Victims of Love

Commenting on Monday's dismissal of a class action lawsuit against Merrill Lynch for pushing Internet stocks recommended by analyst Henry Blodgett, Paul La Monica writes for CNN.com that "[t]he next time an Internet stock you bought for more than 100 times earnings plunges, it's your fault, not Wall Street's." That's great news, since it is manifestly true that ordinary investors got caught up in the hooplah of the Net bubble and -- like the professionals, too -- wanted to make a quick buck. Responsibility for investment decisions should be personal unless fraud or deception is involved.

The irony is that, at the same time the federal courts are reinforcing the concept of personal responsibility (see also the recent dismissal of a suit against McDonalds, for allegedly "causing" obesity), private industry is running scared. Kraft announced yesterday it is reformulating its mass-produced food products to make them leaner and more healthy, in part to avoid potential liability in tort. Kraft fears that the food processing industry may follow the tobacco industry in getting hammered by the legal process. And Congress has jumped into the controversy with the "Personal Responsibility in Food Consumption Act," pending in the House of Representatives.

Stick to your guns, Kraft. Change your manufacturing and marketing strategies because it's the right thing to do, and good for business, not because of some wacko class action threats. A failed lawsuit has already been launched against Kraft by a man in California, seeking a ban on Oreo Cookies, one of America's favourite snacks. The law won't countenance ordinary decisions being turned into torts by "victims" trying to shift personal responsibility to third parties.

 Posted by glenn