What's a blue sky law?

State securities laws. Each state has its own, just like they've got their own Corp Law.They emerged often before the federal '33 & '34 Acts (reponse to the Wall St crash) to control scam artists who "sold nothing but the big blue sky."

Over time they've become pretty effectively harmonized with the Federal '33 & '34 Acts in terms of definitions, and the filing process has been dramatically streamlined via the internet, so you mostly just file federal forms for new issues and periodic reporting.

But still there are differences in some key states about who can sell what to whom and when. When Blue Sky was more onerous, I "paid my dues" as a baby corporate lawyer overseeing my lawfirm's blue-skying of initial public offerings that should have been sold in all 50 states but required getting approvals or exemptions from some (e.g. Calif, Texas). And sometimes they weren't 50-state deals, but instead 35 states, or 40-something.

Personally, I think the Commerce Clause should permit more federal pre-emption rather than the states deferring to the feds for policy and efficiency purposes, but the most important thing is the result of a national financial market place. It's only gotten really out of hand when things like state-level tender offer regulations add a whole heap of complexities to what is really a nationa/globall market for control, and should be treated as such.

The division of labor between the feds and the states gets more complicated with things like personal responsibility for fraud, where a lot of the litigation would be state level (or at least have a state cause of action in addition to a federal one) and supervision. Remember also that states have their own banking regulatory and insurance regimes. And Spitzer was invading not just oversight of specific broker-dealer or insurance broker operations but the sorts of transparency and pricing provisions (both on securities issuers and on mutual funds) that can impede the efficiency of the markets for both securities and services.

One of the most important trends in the past two decades has been an essential move toward international standards and practices (accounting, disclosure, exchanges) and regulatory principles that are critical for bringing countries like China, Russia, India and Brazil into the international economic system. What Spitzer represents is a dangerous countervailing impulse at the state level in the US, with far higher potential for popular political traction.

Eliot stage-managed a fine wake-up call, and a warning to the feds that if they leave a regulatory vacuum someone's going to stick their nose in places that are unhealthy. But it's time he got out of the business.

And there endeth this afternoon's rant.

Thanks for the lesson. I had never thought of Spitzer's work that way.

As if you don't read enough already!

But seriously, the financial services sections of the FT and WSJ are juicy, and often given you a better idea of what's happening in emerging market countries than most other parts of the papers. Because litlle local items -- new legislation, turmoil among parties, civil disturbance, new investment -- will have a significant and rapid effect on local financial markets prospects so they get reported there..

As for the big picture in international financial markets and important national developments, the Economist is of course indispensable and will give you useful perspectives on an issue like Spitzer.

Good advice, and very ... Barnettian.

At least on the "what's been wrong about our approach" and the general direction we should be thinking about, I sometimes feel like Barnett has been picking at my brain. But then if like me you start with political economy and then add the security you probably get somewhere like Barnett when you focus on security and try to integrate the two. He admits he's an economic determinist.

He doesn't put enough "political" in the mix at the great power/system level, and he isn't "political/cultural" enough at the national/community level. He way overestimated how easily the military problems in Iraq could be contained and underestimated the global fallout.

His "economy" overlooks a couple of key ingredients like fiscal policy, trade and exchange rates. Oh he's good, everything gets mentioned and mentioned appropriately. But they're just not a big enough part of his doctrine.

That being said, it appears from some of the things that show up on his blog, that he's taking on board a bit more of the real world these days than is reflected in his book. And the theme of connectivity (which implies a two-way flow between Core and Gap), rather than simply "globalization" per se (which can be a one-way flow of harm to the Gap), is a brilliant way of communicating an important insight. And one that applies actually much more to the "emerging Core" like India, China, Russia and Brazil than the "left-behinds," I might add.

So far, however, he's still in the group that believes the US can afford to pay the bill for all this, yet I'm becoming more and more convinced the dollar regime is on its last legs. And I'm a bit frightented by the prospect of our political system handling simultaneously a quasi-defeat in Iraq and a major hit to the dollary's place in the international financial system (and the recession that will accompany it).Of one thing I'm sure, there won't be a lot of interest in placing "making the world a better place" at the center of a grand strategy for a new American century, if I know my fellow citizens.

Iraq has accelerated by a good decade the rebalancing of the globe and the decline of US hegemony as far as I can tell. That's all part of my "9/11 was like Sarajevo" story that I can't yet get out of my head and down in writing without sounding like Cassandra.

I look forward to seeing tomorrow night where Barnett and his briefing have evolved to now.

It begins with a quote from Lincoln: "If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it."

Shades of Barnett in the book vis a vis the big picture (but they don't believe in nation-biulding), with a more nuanced approach to the nature of American power, global institutions (in the Fukuyama sense), and with the argument you're making here -- we're the only ones who can screw it up, and the Iraq war was a step in that direction. I think you'd agree with a lot of what they're saying.