Quotes of the day

The tramp is freer than president or king, but his freedom is his undoing. While he lives he remains socially sterile and when he dies he leaves behind him nothing to make the world glad he lived.--A.W. Tozer

... trying to invest like "Warren Buffett" is among the stupidest things anyone can do with their money. Buffett is a freakish outlier whose success no one can explain. Stock picking is a losing game for most people, whether over the long or short term. No amount of meticulous research will allow you to consistently outsmart the market. And that's the key to value investing. To invest like Warren you have to consistently outsmart the market, or at least outsmart the market to such a large degree that it overwhelms the times the market outsmarts you.--John Carney

What we witnessed was truly a perverse form of competition. [Visa] competed on the basis of raising prices. What other industry [besides debit cards] do you know that gets away with that?--Ronald Congemi

... we’d probably do better to isolate the worst kids in their own school or work hell; they’d be worse off but the gains to other students would more than compensate. At the other end of the status spectrum, the number of new businesses we get seems limited by the number of folks personally wealthy enough to start new businesses. So having more really rich folks benefits everyone via innovation.--Robin Hanson

I graduated law school in 2003, owing Harvard University just under $150,000. At the time, I had no idea what starting my professional career $150K in the hole would do to my life. I figured I’d work hard, make money, and I’d pay my loans out of my general non-disposable income funds — kind of like my cable bill. Seven years, two careers, numerous deferments and defaults, and one global economic meltdown later, I still owe a ton of money. Now, however, I pay it to various debt collection agencies and lawyers. When prospective landlords run a pro forma credit check on my application, they come back looking at me like I’ve been convicted of multiple war crimes. Every raise I’ll ever get will be eaten up by the collection agencies until sweet death allows me one everlasting and satisfying default. And, oh yeah, I don’t even want to practice law anymore — I quit my Biglaw job because, despite the debt, I really wanted to have a job that I enjoyed. So I essentially purchased a $150,000 disposable good. My time working in Biglaw was kind of like a very expensive vacation that I debt financed. ... Let me get this straight, you owe six figures and yet 32% of you “planned” to get a job paying in the low five figures? That was your plan all along? Wow. That sounds even worse than my retirement plan of winning the lottery.--Elie Mystal

I deliberately tried to write my post to avoid remarks directed at raising or lowering the relative status of the commentators, a good overall habit (which I don't always follow and which hardly any commentators on other blogs seem to follow). --Tyler Cowen

[Harry Reid] was wowed by Obama's oratorical gifts and believed that the country was ready to embrace a black presidential candidate, especially one such as Obama - a ‘light-skinned’ African American ‘with no Negro dialect, unless he wanted to have one,’ as he said privately. Reid was convinced, in fact, that Obama's race would help him more than hurt him in a bid for the Democratic nomination.--Mark Halperin and John Heilemann

I deeply regret using such a poor choice of words.--Harry Reid

Widely cited health-care economist Jonathan Gruber, a professor at MIT, accepted money from the federal government at the same time he advocated for reforms proposed by the Obama administration.--Aleksandra Kulczuga

Michael [Belongia] starts off with some interesting anecdotes about how Fed chairmen often abuse their powers. In one case he discusses how Greenspan used to do an end run around the FOMC, so that he could get his preferred fed funds target (and make it look almost unanimous), even if a number of FOMC members were initially opposed. Another example involves Volcker vetoing the choice of monetarists like Lee Hoskins and Jerry Jordan for the position of regional Federal Reserve Bank presidents. The view from the inside is not pretty. He then does a really nice job of explain why fed funds targeting often ends up being procyclical, pouring fuel on the fire.--Scott Sumner

So we ought to tax bank profits because . . . GM is losing money just like everyone said it would. I am all for regulation which prevents banks from taking on too much leverage--or encouraging others to do so by offering stupid loans. I would very much like to find a system of financial regulation which results in a financial structure that isn't so utterly dominant (and bloated) as it has been for the last two decades. But I'm failing to see why the banks in particular--or rather the customers of the banks who will enjoy higher fees and lower interest rates--ought to bear the financial cost of the Administration's ill-advised bailout of the UAW.--Megan McArdle

The United Nations is a pain in the butt. It pays no taxes and annoys hard-working New Yorkers with its sloth, pretensions and cavalier disregard for traffic laws. The place is a sinkhole dominated by anti-American, anti-Semitic and authoritarian fantasies. It is far from the elegant crown jewel that celebrated the U.S.'s global ascendancy after the Second World War.--Joel Kotkin and Robert J. Cristiano

[Edward Castronova] was stunned to discover that the EverQuest platinum piece was worth about one cent US—higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the EverQuest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game—the equivalent of $3.42 (US) per hour. “That’s higher than the minimum wage in most countries,” he marvelled. Then he performed one final analysis: the Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia. It was the seventy-seventh richest country in the world. And it didn’t even exist. Castronova sat back in his chair in his cramped home office, and the weird enormity of his findings dawned on him. Many economists define their careers by studying a country. He had discovered one. ... Barely a few months later, Castronova’s paper became the most downloaded paper in the [SSRN] entire database—beating out works by dozens of Nobel laureates. Today, it’s still in the top three. ... Ultima programmers soon fixed the [counterfeit gold] bug. But then they had a new problem: how do you drain all the excess gold out of the economy and bring prices back to normal? They hit upon the idea of creating a rare type of red hair dye and offering it for sale in small quantities. It had no real use but, because it was rare, it became instantly popular and commanded an enormous price—which leached so much gold out of the system that inflation subsided. But the programmers had to meditate for hours on what possible side effects their “fix” might have.--Clive Thompson