Friday, March 12, 2010

Quotes of the day

The [University of Arizona's] Eller College of Management is more stressful than the United States Marine Corps. The workload is enormous. Take away the possibility of getting killed or maimed, and the Eller school is more difficult than the Marines.--Mark Finelli, a 9/11 survivor, Iraq war veteran and Eller graduate student

While corporations would often love to tie up bankers with retainers so they can't work for competitors (e.g., Bruce Wasserstein), they usually can't afford the rates bankers would like to charge. It is investment bankers who pay the closest attention to opportunity cost. As we damn well should.--Epicurean Dealmaker

In both financing and M&A, therefore, corporate executives rarely need or want advice thinking about the What or the Why of doing something (buy Company XYZ, because it would be a perfect fit for our European strategy; raise outside investor funds, because the firm needs growth capital). Instead, they need and want help figuring out How and When to do a deal, and then executing it. I have made this distinction before, and it is worth repeating here: investment bankers are not—no matter what we might say in public—"idea men." We are tacticians, not strategists. You don't hire us because you want help figuring out what you want to be when you grow up. You hire us because you've picked a horse, you've entered it in a race, and you want us to figure out how to win. Perhaps you even want us to ride the nag to the finish line for you. We can do that. Investment bankers are deal jockeys. We do deals. ... I have been on the losing end of a few of those discussions, where my best and strongest advice conflicted in the event with my client's desires, and where my conviction was strong enough that I was willing to part ways with my client. While I may have come out of such trials with a sense of pride in my own integrity, I usually lost the deal. It was no satisfaction to have my advice proven correct later, either, nor did that make my superiors or partners any happier. I suppose you might conclude from this that I am not that good an investment banker. You may be right. A really good investment banker would have persuaded his client around to the correct point of view. --Epicurean Dealmaker

Many times in the movie and music business, studios and labels maintain aggressive release schedules which divert resources from currently successful or highly promising content. However, News Corp is properly maximizing their revenue from the blockbuster Avatar and will then be able to dedicate many more resources to push Wall Street 2. In the case of delaying Wall Street 2, greed is good.--Damien Hoffman

In hindsight, I was ripe for post-traumatic stress syndrome or anxiety disorder or depression. According to the Rosalynn Carter Institute for Caregiving at Georgia Southwestern State University, family caregivers face elevated risks to their physical health, mental health, finances, employment, and retirement. I can attest to the mental-health risk. That I managed to keep myself together owes itself largely to a coping strategy of my own—one that brought with it a peculiar discovery. For whatever reason, and quite against my usual introverted nature, I talked. To almost anyone. A provocation as simple as “How are you?” would educe an answer like, “Bad. I’m at my wits’ end coping with my father.” Out could come the whole story. Though I tried not to be too socially inappropriate, I must have discomfited a lot of people. But I discovered that I had to talk. And I discovered that when I talked, other people talked too.--Jonathan Rauch

Will the health care reform bill that the Democrats are trying to figure out a way to ram through Congress end up being the biggest tax increase in U.S. history? Unfortunately, a close reading of the bill leads to the inescapable conclusion that it will be. You see, the crafters of this legislation were smart. They realized that if they included one huge tax increase in the health care bill it would make headlines all over the country, so they chopped up the taxes into a bunch of smaller pieces in order to make them easier to swallow. ... A PricewaterhouseCoopers’ analysis for America’s Health Insurance Plans found that family health insurance premiums would be approximately $4,000 a year higher if the health care reform bill is passed. Can you afford to pay over $300 a month more for health insurance for your family?--Michael Snyder

To me, government is a mechanism that diffuses and dilutes accountability. If government does something wrong, does a bureaucrat get fired? Does an agency go out of business? Do legislators suffer financial losses? If I shop for a coat, the store is accountable to me. If government decides on a policy, my affect on that policy is at best very indirect. Will my vote be determined by that policy, or by my feelings about the elected officials based on other factors? Even if I vote on the basis of a single policy, will others vote the same way? Will the elected officials understand what the voters want? etc. ... The libertarian view instead sees a common human nature at work in markets and government. With Adam Smith, we see bread on our table coming not from the benevolence of the baker but from his self-interest as filtered through the mechanism of the market. We see the government as an arena where rent-seeking is just as aggressive as in the market--except that the forces of competition are weaker for government-generated rents than for rents that can be temporarily captured in the market. ... I tend to think of government as a particular form of charitable organization, one which is rendered corrupt and horribly inefficient by the fact that it obtains its funding via coercion rather than via voluntary donations. Charitable organizations themselves are far from perfect. But I think that, dollar for dollar, I get more community benefit out of my charitable contributions than out of my taxes. ... look at how the issue of health care reform is going to be resolved. It is like gang warfare, where the Democrats and Republicans are going to rumble, and at least one side is going to be very unhappy with the outcome. For me, it is the democratic process that is barbaric, and it is the market process that is comparatively peaceful and civilized.--Arnold Kling

I guess I am a Misesian after all.--Tyler Cowen

At home and elsewhere in Europe, I have often been called a ‘monetarist’… For me it was an honor; they, however, meant it as an offense.--Vaclav Klaus

Over the last year I have struggled with the issue of which group is more appalling; right wing economists who opposed monetary stimulus in 2008-09, or left wing economists who didn’t think it is was possible to use monetary stimulus once rates hit zero. Last year I had this post on Yellen.--Scott Sumner

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