Quotes of the day

The larger point is that we don’t just eat to fill the void in our belly. Instead, we eat excessively to fill all sorts of empty spots, one of which is a chronic lack of status.--Jonah Lehrer

The conviction among OWS activists is that the rich have improved their lot by taking money from the not so rich — that wealth has been cruelly redistributed upward. What they overlook is that the real gains come from the creation of new wealth. Steve Jobs did exceptionally well for himself, but he made the broad mass of consumers, here and abroad, better off in the process. Same for Sam Walton. What Oprah Winfrey created made her rich, but without her, those creations wouldn't have existed to entertain and gratify her audience. Ten years ago, the richest person on Earth couldn't buy a device that does what the iPhone does. Today, anyone can get one free upon signing a two-year carrier contract. Entry-level cars are vastly better in amenities and reliability than your father's Cadillac decades ago. Lifesaving and life-changing medicines and therapies once unknown are now commonplace. Food costs a fraction of what it once did. TV viewers used to have three channels to choose from. Now they have hundreds.
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The wealthy are far better off than they used to be. But their improvement has not come at the expense of those down the economic ladder. Economists Bruce D. Meyer of the University of Chicago and James X. Sullivan of the University of Notre Dame find that over the past three decades, both the poor and the middle class have made substantial material progress. "Median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009," they reported last month in a paper for the conservative American Enterprise Institute in Washington. Those in the bottom tenth of the income ladder enjoyed comparable gains.--Steve Chapman

Jobs, we learn, was a bully. “He had the uncanny capacity to know exactly what your weak point is, know what will make you feel small, to make you cringe,” a friend of his tells Isaacson. Jobs gets his girlfriend pregnant, and then denies that the child is his. He parks in handicapped spaces. He screams at subordinates. He cries like a small child when he does not get his way. He gets stopped for driving a hundred miles an hour, honks angrily at the officer for taking too long to write up the ticket, and then resumes his journey at a hundred miles an hour. He sits in a restaurant and sends his food back three times. He arrives at his hotel suite in New York for press interviews and decides, at 10 P.M., that the piano needs to be repositioned, the strawberries are inadequate, and the flowers are all wrong: he wanted calla lilies.
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In the eulogies that followed Jobs’s death, last month, he was repeatedly referred to as a large-scale visionary and inventor. But Isaacson’s biography suggests that he was much more of a tweaker. He borrowed the characteristic features of the Macintosh—the mouse and the icons on the screen—from the engineers at Xerox PARC, after his famous visit there, in 1979. The first portable digital music players came out in 1996. Apple introduced the iPod, in 2001, because Jobs looked at the existing music players on the market and concluded that they “truly sucked.” Smart phones started coming out in the nineteen-nineties. Jobs introduced the iPhone in 2007, more than a decade later, because, Isaacson writes, “he had noticed something odd about the cell phones on the market: They all stank, just like portable music players used to.” The idea for the iPad came from an engineer at Microsoft, who was married to a friend of the Jobs family, and who invited Jobs to his fiftieth-birthday party.
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Even within Apple, Jobs was known for taking credit for others’ ideas. Jonathan Ive, the designer behind the iMac, the iPod, and the iPhone, tells Isaacson, “He will go through a process of looking at my ideas and say, ‘That’s no good. That’s not very good. I like that one.’ And later I will be sitting in the audience and he will be talking about it as if it was his idea.” Jobs’s sensibility was editorial, not inventive. His gift lay in taking what was in front of him—the tablet with stylus—and ruthlessly refining it.
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Jobs was someone who took other people’s ideas and changed them. But he did not like it when the same thing was done to him. In his mind, what he did was special.--Malcolm Gladwell

No, I still haven't forgotten Gladwell's ineptitude for the massive 'igon' typo when describing 'eigen' values. But he's a good writer.--Cav

We do not admit the [SEC] allegations. But if it’s any consolation, we don’t deny them.--Brad Karp, Citigroup attorney

Even rank-and-file members are getting fed up with their unions' political spending. So last spring, as part of a package of controversial union reforms, Wisconsin Gov. Scott Walker gave government workers the right to opt out of paying union dues.  Reformers have tried to encourage that right elsewhere, claiming that many union members aren't happy with how their dues get spent -- and that claim is bolstered by a recent poll. Taken over the summer by Harris Interactive, the poll found that 62 percent of Americans, and a remarkable 47 percent of respondents from union households, believe that union members don't get their dues' worth from their unions.  One reason, clearly, for the dissatisfaction is the unions' expensive investment in political campaigns. In the Harris poll, 60 percent of those in union households said that labor groups were too involved in politics; 72 percent of all Americans agreed.  These views suggest that many union members must really be unhappy about the staggering resources that unions pour into politics -- or, better put, Democratic politics. According to the Center for Responsive Politics, the dozen biggest unions have spent some $384 million on federal political campaigns alone over the last 20 years, and only 3 percent of that money has gone to Republicans. By contrast, about 40 percent of union members typically vote Republican.--Steven Malanga

... it became suddenly, vividly clear: democratic governments cannot do even obvious right things if the public will not tolerate it. Even dictators have interest groups whose support they must buy. This has come home to me forcefully several times over the last few years, but never more than now. The leaders of the eurozone have a dual mandate to keep the euro intact, and to not do the things which could keep the euro intact. They cannot fiscally integrate to the extent necessary because, as I wrote for the Daily the other day, the Greeks do not want to act like Germans, and the Germans do not want to share their credit rating with anyone who won't.--Megan McArdle

There is mounting capital flight, and multinationals are seeking to repatriate capital.  A confiscatory devaluation may be in the works.  Yes I do know all the good numbers they have put up in the last few years, but I also know Austro-Chinese-Soya business cycle theory!  It’s also the case that Argentina will send economists to jail for trying to calculate the correct rate of inflation.  In short, I am crying for Argentina.  File also under “Yet another reason not to take IS-LM models too seriously.”--Tyler Cowen

In all of American history I can think of only one example where punitive trade barriers against foreign countries were appropriate; Japan and Germany during WWII. Otherwise sanctions usually make problems worse, not better. In WWII we wanted sanctions to hurt their economies, but that shouldn’t be our policy in anything but the most dire scenario. ... The only even semi-respectable argument against China’s [capital account] surplus is the Keynesian paradox of thrift argument used by Krugman. What’s so comical about this situation is that the average “man on the street” China-basher would be totally perplexed by the claim that saving is bad. “You mean we are attacking the Chinese for being too thrifty, not following the foolhardy low-saving policies of our government?” Yup.--Scott Sumner

Western Civilisation is unlikely to go out of business any time soon, but the neoimperialist gang might well face redundancy. In that sense, [Niall] Ferguson’s metamorphoses in the last decade – from cheerleader, successively, of empire, Anglobalisation and Chimerica to exponent of collapse-theory and retailer of emollient tales about the glorious past – have highlighted broad political and cultural shifts more accurately than his writings. His next move shouldn’t be missed.--Pankaj Mishra

Quotes of the day

Dear Sen. [Sherrod] Brown: Your office is advertising for an unpaid intern – one whose responsibilities will be quite extensive. But on your webpage you boast of your efforts to fight poverty by raising the national minimum-wage. Are you not concerned that you are promoting poverty by paying this intern an hourly wage of $0.00?--Don Boudreaux

The boundaries of each firm are not arbitrary; there are economic reasons that Google owns a huge capacity of computing power, whereas Bayer has facilities suitable for drug research. In extreme cases, when an industry rapidly changes or management is particularly inept, the proper course is for the firm itself to be dissolved, taking its resources out of a relatively inefficient organization and putting them in different lines where they will be more useful. Although this process is particularly painful for the workers involved, in a free society, layoffs are the only way to signal when labor is being used in a very unproductive enterprise. Once we understand the vital role played by the stock market and (successful) speculation, the case for government intervention in financial markets is considerably weakened.--Robert Murphy

If regulators believed in efficient markets, then they would have looked to market instruments, like subordinated debt, to promote bank soundness. Instead, they used--and continue to use--the notion of risk-based capital, which is a quota system that ultimately resembles the central-planning model that failed in the Soviet Union. The Shadow Financial Regulatory Committee, which is much more market-oriented than the bank regulators, was clear on the problems with risk-based capital twenty years before the crisis hit. On the other hand, the Public Choice story is quite compelling. I can explain the growth of mortgage securitization in terms of the capture of bank regulators by Wall Street. In fact, it is hard to explain mortgage securitization any other way.--Arnold Kling

Moscow failed; Moscow lost. For all the idealism, brilliance and ingenuity of the minds that tried to fashion a Marxist utopia on the ruins of post-second world war Russia and Ukraine, the greater part of Red Plenty is given over to why and how the Soviet communist project failed.  There were plenty of Soviet economists in the 60s who wanted to bring computers into the system, who wanted to put prices on things that bore some relationship to the labour required to make them, who knew that rules like the tonne-kilometre target – whereby a factory that did its job by moving 100 tonnes of materials over 1,000 kilometres was thought more successful than a factory that achieved the same result by moving half the goods over half the distance – made no sense.  But with the death of Stalin, the director class had lost the main incentive it had to be more efficient – fear. The replacement of Khrushchev by the Brezhnev clique in 1964, and the discovery over the next few years of vast reserves of oil in Siberia, made it easy for the people running the country's economy to brush the reformers aside.--James Meek

I think a lot of today’s political disputes come down to a conflict between farmer and forager ways, with forager ways slowly and steadily winning out since the industrial revolution. It seems we acted like farmers when farming required that, but when richer we feel we can afford to revert to more natural-feeling forager ways. The main exceptions, like school and workplace domination and ranking, are required to generate industry-level wealth. We live a farmer lifestyle when poor, but prefer to buy a forager lifestyle when rich.--Robin Hanson

The dark genius of the meritocracy is that it can take a kid like Mark Zuckerberg, someone who grew up in Westchester and went to an exclusive prep school and generally had things pretty easy by any reasonable standard, and — by surrounding him with other hyper-competitive alpha students — make him feel like he’s an underdog, an outsider, someone who needs to fight and claw his way against all odds to make it to the top and stay there. Whether the flesh-and-blood Zuckerberg felt this way or not, I don’t pretend to know. But the phenomenon is real, and crucial to understanding the psychology of the American elite.--Ross Douthat

The traditional public school system had a very weak incentive structure. Since students automatically went to neighborhood schools, schools did not have to compete for students. The teachers unions long ago eliminated merit pay, and made teachers’ pay determined almost entirely by degrees and years spent teaching. Finally, in this traditional system, students had little incentive to work hard, especially when they did not expect to get much education, and could count on always getting promoted. All this is beginning to change for the better, despite fierce opposition from teachers unions to virtually every important reform. School vouchers, and especially the charter school movement, is bringing competition to the traditional neighborhood school. No longer can public schools automatically have a captive audience of all the school age children in their neighborhood. Charter schools are expanding as rapidly as allowed by local and state restrictions that have been due mainly to lobbying of teachers unions.  ... The disgraceful reaction of the LA teachers union to publication by the LA Times of the database that gives performance scores of the students of 6000 elementary school teachers is indicative of how teachers unions feel toward rewarding better teachers. The support by Arne Duncan, the US Secretary of Education, of the newspaper’s publication of this information is highly commendable. Not only should such information be published and publicized, but they should also be used to design a system where merit plays a sizable part in the monetary compensation of teachers.--Gary Becker

Two economists at the Wharton School of the University of Pennsylvania, while investigating how round numbers influence goals, examined the behavior of major league hitters from 1975 to 2008 who entered what became their final plate appearance of the season with a batting average of .299 or .300 (in at least 200 at-bats). They found that the 127 hitters at .299 or .300 batted a whopping .463 in that final at-bat, demonstrating a motivation to succeed well beyond normal (and in what was usually an otherwise meaningless game). Most deliciously, not one of the 61 hitters who entered at .299 drew a walk — which would have fired those ugly 9s into permanence because batting average considers bases on balls neither hit nor at-bat.--Alan Schwarz

We work for you. Our players play for you. It gives us immense pride to do so. You are the rock on which this franchise is built. We know the best way to honor you is not merely to thank you, but to go out and honor our fundamental commitment to field an excellent team in 2011, another one worthy of your avid support. We can do better. We will do better. We are committed to winning. For you, for us, for the whole of Red Sox Nation. Once more, we say "Thank You."--John Henry, Tom Werner and Larry Lucchino

... hearing the news that Cannell died today at 69 from a battle with melanoma, all those childhood memories came flooding back. Of great theme songs ("The Rockford Files" theme is even more celebrated than "Greatest American Hero"). Of buddy shows with an "and" in the title ("Tenspeed and Brown Shoe," "Hardcastle and McCormick"). Of catchphrases I knew by heart ("I love it when a plan comes together" from "The A-Team," or "Works for me" from "Hunter"). Of gunfights where dozens of bullets could be fired without a single person dying ("A-Team," "Riptide"). Mostly, though, I just thought of good, solid craftsmanship. Cannell and his proteges (notably Donald Bellisario, who would go on to create the very Cannell-esque "Magnum, PI" and "NCIS") could do highbrow ("Wiseguy" was a great cable drama more than 10 years before such a thing existed). They could do lowbrow ("The A-Team" was never high art). And they could do middlebrow ("Rockford Files" is still considered the gold standard for TV private eye shows). And they could do them all with a focus on putting a story together so all the pieces neatly fit together, and so that all the main characters got to do the things that viewers loved about them. (Again, see catchphrases.) Even TV snobs seemed to have a soft spot for at least one Cannell show.--Alan Sepinwall