Category Archives: Consumer protection

Consumer protection

Photo Project Spotlights Pipeline Impact


By Peter Galuszka

Veteran photographer Karen Kasmauski, who grew up in Norfolk, has a brilliant online project that shows the human and environmental impacts of the Atlantic Coast Pipeline.

She is a senior fellow with the International League of Conservation Photographers, a non-profit group that funded her project that centers mostly in rural Nelson and Buckingham Counties that would be dissected by the natural gas pipeline.

She combines spectacular aerial photos with deep close ups of people.

One of her subjects is Ella Rose, a retiree who lives in a small house in Union Hill. She was living a quiet happy life in her natural setting until she got a letter from Dominion Energy stating that they would be routing the ACP about 150-feet from her house.

Union Hill is a touchpoint for pipeline controversy since it is largely African-American community that ACP officials have selected for a compressor station. It is one of similar localities that seem to be targeted with other loud and disruptive equipment along the pipeline route. Continue reading

Virginians Hit the Sauce

By Peter Galuszka

Virginians are stocking up on spirits, fearing that the ABC store system might shut down because of the coronavirus pandemic.

Last week saw sales of $30.1 million up from $4.5 million the previous week. While big, the volume has not surpassed the holiday seasons last year.

For days, there have been rumors that ABC stores would shut down.

Not so, says the ABC system. They are changing store hours to open at noon and close at 7 p.m., seven days a week

So far, one store in downtown Richmond has been temporarily shut down because an employee tested positive for the virus.

Governor Ralph Northam, hoping to ease the financial pain of restaurants now closed to dining inside, has urged them to ramp up their takeout and delivery sales by letting them include wine and beer.

There had been talk that cocktails might be included, but the ABC says no.

A local ABC store employee told me that there are big runs on large bottles and there are some shortages but generally, the delivery system seems to be working. ABC also offers online sales.

Among the best- selling brands are Jack Daniel’s Tennessee Whiskey and Tito’s vodka.

Bottoms up!

A Look at Richmond and COVID-19

By Peter Galuszka

Here is a roundup story I wrote for Style Weekly that was published today that explains the effects of COVID-19 on the Richmond area. Hopefully, BR readers will find it of interest.

It was a tough piece to report. The impacts of the deadly virus are very complicated and multi-faceted. An especially hard part was trying to keep with the fast-changing news, notably the number of new cases and deaths. We were updating right up until the story closed Monday afternoon. It was hard to talk to people with social-distancing and closings.

The experience shows the delicate balancing act between taking tough measures to stem the contagion and keeping the economy going. My view is that tough measures are needed because without them, it will all be much worse, particularly more illness and death as the experience in Italy has shown.

Incredibly, our utterly incompetent president, Donald Trump, now wants to focus on the economy more than taking necessary containment steps. It’s far too soon for that. Regrettably, a number of Bacon’s Rebellion commenters are sounding the same irresponsible tune in keeping with their big business and anti-regulation laud of free market capitalism. Continue reading

Who’s Worse, Price Gougers or Hoarders?

by James A. Bacon

My wife and I were slow to stock up on CoronApocalypse survival supplies — hand sanitizers, masks, rubber gloves… toilet paper. Big mistake. Now we’re running low on toilet paper, and we’re getting nervous. The shelves are empty of paper-supply products at every store we’ve visited. Except paper napkins. You can still get those. I wouldn’t advise trying to flush them down the toilet, though.

Getting word that Kroger would re-stock early Friday morning, my wife made an emergency run around 8:30 a.m. in the hope of snagging a pack or two. Too late. The shelves were bare.

Meanwhile, Virginia’s Attorney General, Mark Herring, has announced his determination to protect citizens against price gouging. Said the AG in a press release last week:

Virginia law offers protections for folks who find themselves in need of things like medicines, cleaning products, hand sanitizers and other necessities during a public health crisis. I would encourage all Virginians to pay attention to any prices that seem too high, and contact my office as soon as possible if you think someone may be illegally overcharging for necessary goods or running a scam.

Continue reading

How to Fix the Borderline Fraud of Surprise Billing

by James A. Bacon

Surprise medical billings are one of those things where people of all political stripes come to agreement. It sucks to go to a hospital within your health insurance network only to discover when you open your bill that an anesthesiologist, consulting physician or emergency room doctor at the hospital, unknown to you, did not belong to your network, and that you’ve been charged thousands of dollars more than you bargained on.

While loathing of the phenomenon knows no partisan grounds, solutions are remarkably hard to find. The General Assembly has been struggling over this issue this session, so far without success. This article in The Virginia Mercury describes three remedies being debated, each with their own pros and cons. I have a few thoughts of my own.

Surprise billing arises from the fact that insurance carriers compete by offering lower rates to customers who agree to stick within restricted provider networks. Hospitals, physicians, labs and other providers agree to charge less in exchange for getting preferential access to the carrier’s customers. It’s one of the few ways to make providers compete on the basis of price and lower costs, and not a strategy we would want insurance carriers to abandon. Continue reading

The Bureaucratic Nightmare of Hospital Billing

by James A. Bacon

It’s not easy going through life with Parkinson’s Disease, afflicted by tremors, stiffness, fumbling hands, and difficulty walking. Carrying on becomes a real challenge when you add debilitating rounds of chemotherapy. That’s the predicament my old friend Lisbeth finds herself in these days: fighting off two terrible diseases at once.

As you can imagine, the last thing Lisbeth needs as she’s trying to keep it all together is to get into a billing quarrel with her hospital. Most people in her condition would be too exhausted to study their hospital bills and spot the errors, much less to contend with an unresponsive hospital bureaucracy to get her money back. Most people would just let it slide. But Lisbeth isn’t like most people. She’s a crusader at heart, and her maladies have not conquered her spirit.

Lisbeth knows I blog about health care from time to time, and she approached me to tell her story. She laid copies of bills, correspondence and her  contemporaneous notes before me and walked me through her healthcare hell. Compared to tales of medical malpractice like amputating the wrong foot or contracting fatal infections in the hospital, this was tame stuff. What struck me, however, was that her complaints, though banal, are likely endemic in the healthcare system. Continue reading

How No Regulation Toasted Vaping

By Peter Galuszka

There’s a mighty disconnect between being innovative in developing new products and putting the buying public in danger. We are often lectured about the benefits brought by industrial creativity unfettered by regulation on this blog and elsewhere but that isn’t always the case.

In fact, doing so without meaningful regulation can spell big disaster for both the public and corporations. The case in point: vaping.

About a decade ago, tinkerers in Asia came up with a pipe-like, vapor device that could give the user an addictive kick of nicotine mixed in a soup of vegetable glycerin, propylene glycol and any number of hundreds of flavors.

In a few short years, vaping grew with mostly-Asian-made devices to head-shop-like outlets typically located in chic-chic shopping districts or strip malls, some with the motif of 50-year-old head shops with lots of the art of psychedelic or the heavy metal era.

Obviously aimed at young vapers, flavors galore were added. Here’s one of them pitched by a vaping shop I visited for a news story:

“If you gaze at the stars long enough, you might get a glimpse of the proverbial “pie in the sky.” Reward yourself here on Earth, instead, by trying this incredibly delicious toasted coconut cream flavor. The buttery baked piecrust and the sweet vanilla with coconut filling are enough to make you feel like you’ve tasted heaven!”

Continue reading

Die, Robocallers, Die!

Attorney General Mark R. Herring has filed suit against two Roanoke-based telemarketing companies, charging them with illegal robocalling and deceptive sales practices. The complaint alleges that Roanoker Bryant Cass and his companies, Aventis, Inc., and Skyline Metrics, LLC, made 586,870 unsolicited robocalls nationwide between 2014 and 2017, pitching car-selling services to people who listed cars for sale on Craiglist, Autotrader.com and other sites.

“While robocalls are extremely annoying, they can also be dangerous and could potentially scam Virginians out of hundreds if not thousands of dollars,” said Herring in a press release. “My team and I will continue to do everything we can to protect consumers and shut illegal robocall operations like this one down.”

Bacon’s bottom line: I’m not a fan of Herring, but he’s got my full support on this one. As punishment, $500-per-call fines are inadequate. Cass should be confined to a cell and forced to endure his 586,870 robocall sales pitches through the rest of his natural life. And if there were a way to pump the robocalls into hell, I’d be for that, too.

Long-Term Care: A Great Bet If Made Long Ago

It is just like your econ professor told you – insurance is nothing but a bet.  It is a bet you often don’t want to win, but in one field you had a great chance of winning simply by hanging around and continuing to breathe.  That field is (or at least was) long-term care coverage.

Two top executives from major insurers told the State Corporation Commission last week just how badly their companies calculated the risk on long-term care decades ago.  They were seeking to explain the major premium increases their companies are seeking here in Virginia and all around the country in a proceeding previewed (here) in March on Bacon’s RebellionContinue reading

Cuccinelli to North Carolina on Electricity Regulation – Avoid Virginia’s Mistakes

The Cooch is back. Former Virginia Attorney General Ken Cuccinelli penned an op-ed for the Wilmington, North Carolina based Star News opposing Duke Energy’s proposed changes to electrical regulation.  The title of the opinion piece is, “N.C. should block this Duke Energy power grab”.  Cuccinelli’s biggest issue with the pending regulation is extending the period of time between utility rate cases.  The editorial board of the Star News agrees. Cuccinelli writes:

“Key provisions to extend the period of time between utility company rate cases are embedded within N.C. Senate Bill 559, being debated at the N.C. General Assembly. Similar provisions hurt Virginia customers, and will hurt North Carolina customers, too.”

Continue reading

Promoting Financial Literacy

Here’s a government initiative I like. The City of Richmond’s Treasurer’s Office is holding its first Financial Literacy Fair this Friday. States the press release:

The purpose of this fair is to empower the citizens of Richmond to take more control of their finances and begin the initial steps needed to build personal wealth. The mission of the Richmond City Treasurer’s Office is to inspire, encourage and pursue the high possibilities of potential in others through the elimination of financial barriers by taking “Small Steps for Big Change.” This literacy fair is one step toward big change in the lives of our Richmond residents.

The fair will hold workshops such as Banking 101, Budgeting and Saving, Balling with Budget and Credit. Financial counselors will be onsite.

Bacon’s bottom line: One reason — I’m not saying it’s the main reason, but it’s a contributing factor — that people fall into the poverty trap is that they often make poor financial decisions. The literacy affair addresses a root cause of poverty. Let’s hope it gets great attendance!

JLARC Report on Licensing: Useful, But a Missed Opportunity

As the old saying goes, you find what you look for. And in its examination of occupational licensing in Virginia the Joint Legislative Audit and Review Commission (JLARC) largely found what it was looking for — inefficiencies and overcharges. Conducting the review was worthwhile, but the exercise was small ball — it missed the opportunity to examine much bigger issues.

In 2017, JLARC instructed its staff to study the Department of Professional and Occupational Regulation (DPOR) staffing and organization, its processing of occupational licenses, and its enforcement of occupational rules. Staff also assessed the affordability of fees and the processes for adjusting fees.

Here’s what JLARC did not study: To what extent does licensing create barriers to entry into the regulated occupations and professions? To what extent do regulated professions use regulations to protect their occupational turf and boost their earnings? To what extent does the public suffer from these legalized labor monopolies?

To its credit, given the limited scope of its inquiry, JLARC did come up with some interesting findings in “Operations and Performance of the Department of Professional and Occupational Regulation“:

  • No legal justification for regulating 11 occupations. Eleven occupations regulated by DPOR appear not to meet the criteria for regulation established in the state code. These include community managers, opticians, residential energy analysts, soil scientists, landscape architects, waste management facility operators and others. Regulation of these occupations does nothing to advance the public health, safety and welfare of the public.
  • Excess fees. DPOR is funded by the fees it charges to applicants. DPOR’s method for calculating fees has over-projected agency expenses leading to unnecessarily high fees in the past. Fees have been reduced since, but the balance still has grown $27.2 million — up from $15 million ten years ago, and far more than needed.
  • Many complaints go unexamined. Staff closed 71% of the disciplinary cases it opened in FY17. Staff do not investigate all potential violations.
  • Poor use of IT. DPOR does review and approve licensing requests in a timely manner, but it would make the process more user friendly by making it more accessible online and by automating key processes.

These are all useful findings, and the report makes some 36 recommendations on how to improve the system. While the goal of improving administrative productivity is laudatory, however, making a flawed system work more efficiently doesn’t do much to build a more prosperous, equitable Commonwealth.

Conservatives have long targeted occupational licensing for creating barriers to upward mobility. Do the state’s 73,000 barbers and cosmetologists really need regulating? Do they really need formal education and credentialing? Is the public health and safety truly harmed if someone gets a bad haircut or cracked fingernail? The crafts of hair cutting, cosmetology and hair-braiding, which provide an avenue of occupational mobility for lower-income Virginians, could be taught perfectly adequately in informal apprenticeships. Why burden people with educational costs and licensing fees?

Of greater concern is the regulation of the medical professions. In theory, the system is designed to protect the public from frauds, charlatans and malpractice. The system does do that, so some form of licensing is necessary. But the system also carves out occupational turf, protecting doctors from competition from nurse practitioners, and nurse practitioners from registered nurses, and registered nurses from licensed practical nurses, and so on down the line. That may not be a big problem in major metro areas, but it is a huge problem in large swathes of rural Virginia that have trouble recruiting medical professionals.

Indeed, it is fair to say that the crisis of access and affordability in rural health care is largely the result of rigid occupational licensing rules that prevent nurses from performing a high percentage of the routine procedures, and dental hygienists from cleaning teeth and filling simple cavities. No health care, it appears, is better than health care not delivered by doctors and dentists.

I would love to think that the General Assembly might get serious about tackling these issues. But I don’t see it ever happening. As the Richmond Times-Dispatch editorial page observes today, only one in twenty jobs required government certification a half century ago. Today, one in four does. It should come as no surprise that highly compensated professions, intent upon maintaining their occupational monopolies, have become major campaign contributors. According to the Virginia Public Access Project, physicians have donated $347,000 to political campaigns so far in 2018-19, dentists $223,000, optometrists $114,000. Nurses? Only $33,000. Don’t expect rural healthcare reform unless it involves paying doctors and dentists more money.

The Real Reason Why Amazon Is the Future

I’ve finally figured out what people can do when robots and AI wipe out half the occupations in the economy — they can get jobs fixing all the #$*& that doesn’t work!

The last couple of months have been a succession of extraordinarily frustrating experiences in the Bacon family — from trying to find tradesmen to complete a gutter job at my mother’s house that the original contractor left unfinished for three months… to badgering our home-warranty company to get our broken microwave repaired, and, after waiting two months for useless parts from China to arrive, to get it replaced… to calling back Comcast technicians three times to get our Internet-cable-telephone service to function properly… to complaining about a two-week-old Microsoft Surface Go tablet whose network adapter stopped working. It’s just astonishing.

If other people are having the same kinds of experiences, our consumer economy is going straight down the toilet no matter what the GDP figures say. I’ll wager that the lost productivity of 340 million Americans navigating phone trees and waiting on hold is a bigger drag on the economy than climate change, hurricanes, cyber sabotage, and telephone marketers rolled into one!

I’ll spare you the gory details but I’m spending more time than ever before dealing with problems created by other peoples’ screw-ups and crappy products. I’m normally a fairly even-tempered guy but I’ve found myself hurling profanities at the wall on one more than one occasion. Other members of my family have been reduced to literal tears.

Some people believe that the progress of AI and robotics is rushing upon us so rapidly that it will obliterate half the jobs in the economy in the next 20 years. I’ll believe it when I see it. Sure, AI might be getting smarter, but everything is getting more complex — IT systems interacting with other systems, nested within yet other systems. Lines of code are multiplying exponentially, far faster than the ability of AI to keep up. Conflicts and failures crop up with increasing frequency. Who’s winning the race — AI or complexity? Right now, I’d say complexity is sprinting ahead of the pack like Usain Bolt.

While the systems are getting more complex, people aren’t getting any smarter. Indeed, given the quality of our educational system, I suspect people are getting stupider. Either that or more people are on drugs. And in a full-employment economy, even stupid, addle-minded people can get jobs. They are wreaking havoc on our lives!

Some people say that Amazon is taking over the world. I, for one, welcome my new corporate overlord. When I bought an inexpensive glare-free Kindle e-reader, the darn thing crashed about one week after the year-long warranty expired. I left a nasty comment on Amazon’s website. A week later, someone from Amazon contacted me and wound up sending me a free replacement.

I now see Amazon as the new model for the U.S. economy. Sure, its products fall apart just like everybody else’s, but its customer follow-up is amazing. Amazon hires people whose job is to clean up other peoples’ messes. The way things are heading, we’ll all be working for Amazon in twenty years.

Protestants, Progressives and Paternalism

If you’re a freedom lover, high scores are good. If you like telling people how to live their lives, low scores are good. Virginia ranks 39th. Source: Mercatus Center.

To put Steve Haner’s recent post about the Virginia lottery in broader perspective, I have displayed the “freedom from paternalism” ranking of the 50 states published this year by George Mason University’s Mercatus Center. Virginia ranks 39th in freedom from paternalism. The flip side of that finding is that the Old Dominion ranks as the 12th most paternalistic state in the country.

By “paternalistic,” Mercatus researchers Russell S. Sobel and Joshua C. Hall, professors at the Citadel and West Virginia University respectively, mean state policies that the political class has decided are for your own damn good.

If you don’t like a busybody government, then New York is the state from hell, with a ranking in a class all by itself. Vermont, Washington, and California are other hard-core busybody states. If you’re a freedom junky, head to Wyoming, the least meddlesome state in the country. Arizona, Nevada and Kansas also are among the least intrusive.

The Mercatus ranking breaks down paternalism into three buckets of policies — selective taxes, “saint subsidies,” and miscellaneous bans and regulations. Virginia scores pretty darned meddlesome across the board. On the less paternalistic side, Virginia has no soda tax and a low cigarette tax but it has a killer tax on distilled spirits.

The ranking encompasses such policies as plastic bag bans, happy hour restrictions, mandatory motorcycle helmets, fireworks restrictions, blood tests, social gambling and Internet gambling. To the point of Steve’s post about the state lottery, Mercatus does not include the presence of state lotteries, horse race betting, or casino gambling.

Why is Virginia so paternalistic? It is often observed that Virginia is either the southernmost Northern state or the northernmost Southern state. I’d hypothesize that we have incorporated the most meddlesome traits of both North and South — Bible Belt blue laws inherited from our Protestant past and the Northern progressives’ instinct for economic regulation on environmental, consumer and other grounds. One way or the other, if you’re a libertarian, you live in enemy occupied territory.

Would an Eviction-Diversion Program Help or Hurt?

Renters-rights defenders and landlord advocates may be reaching common ground on how to reduce the rate of evictions in Richmond: Create an eviction diversion program. Reports Ned Oliver in the inaugural edition of the Virginia Mercury:

Planning is still in its early stages, said [Martin Wegbreit, director of litigation at the Central Virginia Legal Aid Society], but it would likely be modeled on similar efforts in other states, like Michigan, where Kalamazoo County established a program in 2007 as part of an initiative to reduce homelessness. In the Richmond area, more than 30 percent of homeless residents surveyed last year said they had been served with an eviction lawsuit, according to a recent survey by Homeward, a nonprofit that coordinates services for homeless people. …

The one-time program is geared toward low-income families and individuals who can afford their rent but fell behind after an unexpected financial emergency such as a car crash or medical problem. To qualify, they must demonstrate that they are no more than three months behind in rent and show that they will be able to afford their rent once the assistance ends.

Renters-rights proponents like the idea because it reduces the number of renters evicted from their apartments. The program in Kalamazoo assisted 412 households last year, providing $138,000 in rental assistance, an average of $300 to $350 per family.

Landlords like the idea because it provides funding to ensure that they get paid rent on time.

A big question, unaddressed in the article, is where money would come from for an eviction diversion program. NAlso, n one pretends that such a program would settle all the issues between renters and landlords.

Bacon’s bottom line: The eviction-reduction movement is no more than a palliative for underlying social and economic problems: (1) the tightening shortage of affordable housing in the Richmond region, (2) the inability of poor people to find and sustain living-wage employment, and (3) the inability of some people to manage their personal finances responsibly. Until we address the underlying issues, the problem of evictions will always be with us.

Still, I’m a big believer in conducting small-scale experiments, which, if successful, can be replicated and scaled, and, if unsuccessful, can be shut down. The key in an eviction-diversion program is not to measure the number of families assisted but to measure the number of evictions. If a program creates a moral hazard in which renters, knowing that assistance is available, become more lax about husbanding their money, it would be counterproductive. If experience shows that moral hazard turns out not to be an issue, and if the number of evictions demonstrably decline, then the program could prove its worth.