WHEN ARE FAILURES ALLOWED TO FAIL?: The Note points out that most Washington insiders think that Lott's viability as Majority Leader is now in serious trouble, and David Frum (who should know) astutely deconstructs the White House's message.

Lott's response.... is to go on vacation. He has yet to hold a press conference on this (Larry King does not count). To quote Frum: "As revolted as conservatives were by the moral obtuseness of Lott’s words last weekend, they were if possible even more aghast at their amateurism and irresponsibility." If Lott survives the current imbroglio -- I don't think his chances are great, but I reluctantly believe it's a possibility -- how effective can he possibly be as a political leader?

This leads to a bigger question: what does it take for failed political leaders to be given the boot? Obviously, failed presidents are voted out of office. Other leadership positions, however, have a more tenuous connection to electoral outcomes. For example, what the hell are Tom Daschle and Terry McAuliffe still doing holding their positions? Weren't these the guys that blew the last election to someone that half the Democratic Party believes is a moron?

There is a sharp contrast between politics and economics on this issue. Capitalism works because failures are allowed to fail. Bad ideas disappear from the economic landscape, while successes are allowed to thrive. One of the big reasons that the American variety of capitalism has more robust job growth, economic growth, and productivity growth than the continental or Japanese modes of capitalism is that the American system has far lower barriers to entry and exit for entrepreneurs. In theory, elections should function in the same way as markets, and in the long run, political failures do eventually exit the stage. However, in the short run, the "political market" is much more sluggish, which leads to the interregnum we have right now.