Friday, October 14, 2011

Quotes of the day

Even leftists believe in property rights ... at least when it comes to their property. --Greg Mankiw

... the Tea Party has a ready and plausible answer as to how to restore self-government and break the grip of the crony capitalism that ties the Obama administration to Wall Street. They want to drastically reduce the size of government. The protesters have no such view. Like their 1960s predecessors, they're chasing their tails trying to imagine procedural reforms that will allow the demonstrators to govern themselves, while also curbing the power of those greedy capitalists.--Fred Siegel

If [Romney's] rivals looked stronger, he might need to play more to “the poor should pay higher taxes and the uninsured should take care of themselves” strand within conservatism. But as it stands, the field’s weakness is letting him get away with rhetoric and positioning that should make the Obama White House very, very nervous.--Ross Douthat

The Obama administration, under fire for not taking a harder line
on China over its currencyon American consumers who stubbornly take advantage of good deals offered by Chinese sellers and, allegedly, made even more attractive by Beijing’s monetary policy appears set to move against
the Asia export powerhouse on other fronts these politically unorganized Americans as next year’s U.S. elections approach.--Don Boudreaux, riffing on Doug Palmer and Glenn Somerville

It’s remarkable to see how similar the arguments being put forward by wind-energy proponents are to those that the Obama administration is using to justify its support of Solyndra, the now-bankrupt solar company that got a $529 million loan guarantee from the federal government. But in some ways, the government support for the Shepherds Flat deal is worse than what happened with Solyndra. The majority of the funding for the $1.9 billion, 845-megawatt Shepherds Flat wind project in Oregon is coming courtesy of federal taxpayers. And that largesse will provide a windfall for General Electric and its partners on the deal who include Google, Sumitomo, and Caithness Energy. Not only is the Energy Department giving GE and its partners a $1.06 billion loan guarantee, but as soon as GE’s 338 turbines start turning at Shepherds Flat, the Treasury Department will send the project developers a cash grant of $490 million.--Robert Bryce

[The Red Sox] needs a statistical agnostic leader. They need a guy who it doesn’t matter if he plays or not. Or it doesn’t matter what he’s hitting or not. He will talk to anybody on the team about them doing something wrong. I’ve said it a couple times. That was Doug Mirabelli. That was Mike Lowell. That was what those guys did. That was Gabe Kapler. None of those guys were leading the team in home runs or RBIs or batting average. The guys in those clubhouses had an immense amount of respect for them. Orlando Cabrera marching back to Manny [Ramirez]‘s locker and demanding that Manny put himself back in the line-up. Guys like that. This team doesn’t have them. This team has a couple of guys like a [Dustin] Pedroia who is going to play his [expletive] off and expect everyone to do the same. I don’t see him as a kid who stands up in front of the locker room and says, ‘This has got to change.’ I’m not seeing that yet.--Curt Schilling

Anyone — Keynesian or otherwise — paying attention to the last thirty years of empirical macro never expected much crowding out of financial capital in the first place.  It simply has not been in the cards.  To put it more bluntly, the “no crowding out” result is not much of a predictive victory for Keynesian economics, IS-LM, the liquidity trap, and so on, even though I have read it claimed as such many times.  It is a strike against some predictors who were wrong in the first place, especially in the right-wing popular press circa 2009-2010, plus some Republicans who jumped ship on the issue, perhaps because they wanted to attack Obama.  What’s a unique prediction we might look at?  It is a common Old Keynesian claim these days, at least from Krugman, that the AD curve is upward-sloping because of a liquidity trap.  That would imply that harsh and binding minimum wage hikes, and other wage-propping mechanisms, should prove expansionary.  That claim, at least for the Great Depression, has been knocked down fairly conclusively by Scott Sumner.  If there is no comparable test on today’s data, it is because we have grown that much wiser.--Tyler Cowen

I’ve argued before that the Mother of All Bubbles may be excess manufacturing capacity in Asia. Decades of above average returns on investment, compounded by a range of state policies aimed at encouraging the development of this kind of enterprise, have led to a massive overcapacity: the world can’t consume as many widgets as manufacturers need to sell.--Walter Russell Mead

... in 1934 the Austrian mathematician Karl Menger wrote a paper that rejected unbounded utility functions. These unbounded functions include, for example, logarithmic utility, a particularly useful one because it corresponds to exponential growth, and thus is a natural for many time series processes (like compounded returns). Because his result is wrong, the motivation for focusing on the ensemble approach is ill founded. And, to make matters worse, in many important cases it is a time series approach that makes the most sense. After all,we only live one life, and we care about what is dealt to us in that life. If we enjoyed (and recognized that we enjoyed) reincarnation so that we could experience many alternative worlds – and better yet,if we experienced them all simultaneously -- perhaps it would be a different matter. What is fascinating is that Menger’s paper has been cited widely by notable economists, including Samuelson, Arrow and Markowitz, Nobel laureates all.--Rick Brookstaber

I have done 1.5 years of research on the type of tumor that affected Steve Jobs and have some strong opinions on his case, not only as an admirer of his work, but also as a cancer researcher who has the impression that his disease course has been far from optimal. Let me cut to the chase: Mr. Jobs allegedly chose to undergo all sorts of alternative treatment options before opting for conventional medicine. This was, of course, a freedom he had all the rights to take, but given the circumstances it seems sound to assume that Mr. Jobs' choice for alternative medicine could have led to an unnecessarily early death. Again, please understand that I have no knowledge of the specific case, I'm just trying to give insights on his a priori odds of cure.--Ramzi Amri

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