Quotes of the day

The continuing development of prediction markets is important because of their success in foretelling the future in politics, economics, and science.--Miriam Cherry, Robert Rogers

What we ended up with is a program in which you trade in old clunkers for new clunkers.--Senior Obama administration official

Our media and culture are permeated with romanticism about politics and voting. I wish to disenchant people for whom democratic government is a sort of religion, so that they will consider alternatives.--Arnold Kling

In fact there are diseconomies of scale in governance, which is why Ireland is richer than Britain, Austria is richer than Germany, HK is richer than Taiwan which is richer than China. Singapore is richer than Malaysia (even controlling for ethnicity.)--Scott Sumner

We find that, by standards of OECD countries, the US does well in terms of screening for cancer, survival rates from cancer, survival rates after heart attacks and strokes, and medication of individuals with high levels of blood pressure or cholesterol. We consider in greater depth mortality from prostate cancer and breast cancer, diseases for which effective methods of identification and treatment have been developed and where behavioral factors do not play a dominant role. We show that the US has had significantly faster declines in mortality from these two diseases than comparison countries. We conclude that the low longevity ranking of the United States is not likely to be a result of a poorly functioning health care system.--Samuel H. Preston, Jessica Y. Ho

In designing Medicare and Medicaid in 1965, the government essentially adopted this comprehensive-insurance model for its own spending, and by the next year had enrolled nearly 12 percent of the population. And it is no coinci­dence that the great inflation in health-care costs began soon after. We all believe we need comprehensive health insurance because the cost of care—even routine care—appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense. --David Goldhill

All of us sports fans see all sorts of “patterns” that we think are correct. Players have hot streaks, certain hitters or teams are “clutch,” great pitchers get better with age, etc. And [Bill] James showed most of these were just hogwash, or more politely what I call cognitive illusions. What I find interesting about all this is that these illusions are almost identical to the sort of faulty thinking that led people to think Keynes and Livermore were great investors. Seeing patterns where there are no patterns. James showed that sports fans routinely engage in exactly the sort of thinking that would lead someone to falsely reject the EMH, even if the EMH was true. So who are you going to believe? Me or your lying mind?--Scott Sumner

... Your Majesty [Queen Elizabeth of England], economists did something even better than predict the crisis. We correctly predicted that we would not be able to predict it. The most important part of the much-maligned Efficient Markets Hypothesis (EMH) is that nobody can systematically beat the stock market. Which implies nobody can predict a market crash, because if you could, then you would obviously beat the market. This applies also to other asset markets like housing prices. If you think it is useless to be told you cannot predict the market, then you should change your Palace investment advisor. This knowledge will protect you from a lot of investment scams like Mr. Madoff’s and will also provoke a serious discussion of how to protect your Royal Wealth against risk in an uncertain world. ... So please tell your subjects in poor countries to keep studying basic mainstream economics. This economics not only survived the crisis, it also is the proven set of ideas that get countries out of poverty.--William Easterly

... the solution to most of the major problems that confront many black people won't be found in the political arena and by electing more blacks to high office. In fact, politicians tend to be hostile to some of the solutions to problems many blacks face such as school choice as a means to strengthen education, the elimination of oppressive licensing restrictions for various occupations, and supportive of job-destroying labor legislation such as minimum wage laws. The bottom line is there is very little evidence anywhere on the planet that political power is a necessary condition for economic power. --Walter Williams

Consistent with the prior literature, when children enter kindergarten, girls and boys are observationally equivalent in both math and reading. By the end of fifth grade, however, girls have fallen more than 0.2 standard deviations behind their male counterparts in math. The math gap is equivalent to 2.5 months of schooling. Girls are losing ground in math in every region of the country, every racial group, all levels of the socio-economic distribution, every family structure, and in both public and private schools. By the end of the sample, girls do significantly worse than boys on every math skill tested. Underperformance by girls is evident not just in mean test scores, but also in the upper tail of the math distribution. On entry to kindergarten, girls make up 45% of the top five-percentiles in math test scores; by the end of fifth grade just 28% of the top five percent are female. Girls are underrepresented in the bottom tail of the math distribution in kindergarten, but overrepresented in the bottom tail by fifth grade.--Roland Fryer and Steven Levitt

I'm a little surprised that the Republicans, who are generally very good at coming up with diminutive nicknames for their opponents, never latched on to calling Sonia Sotomayor "So-So."--Jesse Livermore