[Chait:] Now, how about this problem we've been seeing, this wedge between rising productivity and median wages where workers are being more and more productive and aren't getting wage gains commensurate with their productivity. That doesn't seem to be connected to tax cuts or any other public policy, does it?

PO: Three things. One, fiscal policy has exacerbated [the distribution problem]; it's diverted attention from some of the things that might likely have raised median income wages gradually over time; and the third thing is I think it's feeding into a social norm or prevailing tendency that everyone's in it by themselves and that feeds the kind of outcomes that we're seeing. There isn't a social norm of raising consciousness about this disconnect and what to do about it.

First, what lessons can we learn from other nations' regulatory systems? Currently, there are more than 10 federal, state and industry regulatory bodies in the U.S. The British have only one such body. Industry experts estimate that the gross financial regulatory costs to U.S. companies are 15 times higher than in Britain. Beyond cost savings, the British enjoy another advantage: While our regulatory bodies are often competing to be the toughest cop on the street, the British regulatory body seems to be more collaborative and solutions-oriented.

With the benefit of hindsight, the Sarbanes-Oxley Act of 2002, which imposed a new regulatory framework on all public companies doing business in the U.S., also needs to be re-examined. Since its passage, auditing expenses for companies doing business in the U.S. have grown far beyond anything Congress had anticipated. Of course, we must not in any way diminish our ability to detect corporate fraud and protect investors. But there appears to be a worrisome trend of corporate leaders focusing inordinate time on compliance minutiae rather than innovative strategies for growth, for fear of facing personal financial penalties from overzealous regulators.

Second, what lessons can we learn from other nations' legal environments? The total value of securities class-action lawsuits in the U.S. has skyrocketed in recent years, to $9.6 billion in 2005 from $150 million in 1997. The U.K. and other nations have laws that far more effectively discourage frivolous suits. It may be time to revisit the best way to reduce frivolous lawsuits without eliminating meritorious ones.

Without referring to her by name, Bush mocked House Democratic Leader Nancy Pelosi for saying Democrats love tax cuts. "Given her record, she must be a secret admirer," the president said to laughter, reeling off a list of tax cuts he said she opposed.

Several organizations filed lawsuits attempting to block the MCRI [Michigan Civil Rights Initiative] from getting on the ballot, arguing the groups violated the Voting Rights Act of 1965 through intentional manipulation and misrepresentation when acquiring signatures. U.S. District Court Judge Arthur Dannow agreed that the MCRI engaged in voter fraud in his statement, but declined to remove the proposal from the ballot, writing that the MCRI defrauded all voters, regardless of their ethnicity, and such, did not violate the Civil Rights Act.

Mr. Menendez has a history of ethical lapses that have been all too common for Democratic officials in New Jersey, especially for those, like him, who continue to take an active part in local party politics. ...Our unqualified endorsement goes to Robert Menendez.

In case you’re wondering, I don’t blame the Bush administration for the latest bad economic numbers. If anyone is to blame for the current situation, it’s Mr. Greenspan, who pooh-poohed warnings about an emerging bubble and did nothing to crack down on irresponsible lending.

"Imagine if we stop being dependent on foreign oil. Brazil did it. They made a simple switch to their cars. Switched to ethanol, grown from their own crops. And it's 33% cheaper than gas," Clinton said, neglecting one key detail: cars must use three times as much ethanol as gas.

"With Proposition 87, we can switch to cleaner fuels, wind and solar power," he says in a political ad, "and free ourselves from foreign oil. If Brazil can do it, so can California."

But as a matter of fact, that's not what Brazil did.

It launched a crash program of offshore oil drilling in the late 1990s, working with a Manhattan Project-like determination to develop its own natural resources.

In 1997, Brazil opened its oil sector to foreign competition, encouraging companies like Royal Dutch Shell to explore and drill for oil in its offshore waters for the first time. It offered incentives — like tax cuts. It also turned its inefficient state oil company, Petrobras, into a for-profit company run like a real business instead of a government cash cow, forcing it to compete on an international-standard level. In short, it got out of the way.

Net result, lots more oil for Brazil — enough to enable the once-oil-dependent country to actually export some, all from fewer energy reserves than the U.S.

Brazil's new P-50 rig has boosted output to an average 1.9 million barrels of oil a day, a bit more than the 1.85 million Brazil consumes.

By contrast, ethanol output in Brazil, the world's biggest producer, is only a small share of its energy consumption.

Last year, the country squeezed out just 282,000 barrels a day mostly using sugar, a more efficient and clean-burning energy source than the corn-based stuff produced in the U.S. But sugar-based ethanol still isn't as efficient as gasoline.

Families who live in desirable areas face massive increases in their council tax bills under plans being drawn up by Labour, it was revealed...

Ministers have purchased sophisticated 'Big Brother' computer systems which calculate the desirability of an area based on the quality of local services and the types of people who live there.

The software, which will be used in the forthcoming revaluation of all 21 million homes in England, contains astonishingly detailed data on the number of households, even those who have pets, wear contact lenses or are vegetarian.

...bills could rise by as much as four times in areas which are deemed 'desirable' - sending some bills spiralling from £1,000 to £4,000.

The Acorn computer system uses marketing information obtained from companies, such as credit card and stores, to create a detailed analysis of individuals and their neighbourhoods based on 287 'lifestyle variables'.

Check out this lecture by visionary physicist David Deutsch, presented on the TedTalks site. The heart of it is a fascinating inquiry into the uniqueness of human life and human knowledge, but it includes -- almost incidentally -- with some real wisdom on the global warming debate. As I was listening, and I could hear the subject turn to global warming, I rolled my eyes -- okay, I thought, here comes the politically correct part. But I was most pleasantly surprised. Here's a really unique pro-growth and pro-freedom angle on it:

The rational thing for a layman to do is take seriously the prevailing scientific theory. And according to that theory, it's already too late to avoid a disaster, because if it's true that our best option at the moment is to prevent CO2 emissions, then that is already a disaster by any reasonable measure. So it's already too late to avoid it, and it probably has been too late ever since before anyone realized the danger.

Now the lesson of that seems clear to me, and I don't know why it isn't informing public debate. It is that we can't always know. When we know of an impending disaster, and now to solve it at a cost less than the cost of the disaster itself, then there's not going to be much argument really. But no precautions, and no precautionary principle, can avoid problems that we do not yet foresee. Hence we need a stance of problem fixing, not just problem avoidance.

It's true that an ounce of prevention equals a pound of cure, but that's only if we know what to prevent. If you've been punched on the nose, then the science of medicine does not consist of teaching you how to avoid punches. I medical science stopped seeking cures and focused on prevention only, then it would achieve very little of either.

The world is buzzing at the moment with plans to force reductions in gas emissions at all costs. It ought to be buzzing with plans to reduce temperature, and with plans to live at the higher temperature -- and not at all costs, but efficiently and cheaply. Some such plans exist, such as swarms of mirrors in space to deflect the sunlight away, and encouraging aquatic organisms to eat more carbon dioxide. At the moment, these things are fringe research. They are not central to the human effort to face this problem or problems in general.

And with problems that we are not aware of yet, the ability to put right -- the the sheer good luck of avoiding indefinitely -- is our only hope of not just solving problems, but of survival. So take two stone tablets and carve on them. On one of them, carve "Problems Are Soluable." And on the other one, carve "Problems Are Inevitable."