Quotes of the day: Russ Roberts edition

What is working well? The Apple Store, access to food and clothing, private high schools, Amazon.com and everywhere else that there is competition. As the economy slinks along or dips down, we’re going to hear continued talk of the decline of America. But what has always made America great is its economic system–a system that let’s competition work. If we want to be great again, all we have to do is remember what made us great before. Our biggest challenge as a nation is our political system. We have overpromised and a democracy that ignores its Constitution isn’t very adept at taking away goodies from the masses. I am very worried about how that is going to turn out. We need to share the pain very widely and that too is not the strong suit of democracy.--Russ Roberts

What I meant is that the Ponzi scheme called Social Security and the demographics of Social Security and medicare are going to require a lot of people to get a lot less than they are expecting. That’s what I meant by sharing the pain. My point about democracy is that politicians hate dashing expectations. See Greece, riots in the streets of.--Russ Roberts

The main thing to realize is that both Citibank and S&P have little to do with capitalism and everything to do with crony capitalism. This is a game of financial musical chairs where the government keeps the market from calling the tune. The cronies call the tune. I should add one more thing. People talk as if S&P and Fitch and Moody’s are independent private organizations. They are, sort of. But the structure of regulation empowers them. Without the regulations requiring their imprimature, I’d assume they’d be gone. Without the implicit support of the regulatory apparatus, why are any of the ratings agencies in business?--Russ Roberts