Economic Policy After a Lost Decade – From Over-Spending to Innovation

Timothy M. Kaine *

Writings on the economic collapse that began in 2007 are legion.[1] Analysts take different perspectives on the causes of the recession and on the policies that must be implemented to return to prosperity. And, at the national level, the President and Congress vigorously contend over the appropriate strategies to put in place to both grow the economy and guard against future collapses such as we’ve experienced in recent years.

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Mixed Agendas and Government Regulation of Business: Can We Clean Up the Mess?

Thomas M. Arnold*
Jerry L. Stevens**

The history of regulation in the U.S. economy shows a cumulative growth of government involvement in private enterprise that has helped business at times and has been at odds with business at other times. The wavering views on how much regulation is warranted change over time and cut across political and philosophical ideologies. For example, in the first two years of President Barack Obama’s administration there was a push for new and large increases in regulation of healthcare and financial markets along with intervention into public markets with massive spending to bailout automakers and financial institutions. Now, in the second half of the Obama term we are seeing a call for regulatory review with an eye on reducing regulatory burdens on economic growth and job creation.

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The Chapter 13 Alternative: A Legislative Solution to Undersecured Home Mortgages

The Honorable Samuel L. Bufford*

The Great Recession that began in approximately 2008 brought severe financial difficulties to a large number of homeowners in the United States. With a rise in the unemployment rate from 4.6% to 10%,many lost their jobs and their ability to make their home payments. At the same time, with an average 30.3% reduction in housing values (which in some places has approached nearly 60%), many homes are now worth substantially less than the debt owed on mortgages secured by the homes. Some 5 million homeowners are at least two months behind in their mortgage payments, and RealtyTrac predicts that some 1.2 million homes will be foreclosed on in 2011. The housing crisis continues to get worse, not better.

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The Immediate and Lasting Impacts of the 2008 Economic Collapse – Lehman Brothers, General Motors, and the Secured Credit Markets

Edward J. Estrada *

Following the economic meltdown that began in the spring of 2008, immediate and longer term ramifications began to ripple through all aspects of the economy. Clearly, these tremors have not yet subsided, and continued fallout will be felt in the coming years. Importantly, even those companies and industries that have seemingly passed through the most immediate wave of impacts will be susceptible to the ongoing struggle to achieve sustainable growth. Many such companies may experience future defaults, largely dependent upon the strength and vitality of economic growth in the coming year and their industry performance in that time frame.

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Orderly Liquidation Authority: A New Insolvency Regime to Address Systemic Risk

Hollace T. Cohen *

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted on July 21, 2010. A key element of the Dodd-Frank Act is Title II, entitled Orderly Liquidation Authority. Title II of the Dodd-Frank Act is a new insolvency regime intended to end “too big to fail” bailouts by providing the United States government with the ability to appoint the Federal Deposit Insurance Corporation (the “FDIC”) as receiver to administer the orderly liquidation of a nonbank financial company or bank holding company whose failure presents systemic risk to the financial stability of the United States.

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The Silver Lining in the Red Giant: China’s Residential Mortgage Laws Promote Temperance Among the Surging Middle Class

Clayton D. LaForge*

The nascent Chinese middle class bypassed the “Great Recession” despite China’s global infrastructure investments suffering dire consequences. Wall Street’s toxic tranches stacked atop one another in collateralized debt obligations seemingly comprised the most epidemic and obscure entity in financial history. Media outlets reported China’s second largest commercial bank held over nine billion dollars in U.S. subprime mortgage-backed securities, yet China’s gross domestic product surged as usual by 8.7% in 2009. Members of the middle class marched on, renovating the apartment and following the latest trends.

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History Repeats Itself: The Post-Furman Return to Arbitrariness in Capital Punishment

Lindsey Vann*

The 1972 landmark ruling in Furman v. Georgia appeared to be the end of the arbitrary imposition of the death penalty in the United States. Almost everyone around the country, including the Justices who decided Furman, believed the decision permanently invalidated America’s death penalty. Though each of the five Justices voting in the Furman majority authored individual opinions with differing reasoning, each relied on the arbitrary imposition of the death penalty in concluding the punishment was unconstitutional under the Cruel and Unusual Punishments Clause of the Eighth Amendment. The Justices in the majority had little Eighth Amendment precedent to rely upon in declaring the death penalty unconstitutional, but Furman came to be known for condemning the arbitrary imposition of the penalty. The Court’s concern that the unique punishment of death not be imposed in an “arbitrary and capricious manner” seemed to indicate the Constitution would not tolerate a system where the penalty was “so wantonly and so freakishly imposed.”

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Sorry Seems To Be the Hardest Word: The Fair Sentencing Act of 2010, Crack, and Methamphetamine

Kyle Graham *

On August 3, 2010, President Obama signed the Fair Sentencing Act of 2010 into law. This measure eliminated the five-year mandatory minimum prison sentence that previously adhered under federal law upon a conviction for possession of five grams or more of crack cocaine. The Act also increased the amount, in weight, of crack that must be implicated for either a five- or a ten-year mandatory minimum sentence to apply upon conviction of any of several federal drug trafficking crimes. The latter provision significantly reduces the disparity between the amount of crack that will trigger these mandatory minimums and the amount of powder cocaine that will produce the same results. Whereas federal law previously treated one hundred grams of powder cocaine as the equivalent of one gram of crack for sentencing purposes, after the Fair Sentencing Act, the statutory ratio now stands at a mere 18:1.

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Recognition: A Case Study on the Original Understanding of Executive Power

Robert J. Reinstein *

Let’s fast-forward to a point in the near future. The President has given up on unsuccessful American mediation attempts to secure a peace treaty between Israel and the Palestinians. To resolve this longstanding impasse, the President offers his own peace plan for the Middle East, which includes the creation of the State of Palestine with defined borders, including the partition of Jerusalem, and the settlement of other outstanding issues that have divided the parties. The plan is accepted by the Palestinian Authority but not by Israel. The Palestinian Authority then declares the independent State of Palestine that has the borders and other conditions prescribed in the President’s proposal. The President quickly announces that the United States recognizes the State of Palestine with those borders and conditions. Does he have the constitutional power to so bind the United States? And suppose that Congress passes legislation to override the President’s decision. Is that legislation constitutional?

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Modeling the Congressional End-Run Constraint

Luke M. Milligan *

For over a century law professors and political scientists have shared a commitment to the study of how judges decide cases. Today the subject of judicial decisionmaking continues to hold the focus of some of the most influential scholars in law schools and political science departments. Despite their common point of study, legal scholars and political scientists have traditionally held deep suspicions about the other‘s models, data, and ideas. Their mutual distrust is a function of contending assumptions about judicial values and goals. Within political science, scholars of “judicial politics” have tended to assume that judges use their office to maximize the implementation of a broad platform of individual policy preferences. This assumption has been resisted, and in most cases flatly rejected, by the constitutional theorists of the legal academy.

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