Is Connecticut A "Business Friendly" State?

An interesting article by the Hartford Courant's Kenneth Gosselin on Sunday posed the question: "What does it mean to be business friendly?"  More specifically, what does it mean here in Connecticut?  Gosselin says:

There is plenty of disagreement about what constitutes business friendly, but there's no dispute about its importance for every state, as governors across the nation play it up. That's especially true in a state that ranks at or near the bottom in job creation over the last two decades.

Before discussing these issues in the context of Pfizer's relationship with the State (including its recent decision to relocate jobs to Cambridge, Massachusetts), Gosselin discusses the importance of a direct line of communication between CEOs and the State's equivalent of a "CEO": the Governor.  He recounts the recent efforts of Governor Dannel Malloy on this score:


Governor Dannel Malloy
http://governor.ct.gov/



Since taking office in early January, Malloy has been visiting employers around the state, including Electric Boat, Travelers, Aetna, CIGNA and several manufacturers including United Technologies Corp. — and he has been struck by some of the reaction that he is getting.

"Almost every time I speak to someone in the business community, they say, 'We're talking to you, the governor? Wow.'" Malloy said.

Malloy's message to business executives has been direct: The state needs to get its fiscal house in order, answer questions quickly from business and streamline the process for obtaining licenses and permits.

"We have to constantly be doing all we can to help create another job," he said.

The article continues:

CEOs expect to deal with executives at the same level at other companies, and that goes for the state of Connecticut, said Matthew Nemerson, the [Connecticut Technology Council's] president.

"The culture is, 'at our level we deal with CEOs,'" Nemerson said. "In state government, that's the governor. So that's the game."

Nemerson said it's crucial for the governor to build relationships with business executives before a company faces a crisis or an expansion — so the CEO is comfortable picking up the telephone and calling the governor.

"Promoting a Rule of Law Culture in the Middle East and North Africa Region"

Leila Hanafi, Staff Attorney and Programs Manager at the World Justice Project, penned an interesting piece this week regarding the Rule of Law in Middle East and North African countries.  She comments on the progress that has been made, as well as the "immense" challenges that countries in the region face in implementing a Rule of Law.  Ms. Hanafi comments:

Nevertheless, despite improved legislations in the MENA countries, there are obstacles involving enforcing legislations that are often challenging. There are cultural norms, traditions, and lack of knowledge of legal rights in the rural and sometimes urban areas that may prevent people from invoking their rights. Rule of Law principles in the region have been formed by the interaction of the Islamic and civil law traditions. In some countries, there has been some common-law influence as well. To proclaim a uniform definition and application of the Rule of Law in such a diverse environment is difficult. Furthermore, developing a regional standard—one appropriate for all political and legal systems across the region—might be seen as far too complex to attempt.

She concludes:

A key discipline that is vital in promoting Rule of Law is education: the most influential tool in promoting values as are essential to Rule of Law. Legal education in the MENA region must be examined carefully. In my view, legal education is not about training judges and lawyers. Rather, legal education should also be about raising legal literacy and reaching out to the underserved groups, to educate them about the system and to help make it inclusive and accessible, not only financially, but also procedurally.

Rule of Law Interview with Robert J. Alpern, Dean of the Yale Medical School

By Dan Elliott

Robert J. Alpern, M.D., the Dean of Yale's School of Medicine, was a panelist at the CBA's June 2010 Rule of Law Conference.  He recently (and graciously) sat down with the Rule of Law Blog to discuss various aspects of the interplay between the medical profession and the law.  Please enjoy the Rule of Law Blog's interview with Dean Robert Alpern.

What is the Rule of Law?

Before the meeting, I did not know what the Rule of Law was.  But I’ve learned that it’s people being treated fairly by their government.

Photo by Terry Dagradi

A common theme at the conference was the effect that regulations and administrative agencies have on business overall.  Are our regulatory structures and administrative agencies helping or hurting the medical profession?

The answer is probably similar in most areas: they’re helping and they’re hurting.  There are many rules that make medicine better.  Certainly, the intent is to protect patients.  Unfortunately, many of the laws go awry because those who write them don’t totally understand the effects on patient care.  So it is not uncommon that rules have very negative effects on health care, on physician-patients relationships, and on the ability to develop new treatments.

Do you find that regulations and the agencies have any noticeable impact on the way future physicians are educated?

No, I think the main impact is on the practice of medicine.  Most of the laws that are passed just affect medicine but obviously anything that affects medicine then has to make its way into the educational system.

Do you find that the regulatory structures and the agencies encourage or stifle innovation in your profession?

Like everything else, it’s a complicated answer.  I don’t think they do a lot to encourage innovation and certainly there are a lot of aspects of the government that stifle innovation, all with the best of intentions, and all in the interest of protecting the patient.  The Hippocratic Oath says, above all else, “do no harm.”  That’s how we were all trained.  The question, however, is that sometimes you can be so attentive to do no harm that it prevents you from doing any good.  That’s the biggest problem we have with regulatory agencies right now.  With the best of intentions to insure that you do no harm, they sometimes prevent you from doing good.  If you look at HIPAA, we’re certainly very interested in patient privacy and we certainly don’t want any information about patients to leak out.  But a lot of the rules can impair the physician-patient relationship and clinical research.  Most people would say that the FDA’s approach to approving drugs today has become so risk averse that they’re really preventing the pharmaceutical industry from developing new drugs.  If the failure rate for new drugs becomes too high, then the business model breaks down for development of new drugs.  I’m sure the FDA has the best of intentions, but it can stifle innovation.

Do litigation and some of the perhaps more litigious tendencies in our society in any way impact the quantity or quality of health care?

The question is: Does the fear of litigation cause doctors to over-order tests?  All physicians fear making a mistake and that’s true independent of whether you could get sued. When I took care of patients, I never wanted to make a mistake or do anything harmful for a patient.  I wasn’t worried about being sued, I was just worried about harming my patients.  So the question is, does the fear of litigation take you further?  Some people say that it does and it causes you to order more tests, but I know people disagree.  I’m totally in favor of tort reform because I think it would lower the cost of medicine.  It’s certainly driving people out of some specialties and some regions of the country.  But to be totally objective, I don’t know how good the data is that physicians really order more tests due to fear of litigation.

The current debate over health care reform in the United States: a good thing or a bad thing for the medical profession?

I think the status quo is unacceptable in health care.  We do deliver excellent health care to those who can afford to be players in the health care system. But too many patients don’t receive the required health care.  There are too many patients that don’t have access to preventative health care.  When you look at the whole structure and the cost of it, it’s not tenable.  We pay way too much money for health care and if you look at the quality of our healthcare system, the product it delivers across the whole country, it’s not the best in the world, even though we’re the most expensive.  That’s unacceptable.  The rate at which the cost of health care is rising is probably also not tenable and it’s going to make industries in this country not viable.  So, something needed to be done.  I think most of the medical profession is glad that there was a health care reform bill that got the ball rolling and got something started.  But, it was not a perfect bill.  It was a bill that could pass through Congress.  Obviously, health care is so complicated and so difficult to improve upon that to have it be driven by a bill that could get through Congress rather than have it be driven by the most brilliant minds deciding how to fix health care was not a good way to do it.  But it’s the only way it could happen in this country.  So they did what they did, but it really needs to be refined in the future.  We don’t want to see health care reform undone, but we do want to see it improved, and we’d like to preserve what’s good about our health care system.  If you get sick in the Untied States and you come to a U.S. hospital, you will get the best care there is anywhere.  But we need to get much better at preventative care and we need to get the costs under control.  Hopefully, this health care reform bill with modifications can accomplish that.

What can the judiciary, legal profession, and legislators be doing differently to address the concerns of the medical community?

I think they need to listen to the medical community, and they need to be courageous.  There’s so much that is driven by uninformed dialogue—so much is being driven by comments that are not accurate.   I would say we need to empower some of the smarter minds in medicine.  I understand that people tend to be self-serving, and you need to get a broad swath of people so that you can avoid that.  But there are a lot of brilliant people in health care in this country.  Sometimes, one gets the feeling that they’re not being listened to.  Then, when they come up with the right thing to do, it may not be popular among all the voters.  I’ve never been convinced that our Congress has the guts to do the right thing if it’s not popular.  Those would be my two pieces of advice.    

Do America and Greece Have a "Lawyer Problem"? Or is it a "Law Problem"?

University of Tennessee Law Professor Glenn Harlan Reynolds posed that question in an interesting column in the Washington Examiner over the weekend.  In the context of recounting the strife of Demetri Politopoulos, an American brewer/entrepreneur in Greece, in dealing with complex and antiquated laws and regulations, Reynolds asks whether Greece's hurdles to economic recovery are a result of too many lawyers (1 lawyer for every 250 people), or simply too many laws.  Citing to the work of his colleague Ben Barton (and comparing the Greek and American situations), he concludes:

In particular, he [Barton] notes that in America, pretty much all judges (except for a few justices of the Peace and such) are lawyers. And, after examining the work of judges in a number of different areas, he concludes that judges systematically rule in ways that favor lawyers, and that make the legal system more complex. (And legislators, mostly lawyers themselves, aren't much better).

Barton tells me that his thesis gets two very different reactions depending on the audience: Non-lawyers find it painfully obvious, while most lawyers and legal academics find it shocking and offensive.

I'm neither shocked nor offended, but I do think that there's a real problem with America's current legal environment, and I think that we're in pretty much the same situation as Greece: If we want the kind of economic growth it's going to take to get us out of our current economic and indebtedness crisis, we're going to have to drastically reduce the number of laws and regulations confronting new and existing businesses.

The New York Times article on Politopoulos to which Reynolds cites is a great read on an American entrepreneur abroad.  Among many interesting tidbits is this difficulty with Politopoulos' idea to produce a Snapple-like herbal tea beverage:

Bad as all that has been, nothing prepared him for this reality: He would be breaking the law if he tried to fulfill his latest — and, he thinks, greatest — entrepreneurial dream. It is to have his brewery produce and export bottles of a Snapple-like beverage made from herbal tea, which he is cultivating in the mountains that surround this lush pocket of the country.

An obscure edict requires that brewers in Greece produce beer — and nothing else. Mr. Politopoulos has spent the better part of the last year trying fruitlessly to persuade the Greek government to strike it. “It’s probably a law that goes back to King Otto,” said Mr. Politopoulos with a grim chuckle, referring to the Bavarian-born king of Greece who introduced beer to the country around 1850.

Rule of Law Interview with Francis Brady, Steven Greenspan, and Wesley Horton: Part III

Question 3: What challenges does the Rule of Law face? What are its vulnerabilities?

Steven Greenspan, Francis Brady, and Wesley Horton

Steven M. Greenspan

The essence of the Rule of Law is to have a consistent set of rules by which people can make judgments. I think the problem with the Rule of Law is that it is to some degree inherently political. Every two years or every four years there are changes and attacks to the consistent application of the law. The changes are sometimes used as a threat. And as a consequence, businesses and people generally are worried that previously accepted behaviors may change. A fundamental aspect of the Rule of Law is that laws such as tax laws, inheritance laws, and environmental laws must be consistent. These types of laws, by their very nature, must have longevity. And the more the public loses confidence in longstanding application of a set of laws that are designed to be long term laws, people get a little bit queasy.

Wesley W. Horton

The specific challenge that came up at the Conference concerning administrative agencies was that their decision making is opaque, that they're incredibly harsh and that you can't tell many times in what direction they are going. So it seems to me - and I wouldn't have said this before the Conference - that one of the major challenges the Rule of Law faces today concerns having administrative agencies work in a way that is more conducive to the Rule of Law.

Francis J. Brady

One of the foundations that the Rule of Law is dependant upon is voluntary adherence by the citizens. We could have all the rules in the world, but we don't have enough policemen to enforce them. So we have to have people willing to recognize that the Rule of Law is important. The classic examples are tax laws in this Country. Most people pay the taxes that are due. That is distinct from many European countries, where paying taxes is an alternative that people attempt to minimize. In many other countries, there seems to be an attitude that, if you can avoid taxes, then you are a champion in your own right and your family's right. Here, the Rule of Law requires - and people adhere to - the paying of taxes even though it is contrary to individual, specific interests. But as Steven pointed out, it is a political issue in many ways. The concern that I have is the great divide we have at our national level between the two political parties. The tension that has been developed there causes a divide among the populace. While it may not result in a direct deviation from laws that have been enacted, it creates an ambiance, if you will, of skepticism, criticism, undue criticism of government. Government is, in our Country, the progenitor of the Rule of Law. So I am concerned about that vulnerability, that the increasing divide between the two parties is going to adversely impact the Rule of Law. Again, as Steven pointed out, you need some continuity, and if the Democrats are raising taxes and the Republicans are cutting taxes, then there is no predictability about what these fundamental tax laws are, for example. It undermines long term confidence.