Quotes of the day

... something that is good for the public ... is not necessarily a public good (something that taxpayers ought to subsidize).--Arnold Kling

Other people may have Ph.D.s in economics, but they're not economists. They don't think like an economist.--Milton Friedman

We are all prisoners of where we have been. The longer you are attached to a place, the harder it is to see it without rose-colored glasses. When [John] Thain got to Merrill, he started moving quickly to put the problems behind him.--James Cox

In order to avoid a federal bailout like the one we saw with the savings and loan industry, policymakers may want to consider a variety of alternatives, including privatization of one or more of the GSEs.--Jay Cochran & Catherine England, back in 2001

When [Cato Institute President Ed] Crane responded that Cato never accepts government funding, he received a starchy letter from Fannie Mae hotly denying that it was in any way a government entity.--George Will

Fundamentally, the Fannie and Freddie debacle is about the role of government in a free society. If government is limited to protecting people and property, and individuals are allowed to keep the fruits of their labour and to bear the risks of loss, then capital will be efficiently allocated.--James Dorn

These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, producing the housing bubble. --Walter Williams

...the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to around 2,000 billion euro, (more than Fannie Mai) or over 80 % of the GDP of Germany. This is simply too much for the Bundesbank or even the German state to contemplate, given that the German budget is bound by the rules of the Stability pact and the German government cannot order (unlike the US Treasury) its central bank to issue more currency. The total liabilities of Barclays of around 1,300 billion pounds (leverage ratio over 60!) surpasses Britain’s GDP. Fortis bank, which has been in the news recently, has a leverage ratio of "only" 33, but its liabilities are several times larger than the GDP of its home country (Belgium).--Daniel Gros & Stefano Micossi

Never again will we risk another Holocaust.--Sarah Palin

For [Jerry] Manuel, the team is what counts; while for [Willie] Randolph, his main focus was on himself, and the team came second.--Michael Gorman