Puff, Puff 2

Sorry about the Dow slipping under 10,000. As I’ve mentioned several times before, when Alan Greenspan, concerned about dangerously high stock valuations, gave his famous ‘irrational exuberance’ speech in December 1996, the Dow was 6400 and the NASDAQ was around 1250. Five years of hard work and brilliant technological advance later, perhaps we’ve grown into those valuations and they’re no longer irrational at all . . . though markets being the over-reactors that they are, there’s always the worry – not the prediction, but the possibility – that they will overshoot on the downside as they did on the way up. So we may have seen the bottom here at 9900, but you should be prepared for the possibility that we have not.

Note that the Japanese Nikkei Dow is now down nearly 75% from its high 11 or 12 years ago, whereas our own Dow has about quadrupled. The Japanese market was wildly overvalued, and may even now not have bottomed. But there has been a roughly 16-fold shift in these two Dows, with ours quadrupled and theirs cut to a fourth of its former self. I’m not suggesting that most people do anything with that information; but I do think it provides some interesting perspective.

Bill Dunbar: ‘Excuse me, but NOBODY IN THIS COUNTRY could not know that tobacco is bad for you. Is it the government’s job to decide what consenting adults can and can’t do? Even if it may be bad for them? I am a non smoker, but as long as I’m not forced to breathe it, people should be able to do what they want. I think that the concept of suing a company for selling a legal product is absurd. If people consider tobacco so evil, then get the votes in congress to outlaw it. I think in this environment many of the things that we take for granted would never be introduced if they were invented today. Consider the automobile. If it were invented today, do you suppose that you could buy one anyplace and almost anybody with even passable eyesight would be easily able to get a license to drive one? No way. The issue of liability would get it killed before it even left the drawing board. So many things we all enjoy wouldn’t be here. Scuba gear, chain saws, lawn mowers, motorcycles, the list is endless.’

☞ Well, I appreciate the frustration, but let’s take this piece by piece.

<< Is it the government’s job to decide what consenting adults can and can’t do? Even if it may be bad for them? >>

☞ No!

<< I am a non-smoker, but as long as I’m not forced to breathe it, people should be able to do what they want. >>

☞ I agree! If you’re not bothering others – and if you’re willing to cover the cost of the ‘externalities’ of your behavior (e.g., pay more for health insurance, so I don’t have to cover the extra cost of your care) – you should surely be left alone to do what you want.

<< I think that the concept of suing a company for selling a legal product is absurd. >>

☞ Well, phrased that way, it does sound absurd. But would you pass a law exempting tobacco companies from being sued? How about exempting all other corporations that sell legal products, as all do, while you’re at it? I think judges and juries should be free, having considered the merits of the cases brought before them, to throw them out as absurd. But I’m not sure your judgment should preempt theirs (and of course you are not suggesting that it should). Perhaps more to the point, I don’t think the tobacco companies would have had much to worry about from these lawsuits if over the years they had been forthright in disclosing the lethal and addictive properties of their product. Instead, of course, they engaged in a massive disinformation campaign on an issue that directly affected the health of millions of people. If you haven’t already seen it, rent or buy a copy of THE INSIDER with Russell Crowe and Al Pacino. It might change your mind.

Had the companies been forthright, state legislatures or Congress might decades ago have restricted the companies’ right to advertise and promote their product so aggressively to children. It would have remained a legal product, but the companies might have been restricted from handing out “loosies” in school playgrounds and using cool cartoon characters to advertise their brands. The practice of paying movie companies to place cigarettes in the mouths of teen idols might have been restricted – or, understanding the repercussions, editors and producers might voluntarily have done less to make smoking seem sexy. Cigarette taxes, which help discourage new smokers, might have been raised sooner and higher.

<< If people consider tobacco so evil, then get the votes in congress to outlaw it. >>

☞ Prohibition is a terrible idea. First off, this is supposed to be a free country. Second, prohibition just doesn’t work.

<< Consider the automobile. If it were invented today, do you suppose that you could buy one . . .? No way. The issue of liability would get it killed before it even left the drawing board. So many things we all enjoy wouldn’t be here. Scuba gear, chain saws, lawn mowers, motorcycles, the list is endless. >>

☞ Well, somehow bungee jumping made it past this wall of liability, and rollerblades, and Lasik surgery (they’re operating on your EYEBALL!), and those RAZOR scooters, and radiation-emitting cell phones and (most importantly) fat-free cheese . . . so I’m not sure you’re entirely correct. But I do agree cigarettes probably would not have made it to market, had we known then what we know now.

David Smith: ‘You write: You always thought that the leading cause of preventable death was stupidity – and there are certainly examples. But it’s not. It’s tobacco. I would argue that it is indeed stupidity: because the vast majority of current smokers DO know about the dangers of tobacco.’

☞ Unfortunately, most smokers start their addiction between the ages of 8 and 14. I’m not sure we can just say it’s the 8-year-old’s fault for lacking an appreciation of his mortality. Once addicted, even for exceptionally smart people, it is very hard to quit. (But my exceptionally smart friend Jane did it, after 20 years of trying – so you can, too!)

HAVE A GREAT WEEKEND