Quotes of the day

... it’s likely [Sean Parker's] greatest contribution to Facebook was his creation of a corporate structure—based on his Plaxo experience—that gave Zuckerberg complete and permanent control of the company he founded.--Steven Bertoni

After eight years, I’ve performed more than two thousand operations. Three-quarters have involved my specialty, endocrine surgery—surgery for endocrine organs such as the thyroid, the parathyroid, and the adrenal glands. The rest have involved everything from simple biopsies to colon cancer. For my specialized cases, I’ve come to know most of the serious difficulties that could arise, and have worked out solutions. For the others, I’ve gained confidence in my ability to handle a wide range of situations, and to improvise when necessary. As I went along, I compared my results against national data, and I began beating the averages. My rates of complications moved steadily lower and lower. And then, a couple of years ago, they didn’t. It started to seem that the only direction things could go from here was the wrong one. Maybe this is what happens when you turn forty-five. Surgery is, at least, a relatively late-peaking career. It’s not like mathematics or baseball or pop music, where your best work is often behind you by the time you’re thirty. Jobs that involve the complexities of people or nature seem to take the longest to master: the average age at which S. & P. 500 chief executive officers are hired is fifty-two, and the age of maximum productivity for geologists, one study estimated, is around fifty-four. Surgeons apparently fall somewhere between the extremes, requiring both physical stamina and the judgment that comes with experience. Apparently, I’d arrived at that middle point. ... I watched Rafael Nadal play a tournament match on the Tennis Channel. The camera flashed to his coach, and the obvious struck me as interesting: even Rafael Nadal has a coach. Nearly every élite tennis player in the world does. Professional athletes use coaches to make sure they are as good as they can be. But doctors don’t. I’d paid to have a kid just out of college look at my serve. So why did I find it inconceivable to pay someone to come into my operating room and coach me on my surgical technique?--Atul Gawande

... when you see a fabricated, unverified quote attributed to you in a book that claims to be a historical description of an important policy meeting with the President, it sticks with you. Mr. [Ron] Suskind’s earlier book about the Bush Administration was an inaccurate and unfair depiction of the President and the advisors for whom I worked, and of the White House in which I worked. It was clearly fed by a disgruntled former Presidential advisor [Paul O'Neill] promoting himself and pushing his own agenda. I will assume the same about his latest. Amazon should move it to the Fiction category.--Keith Hennessey

The [Obama] administration was supposed to have the economic dream team. Couldn't they have spared a moment to sit down with the folks at [the Department of Energy] and explain the concept of sunk costs?--Megan McArdle

How does the surgeon with broken hands fix his own hands? If congress is able and willing to vote to circumvent itself, then it is not really in need of circumvention. If it can't circumvent itself, but circumvention really is necessary, then what? Perhaps Mr Orszag imagines CIA director David Petraeus setting up a number of independent panels and commissions after mounting a successful military coup? I would suggest a constitutional convention. Anyway, in the absence of a plan for implementation, Mr Orszag's article is a bit like telling a kid failing at basketball to get taller.--W.W.

Yale? Seriously? Yale?--Greg Mankiw

Chinese, Japanese, Vietnamese ... Iceberg, Roseberg, Steinberg ... Harvard, Yale, Princeton, it's all the same to me.--a punchline + a Cav addendum

But surely if, say, President Jimmy Carter was as smart and as full of correct foresight as he would have had to be in order for sensible people to take seriously his late-1970s pronouncements on the future of America’s energy economy, he could have made a personal fortune, starting at 12:01pm on 20 January 1981, launching and running an energy company (or, more precisely, a synthetic-energy company). Yet he didn’t even try. He selfishly denied to Americans – indeed, to the world – the blessings of synfuels. Sure, he did other things. Built houses for poor people. Visited foreign leaders. But does the value that Mr. Carter supplied to the world through these deeds come close to the value that Mr. Carter would have supplied had he actually founded and successfully run a company producing ‘alternative’ energy? Doubtful. And what of Pres. Obama? Even if he wins a second term in the White House, he’ll be only 55 years old when he leaves office. Will he found and run a health-insurance company? How about a ‘green’ energy firm? Or will he, perhaps, found and run a firm specializing in offering middle- and low-income Americans better and more fully disclosed access to consumer credit? Will he create a successful automobile firm? I’ll bet (seriously) a good deal of money that he’ll do none of these things. He’ll not even try. And for good reason: not only does he know nothing about these matters, he knows nothing about finding investors willing to stake their own funds, or about finding skilled workers and managers willing to cooperate together in such upstart enterprises, so that such enterprises become realities with real prospects for success. He knows no more about the economic matters upon which he pronounces than does a soap-opera actor portraying a physician know about cardiology or obstetrics.--Don Boudreaux

Predicting toxic drug effects in humans - now, that's something we could use more of. Plenty of otherwise viable clinical candidates go down because of unexpected tox, sometimes in terribly expensive and time-wasting ways. But predictive toxicology has proven extremely hard to realize, and it's not hard to see why: there must be a million things that can go wrong, and how many of them have we even heard of? And of the ones we have some clue about, how many of them do we have tests for?--Derek Lowe

Had we lived, I should have had a tale to tell of the hardihood, endurance and courage of my companions which would have stirred the heart of every Englishman. These rough notes and our dead bodies must tell the tale.--Captain Robert Falcon Scott, journaling his failed expedition to the South Pole

Maybe that is what a recession is. Not a macroeconomic accident in which all of us suddenly decided to spend less and consequently have been unemployed more. But a period in which the up escalators are less crowded and the down escalators have more people than usual.--Arnold Kling

I suspect the biggest source of inflation fears has been Chinese investors. The regime there has been on a treadmill to Hell, needing to create millions of jobs each year to avoid having its populace revolt. To create those jobs it has to keep its exports cheap, which requires it keep its currency artificially low. It does this by printing money, quite literally. Anyone holding lots of Chinese currency would understandably want to hedge against inflation. But China has been putting the brakes on inflation. It is allowing its manufacturing sector to slow down — we've now had three consecutive months of contraction in Chinese manufacturing. The government is quite audibly fighting inflation. So perhaps the demand for gold from Chinese investors is retreating now that the economy appears to be slowing.--John Carney

Bloomberg published a nice piece earlier this week which supports my long-held belief that the term “investment banking management”—like “military intelligence” or “legal ethics”—is, in the trenchant phrase of Raymond Chandler,¹ “an expression which contains an interior fallacy.” In other words, an oxymoron.--ED

Basel III involves complex risk weighting that is easily open to manipulation and regulatory arbitrage. Covered bonds, a structured finance arrangement popular in Europe, get a much lower risk weighting than other debt securities — which means banks that already own them (the Europeans) will have an advantage over those that don’t (the Americans).--John Carney

... overpaid and underperforming government employees are a drag on productivity, and especially on fiscal outlooks when economies are weaker. This helps explain why many state and local governments of the US, and governments in countries like Greece, are encountering serious obstacles to improving their fiscal houses as they respond to the Great Recession.--Gary Becker

[My plan to raise taxes on higher incomes] is not class warfare. It's math.--President Obama

Class warfare isn't leadership.--John Boehner

The President’s goal of raising taxes undermines his goal of increasing investment and growth.--Keith Hennessey

You know those Christian versions of mints, with bible verses on them? They're called Testamints. Well, someone's gone and created some popsicles with Christian messages on them. The name of the product? Test-icles.--James Williams

The American people did not choose this fight

It came to our shores, and started with the senseless slaughter of our citizens. After nearly 10 years of service, struggle, and sacrifice, we know well the costs of war. These efforts weigh on me every time I, as commander in chief, have to sign a letter to a family that has lost a loved one, or look into the eyes of a service member who's been gravely wounded. So Americans understand the costs of war. Yet as a country, we will never tolerate our security being threatened, nor stand idly by when our people have been killed. We will be relentless in defense of our citizens and our friends and allies. We will be true to the values that make us who we are. And on nights like this one, we can say to those families who have lost loved ones to al Qaeda's terror: Justice has been done.--President Obama

A few quick thoughts:

1. This has taken a long time.  Almost a decade since September 11, 2001, and the intelligence on the Abbottabad first surfacing last summer.  While intelligence and special operations are complex and challenging, I still wonder how much of the time was in careful deliberation and how much was in the limits of intel.
2. Hopefully this will strengthen the resolve of the administration when it comes to foreign policy and negotiation.  Peace comes through strength as well as a balanced view of varied interests; not through avoidance, enabling, or capitulation.
3. The competence of the execution of this operation promotes the Obama legacy over Jimmy Carter's to me.  I worried about this back in 2008.  So did others.  I hope this administration's legacy outperforms noticably and measurably.
4. There is a higher police presence in the subway stations, as I saw from my morning commute.  I am sure that this success of U.S. policy will incite and rally al Qaeda sympathies around the world, and bring higher risks of terrorist events against U.S. citizens and on U.S. soil.  But there is no better alternative.  There must be consequences for terrorist actions.
5. The quick disposition of Bin Laden's body at sea begs some questions.  I am certain that photos and probably video of his body exist; but as much as journalists would want to verify the evidence of his death, the controversy they would add is a tradeoff I am sure the bureaucrats in Washington D.C. worked hard to price, and avoid.

Quotes of the day

Life isn't like a story, it's more like a run-on sentence.--Eric Falkenstein

IN REAL LIFE, MOST OF US ARE A MIX of wise and foolish, prudent and silly, thoughtful and impulsive. Nevertheless it helps us to see what the issues are by setting out the alternatives as a simple choice. That is what Proverbs 9 does for us. It pictures two women, Wisdom and Folly, calling out to people. In some ways, this drive toward a simple choice ... is typical of Wisdom Literature. It is a powerful, evocative way of getting across the fundamental issues in the choices we make. ... There is a sense in which someone who accepts wisdom is already proving wise; the person who rejects wisdom is a mocker or wicked. Hence the powerful contrast of ... “Do not rebuke a mocker or he will hate you; rebuke a wise man and he will love you.”--Don Carson

We all saw him run that 40. Oh my goodness, that's the slowest 40 I've ever seen in my life.--Rex Ryan, on why Tom Brady dropped to the sixth round of the NFL draft

[Walter Williams'] students learn more about free markets before 9 a.m. than most college kids do all day — or maybe all semester, given the biases of the modern academy.--JOHN J. MILLER

I’m happy to have gotten my education before it became fashionable for white people to like black people.--Walter Williams

When you talk about liberty, you have to smile.--Milton Friedman

I thought one of the strongest arguments for the mandate--and the broad outlines of the Patient Protection and Affordable Care Act--was people with pre-existing conditions. The new high-risk pools were supposed to be a stop-gap for those people until PPACA kicked in. But so far, just 12,000 have signed up, or about 3% of the expected total. Either pre-existing conditions just aren't the large problem that advocates claimed, or something has gone disastrously wrong with the implementation of these pools. ... thanks to the rules making it illegal to exclude children with pre-existing conditions, insurers have now stopped selling child-only policies in 34 states. Both the government of Massachusetts and the administration are eagerly exploring the option of simply commanding insurance companies to sell policies at the price they would like to pay, a tactic that doesn't really have a great track record in modern industrial economies.--Megan Mcardle

In terms of income, the gap between rich and middle class is growing, but in terms of happiness it is relatively low by broader historical standards. Second, a lot of envy is local. People worry about how they are doing compared to their neighbors, their friends, their relatives, their co-workers, and the people they went to high school with. They don’t compare themselves to Michael Bloomberg, unless of course they are also billionaires. When the guy down the hall gets a bigger raise, perhaps by courting the boss, that’s what really bothers us. In other words, envy and resentment are not going away and they also do not stem fundamentally from the contrast between ordinary lives and the lives of the very wealthy. ... The weight has not swung to the point where there is more unearned wealth than earned wealth and so Americans identify with business and a business ethic, especially compared to attitudes in Europe. Americans know that they have done well by their pro-business and pro-wealth ethic. Should they trade in those views for a bundle of envy and resentment? The case for that switch has not yet been made and fortunately there is still a lot of common sense out there.--Tyler Cowen

Price equals marginal cost. And the marginal cost of accessing a journal article is pretty much zero. The research has been written, the type has been set, and the salaries have already been paid — usually thanks to a university, think tank, or government grant. So the socially optimal price is: free. Every time we charge a price higher than this, we risk pricing out someone who might benefit from the insights of an academic scribbler.--Justin Wolfers

In the days after this quake, intellectuals were divided between the impulse to hold fast with the government at a time of crisis and the urge to point out failures in leadership. I frequently heard comparisons of Japan’s nuclear lobby to the American entanglement with defense contractors.--Evan Osnos

So really, the question isn't how will we feed 9 billion by 2050? The question is how many people will we really have and what will they be eating? Poverty of course plays a big role in both these issues because, as Juergen Voegele, director, agriculture and rural development, the World Bank, pointed out to Revkin: "We already have close to one billion people who go hungry today, not because there is not enough food in the world but because they cannot afford to buy it." Raising incomes, or course, is a difficult nut -- one that doesn't succumb to a solution hatched in a lab. But more income means better-educated families, and even declining population growth. The flip side, though, is that rising incomes are also associated with higher meat consumption, which can get us closer to option five on Smil's lifestyle if we are not careful. So the best case: to raise incomes and to incentivize less resource-intensive food consumption.--Samuel Fromartz

I don't buy individual Chinese stocks.
I don't buy stocks with market caps under $500 million (and usually not under $1 billion).
I don't invest in one-drug biotech companies.
I don't do private placements.
I don't buy closed-end fund IPOs.
I don't trade naked options.--Joshua Brown

The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.--Barack Obama, in 2007

When Jackie Robinson broke into baseball, he had to be the best. There was no alternative. Today, black athletes can show up and fail and nobody will say blacks can’t play. We can afford incompetent athletes, but we can’t afford an incompetent president. The first black president needed to be better than Jimmy Carter.--Walter Williams

I ... suggest that the legitimacy of a war is established not by how it is organized, but by whether its aims are both morally and strategically sound. The Iraq War was a mistake, in this sense, not because Jacques Chirac and Gerhard Schröder opposed it, but because it involved serious strategic miscalculations on the part of the American government: An overestimation of the danger that Saddam Hussein posed to the United States, and an underestimation of the difficulty of occupying Iraq and transforming it for the better. ... There is no perfect way to fight a war: Every approach to military action comes with distinctive dangers as well as with advantages. Which is why discretion in warmaking really is the better part of valor. Some conflicts are better approached as multilaterally as possible. Some are better fought under explicit American leadership, or by America alone. But many, in Iraq and now in Libya, are better left unfought entirely.--Ross Douthat

No clear national or even humanitarian interest for military intervention. Intervening well past the point where our intervention can have a decisive effect. And finally, intervening under circumstances in which the reviled autocrat seems to hold the strategic initiative against us. This all strikes me as a very bad footing to go in on. And this doesn't even get us to this being the third concurrent war in a Muslim nation and the second in an Arab one. Or the fact that the controversial baggage from those two wars we carry into this one, taking ownership of it, introducing a layer of 'The West versus lands of Islam' drama to this basically domestic situation and giving Qaddafi himself or perhaps one of his sons the ability to actually start mobilization some public or international opinion against us. I can imagine many of the criticisms of the points I've made. And listening to them I think I'd find myself agreeing in general with a lot of it. But it strikes me as a mess, poorly conceived, ginned up by folks with their own weird agendas, carried out at a point well past the point that it was going to accomplish anything. Just all really bad.--Josh Marshall

Until Apple introduced its highly popular touchscreen device [the iPhone] in 2007, which went on to become the world’s leading smartphone, Deutsche Telekom had been generating decent sales from its American operation, with growth in some years surpassing that achieved in Germany.  But after the iPhone went on sale, sold exclusively at first by AT&T in the United States, T-Mobile USA began to lose its most lucrative customers, those on fixed monthly plans, who defected to its larger American rivals — AT&T and Verizon Wireless, which began selling the iPhone in February.--KEVIN J. O'BRIEN

Photo link here.

I think I know how to help reduce the projected deficits

Cap Social Security and Medicare payments, and all other entitlements, in nominal 2010 dollars. Gradually, inflation and real GDP growth will fade the enormous weight of these programs on taxpayers. I think this beats dramatically increasing taxes, reducing short term benefits and spending, or indulging in seigniorage (or a combination of these). And given the low-inflation season we find ourselves in, the erosion of the dollar isn't on the forefront of our minds the way it was back in the White House of Jimmy Carter.

It's like Paygo, but Congress basically says: we're limiting total entitlement spending to $1 trillion per year (with the option to reduce in deflationary times).

Nothing will be "taken away" from the elderly and the lower-income population in the short term, while in the long term, these income transfers will fall to more sustainable levels. Politicians looking for re-election in the next 2-6 years can claim that they "SAVED [enter special-interest program name here]!" Folks in their 50s or younger can plan on reduced payments, but we will still get something.

Will it be popular? Of course not. Nobody is happy taking less than they are accustomed to. But this is probably the most stable way to do it. Stability increases the ability to plan and adjust for the long term. I really think this is the most practical way out of the Ponzi scheme our elected officials have trapped us in.

This is the first time I have ever said or typed the following words

Thank you, Jimmy Carter.

Quotes of the day

It's hard enough for me to explain my libertarianism (government is good--including the Fed vs. the old gold standard--but we need a lot less of it) to others in New York City. My infant is a little too codependent on mommy to show any libertarian leanings; but I have a lot of hope for my elementary school student and preschooler: both of them favor my Red Sox over the Yankees!--Cav

A couple years ago, I participated in a panel discussion on libertarianism in Mike Sandel's Justice class, along with my friend and colleague Jeff Miron. Jeff is a true libertarian, and he defended that position with gusto. By comparison to Jeff, I seemed lacking in conviction. I described myself as a "libertarian at the margin." By that, I meant that given our starting point today, I believe more reliance on individual liberty and less on governmental solutions is usually a step in the right direction, but I often recoil at more radical libertarian positions. David Brooks's column yesterday offers a good explanation of skepticism about big radical ideas, such as pure libertarianism. It made me feel better about my watered-down variety.--Greg Mankiw

You have to listen. A lot of guys can talk.--Art Linkletter

Was Jesus a wandering sage? Maybe so. A failed revolutionary? Sure, why not. A lunatic who fancied himself divine? Perhaps. An apocalyptic prophet? There’s an app for that … But this isn’t history: It’s “choose your own Jesus,” and it’s become an enormous waste of time. Again, there’s nothing wrong with saying that the supernaturalism of the Christian canon makes it an unreliable guide to who Jesus really was. But if we’re honest with ourselves, then we need to acknowledge what this means: Not the beginning of a fruitful quest for the Jesus of history, but the end of it.--Ross Douthat

Greed-based utility is an assumption lying at the heart of the Capital Asset Pricing Model (CAPM) that has been taught to every finance MBA since the 1960s (including this one), and is the basis for how trillions of dollars of investments are managed in the real world. If utility isn’t greed-based, then CAPM simply can’t explain reality. ... if our actions are based not on absolute wealth but relative wealth—an envy-based economy—the market would need no risk premium. ... Risky investments seem less dangerous when everybody buys them. And in a benchmarking environment, underperforming your peers is itself the riskiest bet. ... Maybe greed isn’t good in an unmitigated sense. But compared to envy, on occasion, greed might actually be a little better. --Timothy Taylor

The sad truth is that under the Ethicist's code of conduct, we have more deaths and more foreclosures than necessary, all in the name of fairness.--Greg Mankiw

The story of Sweden over the last 50 years has been one of a steady loss of exceptionalism. In some ways the outside world has grown more "Swedish" -- we all wear seatbelts, drink less, and believe in gender equality. At the same time, Sweden has grown much more worldly -- it drinks more, works and earns less, and struggles with the assimilation of immigrants. The Swedes themselves no longer believe in a Swedish model, or, when they do, it's very different from the heavily regulated "people's home" of myth.--Andrew Brown

The renminbi, China’s currency, is in global opinion — save in China — held unduly low to keep China’s export machine revved up. When Treasury Secretary Timothy F. Geithner arrived here on Sunday, an opening argument to his counterparts was that Chinese rules were forcing American companies to surrender their technological jewels just for a ticket to compete in the Chinese market. Some of these tactics come straight from the playbook of Japan and other developing nations that have sought to raise their export-driven economies to a higher level. China is different in two respects that may seem contradictory. On one hand, major industries like oil, telecommunications, banking and aviation are deemed strategic and are under tight state control. Of the 22 Chinese corporations listed on the Fortune Global 500, 21 are controlled by China’s central government or state-run banks. Just one, Shanghai Automobile, is run by a local government. None are privately owned.--Michael Wines

At first glance you might think; “Aha Sumner, there’s your smoking gun. [Paul Krugman] does oppose the neoliberal agenda of privatization, deregulation and free trade, or at the very least thinks it failed. Just as you said. You’ve finally nailed him.” Not so fast. He didn’t say these policies were tried and failed, he said they were recommended by American officials, and he also said Latin America had not done well. But he never actually said the policies were tried and failed. Again, you might think I am being absurdly pedantic here. But I am quite serious. Indeed I think it is quite possible that Krugman actually favors neoliberalism–as many of his fans insist who write in the comment section of my blog. As with the President Fox example, my interpretation also has the virtue of being true. In most of Latin American neoliberal policies are been tried only fitfully. Only one country in Latin America has enthusiastically embraced neoliberalism; Chile. And Chile also happens to be the only economic success story in South America. So the facts of the matter actually fit my interpretation, strange as it may seem. ... So is [Krugman] brilliant? Yes. But social intelligence? Let’s just say it’s “on the charts.”--Scott Sumner

Progressives and conservatives alike call the United States a "free-market economy": both sides have an interest in perpetuating this delusion. The idea is ridiculous - as ridiculous as calling Europe's economies "socialist". True, the blend of government and private enterprise is a bit different between the US and the European average, but the models (insofar as it makes sense to talk of a European model) are neighbors not polar opposites. All this was true, obviously, long before 2009. Obama, I agree, does want to narrow the gap a bit more - but it just was not that wide to begin with.--Clive Crook

The average state experiences a 40 to 50 percent increase in earmark spending if its senator becomes chair of one of the top-three committees. In the House, the average is around 20 percent. For broader measures of spending, such as discretionary state-level federal transfers, the increase from being represented by a powerful senator is around 10 percent.--Joshua Coval

I can tell a story about crowding out, where the federal money either does something that the private sector might have done anyway, or hires away resources (particularly skilled labor) from private firms. If the government is monopolizing the local supply of cranes and crane operators in order to build a new sewage treatment plant, your construction project may not get built. And because government funds are for discrete projects, and future funds are uncertain--your chairman may get unelected, or their party may lose power--it's probably hard to get firms or workers to relocate to your area in order to pick up the slack. I can even tell a slightly more exotic story where there's what economists call a "resource curse" to federal funds. Countries that have large deposits of natural resources are not, as you would expect, richer and happier as a result; rather the reverse. It turns out that when you have a fat supply of practically free money, the elites spend all their time thinking about how to divert that money into their pockets, and none of their time thinking about how to build good political and economic institutions. And because the government can support itself without tax revenues, it is not made accountable to the citizenry it is betraying. Norway is the great exception to this rule--but Norway had very strong institutions before it had fossil fuels.--Megan McArdle

After controlling for challenger strength, the presence of major scandals or controversies, and the national political climate, the conservatism of the incumbent's voting record continues to have a strong negative influence on incumbent electoral performance. For every additional one point increase in conservatism, Republican incumbents lost an additional three percentage points in support relative to their party's presidential candidate.--Alan Abramowitz

... as the length of education and training for a scientists gets longer, the value of a scientific career drops sharply. [Also], teamwork has been getting more important. For example, on the issue of teamwork, Jones looks at all science, engineering, and social science journal articles published from 1995 to 2005, and shows that team-written papers have far more impact than solo papers.--Mike Mandel

San Francisco and New York are far and away the leaders in human capital density with 7,031 and 6,357 college degree holders per square mile, respectively.--Richard Florida

Similarly seeking to illustrate how important an issue is to the next generation, yesterday President Obama introduced one of his daughters into the oil mess debate. He told a news conference that when he was shaving yesterday morning, his 11 year old daughter, Malia, knocked on the bathroom door and peeked her head in and asked: "did you plug the hole yet, daddy?' It didn't work for Jimmy Carter.--Tom Shine

A Wall Street Journal investigation provides the most complete account so far of the fateful decisions that preceded the blast. BP made choices over the course of the project that rendered this well more vulnerable to the blowout, which unleashed a spew of crude oil that engineers are struggling to stanch. BP, for instance, cut short a procedure involving drilling fluid that is designed to detect gas in the well and remove it before it becomes a problem, according to documents belonging to BP and to the drilling rig's owner and operator, Transocean Ltd. BP also skipped a quality test of the cement around the pipe—another buffer against gas—despite what BP now says were signs of problems with the cement job and despite a warning from cement contractor Halliburton Co. Once gas was rising, the design and procedures BP had chosen for the well likely gave this perilous gas an easier path up and out, say well-control experts. There was little keeping the gas from rushing up to the surface after workers, pushing to finish the job, removed a critical safeguard, the heavy drilling fluid known as "mud." BP has admitted a possible "fundamental mistake" in concluding that it was safe to proceed with mud removal, according to a memo from two Congressmen released Tuesday night. Finally, a BP manager overseeing final well tests apparently had scant experience in deep-water drilling. He told investigators he was on the rig to "learn about deep water," according to notes of an interview with him seen by the Journal.--Ben Casselman and Russell Gold

What accidents like the [BP oil spill or the space shuttle] Challenger should teach us is that we have constructed a world in which the potential for high-tech catastrophe is embedded in the fabric of day-to-day life. At some point in the future-for the most mundane of reasons, and with the very best of intentions-a NASA spacecraft will again go down in flames. We should at least admit this to ourselves now. And if we cannot-if the possibility is too much to bear-then our only option is to start thinking about getting rid of things like space shuttles altogether.--Malcolm Gladwell

It was only about 10,000 years ago that humans in many parts of the world began raising livestock and growing food through deliberate planting. These advances provided more reliable sources of food and allowed for larger, more permanent settlements. Native Americans alone domesticated nine of the most important food crops in the world, including corn, more properly called maize (Zea mays), which now provides about 21 percent of human nutrition across the globe. But despite its abundance and importance, the biological origin of maize has been a long-running mystery. The bright yellow, mouth-watering treat we know so well does not grow in the wild anywhere on the planet, so its ancestry was not at all obvious. Recently, however, the combined detective work of botanists, geneticists and archeologists has been able to identify the wild ancestor of maize, to pinpoint where the plant originated, and to determine when early people were cultivating it and using it in their diets. ... Looking at the skinny ears of teosinte, with just a dozen kernels wrapped inside a stone-hard casing, it is hard to see how they could be the forerunners of corn cobs with their many rows of juicy, naked kernels. Indeed, teosinte was at first classified as a closer relative of rice than of maize. But George W. Beadle, while a graduate student at Cornell University in the early 1930s, found that maize and teosinte had very similar chromosomes. Moreover, he made fertile hybrids between maize and teosinte that looked like intermediates between the two plants. He even reported that he could get teosinte kernels to pop. Dr. Beadle concluded that the two plants were members of the same species, with maize being the domesticated form of teosinte. Dr. Beadle went on to make other, more fundamental discoveries in genetics for which he shared the Nobel Prize in 1958. He later became chancellor and president of the University of Chicago.--Sean Carroll

For large stocks in particular, algorithmic trading narrows spreads, reduces adverse selection, and reduces trade-related price discovery. The findings indicate that algorithmic trading improves liquidity and enhances the informativeness of quotes.--Terrence Hendershott

Machine Trading Good? At a minimum, not bad. The problem is that many people think stuff they don't understand must be bad. Of course, they still watch their plasma tv. Somehow, not understanding THAT must be okay.--Mungowitz

Any mother who wears her vintage Valentino while making muffin topping with her kids should be hauled up before the Department of Children and Family Services.--Roger Ebert

The finale of Lost pretended to be about the ultimacy and redemptive power of love, or something like that, but it exemplified instead the incoherent ruinous mess of our needy scattershot attachments, our whorish readiness to be doped by the dull, warm, indeterminate golden light. Speak not to me of love, Lost, if you know not love.--Will Wilkinson

This may not sound especially exciting, but watching Pierce is not exactly exciting. Watching Pierce play basketball is like watching a great plumber or great carpenter or great auto mechanic at work. No wasted motion. No pointless energy. No false moves. I love this sort of basketball. It’s why I love Tim Duncan too. “Adventure?” the Jedi teacher Yoda asks in The Empire Strikes Back. “Excitement? A Jedi craves not these things.” Paul Pierce craves not these things. No, he cannot dominate a game anytime he likes, a la Kobe or LeBron. He will not pull out some sort of ridiculous and superfluous move to make the SportsCenter highlights. He will have games when he scored 8 points and games when he scores 30. He plays to play. He does what needs to be done. He has learned Roy Williams’ lesson well. Just do something? Yes. Paul Pierce does.--Joe Posnanski

Quotes of the day

She had an unequalled gift, ... of squeezing big mistakes into small opportunities. --Henry James

At the start of this campaign, the issues were health care and the economy. After "Ted Kennedy's seat" and "Curt Schilling the Yankees fan" and "only the little people campaign at Fenway", the genius Dems succeeded in making their own assumptions about one-party rule a very potent secondary issue. Very foolishly, Obama both underlined the regal hauteur of the Massachusetts machine - and simultaneously nationalized the election by portraying it as a referendum on the Hopeychange. If Martha now loses, he can't plead it's nothing to do with him.--Mark Steyn

Why would you hand the keys to the car back to the same guys whose policies drove the economy into the ditch and then walked away from the scene of the accident?--Chris Van Hollen

That's Chris Van Hollen, the chairman of the Democratic Congressional Campaign Committee, meaning to help Coakley win Teddy Kennedy's seat, and running right off the road into a ditch called Chappaquiddick.--Ann Althouse

You can have religious freedom but you probably shouldn’t work in the emergency room.--Martha Coakley

In a race where the Republican nominee didn’t know how to use the Internet, Barack Obama was the Internet: sleek, protean and ubiquitous. The Obama campaign dominated online fund-raising, online organizing and social media. This virtual edge translated into an enormous real-world advantage — in dollars raised, enthusiasm harnessed and Election Day boots on the ground. A year later, some of the Democrats’ advantage is still there. But it’s been crumbling ever since Obama took office. Republican politicians have taken over Twitter. Sarah Palin has 1.2 million followers on Facebook. And in liberal Massachusetts, Scott Brown, the Republican Senate candidate, has used Internet fund-raising to put the fear of God into the Bay State’s establishment.--Ross Douthat

As of Monday morning, Republican Scott Brown has 76,538 fans on his Facebook page. With polls opening in less than 24 hours, Democrat Martha Coakley has 14,441 fans. On Twitter, Brown has 10,187 followers compared to Coakley's 3,514 followers. The total uploaded views for Brown's YouTube videos are 578,271 versus 51,173 for Coakley.--Eric Kuhn

Attorney General Martha Coakley—who had proven so dedicated a representative of the system that had brought the Amirault family to ruin, and who had fought so relentlessly to preserve their case—has recently expressed her view of this episode. Questioned about the Amiraults in the course of her current race for the U.S. Senate, she told reporters of her firm belief that the evidence against the Amiraults was "formidable" and that she was entirely convinced "those children were abused at day care center by the three defendants." What does this say about her candidacy? (Ms. Coakley declined to be interviewed.) If the current attorney general of Massachusetts actually believes, as no serious citizen does, the preposterous charges that caused the Amiraults to be thrown into prison—the butcher knife rape with no blood, the public tree-tying episode, the mutilated squirrel and the rest—that is powerful testimony to the mind and capacities of this aspirant to a Senate seat. It is little short of wonderful to hear now of Ms. Coakley's concern for the rights of terror suspects at Guantanamo—her urgent call for the protection of the right to the presumption of innocence. If the sound of ghostly laughter is heard in Massachusetts these days as this campaign rolls on, with Martha Coakley self-portrayed as the guardian of justice and civil liberties, there is good reason.--Dorothy Rabinowitz

For those readers who have never had the privilege of living in a battleground state, let me explain what the experience is like. Every other television commercial is about the campaign. Day after day, the race dominates the front page of the newspaper. Your mailbox is stuffed with fliers for or against one of the candidates. Your friends and neighbors talk about the campaign -- and who you support can affect your friendships. You can't escape either the race. All of this would be tolerable if it were not for two things. First, the phone calls. Over this weekend, by my count, we have received ten phone calls asking us to vote for or against someone, and then a few phone calls on top of that polling us about our voting intentions (weirdest call, hands down, was a recorded message from Pat Boone. The Official Blog Wife got that call, and the end of it had no idea who Boone wanted her to vote for). Since these inquiries can't be put on the Do Not Call list, the phone will not stop ringing. Second, the candidates are God awful. Seriously, they stink. Just to review our choices: Democrat Martha Coakley has a prosecutor's complex that would make Javert seeem like a bleeding-heart liberal. She is a God-awful politician so out of touch with reality that she accused Red Sox hero extraordinaire Curt Schilling of being a Yankee fan (Schilling's blog response is here). Based on the ads I've seen, her campaign has also been, by far, the nastier of the two. This leaves Republican Scott Brown, who based on his vacuous Boston Globe op-ed, is an empty shirt with no actual policy content whatsoever. He was in favor of health care reform before he was against it. He can't stand the run-up in government debt, and wants to cut taxes across the board to take care of the problem -- cause that makes perfect economic sense. The one thing he is unequivocally for is waterboarding suspected terrorists.--Daniel Drezner

Jonathan Cohn headlines his latest plea to ignore a Brown win and pass health care anyway "Pelosi Isn't Panicking. Her Party Should Listen." Umm, call me cynical, but maybe the reason Pelosi isn't panicking is that Pelosi's got one of the safest seats in the country? I mean, take this for what it's worth but if Brown wins today, my advice to Blanche Lincoln, and Ben Nelson, and their counterparts in the house? You should panic. They're coming for you next.--Megan McArdle

When I realized that health care was probably going to pass, I was, as you can imagine, sort of unhappy. I thought that this was, over the long run, very likely to result in the untimely deaths of lots of people, maybe including me. I may have been in error about this belief--but it was sincerely held. ... it's not that hard to understand why the people on the other side want what they want. They look at people without insurance, and they want to help them. I'd like to help them too. They believe, as I do not, that the government will be able to muster the political will to control costs. They believe, as I do not, centralized government planning will improve the health care system rather than being hijacked by special interests within it. They believe, as I do not, that there is so much fat and waste in the pharma and medical technology industries that they can considerably reduce reimbursements without reducing useful innovation and thereby condemning those who might have been saved to an early death. These are not unreasonable beliefs. Neither are mine.--Megan McArdle

In a recent column, Krugman urged readers to trust their eyes more than dry statistics (something you could rarely accuse him of doing, which I honestly mean as a compliment). Don't people seem well off in London, Paris, and Frankfurt, he asks? They do. Milan is also really nice: all those Ferraris. But these places are not exactly at the European mean. He should try comparing Bolton, Lancashire (my hometown) with Princeton, N.J. That would remind him that statistics can be useful. But if superficial impressions are allowed, here is mine gleaned from traveling around the U.S.: Americans live in bigger houses than their European counterparts, eat better food, drive bigger cars, wear better clothes, and are surrounded by more and better stuff. Put it this way: If America's living standards suddenly descended to Europe's, rather than the other way round, it would be a calamity that would make the country's present economic difficulties look trivial. And yet, as I say, higher U.S. productivity is not the main reason for this prosperity gap. Comparing America with the richest European countries, output per hour worked is not that different. In levels of productivity, Europe's most successful economies have caught up. Then why are they still so much poorer? Because Europeans work less. A higher proportion of the U.S. population is employed, and Americans work longer hours. Effort, not efficiency, is why Americans are richer. ... Despite the worsening polarization of its politics and the astounding variety of its cultures, ethnicities, and religious traditions, the United States binds its people together more harmoniously than most European countries do. Everywhere, the Stars and Stripes: That, too, is social cohesion. The idea of America, with its emphasis on individualism and the market, is a remarkably powerful unifier. This is a paradox that social democrats need to ponder.--Clive Crook

If [Paul] Samuelson and other Soviet growth optimists were just appealing to catch-up, they certainly wouldn't have predicted that the Soviets would surpass the U.S. My claim wasn't that it was crazy to think that the Soviet Union could temporarily have higher growth than the U.S. My claim, rather, was that "There was never a point in Soviet history when a sensible economist would have seen communism as good for growth in any meaningful sense." If Samuelson and company had said, "The Soviet Union has decent growth for the time being because its ability to copy more advanced economies outweighs the harm of its terrible economic policies," my criticism would be less harsh (though I'd still fault them for trusting Soviet statistics, ignoring collectivization famines, etc.). The same goes for Europe. Its relatively statist economic policies didn't prevent it from exceeding U.S. growth for decades. But with better policies, Europe would still be gaining on us - or would have already caught up.--Bryan Caplan

I would suggest that explaining the depth of the recession is a challenge for just about any macroeconomist. There is no well-established theory that can explain how we got to 10 percent unemployment. If you are a Yale Keynesian, you would have been able to tell a good story when the S&P 500 stock index was down near 800. But it has gone back up over 1000, which means that Tobin's q is doing ok, which means that investment should be doing ok. It is not. If you are what Greg Mankiw calls a macroeconomic "engineer," meaning that you believe in macroeconometric models, then you have to explain why unemployment today is higher with the stimulus that what the models predicted without the stimulus. The standard macroeconometric models do not explain the depth of the recession.--Arnold Kling

Kling is being very polite in trying to give me another chance to recant my absurd argument, but I remain as stubborn as when Jimmy Carter gave Ford another chance, and Ford kept insisting that Poland wasn’t under Soviet domination.--Scott Sumner

A dozen years ago, Mr. McGwire was celebrated as a modern-day Babe Ruth, whose Popeye physique seemed to attest to his hard work. Yet last week, in a tearful apology, he confessed that he was using steroids in the course of his heroics. Only a couple of years ago, Wall Street was lauded as a marvel of financial innovation, the wellspring of prosperity, and the heads of major banks were lionized for bold risk-taking. Yet in tense exchanges before the Financial Crisis Inquiry Commission last week, bank chieftains found themselves pressed to explain how so many of their investments proved so disastrous.--Peter Goodman

Predators may have "roamed the financial landscape," but it was government that set them loose. It was government-sponsored enterprises that packaged these loans into securities for sale. It was government-sanctioned ratings companies that certified them as triple-A so that responsible investors would buy them. Prof. Blinder seems to have no recollection of these horrible policy decisions. Interestingly, none of the "reforms" in the House financial regulation bill he touts would address any of these problems. This bill follows the time-honored congressional practice of shifting blame to others, for Congress is never at fault when its foolish policies go haywire. It's always the fault of those who respond rationally to the stupid incentives Congress sets in motion.--Richard Belzer

Don't look to investment bankers for answers on how we got here. We don't know and we don't care. We take the world as we find it and try to make money.--Epicurean Dealmaker

As a new year begins, stock-fund managers are all smiles about 2009's outsize gains, their best results in 50 years. But factor in the horrendous 2008 and some 97% of all stock funds still show a loss.--Sam Mamudi

In the past decade, media businesses, from music to newspapers, have suffered from the impact of unbundling. Civil wars in the cable business make it likely that it’ll be next.--James Surowiecki

Quotes of the day

Sadly, much of the history written in the past 14 months had redounded to the salvation of parties who will be tempted to make the same mistake again.--Holman Jenkins

I have seen the motto, "In essentials unity; in nonessentials charity," and I have looked for its incarnation in men and churches without finding it, one reason being that Christians cannot agree on what is and what is not essential. Each one believes that his fragment of truth is essential and his neighbor’s unessential, and that brings us right back where we started. Unity among Christians will not, in my opinion, be achieved short of the Second Advent. There are too many factors working against it. But a greater degree of unity might be realized if we all approached the truth with deeper humility. No one knows everything, not saint nor scholar nor reformer nor theologian. Even Solomon in all his glory must have overlooked something.--A.W. Tozer

We must recognize Israel's achievements under difficult circumstances, even as we strive in a positive way to help Israel continue to improve its relations with its Arab populations, but we must not permit criticisms for improvement to stigmatize Israel. As I would have noted at Rosh Hashana and Yom Kippur, but which is appropriate at any time of the year, I offer an Al Het (a plea for forgiveness) for any words or deeds of mine that may have done so.--Jimmy Carter

Isn't that nice. Oh, in a not-at-all related story, Jimmy Carter's grandson is running for Congress in a Georgia district that has a significant (at least for Georgia) Jewish population. ... The only thing worse than no apology is a convenient apology. Funny, I didn't think I could like Jimmy Carter less, I guess I was wrong.--Patrick Archbold

Sometimes—like during the economic horror show we have just lived through this past year—I think the point is simply to endure.--Epicurean Dealmaker

Investors who seek triple-A debt are running out of options. Yet another top-rated class of debt is on the hit list now that Standard & Poor’s may downgrade covered bonds — a type of mortgage-backed security popular in Europe. Soon there will be little AAA debt left outside the world of government and quasi-government debt. That’s putting safety-oriented investors in a bind.--AGNES CRANE and UNA GALANI

... we don't like to buy stocks that have already rallied, and we don't like to sell stocks that have already fallen - our instinct is to do the opposite - buy low, sell high. So that's why I mentioned Newton's First Law of Motion to describe the big move in stocks this year. An object in motion tends to stay in motion - like the stock market since the march lows - until an outside force acts on it. I've been thinking that the outside force will be "reality" - the reality that things are not really getting better - that we (As a country) have pretty much spent all the money we have and all the money we borrowed already. The reality that unemployment overrides existing home sales in terms of importance in the economy, and that you can't tax and spend your way back to prosperity. Perhaps the outside force will be the eventual inevitable Federal Reserve interest rate hike needed to remove the massive fiscal stimulus that's been enacted.--Kid Dynamite

Quotes of the day

Some strategies that fail ex post might be optimal ex ante.--Greg Mankiw

Someone is lying about the Iran [uranium enrichment program] negotiations. Time will tell who that someone is. --William Jacobson

Here is why I respect Belichick so much. The data suggest that he actually probably did the right thing if his objective was to win the game.--Steven Levitt

An eclectic essayist is necessarily a dilettante, which is not in itself a bad thing. But Gladwell frequently holds forth about statistics and psychology, and his lack of technical grounding in these subjects can be jarring. He provides misleading definitions of “homology,” “sagittal plane” and “power law” and quotes an expert speaking about an “igon value” (that’s eigenvalue, a basic concept in linear algebra). In the spirit of Gladwell, who likes to give portentous names to his aperçus, I will call this the Igon Value Problem: when a writer’s education on a topic consists in interviewing an expert, he is apt to offer generalizations that are banal, obtuse or flat wrong.--Steven Pinker

But the government owned AIG, which created the situation that Germans call Anstaltslast: the fact that state-owned companies simply don’t default on their obligations. The government was also battling a major crisis using the only weapon at its disposal: enormous amounts of liquidity. When you’re putting out a fire, you don’t stop to worry that large amounts of liquidity are going to end up where you don’t particularly want them — the important thing is putting out the fire. So yes, given a bit more aggression and foresight, the Fed could have tried to cram down a haircut onto AIG’s counterparties. But at the time, no one was particularly interested in being harsh to the global financial sector; instead, they were trying to rescue it. With hindsight, it now seems that companies like Goldman Sachs have turned out to be the biggest winners, paying out billions of dollars in bonuses even as the rest of the country struggles with an extremely nasty recession. But that wasn’t particularly foreseeable.--Felix Salmon

While there have been hedge fund losses during the crunch, the hedgies have not endangered financial stability to anything like the extent that regulated financial institutions have. This could well be because they are diversified in their risk taking, relatively small, and typically not highly leveraged. It is clear that 10,000 small, diverse, low leverage firms form a much more stable financial system than 10 huge, similar, highly leveraged ones.--David

Professional traders – and I’m not including the risk-junkie cowboys who drove the derivatives mess to heck in a handbasket – understand [that big losses are expensive and can set you back years]. And because they do, they focus the majority of their efforts on avoiding losses, instead of on capturing gains. It’s counter-intuitive, but it really makes a difference.--Keith Fitz-Gerald

The fact is 4.1 million jobs — and counting — have been lost under this president — the most since Herbert Hoover.--Don Surber

I'm a registered Democrat living in New York City, and I buy my own health insurance. But now, having seen the health-care reform bill that passed the House, I'm preparing for life without health insurance. And unless I'm the only person covered under the Empire Blue Cross/Blue Shield "Tradition Plus" plan, a lot of other people will end up just like me, uninsured. I will gain one thing, though—an annual fine for losing my insurance. The exact amount of that fine isn't clear yet, but so far it looks like I'll be paying about the same amount—$2,000 a year—for having no insurance as I do now for having it.--Andrew Heinze

I’m a forty-four year old, healthy, athletic woman raising five kids and governing a large state, I thought as [~300 lb Steve Schmidt's] words faded into a background buzz. Sir, I really don’t know you yet. But you’ve told me how to dress, what to say, who to talk to, a lot of people not to talk to, who my heroes are supposed to be and we’re still losing. Now you’re going to tell me what to eat?--Sarah Palin

CNN was so sick of Lou Dobbs, it gave him an $8 million severance package to leave.--Michael Shain

Obviously, if I had rescued the hostages or they had not been taken, I would have been re-elected.--Jimmy Carter

Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).--Steve Landsburg

The Pacific is experiencing a little fire burn, cauldron bubble

double, double toil and trouble. Thanks to Presidents Bill Clinton and Jimmy Carter.

Quote here.

Pic link here.

Blogging light today, as is typical with quadruple witchings.

The first shall be last

and the last first:

[President Obama's] disapproval rating is a bit higher than average (24 versus 16 percent).

The least popular president one month in: Ronald Reagan (55 percent).

The most popular president one month in: Jimmy Carter (71 percent).

What worked to pull us out of the Recession of the Seventies?

Peter Ferrara recounts:

The first was across-the-board reductions in tax rates to provide incentives for saving, investment, entrepreneurship and work.

The second component was deregulation to remove unnecessary costs on the economy.
...
Third was the control of government spending. In 1981, Reagan forced through Congress not only his famed, historic tax cuts, but also a package of budget cuts close to 5% of the federal budget -- equivalent to roughly $150 billion today.
...
The fourth component of the Reagan recovery plan was tight, anti-inflation monetary policy, which was spectacularly successful.
...
We know such policies work because they turned around in just two years an economy far worse than today's. We were suffering from multiyear, double-digit inflation, double-digit unemployment, double-digit interest rates, declining incomes, and rising poverty. In fact, what we suffer with today is not the worst economy since the Great Depression, but the worst economy since Jimmy Carter -- the last time liberals were dominant politically and intellectually.

Jimmy Carter's greatest success

now tainted with failure.

It's nice that President Bush and Cerberus head John Snow

are really, really good friends. Then, if Cerberus is about to lose a ton on it's Chrysler stake, the White House can use taxpayer resources to bailout a good friend:

The Bush administration is signaling its readiness to avert a collapse of the nation's auto industry, a day after efforts to forge an emergency-relief package foundered in the U.S. Senate.

White House spokeswoman Dana Perino said the administration would consider tapping the $700 billion government pool -- known as the Troubled Asset Relief Plan, or TARP -- that was created ahead of the November election to calm turmoil in financial markets.

I'm not sure who will be remembered to be a morally worse President, Bill Clinton or George W. Bush. I'm thinking the latter. Of course, only 4 Presidents have been re-elected in my lifetime, so by that measure, Jimmy Carter and George H.W. Bush are a cushion for the others.

Change has not come to America's AG office

WSJ:

Before that, however, Mr. Holder will have to win Senate confirmation, and Members might want to ask about the politicization that took place during his watch at Justice. The first question revolves around Mr. Holder's role in Bill Clinton's pardon of fugitive financiers Marc Rich and Pincus Green, a pardon that even Jimmy Carter denounced as "disgraceful" and "attributable to large gifts." Mr. Rich's former wife, Denise Rich, had donated to the Clinton Presidential Library.

...

That's not the only dubious pardon in which Mr. Holder was involved. In 1999, President Clinton offered clemency to 16 Puerto Rican members of the terrorist FALN, despite a previous warning from Attorney General Janet Reno that the group posed an "ongoing threat" to U.S. security. Here again, Mr. Holder's role seems to have been larger than he has let on. A 1999 New York Times report notes that Mr. Holder and Justice Department pardon attorney Roger Adams met in November 1997 with Democratic House Members to discuss the Puerto Rican case.

...

Then there is Mr. Holder's role, as U.S. Attorney, in the case of Hillary Clinton health czar Ira Magaziner. Mr. Magaziner, recall, had filed an affidavit insisting that "only federal government employees served as members" of Mrs. Clinton's health-reform task force, a claim later demonstrated as untrue. In November 1994, federal Judge Royce Lamberth described Mr. Magaziner's affidavit as "misleading, at best," and he asked Mr. Holder to investigate Mr. Magaziner for perjury. In August 1995 Mr. Holder announced he would not do so, and even insisted on Mr. Magaziner's innocence in an 18-page letter, despite acknowledging that Mr. Magaziner's statements left him "open to charges that portions were inaccurate." Two years later, Mr. Holder was sworn in as deputy AG.

No doubt reporting this history will seem rude amid Washington's postelection elation. But it certainly is relevant to a President-elect who told voters he wouldn't represent a third Clinton term yet now seems to be populating his Administration with Clinton retreads. For a politicized Justice Department, none can compare to the Clinton Administration's, and the role that Mr. Holder played in it deserves the fullest airing before he is given the opportunity to return.

Previous Eric Holder post here.

No Excuses Moment

for the liberal agenda, according to Bret Stephens:

This is a politics that has been in the making since at least 1968, though its real origins probably go back to 1944 and the first great liberal what-if: What if an ailing FDR had died nine months earlier, and been succeeded by the great progressive icon and polymath (and original moonbeam), then Vice President Henry Wallace?

In that case, perhaps, desegregation would have happened sooner, universal health care would be with us today, and the "century of fear" that Wallace predicted as the outcome of the Truman Doctrine would have been avoided by means of a more conciliatory policy toward the Soviet Union.

From that moment on, the liberal what-ifs multiply in dizzying profusion. What if John F. Kennedy had dodged the bullet in Dallas and lived to get the U.S. out of Vietnam before it fully got into it? What if Robert F. Kennedy had dodged the bullet in L.A. five years later? What if Jimmy Carter hadn't been so earnest, truthful and unlucky? What if Ronald Reagan hadn't proved such an adept political mythmaker? What if Donna Rice hadn't been pictured on Gary Hart's lap? What if Willie Horton hadn't been given a furlough? What if Bill Clinton hadn't squandered his political gifts with cheap trysts? What if Bush v. Gore had gone 5-4 the other way? What if 9/11 hadn't intervened to give the Bush administration its mandate for another bout of the politics of fear? What if John Kerry hadn't been sandbagged by Osama bin Laden's last-minute video intervention?

...

The upshot of all this has been an amazing lack of introspection among the frequently wronged, but never wrong, liberal American hard core. Politically, this hasn't yielded such great results: The number of Americans who self-identify as liberals continues to fall, to 21% in 2008 from 22% in 2004, according to CNN. (The number of self-identified conservatives held steady at 34%.) Then again, without that hard core Mr. Obama's primary triumphs would never have been possible.

Now the long wait is over, and the liberal ship has come in. In Mr. Obama, liberals have a president who seems to have stepped out of the last episodes of the West Wing. He has the Congress in his left pocket, the news media in his right pocket (or is it the other way around?), and he floats on a tide of unprecedented international enthusiasm. The Republican Party has no obvious standard-bearer, as it did in Ronald Reagan after Gerald Ford's defeat in 1976. It could well spend the next four years, or eight, tearing itself to pieces.

Instead, the only things that stand in Mr. Obama's path are what Marxists like to call "objective factors": the financial crisis, the mess in Detroit, the disposing of Guantanamo detainees, the wars in Iraq and Afghanistan, Russian hostility, Chinese assertiveness, maybe the disintegration of Pakistan.

David Broder on John McCain

Really excellent:

We suspected, and soon confirmed, that he had limited interest in, and capacity for, organization and management of large enterprises. His first effort at building a structure for the 2008 presidential race collapsed in near-bankruptcy, costing him the service of many longtime aides. From beginning to end, the campaign that followed has been plagued by internal feuds and by McCain's inability to resolve them.

The shortcoming was intellectual as well as bureaucratic. Like Jimmy Carter, the only Naval Academy graduate to reach the Oval Office, McCain had an engineer's approach to policymaking. He had no large principles that he could apply to specific problems; each fresh question set off a search for a "practical" solution. He instinctively looked back to Theodore Roosevelt and the Progressive era, with its high-mindedness and disdain for the politics of doling out favors to interest groups. But those instincts coexisted uneasily with his adherence to traditional, Reagan-era conservatism -- a muscular foreign policy, a penchant for tax-cutting and a fondness for business …

His vice presidential choice, his best opportunity to put his stamp on the future, was made, typically, more on instinct than careful appraisal. McCain saw Sarah Palin as reinforcing his own reformer credentials. The convention embraced her, not as a reformer but as the embodiment of beliefs precious to the religious right. And the mass of voters questioned her credentials for national leadership.

The campaign has been costly in terms of McCain's reputation. He has been condemned for small-minded partisanship, not praised for his generous and important suggestion that the major party candidates stump the country together, conducting weekly joint town hall meetings -- an innovation Obama turned down.

The frustration for McCain and his closest associates is their belief that he is ready to practice the kind of post-partisan politics the country wants -- which they believe Obama only talks about.

Should McCain still win the election, it will demonstrate even more vividly than the earlier episodes in his life the survival instincts and capacity for overcoming the odds of this remarkably engaging man. If he becomes president, the country would have to hope this campaign has honed his leadership skills.

Supreme Court Justices

Another reason I am girding my loins:

Presidents come and go. Even our worst ex-president, Jimmy Carter, lasted only one term, so the damage he could do, while grievous, was finite. People could act on their buyer's remorse at the next election.

Supreme Court justices are a different story. They are appointed for life, and the damage they can do to our nation is infinite and usually irreversible. Who appoints them matters.

Are we at a bottom?

Paul Krugman wins the economics Nobel prize. The temperature in hell may have briefly dipped below 0 degrees Celsius. Alex Tabarrok nicely summarizes Krugman's New Trade Theory.

Russell Roberts is disappointed.

Bryan Caplan makes a prediction:

When Obama wins, Krugman will quickly drop his partisan hackery. He's unfair to his enemies, but he does not suffer fools gladly. And it's safe to say that a year into Obama's presidency, there will be plenty of folly for Krugman to decry.

Tom Firey affirms Bryan's call, in juxtaposing Krugman's treatment of Jimmy Carter and Ronald Reagan.

Former New York Times ombudsman Daniel Okrent captured it best:

Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.

Megan McArdle once said:

Paul Krugman is voting for doom. It's worth keeping in mind, however, that Paul Krugman has predicted eight of the last none recessions under the Bush administration.

Jon Henke rounded up Krugman's recession predictions during the Bush Administration. People who would have sold stock at the newly minted Nobel laureate's doomsday prediction would still be underwater, given the Dow was trading around 8,000 from 2001-2003 and it paid out a couple of percentage points annually in dividend yield.

Don Luskin says:

Krugman's New York Times column drawing on economics is the equivalent of 2006's Nobelists in Physics, astronomers Mather and Smoot, doing a column on astrology -- and then, in that column, telling lies about astronomy.

Earlier prediction market prices and observations here.

Quotes of the day

China is proving that American companies will throw freedom of speech out the window if the price is right.--Megan McArdle

* * *

So much for the assertion -- made so confidently this year by Barney Frank, Chris Dodd and Chuck Schumer -- that Fannie Mae and Freddie Mac would rescue the mortgage market from the housing slump.

It's time Mr. Paulson put taxpayers ahead of Wall Street.--WSJ

* * *

Will a “debt burden” of 40% (publicly-held debt %GDP) bankrupt our grandkids? How about 80%, or 120%? Oops, wait a minute, 120% debt is what my grandparents’ generation bequeathed to their future grandkids in 1946. Well, I became one of those grandkids, and here we are sixty years later: not only has the debt failed to eat us alive, but we’ve run it back down to 40% of GDP—not because we reduced the debt, but because we grew the economy.--Steve Conover

* * *

The most painful and frustrating economic policy blunder of the past 50 years was the Great Inflation of the 1970s. Painful, because it was the catalyst for three damaging recessions (1973-75, 1980, 1981-82), all the while eroding living standards and seriously undermining confidence in America.

It was also deeply frustrating. Despite the teaching of Milton Friedman -- which clearly explained that inflation was caused by too much money chasing too few goods -- a combination of bad economic models, denial and political expediency allowed it to happen.--Brian Wesbury

* * *

There is something unseemly about Greenspan's conduct. Former presidents don't criticize U.S. foreign policy during times of war, Jimmy Carter notwithstanding. The same unspoken rule should apply to economic policy...

When the press calls, just say "no comment." This is an acquired skill, but I'm sure you'll catch on.--Caroline Baum

* * *

The question of personhood is not definitionally religious, even if the only people interested in expanding society's definition of personhood are religious. Blacks are people, and those of us without any particular religious convictions are able to apprehend this, even if 150 years ago the only people much interested in prosecuting their claim to personhood were ministers and their flocks.--Megan McArdle

In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall.--Peter Ferrara

The time women spend putting on make up and getting dressed works out at 3,276 hours over their lifetimes while men only devote 1,092 hours to looking their best.--Jessica Salter

* * *

Amazingly, 50 to 90 percent of the earth’s heat (no one is sure of the exact figure) comes from the radioactive breakdown of uranium and thorium, which make up 2 percent of the earth’s crust. The energy released from these radioactive elements is enough to raise the earth’s internal temperature to 7,000 degrees Fahrenheit — hotter than the surface of the sun.

Let’s mine small amounts of uranium, put them in a controlled environment, accelerate the breakdown a bit by initiating a chain reaction, and use the heat to boil water to produce electricity. In fact, this is what we do in a nuclear reactor.--William Tucker

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If God behaves differently in response to testing prayers than to non-testing prayers, then we will not learn whether non-testing prayers help (or hurt). On the other hand, if the null hypothesis is that prayer should have no impact, and we find one in patient-blind randomized control trials, then the atheists have some explaining to do.--Ian Ayres