The Real Estate Section in today's Washington Post has an informative article by Kenneth R. Harney on the likely winners and losers from Kelo, "Court Ruling Leaves Poor at Greatest Risk":

Where does that leave you if your local government sees potential for a higher and better use for your home and land? What if you, like the New London homeowners, don't want to give up your home no matter what you're offered?

In brief: The court's decision leaves you in a weaker position, at least under federal law, than you might imagine. The majority of justices on the current court appear to be saying that "public purposes" may be discernible in a wide variety of private projects. If, for example, your city's political leaders decided that all the houses on your street would produce higher tax revenue as a regional shopping center, they are now in a stronger position to seize your house under the court's Kelo doctrine.

As a practical matter, who's really at greater risk of such seizures? Surely not homeowners in the wealthier parts of town, who have the ears of, if not control of, the local political establishment.

Dana Berliner, a lawyer for the Institute for Justice, the libertarian public interest law firm that represented the New London homeowners, says certain categories of homeowners are at heightened risk. Based on her research on more than 10,000 of what she terms "abusive" eminent domain seizures across the country, the high-risk homeowners are:

· Residents of older neighborhoods in locations that make them attractive for a supposedly "higher and better use" -- for example, near a waterfront or in a low-density area adjacent to higher-density commercial areas.

· Working-class and middle-income areas in general.

· Neighborhoods with high concentrations of lower-income minority residents.

This being the Real Estate Section of the paper, the article also provides some practical advice for what homeowners can try to do to prevent having their homes seized and given to politically-influential developers.

Allow me to second Larry Ribstein's motion that the President nominate my dear friend and sometimes co-author Edith Jones as the obviously best appointment to replace Justice O'Connor. She is smart, thoughtful, experienced, principled, and of impeccable judgment and character. An extraordinary person and extraordinary judge. As Larry suggests, she is the obviously correct choice for the slot.

In addition, Ribstein notes another key element of Jones's background that distinguishes her from many other excellent candidates--her deep experience in business law issues, an area in which, as Larry notes, the current Court is "sadly lacking." Given the substantial portion of the Court's responsibilities on issues including bankruptcy, securities, antitrust, etc., the Court could certainly use some additional expertise on those issues.

If the President decides to appoint a woman and does not decide to name Edith Jones, I think the clear other choice is my friend Alice Batchelder of the Sixth Circuit. Batchelder, like Jones, is smart and deeply experienced, as well as sharing a particular expertise in business law. She also has great judgment and common sense. She began her judicial career as a Bankruptcy Judge, then was appointed by President Reagan to the federal District Court for the Northern District of Ohio, before being named to the Sixth Circuit by the first President Bush. Batchelder is smart, thoughtful, and charming, and would also make a superb choice to the Court. Given Batchelder's immense experience and sound judgment, she may be a somewhat easier confirmation than Judge Jones (although, as I previously noted, I think it is going to be a fight regardless, and the goal should not be to try to avoid a fight, but rather to get someone actually worth fighting for).

Finally, both Jones and Batchelder would bring to the Court something that currently is sorely lacking--a real-world, outside-the-beltway perspective. The insularity of the Court today is quite striking, especially after the long stability of the Court's membership, and they must be oblivious as to what is actually going on in the rest of the country and how they are perceived in real America (sorry Justice Breyer, I don't count Cambridge as "real America"). It has been decades since any of them lived outside the northeast corridor (at least Justice Thomas gets out in his RV during the summer). It might be useful to have someone around who can pop their balloons every once in awhile and give them a sense of the real world. Jones and Batchelder, both of whom are absolutely loaded with good common sense and grounding, would certainly meet this test. Others on the short list, such as McConnell, Bainbridge's choice, obviously fit this bill as well (although Michael's real-world credentials are somewhat attenuated by his professional career as an academic...).

If the President decides to appoint a woman, it seems obvious that Jones is head-and-shoulders above the pack, with Batchelder making an excellent choice as well. As far as I can see, there are no other candidates in the same league as these two (assuming the President doesn't want to pick another fight with Brown again so soon).

Update:

[In response to some emails, I wanted to make sure that readers recognized that my crack at academics in discussing Michael McConnell's suitability for the Court was a joke.]

Roy Poses has an interesting post on the Health Care Renewal blog, where he looks at some of of the interrelationships between the parties and some of the financial details in the case.

[In my "Economics of Kelo" post, I simplified the actual relationship between Pfizer and the City of New London and the New London Development Corporation in order to try to get to the larger question of the role of "public use" in the case. I don't think it changes the analysis of the basic constitutional question and what the Court decided, which is why I used "Pfizer" as a shorthand reference to the private parties in the case in my post. Those looking for a more detailed summary of the facts can find it in Dr. Poses's post.]

For those, like me, who never really got the hearsay rule and its exceptions, you have two choices. First, you can do like me and practice in bankruptcy court, which has somewhat loose de facto evidence rules.

Second, you can learn everything you need to know from this video enactment of the hearsay exception acted out by Lego characters (yes, Lego characters) with a rocking musical accompaniment.

HT to Sean Sirrine, who has the story behind the video as well.

Update:

Just to clarify, my comment that the video has "everything you need to know" was in jest--I realize that there are many more exceptions to the hearsay rule.

I'd be out of a job quick if we could replace all the law professors with Lego characters...

P.S.: A reader reminded me that the tune for the video is from the Schoolhouse Rock video "Interjection!"--I knew I recognized it, but couldn't place it precisely.

Sean Sirrine has a very thorough roundup of the various legislative proposals related to a Ninth Circuit split.

Students say yes, some faculty say no, Arabic language department says get out of here. The story here.

Reading the tea leaves, it seems clear that there will be a brutal confirmation battle regardless of who is nominated. At this point, a confirmation battle will be supply-side driven--the interest groups have the money already, and they are going to spend it one way or the other. And then try to raise some more. And the politicians are going to try to raise money by pandering to these same players. No one is going to roll over on either side just because a particular nominee is thought to be "moderate" rather than "conservative".

The credentials or qualifications of the particular nominee under consideration will be largely beside the point.

So, the same nasty fight is going to occur regardless of who is nominated, and be just as nasty and expensive, regardless of who is nominated and the particular perception of whether he or she is moderate or conservative. So, it seems to me, the Bush Administration would be smart to simply nominate the best person that they want, and not be tricked into thinking that they can somehow avoid a nasty confirmation battle by nominating someone with a more "moderate" perception.

So if there is going to be a fight (which there undoubtedly will be), they may as well at least make it someone worth fighting for.

On the Comments Board to my "Economics of Kelo" post (and let me echo David and others on how much I have learned from reading those comments), one participant raised an excellent question, that I think is worthy of a longer response (sorry to write so long, which I have been doing a lot lately for some reason).

Bill writes on the Comment Board:

Todd's economic analysis here is great. [TZ--I think this part of the post is especially brilliant.] But I am reminded of his previous reluctance to embrace social science in considering whether Ten Commandment displays or litigation about them is more divisive. [I wrote a long post under his original one there.]

Todd: You call Breyer's analysis "second rate". Is there any other relevant difference (besides quality of analysis) between your Kelo analysis and the social scientific inquiry into divisiveness that you forswore? I can think of two or three that I mentioned in the other post. But none of them really seem decisive to me.

Perhaps I'm just deluding myself, but I think these situations are distinguishable. So let me take a crack at explaining why I think so, and when and what type/quality of social science evidence may be relevant. Note that it is a seperate question whether this sort of evidence should ever be relevant to constitutional decision-making, a different question that arises in many cases (such as the reliance on social science evidence in Brown v. Board of Education and whether the reliance on the social science evidence there was appropriate and improved the Court's decision and decision-making).

In my "Economics of Kelo" post, I am trying to argue that economics can help us to understand why the "public use" clause is written into the Fifth Amendment and should be enforced. In the "divisiveness" context (here and here), recall, my argument is that the Court should either skip the divisiveness inquiry or actually use real social science to determine whether or not religious displays are truly divisive (just like they rely on empirical evidence in reviewing dormant commerce clause cases, as in the wine cases).

The problem in the religion context, I think, is that Breyer is doing neither--he is postulating that religious displays are "divisive" and that some case rulings will reduce this divisiveness (but not all)--but the Court has no empirical evidence to support these claims. Certainly, such empirical evidence could be produced through surveys and studies, it just hasn't (or at least Breyer doesn't rely on it). Instead, he is relying on his own gut assumptions about what is or is not divisive, rather than real social science research.

Given the lack of any good social science evidence on this point, I believe that the Court should rely on principle, rather than Breyer's personal speculations, formed by a relatively cloistered and narrow social and intellectual life unrepresentative of the overwhelming majority of Americans. If valid social science evidence were available, and it tended to a determinate answer on the question of divisiveness (one way or the other), there would still be the more fundamental question as to whether this sort of social science evidence should be relevant to the decision (a question, of course, that is relevant to all "Brandeis brief"-type evidence). The only polling data I have seen suggests that these displays are not that divisive. Certainly I wouldn't rely on this one weak poll to conclude that the Ten Commandments are not divisive, but there is also no strong evidence to back up Breyer's argument that they are divisive (or to clarify, there may be such evidence out there, but he doesn't rely on any in his decision). So until such evidence is produced one way or the other, it is largely just my hunch against his. And, my own personal hunch would be that if such research were produced, it wouldn't tend to support the distinctions that the Court is drawing. But, of course, my personal hunches don't seem any more valid or relevant to Supreme Court decision-making than Justice Breyer's personal hunches.

So, in this light, it would certainly be valid to reject my Kelo analysis on the ground that the economic analysis that I put forth is incorrect or incomplete, in the same spirit as my criticism of Breyer's gut-feeling estimates of divisiveness in the religion context.

In my defense, however, I would offer that using economic analysis to support the general proposition that the Court should consider the "public use" clause in a case like Kelo is different from saying that the Court should use this evidence to drive results in any given case, as Breyer seems to be suggesting. I am not saying that the economic analysis can be used to balance subjective value with holdout problems in any given case; rather, I am supporting the more general proposition that there are very good reasons why we should take seriously the "public use" requirement in the Constitution.

To illustrate the distinction, consider freedom of speech. There is a difference between saying that the concept of a "free marketplace in ideas" provides a general presumption in favor of protecting freedom of speech versus saying that in any given case a particular idea is a valid contribution to the marketplace of ideas. I would argue that my economic analysis is more like the former (explaining the principle, but not the outcome). And that Breyer's analysis in the Ten Commandments cases is more like the latter (outcome-dterminative), only badly done. And that the Supreme Court's analysis in the context of facially-discriminatory bans on interstate commerce (such as in Granholm and older cases such as Maine v. Taylor) is in the second category (outcome-determinative), but I think generally well done.

Even Congress's "lone self-described socialist, Rep. Bernard Sanders of Vermont" doesn't like Kelo:

I disagree with the Supreme Court's decision in Kelo v. New London," Mr. Sanders said. "I believe that the result of this decision will be that working families and poor people will see their property turned over to corporate interests and wealthy developers."

Rep. Maxine Waters, "California Democrat and member of the Congressional Black Caucus, said she is 'outraged' by the decision. 'It's the most un-American thing that can be done.'"

And when is the last time those two agreed with Tom DeLay?

"The Supreme Court voted last week to undo private property rights and to empower governments to kick people out of their homes and give them to someone else because they feel like it," said House Majority Leader Tom DeLay, Texas Republican. "No court that denies property rights will long respect and recognize other basic human rights."

The Washington Post describes the legislation, co-sponsored by conservative James Sensenbrenner and liberal John Conyers in its story, curiously titled "House Votes To Undercut High Court On Property"

The House measure, which passed 231 to 189, would deny federal funds to any city or state project that used eminent domain to force people to sell their property to make way for a profit-making project such as a hotel or mall. Historically, eminent domain has been used mainly for public purposes such as highways or airports.

The measure, an amendment to an appropriations bill, would apply to funds administered by the departments of Transportation, Treasury, and Housing and Urban Development. House Majority Leader Tom DeLay (R-Tex.) and Majority Whip Roy Blunt (R-Mo.) said they will push for a more inclusive measure that would apply to all federal funds.

A fact sheet said under the bill the locality or state would "lose any federal funds that would contribute in any way to the project the property would be taken for."

Nancy Pelosi, by contrast, agrees with the decision and opposes the legislation:

House Minority Leader Nancy Pelosi, California Democrat, said she "would oppose any legislation that says that we would withhold funds for the enforcement of any decision of the Supreme Court, no matter how opposed I am to that decision." She then added: "And I'm not saying that I'm opposed to this decision." Arguing that Congress has no business interfering with the ruling unless it wants to amend the Constitution, Mrs. Pelosi said: "This is almost as if God has spoken."

So how about a constitutional amendment that makes it clear as to the limits of the emininent domain power along these lines--"nor shall private property be taken for public use without just compensation."

What amendment do we need--change the type font to italicize the words "public use"?

[In light of the Supreme Court's recent religion cases, the irony inherent in Congresswoman Pelosi's characterization of the Supreme Court's ruling in Kelo as "almost as if God has spoken" is just too easy, so I'll just let the readers supply their own ironic commentary on that one.]

Update:

An even curiouser headline of the same debate from the New York Times:

Republican Lawmakers Fire Back at Judiciary

Stepping up their assault on the federal judiciary, Congressional Republicans announced efforts on Thursday directed at overturning two recent Supreme Court decisions, one that allowed government to claim private property for economic development and another that stripped Kentucky courthouses of the Ten Commandments.

In contrast to the headline, the story notes in paragraph 6:

Illustrating the broad discontent in the House over the court ruling on property rights, House members voted 365 to 33 late Thursday night in support of a resolution expressing "grave disapproval" at the court decision.

It does not note this particular item from the Washington Post story, which I forgot to include in my original post:

Sen. John Cornyn (R-Tex.) introduced a similar measure and immediately drew a Democratic co-sponsor, Sen. Bill Nelson (Fla.), as well as Sen. Rick Santorum (R-Pa.), who is number three in his party's leadership. The House bill is sponsored by Judiciary Committee Chairman F. James Sensenbrenner Jr. (R-Wis.). Its Democratic co-sponsors include Reps. John Conyers Jr. (Mich.), Maxine Waters (Calif.) and Peter A. DeFazio (Ore.).

And yet the New York Times summary of all of this bipartisan activity is "Republican Lawmakers Fire Back at Judiciary" and that Republicans are "Stepping up their assault on the federal judiciary"?

At the least the Post headline, while implying editorial disapproval of Congress, wasn't as heavy-handed as the Times in turning it into a partisan attack (in fact, to reinforce the implicit message, the only picture in the on-line version of the Times article pictures only Republican lawmakers).

And some wonder why I don't generally read that Times any more? For more reasons, see here.

Orin says it is generally thought to be good. I'm not so sure (I honestly haven't made up my mind). In general, I think it is probably a good thing, but I think there may be substantial unrecognized costs.

It is true that articles are much shorter in other disciplines. I suspect the main reason for that is that most scholarship is in the nature of what Kuhn calls "normal science," i.e., science that takes place within a commonly-accepted paradigm. As such, most research is conducted within a relatively closed set of assumptions and techniques, which, in general, need not be repeated from one article to another. The problem with law review article length became that too much length was taken with rehashing the "normal science" portion of the article, primarily (in my view) because of the need to educate the law students reading the article, to whom there is no normal science because they haven't been immersed in the literature of a given field. So to the extent that most law review articles are in the nature of "normal science," shorter is better, following the convention of other fields.

In addition--and this differs from law reviews--other fields seem to have constraints on the number of journals in a field, and hence, on the number of slots for articles. Shorter articles permit each journal to publish more articles in each issue, which may be useful for capacity-constrained journals and fields. Law reviews seem to be under no constraint (in fact, it may be that there are more slots available in journals than there are articles truly worthy of being published).

The problem, however, are for those articles that are outside the established paradigm, and thus are not in the nature of normal science. Those articles may need to be longer, in order to educate the editors and the reader as to why a new paradigm is being proposed.

I have personally felt this pinch--because much of my work on consumer bankruptcy and consumer credit draws on economic concepts and empirical research that has been largely ignored by the legal academy, it does in fact take a fair amount of set-up. The economic approach to consumer bankruptcy, as one might expect, is well-established in the economic study of consumer credit--and much of the work there is now empirical, meaning shorter articles in the normal science mode.

But law professors have gone off in a very different direction which has little to with economic analysis. As a result, although the dominant paradigm in economics, it is not in law. So the short-cuts associated with ordinary science--and shorter articles--are in fact an obstacle for much of my work.

So I'm still on the fence as to whether adopting a rule requiring shorter articles will turn out to be an improvement over the old standard that evaluated articles on a case-by-case to determine whether they were the "correct" length.

The basic economic problem of eminent domain is the trade-off between strategic holdouts on one hand and sincere subjective value on the other. The nature of a "property" right is that it gives a holdout power to anyone who holds it--I don't have to sell you my car or my autographed picture of Franco Harris's Immaculate Reception. And you can't have the government take them, even if you promise to pay compensation, but can acquire them only if I consent to what you give me in exchange. In so doing, we protect my subjective value in the good--i.e., the value that I put on Franco (especially because my wife gave me the picture as a Tenth Anniversay gift) is much higher than the market value of my Franco picture. So, in order to protect my subjective value, I am given a property right which permits to refuse to sell it--even for "fair market value." I have a holdout power, but it is not a problem, because we assume that the reason I refuse to sell is because I place a higher value on Franco than the market price.

This "holdout" power potentially becomes a problem in a case such as Kelo, where the buyer needs to assemble several pieces of land to build a building. Any individual may decide to hold out to try to extract a larger share of the surplus associated with the higher economic value from the transaction.

The problem is that in theory, in any given situation when someone refuses to sell we can't tell whether it is because of strategic holdout or subjective value. If we knew this, then we could get rid of market transactions in general, and move to a system of central planning where the planning czar just assigned various goods to their highest valued user. But that obviously won't work. But there are better, and worse, ways of dealing with this problem. The overall facts of Kelo illustrate one of the worse ways of dealing with it, and why we need to have a real "public use" doctrine that doesn't permit taking from A to give to B.

Suppose I make you an offer for the "fair market value" of your house and you refuse. So I go to the City Council and tell them that I will make an enforceable promise to pay one dollar more in taxes than you pay on your house if they would just condemn it and give it to me. And if they evicted you, they wouldn't pay your moving expenses or disruption expenses associated with finding a new place to live. Now imagine you grew up in the house, lived there for sixty years, raised your kids there and hoped to die there.

Under those facts, would your unwillingness to accept my offer evidence that you are just being a strategic holdout? Certainly it seems plausible in that situation that the refusal of you to sell to me is efficient, in that you have high subjective value. So if I get the house and only have to pay fair market value through an eminent domaian proceeding, that result is economically inefficient because the property is not held by the highest-valued user. But in addition, we know that the strategic holdout threat isn't meaningful here. Why? Because at the time I refuse to sell, I have no strategic holdout power--if I don't sell, you can go down the street and buy another house. So we can infer from my behavior that my refusal to sell is the result of subjective value, not strategic holdout.

And all of this analysis excludes that the wealth loss here is not just the possibility of an efficiency loss by ignoring subjective value and the undercompensation problem (the so-called "Harberger Triangle" dead-weight loss), but also the Tullock Box of the rent-seeking expenses you and I both burn up trying to effect this political transfer rather than a voluntary market transfer (the real costs of rent-seeking, of course). When we replace a positive-sum voluntary market exchange with a political exchange, both parties have an incentive to "lawyer-up" and engage in various rent-seeking expenditures to try to get the result they desire. So this is the primary reason why the "public use" requirement is (or should be) a gatekeeper to make sure that I am not taking your house just because I want to end-run a consensual market exchange that I might find inconvenient or too expensive. None of the other restrictions on takings perform this function of properly channeling private transactions through the market where they belong, and where subjective value can be protected (and thus efficiency can be protected as well). Moreover, this is a threat that is unique to the private takings situation in Kelo, because with respect to a traditional public purpose taking, the undercompensation problem remains, but the strategic temptation to end-run the market to try to get the property for less than the seller's subjective value will not, because governement actors don't benefit as directly as Pfizer does.

Second, focusing on the holdout problem in the Kelo context is to focus on the wrong issue. The scenario here is different from when a government wants to build a school or post office, traditional public use purposes. Schools and post offices have to go in a particular geographic area (that's why they are being built), and thus strategic bargaining may be plausible because it is similar to a bilateral monopoly situation. The small group of landowners in the relevant area can act strategically and try to extract a high price for its sale.

In Kelo, however, there is no obvious holdout power because Pfizer could put its building in any city in America. So its not like a neighborhood school, road, or post office. In Kelo, the holdout power is created artificially by the city's desire to give Pfizer a sweetheart deal to bring it to town.

So ex ante, there is no viable holdout power in this situation because there are an infinite number of close substitute sites for the building. The building is going to be built somewhere, the only question is what city--New London, Hartford, Bridgeport, Boston, New York, Chicago, etc. The artificial scarcity that says the building has to be built in New London was created by the city's other subsidies to attract Pfizer to town (the obscenely low rent, etc.).

So if one is truly concerned about the holdout power problem, then the correct solution is to require the city to eliminate the artificial scarcity that "requires" the building to be built in New London rather than some other city, the same way that a new school would have to be built in New London. If we allow both the subsidies and the Taking for the benefit of the private party, we are allowing the distribution tail of what city the Pfizer headquarters will be built to wag the efficiency dog of whether the homeowner is holding out versus having subjective value. Instead, we want to have the parties bargain ex ante before they finally select the city--i.e., choose the city and the plot of land at the same time--not bargain ex post after the city is selected. Forcing an ex ante bargain when there are still many substitutes for the proposed site would eliminate the holdout problem and allow us to determine the extent of parties' subjective value, because the negotiations would be conducted against the backdrop of a competitive market, rather than a bilateral monopoly. The bilateral monopoly is thrust upon the city in the road or post office scenario; it is freely-chosen in the Kelo situation.

Instead, the ruling in Kelo enables the worst possible economic outcome--it permits cities to create artificial scarcity just to get a larger piece of a stable-sized pie (getting Pfizer to New London rather than Hartford), while then permitting cities on the back end to take land from private landowners who may or may not be losing subjective value and being undercompensated in the process.

And the incentive effect of Kelo is obvious--it now enables corporations to extract both subsidies and takings as the price for locating in city A rather than city B.

To further understand the second point, recall the Alaska Packers case from first-year Contracts (any of my former Contracts students out there reading this?). In that case, the shipowner and the crew bargained for wages while on the dock in San Francisco, then when the crew got to Alaska they demanded to renegotiate. The renegotiation may have been either sincere or strategic, its not clear. What we do know, however, was that the crew's bluff was real, because the captain could not turn the boat back around and cruise back to San Francisco to get a new crew without losing the seasonal catch. The Court refused to enforce the modified contract.

This is the correct answer, even though we can't tell for sure whether the subsequent renegotiation demand was sincere or strategic. The reason it is correct is because we want to make the fishermen and the shipowner in Alaska Packers have the right incentives to strike their bargain while they are all still on the dock in San Francisco. At that time there are still close market substitutes, not when they are on the boat to Alaska and it is now a bilateral monopoly situation. So we want to have a rule that enforce the first deal, not the second.

Same analysis applies here--the private taking only comes about because of the contrived artificial scarcity created by the ridiculous government subsidies to lure Pfizer to New London rather than some other city. There is no efficiency gain from providing public goods (as with a road, school, or post office). So rather than rewarding the city for creating an artificial scarcity, which then makes it vulnerable to a hold-out power, it would make more sense to deny them the right to condemn ex post, thereby encouraging more efficient arms'-length bargaining ex ante.

Recipient of the William J. Brennan Award from the DC Bar. The honor is presented biannually to a DC Bar member in recognition of "outstanding work toward furthering the public interest and equal justice."

Jonathan Adler has more.

Are any law reviews planning symposia on the Bankruptcy Reform Legislation?

My new colleague on the Dartmouth Board of Trustees comments: "I think Social Security is a real scam," said Rodgers, the CEO of Cypress Semiconductor. "I think everybody knows now there is no Social Security fund, that you have no retirement account--that's all a scam. If I ran this company the way the government runs Social Security, I literally would already be in jail."

From Hear the Issues (a site I'm not familiar with, so I don't know if it has any angle):

A Gallup poll released on June 21st, 2005 shows that Americans' confidence in the Supreme Court has been declining. Gallup asked Americans to rate their level of confidence in 15 institutions in American society, including the Supreme Court. The Supreme Court ranks in the middle of the list, much lower than the military, police, and organized religion, but higher than HMOs, big business, Congress, and organized labor.

Overall, 4 in 10 Americans say they have a great deal (16%) or quite a lot (25%) of confidence in the court. This 41% confidence rating is among the lowest Gallup has ever found for this institution, and it perpetuates a gradual decline in the public's confidence over the past three years.

The story also reports that traditionally Republicans have had greater confidence in the Supreme Court than Democrats ("Republicans and Democrats were not radically different in their confidence with the court from 1973 until 1984, at which point 57% of Republicans and only 44% of Democrats said they were confident in the court."), but that confidence by conservatives has fallen during the past three years, in part because of popularity bump for the Court with conservatives after the 2000 election (or as the article puts it "after the court decision that gave Bush the presidency").

The Conclusion:

The public's current confidence rating in the U.S. Supreme Court is among the lowest that Gallup has found historically. Republicans and Democrats currently show only modest differences in their views of the court -- a much different picture from what Gallup found after the 2000 election controversy when Republicans were much more likely than Democrats to express confidence. Conservatives, moderates, and liberals have roughly the same level of confidence in the court, but since 2000, ratings of the court among conservatives have dropped significantly.

I tried to click through to the Gallup Poll itself to get the primary sources, but this poll seems to be subscriber-only.

Last week David Bernstein noted the ringing dismissal of the judicial ethics complaint that had been lodged against Judge Danny Boggs for attending judicial education seminars. Monday, the Washington Times ran this column by Robert Huberty of Capital Research on the same issue, "Why Press Gets 'Bad Press.'" Huberty writes:

The Capital Research Center is a nonprofit organization that studies other nonprofits. We are familiar with both the Community Rights Counsel and FREE and with the games some journalists play: using the "funding" issue to discredit one organization, while ignoring the financing of others.

All this raises serious questions at the heart of the media's problems. For example, what is the accepted media definition of "corporate-financed" and when and why is the term used?

The Urban League, NAACP, Council on Foreign Relations, Mexican American Legal Defense & Education Fund, and National Council of La Raza (among others) all have received hundreds of thousands of dollars — in some cases, millions — from U.S. corporations. Among environmental organizations, the Nature Conservancy, Environmental Defense, Sierra Club Foundation and World Wildlife Fund (among others) receive corporate support — including money from companies vilified by the media as "anti-environment."

Yet, of all the organizations I named, only FREE is identified as "corporate-financed." Why?

If facts really matter, FREE openly provides details about its funding. Of the $896,000 it raised last year, 78 percent came from foundations and individuals; just 22 percent from corporations. More important, no corporate money — and no foundation money with corporate ties — is ever used for its legal seminars, which (for the record) are cosponsored by Montana State University. This information is readily available on the organization's Web site ( www.free-eco.org). All a reporter has to do is look.

And how about the motives and financing of the organization complaining about FREE's seminars: the Community Rights Counsel. Should that be part of the story? Some readers might find it interesting, for example, that the organization receives major funding from George Soros.

FREE is transparent about its funding sources, listing on its website, its major donors and the amounts they contribute, both corporate and foundation. On the front page of FREE's website, there is a link for "funding," which takes you to a page that breaks out FREE's funding sources.

The Community Rights Counsel (CRC) , the complainants in the ethics complaint, does not disclose its funding sources or amounts up-front on its web site. It does provide a list of its financial supporters (not amounts) inside two of its publications, here and here). It states that it "receives a very small percentage of its funding from a small number of individual donors; it has never taken money from a corporation or a corporate foundation." As Huberty notes, Geroge Soros's Open Society Institute is disclosed as providing funding for the latter report.

Huberty states that "some readers" might find that last bit of information "interesting." Personally, I do not--I don't really see as very relevant the ideological predispositions of a donor foundation, or the guilt by association of linking one organization to others that a given foundation may support. Given the variety of philanthropic foundations out there and the variety of programs that they support, it seems inappropriate and unreasonable to draw inferences about the receiving organization from the ideological predispositions of the donor foundation (or the other organizations that the foundation supports). Randy commented on this awhile back in the context of gun research, and I think his views are pretty close to mine as to what the rules should be.

On the other hand, CRC seems to agree with Huberty and disagree with my view about the relevance of this sort of information. In its ethics complaint complaint against Judge Boggs, it charges:

FREE's funding comes almost entirely from corporations, corporate-controlled foundations, and a collection of highly-ideological foundations, including Sarah Scaife Foundation (run by Richard Mellon Scaife), Charles Koch Foundation and Claude Lambe Foundation (both controlled by Charles Koch and other employees of Koch Industries) and Castlerock Foundation (run by the Coors family of Coors Inc.).... Almost all of FREE's foundation funders also finance other organizations, such as the Pacific Legal Foundation (PLF) and the Washington Legal Foundation (WLF), that bring environmental litigation in federal court. FREE's funders also share the same perspective on federal environmental protections: either for pecuniary or ideological reasons, FREE's funders desire judicial rulings that limit or cut back on environmental protection. (emphasis added).

Leaving aside the specific of the Boggs complaint, Huberty's larger point is important as well. As he notes, the term "corporate-funded" is a term of aspersion which some see as relevant only in some contexts. For instance, Enron in its heyday was a major supporter of the Kyoto Protocol and was widely praised by leading environmental organizations for its positions on environmental issues. Enron, of course, was not an oil or coal company, but rather, made its money off natural gas and alternative energy; thus, it is not surprising that it threw its lobbying efforts behind a treaty designed to reduce the use of rival fuels and increase demand for Enron's products. Leading environmental groups went so far as to lobby for tax breaks that had the effect of directly subsidized Enron's alternative energy programs.

Moreover, as I noted in a law review article a few years ago (73 Tulane L. Rev. 845 (1999)), these sorts of rent-sharing arrangements between industry and environmental groups are quite common:

The presence of these "gains to trade" politics may explain the otherwise puzzling financial support of industry for environmental interest groups. For instance, in recent years members of the waste treatment industry have pumped hundreds of thousands of dollars into the coffers of various environmental advocacy groups, including the National Audubon Society and the National Wildlife Federation. Indeed, the Sierra Club has recognized that "the commercial waste industry has an interest in improving regulations sufficiently to drive mom-and-pop operations out of business." Of course, the waste treatment industry also is aware of these potential gains to trade. Oil companies, including Atlantic Richfield and Chevron, contribute to environmental groups such as the National Audubon Society, who lobby to restrict opening new areas for drilling, thereby keeping new supplies off the market. As these examples illustrate, there are ample gains to trade between environmentalists and polluting industries, and they are usually exploited.

So, when environmental groups take positions consistent with the financial interests of their corporate donors, and support policies that subsidize their donors (such as tax breaks), or injure their competitors (small commercial waste companies), or assist them in foreclosing competition and raising prices (such as restrictions on oil drilling), why wouldn't it be relevant that these groups too are "corporate funded"?

[Like David, I too have participated in FREE programs, having lectured at the program on "Understanding the Ecology, Economics, and Ethics of Climate Change" in July 2002. Also on the faculty were Michael E. Schlesinger, Professor of Atmospheric Sciences at University of Illinois, a leading expert on the science of climate change, Rob Mendehlson of Yale School of Forestry and Environmental Studies, and Lakshman D. Guruswamy, University of Colorado College of Law, among others. Over all, as a check of the FREE website will confirm (they list their programs since 1993 on their website), their programs feature a range of speakers from a variety of perspectives (much more than say the typical AALS program), and have featured quite a distinguished faculty.]

Interesting article on the work at the White House surrounding a possible Supreme Court nominee (I'm told by a reader that access to the article requires registration). (HT: SCOTUS who also links to an interesting Novak column on the other day on the same topic).

The 10 Commandments cases also nicely illustrate the fundamental problem with the Supreme Court's "now you see it, now you don't" approach to looking to international sources for guidance on interpreting the U.S. Constitution. If the Court is going to engage in a free-range analysis of policy, history, psychology, etc., about the accommodation of religion in society and the public sphere, wouldn't the development and experience of Europe be at least as relevant here as in the other cases where the Court has looked to those sources for guidance? I can't see of any reason why world experience on interpreting the Establishment Clause would be any less relevant than for interpreting, say, the Cruel and Unusual Punishment Clause in the context of the juvenile death penalty. Furthermore, my impression is that public displays of religion are much more permissible in Europe, for instance, than what would be permitted here (not to mention Israel and Islamic societies). Maybe someone can explain to me why it would be relevant in interpreting one clause and not the other because I can't see the difference.

Leaving aside all of the intellectual arguments for whether the Court should or should not rely on international law for constitutional guidance, it is hard to escape the conclusion that the Court's periodic reliance on world legal opinion is purely strategic rather than sincere, perhaps to dress up the Court's personal predilections in the guise of legal authority. I am not aware of any principle that the Court has articulated which would permit litigants or the public to predict when international law or practice would be relevant to the interpretation of the U.S. Constitution. Nor am I aware of any scholar who has defended reliance on international sources who has tried to distinguish when international law is relevant to constitutional interpretation versus when it is not.

Update:

A reader has offered the amendment that the term "foreign law" rather than "international law" is the more accurate term to use here. I think the context makes clear what I had in mind, but if not, I offer this amendment as well.

From the Washington Times today:

A 70 percent majority

Seventy percent of Americans would have no objection to posting the Ten Commandments in government buildings, and 85 percent would approve if the Commandments are included as "one document among many historical documents" when displayed in public buildings, according to a survey conducted for the First Amendment Center. The State of the First Amendment survey, conducted since 1997, samples the American public's opinion each year on a variety of First Amendment issues. The U.S. Supreme Court ruled Monday on two cases, from Kentucky and Texas, concerning Ten Commandments displays. In a case involving Kentucky courthouse displays, it said county officials crossed a constitutional line and were, in effect, endorsing religion even though other documents were added. But in the Texas case, the court approved an outdoor display where the commandments are part of a larger exhibit on the grounds of the Statehouse that recognized the history of the nation's legal system and religious heritage.

The full survey is available here (the 10 Commandments questions are at pages 10-11).

Overall, if the divisiveness of religious displays is the test, this doesn't seem very divisive to me, especially when compared to much political rhetoric. Nor does this survey evidence bear out the assumption that the "greater diversity" of American religious belief today makes these displays more divisive or controversial than traditionally. And one suspects that if the survey results were broken down by geographic region, it would be even less divisive in many red states. Having lived in red states most of my adult life (unlike most members of the Court, I suspect), I can tell you from personal experience that these sorts of displays simply are not controversial or divisive in any meaningful way, especially when compared to other elements of the public dialogue.

So while America's legal and intellectual class seem to believe that public religious displays are unusually divisive or offensive in modern America, there seems to be little evidence to support that view. Indeed, I would be hard-pressed to come up with any other proposition in the public debate today (tax cuts, social security reform, war, etc.) that would meet with public approval of 85% of the public that they would "strongly" or "mildly" agree that a public official could take a particular action.

My personal view is that the Court should probably just scrap any further discussion of the purported divisiveness of religious displays and stick to law, rather than second-rate sociology. I don't see that it really adds much to the analysis in the first place, so not that much would be lost and perhaps some intellectual integrity would be gained. The divisiveness inquiry is utterly intellectually vacuous, unsupported by any serious social science evidence of which I am aware, and for most of the country, by common, everyday experience. Indeed, as Eugene has noted, it is quite probable that the Court's efforts to try to police the proper boundary lines of divisiveness probably has created more divisiveness on religious issues than it has solved. On the other hand, if the Court (and academics and commentators) want to stick with the argument that religious displays are unusually "divisive" relative to other elements of public discourse,they should actually come up with some empirical evidence to back it up, rather than pretending that it is anything more than their personal bias and experience.

Great column by Robert Samuelson today captures the continuing debate over Kyoto and greenhouse gas emissions:

Almost a decade ago I suggested that global warming would become a "gushing" source of political hypocrisy. So it has. Politicians and scientists constantly warn of the grim outlook, and the subject is on the agenda of the upcoming Group of Eight summit of world economic leaders. But all this sound and fury is mainly exhibitionism -- politicians pretending they're saving the planet. The truth is that, barring major technological advances, they can't (and won't) do much about global warming. It would be nice if they admitted that, though this seems unlikely.

Europe is the citadel of hypocrisy. Considering Europeans' contempt for the United States and George Bush for not embracing the Kyoto Protocol, you'd expect that they would have made major reductions in greenhouse gas emissions -- the purpose of Kyoto. Well, not exactly. From 1990 (Kyoto's base year for measuring changes) to 2002, global emissions of carbon dioxide (CO2), the main greenhouse gas, increased 16.4 percent, reports the International Energy Agency. The U.S. increase was 16.7 percent, and most of Europe hasn't done much better.

Here are some IEA estimates of the increases: France, 6.9 percent; Italy, 8.3 percent; Greece, 28.2 percent; Ireland, 40.3 percent; the Netherlands, 13.2 percent; Portugal, 59 percent; Spain, 46.9 percent. It's true that Germany (down 13.3 percent) and Britain (a 5.5 percent decline) have made big reductions. But their cuts had nothing to do with Kyoto. After reunification in 1990, Germany closed many inefficient coal-fired plants in eastern Germany; that was a huge one-time saving. In Britain, the government had earlier decided to shift electric utilities from coal (high CO2 emissions) to plentiful natural gas (lower CO2 emissions).

On their present courses, many European countries will miss their Kyoto targets for 2008-2012.

Kyoto is nominally an environmental treaty--although the effect on global warming is thought to be very small, perhaps on the order of a reduction in temperature of 0.15 degrees C in 2100, or putting off the same warming trend by 6 years. But once you look into the details of the treaty, at this point it seems clear that its primary purpose as drafted (and why Europe is so keen on ratification by the U.S.) is economic, and, in particular, for Europe to gain economic advantages versus the United States.

Many scholars have discussed the costs that the United States would incur in order to achieve these modest results. But there is an additional cost that is often ignored--the rent-seeking costs of self-interested actors using collective decision making processes to redistribute wealth to themselves.

Collective action, whether by national or international bodies, has both benefits and costs. The potential benefit is that the jurisdiction of the regulatory body can match up more closely with the scope of the problem to be regulated. The problem is that any collective decision-making process is subject to rent-seeking, meaning that well-organized interest groups can travel under the banner of the regulatory body in order to tap into others' pockets in order to enrich themselves. It has been long recognized that within the United States alone, environmental regulation has been used by rust belt states to impose competitive disadvantages on growing states in the South and West through a variety of regulations that disproportionately impact new businesses in less-developed regions of the country.

As Bruce Yandle has observed, rent-seeking explains many of the details of Kyoto, which have little to do with environmental improvement and much to do with economic advantage (including such seemingly mundane issues of the choice of 1990 as the baseline for emissions targets). Yandle notes that these rent-seeking pressures are reflected in a variety of provisions in the treaty that would provide European countries with competitive economic advantages versus the United States. In other words, its not just that the costs of the treaty may exceed the benefits, the treaty is written in such a manner that the costs will be larger for the United States relative to Europe, giving Europe a comparative economic advantage.

Moreover, this assumes that both the U.S. and Europe are equally committed to complying with the treaty. In fact, one reason the United States has probably been reluctant to enter into Kyoto is because it would probably actually abide by its terms, unlike the Europeans. As Samuelson suggests, the "sophisticated" Europeans by contrast, probably do not intended to comply with Kyoto, and it is questionable whether they ever intended to meet their targets from the very beginning.

Of course, the fact that rent-seeking is an inherent part of any collective decision-making does not mean that particular collective decisions should not be taken. Instead, it simply means that we should recognize the omnipresence of rent-seeking in all collective bodies, and take that into account not only in designing institutions ex ante, but in evaluating the decisions produced ex post. The goal should be to design policies that solve the collective action problems while minimizing the rent-seeking costs. I have called this the trade-off between "environmental externalities" and "political externalities," (an insight that I first drew from Buchanan and Tullock's analysis in the Calculus of Consent).

So it seems perfectly appropriate to me to say that global warming can only be addressed through international collective action, but that as a result of poor institutional design, poor bargaining, or the poor enforcement (i.e., the unlikeliness of Europe's compliance with the treaty), the rent-seeking costs of Kyoto exceed the small environmental benefits the treaty might generate. It is also perfectly appropriate to conclude the opposite. Different people can reasonably disagree about how to trade off these costs and benefits, as well as the trade-off between political and environmental externalities. (This, of course, focuses just on the wisdom of pursuing an emissions-reduction policy, as in Kyoto, rather than a completely different policy, such as adaptation and amelioration of the effects, or providing compensation for any harms caused by emissions.) And if the costs of international collective action become too high, it is perfectly appropriate for individual countries to act unilaterally or bilaterally to bring about constructive results with lower economic and rent-seeking costs.

Samuelson concludes:

What we have now is a respectable charade. Politicians and advocates make speeches, convene conferences and formulate plans. They pose as warriors against global warming. The media participate in the resulting deception by treating their gestures seriously. One danger is that some of these measures will harm the economy without producing significant environmental benefits. Policies motivated by political gain will inflict public pain. Why should anyone applaud?

More generally, both the New York Times and Washington Post editorials are very taken with (one might even say that they "adored") Breyer's comment that ordering the removal of the Texas monument could "create the very kind of religiously based divisiveness that the Establishment Clause seeks to avoid," suggesting that both Editorials believe that the touchstone for interpreting the Establishment Clause is the potential for "divisiveness." I have heard esteemed constitutional law scholars make this argument as well.

Leaving aside for the moment whether the opinions were correctly decided or not, or whether the purpose of the Establishment Clause is to minimize social divisiveness, the idea that the Supreme Court has any idea what could make for more or less divisiveness on this issue is, quite frankly, preposterous.

Eugene questions whether Supreme Court intervention in this area has actually tended to reduce rather than increase divisiveness.

I think there is a more important point here--how can the Supreme Court possibly know what exact type of religious display may actually be more or less divisive? More or less divisive than the alternative? Well, who in the heck knows--but that is the point isn't it? How can the Supreme Court possibly know what the most divisive policy is with respect to these hair-splitting distinctions.

If the Supreme Court is going to leave the realm of constitutional principle and engage in the policy analysis of social divisiveness, surely it has some obligation to have some foundation deeper than hunch and guesswork, doesn't it? It seems like it has to at least have some empirical foundation for its judgments.

Now, I have not seen a shred of serious empirical evidence that would answer Eugene's question or provide any guidance whatsoever about the degree of "divisiveness" of a given opinion. And isn't it obvious that the purported divisiveness of a given display will differ very much from one location to another? It is bad enough that the Supreme Court thinks it is qualified to engage in this sort of hair-splitting without any empirical evidence to support it ("not removing this one is divisive, removing that one would be more divisive than the divisiveness it is supposed to cure"); it is even worse when it is pretended that this is proper jurisprudence.

In fact, I'll bet that on an actual "divisiveness" scale, both displays rated pretty low--I'll bet few people really cared much about them one way or the other. And I'll bet that the communities in these cases reached a fairly consensus agreement on what they would be willing to tolerate.

Compare the mythical nature of the likely divisiveness in these cases with, say, the recent political comments by Karl Rove and Senator Durbin. Yet nobody thinks that the divisive nature of those comments has anything to do with whether they are constitutionally-protected. If so, then public divisiveness doesn't seem to get us very far as a constitutional concept. And if it does, then let's apply the concept where it really matters.

In sum, the whole discussion of the supposed "divisiveness" of religious displays seems silly to me. No serious empirical evidence is offered to back it up, and there is no reason to think that the Supreme Court has comparative advantage in weighing degrees of "divisiveness." It seems far better for the Supreme Court to actually try to make principled rulings rather than to pretend like they actually have some empirical data to back up what amounts to personal, uninformed hunches of nine inside-the-beltway lawyers.

And for those running a mental regression on the New York Times Hypothesis, its not clear how to code this outcome:

The Supreme Court reached opposite results yesterday in a pair of cases involving the Ten Commandments, upholding a display of the commandments on the grounds of the Texas Capitol, while striking down displays in Kentucky courthouses. The rulings will be criticized from all sides; we would have preferred the Texas case to have come out the other way. But taken together, they are an important reaffirmation of the nation's commitment to separation of church and state.

And just to clarify--the precise hypothesis, as I understand it, is that the best predictor of the outcomes in Supreme Court cases is the preference of intellectual and societal "elites." Because the preferences of this group is difficult to measure, if one were to run a regression, the operational variable that one could use to proxy for this variable would be the views of the New York Times Editorial Board.

So the hypothesis is that the prevailing views of the country's elites is the best predictor of outcomes in Supreme Court cases, as opposed to other variables (such as political ideology, general public preferences, etc.). The 10 Commandments case would be hard to code on that basis. (The Washington Post is similarly equivocal, "The court's approach may not be philosophically satisfying, but in practical terms, it isn't a bad way to evaluate public religious monuments.").

From today's New York Times Editorial:

With the religious right clamoring for more religious iconography in public spaces, it is understandable that the court might have shied away from a dramatic ruling that would have heightened what is already a strong antagonism toward the judiciary among some conservative groups. Ceding some ground on Ten Commandments displays may seem like a way to keep the peace. But as our country becomes more religiously diverse, putting one faith in a privileged position is likely to create more religious strife, not less. As with so much else, the founders, who came up with the idea of a clear wall of separation between church and state, had it right.

Its one thing to agree with the opinion and make an argument that the interpretation of the First Amendment should change with the ages, but no one seriously believes that it was the founders who "came up with the idea of a clear wall between church and state" do they?

There has been much criticism lately about so-called "exotic mortgages" that are creating a "housing bubble" ((expressed by David, among others).

Although often lumped together, the two are distinct. And I'm not sure I see what the problem is here. I want to focus on the supposed harm of exotic mortgages, especially interest-only mortgages (which are said to create the housing bubble by allowing people to borrow "too much" and forcing up home prices).

The concern, as I understand it, is that people who have interest-only loans (for instance) are going to be hurt if home prices fall (although it is not clear why they would, if everyone is adopting the new mortgages--but I digress). The idea is that if housing prices fall, and if they have to sell their house, they will be forced to come up with a big wad of cash to make up for the shortfall. And so these exotic mortgages are said to be "bad." Now here's what I don't get:

Households have three basic sources of capital--human capital, financial capital (stocks and other financial investments), and their homes. For obvious reasons, there is a very high correlation between and individual's human capital and their home values--local real estate markets are tied very closely to local economic conditions (i.e., salaries/human capital). So, for instance, a few years ago, Boston simultaneously suffered a downturn in its high-tech sector, leading to layoffs and pay cuts, while naturally also reducing housing prices. Thus, Bostonians simultaneously suffered dramatic reductions in both the value of their human capital and residential real estate investments.

So, the correct strategy to minimize one's mortgage payment (such as by paying only interest and not making the additional principal payment?) and to instead invest the difference in a diversified financial portfolio of stocks or other financial assets that are not so closely tied to the local economy. It seems to me that it is not correct to pay down the principal on one's mortgage, which would increase the covariance of your human wealth with your home equity. In fact, it is likely that one of the reasons why housing prices have been rising is because the moribund stock market seems to be inducing some people to remove their assets from the stock market and to put them into residential real estate.

Moreover, money paid in as principal on your house (such as a downpayment) is dead capital--and the only way to get it back out to invest is to take out a home equity loan, which usually has a higher interest rate than it would be if you were just paying interest in the get go and using the saved principal payments for other purposes. So because of the time value of money, you are getting poorer when you pay down principal on your loan that does nothing for you, because you aren't getting any interest on this money. And this doesn't even take into account the "home equity trap" that may mean that you can't get approved for a home equity loan when you most need it, such as when you become unemployed.

And the primary wealth accumulation component of a house is the speculation appreciation in value, not the paid-down equity. Thus, that paid-down equity will do little to hedge against the upside or downside risk of property value fluctuations. So it seems to me that we want to encourage individuals to minimize their principal payments on their houses and instead to diversify that money into financial assets that will diversity away from the risk associated with human capital. In other words, rather than encouraging people to make worthless principal payments on their mortgages that do nothing for them, we would be better off encouraging them to invest in financial assets, and if their houses actually fall in value, then they can tap these savings if they need to make up the difference.

So the question of what happens if housing prices fall (or interest rates rise) is only half the question. The other half is what happens if housing prices don't fall that much, or interest rates don't rise that much? In that case, all of those who earned effective negative rates of return on piled-up principle payments on their home mortgages will be the ones who are worse off in an opportunity cost sense as compared to those who invested those funds. Obviously there is a risk issue here either way, as there always is. For instance, just a year or two ago Alan Greenspan was noting that Americans who had entered into 30-year fixed mortgages had paid millions of dollars in higher interest fees than they would have paid had they held variable-rate mortgages that would have allowed them to ride the interest rate market down.

So, it seems to me, rather than hand-wringing about exotic mortgages and housing bubbles in isolation, the relevant question is whether people have properly diversified their wealth holdings in case the housing bubble does burst and in case a fall in housing prices is offset by a rise in the price of financial assets. On that issue, I have seen little intelligent analysis recently.

Update:

Interesting and extended comment on my post at Shivering Timbers, which for some reason the Trackbacks didn't pick up. I commend the entire long version of the post, but here's a summary he sent me:

In summary, I think there are two flaws in your analysis.

First, most people don't think in terms of risk as "deviation of expected return" but rather the odds that an unforeseen event will have a negative impact on their lifestyle. Exotic mortgages (and any other strategy to increase the leverage of one's home) increase this lifestyle risk by increasing the odds that some negative event (job loss, etc.) might cause a forced-sale situation. Most people would consider losing their home a much more negative event than an unrealized decrease in the value of the home.

Second, even though exotic mortgages can be used for good or bad (just like any tool), your analysis supposes that people are using them as part of a well-considered asset diversification strategy. While I'm not aware of any data specifically addressing this point, everything I've seen (such as the dramatic increase in the percent of homes bought purely for investment) suggests that this tool is in practice being used to buy more home(s) than people could otherwise afford, in the hope of future asset appreciation. In other words, the leverage is being employed to increase asset concentration, not decrease it. This is classic bubble behavior.

Fascinating story by James Tooley describing the research he and Pauline Dixon are doing on the growth of private schools for the poorest of the poor in the developing world. The research, and the efforts it describes, are among the most fascinating and important efforts to improve the plight of the poor around the world:

The accepted wisdom is wrong. It ignores the remarkable reality that the poor in Africa have not been waiting, helplessly, for the munificence of pop stars and western chancellors to ensure that their children get a decent education. Private schools for the poor have emerged in huge numbers in some of the most impoverished slums and villages in Africa. They cater for a majority of poor children and outperform government schools, for a fraction of the cost.

My research has found this in Kenya — where the international community might excuse the inadequacy of state education as a blip while free primary education beds down. But it’s as true in Ghana and Nigeria too — where free primary education has been around for a long time, supported by generous handouts from the British government and the World Bank.

For what its worth, some frank predictions I have heard as to why Rehnquist won't retire:

"He has been there long enough to know that when you leave the Court you shrivel up and die. He has seen what happened to Blackmun, Marshall, etc. If he leaves, he'll be dead in six months. Without the Court, most Justices have no life."

"Former Supreme Court Justices are nobodies, unlike former Congressmen and Cabinet Secretaries. For someone whose whole life has been built around the Supreme Court and Washington, he can't accept being a nobody. They even kick them out of the Supreme Court Building."

"He's so stubborn, the only way he will leave is when it is clear he is doing it on his terms, rather than being pushed."

On the hand, it has also been observed that these reasons would not apply to O'Connor--who who has a life outside Washington and outside the Court, and could retire to her ranch and grandkids in Arizona.

Interesting profile in the NY Times on several new conservative filmmakers, including Evan Coyne Maloney's expose of campus speech codes in "Brainwashing 101."

Freeport moves to seize 3 properties: Court's decision empowers the city to acquire the site for a new marina:

FREEPORT - With Thursday's Supreme Court decision, Freeport officials instructed attorneys to begin preparing legal documents to seize three pieces of waterfront property along the Old Brazos River from two seafood companies for construction of an $8 million private boat marina.

***

The tracts of land would be used for a planned 800- to 900-slip marina to be built by Freeport Marina, a group that that includes Dallas developer Hiram Walker Royall. He would buy the property from the city and receive a $6 million loan from the city to develop the project.