Wednesday, June 22, 2011

Quotes of the day

The New Republic's Jonathan Chait is unimpressed by my "rebuttal" to Stephen Metcalf's Slate essay about libertarians and the philosopher Robert Nozick. This is probably due to the fact that I didn't write one.  However, others have, and I want to make sure Chait has sufficient reading material before his next squash game with Jacob Weisberg.--Matt Welch

I fear it represents a great deal of confirmation bias on the left. A lot of liberals who see all libertarians as less-lovable Ron Swansons nod along with Metcalf as he makes one clich├ęd assertion after another and the end result is a bunch of readers happily cheering a piece that makes no attempt at all to treat its subject with any sort of seriousness or grace. It affirms deeply held opinions and distrust, and helps cement the language barrier between liberals and libertarians in ultimately a very destructive and unfortunate way.--E.D. Kain

What strikes me about Paul [Krugman]'s blog post, however, is how completely unconvincing it is. He uses a chart that starts the Reagan era in 1979, arguing we need to correct for the business cycle. But would or should this persuade anyone? The null hypothesis being tested is that Reagan policies had a significant effect on revenue growth. But would any believer in that null hypothesis include the last couple years of the Carter administration as part of the Reagan era? Weren't the policies of those years precisely what Reagan was trying to reverse? Maybe Paul's chart might appeal to someone who already agrees with him, but I thought economists turned to data to try to persuade those who are truly undecided. It is hard to see how this presentation of the data would move someone who is yet to make up his mind. One more thing: What Paul calls "the Clinton miracle" might also be called "the Internet bubble."--Greg Mankiw

Magnetar would put down a few million bucks to start a collateralized-debt obligation (CDO), cram it full of the junkiest mortgage bonds it could find, then get a bank like JPMorgan to sell it off to investors as a triple-A, gold-plated piece of the booming housing market; when in reality it was a time bomb filled with toxic waste. Whatever Magnetar lost when the thing went bust, it more than made up by taking out massive short positions against it. For a real world corollary, consider this akin to building a crappy house, selling it to someone, and then taking out an insurance policy so that when it falls down or catches fire, you get paid big bucks.--Matthew Philips

$25 billion a year isn't bad, especially when you consider that the expenses of the supplement companies are just a tiny bit lower than those of the drug companies. Not having to do any preclinical research at all helps, of course, and not having to run any clinical trials at all (nothing for efficacy, nothing for safety) helps, and not having to be reviewed by the FDA helps, too. And then on the other side of the ledger, being able to say any damn thing that comes into your head helps the most of all. And as you'll see from that article, not only has Senator Hatch himself benefited greatly from his nutritional ties, but so has his family, immediate and extended. And his friends, and his former business partners - pretty much everyone within range, it seems. Each sides regards the other as the gift that keeps on giving. And why shouldn't they?--Derek Lowe

Complacency is baked into our species. We can’t resist thinking that recent experience defines the future. Give us a run of good luck, and we are apt to turn that into an implicit expectation that our luck will continue -- even that we are entitled to it. This kind of thinking was instrumental in the run-up to the financial crash of 2008. Too many private and public institutions assumed that an extraordinary run in prosperity, particularly in the real estate market, was just normal. It didn’t occur to them that things could go so wrong. Even when token stress testing or risk assessment was done, it largely excluded the possibility of a bad shock or a protracted slump. Risk wasn’t systematically measured; it was ignored. It’s easy to write this off to greed or foolishness on the part of Wall Street. But the truth is, our entire civilization rests on a foundation just as shaky. We assume that the very Earth is static and will always be as it is now, or as we remember it. Yet geophysics tells us that is emphatically not the case. Bad things happen. ... natural disasters are almost always compounded by human error. The buildings in Port-au-Prince, Haiti’s capital, were poorly constructed. That most of them would collapse in a severe earthquake, leading to enormous loss of life, was easily predictable. Worsening the situation, United Nations aid officials staffed the relief effort with personnel from Nepal, where there was an ongoing cholera epidemic. Unsurprisingly, those workers brought the disease with them, and so began an outbreak that is thought to have so far killed at least 4,700 Haitians. It’s easy to dismiss this kind of poor response when it occurs in Haiti, which has an infamously ineffective government. But a mortifying degree of incompetence was also on display after Hurricane Katrina struck New Orleans in 2005, and again this year when the Japanese tsunami swamped four reactors at the Fukushima Dai-Ichi nuclear-power plant. --Nathan Myrvhold

It goes without saying that economists--especially macroeconomists--have a poor track record on big historical trends (eg, most economists in the 1950s believed that socialism was more productive yet less polluting than capitalism, that a permanent trade-off between inflation and unemployment existed, that the third world would grow dramatically after colonialism, that dynamic programming would be useful for fiscal policy, or more recently, that requiring 20% down payment to get a home mortgage was merely a pretext for racism and should be abolished, to name but a few).  Too many believe in the naive Marxist fantasy about a life of dilettantish activities unrelated to economic scarcity. How many times are programs justified by the fact that 'The US is the richest country in the world' or some corporation has billion of dollars, as if that capital was sitting there, unused and probably stolen.  Bankruptcy will make us a better society because currently many people think that solutions are as simple as creating a mountain of debt (Bill Gross estimates it at 500% our GDP) to create make-work or new economic rights, and those sinecures don't create what Arthur Brooks calls perceived earned success, the satisfaction that comes from work that is appreciated both by your boss, who compares your cost to alternatives, and your customers, who compare your value to alternatives. There are no shortcuts to the rewards of the virtuous life, as a person or a society.--Eric Falkenstein

The failure of Western experts to anticipate the Soviet Union's collapse may in part be attributed to a sort of historical revisionism -- call it anti-anti-communism -- that tended to exaggerate the Soviet regime's stability and legitimacy. Yet others who could hardly be considered soft on communism were just as puzzled by its demise.--Leon Aron

Like many people, Justice Ginsburg assumes lopsided statistics prove discrimination.--Kay Hymowitz

I pray that Allah destroys America and all its allies. And the day that happens, and I assure you it will and sooner than you think, I will be very pleased.--American-born cleric Anwar al-Awlaki

Vodka's a joke. I don't listen to the Black Eyed Peas. I don't watch reality television. I don't drink vodka. I make those decisions for the same reason. It's filler. There's no substance to any of that stuff. It's designed to smell and taste like nothing.--Adam Stemmler

Among 50-year-old men, for example, those in the highest education group are now projected to live almost six years longer on average than those in the lowest education group -- and this differential has been rising sharply. The widening gap in life expectancy is also evident geographically. In 2007, men living in the American counties with the greatest average longevity could expect to live more than 15 years longer than men in the lowest- ranked ones. In 1987, that gap was less than 12 years. Sadly, life expectancy in some counties actually declined over that period. The leading explanations for this involve health behavior -- including diet, exercise and smoking. For example, men 50 and older without a high-school education are more than twice as likely to smoke as those with a college degree. Exercise behavior also varies substantially. Among 45- to 54-year-olds in one study, only 16 percent of those without a high-school degree exercised vigorously at least once a week, whereas 56 percent of college graduates did.--Peter Orszag

This month marks the two-year anniversary of the end of recession and start of recovery. But it’s a recovery in name only, so weak as to be nonexistent. And it has been weak from the start. Real GDP growth has averaged only 2.8 percent per year compared with 7 percent after last deep recession in 1981-82 ...--John Taylor

If the US is able to build the healthiest financial sector in the world, certainly other countries will want to imitate it. If some prefer to redistribute the risks to their own taxpayers, and their taxpayers are willing to bear this cost, so much the worse for them. All this emphasis on international coordination of policy is unnecessary. And it’s good to see so many disparate voices once again adopting the Reaganite stance of hanging out a beacon to the world.--John Carney

[Tim] Thomas became the face of the playoffs — his pugnacity, flexibility, and pure skill were exhilarating. He became the beard of playoffs, too. And there was exhilaration in that. If you came to see him as a bear, he was also a paragon of what else a bear could be, a tough, tender vision of love — him loving you, you loving him, him protecting you. Of course, he’s the goalie. You can always sense warmth in Thomas' beady eyes — not lust or desire, nothing deviant or super freaky, just pure love. He’s the bear that Timothy Treadwell expected to find in "Grizzly Man." He’s the aberrant bear you bring home from Castro Street to mother. Even in the finals after he’d just laid out a Canuck, he radiated more affection than brutishness or anger. He’ll deck you, but he’ll also water your plants.--Wesley Morris

The effort to understand the universe is one of the very few things that lifts
human life a little above the level of farce, and gives it some of the
grace of tragedy.--Steven Weinberg

The quality of mercy is not strain’d,
It droppeth as the gentle rain from heaven
Upon the place beneath: It is twice blest;
It blesseth him that gives and him that takes ...--William Shakespeare
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