Tuesday, May 10, 2011

Quotes of the day

Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase. And the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions.--John Boehner

Much of the attraction between the sexes is chemistry. New studies suggest that when women use hormonal contraceptives, such as birth-control pills, it disrupts some of these chemical signals, affecting their attractiveness to men and women's own preferences for romantic partners. The type of man a woman is drawn to is known to change during her monthly cycle—when a woman is fertile, for instance, she might look for a man with more masculine features. Taking the pill or another type of hormonal contraceptive upends this natural dynamic, making less-masculine men seem more attractive, according to a small but growing body of evidence. The findings have led researchers to wonder about the implications for partner choice, relationship quality and even the health of the children produced by these partnerships.--SHIRLEY S. WANG

I was just wondering if you would consider a deployment of outside military troops to be less of an interference than using the descriptive word “democracy”?--Bill Easterly, to the World Bank

Initially, [former governor and General Sterling] Price was against secession for the state of Missouri. But that changed after May 10, 1861 and the Camp Jackson Affair. Missouri Governor Claiborne Fox Jackson, a southern sympathizer, had called out the state militia for training. They established "Camp Jackson" about 4 to 5 miles from the St. Louis Federal Arsenal. Federal Captain Nathaniel Lyon, an ardent abolitionist, saw this as a threat to the federal arsenal and forced the militiamen to surrender to his Missouri Home Guard. In marching the prisoners through St. Louis a riot broke out and many of the prisoners were killed or wounded. Price was outraged at the Camp Jackson Affair.--The Civil War Muse

... the textbook money multiplier doesn't exist anymore. This means that Fed attempts to juice the economy by raising the quantity of reserves—the basic effect of quantitative easing—are bound to fail. But it also means that predictions of massive inflation resulting from the rising reserves are also likely to be wrong.--John Carney

... Democrats wrestling with the legacy of Ronald Reagan’s deficits resented the influence of what the analyst Ed Yardeni had dubbed “the bond vigilantes”: the investors who enforce fiscal and monetary discipline when governments won’t. If your political system inflates its currency, or fails to align its spending with its tax revenues, the bond vigilantes will raise your interest rates until you either get it together … or catapult into a crisis. In the 1990s, we chose to get it together; thanks to tax hikes under both Bush I and Clinton, and a massive influx of capital-gains-tax revenue from the stock-market bubble, we even enjoyed a brief surplus. The bond vigilantes retreated over the horizon. But now deficits are back—and bigger than ever. In 2010, the United States spent $1.3 trillion more than it took in. ... not bearish on America. “We own U.S. corporates, Fannie and Freddie mortgages—we haven’t left the country, we’ve just left Treasuries.” It would be one thing, he told me, if this were 1943 and we were in World War II; but we’re not, and he has a fiduciary duty to his investors that he can’t violate just because his country doesn’t want to make hard choices about taxes and spending. And would he have bought the Victory Bonds that the government sold to fund the war effort? For the first time in the interview, Gross obviously tried to hedge. “Well, I’d like to think that the government wouldn’t have picked the pockets of its savers.” But it did then, just like it is doing now, I pointed out; the government inflated away the value of the bonds so that they yielded negative real returns. Gross smiled. “Maybe if they framed it as a ‘Victory in Afghanistan’ thing, I might be more favorably disposed.” So the people worried about the bond vigilantes have at least one ray of hope after all. The leader of the gang may be tough—but at heart, he’s still a bit of a patriot. That may not be enough to save us. But perhaps it will buy us some time to clean up our act.--Megan McArdle

In case you missed it ailing mortgage giant Fannie Mae announced its first quarter earnings loss numbers on Friday. About $11 billion in credit losses on the firm's giant mortgage portfolio led to a fresh $6.5 billion loss in the quarter. Ultimately, it needs another $8.5 billion from taxpayers to stay afloat.--Daniel Indiviglio

Donald Trump’s support among Republicans has collapsed in the wake of President Obama’s release of his long form birth certificate, according to a new survey by the Public Policy Polling. PPP, which in April gave Trump sole possession of first place among Republican voters, now has him back in the pack with the support of just just eight percent, tied with Ron Paul.--Keith Koffler

All good things must come to an end, and after more than two and a half years of producing an Economix post every week, it is time for me to move on. ... At its best, normative economics draws heavily on positive economics: scores of studies have shown the ways in which rent control can screw up a housing market, with too little supply and misallocation of housing units, and that helps formulate policy prescriptions. Yet the economic approach to public policy is distinguished by attributes beyond an attention to evidence. There is a strong predisposition within economics to emphasize individual freedom. Our theories start with the assumption that giving individuals more choices is a good thing — and that assumption leads to the view that people benefit from having more money or lower prices for the goods that they buy. That assumption doesn’t mean that all regulation is bad or even that, in some cases, people are better off facing fewer soups on a supermarket shelf. Even though people value more choices, they also value information, and an overload of choices can make it hard to figure out which soup is really best. But our assumptions do put freedom first, and that’s an important perspective. Economics marries a predilection for personal freedom with a longstanding tendency to view the interests of the government as being distinct from the welfare of the people.--Ed Glaeser

Children that we are, even you and I, who have given up so little, know in our hearts not only that it is more blessed to give than to receive, but that it is also more fun—the kind of holy fun that wells up like tears in the eyes of saints, the kind of blessed fun in which we lose ourselves and at the same time begin to find ourselves, to grow up into the selves we were created to become.--Frederick Buechner
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