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Tagged with “radio” (6)

  1. Who Decides How Much a Life Is Worth? (Ep. 344) - Freakonomics Freakonomics

    FEINBERG: The 9/11 Fund was fascinating, because Congress authorized unlimited funds. “Whatever Feinberg thinks is appropriate, fine with us. We don’t know how to value these lives.” And in that program, I spent taxpayer money, $7.1 billion. I thought that the Congress would hang me. And, instead, the Congress was very, very satisfied.

    DUBNER: There were a lot of things about the 9/11 Victim Compensation Fund that were unique. The airlines and other industries, for instance, didn’t contribute one cent. The legislation was written essentially to protect the airline industries and other industries, maybe insurance firms, from going out of business.

    FEINBERG: It basically — although the program was voluntary — it encouraged all victims who lost loved ones in the World Trade Center, the airlines, the Pentagon, to divert themselves out of the legal system, come in for a special award, and promise on a signed piece of paper, “I will not sue.” If you’re giving immunity, in effect, to the airlines, who can’t be sued for negligence, or Boeing, “the cockpit door wasn’t secure, the security system was negligently installed” — if you are giving them sort of immunity from suit, well, what about the victims, who paid the price?

    Congress decided, we better balance it. We’ll make it very difficult to sue the airlines or the World Trade Center, but at the same time we’ll make it very easy for victims to get compensated without suing. So that was the balance that was struck. That meant — the minute I saw that, that voluntary applicants have to sign a paper, “I will not sue” — well, that means everybody who filed a claim has to receive a different amount of money. A stockbroker or a banker or a high-priced lawyer or accountant — their survivors expect more from the 9/11 Fund in return for a promise not to sue than the waiter, the busboy, the fireman, the cop, the soldier. The minute you take a program with public money and join the litigation at the hip of the program, everybody’s getting a different amount, and that causes tremendous divisiveness.

    DUBNER: I believe it was Senator Kennedy who said to you, “Listen, you need to understand that a life is a life and that while you do need to recompense more in some cases…” — can you talk about that balance you tried to strike?

    FEINBERG: Of course. Senator Kennedy said, flat out, privately, “Now Ken, this is all taxpayer money, coming out of the U.S. Treasury. Make sure that 90 percent of that money doesn’t go to 10 percent of the victims. That will be a real mistake.” So, what I did under the statute, I had discretion. And I could say to a stockbroker’s widow, “You know, if you run the numbers, purely the calculation of lost earnings, your husband, over a lifetime, after taxes etc., would have made $21 million. Well, Congress never intended to give you $21 million. So, I’m exercising my discretion under the statute and I’m going to reduce it to $6 million. Now, there are very, very few people even getting $6 million. But, based on the data and what your husband was earning, and what he was likely projected to earn, you are going to be a high-end compensated individual. Whereas the waiter or the bus boy might have had lifetime earnings after taxes of $800,000, I’m going to raise you, in my discretion, closer, not to $2 million, but closer to the median of about $1.5 million.” And that way, exactly as you point out, I managed — exercising my valid discretion — to narrow the gap between the rich and the poor.

    DUBNER: Did you hear a lot of complaints from the families of the highest earners?

    FEINBERG: Some. A few sued. They went to federal court, claiming that I was violating the statute by not giving them their full economic lost-wage earnings.

    DUBNER: They sued within the corridor of the settlement, having agreed to the settlement?

    FEINBERG: No, they didn’t accept a settlement. I said, “I’ll give you $6 million instead of $21 million or $24 million.” And they said, “You are violating the statutory language,” they went to court. They all settled their cases five years later. There was never a trial, and people ask me all the time, “Did they get more or less?” Well, some may have got more. Some of may have got less.

    DUBNER: Hard for you to know.

    FEINBERG: Hard to know because it’s confidential, but don’t forget those families lived with this for five years, and relived it, and relived the tragedy. And at the end of the day, whatever they got, 25 percent of it went to their lawyers.

    DUBNER: Do you feel it’s a more complicated calculation to do the kind of calculations that economists like Kip Viscusi do that try to put a price on, among other things, public goods, clean air and water and so on. Do you think that’s inherently a much more—

    FEINBERG: Oh, much more difficult. What I do in all of these programs is not rocket science. The tough part, the debilitating part, is the emotion. The stories you hear, you wouldn’t believe. A lady comes to see me, 24 years old, sobbing, “Mr. Feinberg, I lost my husband. He was a firefighter and he died at the World Trade Center. And he left me with our two children, six and four. Now, when you cut the check from the 9/11 Fund, I’m going to get $2.4 million, tax-free. I want it in 30 days.”

    “Mrs. Jones, why do you need the money in 30 days? This is public money. The Treasury has to do its due diligence, it might be 90 days. You’ll get your money.”

    “I want it in 30 days.”

    “Why?”

    “I’ll tell you why, Mr. Feinberg, I have terminal cancer. I have eight weeks to live. My husband was going to take care of our two children. Now they’re going to be orphans. Now I’ve got to get this money while I still have my faculties. I’ve got to set up a trust, get a guardian, make sure they’ll be provided for. I don’t have much time. You’ve got to help me.”

    Well, we ran down to the Treasury. We accelerated the program. We got her the check. Six weeks later, she died.

    DUBNER: Did you try in the beginning to be more empathic perhaps than you realized was a good idea?

    FEINBERG: Yes, and I make mistakes. You see, you make mistakes and you learn your lesson. I remember one 83-year-old man came to see me after 9/11. He said, “I lost my son. Mr. Feinberg, a father should never bury a son. I’ll never be the same. Doesn’t matter how much money you give me.”

    I made the mistake of saying to this very nice man, “This is terrible, I know how you feel.”

    He looked at me. Nice man. Tears. “Mr. Feinberg, don’t ever tell people like me that you know how I feel. You have no idea how I feel. You have a tough job, but those words ring hollow. They’re pretentious, they’re robotic.” Well, I’ll never do that again.

    Charles WOLF: I was angry. I was very angry. Yet, at the same time I didn’t want to bite the hand that would feed me.

    http://freakonomics.com/podcast/kenneth-feinberg/

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  2. NUMMI 2015 | This American Life

    A car plant in Fremont California that might have saved the U.S. car industry. In 1984, General Motors and Toyota opened NUMMI as a joint venture. Toyota showed GM the secrets of its production system: How it made cars of much higher quality and much lower cost than GM achieved.

    http://www.thisamericanlife.org/radio-archives/episode/561/nummi-2015

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