The Bankruptcy Study is Baaacccckkk!!! Gail Heriot

Two years ago, a study claiming (falsely) that half of all bankruptices are caused by illness or injury received front-page treatment in newspapers all across the country.  Anyone reading the fine print, however, learned that, among numerous other tricks, the study included “uncontrolled gambling” as a medical cause.  The whole thing was timed to de-rail the 2005 bankruptcy reform legislation, but (fortunately for the cause of truth) it failed in that endeavor.

On Tuesday, the House Subcommittee on Commercial and Administrative Law held a hearing on “Working Families in Financial Crisis:  Medical Debt and Bankruptcy.” And guess what?  It’s baaaccckkk!  Two of the study’s co-authors appeared as witnesses to present the study as if no one had ever offered the slightest criticism.

Fortunately, Todd Zywicki of George Mason University was there to rebut all this, which he did with great authority.  But through the use of a cheap trick, the majority staff members attempted prevent him from being as effective as he could have been in his oral testimony.  The agenda as originally prepared called for Donna Smith, who was featured in Michael Moore’s Sicko, to testify first, followed by the experts witnesses on both sides, so that the witnesses invited by the minority would have a chance to respond to the study co-authors.  Minutes before the hearing began, the order of witnesses was re-arranged, so that Zywicki & and Clifford J. White III, Director of the Executive Office of United States Trustees, the other witness invited by the minority, would directly follow Ms. Smith s emotional testimony.  The co-authors of the study, who were invited by the majority would both go later and thus be unrebutted. 

The legislative process in action is a beautiful thing to behold, isn’t it?