Quotes of the day

After 30 years of television, [David Letterman's] subversions are the conventions. But instead of continually seeking to subvert and undermine, now he’s aiming lower — at his audience. Instead of taking us for a joyride through the often-idiotic world of TV, he’s telling us we’re the idiots, because we’re not all New York hipsters with properly conventional politics. Letterman, it seems, has finally forgotten his Indiana roots.--Stephen Green

It is defensible to be truly agnostic. It is also defensible to believe that general principles of economic theory and empirics and ethics allow us to have "all things considered" policy views on matters we have not studied closely. It is not defensible to hold such views but, under the cloak of a not-really-meant agnosticism, refuse to put them on the social science table, so to speak.--Tyler Cowen

It's kind of embarrassing to have to explain [the failure of price controls], because it's a pretty elementary and widely understood component of the classical liberal analytical framework. I frequently disagree with liberals (obviously). But I hope I don't often airily proclaim that I don't take them seriously, because after all, they don't really mean anything they say about market failures--it's all just a fig leaf for their ideological mission to destroy the private sector.--Megan McArdle

All of these papers suggest that the search for a villain behind the crisis will ultimately be fruitless.--Megan McArdle

Can it really be that the G20 is about to adopt elaborate banker-compensation rules without a single study showing that compensation incentives contributed to the crisis?--Jeffrey Friedman

Inequality in economic resources is a natural but not altogether attractive feature of a free society. As health care becomes an ever larger share of the economy, we will have no choice but to struggle with the questions of how far we should allow such inequality to extend and what restrictions on our liberty we should endure in the name of fairness. In the end of our day of philosophizing, however, we face a practical decision: Who gets the magic pills, and who pays for them?--Greg Mankiw

If the cable and telecom companies had no legally-backed monopoly powers, I would not favor legally enforced net neutrality. "Let the market decide" would be a good answer.--Tyler Cowen

Nor is it some act of extraordinary courage that led ACORN to appoint an independent panel. At this point, ACORN's shelf life is probably about 90 days. This was not a bold, gutsy move; it's a desperate hail mary pass. Appointing an independent panel is what all organizations do when something truly indefensible has happened. I'm sure Arthur Anderson appointed an independent panel to find out why they'd been peddling their integrity to the nice folks at Enron.--Megan McArdle

To admirers, Keynes was nothing short of the savior of the capitalist system. His "General Theory of Employment, Interest and Money" (1936) proposed a diagnosis and remedy for the calamity known as the Great Depression. According to Keynes, economic downturns are not a fundamental indictment of the market economy. Rather, recessions and depressions arise from insufficient aggregate demand. A smart government can remedy the problem with its monetary and fiscal policy—say, by printing up some money and spending it. Once the right policies are put in place, the thinking goes, the world is safe again for free markets. To detractors, Keynes was an economist whose reach exceeded his grasp: He tried to replace classic economic principles with new ones of his own, but what he offered was vague and incomplete. Keynes's many followers have tried to give his theory analytic rigor, but with only limited success. Despite these intellectual deficiencies, the detractors say, Keynesians recklessly push their ideas in the political arena, where they often lead to high inflation and excessive budget deficits. The fiscal policy of the Obama administration is a case in point. When the White House pushed for a massive increase in infrastructure spending to create jobs, it was taking a page from the Keynes playbook. ... Which brings us to a third group of macroeconomists: those who fall into neither the pro- nor the anti-Keynes camp. I count myself among the ambivalent. We credit both sides with making legitimate points, yet we watch with incredulity as the combatants take their enthusiasm or detestation too far. Keynes was a creative thinker and keen observer of economic events, but he left us with more hard questions than compelling answers.--Greg Mankiw