Bizarro hedge-fund manager Michael Burry (Christian Bale) creates credit-default swaps and hangs tight when investors in his fund see their money disappearing before the bubble bursts. Deutsche Bank trader Jared Vennett (Ryan Gosling) and de facto partner Mark Baum (Steve Carell) figure out the risk to the whole economy that this bubble created, thanks to collateralized debt obligations that have grown much larger than the thing being securitized. Boulder, Colorado garage investors Charlie Geller and Jamie Shipley (John Magaro and Finn Whitrock), who get in on the action thanks to former Smartest Guy in the Room Ben Rickert (Brad Pitt), decide to blow the whistle when a disgusted Pitt reminds them that their cashing in requires the economy to collapse. The economy collapses. Nobody goes to jail.

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The Rise of Judicial Review for Economic Liberty

Judicial review of state intrusions on economic liberty is on the move. The Fifth, Sixth, and Ninth Circuits have held that pure economic protectionism is an illegitimate government purpose and fails even the most lenient rational basis review. In Craigmiles v. Giles, the Sixth Circuit similarly struck down restriction on casket makers’ ability to sell their wares without following the regulations applicable to funeral homes. In Merrifield v. Lockyer, the Ninth Circuit also held that economic protectionism is not a legitimate government interest. The court struck down a law that created different licensing categories for different types of exterminators, and this classification had no purpose other than helping some exterminators and harming others.

This trend represents a dramatic change from what was the norm—the routine dismissal of claims of interference with economic liberty.  These dismissals were rooted in two famous (or infamous) Supreme Court decisions that decreed an extremely relaxed form of review of economic legislation that was thought to amount to no review at all. 

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Tradition and the Constitutional Curator

It is uncommon today for people to argue for the retrieval of the beliefs and institutions of prior periods once they have been set aside. Even those few who do are not usually sanguine about the odds of retrieval. Particularly in intellectual circles, it takes a certain degree of rash temerity to make such arguments—and to risk the label of traditionalism or even reaction—in light of the overwhelming intellectual prejudices in favor of progress.

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The Use and Abuse of American Foreign Policy Doctrines

middle eastern crisis with political issues of the persian gulf

American Presidents often justify their foreign policies in terms of doctrines. Most of them concern the conditions under which the United States will or will not intervene militarily abroad. A brief review of those doctrines suggests that Americans have lost much of the self-restraint that the early doctrines especially were meant to inculcate. As American foreign policy doctrines shifted from countering foreign intervention in the 19th century to regime change in the 21st century, the costs of this loss of self-restraint have escalated exponentially. Shifting to doctrines focused on regime change has destabilized the Middle East for at least a generation and made a lasting peace within that region or between it and the United States highly unlikely.

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Introducing Marc DeGirolami as Guest Blogger


I am delighted to introduce Marc DeGirolami as a guest blogger for the month of January. Marc is a professor at St. John's University School of Law, where he is also Associate Dean for Faculty Scholarship and Associate Director of the Center for Law and Religion. His writing concerns law and religion, criminal law, and constitutional law. He is the author of The Tragedy of Religious Freedom (2013), which was the subject of a great discussion at Liberty Law Talk. He is also the co-leader of The Tradition Project, a research initiative that will explore the value of tradition in a system…

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Living the New Constitutional Morality

Photo: Doug Mills/The New York Times

The presidential nominating contests continue to befuddle prognosticators, but the consensus winner of the Syntactical Caucus of 2016 is already in. Whether Republican or Democrat, the next President will almost certainly display an unreasoning proclivity for the first person singular.

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Democracy’s Last Period Problem

The budget deal last December was notable for its neglect of any reform to entitlements. The Obama years will likely be remembered for the utter failure to come to grips with our burgeoning unfunded obligations, which remain the greatest threat to our future. But don’t take my word for it. Here is the eloquent economist Caroline Hoxby:

         Programs such as Social Security, Medicare and disability have needed reform for many years because they are not fiscally sound. They will predictably impose an increasing burden on the economy. Today’s young Americans will have to be heavily taxed when they are adults to pay for benefits mainly enjoyed by previous generations. This will discourage them from working and upgrading their skills, causing future growth to slow. Most economists have agreed year after year that these programs need attention, yet reforming them always takes a back seat to agonizing about the latest crisis—even when we know that such agonizing cannot help much and that we must let the economy re-equilibrate.

Sadly, reform seems further away than ever, as Republican presidential candidates are largely silent about the issue and Democratic candidates want to add to entitlements by increasing social security benefits. One reason for less serious talk about reform, let alone action, is simple: the baby boomers are either now collecting old-age entitlements or getting ever closer to the day they will do so. Politicians are leery of annoying this massive, aging voting bloc.

This issue highlights a little discussed danger for democracy—its last period problem.

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Take It to the Bank

This coming week the Supreme Court will hear argument in Bank Markazi v. Peterson (briefs etc here). Here’s what I’ve previously written about the case:

Bank Markazi v. Peterson … concerns nearly $2 billion in foreign currency reserves held in Europe by the Central Bank of Iran. The plaintiffs hold default judgments against Iran and tried to seize the assets. Under ordinary legal principles (the Foreign Sovereign Immunities Act, as well as various provisions of New York’s Uniform Commercial Code), the assets can’t be attached. The plaintiffs’ lawyers, however, persuaded Congress to enact the Iran Threat Reduction and Syria Human Rights Act of 2012….

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Illegitimate Birth of the One-Child Policy

Chinese Boy Portrait

For 35 years the one-child policy loomed large in Western perceptions of China, and news that Beijing will now permit all couples a second child has prompted a spate of commentary. The policy’s origins, however, are not widely known. Perhaps they are felt to be self-evident. This draconian measure might seem to have been a stereotypically Chinese response to a crisis of overpopulation, shaped by Asiatic traditions of state supremacy and implemented with Maoist brutality. But that description is almost entirely wrong.

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Retro Commie Chic Tailored to This Year’s Campaign

Franklin D. Roosevelt delivers campaign speech, Topeka, Kansas (1932).

What made Franklin Roosevelt and the Greatest Generation great? Others may tell you it was defeating Nazism in a worldwide war. But Harvey J. Kaye, Professor of Democracy and Justice Studies at the University of Wisconsin, maintains that its heart and soul was none other than the Popular Front.

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