Quotes of the day

Men, it has been well said, think in herds; it will seem that they go mad in herds, while they only recover their senses slowly, and one by one.--Charles Mackay

I find it deliciously ironic that one of the top five results returned by Google for the search terms "corn stover removal soil fertility" turns out to be research paid for the company planning to do the removal.--Andrew Leonard

People seldom do what they believe in. They do what is convenient, then repent.--Bob Dylan

The beauty of errors of omission is that they they are largely undetectable by clients as long as they go unreported by managers. Because I believe that owning up to one's mistakes in a public fashion decreases the probability of those errors reoccurring, I do so here.--William Ackman

I love that as a six year old [my daughter] still believes in the concept of “too much” money. Those words are so foreign to me as an adult. There’s no such thing as “too much” money. That’s crazy talk. Have you ever heard someone at work say, “Yeah, my wife and I realized we have too much money so we’re trying to figure out how to do something with it before it does something with us.--Jon Acuff

Should Osama bin Laden be captured alive—and I imagine most Americans hope he won’t be captured alive. But if he is, it is ludicrous to suggest he should be tried in a Federal court on Center Street in Lower Manhattan.--Charles Schumer

On February 4, 2009, President Obama signed Public Law #111-3, the Children’s Health Insurance Program Reauthorization Act of 2009. §701 of this law increased tobacco taxes, effective April 1, 2009. Since most smokers have annual family income less than $250,000, this was a clear violation of the President’s pledge.--Keith Hennesey

As the dean of Harvard Medical School I am frequently asked to comment on the health-reform debate. I'd give it a failing grade. Instead of forthrightly dealing with the fundamental problems, discussion is dominated by rival factions struggling to enact or defeat President Barack Obama's agenda. The rhetoric on both sides is exaggerated and often deceptive. Those of us for whom the central issue is health—not politics—have been left in the lurch. And as controversy heads toward a conclusion in Washington, it appears that the people who favor the legislation are engaged in collective denial.--Jeffrey Flier

How much do you have to hate somebody to believe everlasting life is possible and not tell them that? I mean, if I believed, beyond the shadow of a doubt, that a truck was coming at you, and you didn’t believe that truck was bearing down on you, there is a certain point where I tackle you. And this is more important than that.--Penn Jillette

Aggregators, investment or otherwise, are not the cause of the downfall of traditional news gatherers like newspapers. They are simply a sign that people are hungry for information and analysis presented in an efficient manner. For better or worse, that instinct to seek out order in an increasingly complex world is here to stay.--Tadas Viskanta

... let's face it, the genre of the female political autobiography is itself in its infancy. It's like some 53rd state, housing at this moment in time only a handful of crude, wooden, lean-to outposts.--Sandra Tsing-Loh

In truth, we are forever innovating to stretch our resources. Transportation was one of the scarcest goods during the first half of America’s nineteenth century, but by the end of the century the railroads had made it so abundant that the face of America changed irreversibly. That could be said today about information. Innovation makes scarce goods abundant. This quest to do better, to go farther, to extend our reach is part of what makes us human. There is more to economics than the desire to consume and to avoid risk. ... Most observers now acknowledge that capitalism, even in the midst of the 1930s depression, has long been creating unprecedented, unimagined levels of productivity and wage rates—for the rest of the world as well as for the handful of capitalist economies themselves. Now, however, some philosophers and social critics are suggesting that even capitalism has outlived its usefulness—that pursuit of new goals requires another system. It must be clear by now that this analysis overlooks what has been the key dimension of capitalism from its first functioning early in the nineteenth century. This dimension is what capitalism’s dynamism offers to human experience and human benefit—the true moral dimension of economics, in other words. Well-functioning capitalism, where it is attainable, is of undimmed value because it allows human beings to realize their true nature as creators and innovators.--Edmund Phelps

Upon Singapore’s independence in 1965—three years after Jamaica’s own establishment as a nation—the two nations were about equal in wealth: the gross domestic product (in 2006 U.S. dollars) was $2,850 per person in Jamaica, slightly higher than Singapore’s $2,650. Both nations had a centrally located port, a tradition of British colonial rule, and governments with a strong capitalist orientation. (Jamaica, in addition, had plentiful natural resources and a robust tourist industry.) But four decades later, their standing was dramatically different: Singapore had climbed to a per capita GDP of $31,400 (2006 data, in current dollars), while Jamaica’s figure was only $4,800.--Josh Lerner

If the New England Patriots were allowed to spend $50 million more on players than any other team, they would go 15-1 or 16-0 every single year. And people would not stand for it. But in baseball, a great and dominant team might only win 95 out of 160, and it doesn’t seem so bad.--Joe Posnanski

One of my strongest beliefs about the financial crisis is that the narrative that we come to accept about it will matter much more than the crisis itself. I see a strong parallel between the narrative "TARP prevented a Great Depression" with the narrative "The New Deal ended the Great Depression." The latter narrative has very little economic support, even among economists who avidly support the New Deal. However, it is the dominant narrative because it supports progressive ideology. --Arnold Kling

So, phrasing it as "the top 5% of earners pay 60% of the taxes," while comparing apples to oranges, sounds a lot more "unfair" to the wealthy than "the group that earns 37% of the income pays roughly 60% of the taxes."--Kid Dynamite

In his classic book “Famine Crimes” Alex De Waal observes that NGOs make “habitual inflation of estimates of expected deaths.” De Waal notes that during the pre-Christmas prime fundraising season, ‘One million dead by Christmas’… has been heard every year since 1968 and has never been remotely close to the truth.” Put into the current mix a credulous Western media that is happy to check the box “Ethiopia = famine,” and is unable to handle subtleties like chronic food insecurity and chronic malnutrition vs. emergency famine. Between unreliable media, NGOs, and government, it is tragically difficult to know when tragedy is happening.--William Easterly

There's no doubt that erasing global inequality, which has been with us for millennia and has expanded to unprecedented levels over the past century and a half, won't be easy. But by accepting the role of failed governments and institutions in causing poverty, we have a fighting chance of reversing it.--Daron Acemoglu

Some people are calling what I did an act of civil disobedience. I don’t know much about that, but if civil is what the government is, then call my part savage disobedience.--Wayne Johnson

Most pundits, professional and amateur, consider a genius as someone who can effectively articulate one's platform more efficiently than themself. An idiot is someone who effectively articulates the other side.--Eric Falkenstein

While I love that Singapore's health outcomes are just as good as ours for a fraction of the cost

I do not want to live there, given Bryan Caplan's What's Rotten List:

1. Conscription
2. Death penalty for drug trafficking
3. State ownership
4. Defamation law
5. Censorship
   

Not a good trade. Yet.

Quotes of the day

Royalties from The Great Gatsby totaled only $8,397 during [Scott] Fitzgerald’s lifetime. Today Gatsby is read in nearly every high school and college and regularly produces $500,000 a year in [Fitzgerald's daughter] Scottie's trust for her children.--William Quirk

Hong Kong, Singapore and Korea experienced great economic success: all have per capita GDP that is at least seven times higher than in 1960. ... The disastrous experience with public housing in the United States should give us pause about its implementation elsewhere. One can also find examples of public housing becoming sinkholes of corruption in African countries. Yet there is no gainsaying the fundamental success of Hong Kong and Singapore.--Richard Green

Perhaps us aid critics are just not as good as the medical critics. Or perhaps it is because we care so much more whether medicine really works than whether aid or military intervention really works?--William Easterly

I think there are three qualities that people believe are weaknesses, but which I believe are strengths: hypochondria, paranoia and megalomania.--Jacques Attali

Who single-sources a quote of a public figure praising slavery?--Megan McArdle

It’s superb. It highlights the essence of political discourse: dishonesty without lying.--Russ Roberts

I am not only against inflation but I am also against deflation. So, once again, a badly programmed monetary policy prolonged the depression.--F.A. Hayek

Let’s talk about the real world for a moment… we broke it. Please don’t be mad. I know we were supposed to bequeath to the next generation a world better than the one we were handed. So, sorry. —Jon Stewart

Pay no attention to the man behind the curtain. And if you do notice what he’s really doing, he’s not spending your money just to waste it or give it to his friends. He’s doing it because he had to. He’s saving lives. The lives of America’s gallant men and women in uniform. Or America’s crippled children. Or to prevent the elderly from living lives of quiet desperation. Or to save the economy. Whatever. As long as you get sucked in, they don’t care what they say. Don’t get sucked in.--Russ Roberts

Bondholders are still going along with our apparently reckless spending plans on the assumption that we'll have to do something, eventually. I'm sure we will. But that "something" is going to be pretty ugly, and almost certainly done at the worst possible time, as Japan's case may end up illustrating. It may even be default, if we don't start acting like adults relatively soon. Sovereign debt risk seems to be back--and the debt is literally bigger than ever.--Megan McArdle

Purists will complain that we've sapped our language of its poetry by turning it into a blunter instrument. The purists are wrong. We're still poets. We've just traded sonnets for haiku. Today, the romance of our language is found in its smallest constructions, in its syllables and how they sound when we put them together, simply, quietly. Our words have white space around them. That's where we've become artists again.--Esquire

I don’t know how you guys walk around with those things.--Elaine Bennis

I wouldn't want to join a church that would accept me.--Malcolm Muggeridge

... a few years ago, University of Pennsylvania researcher Ian Blair discovered that vitamin C appeared to encourage the creation of substances that can harm DNA and thus cause cancer. This is hardly firm evidence that C is the latest surprise cancer agent, but it probably should give C junkies pause. Your doctor may still swear by the vitamin's efficacy and benignity, but if you want to err on the side of caution, cut back on C.--Jim Atkinson

You never learn anything from people who agree with you, and I like to learn.--Nemo J. Publius

For the past six years, I've been teaching students in the Centurions Program to draw a grid listing the four basic questions that most people ask about life: Where did I come from? What's my purpose? Why is there sin and suffering? Is redemption possible? Then, on the other side of the matrix, we list the various philosophies and prominent world religions. By examining how each view answers the four questions, we can determine which worldviews conform to the way things really are. This is the correspondence theory of truth—a thoroughly rational test.--Chuck Colson

Freedom drives out poverty

Terry Miller, co-editor of the 2009 Index of Freedom, writes:

The positive correlation between economic freedom and national income is confirmed yet again by this year's data. The freest countries enjoy per capita incomes over 10 times higher than those in countries ranked as "repressed." This year, for the first time, the Index also correlates economic freedom with important societal values like poverty reduction, human development, political freedom and environmental protection. The linkages are robust, with economically freer countries performing significantly better on every indicator of well-being.

The freest 5 nations: Hong Kong, Singapore, Australia, Ireland, New Zealand.

The least free: North Korea, Zimbabwe, Cuba, Burma, Eritrea.

The US was ranked sixth. I prefer the US to HK and Singapore, as Hong Kong is the exception of China (ranked 132 out of 179), and Singapore also has some important distinctions, such as mandatory military service which includes 2 years of active duty and 2-3 decades in the reserves.

Avoiding a Buffet Mentality

or, um, Moral Hazard.

Bryan Caplan is getting long

Singapore.

How Singapore achieves U.S. standards of healthcare

for a quarter of the cost.

Poverty's negative correlation to Freedom

Mary Anastasia O'Grady reports:

The 2008 Index of Economic Freedom also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.

The annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom.

Top 5		Bottom 5
1. Hong Kong		153. Burma
2. Singapore		154. Libya
3. Ireland		155. Zimbabwe
4. Australia		156. Cuba
5. United States		157. North Korea

Unrated: Congo Dem Rep, Iraq, Montenegro, Serbia, Sudan

NOTE: I think there's some long-term risk of Hong Kong reverting towards China (ranked near the top of the lowest quintile, at #126). And Bryan Caplan recently noted a notable exception to the freedom in Singapore:

Singapore has conscription. Two years of mandatory military service. Or as I see it, hell on earth. It's not just state slavery. It's state slavery in an especially unpleasant line of work. Even in peacetime, my best-case scenario for military service is that it's like full-time Physical Education.

I'm happy to waste 11% of GDP on unnecessary health care expenditures, and live with another percentage point or so of unemployment, to keep myself and my sons from involuntary military service. And frankly, the purported "social benefits" of the draft - greater social cohesion, egalitarian mingling, and the fostering of patriotism - horrify me as well. Hey, I never claimed to be normal.

Maybe one day a key member of the exceptionally economically literate elite of Singapore will re-read a standard textbook critique of conscription. Or maybe he'll come across David Henderson's great article on "The Role of Economists in Ending the Draft." And then he'll suddenly say: "What were we thinking? Conscription is really inefficient." It would be nice if he'd add, "Oh, and monstrous too," but I don't ask for miracles. Until that day comes, the policies of the U.S. remain the lesser evil.

UPDATE: Don Boudreaux has more:

But unleash people from the countless foolish and rent-seeking constraints imposed by government and from constraints imposed by their own superstitions and they will create resources. They will flourish and prosper, not only materially but also culturally and intellectually. A free people can and will build a dynamically prosperous society in even relatively barren and inhospitable places such as New England, Arizona, and Hong Kong. An unfree people will languish in poverty even in lush paradises such as much of Central and South America and in lands teeming with 'natural' resources such as Congo and Russia.

Singapore: liberty, Justice and JOBS for all

Bryan Caplan with a compelling Singaporean solution to rising unemployment:

With flexible wages, of course, it doesn't matter who legally pays the a tax. But the whole problem with recessions is that wages are somewhat sticky - you can have surplus labor for years before wages fall enough to restore full employment. By cutting employers' share of the tax, the Singaporeans greatly speed up the wage adjustment process.

A little more liberty would be nice?

UPDATE: More mind-blowing Singaporean solutions--this time on healthcare:

Singapore has achieved American health outcomes for about a quarter of the share of GDP the U.S. spends. Furthermore, if Canada shows that socialized medicine can save a few percent of GDP without hurting health, Singapore shows that the free lunch offered by greater government control is meager compared to the free lunch offered by old-fashioned individual incentives.

Why bears will have a hard time waking up from the dead

Today's WSJ:

Foreign governments, flush with cash and no longer content with the meager returns to be had on safe but low-yielding investments like Treasurys, are becoming increasingly aggressive players on the equity front.

The new boldness of these government-controlled investors was on display Sunday night when entities controlled by the governments of China and Singapore agreed to invest as much as $18.5 billion in return for stakes in the big British bank Barclays PLC.

In doing so, Chinese lender China Development Bank and Temasek Holdings Pte. Ltd., the Singapore government's investment agency, could play a role in the outcome of the biggest bank-takeover battle ever. That increasingly bitter contest pits Barclays against a consortium of European banks led by Royal Bank of Scotland Group PLC in seeking to acquire Dutch banking giant ABN ABN Amro Holding NV.

While potentially boosting their investment returns, such deals expose the government-controlled funds and other entities involved to risks that range from simple investment losses to political backlash. If it continues, the trend could also reshape global financial markets, bidding up prices for more speculative assets like stocks, corporate bonds and real estate, while crimping demand for safer investments like Treasury bonds.

"There has been a fairly spectacular increase in financial assets under management by governments," said Dominic Wilson, director of global macro and markets research at Goldman Sachs Group. "The scale of the issues around such investment is different than anything the world has ever seen. Neither [governments] nor the markets know exactly what they should do with the assets."

If completed, the Barclays deal would provide further evidence of an important global shift in wealth. "This is basically a flow of capital from emerging markets to established markets," says John Studzinski, former chief of investment banking at HSBC Holdings PLC and now head of Blackstone Group's mergers-and-acquisitions advisory group, which advised China Development on the deal. The private-equity firm's role shows how private and public investors are joining together to create powerful forces.