Thursday, March 24, 2011

Quotes of the day

The government didn’t charge nearly as much as Warren Buffett did.--Lloyd Blankfein

Bank of America said the Fed had vetoed its plans for a modest dividend increase in the second half of 2011.--BEN PROTESS and ERIC DASH

CalPERS, the pension fund in charge of California's $230B portfolio, recently noted they rejected adjusting their expected return over the next 10 years from 7.75% down to 7.5%. That 'saved' them $400MM this year! ... Either someone invents cold fusion, the Mayan alien astronauts bring us all sorts of manna when they return in 2012, or we will monetize our debt to pay for all these off-balance sheet liabilities. I'm betting on the latter.--Eric Falkenstein

The astonishing part was the way that the four-year-olds’ ability to defer gratification was reflected over time in their lives. Those who waited longest [to eat the marshmallow] scored higher in academic tests at school, were much less likely to drop out of university and earned substantially higher incomes than those who gobbled up the sweet straight away. Those who could not wait at all were far more likely, in later life, to have problems with drugs or alcohol.--The Economist

What bothers me is when I see attempts to redistribute wealth from the two marshmallow eaters to the one marshmallow eaters. For instance, by the time I retire in 6 years I will have probably averaged about $80,000/year over my working life, which makes me comfortably upper middle class. Because I am a two marshmallow personality, I’ve probably saved about half of that income. So I’m doing fine. Most Americans with similar incomes are one marshmallow types, and save something closer to 10% of their incomes.--Scott Sumner

[Herman] Husband really was a prophet. He proposed such things anathema to the creditor class as going off the gold standard and managing a slow, deliberate rate of paper depreciation; imposing taxes on wealth and income; making those taxes progressive; and instituting programs for supporting the elderly after they could no longer work. Prefiguring Bretton Woods, the New Deal, and Great Society by nearly two centuries, Husband became known as “the madman of the Alleghenies.”  ... So in judging the relative effectiveness of popular versus elite finance, it’s worth considering some outcomes. The sophisticates [Robert] Morris and [James] Wilson, like many of our best-certified wizards today, persisted in speculating well past the point where rationality would suggest stopping, often in manifestly dubious ventures.  ...  And inevitably, just as today, it all came crashing down. Wilson was serving on the U.S. Supreme Court when his increasingly desperate throwing of good money after bad finally landed the great legal scholar in debtors prison. Our mighty founding financier Robert Morris? He ended up in debtors prison too. In 1800, the first Bankruptcy Act was passed — in large part to get Robert Morris out of jail.--William Hogeland

Because [Paul Krugman] never engages in real arguments but rather ad hominem and straw men, his adversaries are unpersuaded, which makes him even angrier. ... It's a strange lack of self awareness to find one's certainty interesting to others, because of course everyone believes he is right, otherwise he wouldn't believe what he believes, but it seems [Brad] DeLong and Krugman simply think everyone else is merely a duplicitous shill or moron. ... As Krugman's dyspeptic disposition highlights, being certain you know better can not only be bad epistemologically, but make you feel bad too.--Eric Falkenstein

As former chairmen and chairwomen of the Council of Economic Advisers, who have served in Republican and Democratic administrations, we urge that the Bowles-Simpson report, “The Moment of Truth,” be the starting point of an active legislative process that involves intense negotiations between both parties. There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention. ... We know the measures to deal with the long-run deficit are politically difficult. The only way to accomplish them is for members of both parties to accept the political risks together. That is what the Republicans and Democrats on the commission who voted for the bipartisan proposal did. We urge Congress and the president to do the same.--Martin N. Baily, Martin S. Feldstein, R. Glenn Hubbard, Edward P. Lazear ,N. Gregory Mankiw, Christina D. Romer, Harvey S. Rosen, Charles L. Schultze, Laura D. Tyson, Murray L. Weidenbaum

In what may be the nerdiest ripple effect from last year's scandal, Tiger Woods has been excised from the latest edition of Greg Mankiw's popular econ textbook, Principles of Economics. ... The new edition replaces woods with Tom Brady. "I thought all the recent events surrounding Woods' social life might be distracting," Mankiw told the Harvard Crimson.--Jacob Goldstein

... our ideal candidate has also cursed out an editor, had spokespeople hang up on them in anger and threatened to resign at least once because some fool wanted to screw around with their perfect lede.--Matt Doig

I believe there are two categories of media: national and local. The national media is the one most troops dislike. They are the ones who seem to focus on stories that make us look bad or don’t provide complete context. They like to take credit for breaking stories like Abu Ghraib when the reality is that it was a concerned soldier who turned in those sorry excuses for troops. Most people don’t know that, because the national media takes credit for “breaking” the story. They focus on the deaths of our troops instead of the lives of our troops. They focus on the failed missions or the ones that didn’t go as planned instead of the successful ones. On the contrary, the local media seems to have a greater proclivity for telling positive stories about our troops, while not ignoring the negative ones. They seem more balanced because the troops come from their hometowns. They are the sons and daughters of these hometowns while the national media is largely detached.--C.J. Grisham

In 1930, 21.5 percent of the workforce was employed in agriculture and agricultural production representing about 7.7 percent of national GDP. By 1970, 4 percent of the workforce was employed in agriculture and agriculture’s share of GDP had dropped to 2.3 percent. By 2000, the percent of workforce and GDP share had fallen even further to 1.9 percent and 0.7 percent respectively.--Ronald Bailey

The North Korean government turns a country into a prison, starves millions to death, and yet escapees still think "free health care" is worth mentioning? What's wrong with people? To me, this reveals a lot about the world-wide appeal of government-run health care. Socialized medicine is like a love potion. The government can treat you like dirt, but as long as it slips a little of this potion into your drink, you'll probably think "How wonderful - the government loves me so much that it takes care of me whenever I'm sick without asking for a thing in return." And who would be vile enough not to love such a government back? My point: Whatever you think about socialized medicine, it's not that great. It's not remotely enough to, say, redeem North Korea. The fact that anyone would imagine otherwise reveals a strong human tendency to judge socialized medicine like a bad boyfriend - with our hearts instead of our heads. When someone says, "Dump him - he's just not good for you!" we really ought to calm down and listen.--Bryan Caplan

If Kate Middleton were American, she would be from somewhere like Darien, or possibly Westport, or the horsier parts of New Jersey: Bernardsville or Far Hills. She would probably have gone to boarding school—nothing top-tier but probably something with a retro snob appeal that would have made her strive-y parents happy—Miss Porter’s, maybe, or Westover. College would have been something like Trinity—respectable but not so taxing that classes would have kept her from a spring trip to one of the better Caribbean islands. Her job would be in fashion, probably in PR, and it would be understood that her hours would allow ample time for drinks at Brinkley’s. Weekends would be for working out at Equinox and the occasional blowout brunch at Lavo. She would probably date a banker with a similar background. She would live on the Upper East Side, or possibly in Murray Hill, even though she’d have lots of friends who live in the West Village. She would get her hair done at Fekkai, and her clothes would be some combination of Jimmy Choos, Ralph Lauren, and ­Theory—sometimes frugal, forever tasteful. But here is where the stories begin to diverge. William is not your run-of-the-mill hedge-fund bachelor. He’s the future King of England. ... Kate’s real competition, famously not dull at all, is her dead mother-in-law, the Real Housewife of Kensington Palace, England’s first reality-television star.--Will Frears
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