LAWSUITS & PRICE CONTROLS : Where economics & politics meet.

Republicans are supposed to be the party of states' rights. Democrats are supposed to be the party of the national government. So why is it that in the great debate over a patients' bill of rights, it's the Democrats who insist that patients should be able to sue their HMOs in state courts and Republicans, including President George W. Bush, who see suits in state courts as an abomination?

It may have something to do with the fact that patients generally get a better break and bigger settlements in state courts--the courts that are, as the Republicans would say on so many other issues, "closest to the people." And Republicans just hate the idea that plaintiffs and their lawyers might get some money out of those HMOs. "The idea is to serve more patients, not to create more lawsuits," the president said.

But what if lawsuits and, more important, the threat of lawsuits, might make the HMOs more responsive to patients' needs? If you see trial lawyers as being regularly in the wrong, that question is politically incorrect. Better, in this view, to risk HMOs being less responsive than to invite more lawsuits.

Personally, I'm not big on lawsuits as the best way to settle disputes. But this debate, and several others now going on, suggests that a lot of positions held out as matters of high principle are nothing of the sort. When Republicans say they're for states' rights, they don't really mean it when it comes to anything having to do with lawsuits. If keeping things federal and national will reduce the ability of plaintiffs to challenge corporations and HMOs, Republicans are all for big government in Washington.

In fairness, Democrats have their own inconsistency on the same issue. They do, indeed, side with trial lawyers on most questions. They therefore like states' rights and devolution to local juries because those juries are more likely to side with those who bring suit.

What both inconsistencies suggest is that the real debate in our country is only occasionally about local power. It is usually about economic power. It's about the right of individuals, singularly or collectively, to challenge established economic institutions, either in court or before regulatory bodies. On most issues, Republicans want the market to rule while Democrats think the market should be tempered--by regulation, by lawsuit, and by social insurance and modest economic redistribution.

Fortunately, we are a democracy and the voters usually rebel against pure market outcomes when they think such outcomes are shortchanging their interests or things they value. That's why the debate over the cost of electricity on the West Coast has been so fascinating. No matter how many economists defended the market and the behavior of the electricity giants, the people of the West knew there was something very strange about the exorbitant increases in the prices they were paying for power.

Eventually, the people's will and reality triumphed over ideology. The Federal Energy Regulatory Commission voted for a form of price controls after the president and many Republicans insisted that price controls were a terrible idea. Given the president's insistence that he opposed price controls, and given the insistence of California Republicans that something had to be done to quench the rebellion of West Coast voters, White House spokesman Ari Fleischer had to square a circle. He tried hard. "This is not a price control," Fleischer insisted. "This is a market-based mitigation plan." OK. If the cost of taking a first step toward price controls is to insist they're not price controls, that will be just fine by Western consumers--as long as their prices go down. And the phrase "market-based mitigation plan" deserves a place in the pantheon of political euphemisms.

The fact is that Republicans almost always side with corporate interests, partly because that is where their support comes from and partly because they truly believe in the unfettered market. The Democrats are more ambivalent. They get corporate contributions, too, and are friends of the market in principle. But they are also more willing than Republicans to challenge market outcomes.

If both parties could be honest about the nature of their differences, we could drop the euphemisms and the phony talk about "states' rights" and "local control." And then we could have a real debate.

[C] 2001, Washington Post Writers Group