The American Rule of Law and the Collapse of the American Economy

Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies. The American economy only works when a veil of trust and honesty under lays the enormous quantity of transactions that occur between strangers in the market every second. Legal philosophers sometimes call this cloud of trust, the Rule of Law, to distinguish the concept from real laws and court decisions. Legal philosophers, however, have too limited a view of the economic importance of the Rule of Law, generally limiting their discussion to its effect on the judicial system. The Rule of Law means that Americans can trust other Americans not to take advantage of them in financial and economic transactions. More importantly, the Rule of Law states that Americans can trust other citizens not do something that undermines the sovereign national commonwealth provided by the original endowment of individual liberty. The economy collapsed because Americans do not have confidence in their economic system. The loss of confidence revealed three deep structural legal and economic flaws that have been allowed to fester under the lazy gaze of the past two Presidents. The 3 weaknesses in the U.S. economic system have been masked by a series of speculative bubbles and political baubles, whose intractable resolution became apparent in the Spring of 2008