Politics, Moderate



Republicans are propping up scammers and cheaters

Catherine Rampell on

That rule just dealt with mandatory arbitration clauses in certain financial contracts. Congress and the administration have delayed or dismantled other regulations curbing forced arbitration in disputes involving nursing homes, for-profit schools and sexual harassment claims against government contractors.

This year, the House also passed a bill that would make it more difficult to bring class-action cases in general.

To its credit, the House Liberty Caucus opposed that legislation. In a statement, the libertarian-leaning group argued that "Class action lawsuits are a market-based solution for addressing widespread breaches of contract, violations of property rights, and infringements of other legal rights." It added that class actions are "a preferable alternative to government regulation."

Republicans have lately pursued other measures designed to limit the private-sector financial consequences faced by corner-cutters.

On the very day Equifax announced its massive data breach, the House held a hearing on legislation to cap actual and statutory damages for class actions involving credit agencies at $500,000, and to eliminate punitive damages.

Republicans have also made it easier for firms that can't make ends meet honestly to score government contracts.

They did this by killing an Obama-era order requiring companies bidding on government contracts to disclose if they've recently broken any labor laws.

Without such disclosures, it's harder for agencies to tell if a bid happens to be unusually low because the firm is efficiently run -- or because the bidder likes to illegally work employees off the clock. This, of course, puts firms that are run well, and that don't break labor laws, at a disadvantage.

To be fair, cheating isn't the only bad-business model being propped up by Republicans. Some companies just have trouble competing because the world has changed.

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I'm looking at you, coal.

Trump typically blames the decline of coal -- and coal jobs -- on burdensome environmental regulations. The real culprit, though, is technological change. Innovation has allowed fewer workers to extract the same amount of coal, and more significantly, has made natural gas a much cheaper alternative to coal.

The administration's response has not been to let unfettered energy markets sort things out and help displaced coal workers transition to other ways to support their families. Instead, it's been to directly subsidize the coal industry -- and delay the inevitable.

In the long run, none of these actions are good for consumers, workers or the healthy functioning of markets. They merely reward firms that can't hack it under 21st-century economic forces and 21st-century laws.


Catherine Rampell's email address is crampell@washpost.com. Follow her on Twitter, @crampell.

(c) 2017, Washington Post Writers Group



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