Some prosecutors will say or do anything to win a case. Even if that means convicting an innocent person, letting a rapist off the hook, and smearing an 11-year old girl. Sometimes these ambitious prosecutors run for higher office and win. Sometimes they become judges. In a just world, more of them would repent and then help us to clear landmines.

The Associated Press reports on the various former Republican politicians who got fat contracts and enriched themselves in exchange for lobbying on behalf of Freddie Mac. Unfortunately for taxpayers, these amoral lobbyists were successful and the government-created entity was able to dig itself even deeper into a hole — which taxpayers are now responsible for filling.

When the Washington Nationals played their first-ever baseball game in the nation’s capital in April 2005, two congressmen who oversaw mortgage giant Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on. …The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time. Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006: Sen. Alfonse D’Amato of New York, at Park Strategies, $240,000. Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297. Rep. Susan Molinari of New York, at Washington Group, $300,062. Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader Tom DeLay, R‑Texas, $240,790. …The tactics worked — for a time. Freddie Mac was able to operate with a relatively free hand until the housing bubble ultimately burst in 2007.

Interestingly, at least one of these former politicians is contemplating a return to the political arena. He even portrays himself as a friend of the taxpayer. It is unclear, though, how much of a friend he really is considering that the story reveals that, “Freddie Mac enlisted prominent conservatives, including Gingrich…, paying [him] $300,000 in 2006, according to internal records.”

When they are the educational choices made by the world’s poorest people.

By now, most people working in international development and education have heard that some of poorest people on the planet have given up on their failed government schools and started paying for ultra-low-cost private schooling out of their own nearly-empty pockets. But the experts have usually ignored the phenomenon, or deprecated these private schools and the parents choosing them. In the past few years, however, researchers like James Tooley have blow this story wide open, revealing that fee-charging private schools are enrolling the majority of students in many Third World slums and villages, and that they are significantly outperforming the much higher-spending “free” government schools.

In a new Forbes commentary, former U.S. assisitant secretary of education Chester Finn tells how he went from skeptic to convert by seeing these schools for himself in the impoverished Old City of Hyderabad.

Want to visit these schools, too, but are a little apprehensive about the air fare? Just stay tuned until next April when Cato publishes The Beautiful Tree, James Tooley’s first-person narrative account of his research, adventures, and discoveries from the shanty towns of Africa to the remote mountain villages of Gansu, China.

If the free education marketplace can more effectively serve families in some of the most disadvantaged corners of the globe, imagine what it could do in far wealthier nations such as our own.

There is much excitement about a federal “stimulus” plan focusing on state and local infrastructure spending. At first blush, it seems like a pro-growth idea to get unemployed construction workers off the couch and onto the job site building new government highways, bridges, and the like.

However, national income data from the Bureau of Economic Analysis puts some perspective on such government investment ideas. (See Tables 1.1.5 and 3.17)

The government isn’t the only entity that builds “infrastructure.” New semiconductor plants, refineries, and electricity transmission wires are private infrastructure, which is every bit as important to economic growth as government highways. Indeed, U.S. private infrastructure investment is 4.6 times larger than all federal, state, and local investment combined.

The figure shows that gross private domestic investment was $2.1 trillion in 2007. That compared to $340 billion of gross investment for state and local governments and just $123 billion for the federal government. And note that most ($82 billion) of the federal investment was for military hardware, and thus did nothing for our standard of living in the sense of creating consumable products.

What is the policy upshot? It is far more important for the government to create an environment where private investment can thrive than it is for the government to invest itself. 

The private sector puts new factories and equipment in place when it can earn at least a normal return on the income generated over future years. The government skims off roughly a third of the return in income taxes (and most of that money dissappears down the economic black hole of transfer spending). A reduction in that skim would cause relatively little government revenue loss compared to the huge leverage effect it would have over the gigantic private sector investment budget.

So, let’s cut the corporate income tax, and while we’re at it, privatize as much state and local infrastructure spending as we can.

Illinois Gov. Rod Blagojevich (D) is innocent until proven guilty.

That said, as I blogged in October, this is a man who thinks he has the power to write the laws:

Gov. Rod Blagojevich’s agenda was dealt a major blow Friday after a state appellate court ruled he doesn’t have the power to expand state-subsidized health care without lawmakers’ approval…

Last year, Blagojevich sought to expand health-care coverage through an “emergency rule” allowing families with higher incomes—up to $83,000 a year for a family of four—to sign up. The move was quickly shot down by a legislative rules-making panel and blocked by Secretary of State Jesse White, but Blagojevich signed up people anyway…

“This is a clear and predictable message to the governor that no matter how laudable the goal is, he is not a one-man legislature and he has to work in conjunction with the General Assembly to pass this kind of program,” said state Rep. John Fritchey (D‑Chicago).

So it hardly stretches credulity to believe that a man who fancies himself a monarch might also be guilty of lesser acts of corruption like using his office to enrich himself, which is pretty much what all politicians do.

The Big Three automakers seem ready to settle for a $15 billion bailout that will probably do very little good and considerable harm.

They’re thinking too small. Much too small.

If they model themselves on the public school system, as I suggest in a new Cato Commentary, they will have a truly risk-free business model in which they will be well protected from the rigors of competition and fickle consumers.

Update: It seems I’m not the only one to see the merits of modeling the auto industry on our famously efficient and successful school monopoly. Jay Greene proposes an NCLB act tailored to the automakers.

Marie Gryphon, of the Manhattan Institute (and a Cato adjunct scholar), has a terrific new paper advocating a “loser pays” system to deter frivolous lawsuits. Here are excerpts from the executive summary:

This study argues that loser pays could be an important part of a larger effort to reduce litigation costs, better compensate prevailing litigants, and better align tort law with its goal of deterring socially harmful conduct. A loser-pays rule would discourage meritless lawsuits, but because any such rule should also ensure plaintiffs of modest means but strong legal cases access to justice, our proposal calls for:

1. A robust litigation insurance industry similar to those that now exist in other loser-pays countries; and
2. A cap on recoverable fees to eliminate the incentive that large litigants might have to attempt to “buy a verdict” under loser pays.

This study explores in depth how a loser-pays rule would change litigation in America. It includes key findings about the likely effects of loser-pays reform and evaluates previous experiments with loser pays in America.

The Status Quo

This study delves into the available evidence about how the legal marketplace works, which lawyers file low-merit lawsuits, and how they stay in business:

• The subgroup of lawyers that file most nuisance lawsuits works to obtain settlements in weak legal cases before its members ever see a courtroom.
• The American system facilitates nuisance lawsuits, since the high cost of defending against weak cases gives defendants a strong incentive to settle.
• In contrast to nuisance suits, low-merit mass torts and class-action suits are able to attract some of the best lawyers in the United States because the potential damages stemming from these suits make them very lucrative, even when they are settled for a small fraction of the amounts demanded.

Effects of Loser Pays

This paper infers from its examination of the scholarly literature how loser pays would affect the American legal system:

• Almost every economist who has studied loser pays predicts that it would, if adopted, reduce the number of low-merit lawsuits.
• 
  
  A loser-pays rule would encourage business owners and other potential defendants to try harder to comply with the law. Doing so should produce fewer injuries.
• Loser pays would deter ordinary low-merit suits, but it would not discourage low-merit class actions to the same extent because the risk of enormous losses, rather than the costs of legal defense, is the primary source of pressure on defendants to settle.