A European View Of Obama’s Economic Transition Team

While he might drive you up the wall at times, Willem Buiter never fails to entertain. His latest missive at FT.com takes on the Obama economic advisory team.

Buiter finds nothing to like about them, dismissing the whole lot because they are too old, there aren’t enough serious economists, too many lawyers, they’re trade protectionists and they all carry the baggage of past failures. Buiter is at his best when he goes after the lawyers.

Far too many lawyers! I count eight of them. America is held back and at times almost suffocated by an overgrown legal infrastructure and an overweaning legal profession, much in the same way that the UK was held back and almost suffocated by organised labour during the last years before Margaret Thatcher came to power.

Lest I be the target of a class action suit by the US legal profession, let me state here that (a) some of my best friends are (or were) lawyers and that (b) a limited quantum of lawyers is necessary to support the essential infrastructure of the rule of law. Unfortunately, in the US, the legal profession has grown to an astonishing size and has become a veritable succubus preying on the body politic and on the economic resource base of the country – the ultimate rent-seeking, wealth destroying profession. According to Legal Reform Now! there are 1,143,358 lawyers in the US, one for every 200 adults. The main problem is not that there are over a million socially unproductive lawyers in the US. The problem is that these lawyers are an essential component of a dysfunctional legal framework that has created the most litigious society in the world. The damage this dysfunctional legal framework causes must be measured not primarily by the direct cost of litigation, astounding though it is, but through the actions not undertaken and the creative and productive deeds not done because of fear of litigation. The first thing we do…

Except for a depressingly small minority among them, lawyers know nothing. They are incapable of logic. They don’t know the difference between necessary and sufficient conditions or between type I and type II errors. Indeed, any concept of probability is alien to them. They don’t understand the concepts of opportunity cost and trade off. They cannot distinguish between normative and positive statements. They are so focused on winning an argument through technicalities, that they no longer would recognise the truth if it bit them in the butt. If you are very lucky, a lawyer will give you nothing but the truth. You will never get the truth, let alone the whole truth. Things have degenerated to the point that lawyers and the legal profession not only routinely undermine justice, but even the law.

But the American political system is completely dominated by this largely socially unproductive and parasitic profession. Consider the membership of the House and the Senate (according to the Congressional Research Service 170 members of the House (out of 435) and 60 Senators (out of 100) are lawyers). Consider the professional training and background of past and future presidents (including Obama, 26 out of 44 presidents were lawyers) – and weep.

That is as fine a hatchet job as I’ve seen done in some time on the members of the bar.

Buiter does except Paul Volker from his almost universal scorn of the assemblage. Apparently, beyond a certain age, age does not matter anymore. Nevertheless it’s an amusing piece and one which contains more than a few grains of truth.

Tom Lindmark

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