Quotes of the day

Overall, a $1 increase in prescription drug spending is associated with a $2.06 reduction in Medicare spending.--Baoping Shang, Dana P. Goldman

... bank capital regulations, which were supposed to promote safety and soundness, did the opposite. There was excessive leverage, because the banks were able to hold the same risk with less and less capital needed to comply with regulations. The methods used to create this regulatory capital arbitrage involved tight interconnections among firms, creating domino effects. And the funding mechanisms for these new financial structures involved short-term lending, making the system vulnerable to 21-century bank runs. Thus, all of the main elements of the financial crisis were policy-driven, because of self-defeating housing policy and bank capital policy.--Arnold Kling

... if every deviation from the ideal is a reason to be panicked and stampeded into putting dangerous arbitrary powers into the hands of government, then go directly to totalitarianism, do not pass "Go", do not collect $200. --Thomas Sowell

The Wall Street meritocracy was a game to Dick Fuld, Lloyd Blankfein, Jimmy Cayne and the rest of Wall Street, and amid that game Hank Paulson and Ben Bernanke pulled a chair out from it -- and Fuld was left standing while Merrill Lynch & Co.'s John Thain and Citigroup Inc.'s (NYSE:C) Vikram Pandit caught the last seats. Sadly, amid that game ... the music could stop at any moment for those still living in Wall Street's meritocracy.--Matthew Wurtzel

California remains an important story for its lesson in political failure, cousin of the term market failure. Its ambitions overstretched its capacities, and now the government is struggling to find balance with a handful of dysfunctional political institutions in the way. We can only hope they get a constitutional convention in place that establishes a workable government -- and not one that just jacks up tax revenue potential. That way spells brain drain.--Tim Kane

... protests are a bad idea. You will always be judged by your looniest adherents, in part because badly hand-lettered signs with ho-hum slogans at a PTA level of anger are just not very photogenic. Unless you can police your movement as effectively as, say, the Civil Rights marchers did, you will likely end up giving your political enemies ammunition. And of course, the Civil Rights movement was more easily able to present a united front because people who acted anything but saintly in their Sunday best were very likely to be beaten by the actual police.--Megan McArdle