Merck Will Be Tort Bar's Next Target

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Remember AH Robins? I do. That was from the time when you went sterile if you used its birth-control IUD. Robins didn't make the product; it became a trust for those who used its IUD.

Is Merck(MRK Quote) going to be a trust for those who took Vioxx? That's what you are betting if you sell this stock down $12. You are betting that the tort bar, which has almost finished destroying tobacco and asbestos, just found its newest target.

Frankly, I think that's a decent bet. I fear the tort bar has become the single biggest destroyer of capitalism and shareholder value in the world. It is virtually unstoppable. And when the juries hear that people died because they took a drug meant to relieve shoulder pain, they will destroy Merck, sure as shinola.

That I could write these words instead of urging you to buy Merck is a testament to the acknowledgement of the tort bar's power. It is unchecked and will be unchecked no matter who is elected president. Because the incentives to be a tort lawyer, to take the cases, to bankrupt Merck, are too great and the barriers to doing so are way too low.

Is it an overreaction? Short-term, I am sure it is. Long-term? Nah. This was a widely prescribed drug. So, $27 billion in losses between lost sales and jury verdicts?

Reasonable.

Random musings: In my next life, I am going to open a law firm and sell shares -- against the law right now -- so that when I sue companies, like Merck will be sued, you can profit from my future triumph. Only with communism and the tort bar can we have expropriation without representation. Both forces don't let us participate in the upside as they destroy the value of shareholder equity. Communism's been defeated pretty much worldwide. But class actions that bankrupt companies are in true ascendancy. Don't just blame the Democrats. The Bush administration has been unwilling to take the radical action of reconsidering the statutes that created class actions. And the tort bar remains the single most insulated, most lucrative endeavor in America. Think about it; if we could buy shares in law firms, at least we could benefit from their actions. Right now, though, the 40% of the 2% of the GDP that these brigands get goes right to them, and we can't share in the bounty. Nuts.