Quotes of the day

Instead of listening to the left of the party, which wants him to toughen up his anti-capitalist line, I’d like Obama to listen to the independents who seem to have shifted in droves to the Republican side in Massachusetts. Hear the message this way: “You promised to change the way Washington works. You promised to force the parties to work together, and to make policy in the open. You promised to stop the back-room deals. You broke your word. You gave us Washington as usual, only more so. It’s trench warfare on Capitol Hill, and you surrendered your leadership to partisan Democrats. You went along with their stimulus plans, and you are ready to go along with their healthcare reform. You gave us a crippled, polarised Congress, and political horse-trading at its most squalid. Do something about it.--Clive Crook

I don't really think it's reasonable to say "Obama should have known that Americans were going to be disenchanted with much of his agenda, and rushed it through faster." First of all, I'm not sure how much faster it could have gone. And second of all, if Obama had thought that health care reform was going to be this unpopular, maybe he would have thought twice about doing it in the first place.--Megan McArdle

The problem is this we are spending almost a trillion dollars and folks are telling me I should vote yes and we will fix it later. You wouldn't buy a car for a trillion dollars and say yeah, it doesn't run but we will fix it later.--Rep. Stephen Lynch (D-MA)

I've maintained for months now that incremental reform in the health care package would make much more sense from my perspective.--Rep. Jim Costa (D-CA)

If there isn't any recognition that we got the message and we are trying to recalibrate and do things differently, we are not only going to risk looking ignorant but arrogant.--Rep. Anthony Weiner (D-NY)

To that end [for more transparency in the healthcare legislation process], I believe it would only be fair and prudent that we suspend further votes on health care legislation until Senator-elect Brown is seated.--Sen. Jim Webb (D-VA)

There’s going to be a tendency on the part of our people to be in denial about all this if you lose Massachusetts and that’s not a wake-up call, there’s no hope of waking up. It’s why moderates and independents even in a state as Democratic as Massachusetts just aren’t buying our message. They just don’t believe the answers we are currently proposing are solving their problems. That’s something that has to be corrected. The only we are able to govern successfully in this country is by liberals and progressives making common cause with independents and moderates. Whenever you have just the furthest left elements of the Dem party attempting to impose their will on the rest of the country -- that’s not going to work too well.--Sen. Evan Bayh (D-IN)

... since Scott Brown has won and the Republicans now have 41 votes in the Senate, that approach is no longer appropriate. I am hopeful that some Republican Senators will be willing to discuss a revised version of health care reform because I do not think that the country would be well-served by the health care status quo. But our respect for democratic procedures must rule out any effort to pass a health care bill as if the Massachusetts election had not happened. Going forward, I hope there will be a serious effort to change the Senate rule which means that 59 votes are not enough to pass major legislation, but those are the rules by which the health care bill was considered, and it would be wrong to change them in the middle of the process.--Rep. Barney Frank (D-MA)

The Republican Party was not so badly split as the Democrats by the civil rights issue. As it turned out, only one Republican senator would participate in the filibuster against the bill. In fact, [from 1933-1964], Republicans had a more positive record on civil rights in Congress than the Democrats. In the twenty-six major civil rights votes since 1933, a majority of Democrats opposed civil rights legislation in over 80 percent of the votes. By contrast, the Republican majority favored civil rights in over 96 percent of the votes.--Dirksen Center

As Obama continues to make decisions that mirror the Bush doctrine, it is becoming apparent that the former president was not ignorant or irrational in his foreign policy decisions despite the harsh criticism and disloyalty he endured. He was in fact, ahead of his time, a visionary who understood politics and warfare in the modern age of terrorism. That is why Obama is now following his lead.--Jeffrey Shapiro, attorney who served on John Kerry's 2004 legal team

I still believe that foreign aid does not raise economic growth rates, on average. But aid can alleviate human misery, such as when a visiting doctor gives vaccines or hands out medicine. (In fact per capita income may fall, as a result, if some "weaklings" are kept alive.) I also believe that the U.S. military can make a huge difference in the immediate aftermath of catastrophes. Imagine U.S. troops liberating Buchenwald. Would any commentators say the following? "Don't give him that blanket, sell it to him!" "Hey buddy, get a job!" "Moral hazard: they'll just go get captured again." etc. I don't think so.--Tyler Cowen

We therefore suggest taxing banks based on the difference between their assets at the end of August 2008 and their current level of capital. After all, the support these firms received was based on the size of assets before the financial panic began, not the size of those assets today. ... Our approach would remove the incentive for such behavior because it ties the tax to the size of the firms when the government guarantees were so valuable. Likewise, by focusing on the historical size of a bank, our plan would allow little room to engage in sham accounting transactions to sidestep the tax. As we saw in the time leading up to the crisis, banks created many legally separate companies — the infamous “special purpose vehicles” — to buy certain assets without having to put up the bank’s capital to support them. If the banks had bought the assets directly they would have been required to hold more capital. By August 2008, these tricks had been exposed; financial institutions can’t retroactively cover such vehicles back up, or make themselves seem smaller than we know they were. Nor should they be able to avoid the tax by inventing any new tricks to change the appearance of their current size. It is generally a bad idea to enact after-the-fact penalties. But giving away free insurance, as the government did during the bailout, is also bad. Our tax would merely ask financial institutions to finally pay for the insurance policy that kept them afloat. --DOUGLAS W. DIAMOND and ANIL K KASHYAP

It is common these days to dismiss as simpletons or ideologues those who speak in favor of the free market or capitalism. An honest assessment shows otherwise. Economic freedom, as represented in the Index of Economic Freedom, is a philosophy that rejects economic dogma, championing instead the diversity that follows when entrepreneurs are free to choose their own paths to prosperity. The abiding lesson of the last few years is that the battle for liberty requires perpetual vigilance. President Obama professes desire to foster prosperity, environmental protection, poverty reduction and better health care. How ironic, then, that his economic proposals so consistently ignore or even undermine the one system—free enterprise capitalism—that has proven best able to achieve those goals. Now America's once high-flying economy is barely crawling forward. Americans deserve better, and they can do better—as soon as they reverse course and start regaining the economic freedom that made America the most prosperous country in the world.--Terry Miller

Small countries like Singapore, Denmark and Switzerland seem to be more effectively governed that bigger countries like Germany, Britain and Italy. Why is that? I am not really sure, but I’d guess it is partly related to the principal/agent problem. The US appears to be an exception, but I think we are coasting on our past (decentralized) success. I wonder how much longer we can maintain our position near the top of the global PPP income rankings. Today the Heritage Index of Economic Freedom came out, and we continued to slip, down to number 8. All of the countries ahead of US are small, not just relative to the US, but relative to the UK and Italy. It’s also interesting to note that all but one were colonies of Britain when Britain was one of the most democratic countries in the world. The only exception is Switzerland, which is currently the most democratic country in the world.--Scott Sumner