Tuesday, March 08, 2011

Quotes of the day

This was not a simple and singular lapse of judgment, but an egregious breach of trust, a fraud, pure and simple, by a person who had no moral compass.--Judge Richard Howell, Raj Rajaratnam's judge, in sentencing convicted insider-trader Eugene Plotkin to 57 months of jail

Much [government stimulus] intervention turns out to hobble markets rather than enhancing them, ... unpredictable discretionary government intervention scrambles the prospective underlying supply–demand balance. ... The recent pervasive macro-stimulus programs exhibit the practical shortfalls of massive intervention.--Alan Greenspan

I expect that we won't be that impressed with the productivity of some of the government employees [on tonight's Undercover Boss]. If the mayor [of Cincinnati] wants to show empathy, I predict that he will not do it with his own bank account or even his mayor's expense account.--David Henderson, March 6

... even though the mayor had fooled the meter maid, who had had her suspicions about his real identity, he told her who he was before they went out on the afternoon shift. He didn't wait, the way the past private-sector employers did, for the days-later meeting. Why? I think it was because he found her story about her son's illness moving and he wanted to tell her ASAP that he would do something for her. This is the desire for instant gratification that we see so often in politicians. I think he wanted the immediate credit for being a good guy. Another interesting thing is that with most of the private-sector jobs, the undercover boss was actually put to work on top of the work that the supervisor was doing. In this one, that didn't happen as much. While working with Danny to pick up dead animals, he mainly drove around with Danny as his companion. He didn't add much, if any, productivity. While working with Karen in the rec center for kids, we saw him play volleyball with the kids and maybe help a little with hotdogs, but that was about it. With the meter maid, he accompanied her but they did parking tickets together: there was no additional productivity. ... Notice the irony of giving $10,000 to the motorcycle repair mechanic. As commenter Pandaomoni pointed out, what does he do with it? Retire early. ... It's a tribute to my model of government vs. private incentives that some of them did come true and that other things, that I didn't predict, are things that the model would predict. As I often tell my students, "I'm not brilliant; my model is brilliant."--David Henderson, March 7

Freddie and Fannie played a relatively constructive role when they were in the business of securitizing mortgages with 20 percent down payments (or 10 percent, but with private mortgage insurance added). That was their core business, and they should go back to that core business immediately. They should be forbidden from participating in the market for loans with low down payments. They also should be forbidden from participating in any loan other than for purchase of a home by people intending to live there. That means no loans for investment properties, no home equity loans, no second mortgages. I also think that it would be best to limit Freddie and Fannie to 30-year and 15-year fixed-rate products. All of these limitations should be put in place ASAP. Longer term, the question is whether or not to keep Freddie and Fannie at all.--Arnold Kling

Welcome to Japan, where the poor get poorer—and the rich get poorer, too. ... Perhaps this is how the world ends, with people grown too isolated from each other to even meet and procreate. Ruin/nation, meet alien/nation, where so many sing—and eat and sleep and live and die—alone.--Spike

I had imagined graduate school as a shining city on a hill, but it turned out to be more like an extended visit with a bear in a cave.--Errol Morris

It pays to be bad, and slightly nutty as well.--Matthew Lynn

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