Quotes of the day

Your 60th got us into the financial crisis. Let’s hope this party gets us out of it.--Lloyd Blankfein, to Steve Schwarzman, at Leon Black's 60th birthday party

I got crucified because I said you can keep your money in Bear Stearns. I got crucified in this country!!! I learned my lesson, you can’t be as confident as you’d like. I never said you should buy Bear Stearns, I said you should keep your money there. In 36 hours Bear Stearns fell apart. It was fine to say it wasn’t going to fall apart and then it fell apart. My first call was that it was okay to keep your money there which turned out to be true.--Jim Cramer

It’s like a machine out there, and I’m that one part that isn’t up to speed with everyone else.--Chad Ochocinco

The idea of getting paid to take some 'abstract risk,' is becoming more quaint every year.--Eric Falkenstein

I too think our politicians are inadequate, but I don't want them to listen to me, rather, I would like them to be less important. That would take people actually voting for people who aren't promising to increase government, however, and I sense I'm not in the majority on that, and may never be.--Eric Falkenstein

By now, most Americans have lost hope that our current government will come up with a viable jobs program. It won’t. I am coming more and more to think that with the government essentially paralyzed for the foreseeable future, the only way we’re going to get jobs is by turning to actual job creators: business itself.--Joe Nocera

Yeah, that Joe Nocera, the one who called the Tea Party 'terrorists'.--Cav

If [Warren Buffet] really wanted to make (the tax code) fair, why doesn’t he propose a wealth tax on everyone over $1 billion worth of wealth of 50 percent once and for all. That would really work for him, but of course he’s not going to suggest that because he would have to pay that. It’s never seen a tax, and when he gives (the investments) to the Bill and Melinda Gates Foundation, it never will. This is ridiculous.--Arthur Laffer

I've been practicing literary criticism for more than 60 years. In 1976, I resigned from the once splendid Yale English department, which I had joined in 1955, to protest the decline in aesthetic and cognitive standards in the profession. I became a professor of the humanities, a department of one. I have been the pariah of the profession for the last 45 years. I maintain canonical standards for the study and appreciation of literature. I practice philology and knowledge of the history of language. I do not give in to political considerations, however they mask themselves. All this business about gender, social class, sexual orientation and skin pigmentation is nonsense. I'm 81. I'm not prepared to temporise any more. I've been prophesying like Jeremiah since 1968, warning the profession that it was destroying itself. And it has. There are fewer and fewer people teaching English, or any other kind of literature, in American universities. Students don't wish to study garbage and that's all they're offered.--Harold Bloom

I adopted, subconsciously at least, my father's view that those with much more than us had come by it dishonestly. I had no evidence, of course. Sure, I had a few stories about wealthy people who had taken advantage of others, but I had no basis for my grudge against the millions of people I resented. Because I couldn't have some of the material possessions other kids had, I felt left out, and that was enough. Then, in my late teens, I started to learn economics. I started to understand that the vast majority of income in a relatively free society is earned. It's true that a small number of wealthy people did get their money by fraud or dishonesty. More common, especially in societies with lots of government controls, were people who got wealthy by using political pull. But I started to see that the typical high-income person in a relatively free society gets his or her income the old-fashioned way--by earning it. This resentment over the good fortunes of others is not unique to me. Often, when one person tells another that he or she won a prize or is going on a great vacation, the other person responds, "I hate you." It's generally said jokingly, but the fact that it is said at all speaks volumes. ... [Will Herberg, a prominent American Communist] told us of his intense resentment of the fact that he was smart and had nothing, while they were dumb and had a lot. "That," he said, "is how I became a Marxist. I hated the rich." We were shocked. We had thought that virtually all intellectuals came to their views via their intellect, not via their resentments. Herberg must have read our faces, because he added that his route to Marxism was a very common one. "The number of people who became Marxists by reading Marx," I still remember him saying, "can be counted on the fingers of one hand."--David Henderson

When women's wages rise, the cost of kids rises. But so does wealth! The income and substitution effects go in opposite directions. And the fact that they go one of the three logically possible ways consistent with consumer rationality does nothing to confirm consumer rationality. ... higher value of time ("the increased opportunities for the mother outside of the home") is supposed to imply fewer kids. In the second paragraph, lower value of time ("short term income low and longterm prospects--for both parents and children--bleak") is also supposed to imply fewer kids. You could say the first is a substitution effect and the second is an income effect, but both effects are plainly both income AND substitution effects.--Bryan Caplan

Two extreme models of the macroeconomy have recently been discussed on the internet. On the extreme right you have Casey Mulligan, arguing that demand shocks can’t explain high unemployment, and that our economy is faced with a supply problem. If workers cut wage demands we could return to full employment. On the extreme left people like Paul Krugman argue that wage cuts won’t boost employment at all; instead they will simply depress AD even further. In the middle is the sensible AS/AD model, with downward-sloping AD curves and upward sloping AS curves. The textbook workhorse. This is the model that accurately describes the US economy. If AD declines, output will also decline (due to the upward sloping SRAS curve.) If workers accept pay cuts, then SRAS will shift right and output will increase. Neither the Mulligan nor the Krugman models are consistent with the empirical evidence. ... Both Krugman and Mulligan are partly right. More monetary stimulus really would reduce unemployment (at least if it succeeded in raising NGDP.) Krugman’s right about that. And cutting the minimum wage and reducing maximum UI benefits really would reduce unemployment. A competent government would do all of those things. An incompetent government would do none of them. Which one are we?--Scott Sumner

Prior to meeting Warren [Samuels], I think it would be accurate to say that I divided the world neatly into those who are (a) stupid, (b) evil, and (c) those who obviously are smart and good who agree with me. I disagreed with many people both in college and outside of the academic setting. But I thought the root cause of the disagreement was in 90% of the cases was a consequence of them being misinformed because of their lack of exposure to the ideas of Mises and Rothbard. Once they would have read Mises and Rothbard, their world view would change appropriately. Unless, of course, they were in the 10% of people who are evil. Warren destroyed that simple intellectual picture of the world. Here was a man who was as sharp as anyone I have ever met, who had read more and in fact forgotten more than I would ever read, and who was genuinely interested in the truth with no hidden agenda, and yet his disagreed; he questioned; he probed; he thought about the choice of words; he simply expressed the joy in figuring things out. In the process, Warren didn't overturn my intellectual commitments to the Austrian school and the Virginia Political Economy tradition in which I was being educated, but he made more self-critical and less self-satisfied, and hopefully a better scholar, teacher, and a more sophisticated representative of the Austrian school and Virginia Political Economy. ... Besides his role as a mentor to generations of scholars in political economy, Warren was also just an amazing scholar and economic thinker. He set a standard for professional work ethic that I think is rivaled only by his debate partner in political economy --- James M. Buchanan. Everyone should just look at his CV and see what it takes to build a professional career as a scholar. He spent his career as an engaged editor of scholarly journals, of book series that kept the classic works in print, as well as encouraging contemporary work, and he was an author of journal articles as well as books. He just worked day in and day out as a scholar of political economy. His natural curiosity took him from Wisconsin style institutionalism, to Classical economics, to Chicago economics, to public choice, to Austrian economics, to Coasean law and economics, etc. The overarching theme of his work is the role of government in political economy, and he kept thinking seriously about that question throughout his career.--Peter Boetkke

Protein engineering is a hot field, as well it should be, since enzymes do things in ways that we lowly organic chemists can only envy. Instead of crudely bashing and beating on the molecules out in solution, an enzyme grabs each of them, one at a time, and breaks just the bond it wants to, in the direction it wants to do it, and then does it again and again. If you're looking for molecular-scale nanotechnology, there it is, and it's been right in front of us the whole time. Problem is, enzymes get that way through billions of years of evolution and selection, and those selection pressures don't necessarily have anything to do with the industrial reactions we're thinking of these days. And since we don't have a billion years to wait, we have to speed things up. Thus the work at places like Codexis on engineered mutant enzymes, and thus a number of very interesting takes on directed evolution.--Derek Lowe