Wednesday, February 02, 2011

Quotes of the day

While Linda [Brandes] has received roughly $65 million to $70 million in assets from Charles in their divorce, her lawyers insist that’s not enough.--Peter Rowe

Maybe the solution to our marital strife wasn’t to be found on the therapist’s couch, but in the hard language of empirical data. ... My relationship bubble had burst not long after I said “I do.” Were we insufficiently compatible—or just reacting to screwed-up incentives? I realize this might sound nuts to some people. But I was convinced I was onto something, that the principles of economics—often fact-based and always pragmatic—could reveal the route to wedded bliss (or, in econ-speak, “utility”). So I picked up the phone and cold-called Gary Becker. This also might sound nuts. Gary Becker is one of the world’s most famous living economists. He’s won the Nobel Prize and the Presidential Medal of Freedom. But could he give relationship advice? Indeed he could.--Paula Szuchman

Luck favors the prepared.--Don Miller

... we should prioritize debt payments over other spending. I know--you'd expect me to say that! But hear me out. In the first place, our debt payments do not simply go to enrich feckless corporations. They go into things like insurance pools, 401(k)s, and pension funds. If the government stops payments, yes, some rich people would take a bath. But so would a lot of ordinary people. Even more importantly, if the government misses a debt payment, that's it for borrowing more money in the near future--and I, for one, am skeptical that the IMF would be able to mount a bailout, which is what we do when developing nations have this sort of trouble. The United States currently runs a $1.5 trillion budget deficit. If we miss a debt payment, that means we immediately have to balance that budget, and keep it balanced. ... if we can't borrow money, no one's going to bail us out--or the states. And you can expect a default to be followed by a pretty ugly recession in an economy as credit-driven as ours. ... Over the long run, if the credit taps get cut off, the social service cuts will be deeper, uglier, and permanent.--Megan McArdle

In a new Kaiser Family Foundation poll, 54 percent urge Congress and the president to "act quickly" and 57 percent prefer spending cuts to tax increases. But there's little support for cuts in Social Security (64 percent opposed), Medicare (56 percent) and Medicaid (47 percent), which together approach half of federal spending. The State of the Union gave Obama the opportunity to confront the contradictions and educate Americans in the unpleasant realities of uncontrolled government. He declined. What we got were empty platitudes. We won't be "buried under a mountain of debt," Obama declared. Heck, we're already buried. We will "win the future." Not by deluding ourselves, we won't. Americans think deficits are someone else's problem that can be cured by taxing the rich (say liberals) or ending wasteful spending (conservatives). Obama indulged these fantasies.--Robert Samuelson

So [Paul] Krugman’s favorite story about recessions — the one that he says “changed his life” — is really just a story about babysitting co-ops, unless it’s supplemented with some other story about what keeps real-world prices from falling. Until he tells us what that supplemental story is, Krugman’s got nothing.--Steve Landsburg

What we had was a misallocation--too much housing--and so now must move labor and capital to other areas, which creates temporary unemployment. To try to cover this up via having the government spend more on backfilling teacher's pensions, or have everyone buy an unsustainable amount of everything, would not solve this problem faster. Notice they don't spend any time discussing what government would spend this stimulus on because it doesn't matter to them. It's fun to think a solution to a hangover is more of a different type of alcohol, but I've tried it, and it doesn't work. Unfortunately Keynesians don't have any intuition for this, because everything's all just 'aggregate demand', not housing, technology, energy, etc. Aggregation leads to simplifcation, but clearly it has a cost, and I think any macro theory that ignores the fact that an economy is a network of firms and individuals is pointless. ... Yahoo!, Microsoft and the rest are all hiring economists to design services based on game theory and other microeconomic specialties. This is in contrast to banks, that basically all went from having a large economic staffs in the 1970s, but a flak PR guy today for CNBC interviews. Bottom line: if you are going to do economics, don't do macro.--Eric Falkenstein

From 1995 to 2007 Rhode Island collected $341.3 million from the estate tax while it lost $540 million in other taxes due to out-migration. ... Rhodes Island lost a net of 107,086 residents to other states between 1991 and 2009, or about one in ten current residents. The top states that people from Rhode Island move to are Florida, North Carolina, Virginia, Georgia, and Texas. The top states that people move into Rhode Island from are New York, Massachusetts, New Jersey, California and Illinois.--Ocean State Policy Research Institute

Note that FL, NC, VA, GA, and TX are lower tax domiciles, while NY, MA, NJ, CA, and IL are higher tax domiciles. Just sayin'--Cav

Since 1995, the Small Business Administration has released a series of reports estimating the cost imposed by regulations on all businesses, and broken them down into average costs per employee for businesses with fewer than 20 workers and for those with 500 or more. These studies are the primary source for claims that small businesses pay more than their share to comply with federal rules. The most recent report, published in September, found that regulation cost businesses $1.75 trillion in 2008 (in 2009 dollars). For small businesses, the tab was $10,585 per employee, or 36% more than large businesses paid.--Carl Bialik

We’re good athletes, we’re blessed, and we take a lot of pride in playing. But the real heroes are the police, the firemen, the military, even the regular Joe off the street that goes into a fire and protects somebody and saves their life. Nothing we do in sports is really heroic. I think there’s great things that happen. Guys can do something great, but I don’t want to say it’s heroic. Pat Tillman, being an athlete and then going to serve his country, that’s heroic.--Kevin Youkilis

It was deep! I liked the parts [of the Bible] where some character was once this, but he ended up becoming that. Like he’d be dissing Jesus, and then he ends up being a saint. That was cool.--Lil' Wayne

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