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Four years ago, according to investigative journalist David Cay Johnston, Colorado real estate commissioner Erin Toll noticed what looked to her like a title insurance practice meant to diddle homeowners of their hard-earned dollars. No Colorado homeowner had filed a claim under the title insurance policy for eight years running. “If no claims are made, is there any risk to insure against?” Toll wondered. So did Johnston, a New York Times reporter. As he dug into the title insurance industry, Johnston discovered that state insurance commissioners roll over for the companies they are supposed to police on behalf of unsuspecting consumers, and he also determined that federal regulators are complicit. So he decided to include insurance industry clout as one of hundreds of examples in the book Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill). In Johnston’s big-picture analysis of an industry, title insurance “owes its riches entirely to the government. The product itself costs next to nothing, but because of the way the market is organized, competition pushes prices higher instead of lower and government regulations help hide the true cost.” As a reporter who’s written about state insurance commissioners, I found Johnston’s indictment of them unsurprising. Many of the commissioners, often appointed by governors, used to earn their paychecks from insurance companies and plan to return to the industry after their term has ended — at a higher salary. What surprised me, though, was Johnston’s finding of federal government complicity. So few members of Congress demonstrate sincerity when it comes to consumer protection, he shows, and so few executive branch regulators, whether political appointees or so-called civil servants, are willing to cut into industry profits. “The federal government helps the title insurance companies gouge consumers by requiring disclosure of only the name of the title insurer and the amount paid on the mortgage application,” Johnston writes. “By just adding a box that discloses in large type the portion of your premium that will be used to pay claims, based on the average payout of, say, the previous three years, customers would know when they are being charged a dollar for a product whose benefit is about four and a half cents.” In chapter after chapter, covering dozens of types of scams, Johnston adopts the same modus operandi — muckraking followed by suggestions for reform that legislators and regulators could enact, if they really cared. The scams allowed to benefit wealthy individuals and corporations involve pension funds, sports stadiums, electricity transmission, golf courses, and health care, to name just a few. PERFECTLY MAINSTREAM Johnston is a populist journalist who has been exposing corruption for nearly 40 years. Somehow, he finds mainstream outlets for his let’s-stop-screwing-the-common-man expos�s — even among often-cautious book publishers. Before writing Free Lunch, Johnston wrote a book called Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich — and Cheat Everybody Else. Before launching his research for Free Lunch, Johnston had been exploring inequities in taxation, the revenue side of the federal, state, and local governments. For the new book, Johnston switched his emphasis to the spending side of government. Johnston is not a dispassionate person (I have encountered him through an organization called Investigative Reporters and Editors). As might be expected, his books are not written dispassionately. A yeoman researcher, Johnston wants his hard-won findings to inflame readers. He wants the super-rich who benefit from the inequities as well as the government officials complicit in that enrichment to become enraged at him. Simultaneously, Johnston wants the 95 percent of taxpayers who are not rich to become enraged at those who bend and break the rules to perpetuate unfairness throughout American society. Under the rubric of government deregulation, Johnston writes, the exploitation of most taxpayers so that those with the largest incomes become richer is all “legal” in the narrowest sense. Johnston maintains that the foundation of the scandals he exposes is rotten. Criminalizing currently legal behavior within Congress, especially favors from lobbyists expecting a quid pro quo, could serve as a partial solution to increasingly damaging inequalities. Criminalization seems unlikely in the near future, which means the citizens getting hurt need to mobilize against incumbent politicians and their executive branch appointees, Johnston maintains. Along with dozens of case studies showing heartless billionaires and their multinational corporations feeding at the trough of government budgets, Johnston offers sermons meant to rouse taxpayers sending money to uncaring and sometimes corrupt governments. The recipients of the subsidies for the wealthy — which Johnston considers corporate welfare — are as much to blame as the governments awarding those subsidies, Johnston insists. He traces the ratcheting up of greed to the Ronald Reagan presidency, through the presidencies of the two George Bushes (with Jimmy Carter and Bill Clinton complicit, but less so). “In less than three decades, presidents of companies have gone from apologizing when they had to lay off workers to boasting of the riches they obtained through mass firings,” Johnston writes. “We sing the praises of investors who owe their wealth not to creating businesses, but to buying companies in deals that required destroying lives and careers, just so that they could squeeze out more money for themselves.” Maybe Johnston’s book will alleviate the inequities, if only a tad.
Steve Weinberg has practiced investigative journalism for about 40 years. His new book, Taking on the Trust , is a biography of Ida Tarbell and John D. Rockefeller, scheduled for publication in March.

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