Quotes of the day

Parents are unlikely to meet much success if they insist that their children adopt any particular set of political values. We want our son to think for himself and to come to his political views, whatever they turn out to be, ultimately because he believes in them. Nevertheless, we’re optimistic that if Thomas is reared and educated properly, he will share our classical-liberal values. We have good reason to be optimistic. Classical-liberal (or, if you prefer, libertarian) political values are no more than the application to society at large, and to government, of some of the most fundamental and indispensable rules that every decent person learns early in life and adheres to until death. What are these rules? “Keep your promises.” “Tell the truth.” “Don’t take other people’s stuff.” “Don’t hit other people.”--Don Boudreaux

Pawel joined the army and married a fellow skinhead at age 18. But his sense of self changed irrevocably at the age of 22, when his wife, Paulina, suspecting that she had Jewish roots, went to a genealogical institute and discovered Pawel’s maternal grandparents on a register of Warsaw Jews, along with her own grandparents. When Pawel confronted his parents, he said, they broke down and told him the truth: his maternal grandmother was Jewish and had survived the war by being hidden in a monastery by a group of nuns. His paternal grandfather, also a Jew, had seven brother and sisters, most of whom had perished in the Holocaust.--Dan Bilefsky

Maybe it was just my education, but much of education is backwards. You study all the hard stuff, and then you find out in the real world that you don’t use it. As long as you can use an HP 12 calculator or a spreadsheet, you have the finance knowledge that you need for most management positions. I should have taken organizational behavior and social psychology — and maybe abnormal psychology, come to think of it. --Guy Kawasaki

... certain senior level internal audit personnel do not have the professional expertise to properly exercise the audit functions they are entrusted to manage, all of which have become increasingly complex as the Firm has undergone rapid growth in the international marketplace.--Matthew Lee's internal whistleblower letter to Lehman senior management

To understand the CIA, you need to know that from its beginning in 1947, it was divided by a class system, as rigid and acrimonious as any. Everyone in the agency, wherever he or she stood, knew about it and either benefited or suffered from it. On top were the field operatives, the officers who served overseas, ran informants, conducted covert action. In the early years, most operatives came out of Ivy League schools. Many lived off trust funds, not their modest government pay. They played tennis, lived in Georgetown, and could tell the difference between a spinnaker and a jib. But by the mid-'60s, the establishment's romance with the CIA and espionage had cooled (the Bay of Pigs had a lot to do with this), and the CIA had to turn to Main Street to fill its ranks. Ohio State took over from Yale, and the bowlers from the tennis players. ... The first thing [Deputy Director Dave] Cohen did was order a "scrub" of every informant with dirty hands. Drug dealers, dictators' minions, arms dealers, terrorists—Cohen ordered the operatives to sever ties with all of them. The only problem was, these were the people who mix well with our enemies—rogue regimes like Iran and North Korea and terrorist groups like Hezbollah and Al Qaeda. [Clinton-appointed Director John] Deutch and Cohen didn't care; they had a mandate to clean up the CIA, and that's what they were going to do. ... What John Deutch set in motion was the deprofessionalization of the directorate of operations, handing it over to bureaucrats who only went overseas to get a quick taste of life in the field before returning to the safety of the Beltway. The idea that an officer would spend his entire career abroad learning the fundamentals of espionage is incomprehensible to the new CIA. ... On January 10, 2010, CIA director Leon Panetta wrote a Washington Post op-ed in which he disputed that poor tradecraft was a factor in the Khost tragedy. Panetta is wrong. An old operative I used to work with in Beirut said he would have picked up Balawi himself and debriefed him in his car, arguing that any agent worth his salt would never expose the identity of a valued asset to a foreigner like the Afghan driver. I pointed out that if he'd been there and done it that way, he'd probably be dead now. "It's better than what happened," he said. ... If we take Khost as a metaphor for what has happened to the CIA, the deprofessionalization of spying, it's tempting to consider that the agency's time has passed. "Khost was an indictment of an utterly failed system," a former senior CIA officer told me. "It's time to close Langley."--Robert Baer

... crooked Afghan cops supply much of the ammunition used by the Taliban, according to Saleh Mohammed, an insurgent commander in Helmand province. The bullets and rocket-propelled grenades sold by the cops are cheaper and of better quality than the ammo at local markets, he says. It's easy for local cops to concoct credible excuses for using so much ammunition, especially because their supervisors try to avoid areas where the Taliban are active. Mohammed says local police sometimes even stage fake firefights so that if higher-ups question their outsize orders for ammo, villagers will say they've heard fighting. America has spent more than $6 billion since 2002 in an effort to create an effective Afghan police force, buying weapons, building police academies, and hiring defense contractors to train the recruits—but the program has been a disaster.--T. Christian Miller, Mark Hosenball, and Ron Moreau

In 1973, Yassir Arafat, Chairman of the Palestine Liberation Organisation, had an unusual problem. His elite unit, Black September, had seized international headlines by kidnapping and then murdering Israeli athletes at the 1972 Munich Olympics, along with other high-profile attacks. That had forced the world to take the PLO seriously, but now that Arafat was seeking international recognition, he needed to muzzle his own attack dogs, a hundred ruthless warriors with nothing to live for but the cause. The solution was simple. The PLO married off most of Black September, offering them Beirut apartments, shapely young brides and a “child bonus” of $5,000 if they had a baby within a year. No longer did these men have nothing to lose.--Tim Harford

For Apple, which has enjoyed enormous success in recent years, “build it and they will pay” is business as usual. But it’s not a universal business truth. On the contrary, companies like Ikea, H. & M., and the makers of the Flip video camera are flourishing not by selling products or services that are “far better” than anyone else’s but by selling things that aren’t bad and cost a lot less. These products are much better than the cheap stuff you used to buy at Woolworth, and they tend to be appealingly styled, but, unlike Apple, the companies aren’t trying to build the best mousetrap out there. Instead, they’re engaged in what Wired recently christened the “good-enough revolution.” For them, the key to success isn’t excellence. It’s well-priced adequacy. These two strategies may look completely different, but they have one crucial thing in common: they don’t target the amorphous blob of consumers who make up the middle of the market. Paradoxically, ignoring these people has turned out to be a great way of getting lots of customers, because, in many businesses, high- and low-end producers are taking more and more of the market. In fashion, both H. & M. and Hermès have prospered during the recession.--James Surowieki

[Michael] Lewis is considered an expert because he worked on Wall street for 2 years and wrote Liar's Poker, an insider's view of the bluster of rich young men. As anyone who has worked in an industry for a couple decades knows, the impressions of a kid right out of college has after 2 years in a business, no matter how smart and eloquent the sojourner, are invariably quite mistaken. Indeed, Lewis's main thesis in Liar's Poker remains a theme in his latest book, the Big Short: finance is mainly an irrelevant Rube's Goldberg device for paying greedy, selfish people too much money. He notes that banks actually were shorting some products they were promoting, as if there was a big conspiracy, ignoring the fact that a market requires sellers, and increasing liquidity is a good thing because if every asset must be held to maturity, costs of financing would be much higher, etc.. Further, large financial institutions have many departments, and the fact they have different opinions is about as strange as the fact that America is full of people who disagree on whether tax rates are too high or too low. Ultimately Lewis blames everyone, but especially greedy bankers, and so in a banal sense he is correct. But Lewis will most assuredly sell more books than [Gary] Gorton, part of the reason these crises are endogenous.--Eric Falkenstein