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‹ FEATURED DISCUSSION

November 02, 2006

Will Wilson on the Connecticut AG's race

By Ted Frank

Will Wilson, of AEI's Federalism Project, gives us this analysis:

The shortlist of “most inventively and aggressively extraterritorial rent-seeking AGs” reads: Spitzer, Lockyer, Crist, and Blumenthal. Two of these chaps, Crist and Spitzer, will most likely move into their respective governor’s mansions in a few months. General Lockyer has been term-limited into a probable position as Treasurer Lockyer. An important question, then, turns on Richard Blumenthal: Will the thus-far short-lived Spitzer approach—what Michael Greve calls indictment-driven inverted federalism—catch on institutionally, or will it die off when General Spitzer and his generation leave office this fall? A Blumenthal victory would go a long way toward keeping AG litigulation at the helm of national economic and industrial policy decisions.

Fittingly, Mr. Robert Farr, Blumenthal’s challenger, has centered his campaign on “silly suits” and the role of the attorney general from a public choice standpoint. Of course, his campaign strategy is a bust, if laudably so. What sane Connecticutter would vote against an AG who redirects out-of-state money into Connecticut’s coffers? One commenter on the Connecticut Local Politics blog described Blumenthal: “he is a very proactive AG and he does push the limits of his statutorily granted authority. For the most part, however, I think it has been to the benefit of the people of CT.” (Some would add that he pushes the limits of his constitutionally granted authority as well.) But that description captures the impossibility of Farr’s campaign—as well as the collective action problem presented by Spitzerism. No sensible state would stop scraping the surplus of the others while itself being scraped by them; they must all be locked into a “federal jurisdiction in federal matters” paradigm. To update an old phrase, they must be hung together, else they most assuredly will hang each other separately.

Since no voter would opt-in to that scheme voluntarily, Farr has to make his pitch more realistically palatable. To do so, he has adopted a slightly different tack: he highlights cases in which Mr. Blumenthal’s litigation has itself cost more than the eventual settlement or award has brought back to Connecticut. His minister of Silly Suits radio ad, for instance, notes a suit against the Big East Conference in which Connecticut grossed $1M, but netted negative $1M due to high legal costs. Of course, such an attack plan is just barely more politically productive than simply reading James Buchanan’s complete works over the airwaves.

And this raises a second hurdle over which Farr, and all parties interested in reversing the AG power trend, will have to leap: surplus swiping lawsuits come with a built-in publicity apparatus. The AG announces a new multi-million dollar settlement and—voila!—he no longer needs to campaign. (If that sounds like hyperbole, try google searching for Richard Blumenthal’s campaign website.) Such settlements are necessarily appealing to rational, self-interested voters. And the AGs have another inherent political edge that even incumbents to other offices do not have: unlike legislators, they need not share their coups with others; unlike governors, they are mostly unconstrained by the legislature. Sue as you like, settle for what you can get, and take all the credit.

Barring a federal intervention into a true collective action void, no sane voter will stop them. Inasmuch as this AG trend cuts across both parties equally (the unwritten bipartisan agreement to fleece globally), inasmuch as Congress fears rocking the boat, and inasmuch as the states themselves will never voluntarily want out, no preexisting institutional mechanism will halt the trend any time soon. Eliot Spitzer’s move will not clot the hemorrhaging of global surplus via settlements; the Blumenthal campaign (if you can find it) et al. will see to that.

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Regulation Through Litigation



 

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.