Elena Kagan’s nomination to the Supreme Court will presumably generate renewed discussion of this issue.

It’s an academic debate, however, since (virtually) no judges follow the Constitution. Instead, judges on the left and the right invoke the Constitution when it supports their desired outcome and ignore the Constitution when it does not. Only a few apply the Constitution consistently, indpendent of where it leads.

This is unfortunate, but it seems inevitable.

The fear that began in Athens, raced through Europe and finally shook the stock market in the United States is now affecting the broader global economy, from the ability of Asian corporations to raise money to the outlook for money-market funds where American savers park their cash.

Why should Greece’s debt woes have this range of global impacts?

One possibility, usually referred to as contagion, is that economic stress in one country causes concern or even panic about other countries.

But that story is not persuasive. If other countries have their debts under control, why should markets worry just because one small country is in trouble?

The better explanation for what looks like “contagion” is that many countries face unsustainable debt burdens, and the situation in Greece spurred markets and rating agencies to recognize this fact.  Everyone is now more aware that many of the world’s economies have been consuming more than they can produce and face the real prospect of a lower standard of living.

Arnold Kling has a new paper that argues for auditing the Fed. Arnold makes a good case, but I am not convinced.

I accept that the Fed has caused instability in the U.S. economy, and I think we would be better off without a central bank.

But a Congressional audit will just make things worse.

In particular, even a one-time or limited audit will open the door to future, more aggressive audits that evolve into a Congressional takeover of monetary policy. Whatever you think about Ben Bernanke setting interest rates, it beats Barney Frank or Nancy Pelosi setting interest rates.

So, given we have a Fed, we want it as independent as possible. You can’t fix bad government with more government.

At forbes.com.

WASHINGTON—In a move that will stoke a battle over the future of the Internet, the federal government plans to propose regulating broadband lines under decades-old rules designed for traditional phone networks.

The decision, by Federal Communications Commission Chairman Julius Genachowski, is likely to trigger a vigorous lobbying battle, arraying big phone and cable companies and their allies on Capitol Hill against Silicon Valley giants and consumer advocates.

Breaking a deadlock within his agency, Mr. Genachowski is expected Thursday to outline his plan for regulating broadband lines. He wants to adopt “net neutrality” rules that require Internet providers like Comcast Corp. and AT&T Inc. to treat all traffic equally, and not to slow or block access to websites.

The FCC’s position makes makes no sense.  Different content generates different costs of transmission, so it is efficient for internet service providers to charge different prices.

The counter claim is that existing providers have monopoly power and can therefore charges excessive prices. True. But the right solution is to allow innovation and competition to develop alternate methods of transmission.  Regulating prices just suppresses the incentive for innovation, which is bad for productivity over the long haul.

BRUSSELS — The European Union’s financial services commissioner, Michel Barnier, vented his frustration with U.S.-based credit ratings agencies Wednesday as Moody’s Investors Service put Portugal on review for another possible downgrade that could make it more difficult for the country to service its debt. …

Mr. Barnier complained that there were too few debt rating agencies, and he suggested that they were overly dominated by U.S. owners.

“There are not enough ratings agencies, not enough competition, and not enough diversity,” he said. “Why should there not be an agency that is more European than those that exist today?”

It is entertaining that Barnier is annoyed at the ratings agencies for being too negative, given all the criticism they have received over the past few years for being too positive on sub-prime debt and related assets.

Barnier is right that the government-protected oligopoly of U.S. ratings agencies is problematic. But this has nothing to do with the debt crisis in Europe.  That is occurring because millions of independent “ratings agencies” – better known as investors – have concluded that Greece, Portugal, Spain and others cannot pay their debts.

Who said the following in response to an interviewer’s question about whether the Times Square bombing suspect should get Miranda rights:

 He’s a citizen of the United States, so I say we uphold the laws and the Constitution on citizens.

Answer: Glenn Beck, on Fox and Friends yesterday morning.

I agree with Beck. If we toss out the Constitution whenever it is popular or convenient to do so, then it is meaningless.

Today is the offical release date for Libertarianism, from A to Z.  Comments welcome.

You can watch an interview about the book on youtube.com or reason.tv:

http://www.youtube.com/watch?v=-6Ka9alszwo

 http://reason.tv/video/show/jeffrey-miron-libertarianism-f

You can also attend my first book event, 7:00 PM today, at the Harvard Coop (main building, 3d floor).

But for all their support and cultural cachet, the majority of the 5,000 or so charter schools nationwide appear to be no better, and in many cases worse, than local public schools when measured by achievement on standardized tests, according to experts citing years of research. Last year one of the most comprehensive studies, by researchers from Stanford University, found that fewer than one-fifth of charter schools nationally offered a better education than comparable local schools, almost half offered an equivalent education and more than a third, 37 percent, were “significantly worse.”

Let’s say this characterization of charters is correct. Does that mean charters are unnecessary?

No. Charters pay their own capital costs, so they are cheaper than public schools. Plus, charters give parents and children more choices, which seems to make them happier independent of test scores.

The U.S. government’s massive share of the nation’s mortgage market grew even larger during the first quarter.

Government-related entities backed 96.5% of all home loans during the first quarter, up from 90% in 2009, according to Inside Mortgage Finance. The increase was driven by a jump in the share of loans backed by Fannie Mae and Freddie Mac, the government-owned housing-finance giants.

These facts leave me all but speechless; I cannot imagine a good reason for government to back any mortgages, let alone the entire market.

The American obsession with homeownership is incredibly costly. And it’s not just the moral hazard and the risk of a sub-prime crisis. It’s also the overinvestment in housing and the underinvestment in factories, equipment, and R&D.