Quotes of the day

Debt didn’t get dangerously out of scale because the [government's] system was broken. It got out of scale, in part, because the system worked. The government doesn’t make people go into debt, of course. It just nudges them in that direction. ... Subsidizing debt seems harmless simply because we’ve always done it. But the fact that you’ve had a bad habit for a long time doesn’t make it less dangerous.--James Surowiecki

Given the discretion to do so, financial regulators will always do the wrong thing. ... Valuations can remain irrational much longer than a regulator can remain employed.--Steve Randy Waldman

Those who would sacrifice property rights to development end up with neither.--Alex Tabarrok

Our first stimulus bill, it seemed to me, was sort of like taking a half a tablet of Viagra and then having also a bunch of candy mixed in, you know, everybody was putting in things for their own constituencies. It doesn’t have really quite the wallop that might have been anticipated there.--Warren Buffett

I am going to argue that interest rate targeting is not what central banks really do; it's a social construction of what they really do. Interest rate targeting is not reality, it's a way of framing reality.--Nick Rowe

They all say that fighting confirmation bias is a never-ending battle. But if you can't conquer this gremlin of your own mind, you don't stand a chance of outwitting the market.--Jason Zweig

Why aren't academic economists Bayesians? If even iconoclastic behavioral economists agree that rational agents should be Bayesians, what excuse have academic economists got to be anything else?--Bryan Caplan

Most people focus narrowly on their bequests, not on the total receipts of their offspring. I doubt your children are Becker-Barro altruists. After all, you aren’t.--Tim Harford

Once people are trapped into playing, they have a hard time stopping. (Consider Vietnam.) The higher the bidding goes, and the more each bidder has invested, the harder it is to say “uncle.” The best advice you can give anyone invited to play this particular game is to decline. Some games and battles are like that: even when you win, you lose. When you see at the start that such a dynamic is likely, you’re better off just walking away.--Richard Thaler

The health-care bills under consideration would hand over to the federal government nearly all power for organizing American health care. And yet there is not a shred of evidence that Congress or the administration can handle these tasks well. Indeed, there is abundant evidence that, in a crunch to control costs, politicians will do what they always do, which is impose across-the-board payment-rate cuts. That’s certainly how the House-passed bill reduces Medicare spending. There’s no delivery system reform. It’s not “pay for performance.” There’s no calibrating of reimbursement levels based on the quality of care provided. It’s cuts for all providers, no matter how well or badly they treat patients.--James Capretta

The best solution to reducing the real burden of the public debt is neither inflation nor higher taxes, but more rapid growth of the American economy. This involves lower, not higher, taxes on investments and incomes of small and large businesses. It also requires greater concern about the fact that the US is falling behind many other countries in the proportion of its young population, especially males, who receive a higher education.--Gary Becker