Quotes of the day

The tragedy of the commons occurs when no one has the right to exclude users of a resource and, as a result, the resource is overused. The tragedy of the anti-commons occurs when many people have the right exclude users of a resource and, as a result, the resource is under-used.--Alex Tabarrok

There are two obvious features about American inner cities and neither are talked about very much (see the NYT discussion, no mention). First, most have long and deep Democratic political rule. That is, not only the mayor, but the police chief, school superindendent, and every other head bureaucrat is a Democrat. Five of the 10 cities with the highest poverty rates (Detroit, Buffalo, St. Louis, Milwaukee, Philadelphia and Newark) have had a Democratic stranglehold since at least 1961, and most dangerous big US cities are strongly Democratic. Why isn't this relevant? ... American minorities don't need money, pity, or special rights, they need temperance, diligence, thrift and other bourgeois virtues, exactly what their community leaders are telling them are orthogonal to their position. The last thing you should tell someone in really bad straights is that his problem is the indifference, if not cruelty, of others, because it doesn't help him.--Eric Falkenstein

... the urban underclass and lower middle class will never find opportunities until cities figure out how to deliver decent services at a viable price: the high taxes and tangled regulations of our big cities are walls that emprison the poor more than protecting them. This is true even though the poor don’t pay income tax. Sales taxes (and crushing ‘sin taxes’ on some of the pleasures they enjoy and perhaps need most) cut into their disposable incomes. Sky high property taxes jack up their rents. High wage scales for unionized public servants, inflated by collective bargaining madness and the generally high cost of living and elevated tax levels in blue America, mean that the poor get less from the state: fewer (and often, worse) teachers, fewer cops on the beat, fewer firefighters, fewer and more crowded health services. Worse than all this, small business is crushed by high taxes, intrusive and often irrational regulation, which means that new jobs aren’t created and new businesses don’t start. That reduces demand for workers in the neighborhoods that need jobs most; it also curtails the ability of inner city residents to develop the entrepreneurial skills and experience that could fuel the rebirth of the Black middle class. Disaster is too kind a word for what the blue social model has (inadvertently) built in America’s cities. No wonder that to be young, gifted and Black today means fleeing the consequences of blue social policy as fast as you can.--Walter Russell Mead

To rely upon a reserve requirement for the meeting of cash-withdrawal demands of banks' customers is analogous to trying to protect a community from fire by requiring that a large water tank be kept full at all times: the water is useless in case of emergency if it cannot be drawn from the tank.--unsourced

Responding to a court ruling, [the Fed] made public thousands of pages of confidential lending documents from the crisis. The data dump arose from a lawsuit initiated by Mark Pittman, a reporter at Bloomberg News, who died in November 2009. Upon receiving his request for details on the central bank’s lending, the Fed argued that the public had no right to know. The courts disagreed. The Fed documents, like much of the information about the crisis that has been pried out of reluctant government agencies, reveal what was going on behind the scenes as the financial storm gathered. For instance, they show how dire the banking crisis was becoming during the summer of 2007. Washington policy makers, meanwhile, were saying that the subprime crisis would subside with little impact on the broad economy and that world markets were highly liquid. ... Protecting global lenders and investors from the effects of their financial decisions was exactly what the Fed decided it had to do. Bankers and investors on the receiving end of this largess have long known the extent to which the Fed rescued them in their time of need. Now, thanks to these Fed documents, the rest of us can see it, too.--GRETCHEN MORGENSON

The Pecora Commission investigation into the sources of the 1929 stock market crash began two and one-half years after the event, lasted over two years, and helped shape the regulatory environment for decades. In contrast, the underfunded, marginalized Financial Crisis Inquiry Commission lasted one year, at a time when the size, complexity, and interconnectedness of the global financial system has grown exponentially from 1934. In terms of academic interest, regulatory concern, and social impact, understanding the sources of the recent financial crisis must rank as one of the most important socioeconomic research projects of our time. From my perspective, it's time to stop dicking around and start trying to understand it.--Epicurean Dealmaker

Mercantilism, "economic nationalism for the purpose of building a wealthy and powerful state,"1 is based on this logic: "The richer the nation, the stronger the nation; the stronger the nation, the better for every member of that kingdom."2 It wasn't until the 17th century that mercantilism was seriously challenged, and Adam Smith finally drove a stake through its heart when he published The Wealth of Nations 235 years ago. Perhaps most economists hold this clean view of history, but it seems that the rest of the world never got the memo. Unfortunately, the archaic and counterproductive ideas of mercantilism are alive and kicking in 21st-century America. ... Mercantilism is an economic theory from the perspective of exporters, protectionists, politicians, and money hoarders, and its primary beneficiaries are big business and big government. Basically, the more goods you sell outside your country and the more gold and silver you bring in and store safely in your vaults, the better. The corollaries are that exports are good, imports are bad, a weak currency is wonderful, and trade surpluses are the bees' knees. Whether they realize it or not, many modern politicians of various stripes are mercantilists. ... Unfortunately, the reality of protectionism is downright ugly. First, there is the effort put into lobbying Congress instead of making tough choices and creating a productive industry. Second is the direct cost of the protected jobs. For example, to save 226 American luggage manufacturing jobs, American consumers have been forced to pay an additional $290 million annually for their luggage, which translates to an outrageous $1.285 million for each job saved.8 (No one, especially the American consumer, would argue that those jobs are worth that much.) Third, more workers typically are employed in industries that use the output than in industries that make the protected output. Workers in steel-using industries, for instance, outnumber those in steel-producing industries by 57 to 1.9 Making steel more expensive hurts the 57 workers who use the steel, while only one steel-producing worker is helped, and that's in addition to all the consumers who are hurt.--Charles Hooper

That adorable skunk, Pepé Le Pew, is one of my wife Sue’s favorite cartoon characters. There’s something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It’s easy to love a skunk – but only on the silver screen, and if in real life – at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn’t been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed.--Bill Gross

... after we get through spending our $1 trillion under ObamaCare, there is no convincing reason to believe that the bottom half of the income distribution will have more care, better care, or better access to care than they have today.--John Goodman

The thing that fascinated me is that somehow [the lead plaintiff in the Walmart class action] managed to discern that the discrimination she experienced was because of her gender and not the fact that she's also obese, unattractive, and African-American. Based on the interview, she also seems to have a sketchy command of grammar. I couldn't judge her height or personality, but those are two more factors that have a big impact on career advancement. I make this observation as a short, hair-challenged, nearsighted, unattractive, over-the-hill individual who was pushed out of two different careers (banking and the phone company) explicitly for being male and white. In my case, my bosses explained it to me directly, as in "You're our most qualified candidate for promotion, but we can't promote a white male in the foreseeable future." This happened in the context of finishing my MBA at night so I could overcome discrimination against me based on the reputation of my school. I'm not complaining. It's just context. We live in a world with so many triggers for bias that it seems simplistic to divide things along gender lines. So I propose a simple test to determine if you, individually, are a victim of gender unfairness. If a genie gave you the chance to magically switch your gender, and become a member of the other sex, would you do it? And let's say the new you would be about the same as now on the scale of attractiveness, intelligence, ethnicity, circumstance, and health. The only real change would be gender. Do you take the offer? If your answer is no, then maybe fairness isn't what you really want. Maybe what you want is all the advantages you have now plus the good stuff that other people have. I totally understand. I want the same thing.--Scott Adams

In a unanimous vote, Congress named former "Two and a Half Men" actor and self-proclaimed "Vatican assassin warlock" Charlie Sheen the inaugural director of the Consumer Financial Protection Bureau. "[Expletive] and [expletive] to you all!" proclaimed Sheen before a crowd of cheering lawmakers. "For my first act as Director, I am renaming the CFPB to be called Charlie's Financial Protection Bureau. Second, I plan to hire 1,224 goddesses as my staff and to make all consumers [expletive]." Spotted shedding tears of joy was Special Treasury Department Adviser and consumer advocate Elizabeth Warren, who had been working to get the CFPB up and running. "Charlie Sheen's 'winning' ways and tiger blood are just what this organization needs to get started on the right foot," said Warren. "Unlike myself, he is a uniting force for lawmakers."--Pymnts.com

Tokyo Electric Power Co. began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to make room to store more toxic liquids that have hampered efforts to restart cooling systems. The release of the water, which has low levels of radiation, will make space for more dangerous fluid in the basement of turbine buildings at the Nos. 2 and 3 reactors. The government approved the plan, the first deliberate toxic discharge into the ocean, the chief cabinet secretary said.--Ichiro Suzuki and Tsuyoshi Inajima

He was like the guy going through a cafeteria, and he wanted to take everything and put it on his tray. That concerned people. ... I was tired of bumping my head against a wall.--Hank Paulson on Jon Corzine

... the NCAA sharply limits the number of athletic scholarships, and even more importantly, limits the size of the scholarships that schools can offer the best players. NCAA rules also severely restricts the gifts and housing players are allowed to receive from alumni and others, do not allow college players to receive pay for playing for professional teams during summers or even before they attended college, and limits what they can be paid for non-playing summer work. The rules are extremely complicated, and they constitute hundreds of pages that lay out what is permitted in recruiting prospective students, when students have to make binding commitments to attend schools, the need to renew athletic scholarships, the assistance that can be provided to players’ parents, and of course the size of scholarships. It is impossible for an outsider to look at these rules without concluding that their main aim is to make the NCAA an effective cartel that severely constrains competition among schools for players. The NCAA defends these rules by claiming that their main purpose is to prevent exploitation of student-athletes, to provide a more equitable system of recruitment that enables many colleges to maintain football and basketball programs and actively search for athletes, and to insure that the athletes become students as well as athletes. Unfortunately for the NCAA, the facts are blatantly inconsistent with these defenses. ... In 1984 the U.S. Supreme Court declared the NCAA’s restrictions on the televising of college football games an illegal conspiracy in violation of the Sherman Antitrust Act. The court said, “good motives alone will not validate an otherwise anticompetitive practice”. Since that decision, the televising of college football and basketball games has rapidly increased. It is time for the court to apply the same valid reasoning to the restrictions on scholarships and other aspects of the competition by colleges for athletes, and to declare these restrictions also a violation of the Sherman Act. Were that done, both student-athletes and schools with greater concern for academic performance of their athletes would gain at the expense of colleges that put athletic competition before academic achievements.--Gary Becker

You have one identity. ... Having two identities for yourself is an example of a lack of integrity. ... the level of transparency the world has now won't support having two identities for a person.--Mark Zuckerberg

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