This week brings proposals for a bailout for the arts and even a bailout for newspapers.

Megan McArdle is right on the money, as usual. An auto industry bailout would be a massive waste of taxpayer money and would only postpone the inevitable. Unfortunately the Democrats will almost certainly do it anyway for political reasons.

Economist Tim Harford's engaging and thought-provoking new book is The Logic of Life: The Rational Economics of an Irrational World. It is Harford's second contribution to that lucrative contemporary genre of pop-economics inaugurated by Levitt and Dubner's megabestseller Freakonomics and by Harford's excellent debut, The Undercover Economist.

The goal of this book, like its predecessors, is to apply rational choice theory and evidence-based economic analysis to all kinds of conundrums and social forces that are familiar from everyday life. This time, the topics tackled include divorce, teenage sex, gambling, racism, and workplace politics. The point is that even seemingly irrational phenomena like racism, poverty, and exuberant executive "compensation" can be explained (though not justified, Harford emphasizes) in rational terms if we analyze them in the harsh light of economic incentives.

While I'm sympathetic to this view in general, I think that Harford, Levitt, et al. sometimes give short shrift to alternative hypotheses in their rush to explain everything in terms of the rationalizations of Homo economicus. For example, many "irrational" behaviors like drug abuse, teen suicide, antisemitism, and religious awakenings are cyclical in nature, like hemlines or musical fads. They spread like social viruses (memes). Cocaine was popular in the 1880s and the 1980s, but not in the 1950s. Understanding why requires understanding the workings of social networks and trends, not just plans and incentives.

I hadn't understood squat about the mortgage crisis until I listened to The Giant Pool of Money, which aired on NPR's This American Life on May 9, 2008. That broadcast, by a crack team of NPR reporters, was a revelation. The same team has a blog called Planet Money where they investigate and explain the current economic crisis better than any other news source I've found.

Milton Friedman, who died last week, was in my opinion the greatest American intellectual of the twentieth century. Friedman was an eloquent, principled, rigorous, and tireless defender of human freedom in all spheres of life, not just economics. In the U.S. he helped end the military draft. He was, alas, less successful in efforts to promote school choice and end the war on drugs, but inevitably his positions on these issues will be vindicated as well. Free to Choose, Milton and Rose's popular manifesto, is more than 25 years old now but still feels revolutionary.

Gary Becker's tribute to Milton Friedman