Friday, April 29, 2011

Quotes of the day

A people thus united and resolved cannot shrink from any sacrifice which they may be called on to make, nor can there be a reasonable doubt of their final success, however long and severe may be the test of their determination to maintain their birthright of freedom and equality as a trust which it is their first duty to transmit undiminished to their posterity.--Jefferson Davis

I think the birther issue is good for the country. A modern republic needs some simple and unimportant issues to keep its citizens invested in the process. The important issues of our time are far too complicated for the average person, and I count myself in that group. We need a few simple issues so we can be part of the political conversation without hurting anything. The last thing our system of government needs is regular citizens getting involved in Middle East strategy, healthcare reform, the budget, climate change, or anything else that might matter. ... The birther issue is sort of like letting your toddler have a toy steering wheel in his car seat. He feels as if he's doing something useful and you don't have to rely on him to keep you out of the ravine. ... The birther issue is educational too, as are many of the so-called distracting issues. The birther distraction teaches us that a president has to be a natural-born citizen. Readers of this blog already knew that, but I'll bet a third of the country learned it recently with the birther issue. And Monica Lewinsky taught us a thing or two about impeachment.--Scott Adams

Ahead of the company's long-rumored IPO, a group of Facebook employees and investors tried to unload $1 billion in stock at a $90 billion valuation but couldn't find enough investor appetite. Instead, they had to lower their asking price to an implied $70 billion valuation -- the high end of where Facebook has traded on private exchanges that traffic in the shares.--GARETT SLOANE

Venture capital has failed to produce viable investor returns since 1998, produced negative 4.6 percent 10-year returns, performed below the consumer adoption rate of technology in the same period, is being outperformed by corporate innovation and capital, lost public trust because of bad past conversion from valuation to value and does not make a dent in the 80% greenfield of technology adoption. The asset class is only statistically perhaps rescued by the success of Facebook, which managed to grow despite VCs’ traditional playbook (not because of it), and a few others (Twitter, LinkedIn) that quickly jumped into Facebook’s valuation slipstream.--Georges van Hoegaerden

It is not clear why we enjoy certitude so much – certitude being the subjective experience of feeling certain ... there is a serious cost to excess certainty. Whenever an analyst or academic presents a number or a conclusion with too much precision, they reduce the demand for better evidence. Why run a pilot, set up a proper survey, if the answer is already known to three decimal places? The fact is that our political system simply does not take evidence seriously. If I had to suggest one single reason for that, it’s our love of certitude. Evidence is the way to reduce honest doubts. Stuffed on a fattening diet of certitude, who has room for doubt? And if we have no doubts, who needs evidence? .--Tim Harford
Portrait link here.

Chart of the day: Ageism via the movies

Source here.

Thursday, April 28, 2011

Quotes of the day

[The film Atlas Shrugged] was made for a trifle by Hollywood standards. The same critics that, if this tiny amount of money was spent on a poorly produced and acted "Indie" film, that happened to be about a hermaphrodite Palestinian boy who after escaping fascist Israeli persecution moves to Texas to face fascist American persecution (and isn't immediately granted his full "right" to all the healthcare the USA can afford), would sing it's praises and laud it's signs of a tight budget as "authentic." I'm not sure if we have art imitating life or the other way around, but the critics are themselves Randian characters. They have an agenda—punish those who love liberty and have the temerity to defend it, then go to parties and be lauded by their friends for their heroic progressivism. And if they can make some snobby lies about cinematography along the way, more the better.--Cliff Asness

I was what you call the buzz kill. ... I could be the ultimate cliché and age first.--Val Kilmer

I don't know if a 6'2 woman gets as much flak as a 5'2 man--but the difference is in degree, not in kind.--Megan McArdle

The place God calls you to is the place where your deep gladness and the world’s deep hunger meet.--Frederick Buechner

Even though their state voted to remain in the Union, about 20,000 Marylanders fought for the South, while about 30,000 fought for the North.--Joshua Horn

We're seeing core consumers under a lot of pressure. There's no doubt that rising fuel prices are having an impact.--Mike Duke, Walmart CEO

I’m shocked that progressive bloggers that are so dismissive of know-nothing conservatives are themselves so ignorant of public finance 101. Tax incidence is all about expected future consumption streams, as is pretty much all of economics. I thought people knew that.--Scott Sumner

So the Obama position seems to be that a) the rich ought to meet obligations over and above what the current tax code requires; b) the Obamas are rich, and c) the Obamas choose to meet no obligations over and above what the current tax code requires. It’s almost enough to make you begin to doubt his sincerity.--Steve Landsburg

Whether or not he was right, the “investigation” of Ackman was a costly and embarrassing error. Without a doubt, it discouraged others from addressing problems at other financial companies—which allowed those problems to grow unchecked. The moral of the story: empowering regulators can result in a less transparent, more dangerous financial system.--John Carney

Having a monarch as the symbolic head of state keeps elected officials in their place, provides an apolitical outlet for popular hero worship and the cults of celebrity, and satisfies the human hunger for ceremonial authority. If it’s an affront to democratic sensibilities, it’s also a safeguard for democratic institutions. Better a real king, crowned and powerless, than the many pseudo-kings who have strutted (and still strut) so destructively across the modern stage.--Ross Douthat
Image link here.

Wednesday, April 27, 2011

Quotes of the day

Hedge-fund managers made a big bet on Barack Obama and other Democrats in 2008. Now, with the 2012 contest gearing up, some prominent fund managers have turned their backs on the party and are actively supporting Republicans.  Daniel Loeb, founder of Third Point LLC, was one of the biggest Obama fund-raisers in 2008, rounding up $200,000 for him, according to campaign-finance records. In the decade prior, Mr. Loeb and his wife donated $250,000 to Democrats and less than $10,000 to Republicans.  But since Mr. Obama's inauguration, Mr. Loeb has given $468,000 to Republican candidates and the GOP, and just $8,000 to Democrats. Hedge-fund kings have feelings, too, and the president appears to have hurt them.--BRODY MULLINS, SUSAN PULLIAM and STEVE EDER

Indeed, if there is one disturbing characteristic of President Obama's foreign policy to date it is, quite simply, that the President is far too easily diverted from his stated goals and foreign policy convictions because of political opposition. On multiple issues, from Afghanistan and Gitmo to Libya and the Middle East peace process, Obama has laid out a policy, either publicly or privately, and then steadily backed away from it in the face of opposition, either from foreign governments, domestic political constituencies or his own military. He has far too often pursued the policies of least political resistance.--Michael Cohen

The Administration's budget did propose spending levels which make the recently increased rate of government spending as a share of GDP permanent, regardless of the reason for the recent increase. If you want to see this in a way that takes account of changes in nominal GDP growth related to the recession, then you can compare actual spending before the effects of the recession began with proposed spending after the effects of the recession are over. For all of 2007, spending was 19.6 percent of GDP. For all of 2021—after the impacts of the recession and the final year of the budget window—the budget submitted in February proposed spending equal to 24.2 percent of GDP. These two budget facts are part of the data presented in my Wall Street Journal chart and are taken directly from CBO tables. The 4.6 percentage point increase represents $1 trillion more federal spending per year at 2021 levels of GDP.--John Taylor

Last August, student loans surpassed credit cards as the nation’s single largest source of debt, edging ever closer to $1 trillion. Yet for all the moralizing about American consumer debt by both parties, no one dares call higher education a bad investment. The nearly axiomatic good of a university degree in American society has allowed a higher education bubble to expand to the point of bursting. Since 1978, the price of tuition at US colleges has increased over 900 percent, 650 points above inflation. To put that number in perspective, housing prices, the bubble that nearly burst the US economy, then the global one, increased only fifty points above the Consumer Price Index during those years--Malcolm Harris

We often see the world of the poor as a land of missed opportunities and wonder why they don't invest in what would really make their lives better. But the poor may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible and celebrating when occasion demands it. We asked Oucha Mbarbk [a rural Moroccan who had only found 100 days of work in the past year] what he would do if he had more money. He said he would buy more food. Then we asked him what he would do if he had even more money. He said he would buy better-tasting food. We were starting to feel very bad for him and his family, when we noticed the TV and other high-tech gadgets. Why had he bought all these things if he felt the family did not have enough to eat? He laughed, and said, "Oh, but television is more important than food!"--ABHIJIT BANERJEE, ESTHER DUFLO

Lighting a candle really is better than cursing the darkness.--Bryan Caplan

What this world needs is some sort of universal standard so we'd always know for sure who is good and who is bad. The Ten Commandments was a start. That list covers some of the basics. But it's a bit dated, and it doesn't cover the important questions of our day, such as who is arrogant, who doesn't work hard enough, who should come out of the closet, who is a hypocrite, who is an Internet troll, and so on. Society is inventing new ways of being bad more quickly than we can evolve the rules to cover the new situations. We need some sort of standard that can keep up. I'm unqualified for the task of creating this new standard of good and bad because I believe free will is an illusion. By my view, we're born, our molecules bump around then we die. No one is good or bad if we're all just bumping around according to physical laws. Any standard for good and bad behavior that I suggest would be inconsistent with my own point of view. But for some reason I'm going to suggest just such a standard anyway. Apparently I can't help myself.--Scott Adams
Photo link here.

Chart of the day: A prediction of China's GDP overtaking the US

Via Brett Arends.

Pot, meet kettle

Via Mark Perry.

Tuesday, April 26, 2011

Cartoon of the day

Via Abraham Piper.

Quotes of the day

If God were knowable, why would we believe in him?--Anne Carson

Paul [Krugman] hasn’t liked any president or any Treasury secretary. He always gravitates to opposition and dramatic policy because it’s much more interesting than agreement when you’re involved in commenting on rather than making policy. He savaged the early Clinton administration from the right, blistering Laura Tyson and Bob Reich, and then moved to savage the more liberal Obama administration from the left. He liked the Bush administration least of all. The only politician I remember him praising in the last sixteen years is John Edwards.--Larry Summers

John Edwards, what a miss!--Cav

Chuck Schumer obviously has political reasons for trying to look like he's fighting to save jobs in New York -- although it's hard to square his recent "concern" with his support for the New-York-jobs-killing Dodd-Frank law, but I'll save that for another column.--Charlie Gasparino

It has occurred to me that Roger Goodell might about 20,000 leagues above his head. It has occurred to me that while Bud Selig is destined to be underestimated because of the way he carries himself, that Roger Goodell is destined to be overestimated for exactly the same reason. ... [Goodell's letter] screamed of desperation and, frankly, it felt a bit incompetent too. If Bud Selig ever wrote a letter like that, people would be pulling out their torches and pitchforks. Roger Goodell is undoubtedly a brilliant guy, and he has a strong history with the league, and he is trying to represent a a group of very different owners who probably resents they have to give ANY of their money for the players. But that’s the job of commissioner, and right now it looks like Goodell is flailing.--Joe Posnanski

Today, both people and institutions seem to bear no penalty for their actions. They are rewarded. Why does reputation no longer matter? The reason is unfortunate and partly attributable to why we got into the financial crisis. People simply don’t matter as much on Wall Street as they used to. Instead size and technology carry the day. ... In the absence of reputation, the government and regulators act as substitutes to ensure appropriate conduct. The government becomes the enforcer through civil and criminal actions for law-breaking. So what you get is more law to cover for lost reputation.--Steven Davidoff

The trial dragged on for two years -- marked by 46 days of hearings, 18 witnesses on the stand, and a hefty 89-page ruling by the judge. Mob crime of the century? Complex terror case? Nope. Just trying to get rid of a bad public-school teacher.--CARL CAMPANILE, REUVEN FENTON & YOAV GONEN

There are very strict rules in the existing contract that prohibit the city from deciding in this case whether these [criminals] should be in the classroom.--Mayor Bloomberg

[New airline regulations] add to the costs of airlines and to the costs of flying in the mistaken belief that most consumers are easily tricked by airlines. Beyond that, the regulators fail to see that competition is the most effective way to protect even ignorant consumers from the consequences of their ignorance. The competitiveness of the airline industry is evident from the many new airlines that have entered and existed this industry during the past 30 years, and from the low profits during the decades after deregulation. Encouraging competition in this and other industries is the only really effective way to help the great majority of consumers, including ignorant and easily fooled consumers.--Gary Becker
Photo link here.

Saturday, April 23, 2011

Quotes of the day

This magnificent grace, this expansive grace, this 'Amazing Grace' calls me to reflect. And it calls me to pray. It calls me to ask God for forgiveness for the times that I’ve not shown grace to others, those times that I’ve fallen short. It calls me to praise God for the gift of our son -- his Son and our Savior.--President Obama

Speaking as a conflicted McCain voter, I'd say Obama's election captures the five things I love most about my country.--William Stuntz

You may be incompetent at your job, but your 5 year old will still need you very much. There is a basic appreciation for one’s biological parents, regardless of how much they actually hang out (note Obama's elevation of his sperm-donor dad), and the littlest things a grandparent does for a child is often looked back at with profound appreciation. For example, in The Education of Henry Adams, the author recounts an episode from when he was six or seven. He vaguely remembers throwing a tantrum about not wanting to go to school. His frail 80 year old grandfather, the American President John Quincy Adams (son of President and Founding Father John Adams), appears, and takes his hand, and walked him silently a mile to the schoolhouse. No lecture, just a walk, but right to school, and the tantrum was over. Looking back, Henry Adams notes that “the seeds of a moral education would at that moment have fallen on the stoniest soil in Quincy”. These are the things parents and grandparents strive for, hoping that when they are long gone a consciousness truly appreciates something they have done in a profound way. ... This gets down to what, specifically, is in a person's utility function. The traditional objective function takes one's consumption as the primary objective, and then present values the 'utility' of this consumption. This leads to weird convolutions, where one 'consumes' children, and actually doesn't enjoy their company but still prefers them. I think a more reasonable approach would be to assume people are maximizing their external appreciation in society. This is going to be increasing in wealth, because the more money one has, the more favors one can do, the more people will flatter you to get business or use your boat. And it all gets back to maximizing status. A status maximizer maximizes his appreciation in this world. Someone looking merely at their consumption bundle should consider themselves rich in the West even if they are at the bottom of society working as a parking attendant, but of course they would not feel rich at all, they would feel very poor. As people crave appreciation from others, maximizing their status is a direct path to that end. So is having children.--Eric Falkenstein
Photo link here.

Thursday, April 21, 2011

Medicare, in under 2 minutes

Keith Hennessey has provided a great brief. He says:
The President and his allies ominously warn that the Ryan plan would “end Medicare as we know it.”

But let’s be honest, how much do you really know about Medicare? If you’re under age 65 there’s a good chance that you know very little about the program. You have had no reason to, at least until now.

Five years ago I had to help a Cabinet Secretary and a senior White House staffer get up to speed very quickly on the absolute basics of Medicare, just the broadest brush strokes. They, like you, needed to understand Medicare principally from a top-down budget perspective, rather than as a participant in the system. I created a simple two-page outline for them to study.

I have updated the numbers in that document and offer it here, hoping it can provide some basic facts and context to the Medicare component of the current budget debate. This outline won’t make you an expert, but at least you’ll have a starting point.

Quotes of the day

To take a net short position [in the US Dollar] now would be illogical. The boat is extremely crowded.--Dennis Gartman (DISCLOSURE: I am short EUR and long CAD in the personal account).

The President’s new budget plan provides insufficient detail to support his claim of $4 trillion of deficit reduction over 12 years. But if we stipulate that amount, it is likely that the President’s new budget proposal would result in $1 trillion more debt over the next ten years compared to the House-passed Ryan plan, and maybe more.--Keith Hennessey

Perhaps the most interesting question is why the FDIC would write a report that could prompt guffaws from financial experts. Two possible reasons come to mind. First, the FDIC made these kinds of claims throughout the debates that led to Dodd-Frank, and somehow they worked. The FDIC was given extraordinary new powers under the new resolution rules, even though the FDIC’s track record in handling large cases is not good. Second, the FDIC has been floundering in its efforts to implement Dodd-Frank’s new requirements. It may be that the report is designed to distract attention away from growing fear that the living will requirement will not be effectively implemented, and that the resolution rules are a disaster.--David Skeel

First of all, while it is technically true that the federal tax take was "around 20% of GDP" during the Clinton era, this was only true at the height of the stock market bubble. Tax revenues exceeded 20% of GDP for exactly one year: 2000. The average tax take under Clinton was 19%. And if you exclude 1999 and 2000, the very height of the bubble, it was more like 18.5%. Without arguing about whether our tax system is fair or not, the fact is that the federal income tax is the most variable part of the code, and the federal income tax is now very progressive; it collects most of its revenue from people at the top. (Whether it should collect even more is an argument for another day.) Because it collects most of its income from people at the top, and because the incomes of the wealthy are more variable than the incomes of the poor and middle class (Warren Buffett's income can drop by $300,000; mine can't), we're going to get deep troughs in recessions, and high peaks in boom times. ... Saying "all we have to do is go back to the tax rates under Clinton" is effectively saying "all we need is another asset price bubble that funnels a huge amount of money into the pockets of the rich". This seems neither particularly feasible, nor desirable. --Megan McArdle

Have you noticed all the huge antiwar demonstrations in the last twelve months? Yeah, me neither. It turns out that a lot of the energy for the movement seems to have been provided by Democrats who are a lot less worried about wars conducted by Democratic presidents. Or at least who believe that advancing the Democratic agenda is much more important than trying to end the wars in Iraq and Afghanistan. This is by no means the whole movement--but it was enough that once a Democrat took office, both the numbers at the demonstrations, and the organizational capacity of the movement as a whole, dwindled away to near-nothingness.--Megan McArdle

Researchers found that job applications containing an attractive picture received roughly a quarter of the responses of one with a plain picture or no picture at all, if the recruiter was a woman. The researchers believe that the reason is that many human resources women are young and in their 20s and subconsciously they do not like extra competition. ... Women who put no picture on their CV were 22 per cent more likely to receive a response than women with a plain picture and 30 per cent more likely than women with an attractive picture. They also that 96 per cent of the company recruiters turned out to be women, typically in their 20s and single. --Richard Alleyne

There's a reason it took centuries for the west to evolve modern economies, the kind where basically everyone is rich by global or historical standards. This stuff is really complicated. The simplest product you buy could not have been brought to your market without a thousand institutions and systems, from double-entry bookkeeping to anti-fraud statutes to telephones and commodity brokers and universal literacy and rail rights-of-way. This stuff cannot be developed overnight, and it cannot be developed by one person, one group, or one plan. And in the end, there is no substitute.--Megan McArdle

It's pretty well known in financial circles that [Donald Trump] is a deadbeat.--anonymous banker

I remember back several years ago that Trump claimed that one of his casinos represented only 2% of his net worth. The casino was bankrupt. 2% of zero is zero.--Cav
Photo link here.

Tuesday, April 19, 2011

Bikini statistics: Penn & Teller on vaccinations

Warning: Contains colorful language.

Previous BS installment here. Via Tim Harford.
Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein

Quotes of the day

Avenge the patriotic gore
That flecked the streets of Baltimore--James Ryder Randall

... the $94,900 in [median household] income includes the estimated value of the median family’s health care plan as well as their salary, which is not what most people think of when they hear the term “median income.”--Ross Douthat

Of course Standard and Poor's does not have access to special, secret information about the US debt situation than we do; that sort of thing is, thankfully, public knowledge. And given the performance of the ratings agencies on mortgage-backed securities, I think we are justified in being skeptical that this represents some revolutionary new piece of information. However. S&P is certainly entitled to their opinion--for all their failings, they do spend a great deal of time analyzing government finances, ... Inflation was a good way to ease the burden of our World War II borrowing--once the war was over. But it is not a good way to ease the burden of an increasingly expensive entitlement program that shows no signs of winding down. Especially since these days, the debt markets are much more efficient than they were in 1948; information about the money supply is transmitted very quickly to potential buyers of our bonds. You can pull all sorts of tricks to force bondholders to eat some losses on the money they lent you--but you can't pull them over and over. America was able to wriggle its way out of a substantial portion of its WWII debts in large part because it was otherwise pretty fiscally sound.--Megan McArdle

I know the idea that reduced [Peoples Bank of China] purchases will lead to higher US interest rates is part of a very widely-held consensus, and so I am reluctant to disagree too quickly, especially when someone as smart as Martin Feldstein makes the case, but I have to say that there is something about this argument that really bothers me. I don’t think a decline in the amount of capital recycled by China, whether through the PBoC or through other institutions, will likely lead to higher US interest rates at all. The reason I say this is because if we accept this argument, then it seems to me that we are also saying that one way for the US to reduce interest rates is to allow its current account deficit to explode to significantly higher levels. Why? Remember that foreigners don’t fund fiscal deficits. They fund current account deficits, and they do so automatically. As long as the US runs a current account deficit, in other words, it will receive exactly the same amount of net capital inflows as the size of its current account deficit. So if the US current-account deficit doubles, for example, net foreign inflows will double too.--Michael Pettis

The “it works in Scandinavia!” case for higher taxes tends to understate both the differences between our respective economies (we’re a vast continental empire with high levels of family disruption, large pockets of extreme poverty, a legacy of racial oppression, and an ongoing influx of low-skilled immigrants; they’re small, homogeneous, and highly educated, with children who are much more likely to grow up in intact households) and the already-existing similarities between our respective welfare states (which are greater than a simple glance at federal taxes as a share of G.D.P. would suggest). I think a better approach is to just take the state of the United States economy on its own terms. Whatever the differences between the Scandinavian experience and our own, as a general rule tax increases tend to dampen economic growth. And growth is what we need.--Ross Douthat

“Taxing the rich” cannot work unless you do it in a way that induces the rich to consume less. Journalists make this mistake a lot ...--Steve Landsburg

Suboptimal hypotheses, rightly worked from, have produced more useful results than unguided observations. I think the key is to be intelligent, start from a decent set of assumptions, and work every day towards becoming a better man. If you use reality as a filter, you will do OK. Alas, I think more often then not such maxims from famous people are used as signals as opposed to principles. I remember one NYT story about how these junk bond investors were all acolytes of the great Ed Altman, yet I have never met a junk bond investor who thinks highly of such models, and Altman's model is pretty lame, about as powerful as rank-ordering firms by Net Income/Assets. They wanted to project gravitas, so they paid lip service to the old man. Similarly, people highlight their idea is derivative from some esteemed source, but that's merely posturing.--Eric Falkenstein

We find that CFOs earn statistically and economically higher abnormal returns following their purchases of company shares than CEOs. During 1992-2002, CFOs earned an average 12-month excess return that is 5% higher than that by CEOs.--Wang, Shin and Francis

There is hardly anyone that is both knowledgeable and [sic] unco-opted.--Larry Summers

The essay [I, Pencil] traces all the amazing transactions that need to occur for a simple pencil to be made, pointing out that not one of the people involved could make a pencil by themselves, and most of them don't even know that they're involved in producing a pencil. But what about the US Forestry Service? Rail rights of way? The education system? This is an argument to which the left-wing has a great deal of recourse whenever anyone suggests that people have a right to keep what they earn from voluntary transactions. You can only make money in the context of society, and so society has a right to regulate your transactions, and seize the proceeds, in any way that society sees fit. And yet, the argument applies just as well to our sex lives or our political beliefs: they take place in the context of all sorts of government protections, from rape prosecutions to whistleblower laws. Without markets and the government, the "anything between two consenting adults" morality to which the majority of the elite subscribes would be impossible; the closest substitute for these things is family, and families have a very clear, deep, and persistent interest in regulating the sexual behavior of their members. Does this mean that the government (or our employers) may properly restrict our sexual behavior to that of which a majority of our neighbors approve? That bed you're having sex in probably travelled on the interstate highway system, so standby for government inspection . . . No? The government can't do that? Then why is this argument supposed to be a telling blow against arguments for strong property rights and freedom from interference in voluntary economic transactions?--Megan McArdle

Your perceptions of others reveal so much about your own personality.--Dustin Wood

When I asked why he desires to help so many people, his answer surprised me. He said “because it’s fun.” And then he went on to say “I like helping people because I enjoy it, I’m the opposite of an evangelical.” I don’t know if he knew I was a Christian, but the comment came like a curveball and I had nothing to say. I was so accustomed to the passive guilt complex so many of us hear week after week and in book after book that I knew he’d have no shortage of evidence that Evangelicals are constantly being made to do good things they don’t really feel like doing. In contrast, as I read through the book of Acts, a defining characteristic of the early church is they felt joy in their work. I don’t see a lot of shame and guilt manipulation in Acts, just a bunch of people who act like they are weirdly in love with each other and with God. And I want to emphasize the word weirdly.--Don Miller

Monday, April 18, 2011

Congress needs some remedial economics lessons

Maybe kick the class off with some Schumpeter: Jesse Jackson Jr. targets iPad, Apple in anti-technology rant.

Quotes of the day

One hundred fifty years ago today, Col. Robert E. Lee was offered the command of the United States army. ... But after the attack on Fort Sumter and Lincoln's call for 75,000 men, Virginia, Lee's home state, seceded. ... To many people today, it would see strange that Lee would turn down such a command and follow the apparently hopeless fate of the Confederacy. Although he was born and raised in Virginia, like Winfield Scott, he had spent much of his life serving the United States of America all over the continent. He disagreed with slavery, and believed that secession was unwise. ... It came down to his view of state sovereignty. Lee viewed himself as a Virginian more than an American. He would follow the choice of his state even though he personally disagreed with it. He viewed his service to the South not as a fight against the Union, but as a defense of Virginia.--Joshua Horn

Higher prices of foods mainly hurt the poor since poor countries and poorer families within a given country spend a much larger fraction of their incomes on foods than do rich countries, and then richer families within a country. For example, the share of national income spent on food is over 40% in India, less than that but still large in China, and under 15% in the United States. If families were spending 40% of their income on food, a 30% increase in food prices would raise by 12% the income they would need to maintain the same level of consumption of all goods. By contrast, a family spending only 15% of its income on food would only need a 4.5% increase in their income to maintain the same consumption basket. This simple arithmetic explains why the current rapid price increase in foods and other commodities, and past large increases in these prices, often caused great distress among poor families of Africa, Asia, and elsewhere in the world. ... during the current sharp run up in food prices, several food-exporting countries, such as Russia and Ukraine, have banned, or greatly restricted, the ability of farmers to export their produce. This lowers the price of food to urban consumers in these countries, and thereby helps the urban poor. However, such bans reduce the prices received by poor farmers of these countries. This reduces their incentives to raise their production of food, and makes these farmers worse off. It also raises the cost of food to families in food-importing countries, and thereby hurts the poor in these countries. Since farmers in developing countries are generally much poorer than those who live in cities and other urban communities, the poor may overall be made worse off when countries greatly restrict their food exports. ... An income subsidy approach has the advantage of allowing prices of foods and other goods to be determined by the forces of supply and demand. As a result, it encourages famers to grow more food when food prices rise, and also encourages poor (and other) consumers to reallocate their spending away from foods that rise most in price, and toward other foods and consumer goods.--Gary Becker

... many grand issues remain unresolved at the frontiers of physics: What is the origin of inertia? Are there extra dimensions? Can a Theory of Everything exist? But even at the undergraduate level, far back from the front lines, deep holes exist; yet the subject is presented as one of completeness while the holes—let us say abysses—are planked over in order to camouflage the danger. It seems to me that such an approach is both intellectually dishonest and fails to stimulate the habits of inquiry and skepticism that science is meant to engender. ... If Newton’s laws are at the bottom of everything, then one should be able to derive the second law of thermodynamics from Newtonian mechanics, but this has never been satisfactorily accomplished and the incompatibility of the irreversible second law with the other fundamental theories remains perhaps the greatest paradox in all physics. It is blatantly dropped into the first days of a freshman course and the textbook authors bat not an eyelash. ... the “God is a mathematician” viewpoint is one of selective perception. The great swindle of introductory physics is that every problem has an exact answer. Not only that, students are expected to find it. Such an approach inculcates our charges with an expectation that is, in fact, exactly contrary to the true state of the world. Vanishingly few problems in physics have exact solutions and a physicist’s career is one of finding approximations and hopefully not being too embarrassed by them. ... The equation that governs the behavior of any quantum system, Schrödinger’s equation, is as deterministic as Newton’s own, but as many people know, quantum mechanics predicts only the probability of an experiment’s outcome. How a deterministic system, in which the result is preordained, abruptly becomes a probabilistic one at the instant of measurement, is the great unresolved mystery of quantum theory, and yet virtually none of the dozens of available quantum textbooks even mention it. ... Physicists have indeed gone further than other scientists in describing the natural world; they should not confuse description with understanding.--Tony Rothman

As far as the laws of mathematics refer to reality, they are not certain; as far as they are certain, they do not refer to reality.--Albert Einstein

You want to repeal health care? Go at it. We'll have that debate. You're not going to be able to do that by nickel-and-diming me in the budget. You think we're stupid?--President Obama

Donald Trump has advocated for massive tax increases that display a stunning lack of knowledge of how to create jobs. His love for a socialist-style universal health care system and his alarming obsession with protectionist policies are automatic disqualifiers among free-market conservatives. This publicity stunt will sputter and disappear just as quickly as the ‘The Apprentice’ is losing viewers.--Chris Chocola

If the man who really should be the mayor, the next mayor of the city of New York, the great police commissioner Ray Kelly, chooses not to run, and if my former adversary [Eliot Spitzer] does run as an independent in 2013, I will run for mayor of the City of New York.--Dick Grasso

I want my son to watch "The Natural" someday, hear Roy Hobbs say, "Some mistakes you never stop paying for," and know that it's not just words in a movie. I want my son to know that you haven't lived until you've fought back, that you haven't won until you've lost, that you can't understand what it's like to relish something until you've suffered, too. I want him to understand that it's the 21st century, that we sit around picking our heroes apart all day, that we expect them to be superhuman at all times, that we get pissed off when they aren't, that it's hypocritical if you really think about it.--Bill Simmons

[Edward Wilson's] new argument, in a nutshell, amounts to a frontal attack on long-accepted ideas about one of the great mysteries of evolution: why one creature would ever help another at its own expense. Natural selection means that the fittest pass down their genes to the next generation, and every organism would seem to have an overwhelming incentive to survive and reproduce. Yet, strangely, self-sacrifice exists in the natural world, even though it would seem to put individual organisms at an evolutionary disadvantage: The squirrel that lets out a cry to warn of a nearby predator is necessarily putting itself in danger. How could genes that lead to such behavior persist in a population over time? It’s a question that bedeviled even Charles Darwin, who considered altruism a serious challenge to his theory of evolution.--Leon Neyfakh

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--Thomas Jefferson et al

We don’t think of love as a strength, but as a compromise of strength. And we certainly don’t think of the value of love in affecting mass, social change, and yet Napoleon realizes he and his work will be forgotten and other leaders will flicker and fade while the work of Christ carries on. And why? Because Jesus loved his men, and charged those men to take his message of love to the ends of the earth. I am wondering whether or not we think of the great commission as a duty, a charge, or a joyful expression of love?--Don Miller

Alexander, Caesar, Hannibal, Louis XIV strove in vain to secure this. They conquered the world, yet they had not a single friend, or at all events, they have none any more. Christ speaks, however, and from that moment all generations belong to him; and they are joined to him much more closely than by any ties of blood and by a much more intimate, sacred and powerful communion. He kindles the flame of love which causes one’s self-love to die, and triumphs over every other love. Why should we not recognize in this miracle of love the eternal Word which created the world? The other founders of religions had not the least conception of this mystic love which forms the essence of Christianity.--Napoleon Bonaparte

For three months, the Arab world has been awash in protests and demonstrations. It's being called an Arab Spring, harking back to the Prague Spring of 1968. But comparison to the short-lived flowering of protests 40 years ago in Czechoslovakia is turning out to be apt in another way. For all the attention the Mideast protests have received, their most notable impact on the region thus far hasn't been an upswell of democracy. It has been a dramatic spike in tensions between two geopolitical titans, Iran and Saudi Arabia. This new Middle East cold war comes complete with its own spy-versus-spy intrigues, disinformation campaigns, shadowy proxy forces, supercharged state rhetoric—and very high stakes.--BILL SPINDLE and MARGARET COKER

Can one person controlling an identity, or a group of identities, really shape social architecture? Actually, yes. The Web Ecology Project’s analysis of 2009’s post-election protests in Iran revealed that only a handful of people accounted for most of the Twitter activity there. The attempt to steer large social groups toward a particular behavior or cause has long been the province of lobbyists, whose “astroturfing” seeks to camouflage their campaigns as genuine grassroots efforts, and company employees who pose on Internet message boards as unbiased consumers to tout their products. But social bots introduce new scale: they run off a server at practically no cost, and can reach thousands of people. The details that people reveal about their lives, in freely searchable tweets and blogs, offer bots a trove of personal information to work with. “The data coming off social networks allows for more-targeted social ‘hacks’ than ever before,” says Tim Hwang, the director emeritus of the Web Ecology Project. And these hacks use “not just your interests, but your behavior.” A week after Hwang’s experiment ended, Anonymous, a notorious hacker group, penetrated the e-mail accounts of the cyber-security firm HBGary Federal and revealed a solicitation of bids by the United States Air Force in June 2010 for “Persona Management Software”—a program that would enable the government to create multiple fake identities that trawl social-networking sites to collect data on real people and then use that data to gain credibility and to circulate propaganda.--Andy Isaacson

My experience with my blank book, What Every Man Thinks About Apart From Sex, has lessons for all of us. It shows that if you have a clear idea, you deliver it well, and then shout about it loudly (and with the right tools), you can make anything happen – you could even get a blank book to the top of the bestseller charts. One small step for an Ideas Man, one giant leap for publishing.--Shed Simove

Perhaps [Henri] Matisse did suffer from fear and loathing like the rest of us, but there is no trace of them in his work. His studio was a world within the world: a place of equilibrium that, for sixty continuous years, produced images of comfort, refuge, and balanced satisfaction. Nowhere in Matisse's work does one feel a trace of the alienation and conflict which modernism, the mirror of our century, has so often reflected. His paintings are the equivalent to that ideal place, scaled away from the assaults and erosions of history, that Baudelaire imagined in his poem L'Invitation au Voyage.--Robert Hughes
Photo links here and here.

Sunday, April 17, 2011

You da man

Ray Allen drains a 3-point shot with 12 seconds left to get the Celtics the win, after trailing the Knicks for the entire second half.

These guys are getting old, this feels like their last shot.

Photo link here.

Friday, April 15, 2011

My comment at Jon Acuff's place

The early church created one of the most sustainable and effective social programs in history, i.e. the daily distribution of food to widows. The early church also provided aid to each other in times of famine. I do not know of any other not-for-profit institution that achieved this type of aid network without the coercion of government (for example the Templars provided a sophisticated financial system in their day, but I think they took a significant vig out of that activity).

The American church of the last couple of centuries built most of the universities and hospitals of their day. As theism gradually faded from the scene (props, Nietzche?), so did the capacity of the church to feed, clothe, house, educate, and heal the neediest in local communities. And once the income tax was instituted (it was unconstitutional during the big boom in church hospital and university building), the opportunity costs became too high to compete. Churches collect 4% of the wages of their congregants; government collects closer to 10 times that amount. Now churches seem to be relieved that there are food stamps, social security, medicare and medicaid, judges and social workers from the state.

I think that if we can reform US entitlement systems, from the Ponzi schemes they currently are to something sustainable–like the food stamps program–then perhaps our democracy won’t be committing suicide in the next 100 years.

There is a moral hazard (of free riding, and of employment disincentive) that comes with an indiscriminate redistributive program, as previous commenters have pointed out. I still believe that 2 Thess 3:10 is relevant today: if a man does not work he should not eat.
Jon's post here.

A seven-year, $154 million contract extension


He gets it.--TF

Thursday, April 14, 2011

Jake Tapper gets it

I hope you do, too.

He compares the President Obama of January 2010 to the version of April 2011

Reelection's in the air!

UPDATE: Greg Mankiw, too:
I must applaud the President for today's speech in which he finally and at long last takes the long-term budget imbalance seriously. There was a surprising amount of finger pointing for a person who claims to be transcending partisanship. That is especially true in light of the fact that President Obama's proposed policies, as put forth in his own annual budgets, have never shown how he would put the economy on a path with a declining debt-GDP ratio, even after the economy fully recovers from the recession.

But let's put that inconvenient truth aside for the moment. I am delighted that these fiscal issues are now squarely on the national agenda. If only someone could lock President Obama and Congressman Ryan in a seedy hotel room, turn off their access to cable, give them an endless supply of coffee and cold sandwiches, and not let them leave until they come to agreement, the nation could take a large step forward.

Cartoon of the day: Net Worth

Via Abraham Piper.

Quotes of the day

Peter over at Cleveland Frowns has a passionate post about Manny Ramirez and the Hall of Fame, and it made me think about Lyndon Johnson. This, I suspect, gives you a pretty good idea about how my ridiculous mind works and why I didn’t get many dates as a young man. In truth, I’m reading Robert Caro’s amazing and mesmerizing “Master of the Senate” about Johnson … and so just about EVERYTHING I hear at the moment makes me think about Lyndon Johnson, which makes it hard to read children’s books to the kids:
”And then the guy who wouldn’t eat Green Eggs and Ham, um, arranged for a filibuster by promising to vote with the pork states and then raised trumped up charges of Sam I Am being a communist.”--Joe Posnanski

As the NFL lockout enters its second month, players from at least 16 teams have already sought out extremely aggressive short-term loans with high interest rates, has learned. According to a financing source, these interest rates range from 18 percent to 24 percent, and upon default, they can rise as high as 36 percent.

The ability for bankers to run the show has long been an obvious flaw in the ratings system for structured products. Investment banks create the securities and benefit when they receive generous ratings. Banks pay the agencies that supply the ratings. Yet the agencies are somehow supposed to hold the line with the people who are responsible for their paychecks. ... So who is Mr. [Michael] Kanef? Before he was the head of regulatory affairs and compliance, he was in charge of ratings on residential mortgage-backed securities. Did such an executive deserve a promotion? And then there is Raymond W. McDaniel, the chief executive throughout the housing boom, the bust and the entire financial crisis. He remains at the helm. And he had to swallow the bitter pill of more than $9 million in compensation last year. Indeed, most of Moody’s top management has been in place through the crisis. --JESSE EISINGER

Two key questions are whether the credit agencies — which benefit from a unique series of government charters — enjoy too much official protection and whether their judgment was tainted.--Roger Lowenstein

According to market research, 1 out of 6 marriages that are happening in the US right now originated online, and these days nearly 30% of couples meet on the internet. But, as great as those stats sound, online dating is also utterly time consuming and competitive. The authors of “Freakonomics” discovered that 56% of men that create an online dating profile do not even get one single message while Jupiter Research found that 97% quit within 3 months.--Katherine Blodget

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record. The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.--Dennis Cauchon

As more Boomers retire, even a smaller percentage will be working (while more retirees will be collecting entitlements). This is why any plan to raise revenue by raising tax rates is irrational. It is all about reducing entitlement spending in the least painful way. There will be pain.--Cav

Republican won 24 of the 37 Senate contests last year, giving them a head start not only on winning a Senate majority in 2012 but possibly winning a 60-seat supermajority two years later. They will need to net 26 or 27 of the remaining 67 contests over the next two cycles to win a majority in 2014, or 36 of the next 67 to get to 60 seats during the next midterm elections. The Senate is always a different kind of numbers game than the House. With unbalanced classes, Senate control — to say nothing about a filibuster-proof majority — hinges on which party has more seats up for election in a particular election cycle. When one of the political parties has a huge election night, as Republicans did last year, it automatically gives that party an opportunity to take over the Senate, whether two years later or four. The 2012 Senate class includes 23 Democrats and only 10 Republicans, and the stunning imbalance means that Democrats will be on the defensive throughout the cycle unless the political environment shifts dramatically to their party.--Stuart Rothenberg

Having defended Fort Sumter for thirty four hours until the quarters were entirely burned the main gates destroyed by fire. The gorge walls seriously injured. The magazine surrounded by flames and its door closed from the effects of heat. Four barrels and three cartridges of powder only being available and no provisions remaining but pork. I accepted terms of evacuation offered by General Beauregard being on same offered by him on the eleventh inst. Prior to the commencement of hostilities and marched our of the Fort Sunday afternoon the fourteenth inst. With colors flying and drums beating. Bringing away company and private property and saluting my flag with fifty guns.--Major Robert Anderson, April 14, 1861

My 5-year-old apparently hates social justice. Have you ever had a moment like that, when you tried to teach your kids a lesson and it backfired?--Jon Acuff

Dying is easy. Comedy is hard. Making a great screen comedy is darn near impossible.--Christian Toto

Since Twitter was invented, Internet behemoths have been clamoring to buy it in the belief that it is the one social service with the potential to compete with Facebook. Last fall Microsoft, Google, and Facebook itself all considered buying the company. Microsoft never made an offer, according to sources, but Facebook is believed to have offered $2 billion for Twitter, and Google, by far the most serious, offered as much as $10 billion.--Jessi Hempel

I think it’s fair to say that Zuckerberg is lacking in conscience. Certainly, someone who had a strong conscience would feel somewhat guilty about the way he treated the Winklevoss twins and his best friend [Eduardo Saverin] when he tried cutting him out of his shares. And you never see signs of guilt over anything. ... He’s certainly chosen great talent [to surround himself with over time], but all of Facebook’s ideas seems to come from other people. There are people who passionately want to change the world for the better. I don’t hear anything like that in Zuckerberg.--Michael Macoby

... you can think about the whole capitalist system as being designed to get us to take actions and spend money now – and those businesses that are more successful in that do better and prosper (at least in the short term). And this of course continuously tests our ability to resist temptation and exercise self-control. It is in this very environment that it's particularly important to understand what's going on behind the mysterious force of self-control. ... It seems that Ulysses and kids ability to exert self-control is less connected to a natural ability to be more zen-like in the face of temptations, and more linked to the ability to reconfigure our environment (tying ourselves to the mast) and modulate the intensity by which it tempts us (filling our ears with wax). If this is indeed the case, this is good news because it is probably much easier to teach people tricks to deal with self-control issues than to train them with a zen-like ability to avoid experiencing temptation when it is very close to our faces.--Dan Ariely

A true bubble is when something is over-valued and intensely believed. Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus. ... If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates? It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.--Peter Thiel
Photo link here.

Wednesday, April 13, 2011

Quotes of the day

Little Franklin Delano Roosevelt sits primly on a stool, his white skirt spread smoothly over his lap, his hands clasping a hat trimmed with a marabou feather. Shoulder-length hair and patent leather party shoes complete the ensemble. We find the look unsettling today, yet social convention of 1884, when FDR was photographed at age 2 1/2, dictated that boys wore dresses until age 6 or 7, also the time of their first haircut. Franklin’s outfit was considered gender-neutral.--Jeanne Maglaty

What do you do when a cathedral of capitalism becomes antiquated? You turn [the NYSE] into New York's best party space.--DAVID K. RANDALL

To my Republican friends: take back your party. So that it doesn’t matter so much who wins the election ...--Nancy Pelosi

Apparently, the phrase "angry left" contains a redundancy.--Arnold Kling

If these reports are correct, the bill contains only about $11 billion in hard cuts. Basically, it looks as if the tea partiers may have gotten snookered by their own side.--Tyler Cowen

The best candidates for the GOP will be the anti-Obamas. That rules out Romney (too good-looking and too unwilling to attack his own health care reform in Massachusetts). That elevates Daniels and Christie. Both are dramatically less elegant and Ivy-League than the President and both have a track record for fiscal responsibility. It looks like Daniels will run. i think Christie will run if no one jumps out early. He will be “talked into” running.--Russ Roberts

Why haven’t our leaders been frank with us? Well, because they believe, not unreasonably, that the political costs of frankness are too high, and that they’re better off waiting for the other guys to put their cards on the table first. So against that backdrop, how would you describe a party leadership that decides to risk the backlash and be honest about the long-term implications of its own vision for the federal budget? Even if this honesty doesn’t produce a completely optimal policy proposal, I think you have to call that leadership … brave.--Ross Douthat

France's bureaucracy is very good at inventing new forms of taxes, and most of them are awful, but two of them are actually great: the value added tax and the wealth tax. And realizing this is incumbent on understanding the Econ 101 difference between a stock and a flow. In practice, in general, it's better to tax stocks than flows, because stocks are capital that should be deployed in the economy, and flows are almost always returns on investment (whether that investment is money or work). If you've been following you realize why the plan proposed by President Sarkozy, who was elected on a slogan of rewarding hard work, is stupid: the wealth tax is one of the few economically efficient taxes in France. The country already has high rates of corporate and personal income tax, and absurdly high payroll taxes. What's more, France is actually a really wealthy country. There are tons of really rich people in France. The reason it doesn't show is because everything in the tax code encourages that wealth to be used for rents instead of productive investment that would create growth, innovation and jobs.--Pascal-Emmanuel Gobry

Philosophers often use state-of-nature thought experiments to help illustrate how politics contributes to the common good... [W]e can also imagine an "inverse state of nature" - a political society that lacks private, nonpolitical activity. In the inverse state of nature, people try to gather together for public deliberation, voting, and law creation, but no one engages in private actions. In the inverse state of nature, life would also be nasty, poor, brutish, and short, because there would be no food, music, science, shelter, or art.--Jason Brennan

Chart of the day: Generational Income Mobility

Via Russ Roberts, who notes:
Notice that all of the quintiles, except the top quintile get smaller shares between 1970 and 2000, roughly the time covered by the Pew study. But the Pew Study comes to the exact opposite conclusion. The lowest quintiles got the biggest gains WHEN YOU FOLLOW THE SAME PEOPLE. Using the Census data over time tells you NOTHING about what “they” (the top whatever percent) had happen to “them” over time.

It is also worth pointing out that the pie is not constant. So you’re well-being can grow even when your share of the pie falls if the pie is getting sufficiently larger.

Tuesday, April 12, 2011

The Summers Heresy

Suggesting that there are important gender differences.

Quotes of the day

The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity. For whatever the reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.--Judge Alex Kozinksi

Bank of America Corp.'s internal auditors are reviewing why two top finance and accounting executives weren't consulted before the bank disclosed to investors that a dividend increase had been rejected by regulators, according to people familiar with the situation. The March 23 filing with the Securities and Exchange Commission was more explicit than an earlier news release. It showed that the Federal Reserve had "objected" to the proposed dividend increase following a "stress test" of all major U.S. financial institutions. Shares of Bank of America, the only bank to disclose the Fed's outright objection, dropped almost 4% in three days after the filing. But Chief Financial Officer Chuck Noski and Chief Accounting Officer Neil Cotty didn't see the filing before it went to the SEC, people familiar with the matter said. Head of investor relations, Kevin Stitt, found out late the night before, according to one of these people.--DAN FITZPATRICK And JOANN S. LUBLIN

Depression may make a wide swath of Wall Street workers worse at their jobs. A new study from the INSEAD international business school shows that people who are down in the dumps are much worse at making accurate predictions.--Kyle Stock

The arrival of the internet caused a large decline in both the pecuniary and non-pecuniary costs of accessing pornography. Using state-level panel data from 1998-2003, I find that the arrival of the internet was associated with a reduction in rape incidence.--Todd D. Kendall

As someone who has unfortunately succumbed to internet porn in the past, I would say that there is at least one pareto improving substitute, which is characterized with the externality of children. Positive or negative, I leave as an exercise to the reader.--Cav

[Garrett Jones presented a paper] titled "A Political Coase Theorem for the Intelligent." It was on how high-IQ pairs in experimental games do significantly better on trust and cooperation. He then reasoned from that to higher IQ creating more solutions to cooperation problems and, therefore, creating more economic growth. He pointed out a number of times in his presentation that, given how many variables researchers had studied in trying to understand differences in cooperation in experiments, adding IQ to the mix should have been done in the 1960s. It shouldn't have had to wait 40 years.--David Henderson

The subjects you propose for a series of Mathematical and Metaphysical Essays are so very profound, that there is perhaps not a single subscriber to our Journal who could follow them.--Sir David Brewster, editor of The Edinburgh Journal of Science to Charles Babbage

Stumbling upon the next great invention in an “ah-ha!” moment is a myth. It is only by learning from mistakes that progress is made. It’s time to redefine the meaning of the word “failure.” On the road to invention, failures are just problems that have yet to be solved. ... Those 10,000 [failures by Thomas Edison] resulted in the Dictaphone, mimeograph, stock ticker, storage battery, carbon transmitter and his joint invention of the light bulb. In the end, 10,000 flops fade into insignificance alongside Edison’s 1,093 patents--James Dyson

A Somber Anniversary: The Civil War begins, 150 years ago today

A nice historical retelling of the Battle of Fort Sumter here.  Image link here.

Monday, April 11, 2011

Quotes of the day

Free and competitive markets aren't thought of as promoting tolerance and reducing bigotry, yet they do so far more effectively than ever-more-detailed civil rights regulations. Writing in the 1730s, Voltaire famously described the London Stock Exchange as a place "where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mohammedan, and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts." Gary Becker earned the 1992 Nobel Prize in economics in part for demonstrating that discrimination is economically detrimental -- free markets penalize an employer who discriminates for reasons unrelated to ability and productivity. Freedom of association is indispensable to making a free society work. No culture is without unfairness. But where men and women are unfettered in their freedom to form or avoid relationships with others -- socially and economically -- tolerance and cooperation increase, and ugly prejudice recedes.--Jeff Jacoby

The story does not say that "responsible lending" produced a housing bubble and a crash, resulted in millions of foreclosures, and wiped out the savings of millions of other borrowers who did not turn in the keys to their lenders.--Arnold Kling

Why do we allow the exceptions of school nurses and military doctors, but no other exceptions? One obvious common element here is that most medics and school nurses are government employees. This seems to be part of a more general pattern, whereby we often relax regulations for the government. For example, the military is also not subject to OSHA rules on workplace safety, and the worst asbestos and hazardous waste sites have been on government property. Congress has also exempted itself from rules against workplace discrimination and stock insider trading.--Robin Hanson

Suppose that in a mere three years your family’s spending – spending, mind you, not income – jumps from $80,000 to $101,600. You’re now understandably worried about the debt you’re piling up as a result of this 27 percent hike in spending. So mom and dad, with much drama and angst and finger-pointing about each other’s irresponsibility and insensitivity, stage marathon sessions of dinner-table talks to solve the problem. They finally agree to reduce the family’s annual spending from $101,600 to $100,584.--Don Boudreaux

The White House said Monday that President Barack Obama regrets his vote as a senator in 2006 against raising the debt limit — a vote he's now pressuring Congress to take.--ERICA WERNER

Leaders eat last.--military correspondent

I know, as you must know, that SecDef Gates recently spoke at West Point and expressed his view that the personnel system must be reformed. I was gratified by that. But I've also heard in the months since my article first appeared too many voices making noise to hide the signal. The nation we have sworn to protect deserves better.--Tim Kane

... I do realize that we in sportswriting and sports broadcasting set the genius bar pretty low for coaches and athletes. The only people who set it lower are the people at Apple, who essentially take a bunch of ordinary people, have them take two Macbook Pro classes and one on the iPhone, and then immediately graduate them to geniuses. These geniuses even get their own bars. But I still maintain that Manny Ramirez was a hitting genius. ... In my own romantic view of baseball and the world, I tended to see Manny as baseball’s Mozart — an often vile personality who did one thing so beautifully that you could not turn away.--Joe Posnanski

How many times have you been told to start with a little stretching? Yet multiple studies of pre-workout stretching demonstrate that it actually raises your likelihood of injury and lowers your subsequent performance. Turns out muscles that aren’t warmed up don’t really stretch anyway, and tugging on them just firms up their resistance to a wider range of motion. In fact, limbering up even has a slackening effect on your muscles, reducing their stability and the amount of power and strength they’ll generate. ... If you’re in the fitness-equipment business, free weights are a loser. The 2010 model looks too much like the 1950 model, and they both last forever. Far better to create gleaming $4,000 contraptions that can be reinvented every two years, and then hire a PR firm to promote some made-up training theory claiming that machines are the answer ... Commercial health clubs need about 10 times as many members as their facilities can handle, so designing them for athletes, or even aspiring athletes, makes no sense. ... It can be hard to believe a true strength coach the first time he tells you that by pressing and dead-lifting on even days, squatting and doing chin-ups on odd days, avoiding all other exercises, and adding a little to the bar each time, you’ll be stronger than you’ve ever been in only a month’s time.--Daniel Duane

... parents under 30 are decidedly less happy than their child-free peers. Then, once parents hit 40, the relationship reverses and people with children are cheerier than those without.--PAMELA PAUL
Photo link here.

Friday, April 08, 2011

Manifesto of the Week

Why We Should Separate Health and State.

Chart of the day: Budget differences

John Taylor writes
From a macroeconomic perspective, perhaps the biggest difference is that the House Budget brings outlays as a share of GDP back close to 2007 levels as a share of GDP, thereby removing the large spending increase of the years 2008-2009-2010, while the Administration budget effectively locks in that increase.
Via Arnold Kling, who observes:
Somehow, we could ratchet up spending by hundreds of billions at the drop of a hat. Reducing spending by less than $100 billion becomes Armageddon.

Quotes of the day

The young woman just told the plain, straight, truth: I want to be her friend but she doesn’t want to be mine. She went on, I’d like her to be my friend. I think I’m a good friend. Talk about the real language of a real heart. Talk about truth telling. I don’t know where my heart learned to translate it’s sentiments into such false sophistication, but after hearing this conversation, I think false sophistication is akin to lying, and I don’t think lying is the right way to get what you want.--Don Miller

It's almost as if the muni salesmen are reading from the script written by the mortgage bond guys in 2005. Remember them? They were the people who insisted that all the "talk" of a housing bubble was irresponsible.--John Carney

Two things I would strongly suggest the [Securities and Exchange] Commission look at is the 500 shareholder rule and the requirements to be a qualified and/or accredited investor to invest in privately held companies. Both of these rules directly or indirectly keep small investors, ie the general public, from investing in privately held companies. Most people do not qualify as accredited or qualified investors so their ability to invest in privately held companies is significantly restricted. And because privately held companies cannot have more than 500 shareholders, most companies prefer institutional investors who can invest large sums of money to small investors who cannot. Some of the most exciting companies to emerge in the past decade have decided to stay private for longer periods of time. There are many reasons why that is the case, but one of the reasons is that founders, Boards, and senior management realize that being public and having your employee equity go up and down every day has a cultural impact that is not always good for the organization.--Fred Wilson

Ryan has moved us off Unreality Island. He is forcing Americans to confront the implications of their choices. With a few straightforward changes, his budget could be transformed into a politically plausible center-right package that would produce a fiscally sustainable welfare state while addressing the country’s structural economic problems. I suspect the process Ryan has started will take us back toward the moderate framework the Simpson-Bowles deficit commission proposed a year ago. Great journeys begin with one bold step.--David Brooks

I don’t want to be alarmist but it is important to be sensitive to cracks in your paradigm. If you wait until it is obvious that you are wrong then it is too late.--Karl Smith

... nobody who writes what Krugman wrote should be mistaken for a person who is being reasonable.--Steve Landsburg

An Oxfam study found that when carpet makers in Bangladesh were pressured to fire their child laborers, the kids went to their next best alternatives: prostitution or starvation.--Bryan Caplan

War: What is it good for? Well, minority rights for one thing. Regardless of what you think of America’s overseas military adventures during the last century, they’ve all had positive domestic outcomes: Minority groups that have contributed to war efforts have been rewarded with expanded rights.--Robert Saldin

A longitudinal analysis suggested that shifting into more committed relationships was followed by improvements in subjective well-being. Little support was found for the assumption that people with a high level of well-being select themselves into more committed relationships.--Journal of Social and Personal Relationships

The slums of Chicago are full of first-round leaders.--Peter Jacobsen

On the train ride home—with the bailout check in your pocket—you think about how the hot tears scalded your cheek when you had to explain to your parents how bad things had gotten. You tell yourself it was all for theatrics: Crocodile tears for their sympathy. But in your most secret heart you know you weren't lying to them: You were only lying to yourself.--Ash Bennnington

Who’s going to get butt-naked right now and stand on a stool and start clapping their hands? I don’t know. Do they have that guy?--Kevin Millar

We’re going to get home right now and my wife’s going to look at me and say [Expletive], you’re 0-6. You guys stink. We all bring this [expletive] home with us, man. We care. We’ll figure it out. We have to. We don’t want to let anyone down. That’s it.--Dustin Pedroia

“I want to feel everything,” Nick [Charles] told me, and I thought I knew what he meant. I thought he meant that he wants to breathe in the mountain air, and really taste the calamari, and take in every reaction from his beautiful little daughter Giovanna. And I know that he did mean all those things and more. But I also think that he means he wants to feel EVERYTHING. He does not want to lie to himself. He wonders if he has spent too much time lying to himself. He does not want to withdraw even for moment. He knows that people are watching, and they can be inspired. He knows that his wife and daughter are with him, and every moment is precious. He knows that he has so few good days left, and as he told me: “I don’t have time for the BS. I just don’t. I’m dying.” And if we are honest with ourselves, truly and devastatingly honest, maybe we should ask: Is it really so different for any of us?--Joe Posnanski