January 2012

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the Weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.


CEI Weekly
July 23, 2010


>>The Nation’s Worst Attorneys General
Some of the nation’s state attorneys general have been very bad indeed, reports Senior Attorney Hans Bader. In the new study, “The Nation’s Worst Attorneys General,” Bader documents cases of AGs engaging in unethical behavior, usurping legislative powers, fabricating the law, and following predatory practices in regards to private (and out-of-state) businesses. He goes on to rank the worst of the worst, a list headed up by California’s Jerry Brown and Connecticut’s Richard Blumenthal.
Read the study here.


>>Shaping the Debate
[Video] Vincent Vernuccio on Non-Union Pickets
Vincent Vernuccio’s media appearance on Fox Business

U.S. Tech Firms’ China Presence Furthers Internet Freedom
Ryan Radia and Greg Conko’s op-ed in The Seattle Times

Obama’s New Financial Regulation Bill Strangles America’s Economy with Red Tape
John Berlau’s op-ed on Fox Forum

More Muscle for Big Merchants
John Berlau’s op-ed on The New York Times’ Room for Debate

Climategate Inquiry Glosses Over the Facts
Iain Murray’s op-ed in The Washington Examiner

Economists vs. Economics
Ryan Young’s op-ed in The American Spectator

‘Climategate’ Fallout may Impact Legislation
Myron Ebell’s citation in The San Francisco Chronicle

Lift Government Barriers to Encourage Competition and Innovation
Wayne Crews’ news release


>>Best of the Blogs
President Obama Signs Dodd-Frank Financial “Reform” Bill: 2315 Pages of Special-Interest Payoffs
By Hans Bader

Blowout Prevention Act – Will Rs Get Buyer’s Remorse?
By Marlo Lewis


>>LibertyWeek Podcast
Episode 102: Collective Insanity
Richard Morrison and Marc Scribner welcome guest co-host Alex Nowrasteh to episode 102. We take on the health care tax, obscenity and the First Amendment, the prognosis for the Gulf of Mexico, and the collective insanity coming out of Venezuela.


>>Support CEI

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“Decisions on which car dealerships to close as part of the auto industry bailout — closures the Obama administration forced on General Motors and Chrysler — were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky: ‘Dealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships.’ Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.”

It’s likely that these race-based closures of auto dealerships violated Supreme Court rulings like Adarand Constructors v. Pena (1995), which say that the federal government can’t use race except to remedy the present effects of its own past discrimination, as I explain below. What this means is that terminated dealers could bring a billion-dollar class-action lawsuit challenging the use of race under 42 USC 1981 and the Constitution, based on cases like Gratz v. Bollinger (2003) (that Supreme Court decision let white college applicants bring a reverse-discrimination class action over a university’s use of race as a factor in admissions, even though it’s seldom clear in such cases exactly which white applicants would have gotten admitted if race hadn’t been used to admit some minorities).

This is just the latest harm the Administration has inflicted on automakers and dealers.  Its incredibly wasteful Cash-for-Clunkers program cost taxpayers and used-car and car-parts businesses billions, and drove up the cost of car-parts and used cars for dealers and consumers alike.

It doesn’t look like the automakers and the government have a valid defense to any lawsuit over the race-based car-dealership closures. There doesn’t seem to be any pattern or practice of discrimination against minorities in the auto industry that could conceivably have justified the use of race as a remedy under the Supreme Court’s Adarand decision (indeed, the automakers have long had affirmative action programs that provide a leg up to minority businesses), and in any event, the Obama administration doesn’t seem to have had any such remedial rationale in mind for using race. If it didn’t have a remedial rationale in mind for the closures, it can’t rely on one later, according to the Supreme Court’s ruling in Shaw v. Hunt (1996). And it can’t rely on a “diversity” rationale for using race (except in universities), according to federal appellate court rulings like Lutheran Church–Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998) and Messer v. Meno, 130 F.3d 130 (5th Cir. 1997). The government may be able to invoke sovereign immunity to limit any such liability to the terminated dealers, but the automakers won’t.

(Ironically, Cash-for-Clunkers, which was designed as welfare for the automakers, actually did virtually nothing for the U.S. automakers it was supposed to help, since it simply shifted auto purchases earlier, encouraging  Americans to buy cars earlier (during the program)  rather than later (after the program ended).  Indeed, it may actually have harmed GM and Ford, since their market share was lower during Cash-for-Clunkers than later on, when car buyers were turned off by Toyota’s safety recalls and bought more GM and Ford vehicles than before.  People who participated in Cash-for-Clunkers bought lots of Toyota vehicles as replacements, which did nothing for the U.S. automakers.)

Insurance industry members are wiping there collective brow after a bill was pulled from the floor of the House of Representatives before a vote. However, every taxpayer in the US should be breathing a sigh of relief. The bill, H.R. 1264 proposed to add wind insurance coverage to the National Flood Insurance Program (NFIP), which provides federal coverage in the wake of a catastrophe. A persistent idea on the hill, the effort to add wind and other perils to the Federal insurance program has, in recent years, been championed by Rep. Gene Taylor, D-Miss., who lost his home during Katrina in 2005.

Whatever their intentions, adding another peril for the federal government to deal with is clearly a bad idea on all fronts–whether from a fiscal, public safety, or free market perspective. The NFIP is already more than $19 billion in debt and counting–a debt that is paid for by every American, regardless of where they live. Estimates claim that the addition of just wind would increase that liability 5-fold. Of course, as we can see by looking at other government run insurance programs, the longer they operate the greater the liability becomes–this is due in part to inefficient underwriting and in part to the moral hazard that subsidizing risky behavior represents.

On July 21, just days before House members planned to vote on the measure, the Obama administration announced its opposition to the addition of wind to the NFIP (as the Bush administration had done in 2008).

The Administration recognizes that the availability of hazard insurance is a key element in the ability of individuals and communities to recover from disasters. However, the Administration opposes House passage of H.R. 1264, which would expand the Federal Government’s role to provide windstorm insurance that is already readily available in the private sector and through State insurance plans without Federal aid….expanding NFIP to cover windstorm insurance would unnecessarily duplicate available insurance products and could “crowd out” such products where they are offered, while offering little to no savings to the American public. At a time when the NFIP is already facing serious challenges, the Administration cannot support such an expansion

There are several fundamental reasons why adding wind insurance to the NFIP is a bad idea.

1. It would undercut competition and increase the national debt:

Private insurance is available. It might not be as inexpensive as people living on the coasts would like, but private insurers are willing to underwrite almost any risk for an adequate premium. When the federal government provides a cheaper version of insurance (under-priced through the miracle of taxes) it prompts consumers to leave their private insurance company for the less expensive option.  This puts increasing pressure on the federal insurance and American taxpayer.

2. Government run insurance programs can’t spread risks as far as private insurance

Private insurance  companies can spread risk by holding policies around the world that are unlikely to occur at the same time. This means that while they are paying claims for a hurricane in Florida, they are still collecting money from premiums on Japanese earthquake insurance policies. The US government is necessarily limited to pooling all of its risk within the USA which makes it much more likely that events will occur at the same time.

3. Cheap insurance doesn’t discourage bad behavior

When priced correctly, insurance provides feedback for the relative riskiness of a person’s decisions. If someone buys a house on the SC coast, they are more likely to have their home destroyed in a storm surge than someone living in the middle of Wisconsin. Therefore, their private insurance company will charge them more money for hurricane insurance. When we remove this feedback (aka remove the expense of insurance from the decision to move to a home on the beach) we encourage more people to engage in risky behavior. If the federal government provides cheap insurance for homes on the beach more people will build their homes there–putting themselves and their homes at risk and increasing the likelihood that everyone else in the country will end up bailing them out.

While the bill could still be brought up, it is a good thing that the Administration and a large number of Representatives have expressed their opposition to this expansion of government. Of course, all of the arguments against federal wind insurance apply to all other forms of insurance as well.

Senator Patrick Leahy (D-VT) is fond of blasting Supreme Court decisions even before reading them.  In his eyes, its decisions are all part of a diabolical plot to enrich corporations (even though the Court often rules against business, and some of its supposedly pro-business decisions are rulings for small businesspeople who make much less money than Senator Leahy and his wealthy trial lawyer pals).

Recently, he did it again, baldly mistating the facts of the Supreme Court’s recent decision in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010).  In that case, the Supreme Court largely upheld the Sarbanes-Oxley Act, rejecting a challenge to an agency it created (the Public Company Accounting Oversight Board) under the Appointments Clause of the Constitution, and merely striking down (and severing) an unconstitutional removal provision, to save as much of the law as possible.

The day of the Supreme Court’s decision, Pat Leahy rushed to the press to falsely denounce the Court for supposedly ACCEPTING the very Appointments-Clause challenge that it actually REJECTED:  “the Supreme Court held that the Public Company Accounting Oversight Board violated the Appointments Clause of the Constitution,” he claimed, going on to argue that the Court did so in response to the bidding of “powerful corporate interests” and “corporate conservatives.”  (The challengers in the case were actually a non-profit advocacy group and a tiny Nevada accounting firm that decried the challenged law for enriching big accounting firms at the expense of small ones and small businesses.) See June 28 Press Release, “Comment On The Supreme Court Decision In Free Enterprise Fund v. Public Company Accounting Oversight Board,” available in U.S. Federal News and in Westlaw’s News Database at 2010 WLNR 13063107 (June 29, 2010).

Relevant portions of Senator Leahy’s press release are below (a Web page that once reproduced it was recently changed, weeks after the court’s decision):

“Comment On The Supreme Court Decision In Free Enterprise Fund v. Public Company Accounting Oversight Board, June 28, 2010

The Supreme Court today issued a ruling in Free Enterprise Fund v. Public Company Accounting Oversight Board. In a 5 to 4 decision, the Court found unconstitutional a key provision of the Sarbanes-Oxley Act  . . . Overturning decisions by the D.C. District Court and the D.C. Circuit Court, the Supreme Court held that the Public Company Accounting Oversight Board violated the Appointments Clause of the Constitution because its members are not under the direct control of the President. Senator Leahy was a co-sponsor of the Sarbanes-Oxley Act of 2002 . . .’ the Supreme Court has once again turned its back on its own precedents and disregarded the longstanding judgments of Congress and our efforts to protect Americans from abuses by powerful corporate interests.  . . .A slim majority of the Supreme Court agreed with these corporate interests that the law violates the Constitution’s Appointments Clause . . .”

California Attorney General Jerry Brown is the worst state attorney general in America, as I documented in a recent study.

But how was he worse than Connecticut’s Richard Blumenthal and Oklahoma’s Drew Edmondson, who likewise received failing grades across the board in CEI’s recent study? (Just like Jerry Brown, they all got an “F” in each of the four judging criteria — (1) ethical breaches and selective application of the law, (2) fabricating law, (3) usurping legislative powers and (4) predatory practices.)

Jerry Brown tops the list because of his repeated refusal to defend state laws.   Defending state laws is an attorney general’s most basic duty.   Yet Brown has repeatedly chosen to attack his own state’s laws, seeking to nullify the democratic process.  Had it been successful, one of Brown’s attacks would have undermined longstanding laws that his office is charged with defending or enforcing, like California’s bill of rights for crime victims.

One example of a law Brown refused to defend was a state constitutional amendment prohibiting gay marriage (but not civil unions) passed by voters as Proposition 8.  This constitutional provision was upheld by the state Supreme Court, which rejected Brown’s argument that it violated the state constitution.  I publicly opposed Proposition 8, but by definition, a state constitutional provision cannot violate the very constitution of which it is a part, and it was wrong for Brown to argue to the contrary.

Brown also refused to defend Proposition 209, a state constitutional amendment banning racial set-asides and racial preferences.  That constitutional provision was upheld by a federal appeals court in 1997, but a dozen years later, Brown refused to defend it, claiming that its ban on racial discrimination was itself discrimination in violation of the Constitution’s equal protection clause.  That’s a logical absurdity.

Even critics of these laws criticized Brown for abdicating his duty to defend them. As the Los Angeles Times noted, Brown’s decision to attack Proposition 8 “surprised many legal experts. The attorney general has a legal duty to uphold the state’s laws as long as there are reasonable grounds to do so.” And even critics of Proposition 8 admitted that it had plausible legal defenses.  As one civil libertarian put it, Brown “ripped up his job description” when he unilaterally decided not to defend Proposition 8 in court. Even some liberal law professors criticized Brown’s position.  Santa Clara University law professor Gerald Uelmen said that Brown’s argument “turns constitutional law on its head,” and that he was unaware of any case law that supported it.

Brown’s rationale for not defending Proposition 8 was also troubling, for different reasons.  Brown didn’t simply object to Prop. 8 on federal constitutional grounds (The Supreme Court and other courts have rejected challenges to state bans on gay marriage (Footnote 1).)

Instead, he made a far more radical claim: that Proposition 8, which was itself part of California’s constitution, violated that same constitution because it restricted a “fundamental right” recognized by the courts based on the state constitution. (Footnote 2)  The logic of Brown’s argument would call into question vital California laws that the Attorney General’s office is supposed to enforce, harming crime victims. For example, the state’s death penalty was struck down decades ago by the staunchly-liberal California Supreme Court, which claimed it violated the fundamental right to be free of “cruel or unusual punishment” under the state constitution. (Footnote 3) That decision was subsequently overruled by an amendment to the state constitution. (Footnote 4)  Under Brown’s argument, serial killers would escape the death penalty, because the amendment reinstating the death penalty would be invalid under his logic. (Never mind that the state attorney general’s office has the designated function of defending the death penalty against court challenges in capital cases. (Footnote 5)) The attorney general’s argument would also invalidate the state constitution’s bill of rights for crime victims, which was passed by voter initiatives in response to decisions by the California Supreme Court that were perceived as soft-on-crime. (Footnote 6)

Many bad court rulings, like the U.S. Supreme Court’s horrible 1857 Dred Scott decision, are based on mistaken notions of fundamental rights that the people later reject through Constitutional amendment. (That infamous decision claimed that slaveowners had a fundamental property right to their slaves that trumped contrary statutes. The Dred Scott decision was later abrogated in part by Constitutional amendment.) The constitutional amendment process is not only a quintessential exercise of democracy. It can also be a vital safeguard against government tyranny. Brown sought to undermine that safeguard.

Footnote 1: See Baker v. Nelson, 409 U.S. 810 (1972) (affirming the Minnesota Supreme Court’s ruling in Baker v. Nelson, 291 Minn. 310 (1971), which rejected a challenge to a state’s ban on gay marriage); see also Citizens for Equal Protection v. Bruning, 455 F.3d 859 (8th Cit. 2006).

Footnote 2: See Jessica Garrison and Maura Dolan, “Jerry Brown Asks California Supreme Court to Void Gay-Marriage Ban,” Los Angeles Times, December 20, 2008.

Footnote 3: See People v. Anderson, 493 P.2d 880, 6 Cal.3d 628 (Cal. 1972).

Footnote 4: See California Constitution, Article I, section 27

Footnote 5: See, e.g., Ayers v. Belmontes, 549 U.S. 7 (2006) (California attorney general’s office represented state in death penalty appeal); Brown v. Sanders, 546 U.S. 212 (2006) (same); Brown v. Payton, 544 U.S. 133 (2005) (same)

Footnote 6: See California Constitution, Article I, section 28 (promoting public safety in many ways, such as by limiting bail for dangerous defendants, broadening use of prior convictions as evidence against them, and limiting use of judicially-fashioned exclusionary rules in favor of defendants, all in response to state court rulings broadening defendants’ rights); Brosnahan v. Brown, 32 Cal.3d 236, 299, 314, 651 P.2d 274, 314, 18 Cal.Rptr. 30, 70 (Cal. 1982) (upholding “The Victims’ Bill of Rights,” whose section 2 repealed a broad state constitutional right to bail; “SEC. 2. Section 12 of Article I of the Constitution is repealed. Sec. 12. A person shall be released on bail by sufficient sureties, except for capital crimes when the facts are evident or the presumption great. Excessive bail may not be required. A person may be released on his or her own recognizance in the court’s discretion.”). Chief Justice Rose Bird, who was appointed by then-Governor Jerry Brown, dissented from the ruling, in a hyperbolic dissent. Bird, who later defended O.J. Simpson and claimed his case was about racism, was subsequently removed from office by California voters in 1986. See Rose Elizabeth Bird, “The Jury Did Its Job: Put the Blame Where It Belongs,” Los Angeles Times, October 6, 1995, at B9 (alleging racism in reaction to O.J.’s acquittal); John Marelius, “Rivals Are Lining Up to Run State in ’11,” San Diego Union Tribune, Feb. 15, 2009 (“Brown was roundly criticized for naming an inexperienced chief justice, Rose Bird, who ultimately was removed from office by voters”) (http://www3.signonsandiego.com/stories/2009/feb/15/1n15gov224926-rivals-are-lining-now-run-state-11/)

A proposal to allow New York State supermarkets sell wine might re-emerge this year if Governor David A. Patterson can break the state’s budgetary stalemate. Battles over how to pay for New York’s ever-expanding welfare and regulatory states means that lawmakers have been unable to come to an agreement on the budget.

Patterson argues that allowing supermarkets to sell wine would increase much-needed government revenue. Current liquor store owners–who apparently fear competition–have been fighting the proposal while wineries and others support it. Surely, lawmakers should cut spending to resolve their mess, but giving consumers greater freedom is a great idea–budgetary mess or not.

The issue appeared to be dying on the vine, along with the governor’s budget. But Patterson says he will call an emergency session of the legislature to get the budget done–even though lawmakers might prefer to be home campaigning as Election Day approaches. Patterson has such authority under the state’s constitution and has tried to use it in the past without much success. Maybe impending elections will rouse lawmakers to action.

When New York lawmakers finally do allow wine in supermarkets, they should allow consumers to buy spirits there as well–as Governor Robert F. McDonnell has proposed for Virginia. Despite claims to the contrary, there is no evidence that such access would increase abuse or other problems, as reported in a Virginia Public Policy Institute study on the topic. There is no good reason to deprive consumers of access to these products as well.

Silly bans against selling wine or spirits at the supermarket are not really designed to address alcohol abuse, underage drinking, or the like. They exist to serve special interests, be they government agencies or liquor stores those agencies have essentially granted monopolies. An ad on this topic by New Yorkers for Economic Growth and Open Markets says it all.

The nation’s worst state attorneys general abuse the power of their office for political ends, undermining the rule of law.  In recent years, many state attorneys general have “increasingly usurped the roles of state legislatures and Congress by using lawsuits to impose interstate and national regulations and extract money from out-of-state defendants who have little voice in a state’s political processes,” as I explain in a recent study, The Nation’s Worst State Attorneys General.

Six state attorneys general comprise the worst-in-the-nation list:

  1. Jerry Brown, California
  2. Richard Blumenthal, Connecticut
  3. Drew Edmondson, Oklahoma
  4. Patrick Lynch, Rhode Island
  5. Darrell McGraw, West Virginia
  6. William Sorrell, Vermont

California’s Jerry Brown tops the list, for repeatedly refusing to defend state laws he disliked.  One example was Proposition 8, a state constitutional amendment prohibiting gay marriage (but not civil unions).  This constitutional provision was upheld by the state Supreme Court, which rejected Brown’s argument that it violated the state constitution.  I personally opposed Prop. 8, but it’s clear, by definition, that a provision of the state constitution cannot violate the very constitution of which it is a part; and it’s the most basic duty of an attorney general to defend state laws, whether or not he likes them.  Another example was Prop. 209, a state constitutional amendment banning racial set-asides and racial preferences.  This constitutional provision was upheld by a federal appeals court in 1997, but a dozen years later, Brown refused to defend it, claiming its ban on discrimination violated the Constitution’s equal protection clause.

Connecticut’s Richard Blumenthal scored 2nd worst on the list.  In CEI’s previous ratings, released in 2007, Blumenthal occupied the #1 worst spot.  Blumenthal hasn’t gotten any better since then,  but competition for worst AG has gotten fiercer.

Blumenthal, who has used the power of his office to spread largesse to cronies, continues to earn low grades for his ringleader role in the Tobacco Settlement racket of 1998, which he used to steer millions of dollars to his cronies, as well as for his support of racial quotas and speech restrictions, his attack on private property rights, and various other egregious acts.

The study uses several criteria for determining who made the list of shame: ethical breaches and selective applications of the law; fabricating law, usurping legislative powers; and predatory practices (such as seeking to regulate out-of-state businesses that broke no state law).

In a new Gallup poll on confidence in institutions, Congress ranked last out of 16 institutions consumers were asked to consider.  Only 11 percent of respondents had confidence in Congress, down 6 points from last year’s poll.  Confidence in the presidency dropped the most this year from last – down a full 15 points to 36 percent.

What I think is more interesting, however, is that the main institutional targets of President Obama’s and the Democratic Congress’ recents attacks and draconian laws gained in confidence in this year’s poll.  The Administration’s demonization of the health care system didn’t seem to resonate with the public.  In this year’s poll, the medical system ranked as number five in overall confidence, up 4 points from last year.

Banks and big business – also the targets of the Administration’s ire, were up one and three points, respectively, in the 2010 poll.

With these kinds of polling results, the Dems are right to be running scared.  Their big “successes” – ramming through an inchoate health “reform” bill and banking legislation that threatens to bury banks and their would-be customers in red tape – don’t sound like they’re going to get a lot of support among their constituents.

Connecticut Attorney General Dick Blumenthal has just been rated the second-worst state attorney general in America by the Competitive Enterprise Institute in its recent study, The Nation’s Worst State Attorneys General. If the ratings had considered only lawsuit abuse, he would have been ranked #1. (In the 2007 ratings of the The Nation’s Top Ten Worst State Attorneys General, Blumenthal was rated the #1 worst attorney general in America. Blumenthal hasn’t gotten any better since then, but the competition has gotten fiercer.)

Yesterday, legal commentator Walter Olson (who runs Overlawyered, the world’s oldest law blog, which federal courts have cited) linked to a draft of the study showing Blumenthal being rated as #3, just behind Oklahoma’s Drew Edmondson. Olson humorously noted that “at only #3, Connecticut’s Richard Blumenthal demands a recount.”

In a sense, Blumenthal now has his recount. Additional information about Blumenthal, such as his mistreatment of small-business owners, pushed Blumenthal ahead of Edmondson in a photo finish, leaving Blumenthal at #2, and Edmondson close behind at #3.

Rated #1 was California’s Jerry Brown, the nation’s worst state attorney general.

All three of these state attorneys general got an “F” in each of the four judging criteria — (1) ethical breaches and selective application of the law, (2) fabricating law, (3) usurping legislative powers and (4) predatory practices.

But picking which one was worst overall was difficult because each of these three was worse than the two others in at least one critical respect. Edmondson is probably the worst state attorney general in terms of contempt for civil liberties. Brown is by far the worst state attorney general in terms of failure to perform basic attorney general job-duties like defending the state and its laws against lawsuits.

The next three state attorneys general in the list of worst state attorneys general — Rhode Island’s Patrick Lynch, West Virginia’s Darrell McGraw, and Vermont’s William Sorrell — fared slightly better. Although they, too, received dismal marks, they each got at least one grade that was not an “F”. (Vermont Attorney General William Sorrell even got a “C” alongside his two Fs and one “D.” These lenient marks triggered a protest from a Vermont think tank, which e-mailed me this morning to say that CEI “must have some kind of soft spot for Sorrell. . . he ought to be tied for worst.”)

Here are the worst AGs’ report cards:

1. Jerry Brown, California: F,F,F,F
2. Richard Blumenthal, Connecticut: F,F,F,F
3. Drew Edmondson, Oklahoma: F,F,F,F
4. Patrick Lynch, Rhode Island: D-,F,F,F
5. Darrell McGraw, West Virginia: D-,F,F,F
6. William Sorrell, Vermont: C-,D-,F,F

Are economists ruining economics? Over at The American Spectator, I say why that may well be be the case. Key points:

  • Economists can’t even predict whether the stock market will go up or down tomorrow. Yet many economists tell everyone who will listen that they know how to solve the financial crisis and dig out of a near-global recession. No wonder people aren’t taking them as seriously as they used to.
  • Economics isn’t the problem. The economic way of thinking is as powerful a tool as any for understanding the world around us. But it has its limits. Too many economists have pretended away those limits out of hubris, or for political reasons.
  • Any economist saying he understands global business cycles when he can’t even understand the pencil poking out of his breast pocket is a charlatan. But the discipline he dishonors is as beautiful as poetry. Interested readers should take a look at Leonard Read’s classic short essay, “I, Pencil,” as a case in point.