Friday, October 28, 2011

Quotes of the day

... it’s hard to escape the conclusion that the only thing Congressional Republicans find more abhorrent than Keynesian economics is austerity for programs they like.--Brian Beutler

Only by reducing the growth of government can we increase the growth of the economy.--Ronald Reagan

During the first 10 months of this year President Obama declared 89 major disasters, more than the record 81 declarations that he made in all of 2010. And Obama has declared more disasters — 229 — in the first three years of his presidency than almost any other president signed in their full four-year terms. Only President George W. Bush declared more, having signed 238 disaster declarations in his second term, from 2005 to 2009.--Amy Bingham

There will be great earthquakes, famines and pestilences in various places, and fearful events and great signs from heaven.--Jesus Christ

The nonfinancial sector wants to issue risky, long-term liabilities and to hold riskless, short-term assets. The financial sector accomodates this by doing the reverse. One question is, how much of this financial intermediation is optimal? Up to a point, financial institutions can use specialized knowledge, monitoring arrangements, and diversification to perform their function relatively safely. However, beyond that point, they are relying more and more on signaling and confidence. This is true for governments as well as for financial intermediaries. Since 2008, my reading has been that the amount of financial intermediation needs to decrease, with whatever painful consequences that follow. This includes a reduction in government-backed intermediation, rather than a new form of government backing of the sort that Caballero is suggesting. The Austrian perspective would be that government support for financial intermediation is the disease, not the cure. In this case, I believe that is correct.--Arnold Kling

Occupy Wall Street is denouncing banks and Wall Street for "selling toxic mortgages" while "screwing investors and homeowners." And the federal government recently announced it will be suing mortgage originators whose low-quality underwriting standards produced ballooning losses for Fannie Mae and Freddie Mac. Have they fingered the right culprits? There is no doubt that reductions in mortgage-underwriting standards were at the heart of the subprime crisis, and Fannie and Freddie's losses reflect those declining standards. Yet the decline in underwriting standards was largely a response to mandates, beginning in the Clinton administration, that required Fannie Mae and Freddie Mac to steadily increase their mortgages or mortgage-backed securities that targeted low-income or minority borrowers and "underserved" locations. The turning point was the spring and summer of 2004. Fannie and Freddie had kept their exposures low to loans made with little or no documentation (no-doc and low-doc loans), owing to their internal risk-management guidelines that limited such lending. In early 2004, however, senior management realized that the only way to meet the political mandates was to massively cut underwriting standards.
Taxpayer losses at Fannie and Freddie alone may exceed $300 billion. The costs of the financial collapse and recession brought on by the mortgage bust are immeasurably higher. Unfortunately, the Obama administration has perpetuated the low underwriting standards that gave us the crisis and encouraged the postponement of foreclosures by lending support to various states' efforts to sue originators for robo-signing violations. Now they are trying to deflect blame from Fannie and Freddie by suing the originators who fulfilled the politically motivated demands of the government-sponsored agencies that drove the mortgage crisis. If successful, all of those efforts will further postpone the ability of banks to grow the supply of credit, and they will sow the seeds of the next mortgage bust.--CHARLES W. CALOMIRIS

I agree with Nietzsche that duty is not obvious, and often some self-serving platitude for some powerful interest, so it isn't helpful to state that something that is a duty is best. Further, it makes no sense to ignore context when applying a universal law, as when you should lie to keep Nazis from finding Jews in your basement, or when you kill a dangerous burglar, and so universal law is not obvious. Lastly, as Ayn Rand noted, ignoring the consequences of actions, and just focusing on the duty, is irrational, because we act to make things in a real world that we might as well believe really is real. Finally, I should note it is rather circular in practice, because in the end the 'universal law' is defended on utilitarian grounds anyway (eg, it will make society happier).--Eric Falkenstein

Limited learning on college campuses is not a crisis because the institutional actors implicated in the system are receiving the organizational outcomes they seek, and therefore neither the institutions themselves nor the system as a whole is in any way challenged or threatened.--Richard Arum, Josipa Roksa

On the cosmic justice front, there might be something to be said for a "clawback" of past earnings of professors and administrators at colleges. But I don't see anyone clamoring for that. Of course, cosmic justice is always served by taxing people with high incomes. Make them pay off everyone else's student loans, bad mortgages, free health care for all, etc. After all, it is the fault of high-income people that students borrowed all that money. Isn't it?--Arnold Kling

The liberal fairness of Occupy Wall Street diverges from conservative and libertarian fairness [of the Tea Party] in that liberals often think that equality of outcomes is evidence of fairness.--Jonthan Haidt

I think I am the 99%

and the government is the 1%.

(Well, 24%, in the case of federal spending of GDP).

Wednesday, October 26, 2011

Photo of the day: Close, but no cigar

Source here, via WestWingReport.

Laughing more than any SNL episode since Will Ferrell left

.... the Steve Schwarzman who grew from modest Pennsylvania beginnings, to develop an insatiable desire for stone crabs, the son of a middle-class family who grew up to own almost as many homes as Charlie Rangel.

Quotes of the day

If Men’s Health magazine was true, you would never need to buy more than one issue. If the articles that promised flat abs and less stress and better sex really worked as promised, you’d never need to have a subscription because every issue is the exact same thing.--Jon Acuff

You can't stop Tebowmania. You can only hope to contain it.--Peter King

In four starts, Tebow now has two fourth-quarter comebacks from at least 13 points down. In John Elway's career, guess how many he had. Two.--Kerry Byrne

I.B.M. named Virginia Rometty as its new chief executive, certifying her status as one of the most powerful women in technology. She joins a list that includes Meg Whitman, the newly installed chief executive of Hewlett-Packard; Sheryl Sandberg, the chief operating officer of Facebook; and Safra Catz, the chief financial officer of Oracle.--Michael De La Merced

According to the British lexicographer John Ayto, 'cool' has become an “all-purpose term of approval.” Indeed, the term is so widely used that this might, at first glance, appear to be a valid definition. But I beg to differ: cool is more precise and complex, and an elusively moving target. It’s cool to be clever, but it’s uncool to be a know-it-all. Sometimes cool stuff is expensive – but sometimes it comes cheap, and the expensive stuff is uncool. Sometimes it’s cool to break the law; at other times it isn’t. Communism used to be cool, but not so much any more. Brooklyn didn’t use to be cool, but now it is. And of course people can be (or not be) cool. Steve McQueen was very cool. Clint Eastwood? – not really: he’s too edgy and tightly wound. Collectively, the Beatles could be cool, but viewed individually, John Lennon was cooler than the other three put together. The Dalai Lama is cool (or, at least, admiring him is), but it’s hard to imagine anyone seeing a pope as cool. Barack Obama is sort of cool, for a politician – although the word on the street says he’s failed to live up to his full cool potential. Tony Blair tried very hard to be cool, and for a while he seemed to enjoy some success. But you can’t fool all the people all the time.--Colin Eatock

No, life cannot be understood flat on a page. It has to be lived; a person has to get out of his head, has to fall in love, has to memorize poems, has to jump off bridges into rivers, has to stand in an empty desert and whisper sonnets under his breath. ... It’s a living book, this life; it folds out in a million settings, cast with a billion beautiful characters, and it is almost over for you. It doesn’t matter how old you are; it is coming to a close quickly, and soon the credits will roll and all your friends will fold out of your funeral and drive back to their homes in cold and still and silence. And they will make a fire and pour some wine and think about how you once were . . . and feel a kind of sickness at the idea you never again will be. So soon you will be in that part of the book where you are holding the bulk of the pages in your left hand, and only a thin wisp of the story in your right.--Don Miller

I write about this mostly anonymous man because players like [Kent] Hull are the bedrock of so many good teams, past and present. Hull did his job and never sought glory. If glory came, as it did in the form of three Pro Bowl nods and two All-Pro selections, he would deflect it. He was the perfect Bill Polian/Marv Levy player. Do your job, be responsible, lead when needed, care only about winning -- and be smart. I am confident in saying he was one of the five or six most valuable players on those four Buffalo Super Bowl teams, because of what he meant to the team in making the line calls on the fastest-moving offense in football, and for what he meant as the last guy out of the locker room ... after every game, after every practice. If a problem needed to be solved, he'd help. If someone just wanted to talk, he'd talk. Part of his football life included being there if anyone needed him; someone usually did. I remember lots of big-talking (rightfully so), boisterous players on those Bills teams, on and off the field, and I remember Hull, with a dip between his lip and gum, accommodating teammates, reporters, fans, and never being too big for any of it. He'd do it quietly. He loved Levy's trademark, "Where would you rather be than right here, right now?'' He lived that. Being a cog in the wheel was his thing.--Peter King

I owe a lot of that stitching in my Hall of Fame jacket to Kent Hull.--Thurman Thomas
Image link here.

Scott Adams humbles me

Here's the conversation:
Personally, I'm quite comfortable paying taxes at the highest rate. It's like paying protection money to the Mafia, and I mean that in the best possible way. High taxes reduce the odds that jealous mobs will kill me for succeeding in my chosen field. Oh, and my taxes are also helping fund national defense, education, social program, and other good stuff. That's a win-win. But please don't insult me with arguments of fairness. Save the fairy tales for your kids. I know some of you will leave comments about your own fairy tales of Laffer Curve economics, in which lower tax rates stimulate the economy and fill the treasury with free money. And then someone will point out that economic growth in the Unites States has often coincided with higher tax rates. Can we agree that the Laffer Curve has been debunked everywhere but on Fox News?--Scott

Scott, are you saying that an economy with a 98% tax rate will outperform an economy with a 2% tax rate, in refuting Laffer? That seems a bit unlike you. But I get your point.--Cav

If you're looking at the two end points of the Laffer curve to decide if it's valid, your brain is broken.--Scott
I was a little surprised by his Dilbertian response. For some reason, I read his blog very differently than his comic strip. Maybe that was wrong of me.

Here are a few links as to why he might want to think about this more.  There's a lot out there worth considering, some from surprising sources.

Well, I suppose any type of marginal humility increase is a good thing.  Hopefully, I am little bit ahead of Adams at this juncture.

Monday, October 24, 2011

Quotes of the day

Corporate executives and managers, as well as some economists, like to think that the increasing pay of senior employees has to do with increasing returns for their specialized skills. Over email, [Emmanuel] Saez offered me a much less flattering explanation: it’s not that managers have become more valuable. It’s that, as he puts it, there’s no good way to measure objectively the productivity of an executive. That lends itself to what Saez calls “bubble phenomena” in their perceived value—to put things bluntly, they benefit from being seen as more important than they are.  If that’s the case and managers do not have some special growing value, then the same forces that have put pressure on wages lower down the ladder—labor mobility, ease of hiring and firing—will eventually apply to them, too. We may already be seeing the beginnings of that with CEO salaries. Whether in a slow seep or a big bang, every bubble will deflate.--Mark Gimein

Corporate governance experts should consider whether there should be real mechanisms to throw out and replace bad boards. Perhaps we need term limits for board members? At a minimum, there should be accountability and some metric to determine what constitutes a good board. We are seeing a search for accountability in the criticisms of the Hewlett-Packard and News Corporation boards for poor oversight. Again, though, we have no real systematic way to measure or monitor this conduct. Boards are also not a panacea and have serious institutional failings. Boards appear to be poor at taking decisive action. In the face of crisis, boards tend to resign or be taken captive by their advisers. Think of Dynegy, where the board resigned en masse after two failed sale attempts. And does anyone really think a board can substantively monitor systemic risk at a $2 trillion institution like Bank of America? Not only do boards need to be held accountable, there is the scary question of whether all of this power being provided to them is a good thing. If not, should this power flow back to the chief executive? This is not to say that corporate governance does not have value. It does, and I believe it has increased shareholder wealth. But this is a learning process. There is still a lot of work to do.--Steven Davidoff

I majored in communism and graduated magna cum laude. SO WHAT?--Jim Cramer, on CNBC today, who did this at Harvard

I’m not planning on going home.--Stacy Hessler, Wall Street Occupier, who has 4 children at home

[Herman Cain] is rising as more and more Republicans come to the conclusion that the Republican Party has found its Michael Dukakis, a technocratic Massachusetts governor running on competence, not ideology.--George Will

... when you’re a speaker, in the sense of public speaking, you can pick your topics. When you’re a would-be president, every topic picks you. Whatever happens this morning is the new topic. So, you have to have the ability to get briefed, very fast. Ideally, you should know a fair amount going in. And I think one of the Republican weaknesses has been that we rely too much on consultants and too much on talking points. And we don’t rely enough on actually knowing things. If you’re going to lead the country and change history, you had better know a heck of a lot before you start, because there’s not much time for learning on the job. And as Obama’s proven, youth and inexperience are interesting, but they can also be a disaster.--Newt Gingrich

[New York City Comptroller John] Liu also claims that public-pension funds are a better deal because they can take much more risk in pursuit of higher profits. But he all but ignores the fact that when pension returns fall short, it’s the taxpayer who must make up the difference. Skyrocketing pension costs have wreaked havoc with the city’s budget; they’re the driving force behind budget cuts, including fewer police officers to deal with more protests and gunplay alike. Yet Liu’s report merely says that concerns about higher taxpayer costs are “legitimate” -- and that’s it. Indeed, the report raises a question that the comptroller surely didn’t intend: If big pension plans offer better returns at lower costs, why not let city workers participate in such plans if they like -- but with only a small portion (maybe 20 percent of salary, instead of 50 percent) guaranteed by the taxpayers? Workers who want more money could contribute more and still benefit from scale. But the extra contributions wouldn’t carry a taxpayer guarantee. Anyway, New York City doesn’t have to guarantee such generous pensions to “work” its size. It could still use the leverage to fight for lower fees on 401(k)-style plans for its workforce. Liu’s report doesn’t advance the cause of fixing pensions. But it does remind New Yorkers of the stakes of the next mayoral race. It should remind them, too, that the current mayor is running out of time. If Mayor Bloomberg doesn’t get something done on pensions -- and soon -- he’ll leave behind a legacy of having left untouched a status quo whose costs are eating the city from the inside out. Sadly, plenty of his would-be successors think that’s just fine.--Nicole Gelinas

All models are analogies, and being analogies, they are limited in their scope. In physics you can describe ice, water and steam, and the phase transitions between them, with one unified theory, amazingly, and hence you can handle the extremes of freezing and boiling. In finance or economics we have nothing like that. Even beautiful Black-Scholes-Merton ignores volatility variations, illiquidity, panic, government regulations on shorting, to name just a few things that lie outside it. Therefore, when the world changes dramatically, every single model you can think of is likely to fail. I would like the following principle to be engraved on the foreheads of all financial and economic model users: All models are short volatility. When volatility changes a lot, the model is going to fail.--Emanuel Derman

Doodling is not anti-intellectual!

Au contraire, mon frère.

I wonder what other seemingly counterproductive habits are actually productive enhancing? I'm hoping fantasy football, for one.

Friday, October 21, 2011

Video of the day: Nice intro to economics

It is great that those who did not go to college will understand this. Even better that those who did will, too. Via David Henderson.

UPDATE: Eric Falkenstein thinks:
So, like discussions in Marxist economics, which often involves very learned, earnest, and prolix researchers, it's best just not to go there [in questioning Keynesian solutions], because it's gibberish. Don't say Aggregate Demand, say, subsidies to investment of some kind, or more government spending, because that's more meaningful, and then ask, should we be subsidizing these investments, or having more government spending? The indirect effects are so speculative you might as well ignore them, and just ask if the direct effects are worthwhile.

Bloomberg vs. Koch

I just received this:

I like what Daniel Indiviglio said about it: basically, there's no there there. And certainly Koch has less than GE's pile of dirt.

Quotes of the day

Dirty tricks were not invented by Nixon; they stretch back to the Fall. Blessed is the Christian whose life is so transparent, who is “trustworthy and neither corrupt nor negligent” (Dan. 6:4), so that the only way he or she can be destroyed is by making Christian conduct and conviction a crime. ... no legal system can ensure consistent justice. Corrupt people will always find ways of exploiting the system to oppress others and advance themselves. Hidden behind the slogan is a deeper issue. Historically there has long been a tension between positive law theory, in which the only law to be obeyed is that enacted by government, and natural law theory, in which some fundamentals are thought to be discoverable by human beings. In the name of equity and justice, British courts, until fairly recently, would sometimes set aside positive law in favor of natural law where it was pretty obvious an injustice was otherwise being committed. Both in Britain and in the United States, such considerations are now rare. In Britain, what must be obeyed is what Parliament says; in the United States, what must be obeyed is what the Supreme Court says. In both instances, positive law largely prevails, as in ancient Persia. The matter has become increasingly difficult here since Western states have come to think they have a therapeutic role in society, defining the “illnesses” that must be confronted and the “therapies” that must be imposed as they go along. The potential for injustice and inequity multiplies.--Don Carson

Our tax dollars at work… a half-billion dollar loan (actually $529 million) from the U.S. Department of Energy to develop a hybrid toy for the wealthy and/or celebri-licious (like Leonardo DiCaprio, one of the first customers) that, in real world driving, won’t get much better mileage than your average crossover utility vehicle. Not only that, but the cars are manufactured in Finland — that’s right, Finland – and shipped here for sale, where their purchasers will then receive a $7,500 tax credit for buying one (the “cheap” base model starts at $96,895, with the full-zoot Eco Chic model going for a bargain $108,900). ... Those Occupy Wall Street-types in their tents at MacPherson Square? If they really, truly are bugged by corporate welfare, they need to schlep their signs and their chants and their anger over to the Mandarin Oriental Hotel. Right now. Because the Fisker Karma is where the rubber meets the road when it comes to corporate welfare. I have no problem with a group of entrepreneurs raising money from private investors to build a hundred thousand dollar toy for rich folks who want to flaunt their eco-consciousness. When and if that’s the case, may they have all the mazel in the world. But damn, it steams me up when my family and every family in America are forced to pay for it.--Andrew Fox

The more people helping each other out, the better.--Pietro Poggi-Corradini

Earlier this year, a report from Standard and Poor’s indicated that of the 1,485 stocks making up the S&P 1500 index, not a single one had a consensus sell recommendation from Wall Street analysts. That doesn’t mean there wasn’t the odd sell recommendation, it just means that there were no stocks that most analysts agreed had less than rosy prospects. Meanwhile, the S&P 1500 is down 2.77 per cent including dividends to Oct. 19, with the financials sector down 19.97 per cent. --Preet Banerjee

One of the running jokes of Mr. Chandor’s [Margin Call] script  is that the higher a person’s [corporate] rank, the less he is likely to understand what the firm is actually doing. This ignorance is almost a point of pride. “I don’t get any of this stuff” — this line is repeated about Peter’s discovery by Will, then Sam, then Sam’s boss, Jared Cohen (Simon Baker) and then Tuld. In a further absurdity, one person who does get it, Peter’s mentor, Eric Dale (Stanley Tucci) has just been downsized out of the company. As a security measure his cellphone has been disconnected, which means that his increasingly desperate former colleagues are unable to find him when he might be of most use.--A. O. SCOTT

I thought, This is a very dangerous person.--Sidney Lumet, on meeting Pauline Kael

Parents, you may be onto something: A small new study suggests that teens' intelligence, as measured by the IQ test, may fluctuate throughout adolescence. The changes -- in both verbal and nonverbal IQ -- ranged to as much as 20 points and were correlated with specific brain areas. IQ has long been thought to remain stable over a person's lifetime.--Amanda Gardner

[Steve Jobs] tries to treat [his pancreatic cancer] with diet. He goes to spiritualists. He goes to various ways of doing it macrobiotically and he doesn't get an operation. ... I think that he kind of felt that if you ignore something, if you don't want something to exist, you can have magical thinking .... We talked about this a lot.--Walter Isaacson, Jobs' authorized biographer

Ohhhh. That cake looks so good.--Kim Kardashian

Italy is house rich, somewhat cash poor, and has a miserable recent history of growth. If you look at the wealth side of the balance sheet, you can easily work up a heady optimism for Italy. If you study public choice theory, it is harder to do so. How many people in that country are either paid to do the wrong thing, or paid to do not so much at all? [The Great Stagnation] reigns. Italy’s privileges and distortions are so often so local, and so concentrated in inefficient professional services, that it is hard to imagine clearing them up quickly in the form of a big bang, in the way that say New Zealand or Chile or Thatcher’s England did. And even those successes took some time to pay off and underperformed for years. Note that if Italy could credibly be expected to grow a mere 2 pct. a year — maybe less — the entire eurozone crisis probably would be messy but manageable. It’s not.--Tyler Cowen

Brian Moynihan is here tonight. He’s the C.E.O. of Bank of America. As many of you know, Brian’s brother Patrick runs a Catholic boarding school in Haiti. Their parents must be so proud to see two of their boys running an underfunded, nonprofit organization.--Steve Schwartzman

Thursday, October 20, 2011

Chart of the day: Herman Cain's Intrade pricing history

Source here.

UPDATE:  Megan has a nice brief on Cain's 9-9-9 tax plan.

Quotes of the day

One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.--Thomas Sowell

... Steven Pinker’s The Better Angels of Our Nature: Why Violence Has Declined is a doorstop of a book about the progress of non-violence and humanitarianism in Western civilization whose index contains no references to Francis of Assisi, Bartolome De Las Casas, or William Wilberforce, and whose author betrays not even the slightest interest in the various sympathetic and provocative accounts of religion’s role in the development of the modern West and modern world.--Ross Douthat

We must hit the QB hard and often. QB's are over-rated, over-paid, pompous bastards and must be punished. Great pass coverage is a direct result of a great pass rush, and a great pass rush is simply a relentless desire to get to the QB.--Buddy Ryan

Steven Jobs, the late co-founder of Apple Computer, and Steven Chu, the current secretary of Energy, are both examples of super-achievers. Jobs created an innovative company that is currently among the most valuable in the world as measured by stock market capitalization. Chu earned a Nobel Prize in physics and sees himself as a leader in the battle against global warming. At this point, it seems likely that Jobs will be remembered as having contributed significantly to human progress. Chu's historical legacy is more problematic. Assuming that Chu's efforts at promoting solar power and electric automobiles are no more successful than the Carter-era effort to build a breeder reactor, they will end in dismal failure. Is there a lesson to be learned from this about where society should want its super-achievers to perform?
The U.S. Constitution was designed to thwart super-achievers in the public sector. However, by the middle of the 20th century our culture venerated super-achievers in office, and we no longer look to the Constitution to impose the restraints it once seemed to enumerate. Unless our culture changes, Constitutional restraints on power will not be resurrected. The longing for super-achievers in government is dangerous and misguided. The power that has accumulated in Washington, state capitals, and local governmental units is more than can be exercised responsibly. We have set ourselves up for disappointment and failure. What if, instead of doling out loan guarantees as secretary of Energy, Steven Chu were to set up a private venture capital fund to invest in the sort of projects he thinks are worthwhile? As a private venture capitalist, Chu might not be able to exert as much leverage on the industry as he can in his role as dispenser of taxpayer-funded guarantees. Power in the private sector is more dispersed. Most of the people who exercise it do not have credentials as impressive as Chu's Nobel Prize in physics. Still, the United States would be better off if super-achievers like Chu felt driven to pursue their goals in the private sector rather than through the institution of government. I would like to see a culture where super-achievers look to the (non-banking) private sector as the arena for attempting to realize their visions. Government should be an arena for quiet competence, not for those who aspire to great achievement.--Arnold Kling

The price black people pay for being free thinkers in this country is a very, very cruel one. Ask Clarence Thomas.--John Nolte

Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show. The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.
Last year Washington also had the most lawyers per capita in the U.S. compared with the 50 states, with one for every 12 city residents, according to figures from the American Bar Association and the Census Bureau. In New York State the figure was one out of every 123 residents, while in California the ratio was one in 243. Associate attorneys in the Washington area who have worked between one and eight years had a median salary of $186,250, compared with the national median for their peers of $123,521, according to a survey by the Washington-based National Association for Law Placement.  Lobbyists play a prominent role in the Washington economy. In 2010 there were 12,964 registered lobbyists, with most working in or around the nation’s capital, according to figures compiled by the Center for Responsive Politics, a Washington- based research group that tracks political spending. Spending on lobbying efforts reached a record $3.51 billion last year, up from $3.49 billion in 2009.
--Frank Bass and Timothy R. Homan

A New England Journal of Medicine article this morning really gets at this tension, between the good of job creation and bad of growing health costs. It suggests that a key driver behind our health-care job growth is a decline in productivity. We’re adding more workers, the article argues, because, in the aggregate, each health-care worker is doing less. And that’s the opposite of every other industry sector that’s growing right now.--Sarah Kliff

There may be a trade-off between practicality and conveying status. Apprenticeships offer the former, but internships offer the latter.--Arnold Kling

How Does Your Kindergarten Classroom Affect Your Earnings? is one of the most impressive empirical papers ever written. The data collection is amazing. The empirical analysis is clear and careful. Above all else, the authors' methods are transparent. Lesser authors would have buried the conflicting findings. Chetty et al. took the high road. Unfortunately, the world is so eager for stories about the power of early education that their paper is being badly misinterpreted. Chetty et al. don't confirm romantic hopes about teachers that change young minds forever. Despite their pro-education tone, they expose these hopes as wishful thinking.--Bryan Caplan

Wednesday, October 19, 2011

Quotes of the day

... most really rich people – the 1 percent of the 1 percenters – only get 19 percent of their income from working. The rest comes from investment income. That’s why billionaire Warren Buffett can make his claims about his secretary getting taxed at a higher rate than he does. Buffett’s wealth comes mostly from items that are taxed at a different rate than regular income. ... the protesters’ embrace of 1 Percenters such as actress Susan Sarandon and hip-hop mogul Russell Simmons shows that it’s not easy these days to pinpoint who is really a 1 Percenter and who is not.--Jeff Cox

I can't believe I'm hoping the three guys [Henry, Werner, Lucchino] who saved Fenway Park and brought us two titles will sell … but s---, I actually want them to sell at this point. It's like having your team owned by the Judge, the creepy old guy who sits in the dark in The Natural, only if you multiplied him by three, made him media-savvy and gave him a house organ (in this case, the Boston Globe) to print anything he wants. Enough is enough. Sell. Nobody trusts you any more.--Bill Simmons

... Generation X could use a better spokesperson. Barack Obama is just a little too senior to count among its own, and it has debts older than Mark Zuckerberg. Generation X hasn't had a real voice since  Kurt Cobain blew his brains out, Tupac was murdered, Jeff Mangum went crazy, David Foster Wallace hung himself, Jeff Buckley drowned, River Phoenix overdosed, Elliott Smith stabbed himself (twice) in the heart, Axl got fat.--Mat Honan

Never mind "Me, we." That makes us, them.--Chris Jones

Unsustainability: Social Security

Reuters reports:
Americans on Social Security benefits may get good news on Wednesday when the government could announce the first cost-of-living increase in two years for 2012.
Some 55 million Americans on social security got no increase in benefits this year and in 2010 because inflation was too low.

The American Institute for Economic Research, a think tank in Great Barrington, Massachusetts, calculates the 2012 cost-of-living adjustment should boost checks by between 3.5 and 3.7 percent.
Indexing this entitlement to wages can be an issue. Let's say that I double your salary, but only after firing your boss and one of your direct reports. I have effectively taken two of 3 payroll taxpayers out, but pushed up liabilities for the program.

Video of the day: For those of you who need a vacation but are too busy

I found this really helpful:

Landscapes: Volume Two from Dustin Farrell on Vimeo.

I think it actually reduced the aches and pains in this tired body. Via Joannah Lodico.

Tuesday, October 18, 2011

Video of the day: Faith and Forgiveness

Gender bender of the day: SAT math scores

Source here.

Quotes of the day

Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust. HP, for example, tried to take a run at Apple head-on, with its TouchPad, the product of its $1.2 billion acquisition of Palm. HP bailed out after an embarrassingly short 49-day run, and it cost CEO Léo Apotheker his job. Microsoft's every move must be viewed as a reaction to the initiatives of these smarter, nimbler, and now, in the case of Apple, richer companies. When a company like Hulu goes on the block, these four companies are immediately seen as possible acquirers, and why not? They have the best weapons--weapons that will now be turned on one another as they seek more room to grow.  There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.--Farhad Manjoo

High tech runs three-times faster than normal businesses. And the government runs three-times slower than normal businesses. So we have a nine-times gap.--Andy Grove, Intel CEO

... the average salary in the securities industry in New York City was twice the average in other private sector jobs. At last count, in 2010, it was 5.5 times as much. (In case you want to gnash your teeth, the average is now $361,330.)--Nicholas Kristof

In 1988 (earliest year available from the USA Today Salaries Databases), the average salary of a baseball player on the New York Yankees ($700,339) was 28 times the average salary in other private sector jobs in New York City (about $25,000). By 2010, the average salary for the Yankees (if you want to gnash your teeth, the average was $8,253,000) was 124 times the average private sector salary in NYC ($66,120). Where's the outrage about "excessive" salaries for Yankees players, which have increased relative to average New York City salaries much more than salaries for NYC bankers? What about an "Occupy Yankee Stadium" protest?--Mark Perry

... couples who say money is not important to them score about 10 to 15 percent better on marriage stability and other measures of relationship quality than couples where one or both are materialistic.--Science Daily

If there is any unifying them surrounding the Occupy Wall Street movement – and I use that noun in the Brownian sense – it’s that some people have too much, and others (the protesters) have too little. Exactly how much of the former’s property they should be allowed to keep, and how much must be yielded over to the latter has yet to be made clear.  But one thing has become clear – property redistribution is all well and good, so long as it’s somebody else’s property that’s being redistributed.--Neptunus Lex

Politicians leave reality to others. What matters in politics is what you can get the voters to believe, whether it bears any resemblance to reality or not.--Thomas Sowell

The amount of disrespect that the players involved here showed to each other, to the organization, to Tito [Francona], to the game, is staggering to me. Probably as staggering are some of the names that are on that list. I'm blown away. I'm incredibly disappointed. Things have changed here for a long, long time, and I think it's for the worse. I think the way that this was handled by the organization is pathetic and embarrassing. Why would you want to root for this team?--Curt Schilling

The negative growth impact of the sharp drop in China’s trade surplus may have forced GDP growth rates to nearly zero, and the sudden and violent expansion in investment was necessary as the counterbalance to keep growth rates high. Changes in the declining consumption share of GDP have had very little impact on changes in GDP growth. And it continues to decline.--Michael Pettis

Like classic demagogues, Berlusconi has displayed, since the beginning of his political career, a remarkable ability to fascinate the masses with political theater that exalts his image. At the same time, he has an impressive ability to win over the Italian public by telling them exactly what they want to hear. His speeches are skillfully crafted to exploit the electorate's beliefs and offer a comforting and simplified vision of reality. Unlike almost all demagogues, however, Berlusconi is immensely rich, and he uses his fortune to obtain and consolidate political power. With his money he buys people, and more often he uses his money to distribute favors of various sorts and value, from presents to jobs. In turn, he gets, as has always been the case with this kind of politics, the loyalty of a large number of supporters. One could say that Berlusconi has established an oligarchy within a democratic system.  ... Berlusconi is surely unfit to govern a democratic republic, but Italians are unfit for liberty.--Maurizio Viroli
Photo link here.

This test shows me my brain does not work as well as I think it does

The color test, via Mark Perry.

A good hacker defense article


Monday, October 17, 2011

Chart of the day: Runaway federal government spending

Source here.

Quotes of the day

The courageous and unshakable old man that Daniel became (Dan. 6) was formed by a young man who obeyed God even in what he ate, and who was so honest that he would not take any credit where none was due. He was committed to faithfulness, humility, courage, and integrity. He has few successors in high places.--Don Carson

A recent study by Jonah Berger of Wharton and Devin Pope of the University of Chicago highlights how being slightly behind is often an advantage. The authors devote a large part of their research to studying 18,000 NBA and 45,000 college basketball games. They also conducted an experiment in which people played competitive games and were given feedback halfway through. During a break in the experiment, someone would come in and tell the participants that they were either slightly behind, far behind, slightly ahead or tied. The control group was told nothing either way. Berger and Pope found that participants who thought they were slightly behind significantly increased their effort.--Azure Gilman

I think this Easterbrook dude has the journalistic equivalent of “tenure”.--Andrew Gelman

California has long been among America's most extensive taxers and regulators of business. But it had assets that seemed to offset its economic disincentives: a sunny climate, a world-class public university system that produced a talented local work force, sturdy infrastructure that often made doing business easier, and a record of spawning innovative companies. No more. In surveys, executives regularly call California one of the country's most toxic business environments, while the state has become an easy target for economic development officials from other states looking to lure firms away. ... its successful firms increasingly expand elsewhere.
In 2007, Google built a new generation of server farms in Oregon; the following year, Intel opened a $3 billion production facility near Phoenix. Earlier this year, eBay, based in San Jose, Calif., said it would add some 1,000 back-office jobs in Austin, Texas, over the next decade. Hank Nothhaft, former CEO of the San Jose-based micro-electronics firm Tessera, has estimated that Silicon Valley lost one-quarter of its computer, microchip and communications-equipment manufacturing jobs from 2001 to 2008. A suffocating regulatory climate has a lot to do with the state's bad business numbers. Writing in the California Political Review this summer, Andrew Puzder, chief executive of California-based CKE Restaurants—which operates 3,000 eateries nationwide—called his company's home state "the most business-unfriendly state we operate in." CKE, which runs Hardee's and Carl's Jr., has stopped opening restaurants in California, where the regulatory process can take up to two years. But it plans to open 300 in Texas, where the start-up time can be six weeks and opening costs $200,000 less than in California.--Steven Malanga

Obama’s most coveted tax hike — an extra 3 to 4.6 percent for millionaires and billionaires (weirdly defined as individuals making more than $200,000) — would have reduced last year’s deficit (at the very most) from $1.29 trillion to $1.21 trillion. Nearly a rounding error. The oil-drilling breaks cover less than half a day’s federal spending. You could collect Obama’s favorite tax loophole — depreciation for corporate jets — for 100 years and it wouldn’t cover one month of Medicare, whose insolvency is a function of increased longevity, expensive new technology and wasteful defensive medicine caused by an insane malpractice system. After three years, Obama’s self-proclaimed transformative social policies have yielded a desperately weak economy. What to do? Take the low road: Plutocrats are bleeding the country, and I shall rescue you from them.  Problem is, this kind of populist demagoguery is more than intellectually dishonest. It’s dangerous. Obama is opening a Pandora’s box. Popular resentment, easily stoked, is less easily controlled, especially when the basest of instincts are granted legitimacy by the nation’s leader--Charles Krauthammer

Congress isn't getting a glimpse of what's on President Barack Obama's Blackberry - or any more internal White House communications related to the bankrupt solar company Solyndra, which received a $535 million loan guarantee from the federal government. House Republicans investigating the loan controversy had requested all internal White House documents about the issue. House Energy and Commerce subcommittee chair Rep. Cliff Stearns said that includes emails on the President's Blackberry. On Friday the White House Counsel sent a letter to the House Energy and Commerce Committee explaining they won't comply with the request because it "implicates longstanding and significant institutional Executive Branch confidentiality interests."--Jessica Yellin

People from every State in this great Nation sent us to Congress to
defend their rights and stand up for their interests. To do that we
have to tear down the barriers that separate citizens from the
democratic process and to shine a brighter light on the inner workings
of Washington.--Senator Obama

The One Percent of the day

Source here, via Glenn Reynolds.

The Real Reason Harrisburg Pennsylvania Went Bankrupt

Nice counterfactual to how government solutions fail. Uglier sausage making than what happens in the markets sometimes.

Designs of the day

Source here, via Sandy Son.

Friday, October 14, 2011

Quotes of the day

Even leftists believe in property rights ... at least when it comes to their property. --Greg Mankiw

... the Tea Party has a ready and plausible answer as to how to restore self-government and break the grip of the crony capitalism that ties the Obama administration to Wall Street. They want to drastically reduce the size of government. The protesters have no such view. Like their 1960s predecessors, they're chasing their tails trying to imagine procedural reforms that will allow the demonstrators to govern themselves, while also curbing the power of those greedy capitalists.--Fred Siegel

If [Romney's] rivals looked stronger, he might need to play more to “the poor should pay higher taxes and the uninsured should take care of themselves” strand within conservatism. But as it stands, the field’s weakness is letting him get away with rhetoric and positioning that should make the Obama White House very, very nervous.--Ross Douthat

The Obama administration, under fire for not taking a harder line
on China over its currencyon American consumers who stubbornly take advantage of good deals offered by Chinese sellers and, allegedly, made even more attractive by Beijing’s monetary policy appears set to move against
the Asia export powerhouse on other fronts these politically unorganized Americans as next year’s U.S. elections approach.--Don Boudreaux, riffing on Doug Palmer and Glenn Somerville

It’s remarkable to see how similar the arguments being put forward by wind-energy proponents are to those that the Obama administration is using to justify its support of Solyndra, the now-bankrupt solar company that got a $529 million loan guarantee from the federal government. But in some ways, the government support for the Shepherds Flat deal is worse than what happened with Solyndra. The majority of the funding for the $1.9 billion, 845-megawatt Shepherds Flat wind project in Oregon is coming courtesy of federal taxpayers. And that largesse will provide a windfall for General Electric and its partners on the deal who include Google, Sumitomo, and Caithness Energy. Not only is the Energy Department giving GE and its partners a $1.06 billion loan guarantee, but as soon as GE’s 338 turbines start turning at Shepherds Flat, the Treasury Department will send the project developers a cash grant of $490 million.--Robert Bryce

[The Red Sox] needs a statistical agnostic leader. They need a guy who it doesn’t matter if he plays or not. Or it doesn’t matter what he’s hitting or not. He will talk to anybody on the team about them doing something wrong. I’ve said it a couple times. That was Doug Mirabelli. That was Mike Lowell. That was what those guys did. That was Gabe Kapler. None of those guys were leading the team in home runs or RBIs or batting average. The guys in those clubhouses had an immense amount of respect for them. Orlando Cabrera marching back to Manny [Ramirez]‘s locker and demanding that Manny put himself back in the line-up. Guys like that. This team doesn’t have them. This team has a couple of guys like a [Dustin] Pedroia who is going to play his [expletive] off and expect everyone to do the same. I don’t see him as a kid who stands up in front of the locker room and says, ‘This has got to change.’ I’m not seeing that yet.--Curt Schilling

Anyone — Keynesian or otherwise — paying attention to the last thirty years of empirical macro never expected much crowding out of financial capital in the first place.  It simply has not been in the cards.  To put it more bluntly, the “no crowding out” result is not much of a predictive victory for Keynesian economics, IS-LM, the liquidity trap, and so on, even though I have read it claimed as such many times.  It is a strike against some predictors who were wrong in the first place, especially in the right-wing popular press circa 2009-2010, plus some Republicans who jumped ship on the issue, perhaps because they wanted to attack Obama.  What’s a unique prediction we might look at?  It is a common Old Keynesian claim these days, at least from Krugman, that the AD curve is upward-sloping because of a liquidity trap.  That would imply that harsh and binding minimum wage hikes, and other wage-propping mechanisms, should prove expansionary.  That claim, at least for the Great Depression, has been knocked down fairly conclusively by Scott Sumner.  If there is no comparable test on today’s data, it is because we have grown that much wiser.--Tyler Cowen

I’ve argued before that the Mother of All Bubbles may be excess manufacturing capacity in Asia. Decades of above average returns on investment, compounded by a range of state policies aimed at encouraging the development of this kind of enterprise, have led to a massive overcapacity: the world can’t consume as many widgets as manufacturers need to sell.--Walter Russell Mead

... in 1934 the Austrian mathematician Karl Menger wrote a paper that rejected unbounded utility functions. These unbounded functions include, for example, logarithmic utility, a particularly useful one because it corresponds to exponential growth, and thus is a natural for many time series processes (like compounded returns). Because his result is wrong, the motivation for focusing on the ensemble approach is ill founded. And, to make matters worse, in many important cases it is a time series approach that makes the most sense. After all,we only live one life, and we care about what is dealt to us in that life. If we enjoyed (and recognized that we enjoyed) reincarnation so that we could experience many alternative worlds – and better yet,if we experienced them all simultaneously -- perhaps it would be a different matter. What is fascinating is that Menger’s paper has been cited widely by notable economists, including Samuelson, Arrow and Markowitz, Nobel laureates all.--Rick Brookstaber

I have done 1.5 years of research on the type of tumor that affected Steve Jobs and have some strong opinions on his case, not only as an admirer of his work, but also as a cancer researcher who has the impression that his disease course has been far from optimal. Let me cut to the chase: Mr. Jobs allegedly chose to undergo all sorts of alternative treatment options before opting for conventional medicine. This was, of course, a freedom he had all the rights to take, but given the circumstances it seems sound to assume that Mr. Jobs' choice for alternative medicine could have led to an unnecessarily early death. Again, please understand that I have no knowledge of the specific case, I'm just trying to give insights on his a priori odds of cure.--Ramzi Amri

We are the 53%

Members here.

Thursday, October 13, 2011

Chart of the day: Solyndra loan guarantees, and the whole pie

Source here.

Quotes of the day

The nation's state and local public employee retirement systems had $2.5 trillion in total cash and investment holdings in 2009, a $726.1 billion or 22.7 percent decrease from $3.2 trillion in 2008, according to new statistics from the U.S. Census Bureau. This follows a $176.7 billion loss the previous year.--U.S. Census Bureau

... IS-LM provides absolutely no framework for policy analysis because it makes no assumptions, and draws no conclusions, about what people are trying to accomplish. If you don’t know what people are trying to do, you can’t possibly know how best to help them.  ... Greg Mankiw and Matt Weinzierl have recently provided ... a [useful] model. Like IS-LM, their model is fundamentally Keynesian. Unlike IS-LM, it is capable of evaluating the relative desirability of various policies. Would we be better off in a world where everyone floats in a vat of money until we all starve to death? The Mankiw/Weinzierl model, reassuringly, says “no”. The IS-LM model, unhelpfully, says “that’s not my department”.--Steve Landsburg

You know, Jamie Dimon is one of the greatest bankers, he’s brought more business to this city than maybe any other banker.  To go and pick on him, I don’t know what that achieves. Jamie Dimon is honorable and works very hard and pays his taxes.  ... The majority of people who work in the financial services sector make something like $72,000 a year. They’re hard-working people and just bashing them doesn’t make a lot of sense.--Mayor Bloomberg

... deviations from Benford's law are compellingly correlated with known financial crises, bubbles, and fraud waves. And overall, the picture looks grim. Accounting data seem to be less and less related to the natural data-generating process that governs everything from rivers to molecules to cities. Since these data form the basis of most of our research in finance, Benford's law casts serious doubt on the reliability of our results. And it's just one more reason for investors to beware.--Jialan Wang

... analysis of the Senate returns over the six-year period, published in the Journal of Financial and Quantitative Analysis in 2004, showed that the Senate portfolio outperformed the market by approximately 12 percent a year. In April of this year, the team published a follow-up analysis of the House in Business and Politics, which showed that House members on average outperformed the market by a smaller but still impressive figure—roughly 6 percent a year. ... Certainly, the guardians of our laws don’t seem eager to pursue the question. No member of Congress has ever been investigated for insider trading. Four times since 2006, Congresswoman Louise Slaughter (D–New York) has sponsored the STOCK Act, which would explicitly make congressional insider trading illegal, and require members of Congress to disclose significant trades within 90 days. It’s never even come to a vote.--Megan McArdle

Why should our legislators be above the law? I have yet to hear an even vaguely plausible reason that our legislators shouldn't be watched at least as closely as we watch CEOs. In fact, I've yet to hear any reason. No one in government wanted to talk about it. The best I can infer is that well, it's a pain in the ass, and they don't wanna. That's absurd. What's even more absurd, however, is that we permit it.--Megan McArdle

If the Republicans want a nominee who will pander to the left, right and middle with no coherent philosophy and no coherent policy proposals, why not just drag out Bob Dole [instead of Mitt Romney]? At this rare historical moment when the country just might be willing to take a flyer on some truly radical changes, it saddens me deeply that warmed-over Dole might be the best the Republicans can manage to dish up.--Steve Landsburg

I find myself liking Herman Cain this year. It reminds me of how I liked Sarah Palin in 2008. And Barack Obama in 2004.--Cav

For an economist, the most fascinating aspect of Pan Am is the highly attractive flight attendants -- or rather, stewardesses, since the show is set in the early 1960s. If you’re young enough, you might think that’s just TV. But I’m just old enough to remember flying in the 1970s, and I recall stewardesses who really were, in fact, hot. Okay, I was too young to understand the concept of “hot” -- but I was definitely aware that I was being attended by some very pretty young women  Not so anymore. Flight attendants aren’t necessarily unattractive now, but they’re no more fetching than people in any other service profession that doesn’t get tips. And what’s changed? In a word, deregulation.--Glen Whitman

Megan wonders, why don't the ultra-wealthy have more servants?

Her suggested reasons here. My favorites:
5.  Labor saving devices  Servants were often standing in for things that machines now do more cheaply, and without stealing the silver.  

6.  Cultural mores We have a much greater affection for personal space than people did in the era of large families and small heating appliances.  Most people don't want anyone else in their personal space.

7. Liability  These days, you're liable for the actions of your employees in a surprisingly wide variety of circumstances.  Safer not to have employees.
Of course, there is a huge nanny industry here in Manhattan. Photo link here.

Tweet of the day

Tea Party: "leave me alone." : "leave me a loan."--David Burge

Financial perversion, embodied

Bradley Keoun and David Henry report:
In the first quarter, the four biggest U.S. lenders -- Bank of America, JPMorgan Chase & Co., Citigroup and Wells Fargo & Co. -- produced combined profit of $13.5 billion, the most since the second quarter of 2007. That figure probably fell by 28 percent in the second quarter, based on a Bloomberg survey of analysts’ estimates. The banks are scheduled to announce results over the next two weeks, led by JPMorgan on July 15.  The second-quarter results may include gains taken under a U.S. accounting rule known as Statement 159, adopted by the Financial Accounting Standards Board in 2007, which allows banks to book profits when the value of their bonds falls from par. The rule expanded the daily marking of banks’ trading assets to their liabilities, under the theory that a profit would be realized if the debt were bought back at a discount.

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein

Wednesday, October 12, 2011

Quotes of the day

Nature, like an enemy, seemed intent on concealing from us its master plan. At the same time, we did have a valuable key to nature’s secrets. The laws of nature evidently obeyed certain principles of symmetry, whose consequences we could work out and compare with observation, even without a detailed theory of particles and forces. There were symmetries that dictated that certain distinct processes all go at the same rate, and that also dictated the existence of families of distinct particles that all have the same mass. Once we observed such equalities of rates or of masses, we could infer the existence of a symmetry, and this we thought would give us a clearer idea of the further observations that should be made, and of the sort of underlying theories that might or might not be possible. It was like having a spy in the enemy’s high command.--Steven Weinberg

What my mother could envision was a future in which I made my own choices. I don’t think either of us could have predicted what happens when you multiply that sense of agency by an entire generation. But what transpired next lay well beyond the powers of everybody’s imagination: as women have climbed ever higher, men have been falling behind. We’ve arrived at the top of the staircase, finally ready to start our lives, only to discover a cavernous room at the tail end of a party, most of the men gone already, some having never shown up—and those who remain are leering by the cheese table, or are, you know, the ones you don’t want to go out with. ... Just as I am fully aware that with each passing year, I become less attractive to the men in my peer group, who have plenty of younger, more fertile women to pick from. But what can I possibly do about that? Sure, my stance here could be read as a feint, or even self-deception. By blithely deeming biology a nonissue, I’m conveniently removing myself from arguably the most significant decision a woman has to make. ... When Gloria Steinem said, in the 1970s, “We’re becoming the men we wanted to marry,” I doubt even she realized the prescience of her words. ... Increasingly, the new dating gap—where women are forced to choose between deadbeats and players—trumps all else, in all socioeconomic brackets. ... It appears that the erotic promises of the 1960s sexual revolution have run aground on the shoals of changing sex ratios, where young women and men come together in fumbling, drunken couplings fueled less by lust than by a vague sense of social conformity.--Kate Bolick

Roubini Global Economics, the economics research firm begun by noted economist Nouriel Roubini, is for sale, according to sources who have been approached by an investment bank conducting an auction for the firm. RGE, as it's known, has grown quickly since its founding by Roubini, who is its chairman. It has over 85 employees, and is still losing money.--David Faber

The top 1% of New Yorkers pay over 40% of all income taxes, providing huge benefits to everyone in our city and state. Paulson & Co. and its employees have paid hundreds of millions of dollars in New York City and New York State taxes in recent years and have created over 100 high paying jobs in New York City since its formation. New York currently has the highest income taxes of any state in the country and thousands of businesses have fled New York to states with no income taxes such as Florida, Texas and Nevada, or moved offshore. Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.--Paulson & Co.

We are legion ... for we are many.--Occupy Wall Street protestor

We are legion for we are many.--possessive demons begging Jesus not to deport them

Chart of the day: Large cap, large lobbying

Source here, via Abnormal Returns.

I always suspected that atheists needed love

Apparently, they need strawmen, too.

Tuesday, October 11, 2011

Jon Stewart dishes like few others

Apparently, he can't take it.

I may not vote for Herman Cain

unless he's running against Russell Simmons.

Hypocrisy of the day: Anti-corporate protestors are big corporate consumers

Source here.

Quotes of the day

In the competition for tight defense dollars, the Army . . . must confront the reality that the most plausible, high-end scenarios for the U.S. military are primarily naval and air engagements -- whether in Asia, the Persian Gulf or elsewhere.--Robert Gates

The shifting winds of consensus lead to the politicization of the [Nobel] economics award.--Noah Smith

New York City's securities industry could lose nearly 10,000 jobs by the end of 2012, New York state's comptroller predicted, a painful blow to the area's economy and government budgets. In a report set to be released Tuesday, Comptroller Thomas P. DiNapoli also said bonuses are likely to shrink this year, reflecting lower profits on Wall Street.--ANDREW GROSSMAN

Should #OccupyWallStreet cheer at this unemployment, or mourn that the potential source of funds for their list of demands is shrinking?--Cav

House Minority Leader Nancy Pelosi’s husband, a real estate developer and investment banker, stands to make millions of dollars in a previously undisclosed residential real estate project in California as a partner with the father of a woman Mrs. Pelosi helped become ambassador to Hungary, records show. Paul F. Pelosi’s investment in Russell Ranch is worth at least $5 million and possibly as much as $25 million in a deal put together by his friend and longtime business associate, Angelo Tsakopoulos, patriarch of a multimillion-dollar real estate development firm, according to Mrs. Pelosi’s latest personal-disclosure statement.--Chuck Neubauer

The issue is not that the less well-off should pay more tax than those 47% who make up what’s likely to be the vast majority of the 99% club’s membership. It’s that the former are busy trying to improve their own lives, bringing others along with them, and the squatters of the Occupy Wall Street crowd are busy doing nothing at all for themselves, preferring instead to take from others.--Neptunus Lex

The one-year scholarships that leave injured kids high and dry, unable to finish college if they are hurt and cut from the team. The NCAA raking in huge royalties for the likeness of players in video games, decades after they have left their teams, and of course the people whose likeness are used get zero.--Tim Kane

In general terms, yes, players do benefit. But that’s not the point. It’s the extent to which they benefit compared to the coaches and other athletic personnel that matters. For example, compare the average salary of NFL players to the average salary of the NFL coach. Then do the same thing for college football players. The Detroit Lions devote about half their revenue to players’ salaries, while down the road a few miles, the University of Michigan pencils in about 10 percent of its revenues for player “salaries.” In a competitive marketplace, these two costs would be much closer to each other. The difference gives you a rough approximation of the exploitation rate.--Allen Sanderson

Top female reasons for sex

Source here (which also ranks top male reasons, ranking 100 reasons in all for each gender), via Robin Hanson:
1. I was attracted to the person
2. I wanted to experience the physical pleasure
3. It feels good
4. I wanted to show my affection to the person
5. I wanted to express my love for the person
6. I was sexually aroused and wanted the release
7. I was ‘‘horny’’
8. It’s fun
9. I realized I was in love
10. I was ‘‘in the heat of the moment’’
11. I wanted to please my partner
12. I desired emotional closeness (i.e., intimacy)
13. I wanted the pure pleasure
14. I wanted to achieve an orgasm
15. It’s exciting, adventurous

Chart of the day: Only $200 million per year to buy America's politicians

Source here.

Monday, October 10, 2011

Do your job

Peter King provides the source:
"Do your job'' is a statement Bill Belichick, via multiple NFL Films mikings, has made a part of the vernacular in New England.

"Do your job'' is something Bill Parcells used to say all the time coaching the Giants, with Belichick on the staff. (As in, "Just do your job and shut up,'' and variations of that theme that he'd say to his players.)

"Do your job'' is something Al Davis used to say when Parcells would call him and talk about what was going wrong with whatever team he was coaching at the time. It would be Davis' effort to get Parcells to get everyone on his team to take accountability, including players and coaches.

So the next time you hear Belichick say that statement, know that it had its birth with Al Davis.
Photo link here.

Buck O'Neil's All-Time Baseball Team

Joe Posnanksi, curator not only of sports, but of history, culture, and what is truly good.

In moment of homersexual weakness, here is his pick for left field:
"Greatest pure hitter I ever saw. And a wonderful man. Wonderful. I think Ted Williams is as big a reason as any that the Hall of Fame started putting Negro Leaguers in (he asked for that during his Hall of Fame speech). All you need to know about Ted Williams is this: His teammates loved him. They absolutely loved him. Joe DiMaggio, his teammates didn't all love him. But they loved Ted Williams. Great player, man. Great player."

Capitalism might not run on greed, which may only be a lubricant

I think it runs on envy. Eric Falkenstein has a great writeup here.

I think I share at least 2 major disappointments with Occupy Wall Street protestors

First is massive lobbying, and how paid for our government is.

Second is CEO and executive pay, and how ineffectual corporate governance is for certain principal-agent problems.

Unfortunately, our legislative and executive branches are addicted to the first and even more ineffectual on the second.

Quotes of the day

Today’s aged hippies no longer understand that there is a difference between the election of a black president and the creation of cheap solar energy; in their minds, the movement towards greater civil rights parallels general progress everywhere. Because of these ideological conflations and commitments, the 1960s Progressive Left cannot ask whether things actually might be getting worse. I wonder whether the endless fake cultural wars around identity politics are the main reason we have been able to ignore the tech slowdown for so long. However that may be, after 40 years of wandering, it is not easy to find a path back to the future. If there is to be a future, we would do well to reflect about it more. The first and the hardest step is to see that we now find ourselves in a desert, and not in an enchanted forest.--Peter Thiel

The first detailed conversation I had was with a middle-aged guy who was there "largely to exercise his first amendment rights" and the "rights embedded in the constitution". He did not really know what he was saying except that he had the right to say it and that it somehow involved good government. He did not like the libertarians (who he thought were rather silly) but he kind of liked the anarchy of the whole scene. And he gave me the quote of the day. The protesters were "anarchists for good government". ... A pretty young black woman I spoke to was about the most lucid person I found. She thought the American dream had been narrowed to a very small elite and that class distinction was rampant. She was at the protest because she thought that Wall Street was the most obvious bastion of elitism in America. I asked her what she wanted to do in life and she said she wanted to work in the fashion industry in New York. I looked at her puzzled and she sheepishly admitted that was another bastion of elitism. Then she told me she wanted to start her own company. I wished her luck. She was charming in her hypocrisy.--John Hempton

Who was Steve Jobs? Well, he was a guy who founded a corporation and spent his life as a corporate executive manufacturing corporate products. So he wouldn't have endeared himself to the "Occupy Wall Street" crowd, even though, underneath the patchouli and lentils, most of them are abundantly accessorized with iPhones and iPads and iPods loaded with iTunes, if only for when the drum circle goes for a bathroom break. The above is a somewhat obvious point, although the fact that it's not obvious even to protesters with an industrial-strength lack of self-awareness is a big part of the problem. But it goes beyond that: If you don't like to think of Jobs as a corporate exec (and a famously demanding one at that), think of him as a guy who went to work, and worked hard. There's no appetite for that among those "occupying" Zuccotti Park. In the old days, the tribunes of the masses demanded an honest wage for honest work. Today, the tribunes of America's leisured varsity class demand a world that puts "people before profits." If the specifics of their "program" are somewhat contradictory, the general vibe is consistent: They wish to enjoy an advanced Western lifestyle without earning an advanced Western living. The pampered, elderly children of a fin de civilisation overdeveloped world, they appear to regard life as an unending vacation whose bill never comes due.--Mark Steyn

Benny [-Jarvus Green-Ellis], he’s a great guy to block for. He’s going to read the play, he’s going to find the right hole. He’s not going to fumble. He’s going to do the right thing. He’s going to give you everything he’s got. He’s a great guy to block for.--Logan Mankins

When a board of directors removes a CEO for poor performance, we don't expect the board to have a specific plan for how the next CEO will run things. The board's job is to remove the underperforming CEO and start a search for a new one. That model reminds me of the Occupy Wall Street protests. Some pundits are criticizing the protesters for not having specific demands, but I don't think that's a fair observation. The protesters are simply trying to fire the old CEO, metaphorically speaking. It's not their job to micromanage the next one. Some politicians have branded Occupy Wall Street as a class war. But I think that misses the point too. If the economy were humming along and creating the right kind of jobs, folks would see wealth as an aspiration and not an enemy. I see Occupy Wall Street as an effort to get rid of the system that brought us to this place. The anger is not so much about replacing politicians as it is a complaint about the nature of government and the corrupting influence of money. Our collective image of the protests is muddied by the media's fascination with the nut jobs in the crowds, allegations that George Soros is the puppet master, and references to evil bankers and capitalists. We humans like to put faces to evil, but sometimes the evil is simply the result of a mismatch between the system and the times.--Scott Adams

Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.--Reed Hastings, CEO

... no one listens to a word the prime minister [David Cameron] says. But if Jonathan Ross or Simon Cowell had told us to stop shopping, that would have been a disaster.--Tim Harford

Europe is demonstrating that a sovereign nation without a true central bank is just an uninsured bank, liable to be tipped over by the markets.--James Saft, via Tyler Cowen

One of the [Obamacare] budget savings that the critics claimed was a gimmick was that a new long-term care insurance program, The Community Living Assistance Services and Supports program or CLASS for short, was counted as reducing the deficit. How can a spending program reduce the deficit? ... So we have phantom savings from a zombie program and many people knew at the time that the program was a recipe for disaster. Now some people may argue that I am biased, that I am just another free market economist who doesn’t want to see a new government program implemented no matter what, but let me be clear, this isn’t CLASS warfare, this is math.--Alex Tabarrok

4 out of the last 5 econ laureates are anti-Keynesian, actually too anti-Keynesian for my tastes, but a lesson there in any case.--Tyler Cowen

Tyler Cowen tells you about Sargent and Sims. My reaction is, "eh."  Sort of like Bert Blyleven. Star players, but not historically important, unless you're from Minnesota.--Arnold Kling

Paul defends the IS-LM model. I agree completely!--Greg Mankiw

Smart people can be very clueless when they apply too much precision to imprecise problems.--Eric Falkenstein

Rather, as has been the case with most sociologists of religion, Habermas has looked at the world and concluded that secularization theory—that is, the thesis that modernization necessarily leads to a decline of religion—does not fit the facts of the matter. Beyond this acknowledgement of the empirical reality of the contemporary world, Habermas admits the historical roots in Biblical religion of modern individualism, and he thinks that this connection is still operative today.--Peter Berger

Al Davis was a great American sports villain, the best of his time, the best of all time. He was great, I think, because he played it big. ... He was the bad guy. End of story. Al Davis' life was not so black. He quietly did many good things, charitable things, he helped friends and strangers, but he did not want anyone to know. He was entirely color blind. He hired the first Hispanic coach in the NFL (Tom Flores), and the first African American coach in the NFL (Art Shell). But he never grandstanded about it. I don't' think this was because he wanted to avoid credit. I think it's because he did not want anyone to think he had a heart.--Joe Posnanski