Quotes of the day

Some strategies that fail ex post might be optimal ex ante.--Greg Mankiw

Someone is lying about the Iran [uranium enrichment program] negotiations. Time will tell who that someone is. --William Jacobson

Here is why I respect Belichick so much. The data suggest that he actually probably did the right thing if his objective was to win the game.--Steven Levitt

An eclectic essayist is necessarily a dilettante, which is not in itself a bad thing. But Gladwell frequently holds forth about statistics and psychology, and his lack of technical grounding in these subjects can be jarring. He provides misleading definitions of “homology,” “sagittal plane” and “power law” and quotes an expert speaking about an “igon value” (that’s eigenvalue, a basic concept in linear algebra). In the spirit of Gladwell, who likes to give portentous names to his aperçus, I will call this the Igon Value Problem: when a writer’s education on a topic consists in interviewing an expert, he is apt to offer generalizations that are banal, obtuse or flat wrong.--Steven Pinker

But the government owned AIG, which created the situation that Germans call Anstaltslast: the fact that state-owned companies simply don’t default on their obligations. The government was also battling a major crisis using the only weapon at its disposal: enormous amounts of liquidity. When you’re putting out a fire, you don’t stop to worry that large amounts of liquidity are going to end up where you don’t particularly want them — the important thing is putting out the fire. So yes, given a bit more aggression and foresight, the Fed could have tried to cram down a haircut onto AIG’s counterparties. But at the time, no one was particularly interested in being harsh to the global financial sector; instead, they were trying to rescue it. With hindsight, it now seems that companies like Goldman Sachs have turned out to be the biggest winners, paying out billions of dollars in bonuses even as the rest of the country struggles with an extremely nasty recession. But that wasn’t particularly foreseeable.--Felix Salmon

While there have been hedge fund losses during the crunch, the hedgies have not endangered financial stability to anything like the extent that regulated financial institutions have. This could well be because they are diversified in their risk taking, relatively small, and typically not highly leveraged. It is clear that 10,000 small, diverse, low leverage firms form a much more stable financial system than 10 huge, similar, highly leveraged ones.--David

Professional traders – and I’m not including the risk-junkie cowboys who drove the derivatives mess to heck in a handbasket – understand [that big losses are expensive and can set you back years]. And because they do, they focus the majority of their efforts on avoiding losses, instead of on capturing gains. It’s counter-intuitive, but it really makes a difference.--Keith Fitz-Gerald

The fact is 4.1 million jobs — and counting — have been lost under this president — the most since Herbert Hoover.--Don Surber

I'm a registered Democrat living in New York City, and I buy my own health insurance. But now, having seen the health-care reform bill that passed the House, I'm preparing for life without health insurance. And unless I'm the only person covered under the Empire Blue Cross/Blue Shield "Tradition Plus" plan, a lot of other people will end up just like me, uninsured. I will gain one thing, though—an annual fine for losing my insurance. The exact amount of that fine isn't clear yet, but so far it looks like I'll be paying about the same amount—$2,000 a year—for having no insurance as I do now for having it.--Andrew Heinze

I’m a forty-four year old, healthy, athletic woman raising five kids and governing a large state, I thought as [~300 lb Steve Schmidt's] words faded into a background buzz. Sir, I really don’t know you yet. But you’ve told me how to dress, what to say, who to talk to, a lot of people not to talk to, who my heroes are supposed to be and we’re still losing. Now you’re going to tell me what to eat?--Sarah Palin

CNN was so sick of Lou Dobbs, it gave him an $8 million severance package to leave.--Michael Shain

Obviously, if I had rescued the hostages or they had not been taken, I would have been re-elected.--Jimmy Carter

Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).--Steve Landsburg