scandals result in resignation and share price depression. Most of the examples of corruption I'm aware of involve politicians and government agencies. If the EPA were private, it would probably have gone bankrupt / been overtaken by competitors due to its cigarette ineptitude and other failings.
> In my mind, if you want a functioning libertarian state you need to strengthen public research and make sure it's not corrupted. So strengthen the EPA instead of abolishing it.
I think the libertarians completely agree with the strengthening sentiment of your comment. Where we differ with you is that we think the most powerful thing you can do to strengthen public research is to privatize it.
To expand on that: as I said above, I believe the EPA by design ends up in a state of regulatory capture (https://en.wikipedia.org/wiki/Regulatory_capture), a problem for which I'm aware of no workable solutions for. You yourself probably don't trust the EPA's health advice nearly as much as a smart friend or two of yours who is actually looking at the literature on a given topic. Contrast this with consumer reports, who (personally) I trust at the same level. I think this problem is structural / inherent to public research originations... and needs to be directly fixed by aligning the interest of the researcher with the consumers of their research.
To put that another way: the best researchers I know aren't working for public research institutions. The best ML researchers I'm aware of have actually quit tenured professorships to join Google, Facebook, and Baidu. The best finance/economics researchers I'm aware of work at hedge funds. The best agricultural researchers I'm aware of work at food conglomerates. The best biologists I'm aware of work at drug companies... The majority of the public researchers I'm familiar with (growing up as the son of a math professor) are basically curiosity junkies. This is sort of good, and I'm happy that they're happy, but I think isn't really the foundation that life-changing research comes from -- you want the researcher to be personally invested in a workable solution, not academically curious about something in the area.
To put that a third way: your comment is an example of the nirvana fallacy. What method can we use to "strengthen public research" that won't result in the same misaligned incentives we're currently seeing? What method of preventing corruption are you suggesting beyond those which are already known to not work?
1. The methods used to figure out that mercury/cigarettes are harmful is some combination of animal testing and running reports over medical records. These are expensive largely because of regulation.
2. Short term profit goals don't actually destroy the incentive to do research, even expensive research. Consumer reports does tests on cars, requiring facilities and specialists. The major banks spend insane amounts of money doing analysis of companies. Intel, google, etc all invest heavily in R&D.
3. Re: corruption, there's a very strong financial incentive for corporations to not be corrupt. Most of them offer satisfaction guarantees for example, and corporate scandals result in resignation and share price depression. Most of the examples of corruption I'm aware of involve politicians and government agencies. If the EPA were private, it would probably have gone bankrupt / been overtaken by competitors due to its cigarette ineptitude and other failings.
> In my mind, if you want a functioning libertarian state you need to strengthen public research and make sure it's not corrupted. So strengthen the EPA instead of abolishing it.
I think the libertarians completely agree with the strengthening sentiment of your comment. Where we differ with you is that we think the most powerful thing you can do to strengthen public research is to privatize it.
To expand on that: as I said above, I believe the EPA by design ends up in a state of regulatory capture (https://en.wikipedia.org/wiki/Regulatory_capture), a problem for which I'm aware of no workable solutions for. You yourself probably don't trust the EPA's health advice nearly as much as a smart friend or two of yours who is actually looking at the literature on a given topic. Contrast this with consumer reports, who (personally) I trust at the same level. I think this problem is structural / inherent to public research originations... and needs to be directly fixed by aligning the interest of the researcher with the consumers of their research.
To put that another way: the best researchers I know aren't working for public research institutions. The best ML researchers I'm aware of have actually quit tenured professorships to join Google, Facebook, and Baidu. The best finance/economics researchers I'm aware of work at hedge funds. The best agricultural researchers I'm aware of work at food conglomerates. The best biologists I'm aware of work at drug companies... The majority of the public researchers I'm familiar with (growing up as the son of a math professor) are basically curiosity junkies. This is sort of good, and I'm happy that they're happy, but I think isn't really the foundation that life-changing research comes from -- you want the researcher to be personally invested in a workable solution, not academically curious about something in the area.
To put that a third way: your comment is an example of the nirvana fallacy. What method can we use to "strengthen public research" that won't result in the same misaligned incentives we're currently seeing? What method of preventing corruption are you suggesting beyond those which are already known to not work?
Or the justice system, administered by private courts (in market-anarchism).
Are you confusing libertarians with anarchists?
Yeah, I think he may be, which is why I posted in the first place.
No I am aware of the difference, just would love to hear how something like that was going to be managed.
(See also, in part, my reply above to maxxxxx).
I guess the bulk of it it would be much the same as what we have now: courts, police, Government departments tasked with protecting the rights of the population.
There would be laws against murder, assault, rape, fraudulent advertising, running two-stroke cars[1], etc. etc.
The main change would be that whole classes of crimes (drug crimes, obscenity, blasphemy, private discrimination[2], etc.) would simply disappear. And - if this were the USA - a lot of powers currently improperly usurped by the Federal Government would be instead claimed by the States, assuming their constitutions allowed.
[1] In other words, collective problems justify collective legislation. If smoky two-stroke cars cause human harm by polluting the air, it may be reasonable to ban them by legislation.
[2] By law, the State would be prohibited from discriminating on the grounds of race, religion, sex, marital status, etc. But individuals would be free to discriminate in whatever rational or irrational manner they chose.
I guess the bulk of it it would be much the same as what we have now: courts, police, Government departments tasked with protecting the rights of the population.
There would be laws against murder, assault, rape, fraudulent advertising, running two-stroke cars[1], etc. etc.
The main change would be that whole classes of crimes (drug crimes, obscenity, blasphemy, private discrimination[2], etc.) would simply disappear. And - if this were the USA - a lot of powers currently improperly usurped by the Federal Government would be instead claimed by the States, assuming their constitutions allowed.
[1] In other words, collective problems justify collective legislation. If smoky two-stroke cars cause human harm by polluting the air, it may be reasonable to ban them by legislation.
[2] By law, the State would be prohibited from discriminating on the grounds of race, religion, sex, marital status, etc. But individuals would be free to discriminate in whatever rational or irrational manner they chose.
I want to reply back but can't either :-(. I hope this is not considered a flame war.
Ditto. I think this is a valuable conversation, esp. for bystanders who haven't been exposed to Libertarianism before (or have been misled into equating it with Anarchism).
No, this is where your insert social system fails to eliminate deception and fraud. Because no social system can be expected to accomplish that.
"Just where in the world are you going to find these angels who are going to organize society for us?"
"Just where in the world are you going to find these angels who are going to organize society for us?"
Yeah, this is a really good point. Short of altering the gene pool (haha), what can we actually do about it "as a society"? I refuse to accept that we just have to tolerate this, but any solution I come up with to prevent it feels like it isn't much better than the problem ..
This is the nirvana fallacy. That people enter into contracts they later regret does not disprove the obvious benefits of allowing legally binding agreements.
If you have an alternate solution, by all means propose it.
(And while we're on the topic of libertarianism, I'd like to note that lawyers being too expensive for poor people is largely a product certification costs, something libertarians want to get rid of)
If you have an alternate solution, by all means propose it.
(And while we're on the topic of libertarianism, I'd like to note that lawyers being too expensive for poor people is largely a product certification costs, something libertarians want to get rid of)
Looks like our current government isn't fairing much better =P
Let's not forget that even most libertarians would be fine with:
1. giving protections to mentally handicapped people when it comes to signing contracts. 2. Allowing for bankruptcy if you cannot uphold a contract
Let's not forget that even most libertarians would be fine with:
1. giving protections to mentally handicapped people when it comes to signing contracts. 2. Allowing for bankruptcy if you cannot uphold a contract
Not at all. Valid contracts must pass a minimum bar of consent. There was no consent granted, the victim in this case is blatantly incapable of giving it.
What occurred is theft.
What occurred is theft.
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Theft defined by what court in the liberal society?
The one owned by the rich people or the one owned by the rich people?
The one owned by the rich people or the one owned by the rich people?
You seem to be attacking libertarians for being anarchists.
Would you attack a democrat for being a republican?
Would you attack a democrat for being a republican?
Sorry I was unclear. I mean "own" as in how the rich own the politicians in the current system. In a libertarian society I have a hard time seeing this being anything but even less protective of people like those described in the article.
What stops you (in anarchism) from opening a court specifically for poor people? Why do you think you're the only one worried about them?
This is where you need to do some research on what Libertarians really believe.
This is just an egregious example of people abusing the poor and helpless. Plenty of the landlords who own those building are as bad or worse.
Worse still are the institutional owners who hang onto tenement property to serve as a buffer.
Worse still are the institutional owners who hang onto tenement property to serve as a buffer.
Why does this lady have power of attorney over herself if she is "brain damaged" and can't read or write(presumably due to said brain damage, and not just laziness).
Good point.
Sad part is she discussed it on the phone with her lawyer. Good grief... my brother is a lawyer, if he ever got a call from a client saying a man came over, bought her steak and would give her a lumpsum of money in return for her monthly payment contract, all alarm bells would go off. He wouldn't even need to see the specific contract or have to be aware his client is mentally challenged to say 'no', first and foremost, followed with 'send it over or come over so we can review the contract'.
Sad part is she discussed it on the phone with her lawyer. Good grief... my brother is a lawyer, if he ever got a call from a client saying a man came over, bought her steak and would give her a lumpsum of money in return for her monthly payment contract, all alarm bells would go off. He wouldn't even need to see the specific contract or have to be aware his client is mentally challenged to say 'no', first and foremost, followed with 'send it over or come over so we can review the contract'.
Sad part is she discussed it on the phone with her lawyer.
No.. the lawyer was an "independent adviser" to her. He worked on every single one of Access 52's deals. Basically, he would call them up, ask if they understood the deal. That's it.
And that really underscores how mentally incompetent she was. Some random lawyer calls her up out of the blue, and she takes his advice.
More details about 2/3rds into the article (search for the guys name "Charles E. Smith" and you'll find the section about the lawyers involved.)
No.. the lawyer was an "independent adviser" to her. He worked on every single one of Access 52's deals. Basically, he would call them up, ask if they understood the deal. That's it.
And that really underscores how mentally incompetent she was. Some random lawyer calls her up out of the blue, and she takes his advice.
More details about 2/3rds into the article (search for the guys name "Charles E. Smith" and you'll find the section about the lawyers involved.)
Makes a lot more sense. Thanks for replying!
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Aside from the Justice Preening, this raises some interesting ethical questions about time preference. I mean, in a lot of cases they understood exactly what they were doing - giving up some money tomorrow in exchange for some today. They just made a more drastic tradeoff than, say, traders selling treasury bonds, but less drastic than, say, the millions of people taking payday loans, or those same traders if they expected interest rates to rise to 30%. It's unclear what exactly it means to "not understand" the tradeoff - presumably if you said the words to them they would repeat them back and tell you they "understand" that this will happen in the future; it's not exactly a difficult calculation, just an if-then.
Does competency then require some kind of accurate estimation on their part of future regret? This seems like a really high bar that millions of, eg, high functioning alcoholics or one-night-stand partakers fail each day.
Does lead screw with time preference specifically? I would assume so, but is it more or less than would be expected given the effect on general mental capacity?
How high of time preference is "too high"? Is it unethical to transact with someone who wants things NOW just a little too strongly, maybe even so strongly that they don't bother to comparison shop? Do our ethics require them to be pariahs, even though they're not "incompetent" enough for someone else to be responsible for their affairs?
Would cashing them in at parity with the estimated present value (which, given their condition, they're likely to squander over roughly the same time period they squandered the larger amount) be more un/ethical? Equally?
Does competency then require some kind of accurate estimation on their part of future regret? This seems like a really high bar that millions of, eg, high functioning alcoholics or one-night-stand partakers fail each day.
Does lead screw with time preference specifically? I would assume so, but is it more or less than would be expected given the effect on general mental capacity?
How high of time preference is "too high"? Is it unethical to transact with someone who wants things NOW just a little too strongly, maybe even so strongly that they don't bother to comparison shop? Do our ethics require them to be pariahs, even though they're not "incompetent" enough for someone else to be responsible for their affairs?
Would cashing them in at parity with the estimated present value (which, given their condition, they're likely to squander over roughly the same time period they squandered the larger amount) be more un/ethical? Equally?
Ethics have nothing to do with it. Time preference is very well defined in financial terms, because it can be replicated easily. That is why the author can say that the value of her judgement is 338k today.
Any substantial divergence from that number is just plain fraud, regardless of how 'strongly' the person wants it.
You can't just swap dollars for pennies, you can't allow that for an awful lot of reasons.
Any substantial divergence from that number is just plain fraud, regardless of how 'strongly' the person wants it.
You can't just swap dollars for pennies, you can't allow that for an awful lot of reasons.
This is particularly screwed up because they had the option of a structured settlement vs. lump-sum at the outset, and were shepherded into the structured settlement. Later, when their circumstances generally have NOT changed, it's absurd that they'd give up 70-90% of NPV to transition.
I wonder if there could be a requirement written into the structured settlements that the settlement provider handle a market-rate transition to lump sum at any time, as part of creditworthiness of the settlement provider. Then, petition a judge in jurisdiction of residence to do the transition.
I'm pretty far-right libertarian, but this is just gratuitous abuse of people who aren't able to take care of their own affairs. Selfishly, I want it destroyed with fire because otherwise people will see this abuse and think they need more regulation even in other areas where it's not necessary.
I wonder if there could be a requirement written into the structured settlements that the settlement provider handle a market-rate transition to lump sum at any time, as part of creditworthiness of the settlement provider. Then, petition a judge in jurisdiction of residence to do the transition.
I'm pretty far-right libertarian, but this is just gratuitous abuse of people who aren't able to take care of their own affairs. Selfishly, I want it destroyed with fire because otherwise people will see this abuse and think they need more regulation even in other areas where it's not necessary.
Excellent comment and similar to a thought I had while reading this. Sure, in this case there are legitimate competency questions that make us wonder if the individuals in question should even be allowed to enter into a contract of this nature.
But it's not that hard to imagine Access Funding making similar deals with other owners of structured settlements. Can a man who was hit by a car and lost the use of his leg sell his settlement at a drastic discount like we see here? How big a discount is too big?
I suppose this is why some states have usury laws. Above a certain interest rate the state decides that willingness to take the loan is, in and of itself, evidence of lack of competency.
But it's not that hard to imagine Access Funding making similar deals with other owners of structured settlements. Can a man who was hit by a car and lost the use of his leg sell his settlement at a drastic discount like we see here? How big a discount is too big?
I suppose this is why some states have usury laws. Above a certain interest rate the state decides that willingness to take the loan is, in and of itself, evidence of lack of competency.
I don't see why structured settlements should be allowed to be sold off at all.
The whole point of choosing a structured settlement is to prevent the person from spending a one-time windfall. So why allow that arrangement to be undone after the fact?
When you retire, you cannot assign your Social Security payments to a company in return for a lump sum. Many pension plans also prohibit you from assigning your pension checks. As a society, we've decided that preventing retirees from becoming destitute is more important than allowing those retirees to access their benefit as a lump sum.
Why is it different for structured settlements?
The whole point of choosing a structured settlement is to prevent the person from spending a one-time windfall. So why allow that arrangement to be undone after the fact?
When you retire, you cannot assign your Social Security payments to a company in return for a lump sum. Many pension plans also prohibit you from assigning your pension checks. As a society, we've decided that preventing retirees from becoming destitute is more important than allowing those retirees to access their benefit as a lump sum.
Why is it different for structured settlements?
Structured settlements are not exclusively used for those reasons:
> Structured settlement cases became more popular in the United States during the 1970s as an alternative to lump sum settlements. The increased popularity was due to several rulings by the IRS, an increase in personal injury awards, and higher interest rates. The IRS rulings changed policies such that if certain requirements were met then claimants could have federal income tax waived. Higher interest rates result in lower present values, hence annuity premiums, for deferred payments versus a lump sum.
https://en.wikipedia.org/wiki/Structured_settlement
They are presumably easier for the person paying the settlement as well. They can pay it from their cash flow over time, instead of liquidating businesses for up front payments, etc.
It's possible that the article is drawing a false connection between the nature of the injury that the settlement is redressing, and structured settlements. It seems like people who are properly unable to care for themselves will require legal guardianship or conservatorship by another, and a trust set up on their behalf, etc. I don't get the impression that structured settlements alone are meant to deny the person who was awarded the settlement a right, so much as that they provide an advantage to one or both parties.
> Structured settlement cases became more popular in the United States during the 1970s as an alternative to lump sum settlements. The increased popularity was due to several rulings by the IRS, an increase in personal injury awards, and higher interest rates. The IRS rulings changed policies such that if certain requirements were met then claimants could have federal income tax waived. Higher interest rates result in lower present values, hence annuity premiums, for deferred payments versus a lump sum.
https://en.wikipedia.org/wiki/Structured_settlement
They are presumably easier for the person paying the settlement as well. They can pay it from their cash flow over time, instead of liquidating businesses for up front payments, etc.
It's possible that the article is drawing a false connection between the nature of the injury that the settlement is redressing, and structured settlements. It seems like people who are properly unable to care for themselves will require legal guardianship or conservatorship by another, and a trust set up on their behalf, etc. I don't get the impression that structured settlements alone are meant to deny the person who was awarded the settlement a right, so much as that they provide an advantage to one or both parties.
> Structured settlement cases became more popular in the United States during the 1970s as an alternative to lump sum settlements. The increased popularity was due to several rulings by the IRS, an increase in personal injury awards, and higher interest rates.
Well, in the 1970s, people had pensions and the 401(k) was a "thrift plan." Yet we've enacted all sorts of protections for the 401(k), because it is now the primary mechanism of retirement savings available to most Americans.
Structured settlements may have originated as a tax break in the 1970s. However, in the last 40 years they've become a way to provide a secure income stream for plaintiffs. We need to treat them as such.
Well, in the 1970s, people had pensions and the 401(k) was a "thrift plan." Yet we've enacted all sorts of protections for the 401(k), because it is now the primary mechanism of retirement savings available to most Americans.
Structured settlements may have originated as a tax break in the 1970s. However, in the last 40 years they've become a way to provide a secure income stream for plaintiffs. We need to treat them as such.
Even if you don't allow them to be sold off, nothing is stopping someone from entering an agreement where they have to pay the same amount monthly to a person X in exchange for a lump sum received now. So they still receive their checks but they have to pay that money to someone anyway.
> Even if you don't allow them to be sold off, nothing is stopping someone from entering an agreement where they have to pay the same amount monthly to a person X in exchange for a lump sum received now. So they still receive their checks but they have to pay that money to someone anyway.
Such an arrangement would be an unsecured personal loan, which would not survive a bankruptcy filing.
This is why you see commercials on late-night TV for structured settlement cash-outs, but you don't see commercials offering to pay you a lump sum in return for handing over your Social Security payments.
The Social Security system pays out $700 billion in benefits each year. The entire structured settlement market is only about $6 billion a year. However, Social Security payments cannot be assigned, and structured settlements can.
These companies don't want to give out unsecured loans to poor people with lead poisoning who don't have jobs. They want to pay pennies on the dollar for a guaranteed stream of payments.
Such an arrangement would be an unsecured personal loan, which would not survive a bankruptcy filing.
This is why you see commercials on late-night TV for structured settlement cash-outs, but you don't see commercials offering to pay you a lump sum in return for handing over your Social Security payments.
The Social Security system pays out $700 billion in benefits each year. The entire structured settlement market is only about $6 billion a year. However, Social Security payments cannot be assigned, and structured settlements can.
These companies don't want to give out unsecured loans to poor people with lead poisoning who don't have jobs. They want to pay pennies on the dollar for a guaranteed stream of payments.
"...these structured agreements often deliver monthly payments across decades to protect vulnerable recipients from immediately spending the money."
Why must someone, an adult, be "protected" from spending their own money. This nanny state nonsense has got to stop. Do people really have to be protected from themselves? If they aren't smart enough to take care of their business, they ought not be allowed outside of a group home.
Why must someone, an adult, be "protected" from spending their own money. This nanny state nonsense has got to stop. Do people really have to be protected from themselves? If they aren't smart enough to take care of their business, they ought not be allowed outside of a group home.
> if they aren't smart enough to take care of their business, they ought not be allowed outside of a group home.
Lack of capacity should be limited as far as possible. A person with intellectual disability may be able to live a reasonably normal life but need help with cooking; or with financial planning. Suggesting that we imprison (because that's what you're calling for) people who have no committed any crime; who pose no risk of harm to others; and who lack capacity over one small aspect of their life is fascistic.
What you're asking appears to be is "Why should this industry, which is heavily regulated to protect the general population from abusive practices, and which has a long history of illegal, unethical, sleazy, behaviours have to comply with regulation to protect society's vulnerable members?"
Lack of capacity should be limited as far as possible. A person with intellectual disability may be able to live a reasonably normal life but need help with cooking; or with financial planning. Suggesting that we imprison (because that's what you're calling for) people who have no committed any crime; who pose no risk of harm to others; and who lack capacity over one small aspect of their life is fascistic.
What you're asking appears to be is "Why should this industry, which is heavily regulated to protect the general population from abusive practices, and which has a long history of illegal, unethical, sleazy, behaviours have to comply with regulation to protect society's vulnerable members?"
>Suggesting that we imprison (because that's what you're calling for) people who have no committed any crime; who pose no risk of harm to others; and who lack capacity over one small aspect of their life is fascistic.
This is largely how we treat children. For the extreme cases, look at those re-education camps parents can send their teens to, often with a 'transporter' that would by any other name be called a kidnapper. And if the child runs away and claims abuse... the police will be right there to send them back.
Is it wrong that the child is treated in so many ways as belonging to the parent?
This is largely how we treat children. For the extreme cases, look at those re-education camps parents can send their teens to, often with a 'transporter' that would by any other name be called a kidnapper. And if the child runs away and claims abuse... the police will be right there to send them back.
Is it wrong that the child is treated in so many ways as belonging to the parent?
That's the American experience. It's less the case in any country that has signed up to the convention on the rights of the child.
In the case of children we protect them because they lack capacity. When they develop capacity we reduce the constraints.
Have a look at English guidelines for medical competance: "Gillick competance". This is used to decide whether someone under the age of 16 can consent to medical treatment without their parents knowledge or permission. (The perhaps odd age of 16 is used because that's the age of consent for sex and the name Gillick Competance comes from a case where a mother did not want girls under the age of 16 to be prescribed the contraceptive pill. (16 is the age of sexual consent in England.)
http://www.nspcc.org.uk/preventing-abuse/child-protection-sy...
https://en.wikipedia.org/wiki/Gillick_competence
For examples of what this means with real life examples:
14 year old refuses chemotherapy for a highly treatable brain tumor: http://www.bbc.co.uk/programmes/b0643x61
14 year old with type 1 diabetes is non-compliant with treatment: http://www.bbc.co.uk/programmes/b0499j2f
Can a 9 year old be given treatment her parents don't agree with? http://www.bbc.co.uk/programmes/b00t3z65
In the case of children we protect them because they lack capacity. When they develop capacity we reduce the constraints.
Have a look at English guidelines for medical competance: "Gillick competance". This is used to decide whether someone under the age of 16 can consent to medical treatment without their parents knowledge or permission. (The perhaps odd age of 16 is used because that's the age of consent for sex and the name Gillick Competance comes from a case where a mother did not want girls under the age of 16 to be prescribed the contraceptive pill. (16 is the age of sexual consent in England.)
http://www.nspcc.org.uk/preventing-abuse/child-protection-sy...
https://en.wikipedia.org/wiki/Gillick_competence
For examples of what this means with real life examples:
14 year old refuses chemotherapy for a highly treatable brain tumor: http://www.bbc.co.uk/programmes/b0643x61
14 year old with type 1 diabetes is non-compliant with treatment: http://www.bbc.co.uk/programmes/b0499j2f
Can a 9 year old be given treatment her parents don't agree with? http://www.bbc.co.uk/programmes/b00t3z65
1) it genuinely protects people who otherwise don't have to live in a group home. silly exaggeration.
2) as you by now should know if you didn't know already, you can sell guaranteed future payments and get your lump-sum if you really want to. tons of businesses will do buy it from you. you're not forced into receiving monthly payments if you don't want to, you can change it on day 1, it just happens to be the default because it makes more sense for most people.
that's not a nanny state, it's incredibly sensible.
2) as you by now should know if you didn't know already, you can sell guaranteed future payments and get your lump-sum if you really want to. tons of businesses will do buy it from you. you're not forced into receiving monthly payments if you don't want to, you can change it on day 1, it just happens to be the default because it makes more sense for most people.
that's not a nanny state, it's incredibly sensible.
>This nanny state nonsense
Is the state even involved in the decision to structure these settlements (other than through its role as enforcer of a contract between 2 non-state parties, namely, the insurer and the insured)?
It could be that the insurer chose to write structuring into the contract to avoid negative publicity from the insured's spending the entire settlement and ending up poor again.
Is the state even involved in the decision to structure these settlements (other than through its role as enforcer of a contract between 2 non-state parties, namely, the insurer and the insured)?
It could be that the insurer chose to write structuring into the contract to avoid negative publicity from the insured's spending the entire settlement and ending up poor again.
This setup is also protecting the state from having to support these people through increased welfare and other social program costs. Therefore the state has an interest in encouraging or even mandating this form of agreement. Otherwise these people are more likely to end up on benefits and receiving assistance from social services that your tax money pays for. But if you'd rather have tax payer funded group homes set up with all the associated costs, that's up to you. I'm not a US citizen, so I've no skin in this particular game.
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>It's unclear what exactly it means to "not understand" the tradeoff - presumably if you said the words to them they would repeat them back and tell you they "understand" that this will happen in the future; it's not exactly a difficult calculation, just an if-then.
I think the mean these people don't understand they are giving up +70% of the present value of the settlement. They probably don't understand what present value means, and figuring out 70% of a large number might not be something they could do even with a calculator. They do know this is bad and embarrassing so they will try to cover up their ignorance by saying, "Yes I understand" even if they do not. I would expect they would be unable to correctly explain un-assited, and un-promted, why they got a structured settlement in the first place, how the structured stealement plays into their everyday finances, why they now think a structured settlement was a bad idea, and how the plan to make up for the loss of monthly checks in their day-to-day expensies.
As I side note I feel you could make a convincing argument that alcoholics should lack legal competency when dealing with matters that involve them getting alcohol. They routinely do things that I don't think can be called competent (much less legal) for example putting people they care about at risk of death by driving while very drunk. We even have special rules for these people related to drinking and driving namely ignition interlocks, that we don't require non-alcoholics to use.
I think the mean these people don't understand they are giving up +70% of the present value of the settlement. They probably don't understand what present value means, and figuring out 70% of a large number might not be something they could do even with a calculator. They do know this is bad and embarrassing so they will try to cover up their ignorance by saying, "Yes I understand" even if they do not. I would expect they would be unable to correctly explain un-assited, and un-promted, why they got a structured settlement in the first place, how the structured stealement plays into their everyday finances, why they now think a structured settlement was a bad idea, and how the plan to make up for the loss of monthly checks in their day-to-day expensies.
As I side note I feel you could make a convincing argument that alcoholics should lack legal competency when dealing with matters that involve them getting alcohol. They routinely do things that I don't think can be called competent (much less legal) for example putting people they care about at risk of death by driving while very drunk. We even have special rules for these people related to drinking and driving namely ignition interlocks, that we don't require non-alcoholics to use.
> I think the mean these people don't understand they are giving up +70% of the present value of the settlement. They probably don't understand what present value means, and figuring out 70% of a large number might not be something they could do even with a calculator.
Cripes, they probably don't even know what the word "percent" means.
These people need far greater protection from the law than they're receiving.
Cripes, they probably don't even know what the word "percent" means.
These people need far greater protection from the law than they're receiving.
At what point must they receive protections stronger than that a child gets? Many 17 year olds know what a percent is. Say the 17 year olds in an honors math class. Yet we restrict them to the extent they cannot vote nor sign contracts (with very few exceptions that require parental signatures).
So if we need to apply the same level of protections, does that not also justify taking away rights like voting (assuming taking it away from educated 17 year olds is justified)?
So if we need to apply the same level of protections, does that not also justify taking away rights like voting (assuming taking it away from educated 17 year olds is justified)?
> So if we need to apply the same level of protections, does that not also justify taking away rights like voting
In my opinion, yes, though in practice this restriction would probably be impossible.
In my opinion, yes, though in practice this restriction would probably be impossible.
What you describe is actually a pretty good test if someone should be allowed to strike a deal - "can they describe it unassisted"?
"Present value" is definitionally what you can trade the income stream for in the present, which amongst other things depends on your discount rate or time preference. It begs the question to say that they sold it for "less than the present value (to them)".
Honestly, rubbish - getting an illiterate, brain damaged person to sign a contract they never read and signed without advice on their side for 1/5 of the face value is not about time preference - it's fraud, or undue pressure or something illegal.
Jail time.
Jail time.
The Dickishness human gene strikes again.
Solution? Maybe the people who live in those cities can sue these companies in a class action lawsuit for grievances. I guess that's what courts are for. Unfortunately, "who's going to do it?" I sure as heck don't have time or energy for it. :/
Solution? Maybe the people who live in those cities can sue these companies in a class action lawsuit for grievances. I guess that's what courts are for. Unfortunately, "who's going to do it?" I sure as heck don't have time or energy for it. :/
Total click-bait headline from the Washington Post? Wow.
It absolutely makes no difference what race the poor people are.
It absolutely makes no difference what race the poor people are.
“A lot of them can barely read,” said Saul E.
Kerpelman, who estimates he has defended more than
4,000 victims of lead poisoning, nearly all of them
black.
When the country has systematically denied access to capital to a certain race of people, and continues to support and legitimize this practice, it absolutely makes a difference what race these people are.
Black lives matter.
Black lives matter.
CEO is named Michael Borkowski. Sounds pretty jewish to me. Jews have systematically greater access to capital, something which the country supports and legitimizes.
Wait, what was I thinking - this racial dimension doesn't matter at all. Just an isolated case...
Black lives matter!
Wait, what was I thinking - this racial dimension doesn't matter at all. Just an isolated case...
Black lives matter!
All lives matter.
>It is not simply said as a matter of truth or a statement of values. Instead, it's a rebuttal to the statement "Black Lives Matter."
>Instead of communicating a love for all beings, "All Lives Matter" are words of negation, repudiation, and refutation.
http://www.huffingtonpost.com/david-bedrick/whats-the-matter...
>Instead of communicating a love for all beings, "All Lives Matter" are words of negation, repudiation, and refutation.
http://www.huffingtonpost.com/david-bedrick/whats-the-matter...
I will not have words put in my mouth by the ridiculous Huffington Post, of all sites.
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It absolutely makes no difference what race the poor people are.
When did it become cool to assume that the logical possibility of discrimination is on the same order of effects to our free markets as actual discrimination? How did you people get past high school?
What struck me wasn't that this was a bad deal (it isn't) but that it's a bad deal for them. If I personally, being of sound mind and making a good wage, were offered a similar buyout of a structured settlement I'd take it.
The future value of 63k with 7% compounding earnings over 35 years easily outpaces the value of the monthly payments. And over that long a time horizon 7% would be easy to get - it's well under the market growth for any given 35 year period.
But that's me - I don't need the money to live off of every month, i don't have a disability that makes me unemployable, and I don't need those checks every month.
If those were my circumstances though? I'd be pissed!!!
The future value of 63k with 7% compounding earnings over 35 years easily outpaces the value of the monthly payments. And over that long a time horizon 7% would be easy to get - it's well under the market growth for any given 35 year period.
But that's me - I don't need the money to live off of every month, i don't have a disability that makes me unemployable, and I don't need those checks every month.
If those were my circumstances though? I'd be pissed!!!
Congratulations djrogers! By sucking at math you just cost yourself nearly 1.5 million dollars in retirement savings!
https://docs.google.com/spreadsheets/d/1y3PFiRhnixOcqeVrxZ2j...
I think one of the kind men from Access Funding would like to buy you a steak dinner.
https://docs.google.com/spreadsheets/d/1y3PFiRhnixOcqeVrxZ2j...
I think one of the kind men from Access Funding would like to buy you a steak dinner.
Your monthly interest rate isn't quite right, it's 7% / 12, rather than 1.07^(1/12).
i.e., if the annual interest rate is 100% (doubles every year), then it'd be incorrect to say the 6-month interest is half that (50%). As two terms of 50% would be a 125% increase, not 100%. To get to 100% you'd need two terms of 41%.
If you apply this to the monthly rate it drops by a little. Compounded over all those years, the total amount drops to by about 6%. As the one value drops by a larger amount in absolute terms, the earnings difference actually drops by about $50k.
Either way, it's still a ridiculous difference and your point fully stands.
i.e., if the annual interest rate is 100% (doubles every year), then it'd be incorrect to say the 6-month interest is half that (50%). As two terms of 50% would be a 125% increase, not 100%. To get to 100% you'd need two terms of 41%.
If you apply this to the monthly rate it drops by a little. Compounded over all those years, the total amount drops to by about 6%. As the one value drops by a larger amount in absolute terms, the earnings difference actually drops by about $50k.
Either way, it's still a ridiculous difference and your point fully stands.
Ya, good point. I was being a lil' quick and dirty when I put my spreadsheet together. Fixed.
Is that $63k taxed as ordinary income? There could be a significant immediate loss there.
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But they are poor, with very little sense of stock value and market returns. While you might think more educates about it, they sadly dont. So they blow the money quickly for something they need at the time. So no, it really wasn't a good deal.
Yeah - that's what I said, it's not a good deal for them.
No, it's not a good deal for anyone. If you run the calculations at a 0% interest rate, you lose money if you take the deal. If you do it at a 5% rate you lose money, at a 10% rate you lose money, at a 20% annual interest rate you lose money. You only win if you get 23% or higher annual returns averaged over 35 years (i.e. impossible even for Warren Buffet, let alone you or me, let alone someone with a GPA of 1.x) It's NOT a good deal, not for anyone.
Interestingly enough, the business examined by this article (Access Funding LLC) is Better Business Bureau accredited. [1] What kinds of businesses aren't BBB accredited these days?
The owner and CEO of Access Funding LLC, Lee J. Jundanian, started a business called Rapid Advance LLC in 2005. [2] This company specialized in structuring advances "on terms that experts say most small businesses, especially distressed ones, would have little hope of meeting", doing a large amount of business during the financial crisis. The advances are not considered loans because there is no set payback period; therefore, "the industry is completely unregulated, and companies can charge customers whatever they want."
Calculating the cost of an MCA [merchant cash advance] is a bit complicated. Because it doesn’t accrue interest over time, the more quickly one repays the advance, the more expensive it is.
For example, if a merchant agrees to pay $70,000 for a $50,000 advance, and it pays it off in six months, the effective annual interest rate is 80 percent. If paid off in three months, the rate jumps to 160 percent. Pay the advance off in a month and the rate skyrockets to 480 percent.
Funnily enough, Mr. Jundanian was awarded with the prestigious "Entrepreneur of the Year Award" by Ernst & Young in 2008 for growing Rapid Advance so quickly. Clearly they were impressed with his ability to find such a profitable way to use questionable accounting to legally prey on vulnerable business owners.
Seems like he's found a new avenue for his talents.
[1] http://www.bbb.org/washington-dc-eastern-pa/business-reviews...
[2] http://www.bizjournals.com/washington/stories/2010/07/19/sto...
The owner and CEO of Access Funding LLC, Lee J. Jundanian, started a business called Rapid Advance LLC in 2005. [2] This company specialized in structuring advances "on terms that experts say most small businesses, especially distressed ones, would have little hope of meeting", doing a large amount of business during the financial crisis. The advances are not considered loans because there is no set payback period; therefore, "the industry is completely unregulated, and companies can charge customers whatever they want."
Calculating the cost of an MCA [merchant cash advance] is a bit complicated. Because it doesn’t accrue interest over time, the more quickly one repays the advance, the more expensive it is.
For example, if a merchant agrees to pay $70,000 for a $50,000 advance, and it pays it off in six months, the effective annual interest rate is 80 percent. If paid off in three months, the rate jumps to 160 percent. Pay the advance off in a month and the rate skyrockets to 480 percent.
Funnily enough, Mr. Jundanian was awarded with the prestigious "Entrepreneur of the Year Award" by Ernst & Young in 2008 for growing Rapid Advance so quickly. Clearly they were impressed with his ability to find such a profitable way to use questionable accounting to legally prey on vulnerable business owners.
Seems like he's found a new avenue for his talents.
[1] http://www.bbb.org/washington-dc-eastern-pa/business-reviews...
[2] http://www.bizjournals.com/washington/stories/2010/07/19/sto...
In Canada it is a crime to charge more then 60% per annum. I would not be shocked if the States had something similar on the books. http://laws-lois.justice.gc.ca/eng/acts/c-46/page-179.html#d...
Edit: It's a States issue. It looks like Massachusetts has some rules http://www.mass.gov/courts/case-legal-res/law-lib/laws-by-su....
Edit: It's a States issue. It looks like Massachusetts has some rules http://www.mass.gov/courts/case-legal-res/law-lib/laws-by-su....
Lol. In UK there are short term loans which are publicly advertised as having an APR of at least 1500%(wonga.com), up to 3500% for larger sums. Fully legal.
In PL wonga.com advertises strictly to elderly (using famous older actors for added nostalgia and trust factor), they intensify ad campaign during holiday season, 'your family deserves good holiday with great gifts!'.
I can assure you that not only is it legal, it's done quite often here in the states
There are state usury laws that limit the amount of interest a lender can charge. http://www.lendingkarma.com/content/state-usury-laws-legal-i...
How relevant is the lead dialogue? My intuition says it's mainly to add to the emotional narrative rather than the tangible one. But I'm curious if its actually a apt point. Anyone have any concrete info either way?
It's relevant because it's the reason she's getting $1k in payments in the first place, as a settlement from whoever was responsible for the lead. It's not that she sold welfare payments and wants to explain away the bad decision with lead. It's that she's a damaged person (lead is a neurotoxin), got settlement payments, and made a bad decision that's more understandable in that context. Without the lead dialogue, she made a bad decision she could've prevented herself you might be able to argue. With the lead dialogue it's, on a mental level, probably quite similar like stealing candy from a baby. Now imagine the baby has to live off of settlements for decades, which have just been reduced by a gigantic amount. Now consider what it means in 5 years when the money's gone (even if she spent as frugally as normal, living on $12k per year tops), and you know she's going to either become homeless or severely dependent on the state or likely a combination of both. That's horrible for her first and foremost, and it doesn't help us or our society, either. Lead played a big role in this. Hell even outside of the 'bad decision', a normal person who lost out on $1m in benefits could still go to work, live a normal life. She can't because she's damaged by lead. (it doesn't talk about it deeply but it says for example she can't live alone or work).
> In a lawsuit dismissed in March, Access Funding accused Blumenfeld of interference with business practices and unjust enrichment.
Wow.
Wow.
This is a substantive claim in spite of the accuser. The independent advisor should not be helping their client solicit other bids...not very impartial.
I'm surprised that people buy into this rubbish that lead paint has actually caused these health issues.
True, irrelevant point to the article but points to a broken system on many levels including understanding and correctly dealing with mental health issues.
True, irrelevant point to the article but points to a broken system on many levels including understanding and correctly dealing with mental health issues.
The epidemiology is solid. Some cohort studies ran for decades. They followed lead levels in blood and bone. They tested intelligence and documented behavior. They tracked educational and criminal history. The neonatal brain is exquisitely sensitive to lead.
And this is why juries don't work.
It is probably banging my head against a brick wall, but seriously whole generations had lead based paint and lead products. Rich and poor.
It's even in the water supply - http://www.slate.com/articles/health_and_science/medical_exa...
But these people with lawsuits had these enormous effects only thanks to lead, right.
Even the whole lead in petrol thing is up in the air, we are not sure if it has made a difference.
These issues are around poverty, not magical beans like evil 'lead'.
It is probably banging my head against a brick wall, but seriously whole generations had lead based paint and lead products. Rich and poor.
It's even in the water supply - http://www.slate.com/articles/health_and_science/medical_exa...
But these people with lawsuits had these enormous effects only thanks to lead, right.
Even the whole lead in petrol thing is up in the air, we are not sure if it has made a difference.
These issues are around poverty, not magical beans like evil 'lead'.
> Even the whole lead in petrol thing is up in the air, we are not sure if it has made a difference
No, that's wrong. We know lead in petrol was very harmful to a lot of people.
The thing that is "up in the air" is whether lead in petrol was responsible for increased crime rates, especially increased violent crime rate; and whether removing lead feom petrol was responsible for the reduction in crime rates.
It's not an outlandish bizarre hypothesis because we know how harmful lead in atmosphere is.
No, that's wrong. We know lead in petrol was very harmful to a lot of people.
The thing that is "up in the air" is whether lead in petrol was responsible for increased crime rates, especially increased violent crime rate; and whether removing lead feom petrol was responsible for the reduction in crime rates.
It's not an outlandish bizarre hypothesis because we know how harmful lead in atmosphere is.
The "magical bean" for lead paint is poor maintenance. There's also the perverse fact that flakes of old lead paint are sweet. So kids suck on them like candy. Especially if they're hungry. I do agree that poverty makes it worse.
What are you even saying? Lead is very well-established as a neurotoxin.
[Citation really badly needed]
[deleted]
The big winner overall in this sad story is arguably the lead industry. They escaped liability for many decades.
[deleted]
I agree with all other people who say that she probably may be able to void the contract if she a) can pay back the money b) knows that it's possible to void a contract. But that is discussed already enough in the threads here. So I want to add a new point.
Should she trust such a contract and its maker? I think even if you are a little brain damanged and unable to read you should have some basic ability to determine if you can trust someone. I mean he came to her home and gave her food. That basically screams "I want to F* you" in one way or another. And when next he introduces some opportunity you can know exactly that this is where he's trying to cheat you. It's basic survival knowledge to recognize that. If you are a young white man, you might not have experienced such kind of situation before, but this structure of getting tricked is very common and not too hard to recognize, no matter where you go or what the trick is. After getting cheated a few times you recognize it as easy as a red light on the other side of the street that stops you from crossing over. If that girl doesn't have that much brain capacity she can't live alone. And if she has she certainly must learn to recognize that.
Should she trust such a contract and its maker? I think even if you are a little brain damanged and unable to read you should have some basic ability to determine if you can trust someone. I mean he came to her home and gave her food. That basically screams "I want to F* you" in one way or another. And when next he introduces some opportunity you can know exactly that this is where he's trying to cheat you. It's basic survival knowledge to recognize that. If you are a young white man, you might not have experienced such kind of situation before, but this structure of getting tricked is very common and not too hard to recognize, no matter where you go or what the trick is. After getting cheated a few times you recognize it as easy as a red light on the other side of the street that stops you from crossing over. If that girl doesn't have that much brain capacity she can't live alone. And if she has she certainly must learn to recognize that.
The second paragraph of the article states she can't live alone:
"She says she can’t work a professional job. She can’t live alone. And, she says, she surely couldn’t understand this letter."
You can't apply your logic and thought process to someone with mental or development issues. It's ignorant.
"She says she can’t work a professional job. She can’t live alone. And, she says, she surely couldn’t understand this letter."
You can't apply your logic and thought process to someone with mental or development issues. It's ignorant.
Then how could she face that person alone? If you have a caretaker he reads your mail, he even might answer your phone, and he certainly should see that not just him and you are sitting in the room, but another dude with a steak he's feeding you. That's how I came to presume she would have some kind of autonomous agenda.
Why is something like disability insurance checks even transferable?
Kudos to the WP for such a good investigative piece. Great job, guys.
I've been thinking about this problem for several years, ever since I saw my first late-night TV commercial with lawyers offering quick cash in return for structured payments. It was obvious that these folks were not pitching a financial service for people to think about very seriously before taking; they were pitching fast cash for people who can't manage their money.
Taking financial advantage of the cognitively-impaired is a very thorny problem. I think it's easy to come up with some kind of armchair policy that sounds good but would cause more problems than it would solve.
But hey, this is the internet, so everybody gets to take a whack at it. This is my take: if you're receiving a structured settlement for permanent cognitive damage, your cognitive damage does not go away simply because you've decided to take all the money in a lump sum. You end up stuck with the same problem, only now you've lost any chance of remedy. So perhaps the thing to do is to make structured settlements a legal requirement of the lawsuit and not simply a civil one. In other words, the judge rules that party X will pay party Y so much per month for so many years and that debt is not transferable by party Y. They're stuck paying them so much, and they're stuck paying them so long. A check must show up each month made out to Y (and Y must have full control over what to do with it)
Y can still make bad financial deals, but they get that money every month no matter what. If Y owes a bunch of people money? They can stand in line and wait on Y to decide how they want to spend their monthly allowance. It's not a debt in the traditional sense, it's an order for one bunch of folks to give another bunch of folks money every so often.
Probably a lot of problems with this solution also, but something needs to be done here. This is a terrible situation.
EDIT: change in text to correctly source the article
I've been thinking about this problem for several years, ever since I saw my first late-night TV commercial with lawyers offering quick cash in return for structured payments. It was obvious that these folks were not pitching a financial service for people to think about very seriously before taking; they were pitching fast cash for people who can't manage their money.
Taking financial advantage of the cognitively-impaired is a very thorny problem. I think it's easy to come up with some kind of armchair policy that sounds good but would cause more problems than it would solve.
But hey, this is the internet, so everybody gets to take a whack at it. This is my take: if you're receiving a structured settlement for permanent cognitive damage, your cognitive damage does not go away simply because you've decided to take all the money in a lump sum. You end up stuck with the same problem, only now you've lost any chance of remedy. So perhaps the thing to do is to make structured settlements a legal requirement of the lawsuit and not simply a civil one. In other words, the judge rules that party X will pay party Y so much per month for so many years and that debt is not transferable by party Y. They're stuck paying them so much, and they're stuck paying them so long. A check must show up each month made out to Y (and Y must have full control over what to do with it)
Y can still make bad financial deals, but they get that money every month no matter what. If Y owes a bunch of people money? They can stand in line and wait on Y to decide how they want to spend their monthly allowance. It's not a debt in the traditional sense, it's an order for one bunch of folks to give another bunch of folks money every so often.
Probably a lot of problems with this solution also, but something needs to be done here. This is a terrible situation.
EDIT: change in text to correctly source the article
I wonder how this state has forgotten to protect who absolutely need protection. They are people, and I know it, but severe mental impaired persons selling their "possessions" to shady companies, it's not the best thing to leave unsupervised.
The state also seems to consider the economic aids as a salable good. They should be shielded by these companies. Mental impaired persons are the weakest in resisting this type of aggression. The aid should be destined for the well being of people and not their ruin.