Quotes of the day

Last year, President Obama proposed to raise $500 billion over ten years through a cap-and-trade system that would limit carbon emissions. This year his climate policy raises nothing. The president still backs cap-and-trade, but he has caved into congressional pressure to give away or spend all that potential revenue rather than use it to help taxpayers. Cap-and-trade has thus become cap-and-spend.--Donald Marron

It is strange for a President to complain repeatedly about ten-year old policies and then not propose to change them. More importantly, this debate is not relevant to the problems we face today.--Keith Hennessey

... U.S.-based multinational firms will face $122.2 billion in tax increases over the next decade. This is a natural follow-up to President Obama's sweeping plan announced last May entitled "Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives for Shifting Jobs Overseas." The fundamental assumption behind these proposals is that U.S. multinationals expand abroad only to "export" jobs out of the country. Thus, taxing their foreign operations more would boost tax revenues here and create desperately needed U.S. jobs. This is simply wrong. These tax increases would not create American jobs, they would destroy them. Academic research, including most recently by Harvard's Mihir Desai and Fritz Foley and University of Michigan's James Hines, has consistently found that expansion abroad by U.S. multinationals tends to support jobs based in the U.S. More investment and employment abroad is strongly associated with more investment and employment in American parent companies--Matthew Slaughter

Watching chickens is a very old human pastime, and the forerunner of psychology, sociology and management theory. ... In the grand scheme of things, if we stand back and consider all the matter and energy we know of in the universe, we're a lot more similar to chickens than we are to almost everything else - all that rock and water, those suns, the endlessness of space and dark matter. Chickens are positively family.--Peter Lennox

Very few funds manage to consistently repeat top-half or top-quartile performance. Over the five years ending September 2009, only 4.27% large-cap funds, 3.98% mid-cap funds, and 9.13% small-cap funds maintained a top-half ranking over the five consecutive 12-month periods. No large- or mid-cap funds, and only one small-cap fund maintained a topquartile ranking over the same period.--Standard and Poor's

Financial innovation, on this view, is in large part the art of turning illiquid assets into liquid assets. And once an asset is liquid, it’s susceptible to highly-dangerous booms and busts. The point is that it’s pretty much impossible to have a bubble in something which doesn’t have a liquid asset class supporting it. --Felix Salmon

There remains, however, an astonishingly gaping absence in [John Kenneth] Galbraith’s worldview. While he is perfectly able to see the defects of businessmen—their inclination to megalomania, greed, hypocrisy, and special pleading—he is quite unable to see the same traits in government bureaucrats. It is as if he has read, and taken to heart, the work of Sinclair Lewis, but never even skimmed the work of Kafka. ... Galbraith’s epistemology is, in fact, neo-Marxian. Just as Marx famously wrote that “it is not the consciousness of men that determines their being but, on the contrary, their social being that determines their consciousness,” Galbraith explains resistance to higher taxation thus: “It is the nature of privileged position that it develops its own political justification and often the economic and social doctrine that serves it best.” In other words, men—except for Marx and Galbraith—believe what it is in their interest to believe. It is hardly surprising that Galbraith always writes as if what he says is revealed truth and counterarguments are the desperate, last-ditch efforts of the self-interested and corrupt. ...Galbraith has come back into fashion: not only his ideas, which imply the need for a huge and expanding class of redemptory politicians and bureaucrats to save people from a fate that would be wretched without them, but his aristocratic assumption of unchallengeable moral superiority, written in his prose as it appears to be written on President Obama’s face. How delightful to be so generous, so very right all the time, and yet make a fortune and stay at the Ritz!--Theodore Dalrymple