Quotes of the week

As soon as you crack your knuckles and open up a comments page, you just canceled your subscription to being a good person.--Louie C.K.

Manipulated by the media, voting their pocketbooks, supporting sectional interests or monofocal issues, voters in America and other Western democracies do not show very great signs of transcendent wisdom. Worse, we labor under the delusion (indeed, we foster the delusion) that somehow things will be all right provided lots of people vote. Our system of government is our new Tower of Babel: it is supposed to make us impregnable. The Soviet empire totters; other nations crumble into the dust, Balkanized, destroyed by civil war, tribal genocide, grinding poverty, endemic corruption, Marxist or some other ideology. Not us. We belong to a democracy, “rule by the people.”--Don Carson

Monetarism is not — nor did it appear to policy makers in the 1970s to be — a laissez-faire program.  Rather, it is a program for government control of economic volatility.--Michael Clune

Devote your life to something you love — not like, but love.--Gene Siskel

Quotes of the day

Consensus isn’t the same thing as excellence.--Andy Greenwald

Roughly a quarter of all hospitalized patients will be harmed by a medical error of some kind. If medical errors were a disease, they would be the sixth leading cause of death in America—just behind accidents and ahead of Alzheimer's.--Marty Makary

The Emancipation Proclamation destroyed the south's best hope for victory – foreign recognition. From then on they would have to look to their own armies for victory.--Joshua Horn

At least when the Pharisees bragged about their piety and how much they gave to the Temple, they actually performed the rituals and gave money. Leftists brag about how compassionate they are and then don’t give much from their own time and pocket books.--Shannon Love

The group that Marx loved, the non-elite working people who create value and have that value transferred to the bourgeoisie, are the main supporters of the Republican Party, and most likely to hate any of the words associated with Marx like “socialism” or “communism” or "Obamacare."--Half Sigma

When an equation is correct, mathematicians call it ‘beautiful.’ A true equation is beautiful because it is elegant and uncluttered with mistakes or unnecessary steps.--John Polkinghorne

Quotes of the day

High frequency traders are very sensitive to cash flow (note Trading Machines shut down pretty quickly after not finding a niche), so they aren't building palaces based on unrealistic expectations like, say, California or or NYU journalism majors.--Eric Falkenstein

... the 93% increase in JPMorgan VaR from Q1 2011 to Q1 2012 is solely due to the sudden "realization" that the world's biggest bank by derivative holdings (at just about $73 trillion) is in reality nothing but a glorified hedge fund.--Zero Hedge

[Peter] Orszag’s [compulsory voting] proposal and others like it are potentially harmful solutions to a non-problem. There is no evidence that nations with compulsory voting are, as a result, better governed than those where voting is voluntary. As Tim Cavanaugh points out, the former category includes many states such as Argentina, Lebanon, Egypt, Congo, and others that are hardly paragons of civic virtue. By contrast, one of the few democracies that has even lower turnout rates than the United States is Switzerland, which is widely considered one of the best-governed nations in the world. ... More generally, we should spend less time worrying about turnout and more about whether those who do turn out actually understand what they are voting on.--Ilya Somin

Obama campaigned as a consistent critic of the Bush administration’s understanding of executive power — and a critic with a background in constitutional law, no less. But apart from his disavowal of waterboarding (an interrogation practice the Bush White House had already abandoned), almost the entire Bush-era wartime architecture has endured: rendition is still with us, the Guantánamo detention center is still open, drone strikes have escalated dramatically, and the Obama White House has claimed the right — and, in the case of Anwar al-Awlaki, followed through on it — to assassinate American citizens without trial.--Ross Douthat

I really dislike fawning Keynesians because I used to be one when I was a TA for Hyman Minsky back in college ... In contrast to the Keynesian vision of us all trying to figure out how to spend our endless vacation, there's Eric Hoffer, the enigmatic philosopher who appeared out of nowhere around 1934 in California at age 34 ... A man is likely to mind his own business when it is worth minding, and so those unhappy with their own meaningless affairs will focus on minding other people's business. Hoffer noted one must not merely provide for those without meaning in their lives, but provide against them, because in a democracy and market economy their preferences will have power. Those who see their lives as inferior and wasted crave equality and fraternity more than they do freedom, and this can cause a Republic to fall to a democracy, and ultimately a tyranny. ... In other words, Hoffer describes the essence of the Liberal desire to micromanage society into perfect equality at the expense of liberty. A coalition of intellectuals and the underclass, both of whom feel unappreciated. We haven't figured out a good outlet for these do-gooders, or a good way for those without a purpose to find life rewarding, so they continue to plague us with their plans and angst. That's a realistic vision of society, a future problem that is real yet potentially soluble.--Eric Falkenstein

Walmart often faces strong local opposition when trying to build a new store. Opponents often claim that Walmart lowers nearby housing prices. In this study we use over one million housing transactions located near 159 Walmarts that opened between 2000 and 2006 to test if the opening of a Walmart does indeed lower housing prices. Using a difference-in-differences specification, our estimates suggest that a new Walmart store actually increases housing prices by between 2 and 3 percent for houses located within 0.5 miles of the store and by 1 to 2 percent for houses located between 0.5 and 1 mile.--Devin Pope & Jaren Pope

Gary Becker, on controlling campaign finance ... as well as other manifestations of special interests, such as lobbying and volunteering

Sharp restrictions on campaign contributions would make more sense if monetary contributions were the only major force that shapes who wins elections and the policies goverment officials support.Yet that is very far from the situation that prevails in American politics, and in the politics of most other democratic nations. One reason for this is that interest groups can often avoid the intent of restrictions on campaign contributions through other ways to influence political outcomes. For example, many industries hire lobbyists and spend other monies to try to persuade legislators, regulators, and others in important political positions to subsidize their industries, or to reduce the taxes on their industries, or to gain other advantages.

It is not only business that is active in these ways since, for example, unions of government employees use political clout to obtain generous pensions and health plans for their members. The tight budgets that are currently being imposed on many national and regional governments-such as the Greek government and state and local governments of the United States- have induced government unions to fight hard to keep their pension and health benefits, and to limit any reductions in these benefits. Similarly, unions of public school teachers have spent considerable money and time to defeat efforts to introduce school vouchers and many other changes in public school systems.

Candidates who galvanize enthusiasm with their oratory and political positions induce many supporters to spend considerable time working to elect these candidates and to promote policies the candidates favor. Time spent by supporters is often as effective and “corrupting” as money spent influencing political outcomes and policies. This is probably especially true in the age of the Internet and other methods of mass communication. Supporters of a particular candidate may spend a lot of time on political issues through blogs, Facebook and other social networks, and through other forms of mass communication. Radio, television, and Internet stars, such as Rush Limbaugh, Bill Moyers, and Matt Drudge, not only affect the views of followers, but also how active they are in supporting conservative or liberal policies.

These reflections lead me to question whether it is wise to control one form of interest group politics; namely, direct and indirect monetary contributions to political campaigns, in an environment where other types of interest group politics are important and are only weakly controlled.

Read the whole thing here.

Quotes of the day

Today's young women make $1.17 for every $1 their moms earned back in 1980. Young men, however, are earning 10 cents per dollar less than their fathers did 30 years ago, new research shows.--Annalyn Censky

Big losers had to have been small losers first. You have to be down 2% before you can be down 5% before you can get down 10% and so on. Cut your losers at the knees before they cut your throat.--Michael Martin

It's a cliche to say risk management is the combination of art and science. You need to know something about history, statistics, and programming to be useful as a risk manager. You also need common sense, and that is best informed by experience ...--Eric Falkenstein

... now it’s looking increasingly as though Corzine demonstrated virtually all of the pathologies of the rogue trader more generally. Lots of financial firms make big bets and blow up. But what we saw at MF Global was much more than that. In fact, as Corzine detailed at great length in his prepared testimony last week, his big sovereign-debt bet didn’t actually lose money at all. But MF Global died all the same, because the bet was so large and risky that it caused a fatal cascade of downgrades and margin calls.--Felix Salmon

In a democracy people are free to express and debate their opinions. This is valuable in itself. But it has also been held to be instrumentally important because it is claimed that through open free debate true ideas will conquer false ones by their merit. Democracy thus has an epistemic value as a kind of truth machine. In a democracy therefore there should be no dogma, no knowledge that cannot be questioned. Not only is this view mistaken, but it is so obviously wrong that it is astonishing that it has ever been taken seriously.--Philosopher's Beard

“Public choice” economics explores the problems of concentrated interests. There are fewer corn farmers than taxpayers, and the gains from ethanol subsidies are large for each corn farmer, while the costs per taxpayer are quite small. The costs of coordination and the financial incentives mean the farmers will get their way so long as the government has the power to subsidize or penalize. This simple dynamic explains much of how our government allocates resources.

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And, unlike Marx or Citizens United, it is something the Tea Party and Occupy can agree upon. Although it may seem far-fetched at first glance, if Occupy found common ground with the Tea Party or the sentiments behind it, much could be done politically. After all, there are many 99 percents. But so far, Occupy has absorbed or been co-opted by various one percents.

...

For example, in education policy, teachers are the one percent, while students and parents are the 99 percent. But it is generally the power of the concentrated teachers’ unions that drives decisions about education spending and policy. The fact that teachers unions support Occupy undermines its power. A true movement of the 99 percents would be on the side of students, not teachers.

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Examples abound that cut across typical ideological lines. For instance, military contractors are the one percent, while soldiers and the citizens they defend are the 99 percent. It is for this reason that in the recent census, 7 out of the 10 richest counties surround Washington, D.C.--M. Todd Henderson

Any time someone gets fired, a manager has failed. He or she hired the wrong person, moved someone into the wrong job, or screwed up in some other way. When it’s necessary to show an employee the door, it’s going to be because we’ve tried and failed to fix whatever in the relationship and the structure wasn’t working. It’s never going to be because the person fits a category that someone has outlined for us. That, in fact, is the opposite of leadership.--Liz Ryan

Fail a lot before you are paying for the failure….I got fired or asked to leave from all my jobs.--Mark Pincus, CEO of Zynga

In 2002, a schoolteacher with previously normal sexual desire began experiencing sexual desires that he was not used to. He began looking at child pornography and engaging in sexual activity that was not common to him before this point. Little did he know, he had an egg-shaped tumor in the orb frontal cortex of his brain, and when he had the tumor removed his sexual desires stopped. A little while later the desires reappeared, so he went back to the doctor’s office. Lo and behold, the tumor had returned to the same region of his brain.--Mike Friesen

... changing your offense makes all your seniors freshmen.--unattributed

In the same way that there are people who never thought they'd see a black American president, there are also people who never thought they'd see a black basketball star dressed like a nerd.  ... If you happen to be someone who looks at Durant, James, or Amar'e Stoudemire's Foot Locker commercials — in which he stalks along a perilously lit basketball court wearing a letterman's cardigan, a skinny tie, and giant black glasses (his are prescription) — and wonders how the NBA got this way, how it turned into Happy Days, you're really wondering the same thing about the rest of mainstream black culture. When did everything turn upside down? Who relaxed the rules? Is it really safe to look like Carlton Banks?--Wesley Morris

On Dec. 12, 1991, [Paul] Kunz set up a Web interface based on a Web server to search a popular database of particle physics literature at Stanford, and sent an email to Tim Berners-Lee about it. It was the first Web site in North America and one of the first dozen in the world.--Liz Gannes

The smartest worriers are learning to code or marrying a developer.--Howard Lindzon

By virtue of its size, business model and popularity, Facebook is the rare company that doesn't need Wall Street to go public. It should press home the advantage and blaze a trail for others to follow.

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Mr. Zuckerberg's has two options: a traditional IPO, in which banks distribute shares to investors in exchange for a percentage of total proceeds; and the little-used "Dutch auction" that cuts out the Wall Street middlemen by making the allocation of shares dependent on prices bid by each investor.

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The biggest difference between the two systems, apart from the lower fees paid by companies in auctions, is that when IPOs go Dutch, banks don't choose who gets shares, giving all investors a fair shake and avoiding potential conflicts of interests.

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This is particularly important for "hot" IPOs, like Facebook. Since these deals often record sharp rises in the first days of trading, there is a temptation for banks to dole out shares to their favorite investor clients, who stand to profit if they get in early.

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Wall Street's penchant for being both poacher and gamekeeper has left banks with conflicted loyalties; they take companies public while at the same time trying to keep hedge funds and other high-paying customers satisfied.--FRANCESCO GUERRERA

Image links here, here, here, here and here.

Quotes of the day

The nation's state and local public employee retirement systems had $2.5 trillion in total cash and investment holdings in 2009, a $726.1 billion or 22.7 percent decrease from $3.2 trillion in 2008, according to new statistics from the U.S. Census Bureau. This follows a $176.7 billion loss the previous year.--U.S. Census Bureau

... IS-LM provides absolutely no framework for policy analysis because it makes no assumptions, and draws no conclusions, about what people are trying to accomplish. If you don’t know what people are trying to do, you can’t possibly know how best to help them.  ... Greg Mankiw and Matt Weinzierl have recently provided ... a [useful] model. Like IS-LM, their model is fundamentally Keynesian. Unlike IS-LM, it is capable of evaluating the relative desirability of various policies. Would we be better off in a world where everyone floats in a vat of money until we all starve to death? The Mankiw/Weinzierl model, reassuringly, says “no”. The IS-LM model, unhelpfully, says “that’s not my department”.--Steve Landsburg

You know, Jamie Dimon is one of the greatest bankers, he’s brought more business to this city than maybe any other banker.  To go and pick on him, I don’t know what that achieves. Jamie Dimon is honorable and works very hard and pays his taxes.  ... The majority of people who work in the financial services sector make something like $72,000 a year. They’re hard-working people and just bashing them doesn’t make a lot of sense.--Mayor Bloomberg

... deviations from Benford's law are compellingly correlated with known financial crises, bubbles, and fraud waves. And overall, the picture looks grim. Accounting data seem to be less and less related to the natural data-generating process that governs everything from rivers to molecules to cities. Since these data form the basis of most of our research in finance, Benford's law casts serious doubt on the reliability of our results. And it's just one more reason for investors to beware.--Jialan Wang

... analysis of the Senate returns over the six-year period, published in the Journal of Financial and Quantitative Analysis in 2004, showed that the Senate portfolio outperformed the market by approximately 12 percent a year. In April of this year, the team published a follow-up analysis of the House in Business and Politics, which showed that House members on average outperformed the market by a smaller but still impressive figure—roughly 6 percent a year. ... Certainly, the guardians of our laws don’t seem eager to pursue the question. No member of Congress has ever been investigated for insider trading. Four times since 2006, Congresswoman Louise Slaughter (D–New York) has sponsored the STOCK Act, which would explicitly make congressional insider trading illegal, and require members of Congress to disclose significant trades within 90 days. It’s never even come to a vote.--Megan McArdle

Why should our legislators be above the law? I have yet to hear an even vaguely plausible reason that our legislators shouldn't be watched at least as closely as we watch CEOs. In fact, I've yet to hear any reason. No one in government wanted to talk about it. The best I can infer is that well, it's a pain in the ass, and they don't wanna. That's absurd. What's even more absurd, however, is that we permit it.--Megan McArdle

If the Republicans want a nominee who will pander to the left, right and middle with no coherent philosophy and no coherent policy proposals, why not just drag out Bob Dole [instead of Mitt Romney]? At this rare historical moment when the country just might be willing to take a flyer on some truly radical changes, it saddens me deeply that warmed-over Dole might be the best the Republicans can manage to dish up.--Steve Landsburg

I find myself liking Herman Cain this year. It reminds me of how I liked Sarah Palin in 2008. And Barack Obama in 2004.--Cav

For an economist, the most fascinating aspect of Pan Am is the highly attractive flight attendants -- or rather, stewardesses, since the show is set in the early 1960s. If you’re young enough, you might think that’s just TV. But I’m just old enough to remember flying in the 1970s, and I recall stewardesses who really were, in fact, hot. Okay, I was too young to understand the concept of “hot” -- but I was definitely aware that I was being attended by some very pretty young women  Not so anymore. Flight attendants aren’t necessarily unattractive now, but they’re no more fetching than people in any other service profession that doesn’t get tips. And what’s changed? In a word, deregulation.--Glen Whitman

Quotes of the day

What was driving unemployment was clearly deficient aggregate demand. [Larry Summers and I] wondered where [President Obama's misplaced belief that high unemployment was caused by productivity gains] could be coming from. We both tried to convince him otherwise. He wouldn’t budge.--Christina Romer

[McCain] didn't have a clue about the economy. I just assumed the guy [Obama] could do it. I thought he was going to be more Clinton-like in his economics and politics. I was caught by surprise by how far left the guy is and how much he's hung onto it and, I would say, at considerable cost to his own standing. ... The president keeps focusing on transitory things. He grudgingly says, 'OK, we'll keep the Bush tax cuts on for a couple years.' That's just the wrong thing to say. What I care about is what's the tax rate going to be when my project begins to bear fruit?--Robert Lucas

Scale matters--you can't take billion-dollar fliers on too many ideas. Appropriateness matters--retirees shouldn't put their living expenses in tech stocks. And the potential payoff matters--we should not invest billions to develop a slightly better form of white-out, or into experiments that have a 1-in-a-trillion chance of developing a low-cost way to turn lead into gold. I think Solyndra flunks on all three counts.--Megan McArdle

As of this moment, which do you think is more likely — that neutrinos can travel faster than light, or that the South won the Civil War?--Steve Landsburg

Our existence today requires that the North won the Civil War, therefore it’s unthinkable they actually lost. Likewise, our atomic existence today requires that neutrinos do not surpass the speed of light, therefore it’s unthinkable they somehow went faster. It’s just that most people comprehend the former and not the latter, and thus don’t see how absurd the latter is.--Sean

Many people, when the pressure is on as hard as it's been, decide that the first thing they have to do is try to hang on to their job. Anything interesting and risky can wait until after the mortgage payment has cleared and the tuition checks have been written. The behaviors most associated with "Don't get laid off" are not the ones that are best associated with "Keep the company going", much less "Discover something new". That last set of behaviors, in fact, might be one of the first to go, along with the people who exemplify them.--Derek Lowe

Here's what the 1936 government pamphlet on Social Security said: "After the first 3 years -- that is to say, beginning in 1940 -- you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. ... Beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. ... And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year." Here's Congress' lying promise: "That is the most you will ever pay."--Walter Williams

Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy F. Geithner may be working at cross purposes as one buys Treasury bonds and the other sells them.  The Fed plans to purchase $400 billion of longer-dated Treasuries in a bid to reduce yields. At the same time, the Treasury Department is selling more long-term securities to decrease its reliance on short-term borrowing. That strategy puts upward pressure on interest rates by adding to market supply.--Rich Miller

... it is clear that the Palestinian Authority now governing the West Bank cannot “deliver” a united Palestine: it cannot sign a treaty that Hamas will pledge to honor. Hamas won the last Palestinian elections; does Israel have any guarantee whatever that, after the Israelis have dismantled settlements and turned over strategic territory to the Palestinians, the Palestinian government will continue to abide by a treaty that Hamas doesn’t accept? The answer is no. Until the answer is yes it is very unlikely that Israel will make large sacrifices for what is likely to be a bogus, temporary peace. The core problem with the land for peace concept at the basis of both the Oslo Accords and every effort since to revive the moribund peace process is, simply, this: the process doesn’t offer enough land to the Palestinians or enough peace to the Israelis to be satisfactory to either side. ... It’s doubtful at this point if the President can get much done before the 2012 election. Palestinians don’t much like negotiating during US election years as they believe that Israel’s political popularity in the US makes itself felt most strongly then. (One reason President Clinton’s peace blitz was ill-timed in 2000: his wife was running for the Senate in New York and Palestinians believed he would not force Israel to make difficult concessions while his wife was running in a state where the Jewish vote is so important and while his vice president Al Gore was in a tough race against George W. Bush. After the election, Clinton was a lame duck and the Palestinians had little confidence that he could deliver on any promises he made.)--Walter Russell Mead

I think that the best way to get rid of the worst teachers(short of full-on vouchers with no government-run schools) would be to de-consolidate school districts, which would shift the balance of power toward parents and away from school administrators and teachers' unions. In my opinion, the large school district is one of the most anti-libertarian institutions in the United States today.--Arnold Kling

In general, despite extensive government subsidies, hyperprocessed food remains more expensive than food cooked at home. You can serve a roasted chicken with vegetables along with a simple salad and milk for about $14, and feed four or even six people. If that’s too much money, substitute a meal of rice and canned beans with bacon, green peppers and onions; it’s easily enough for four people and costs about $9. (Omitting the bacon, using dried beans, which are also lower in sodium, or substituting carrots for the peppers reduces the price further, of course.) Another argument runs that junk food is cheaper when measured by the calorie, and that this makes fast food essential for the poor because they need cheap calories. But given that half of the people in this country (and a higher percentage of poor people) consume too many calories rather than too few, measuring food’s value by the calorie makes as much sense as measuring a drink’s value by its alcohol content. (Why not drink 95 percent neutral grain spirit, the cheapest way to get drunk?)--Mark Bittman

Forget the Crimson Tide. It's the Crimson who's rolling.--Chris Berman

Bill Belichick went to Wesleyan. Safety school.--Cav

The Government-Media complex cries wolf?

Toby Harnden thinks so:

The surf may have told a story but so too did the sight behind the reporter of people chatting and ambling along the sea front and just goofing around. There was a man in a t-shirt, a woman waving her arms and then walking backwards. Then someone on a bicycle glided past.

Across the screen, the “Breaking News: Irene Batters Long Island” caption was replaced by stern advice from the Federal Emergency Management Agency (FEMA): “Stay inside, stay safe.”

The images summed up Hurricane Irene – the media and the United States federal government trying to live up to their own doom-laden warnings and predictions while a sizeable number of ordinary Americans just carried on as normal and even made gentle fun of all the fuss.
...
The media and politicians enjoy a symbiotic relationship during possible impending disasters. The resultant perfect storm of hype over Irene runs the risk of making Americans even more like to ignore warnings in the future.

It's a rookie mistake. Everyone saw what Mayor Nagin and Governor Blanco did, and thought, "Forget taking any pitches, I'm swingin' at anything and everything!"

Quotes of the day: Russ Roberts edition

What is working well? The Apple Store, access to food and clothing, private high schools, Amazon.com and everywhere else that there is competition. As the economy slinks along or dips down, we’re going to hear continued talk of the decline of America. But what has always made America great is its economic system–a system that let’s competition work. If we want to be great again, all we have to do is remember what made us great before. Our biggest challenge as a nation is our political system. We have overpromised and a democracy that ignores its Constitution isn’t very adept at taking away goodies from the masses. I am very worried about how that is going to turn out. We need to share the pain very widely and that too is not the strong suit of democracy.--Russ Roberts

What I meant is that the Ponzi scheme called Social Security and the demographics of Social Security and medicare are going to require a lot of people to get a lot less than they are expecting. That’s what I meant by sharing the pain. My point about democracy is that politicians hate dashing expectations. See Greece, riots in the streets of.--Russ Roberts

The main thing to realize is that both Citibank and S&P have little to do with capitalism and everything to do with crony capitalism. This is a game of financial musical chairs where the government keeps the market from calling the tune. The cronies call the tune. I should add one more thing. People talk as if S&P and Fitch and Moody’s are independent private organizations. They are, sort of. But the structure of regulation empowers them. Without the regulations requiring their imprimature, I’d assume they’d be gone. Without the implicit support of the regulatory apparatus, why are any of the ratings agencies in business?--Russ Roberts

Quotes of the day

Private equity firms do create value, albeit with a heavy assist from financial engineering. Mr. Lee himself marveled on his blog at the ultimately successful restructuring Silver Lake undertook at Skype.  The perception is otherwise. Imagine if Lawrence H. Summers had joined Blackstone or Carlyle instead of recently becoming an adviser to the venture capital firm Andreessen Horowitz. He would be called a sellout akin to Peter Orszag, who left government service to become a vice chairman at Citigroup.  This brings us back to l’affaire Skype. Mr. Lee can be blamed, but instead it is Silver Lake that is vilified. The reason is that Silver Lake is not playing by venture capital rules.  Yet the private equity firm is being blamed for doing exactly what private equity firms do and what is expected of them. In this light, Silver Lake is not “evil. “ Silver Lake is not even acting illegally or immorally. If Mr. Lee had hired a lawyer for an hour, he would have learned of his dilemma.  Name-calling aside, this is all about all about what people think of the industries and venture capital’s innate fear of private equity methods. V.C. and P.E. just may not be right for each other.--Steven Davidoff

It can be cathartic to witness somebody powerful throw a big tantrum, but it's also deeply embarrassing. It becomes even more embarrassing when that person is no longer powerful.--Molly Lambert

You should go work for a real bank.--Jamie Dimon, to a Citigroup banker at the World Economic Forum in Davos

In a post-industrial economy, drug dealing is not the only occupation where wages disproportionally skew towards the top 1%. The odds are stacked against Millenials, whether they strive to be football players or lawyers. Admittance into a top-14 law school, like a scholarship from a top-10 college football program, is the culmination of a lifetime of striving. Of the over 100,000 high school seniors who play football, fewer than 3,000 sign Division I letters of intent. Similarly, the top 25% in Harvard Law’s 2009 class had an average GPA of 3.95 and a LSAT score of 175, which puts them in the 99th percentile of the over 100,000 test takers each year. Yet, despite overcoming nearly impossible odds, each group still has the toughest test of their lives ahead of them — each other. NFL teams rarely draft players not at the top of the depth chart, even at powerhouses like Texas or Oklahoma. And even at Harvard or Columbia Law, “Big Law” firms — those with the coveted $160,000 starting salaries — don’t reach too far below the median class rank when selecting first-year associate. As you go down the ranks, the odds only decrease. NFL players from non-BCS conferences were usually top-tier starters in college, while top-50 law schools typically send only 10-25% of each class to “Big Law”. And just as there are always a few DII and DIII players in the draft each year, students from tier 2 and tier 3 law schools occasionally beat out graduates of elite schools for jobs. But “small school” success stories are the best of the best — collegiate All-Americans, the top 1% of their class in law review.--Jonathan Tjarks

There are almost no Americans left who have either the painfully developed musculature or the painstakingly acquired knowledge to rapidly harvest a field without damaging the crop. To my mind, that's a good thing: Americans don't have these skills because they have better alternatives. But really, it doesn't matter whether it's good or not. The people who blithely assert that we could always get Americans to do this job by paying a higher way are wildly underestimating what's involved in becoming a skilled picker. It is not something you learn to do of an afternoon. If we shut out the immigrants, we will see a lot more ruined crops.--Megan McArdle

Andrew Gelman, a statistics professor at Columbia and an amateur name-ologist, argues that many parents want their boys to seem mature and so pick classic names. William, David, Joseph and James, all longtime stalwarts, remain in the Top 20. With girls, Gelman says, parents are attracted to names that convey youth even into adulthood and choose names that seem to be on the upswing.--DAVID LEONHARDT

... [Chris Mooney] spun the survey to focus on the fact that the disagreement polarized the hierarchical-individualists and communitarian-egalitarians alone, and concludes that 'a little knowledge is a dangerous thing'. Yes, Mr. tendentious English major without an understanding of standard errors, it is.--Eric Falkenstein

Across Atlanta Public Schools, staff worked feverishly in secret to transform testing failures into successes. Teachers and principals erased and corrected mistakes on students’ answer sheets. Area superintendents silenced whistle-blowers and rewarded subordinates who met academic goals by any means possible. Superintendent Beverly Hall and her top aides ignored, buried, destroyed or altered complaints about misconduct, claimed ignorance of wrongdoing and accused naysayers of failing to believe in poor children’s ability to learn. For years — as long as a decade — this was how the Atlanta school district produced gains on state curriculum tests. The scores soared so dramatically they brought national acclaim to Hall and the district, according to an investigative report released Tuesday by Gov. Nathan Deal.--Heather Vogell

The story of the person who kills for love is almost always more compelling than the person who kills for money. I didn't write about the Mafioso in [Popular Crime: Reflections on the Celebration of Violence] because that's a different phenomenon. Those are people who entered a lifestyle where killing people is just a necessary part of what they do. ... "When you have eliminated the impossible, whatever remains, however improbable, must be the truth" is very, very interesting. It's false, and extremely arrogant, and very dangerous. That's not a real way to think about the world. This concept of eliminating the impossible — we could never do that. The whole idea of Sherlock Holmes is dangerous because it encourages people to think that — if they're intelligent enough — they could put all the pieces together in absolute terms. But the human mind is not sophisticated enough to do that. People are not that smart. It's not that Sherlock Holmes would need to be twice as smart as the average person; he'd have to be a billion times as smart as the average person. ... We continually become less tolerant of actions that lead to death. The human race has been in a long struggle to eliminate murder. And we will succeed. ... There will always be occasional exceptions, but we're involved in a long struggle against murder, war, famine, disease — and we move forward more than we move back. And you can only understand this if you look over the sweep of centuries.--Bill James

President Lyndon Johnson and the “best and the brightest” who staffed his administration led this country into three quagmires. By far the most famous, but perhaps not the most expensive and dangerous resulted from LBJ’s escalation of the Vietnam War. More than 50,000 Americans and many more Vietnamese died as a result of that policy; our country was bitterly divided in ways that still weaken us today, and the economic cost of the war was immense. It contributed to the wave of inflation that shook the country in the 1970s and in addition to the interest on the debt from this ill-starred venture we are still paying (as we certainly should) pensions and medical costs for the vets and their spouses. The Second Great Johnson Quagmire now destroying the nation is the Medicare/Medicaid complex. These entitlement programs are the biggest single financial problem we face. They dwarf all the Bush-Obama wars; they make TARP look like small change. They not only cost money we don’t have — and are scheduled to cost inexorably more until they literally ruin the nation — they have distorted our entire health system into the world’s most bloated and expensive monstrosity. Thanks to these programs, we have a health system that marries the greed of the private sector to the ineptitude of government, and unless we can somehow tame these beasts America and everything it stands for could be lost. (Note, please, that by comparison Social Security can be relatively easily reformed to be solvent for the next 75 years. The New Deal, whatever its shortcomings, was almost infinitely more realistic and sustainable than the Great Society.)--Walter Russell Mead

This NFL lockout is so much fun!--Bryan Allain

The way I see it, if the fans vote for Charlie Sheen to start in the outfield, Michele Bachmann at short and Rupaul at first base, then baseball should do its best to make that happen. I think the game is for the fans, completely and entirely, and I wish they would have fans vote DURING THE GAME on who to pinch-hit, who to bring in from the pen, when to hit and run and so on. The complaint I've heard that the fans should have voted Jhonny Peralta over Derek Jeter at shortstop because he had a much better first half feels to me like arguing that a kid should serve broccoli at a birthday party instead of cake because broccoli is s better for you. Jhonny Peralta has been a mostly dreadful player for three years. It's wonderful he had a great 76 games this year. But why does that obligate me to vote him into the All-Star game? Arguing that fans were somehow misguided for choosing the most popular player of the generation to start at shortstop over Jhonny Peralta seems to me like an anti-argument, like arguing that the All-Star Game should not be fun at all. ... Andrew McCutchen isn't in the All-Star Game and I can't even say why. Michael says it best: It feels like a clerical error or something. Clerical errors are no fun at all ... which gets us back to the All-Star Game problem in the first place.--Joe Posnanski

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Quotes of the day

We are a democracy, and as such do not generally elect our best people to office. How could we? They weren’t running.--David Mamet

... we get both more, and less out of a work than the author intended, and we are never actually getting the author themselves. They are always hiding some piece of themselves from us, the piece they can't bear for us to know. Trying to judge a book by an author, or an author by their book, is like trying to judge a glass of milk by looking at the cow. ... But there's another reason I do not think that we should reject books because their authors have terrible opinions, which is that virtually all authors have some terrible opinions. Maybe you don't know about them, or maybe you share their terrible opinions, but you cannot improve your library by purging all the authors with terrible ideas; you can only empty it. ... if you wanted to pick a group of people to model your life on, it's hard to think of a less likely group than successful writers. ... Writers, especially, spend the bulk of their workday not interacting with other people. They are people who have in large part dealt with the hardest human question--how do I live with all these difficult people around me?--by escaping into a world where the people are puppets. Why would we expect that they have some sort of special insight into how to be just and good?--Megan McArdle

I often joke that my main qualification for cancer research is that I am unencumbered by any prior knowledge of the subject.--Paul Davies, physicist

Difference between reporting on business and politics: if I get an interview scheduled with a businessman, he keeps the appointment.--Megan McArdle

[Bill] Simmons is what you might call the Peter Pan of sports fandom. He still has good days when his teams win and rough ones when they lose. He wouldn’t go to the old Yankee Stadium — “just too many bad memories there” — and he doesn’t travel on football Sundays, when he spends 12 hours in the Neverland of his four-flat-screen “man cave.” As a cultural phenomenon, Simmons is a member of the new class of man-boys, defined most famously by Judd Apatow and Todd Phillips, who make movies about men who can’t or won’t grow up. They got rich staying true to their 17-year-old selves and, along the way, helped make losers sort of cool. Simmons knows that the only people his age who obsess about sports the way he does are geeks — in his columns, he refers to his fantasy-baseball league as “the League of Dorks” — and he recognizes the quasi-pathetic nature of a grown man living and dying for his teams. But at the same time he’s unapologetic about it. “I always thought that by the time I turned 40 I wouldn’t care about sports so much,” Simmons told me. “I’d seen it happen to so many other people. But it hasn’t happened to me.” Simmons is not a literary sportswriter. You can’t capture his resonance with lyrical quotes from his oeuvre, because they don’t really exist.--Jonathan Mahler

... the truth is that when they are both right, Federer cannot beat Nadal. It has been talked about time and again: Federer is the greatest player of all time. And he's not the greatest player of his own time. ... Federer's game is scissors. Nadal's game is stone.--Joe Posnanski

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Quotes of the day

Politicians—you may have noticed—tend to adopt a flexible point of view aimed more at getting votes than rigidly sticking to a preconceived view of the world.--John Carney

President Obama, I voted for an idea. What I didn’t realize what I was getting was an idealist. If you’ve never been to the moon, you can’t issue policy about the moon. You have no ... idea what it’s like on the moon. For a president to be sitting in Washington, D.C., and saying, “Go back to your 67 borders in Israel,” how about you live there and try to defend an indefensible border nine miles wide? On one side you’ve got hundreds of millions of people who hate your guts, on the other side you’ve got the Mediterranean. Unless you control, in Israel, unless you control those Golan Heights, it’s an indefensible position. It’s a nice idea, when you grow up you find out that life isn’t the way you imagined it, and President Obama means well. I think he’s actually a good guy. He has no ... idea what the world is like because he doesn’t have to live there.--Gene Simmons

President Obama's re-election campaign is trying to dig up dirt in the Garden State. ... The Obama campaign is trying to keep its efforts from public view, concerned they would only elevate Christie's already impressive standing within the Republican Party, sources said.--JOSH MARGOLIN

... as we have all seen throughout his campaign and his presidency, President Obama talks the talk, but he has yet to walk the walk. We have heard him talk a great deal about the importance of small business and his intention to help small business and it all sounds great; but we have yet to see any action. In fact, if anything, most of the policy he has put forth over the last two years has actually hurt small businesses. Businesses haven’t been sitting on revenues because they want to, it’s because they are nervous about the uncertainty that this Administration has created. This is the most anti-business Administration ever--House Small Business Committee Chairman Sam Graves

When George W. Bush was President, the Patriot Act became part of the liberal conspiracy theory that Republicans were engaged in a lawless crusade to turn the U.S. into a police state. But the Patriot Act can now join Guantanamo, military commissions, unlimited detention, drone strikes, the state secrets doctrine and Middle Eastern democracy as Bush policies that Mr. Obama has embraced one way or another.--Wall Street Journal Editorial Board

... Liberty paid just $12,500 for preferred stock in Sirius XM. At the end of the March quarter, those preferred shares had a market value of nearly $4.3 billion. It’s hard to think of an investment made anywhere, anytime that turned out better.--Shira Ovide

We don't know a lot about 2013. We know that Donald Trump will not be President of the U.S. -- Arnold Schwarzenegger won't either. We know that Apple will release a new iPad that will look cool and cost a lot of money but only be available in theory. We know that the loud guy sitting behind me at the airport who is on the phone begging for a first class upgrade will still be talking. And we know that the New York Yankees have about $150 million in payroll obligations to eight players ... all of those players on the wrong side of 30, and at an average age of 34.--Joe Posnanski

The biggest threat to natural monopolies comes, not from a competitor, but from innovation. As a result, these standards can be far more vulnerable than we realize. That’s why I’m so suspicious of the elevated price for LinkedIn.--Eddy Elfenbein

I listened to [Robert] Kraft, and I don't agree with the Patriots on a lot of things, but I agree with him that we're on the verge of really irritating our fan base and damaging the fabric of the game.--Bart Scott, New Jersey Jets linebacker

Being players and growing up and not having much and the fact that we're squabbling about money is kind of ridiculous to me," he said. "I came into this league ... I probably made more money than I thought I ever would in a lifetime. Everything from here is just icing on the cake. Hopefully, we get something fair done and we get to a point where we can play football.--Wes Welker

Photo links here and here.

Quotes of the day

If you've been following the latest research on diet in the scientific journals, you would understand why the regulators appeared so defensive. Increasingly, some of the basic assumptions about nutrition that have formed the core of the government's recommendations on what Americans should eat are being questioned by studies which suggest the advice is not merely ineffective but may be counterproductive, contributing among other things to the rise in obesity which the White House decries. Rather than be humbled and made cautious by such research, however, government regulators are simply plowing ahead with a conviction that their ideas about nutrition are correct.--Steven Malanga

[William] Byers argues that there is an inherent uncertainty about science and our knowledge that is frequently ignored. Byers contrasts a science of wonder with a science of certainty. He suggests that our knowledge of the physical world will always be incomplete because of the imperfection of models and human modes of thought relative to the complexity of the physical world.--Russ Roberts

... I argue that more competition in K-12 education would make the schooling available to people in poor neighborhoods better than it is now. However relatively lacking is the selection of groceries in poor neighborhoods, grocers there still must compete for customers’ dollars – a requirement that obliges those grocers to be more responsive to their customers than are those neighborhoods’ public schools which receive their revenue, not from voluntarily paying customers, but from taxpayers forced to pay regardless of how well or poorly their schools perform. Consider, for example, that 47 percent of adults in Detroit are functionally illiterate while approximately 0 percent are starving or wanting for the likes of toothpaste, paper towels, and laundry detergent.--Don Boudreaux

... is Romney really telling people who care about freedom that the federal government should not take away their liberties, but it's okay when state governments do it?--Michael Cannon

[President Obama is] a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats. And now he has become head of the American killing machine and is proud of it.--Cornel West

There is one thriving constitutional democracy in the Middle East. It is Israel. Arabs can vote in Israel. There are Arab members of the Israeli parliament. Why does the President of the United States put any pressure on Israel to make concessions to the other side–the side that does not recognize Israel’s right to exist, the side where people danced in the streets on 9/11, the side that mourned the death of Osama Bin Laden. This is a political mystery I do not understand.--Russ Roberts

I admire hockey fighters, and I don’t care for it when people refer to them as goons. It is an uninformed point of view and disrespectful.--Alec Wilkinson

The mechanism by which DCA works in mice is remarkably simple: It killed most types of cancer cells by disrupting the way they metabolize sugar, causing them to self-destruct without adversely affecting normal tissues. Following the animal trials, Michelakis and his colleagues did tests of DCA on human cancer cells in a Petri dish, then conducted human clinical trials using $1.5 million in privately raised funds. His encouraging results — DCA treatment appeared to extend the lives of four of the five study participants — were published last year in Science Translational Medicine. The preliminary work in rodents, cell cultures, and small trials on humans points to DCA as being a powerful cancer treatment. That doesn't mean it's the long-awaited cure — many other compounds have seemed similarly promising in the early stages of research without later living up to that promise — but nonetheless, Michelakis believes larger human trials on DCA are warranted. Like Jonas Salk, Michelakis hasn't patented his discovery. It's not because he doesn't want to, but because he can't. When it comes to patents, DCA really is like the sun: It's a cheap, widely used chemical that no one can own. In today's world, such drugs don't readily attract funding. Pharmaceutical companies are not exactly ignoring DCA, and they definitely aren't suppressing DCA research — it's just that they're not helping it. Why? Drug development is ultimately a business, and investing in the drug simply isn't a good business move. "Big Pharma has no interest whatsoever in investing [in DCA research] because there will be no profit."--Natalie Wolchover

I graduated from college exactly 20 years ago. And as I am reminded every single day where I work, that makes me really old. Mark Zuckerberg, our founder and my boss, said to me the other day, “Sheryl, when do midlife crises happen? When you’re 30?” Not a good day at the office.--Sheryl Sandberg

Almost 47 percent of women from 25 to 29 had never been married in 2009, almost double the 26 percent reported in 1986, according to a Census Bureau report released today.--Frank Bass

Every now and then go away, have a little relaxation, for when you come back to your work your judgment will be surer. Go some distance away because then the work appears smaller and more of it can be taken in at a glance and a lack of harmony and proportion is more readily seen.--Leonardo Da Vinci

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Quotes of the day

When I watched the party and celebration in the streets of London [for the royal wedding], my very first thought was “David would be in his underwear.” That’s admittedly a weird thought, but that’s where I went. I immediately imagined David stripping down to his under armor and doing the robot in the streets after his victory. Just standing there saying, “Hands go up, and they stay there! All I do is win!”--Jon Acuff

In 1997, Julie Preuitt sounded the alarms that the Texas financier R. Allen Stanford was operating a huge Ponzi scheme. The Securities and Exchange Commission official hammered away at the case for years, until the agency finally brought action against Mr. Stanford in 2009. ... Ms. Preuitt brought the concerns to her bosses and later complained to officials in the agency’s Washington headquarters. In turn, Ms. Preuitt received a letter of reprimand. The agency later transferred her to a nonsupervisory position, which in essence was a demotion.--BEN PROTESS

When President Barack Obama took office, in 2009, he championed the cause of government transparency, and spoke admiringly of whistle-blowers, whom he described as “often the best source of information about waste, fraud, and abuse in government.” But the Obama Administration has pursued leak prosecutions with a surprising relentlessness.--Jane Mayer

... power is incredibly destructive. It’s a weird, pathological thing. I also think the intelligence community coöpted Obama, because he’s rather naïve about national security. He’s accepted the fear and secrecy. We’re in a scary space in this country.--Thomas Drake

We are witnessing the bipartisan normalization and legitimization of a national-surveillance state.--Jack Balkin, a liberal law professor at Yale

The program he talked to the Baltimore Sun about was a failure and wasted billions of dollars. It’s embarrassing to the N.S.A., but it’s not giving aid and comfort to the enemy.--Thomas Tamm, a Justice Department lawyer, revealed that he was one of the people who leaked to the Times

I think it’s outrageous. The Bush people have been let off. The telecom companies got immunity. The only people Obama has prosecuted are the whistle-blowers.--Mark Klein, the former A.T. & T. employee who exposed the telecom-company wiretaps

Democracy is the recurrent suspicion that more than half of the people are right more than half the time.--E.B. White

Suffrage coincided with immediate increases in state government
expenditures and revenue and more liberal voting patterns
for federal representatives, and these effects continued growing
over time as more women took advantage of the franchise. Contrary
to many recent suggestions, the gender gap is not something
that has arisen since the 1970s, and it helps explain why American
government started growing when it did.--John Lott and Lawrence Kenny

Kesselschlact means ‘caldron battle’ in German. That’s what the Nazis called battles of total annihilation, and that’s how I felt. Like a survivor of Kesselschlact.--Jim Cramer

Taken from the top, these sentiments [of "Why isn't Wall Street in jail?"] imply that the financial crisis was caused by fraud; that people who take big risks should be subject to a criminal investigation; that executives of large financial firms should be criminal suspects after a crash; that public revulsion indicates likely culpability; that it is inconceivable (to Madoff, anyway) that people could lose so much money absent a conspiracy; and that Wall Street bears collective guilt for which a large part of it should be incarcerated. These assumptions do violence to our system of justice and hinder our understanding of the crisis. The claim that it was "caused by financial fraud" is debatable, but the weight of the evidence is strongly against it. The financial crisis was accompanied by fraud, on the part of mortgage applicants as well as banks. It was caused, more nearly, by a speculative bubble in mortgages, in which bankers, applicants, investors, and regulators were all blind to risk. More broadly, the crash was the result of a tendency in our financial culture, especially after a period of buoyancy, to push leverage and risk-taking to the extreme. ... The mortgage crisis was a societal breakdown—a massive failure of the private market, Wall Street in particular. It wasn't, fundamentally, rooted in fraud. Enron was fraud. The bankers convicted in the savings and loan scandal who dealt sweetheart loans to friends were fraudulent. These people had their hands, willfully, in the till—and knew it. ... I wasn't a fan of Goldman's slickness in letting a short-seller design a collateralized debt obligation that Goldman marketed to clients, for which it was sanctioned by the Securities and Exchange Commission. However, its unsavory dealmaking should not obscure that in betting, correctly, against the housing market, it helped mitigate the crash. Had more firms done as Goldman and shorted mortgages, fewer unsound loans would have been issued. ... imprisonment is a punishment for criminality—not a sociological remedy for unfairness, incompetence, or outsize losses.--Roger Lowenstein

But we didn’t know what [our dad, Warren Buffett] did. In fact, when my sister filled out a form, I think in fourth or fifth grade, about what our parents did, she put “security analysis,” and it was assumed that what he did was check alarm systems. So to a kid it was like “what do all the numbers on the page mean? And what exactly is the New York Stock Exchange and buying and selling and all that?” So we really didn’t know.--Peter Buffett

The U.S. achieved 9% annual growth between 1800 and 1900, with 15 recessions, 4 depressions, and a civil war at halftime.--Bill Smead, contrasting the growth of China on CNBC.  More here.

... maybe there remains one last shiny, fat apple hanging right in front of our faces, one last endeavor that would bring us fast, costless, and easy growth. It is immigration reform. The United States can grow faster by stealing the rest of the world's smart people.--Annie Lowrey

Photo link here.

Quotes of the day

Now who would have been more astonished? Aristotle confronted with Martin Gardner’s calculator, or the Martin Gardner of 1975 confronted with my iPhone? I’m going to say it’s a close call.--Steve Landsburg

In a dynamic setting, …financial innovation always reduces the average variance in the long run because traders learn from past asset payoffs. A question emerges as to how new assets should be introduced to minimize their short run impact on the speculative variance. I show that staggering (or delaying) the introduction of new assets is not effective because it reduces traders’ learning simultaneously with their speculation. A viable alternative is to set temporary position limits (or taxes) on new assets.--Alp Simsek

Not many people want to vote for a candidate who says, “I really am not sure how to improve schools in our area, so I plan to pilot half a dozen ideas, and we’ll keep the one or two that we can prove to have worked.” But the other guy – the one who claims he does know – isn’t telling us the truth about uncertainty and failure. He’s just telling us what we want to hear.--Tim Harford

The woman who was apparently selectively hard to get, i.e. easy for you but hard for everyone else was the runaway winner for the men. Not only that but men thought the selectively hard to get woman would have all the advantages of the easy to get woman with none of the drawbacks of the hard to get woman. They thought she would be popular, warm and easygoing, but not demanding and difficult.--Jeremy Dean

You have to consult. Bad women's comedies are made by men who didn't consult enough women.--Paul Feig

Despite various limitations in data and tools, it should be noted that applying a scientific process is essential if one is to overcome the lack of rigor inherent in attribution claims that are all too often based on mere coincidental associations.--National Oceanic and Atmospheric Administration

Memo to suburban voucher opponents who 'support public education': you're already sending your kid to private school. You're just confused because your tuition fees came bundled with granite countertops and hardwood floors.--Megan McArdle

Circa 2080, imagine a world with two classes, the very rich and the fairly poor. The very rich pay thirty percent of their $1 million a year incomes on health care. The fairly poor earn $100,000 a year. How are we supposed to roughly equalize health care consumption? Does it make sense to give the fairly poor 3/4 of their real income ($300,000 out of a total of $100,000 cash plus $300,000 health care benefits) in the form of health care benefits? And could we enforce that with a mandate + subsidy? Probably not. Of course both health care costs and income inequality have been rising in this country. It is a critical question — and one which remains unanswered — at which margins these problems kick in decisively. Under “Medicaid for everybody plus private cash top-offs,” this same problem does not arise, but there is also less egalitarian redistribution. I would favor that blend over a mandate.--Tyler Cowen

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Quotes of the day

Much like Charlie Sheen, who seems to believe that all publicity is good publicity, recent market behavior suggests that we are in the part of the cycle where “all news is good news.” This was true for the broad market, which shrugged off the continued escalation of commodity prices, unrest in the Middle East, a catastrophe in Japan, tightening monetary policy outside the United States and a deceleration of domestic economic growth.--Greenlight Capital

Pawn shops are benefiting [from the surge in gold and silver prices]. Three publicly traded pawn shop companies, Cash America, EZCorp and FirstCash Financial, recently reported sharp increases in net income compared with a year earlier.--STEPHANIE CLIFFORD

I said to myself, what are the chances of [Mark Zuckerberg] becoming the next Bill Gates? So I didn't meet with him [even though my son-in-law, a former classmate, set up a meeting]. So now I have to work for a living.--David Rubenstein

If I thought delaying this [strike against Osama Bin Laden] could in fact produce better intelligence, that would be one thing, but because of the nature of the security at the compound, we’re probably at a point where we’ve got the best intelligence we can get.--Leon Panetta

Reserve currency status is a global public good that comes with a cost, and people often forget that cost. Just as importantly as a public good it requires a number of characteristics. At a minimum these include ample liquidity, central bank credibility, flexible domestic financial markets, minimal government or political intervention, and very deep and open domestic bond markets. With the exception perhaps of the euro, which may or may not emerge in the next decade on a more rational basis than it currently exists (albeit with more than one defection), no other currency has the necessary characteristics that will allow it plausibly to serve the needs of the global economy. And no other country, not even Europe, will be willing to pay the cost. If there is any chance that the dollar’s status declines in the future, it will require that Washington itself take the lead in forcing the world gradually to disengage from the dollar. Ironically, this is exactly what Washington should be doing. Conspiracy theory notwithstanding, claims that the reserve status of the dollar unfairly benefits the US are no longer true if they ever were. On the contrary, the global use of the dollar has become bad for the US economy, and because of the global imbalances it permits, bad for the world. ... We may seem to be straying from the topic of the role of the dollar, but basically Austin argues that under-consuming countries today are able to use the dollar today for the same reason that European countries used colonialism in the past – as a way of allowing them to export capital and import foreign demand.--Michael Pettis

While some authoritarian leaders greatly improve their economies, they are not the rule. For every example of a dictator like Pinochet and Chiang Kai Shek (in Taiwan) who produced fast economic growth, there is a Stalin or Idi Amin in Uganda with dismal economic policies. Similarly, not every democracy handles the economy well. India, for example, has been a vibrant democracy since its independence in 1947. This democracy during its first 40 years produced slow growth under a socialist government, and then India transited to much faster economic growth after the government shifted toward more market-friendly economic policies.--Gary Becker

Phelim McAleer, an Irish-born film-maker, who lives in Los Angeles, specializes in short polemics poking fun at bossy celebrities who preach green living while traveling in private jets and limousines (previous targets include James Cameron and Robert Redford). Now he’s turning his artistic howitzers upon the heir to our throne.
His film “Prince Charles, hypocrite” was released on YouTube earlier today. It highlights some of the inconsistencies involved in a very wealthy royal, who lives in several palaces, demanding that his subjects “live with less.” Watch it ... on YouTube here.--Guy Adams

A good insult requires far more skill than any compliment. “Cole Porter sang like a hinge” (Ethel Merman). “When she sings, deaf people refuse to watch her lips move” (Jed Larson). “Sting, where is thy death?” (Joe Queenan). The humourless say it’s easy to criticise. Not to that standard, it isn’t. [Simon] Cowell’s put-downs aren’t quite up there, but he hits the odd winner. “You sound like someone who should be singing on a cruise ship. Halfway through your song, I wished the ship was sinking.”--Michael Deacon

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Quotes of the day

A people thus united and resolved cannot shrink from any sacrifice which they may be called on to make, nor can there be a reasonable doubt of their final success, however long and severe may be the test of their determination to maintain their birthright of freedom and equality as a trust which it is their first duty to transmit undiminished to their posterity.--Jefferson Davis

I think the birther issue is good for the country. A modern republic needs some simple and unimportant issues to keep its citizens invested in the process. The important issues of our time are far too complicated for the average person, and I count myself in that group. We need a few simple issues so we can be part of the political conversation without hurting anything. The last thing our system of government needs is regular citizens getting involved in Middle East strategy, healthcare reform, the budget, climate change, or anything else that might matter. ... The birther issue is sort of like letting your toddler have a toy steering wheel in his car seat. He feels as if he's doing something useful and you don't have to rely on him to keep you out of the ravine. ... The birther issue is educational too, as are many of the so-called distracting issues. The birther distraction teaches us that a president has to be a natural-born citizen. Readers of this blog already knew that, but I'll bet a third of the country learned it recently with the birther issue. And Monica Lewinsky taught us a thing or two about impeachment.--Scott Adams

Ahead of the company's long-rumored IPO, a group of Facebook employees and investors tried to unload $1 billion in stock at a $90 billion valuation but couldn't find enough investor appetite. Instead, they had to lower their asking price to an implied $70 billion valuation -- the high end of where Facebook has traded on private exchanges that traffic in the shares.--GARETT SLOANE

Venture capital has failed to produce viable investor returns since 1998, produced negative 4.6 percent 10-year returns, performed below the consumer adoption rate of technology in the same period, is being outperformed by corporate innovation and capital, lost public trust because of bad past conversion from valuation to value and does not make a dent in the 80% greenfield of technology adoption. The asset class is only statistically perhaps rescued by the success of Facebook, which managed to grow despite VCs’ traditional playbook (not because of it), and a few others (Twitter, LinkedIn) that quickly jumped into Facebook’s valuation slipstream.--Georges van Hoegaerden

It is not clear why we enjoy certitude so much – certitude being the subjective experience of feeling certain ... there is a serious cost to excess certainty. Whenever an analyst or academic presents a number or a conclusion with too much precision, they reduce the demand for better evidence. Why run a pilot, set up a proper survey, if the answer is already known to three decimal places? The fact is that our political system simply does not take evidence seriously. If I had to suggest one single reason for that, it’s our love of certitude. Evidence is the way to reduce honest doubts. Stuffed on a fattening diet of certitude, who has room for doubt? And if we have no doubts, who needs evidence? .--Tim Harford

Portrait link here.

Quotes of the day

Little Franklin Delano Roosevelt sits primly on a stool, his white skirt spread smoothly over his lap, his hands clasping a hat trimmed with a marabou feather. Shoulder-length hair and patent leather party shoes complete the ensemble. We find the look unsettling today, yet social convention of 1884, when FDR was photographed at age 2 1/2, dictated that boys wore dresses until age 6 or 7, also the time of their first haircut. Franklin’s outfit was considered gender-neutral.--Jeanne Maglaty

What do you do when a cathedral of capitalism becomes antiquated? You turn [the NYSE] into New York's best party space.--DAVID K. RANDALL

To my Republican friends: take back your party. So that it doesn’t matter so much who wins the election ...--Nancy Pelosi

Apparently, the phrase "angry left" contains a redundancy.--Arnold Kling

If these reports are correct, the bill contains only about $11 billion in hard cuts. Basically, it looks as if the tea partiers may have gotten snookered by their own side.--Tyler Cowen

The best candidates for the GOP will be the anti-Obamas. That rules out Romney (too good-looking and too unwilling to attack his own health care reform in Massachusetts). That elevates Daniels and Christie. Both are dramatically less elegant and Ivy-League than the President and both have a track record for fiscal responsibility. It looks like Daniels will run. i think Christie will run if no one jumps out early. He will be “talked into” running.--Russ Roberts

Why haven’t our leaders been frank with us? Well, because they believe, not unreasonably, that the political costs of frankness are too high, and that they’re better off waiting for the other guys to put their cards on the table first. So against that backdrop, how would you describe a party leadership that decides to risk the backlash and be honest about the long-term implications of its own vision for the federal budget? Even if this honesty doesn’t produce a completely optimal policy proposal, I think you have to call that leadership … brave.--Ross Douthat

France's bureaucracy is very good at inventing new forms of taxes, and most of them are awful, but two of them are actually great: the value added tax and the wealth tax. And realizing this is incumbent on understanding the Econ 101 difference between a stock and a flow. In practice, in general, it's better to tax stocks than flows, because stocks are capital that should be deployed in the economy, and flows are almost always returns on investment (whether that investment is money or work). If you've been following you realize why the plan proposed by President Sarkozy, who was elected on a slogan of rewarding hard work, is stupid: the wealth tax is one of the few economically efficient taxes in France. The country already has high rates of corporate and personal income tax, and absurdly high payroll taxes. What's more, France is actually a really wealthy country. There are tons of really rich people in France. The reason it doesn't show is because everything in the tax code encourages that wealth to be used for rents instead of productive investment that would create growth, innovation and jobs.--Pascal-Emmanuel Gobry

Philosophers often use state-of-nature thought experiments to help illustrate how politics contributes to the common good... [W]e can also imagine an "inverse state of nature" - a political society that lacks private, nonpolitical activity. In the inverse state of nature, people try to gather together for public deliberation, voting, and law creation, but no one engages in private actions. In the inverse state of nature, life would also be nasty, poor, brutish, and short, because there would be no food, music, science, shelter, or art.--Jason Brennan