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Federal funding of research in the physical sciences as a fraction of GDP fell by 54 percent in the twenty-five years after 1970. The decline in engineering funding was 51 percent.

Sixty-nine percent of U.S. public school students in the fifth through eighth grade are taught mathematics by a teacher without a degree or certificate in mathematics.

Ninety-three percent of U.S. public school students in the fifth through eighth grade are taught the physical sciences by a teacher without a degree or certificate in the physical sciences.

Thirty years ago, 10 percent of California’s general revenue fund went to higher education and 3 percent to prisons. Today nearly 11 percent goes to prisons and 8 percent to higher education.

The total annual federal investment in research in mathematics, the physical sciences, and engineering is now equal to the increase in U.S. health-care costs every nine weeks.

China’s Tsinghua and Peking Universities are the two largest suppliers of students who receive Ph.D.’s—in the United States.

And finally, our embarrassing favorite: 49 percent of U.S. adults do not know how long it takes for the Earth to revolve around the Sun.

Rules

An essential part of America’s traditional formula for prosperity is the appropriate regulation of American business. When conceived and administered properly, regulation has occupied a middle ground: neither so strong as to stifle innovation, entrepreneurship, and economic growth, nor too light to prevent the excesses and failures to which the free market is susceptible. In the Terrible Twos we managed the trick of going too far in both directions.

The thicket of federal regulations under which the private sector must operate continued to grow during the last decade. In 2007, the Code of Federal Regulations, which includes the text of existing regulations, totaled 145,816 pages, and has since expanded. It is difficult to believe that every one of the listed regulations enhances the well-being of American citizens. Moreover, regulation can have unintended adverse consequences. In 2005 Congress, under pressure from the credit card and financial services industries, passed the Bankruptcy Abuse Prevention and Consumer Protection Act, a law making it much more onerous for a person or an estate to file for Chapter 7 bankruptcy and then start over with a clean slate. Under the new law, explained the website eFinanceDirectory.com, “you can no longer claim Chapter 7, and therefore dismiss all of your debts, unless you make less than your state’s median wage. Chapter 7 now stipulates that you must take a debt management class affiliated with the National Foundation for Consumer Credit at least 6 months BEFORE you’re eligible to apply for bankruptcy.” We are not in favor of encouraging recklessness, but we are in favor of encouraging risk-taking. And some experts speculate that one reason for the sharp drop-off in entrepreneurial start-ups during the Great Recession—a drop of 23 percent as opposed to the usual 5 percent in previous recessions, according to McKinsey’s research—is that fewer people are willing to take calculated risks and start new companies owing to this change in the bankruptcy laws. Ever since the dot-com boom, many small entrepreneurs have used their credit cards as their original source of venture capital. Now it is much riskier to do so.

In the Terrible Twos, however, other areas of the financial and energy sectors in the United States suffered from too little regulation. The catastrophic financial meltdown of 2008 occurred in the wake of considerable deregulation of the nation’s financial system, which was spurred by, among other things, the belief that the financial industry could largely regulate itself, and that the separations between traditional commercial banking, on the one hand, and investment banking and proprietary trading on a bank’s own behalf, on the other—separations put in place to prevent a recurrence of the Great Depression—were no longer necessary. This belief turned out to be wrong, and devastatingly so.

To be