>Confusion sometimes arises because the past tense of lie also happens to be lay.
>Despite his financial chicanery, he lay down the country's energy policy.

Chortler has muddied the waters on this one. There's lie/lay/lain; then there's lay/laid/laid. The sentence given as an example makes no sense. It would have to be "he lays down" or "he laid down." Let's not even get into Now I Lay Me Down to Sleep or The Lay of the Last Minstrel. The whole lay/lie business is an issue most English teachers would just as soon skim over with the least possible fuss.