Susan Patton beats Erin Callan

I'm hoping my girls beat both.

Erin Callan helped perpetuate (or, perhaps, 'perpetrate') the financial crisis, as the Lehman CFO who reported that her firm was healthy when it was, in fact, dead bank walking.  But her bigger regret seems to be that her job came before her relationships and herself, according to her own words:

Sometimes young women tell me they admire what I’ve done. As they see it, I worked hard for 20 years and can now spend the next 20 focused on other things. But that is not balance. I do not wish that for anyone. Even at the best times in my career, I was never deluded into thinking I had achieved any sort of rational allocation between my life at work and my life outside.

On the other hand, Susan Patton is drawing the ire of feminists and the politically correct police with her letter on how women do need men, and need to compete hard for the good ones.  It looks like the internets have crashed The Daily Princetonian after publishing her letter.  A cached version can be found here.  From Patton's piece:

Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you. 

Of course, once you graduate, you will meet men who are your intellectual equal — just not that many of them. And, you could choose to marry a man who has other things to recommend him besides a soaring intellect. But ultimately, it will frustrate you to be with a man who just isn’t as smart as you.

Here is another truth that you know, but nobody is talking about. As freshman women, you have four classes of men to choose from. Every year, you lose the men in the senior class, and you become older than the class of incoming freshman men. So, by the time you are a senior, you basically have only the men in your own class to choose from, and frankly, they now have four classes of women to choose from. Maybe you should have been a little nicer to these guys when you were freshmen? 

If I had daughters, this is what I would be telling them.

Mrs. Cav heartily agrees with Patton, and has saved this for our daughters to ponder when they are closer to college age.

The Bible and science agree:  making healthy babies who will make more healthy babies is a prime directive that cannot be denied, no matter how many protestors march on Washington.

UPDATE:
All the newspapers, all the tongues of to-day will of course at first defame what is noble; but you who hold not of to-day, not of the times, but of the Everlasting, are to stand for it: and the highest compliment, man ever receives from heaven, is the sending to him its disguised and discredited angels.--Ralph Waldo Emerson

UPDATE:  Ed Glaeser weighs in, affirmatively.  Anecdotally, this blogger met his wife at Cornell, where we were both undergraduates.

Quotes of the day

Economics evolved as a more moral and more egalitarian approach to policy than prevailed in its surrounding milieu. Let’s cherish and extend that heritage. The real contributions of economics to human welfare might turn out to be very different from what most people — even most economists — expect. --Tyler Cowen

In the longer run, the solution to the economic plight of high school dropouts and other low skilled persons is, as I have argued in previous blog posts, to ease the obstacles to boys and girls from poorer backgrounds that prevent them from finishing high school and getting additional training after high school, such as learning to drive trucks or work with computers. In the shorter run, it would be desirable to replace the welfare benefits that discourages many low skilled individuals from working with an expanded earned income tax credit that does the opposite and encourages them to work.--Gary Becker

In Ms. Sandberg's ideal world, "half our institutions are run by women and half our homes are run by men." Until this utopia comes to pass, it might be wise to take another look at "society." Society is, after all, a fancy word for other people. And what is society actually telling women these days? It is telling them that they ought to go out and earn a string of degrees qualifying them for hard-charging careers that the majority of them eventually discover that they don't actually want. As a result, many of them quietly cut back their hours and do what they actually want to do and do very well: make homes for their families. Sheryl Sandberg isn't one of them, and more power to her. But she is likely to find that nagging men and women to change their natures is a more daunting task than anything she does at her day job.--Charlotte Allen

Because pursuit of the truth is often irrelevant in evolutionary competition, humans have an evolved tendency to hold self-favoring priors and self-deceive about the existence of these priors in ourselves, even though we frequently observe them in others.--Eli Dourado

The minimum wage is far from the most harmful regulation on the books.  Why then do I make such a big deal about it?  Because it is a symbol of larger evils.
...
From the standpoint of public policy, the minimum wage is a symbol of the view that "feel-good" policies are viable solutions to social ills: "Workers aren't paid enough?  Pass a law so employers have to pay them more.  Problem solved."  From the standpoint of social science, the minimum wage is a symbol of the myopic view that you can become an expert on X by reading nothing but the leading research that explicitly addresses X: "Does the minimum wage reduce employment?  Read the top papers on the minimum wage.  Problem solved."
...
We need to get rid of the minimum wage.  But that's only a first step.  Our ultimate goal should be to get rid of the errors that the minimum wage has come to represent.--Bryan Caplan

Quotes of the day

I can’t believe I’ve turned into a typical old man. I can’t believe it. I was young just minutes ago.--Maurice Sendak

Much cyclical unemployment involves a waste of time and productivity, but the social cost is especially severe for the long-term unemployed. Unfortunately, the past several years has seen a dramatic rise in this group, not only in absolute numbers, but also as a fraction of all unemployed workers. This social cost of long-term unemployment has received insufficient attention from the media and during this presidential campaign.--Gary Becker

Yes, Obama had a big handicap in the lackluster economy.  Luckily for him, Mitt Romney had made a stupendous pile of money in the very industry that people blame for that lackluster economy.  On that stupendous pile, he paid a tax rate which struck people as absurdly low.  He pushed every button for folks who feel broke and terrified while the very rich sail along just fine. Obama could hardly have had a better opponent if he had ordered him from central casting.  My mother, aka The Swing Voter, delivered an extensive rant on the subject of Mitt Romney's taxes this morning.  I suspect that a more modestly wealthy Republican governor would have taken her vote.--Megan McArdle

In a political system such as China’s, those below imitate those above, and political struggles at the higher levels are replicated at the lower levels in an expanded and even more ruthless form.--Yang Jisheng

Quotes of the day

Too much schooling is a bad thing.--Eric Falkenstein

Some claim that what sets us apart from other animals is our use of tools. Au contraire. Even sea otters -- a species that has neither reached the moon nor invented the beer cozy -- use stones to crack open the shells of their prey. No, what makes us unique is our staggering imagination and creativity, mostly when it comes to ostensibly obeying laws while utterly circumventing their spirit. We are homo loopholeus.--Patrick Hruby

... the startup job creation rate has collapsed during the last three years and actually fallen lower in 2011 than ever before. I’ll ask: Why did the IRS start cracking down on companies that hire American contractors in 2009?--Tim Kane

Take out your sociological goggles and look around

In our society, smart, hard-working, conformist kids go to old-fashioned brick-and-mortar colleges. Their elders expect them to do so. Their peers expect them to do so. They feel like losers in their own eyes if they don't go.

The normativity of conventional education isn't a passing phase. College attendance is a central tenet of our society's secular religion. A student who scoffs at all these expectations probably has a serious problem with authority. Would-be employers treat him accordingly.

That's Bryan Caplan. And this is a doozy:

Middle class jobs will no longer require college only after middle class kids can no longer afford college.

Just got fooled again: unemployment actually RISING

Tyler Durden figured it out:

as chart 2 below shows, people are not retiring as the popular propaganda goes: in fact labor participation in those aged 55 and over has been soaring as more and more old people have to work overtime, forget retiring), and you get 159.4 million: that is what the real labor force should be. The BLS reported one? 154.4 million: a tiny 5 million difference. Then add these people who the BLS is purposefully ignoring yet who most certainly are in dire need of labor and/or a job to the 12.758 million reported unemployed by the BLS and you get 17.776 million in real unemployed workers. What does this mean? That using just the BLS denominator in calculating the unemployed rate of 154.4 million, the real unemployment rate actually rose in January to 11.5%. Compare that with the BLS reported decline from 8.5% to 8.3%. It also means that the spread between the reported and implied unemployment rate just soared to a fresh 30 year high of 3.2%. And that is how with a calculator and just one minute of math, one strips away countless hours of BLS propaganda.

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein

Swamped

with work for the next week.

I hope to get back into a better rhythm soon.

Quotes of the day

What makes it so hard is not that you had it bad, but that you’re that pissed that so many others had it good.--Melvin Udall, in As Good As It Gets

FDR, it seems, was apparently dead wrong about the financial purpose of his Social Security system. He advocated it as an insurance system, in which the benefits paid to an individual were linked to the contributions paid by that individual. But today we are told that the funding side of Social Security is a “tax”—the “payroll tax.” We are also reminded that it’s a regressive tax—a larger burden to the middle class and poor than the rich—but we are not reminded that it is a “contribution” to a system that will eventually pay out benefits in proportion to each individual’s contribution.--Steve Conover

Resentment is a powerful, long-lasting emotion that usually is self-serving and dishonest (I have never heard a criminal complain that his defense lawyer is upper-class, as he often is), as well as useless. Resentment is undoubtedly part of everyone’s psychology, at least potentially, and few of us have never heeded its siren song. A population’s general level of resentment, however, is not a natural phenomenon that one can analyze in purely mechanical terms, as if it increased geometrically with the Gini coefficient. Britain itself has been far more unequal in the past without widespread riots’ breaking out, so it is clear that we cannot understand people’s behavior without referring to the meanings that they attach to things.--Theodore Dalrymple

Photo links here and here.

Quotes of the day

Simply saying that you take allegations with misconduct seriously does not mean that you actually take the allegations of misconduct seriously. In other words, their response came only about three weeks after the presentation and there was an enormous amount of material that if somebody was going to take the material comment seriously, they would have to review. It doesn't seem to make a lot of sense to me -- or even be possible -- to think that somebody who took our concerns seriously would even be able to review it in three weeks. As a result, it kind of feels like a whitewash to me. The question at this point, since the company wasn't able to give any substantive answers to the most serious of the questions that were raised -- they instead deferred to a general statement from the audit committee -- the question now becomes whether the audit committee itself is part of the problem as opposed to being a part of the solution.--David Einhorn

Perhaps it is not ideal that so many of us go on to Wall Street, but targeting individuals looking at career options in this way is hardly the appropriate remedy. Many students who enter these fields are not the scions of banking families but rather hard-working students looking for a challenging job that lets them experience a newfound financial prosperity. To exhort students to consider their contribution to society when choosing a career is one thing but to target those who want to work for Goldman Sachs misses the point; whatever negative impact the company has on our economy is due to structural issues rather than questions of individual morality. Deterring a couple dozen Harvard students from working at Goldman will not change income inequality nor will it create a more equitable society. Goldman will just hire the next people in line. Occupy’s actions continue to erode whatever student support it gained on the heels of a successful janitorial contract. Pitching a simplistic conception of the financial crisis and targeting fellow students is not the way to have a successful movement. Occupy ought to refrain from such ill-conceived protests in the future.--Harvard Crimson

This will sound insane but I think this is Bill Belichick's best coaching job ever. Better than the Super Bowl years. Better than when Tom Brady was lost for the season and the Patriots still won 11 games. Best he's ever done.--Mike Freeman

I know there are people who think only first-ballot Hall of Famers should be Hall of Famers -- only the slam dunk choices, only the ones you just KNOW are Hall of Famers the way you know that the sky is blue, that every exotic meat tastes "a little bit like chicken" and that Parks and Recreation is on NBC on Thursday nights. But Yogi Berra wasn't a first-ballot Hall of Famer. Juan Marichal wasn't a first-ballot Hall of Famer. Larry Doby wasn't voted in at all by the writers, nor was Johnny Mize or Arky Vaughan, who was probably the greatest shortstop between Wagner and Ripken. I don't want a Hall of Fame without them. I'd rather have a Hall of Fame WITH Yogi Berra and Juan Marichal and Larry Doby than one WITHOUT Jim Rice and Bruce Sutter. That's not close for me. I am a Big Hall guy.

Photo links here, here and here.

Quotes of the day

Public-sector unions and other interest groups wrap their causes in the rhetoric of equality. Often, what they’re really protecting are privileges that raise the cost of public services to everyone else — including citizens who earn a lot less than civil servants. Yes, Wall Street’s bonuses are stratospheric. But the New York Times recently reported that Medicaid was paying nine executives $500,000 or more per year to operate nonprofit homes for the mentally disabled. Okun’s message is that equality is a public good, whose benefits — social cohesion, political stability and the like — are worth paying for. The trick is not to overpay.--Charles Lane

I spent hours upon hours toiling away at a register, scanning, bagging, and dealing with questionable clientele. These were all expected parts of the job, and I was okay with it. What I didn’t expect to be part of my job at Wal-Mart was to witness massive amounts of welfare fraud and abuse.

...

I understand that sometimes, people are destitute. They need help, and they accept help from the state in order to feed their families. This is fine. It happens. I’m not against temporary aid helping those who truly need it. What I saw at Wal-Mart, however, was not temporary aid. I witnessed generations of families all relying on the state to buy food and other items. I literally witnessed small children asking their mothers if they could borrow their EBT cards. I once had a man show me his welfare card for an ID to buy alcohol. The man was from Massachusetts. Governor Michael Dukakis’ signature was on his welfare card. Dukakis’ last gubernatorial term ended in January of 1991. I was born in June of 1991. The man had been on welfare my entire life. That’s not how welfare was intended, but sadly, it is what it has become.

...

Other things witnessed while working as a cashier included people ignoring me on their iPhones while the state paid for their food. (For those of you keeping score at home, an iPhone is at least $200, and requires a data package of at least $25 a month. If a person can spend $25+ a month so they can watch YouTube 24/7, I don’t see why they can’t spend that money on food.)--Christine Rousselle

At 25 I made the naïve mistake of getting an MFA in Creative Writing at a private college in New York City.

... 

I hadn’t done any research on schools with funding or really given it much thought at all. I thought when I graduated I’d just sell my novel and pay my student loans with the book advance. Needless to say that didn’t happen and when I graduated in 2005, I had $37,000 to pay back. Not only that but the MFA program was super unsupportive—both the faculty and students. Despite doing well in the program and really trying to connect with people I finished feeling no better off than when I’d started. A few years later when applying to residencies and then PHD programs I couldn’t even get letters of recommendation from most of my former teachers.

... 

I felt like the school had taken advantage of my naiveté by charging all this money for essentially a useless degree.

... 

I started to realize the least common denominator in all of my problems was me and my thinking. I needed to stop feeling sorry for myself for all the things life wasn’t giving me and start being grateful for what I had. As for my job I was clearly in this dog walking profession for a reason and maybe instead of thinking it was beneath me, I’d just try to do the best at it I could. I finally grew up and accepted life on life’s terms and decided to go out there and do the best I could with what I had. This is when things really started to change for me.

...

When I’d have fear about money I’d pay more on my loans, or give an employee a raise, or contribute a little to a charity. I call this daring God to financially take care of me—faith in action. I wanted proof that I’d be taken care of. Initially, I’d do it and sort of cover my eyes afterwards waiting for the ceiling to fall in. It never did. Inevitably, I’d get a new client or business would pick up with training or pet sitting.--Susie DeFord

Occupy, are you listening to this?--Cav

Christopher Hitchens and I were friends for 40 years, plus another five when we were enemies. He took ideas so seriously that if he disagreed with you on a matter that he deemed important, he’d literally throw you in a ditch. It was 1972, the height of our mutual virility. He and I went to a pub to celebrate his most recent intellectual victory over the establishment press. I intimated that sometimes women could be funny on purpose. Even back then, the thought enraged him. Hitchens threw a drink in my face, pressed a lit cigarette into my neck, and hit me over the head with a barstool. The next thing I knew, it was two days later and I was lying hogtied and naked beside the M5. Hitch had already severely damaged my reputation in a vicious essay in the Guardian. But that’s how he operated, and that’s why we loved him.--Neal Pollack

Washington state’s creation of the ferry monopoly is what governments have increasingly done since courts misconstrued the Constitution in a way that licenses governments to dispense particular economic favors by restricting general economic liberty. It is now routine for government to have transactions with rent-seekers — private interests who want public power used to confer advantages on them, or disadvantages on competitors.--George Will

Even though the average congressperson might have more information than the average taxpayer...the cumulative information held by 150 million taxpayers far exceeds the cumulative information held by 538 congresspeople. When it comes to the efficient allocation of public goods...we need to consider sums...not averages. It's interesting to consider though just how many average taxpayers it would take to equal the amount of information held by the average congressperson.--Xerographica

In a market -- one of your beloved markets -- an entrepreneur who presents the same product over and over, deriding customers for not buying it, would be the real fool. You'd laugh at such a fellow and tell him he deserves what he gets -- bankruptcy. Yet, you never view your political program that way, do you?--David Brin

Behind Door #1 are people of extraordinary ability: scientists, artists, educators, business people and athletes. Behind Door #2 stand a random assortment of people. Which door should the United States open? In 2010, the United States more often chose Door #2, setting aside about 40,000 visas for people of extraordinary ability and 55,000 for people randomly chosen by lottery. It's just one small example of our bizarre U.S. policy toward high-skill immigrants.--Alex Tabarrok

We talk about the right to free speech, the right to bear arms, the right to assembly. The right to rise doesn't seem like something we should have to protect. But we do. We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.

...

That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing. People understand this. Freedom of speech, for example, means that we put up with a lot of verbal and visual garbage in order to make sure that individuals have the right to say what needs to be said, even when it is inconvenient or unpopular. We forgive the sacrifices of free speech because we value its blessings. But when it comes to economic freedom, we are less forgiving of the cycles of growth and loss, of trial and error, and of failure and success that are part of the realities of the marketplace and life itself.--Jeb Bush

Evaluate ideas by their consequences (consequentialism)
Be aware that your ideas may be wrong and may fail (fallibilism)
Don’t be hypercritical (anti-skepticism)
Try out, debate, and evaluate alternatives (experimentalism).--Elmar Wolfstetter

Quotes of the day

There was no point to continue to support an institution [SUNY] that the state was backing away from. Inexpensive access to mediocrity is not doing anyone such a favor.--Jim Simons

No child was ever born without having been conceived.--Filipino

For all of [Jerry] Jones' Hall of Fame accomplishments, his inability to replace Jimmy Johnson remains his greatest flaw. Since Barry Switzer's tenure ended in 1997, a run that included a championship won with Johnson's players, the Cowboys have won only a single playoff game.--Mike Freeman

[Phil] Jackson's NBA impact has been massive, but his ongoing influence will be muted. It appears that he will not be remembered as the NBA coach who ran the Triangle best; in all likelihood, he will be remembered as the only NBA coach who ran it at all. If the Triangle truly dies, it dies with him.--Chuck Klosterman

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought. The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.--Reuters

... very vague.--Steven Cohen, on insider trading rules

Conspiracy theories abound with Bernanke, and I’m sure somebody somewhere really thinks that Ben Bernanke intentionally put the U.S. on a path to the Weimar-style hyperinflation that is coming any day now just to save a hundred bucks a month on his mortgage payments, but…I’m with her that it’s an amusing coincidence.

...

If you like a slightly different flavor of conspiracy, though, you might ask: why wasn’t Bernanke refinancing in, say, July or August? Sure, maybe he was busy with the whole stewardship of the economy and/or after-dinner Kindle reading. Or maybe he knew that the Fed was going to move to lower long-term rates and so abstained from trading based on that. Maybe he was taking advantage of his insider knowledge to make a personal profit, or at least avoid a loss.

...

Or not, whatever, what a stupid thing to think. But I thought of it again when I read Mr. Steven A. Cohen’s cogent argument that insider trading rules are somewhat more ambiguous than the proper form of address for him.--Matt Levine

If Sarbanes-Oxley did not deter MF Global, did it deter anyone? Or is this a case of a law which obtained compliance (at great cost in terms of scarce executives' time) from honest firms, while doing nothing to deter dishonest ones?--Arnold Kling

So [Donald Trump] was more upset at the Chinese government for giving American consumers a low price than at OPEC for charging Americans too high a price.--David Henderson

Two politicians — President Obama and former New Jersey Gov. Jon Corzine — made pronouncements last week about financial failures. One of them was hiding something, or just didn't understand much about the job that he was supposed to do. The other one was Jon Corzine.

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Obama, too, may be clueless rather than disingenuous. In his Kansas speech last Tuesday, Obama had this to say about the Dodd-Frank financial-regulation law: "Now, unless you're a financial institution whose business model is built on breaking the law, cheating consumers and making risky bets that could damage the entire economy, you should have nothing to fear from these new rules."

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To the contrary, Americans have plenty to fear. Dodd-Frank took the fatal errors that American politicians and regulators made in their stance toward the financial industry in the years leading up to 2008 — and wrote them all down as a model.

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Dodd-Frank's biggest problem is that it treats big, complicated financial firms differently from how it treats littler, simpler firms.--Nicole Gelinas

So why did 6.3 million jobs disappear between September of 2008 and June of 2009?--Russ Roberts

Liberals often point out that public employment has been declining in 2010 and 2011, partly offsetting job growth in the private sector. They bemoan budget cuts that lead to shrinking headcounts. But then they — including President Obama — defend a public-sector collective-bargaining regime that takes non-layoff savings options off the table. If liberals really want state and local governments to be able to maintain their headcounts, they should push to end collective bargaining for public employees, not to strengthen it.--Josh Barro

Graduate from high school, get married before you have children, work at any kind of job, even one that starts out paying the minimum wage. Fewer than 10 percent of families that follow his blueprint live in poverty, while 79 percent of those who don't follow the three-step plan end up poor. There is no redistribution scheme imaginable close to this in reducing poverty.--Eric Falkenstein

We were in New York this weekend, and we took an architectural tour of some recent skyscrapers. The tour guide said that the way to get rich is to be a zoning lawyer. He also said that a lot of zoning issues end up being resolved politically, that is by developers buying off politicians. The result is to make real estate in New York a field for crony capitalism. And it is not surprising that any attempt by anyone to try genuine capitalism is likely to run afoul of the law.--Arnold Kling

"Protesters" named Time Magazine Persons of the Year; SEAL Team 6 not available for comment--Iowahawk

Photo links here, here, here and here.

Would love to get Paul Krugman and his favorite politicians response to this

Via Russ Roberts.

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.

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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

Stille Nacht, heilige Nacht,
Alles schläft; einsam wacht--Joseph Mohr

In the beginning God disclosed himself, and that self-disclosure was with God, and that self-disclosure was God.--Don Carson of John 1:1

If you believe, then unbelievable things can sometimes be possible.--Tim Tebow

Tebow. TEE-bow. Verb. To defeat an opponent while overcoming a major impediment. Ex.: Despite having a 102-degree fever, Lucy managed to Tebow her competition for the Miss America pageant through her great determination.--Peter King

Corn grits, cocoa, condensed milk, white bread and sugar. This was America's menu for the starving millions in Soviet Russia during the 1921-23 famine – one of the greatest human disasters in Europe since the Black Death. The famine relief was spearheaded by Herbert Hoover, whose biographers credited him with saving more lives than any person who has ever lived.--CYNTHIA HAVEN

... to the extent you measure poverty as a relative concept, you ensure that no public policy can eliminate what you call poverty.--Arnold Kling

So much for Obama's endlessly repeated promise that if you like the health insurance you have, you can keep it.--David Henderson

We have 37 Christmas trees here at the White House--37! That's a lot, right? Yes, that's a lot of trees. And we also have a 400-pound White House gingerbread house.--Michelle Obama

There is surely no such gulf between Marx and Keynes as there was between Marx and Marshall or Wicksell. Both the Marxist doctrine and its non-Marxist counterpart are well expressed by the self-explanatory phrase that we shall use: the theory of vanishing investment opportunity.--Joseph Schumpeter

North Korea has warned South Korea of "unexpected consequences" if it lights up a Christmas tree-shaped tower near their tense border.--BBC News

Many [New York Times reporters] them seem to have a congenital inability, or, at least, unwillingness, to distinguish between libertarians and conservatives. The differences are not small.--David Henderson

Everybody was laughing because when I signed my tax returns this year I had to get completely wasted.--Lady Gaga

Liberals are inclined to see progressive policies as the solution to family breakdown. Conservatives are inclined to see progressive policies as the cause of family breakdown. I think that the reaction of libertarians is to squirm with discomfort. You think that the liberals are in a bad position intellectually, but you are reluctant to affiliate with conservatives on an issue where they are so. . .umm. . .conservative.--Arnold Kling

Undergraduate tuition at New York University is around $41,000, but parents can be assured their bright young things are still getting The People’s Education, reports the student newspaper The Washington Square News. NYU plans to offer not one, but two classes on the burgeoning social movement known as Occupy Wall Street, so that the 1 percent may study the 99 at both the undergraduate and graduate levels.--Adrianne Jeffries

... the current price of a college degree is not just the balance of four years’ tuition; one must also consider the cost, to students and employers, of the ambiguity hanging over what the degree actually means.

...

One root of the problem is the fact that the college degree is issued by the same institution that is in charge of setting, and enforcing, the standards of that credential, says [Salman] Khan, who holds four degrees himself. This is tantamount to investment banks rating their own securities, he says. Meanwhile, the accrediting agencies that are in charge of making sure those “ratings” are legitimate do not currently focus on what students coming out of those institutions measurably know.--Steve Kolowich

I heard this morning that the non-euro members who did go along [with the new rules giving the EU greater power] did so mostly because they hope to join the euro. Talk about the triumph of hope over experience! This is like supporting the death penalty because you're hoping to end up on death row.--Megan McArdle

What “Anglo-Saxon economists” are doing is confusing their own ideology with reality. Economists tend to look at economic problems as involving incentives. Align incentives properly, and problems are easily solved. The tricky part is all in the figuring out how to get incentives properly aligned.

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This turns a blind eye, however, to the role of ideological commitment. The strong commitment on the part of European central bankers to austerity may make the incentives irrelevant. All the incentives in the world might not matter because at some level the central bankers believe that the necessity for expansionary monetary policy is incommensurable with their other ideas about how the world works.

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To put it differently, the monetary experts in Europe may just be too ignorant of the peril they are in thanks to their world view. We cannot count on Draghi and others suddenly taking a more rational approach to monetary policy. They can remain irrational longer than Europe can remain solvent.--John Carney

Over all the notion that the path to safety for banks is to turn them into a service business seems misguided, coming from a place of consumer-finance rhetoric rather than serious thinking about the purposes of a financial industry. The point of a bank is not to reduce credit card fees and clearly disclose mortgage terms, but to provide credit. And the idea that “focusing on the underlying economics of a transaction” can distinguish between a loan and a bond – or a residential mortgage and an RMBS – severely undersells the ingenuity of the financial sector.

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Bair is probably right that the distinction between “prop trading” and useful activity drawn by the Volcker Rule does not prevent banks from doing all manner of risky things. It wasn’t really intended to: “prop trading” sounded sort of nasty, and people made money doing it, and we’d had a financial crisis, and a futile and stupid gesture was required, so presto, Volcker Rule. But that’s because clearly drawing that line is really hard, and replacing the line drawn by the Volcker Rule – in one sentence (“no prop trading”) or 300 pages – with another arbitrary one-sentence definition is equally unlikely to work.--Matt Levine

Players of an online video game called Foldit have helped researchers discover the structure of an protein-cutting enzyme produced by an AIDS-like virus found in monkeys. Scientists have struggled with the problem for a decade, but the gamers helped crack it in just three weeks.--Jacob Aron

... the bottom line is the bottom line, and the best way to get your boss to appreciate you more is to help him make more money for the firm.--Eric Falkenstein

In whatever it is that we try to do, grow trees, cure the ill, distribute food, keep the lights on or build houses, we would always prefer to do this in whatever manner it is that uses the least resources.

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We don't say that using 5 tonnes of copper to wire a house is better than using 500 kg to do the same job. Well, we don't say it is better just because we're using more copper that is. So why would we say that having a retail sector that employed more rather than fewer people would be a good idea?

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Quite, we shouldn't, for the claim is a claim that we should be using more of a scarce resource, labor, to get a job done, the distribution of consumer items. We should no more want to use more labor here than we should use more copper in wiring a house.--Tim Worstall

Image links here, here, here and here.

Chart of the day: Taylor Rule back in positive regime

Source here.

A definition:
A guideline for interest rate manipulation. It was introduced by Stanford economist John Taylor in order to set and adjust prudent rates that will stabilize the economy in the short-term and still maintain long-term growth. This rule is based on 3 factors:

1) Actual versus targeted inflation levels
2) Actual employment versus full employment levels
3) The appropriate short-term interest rate consistent with full employment.

Investopedia explains Taylors Rule
Taylor's rule suggests that the Fed increases interest rates in times of high inflation, or when employment is above the full employment levels, and decreases interest rates in the opposite situations. This method of controlling interest rates has been fairly consistent with interest policy decisions, even though the Fed does not explicitly subscribe to the rule.

Quotes of the day

We knew toil and hardship and hunger and thirst, and we saw men die violent deaths as they worked among the horses and the cattle, or fought in evil feuds with one another, but we felt the beat of hardy life in our veins, and ours was the glory of work and the joy of living.--Theodore Roosevelt

95% of individual traders lose money over ANY 10-year period.--Joe Fahmy

I am the 5%.--Cav

Majority of the money management industry believes through better study of the facts, the investor can beat the markets. Wisdom of Crowds disputes this generally held notion. The edge does not lie in superior information/higher intelligence alone. The game is won or lost elsewhere. Just ask Tebow’s critics.--Vedant Mimani

This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.—Western Union internal memo, 1876.

... the ranks of police officers have fallen by less than 1% after rising by 9% since 2000 alone. That, and the fact that America is a far safer place today than 10 or 20 years ago, suggests that Vice President Biden's claim that "the result [of police layoffs] has been—and it's not unique—murder rates are up, robberies are up, rapes are up," is simply, as the Washington Post observed, "absurd."

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It's important to keep the long rise in local government employment in mind amid the debate over sending more federal aid to cities and states. Steadily increasing municipal-government payrolls, combined with sharply higher employment costs—including rich pension benefits and soaring health-care outlays—have made many local budgets unsustainable. The National Governors Association recognized as much last year when it issued a report predicting a long period of fiscal "austerity" that local governments must solve in part by better controlling personnel costs.

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That almost certainly means that more layoffs are coming. But hyperbolic talk aside, local governments are well-staffed by historical standards and have the troops to do the job at hand.--Steven Malanga

We can agree at the injustice of transferring money from moderate-income pensioners to wealthy bondholders. But I think the even more important question is what makes the average Joe better off. And it's not clear to me that "stiffing the creditors" is the right answer.

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For starters, some of those creditors--maybe a lot of those creditors, depending on the country--are insurance companies and pension funds that serve the aforementioned Average Joes. But leave that aside. Europe is not, at least as I understand it, making the creditors whole because of their abiding love for foreign holders of European sovereign debt. They're stepping in and guaranteeing this debt in order to prevent a run on their banks and their bond markets.

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Runs on financial markets, as far as I can tell, do not righteously limit their damage to rich jerks who didn't need the money anyway. In fact, the people who suffer the worst from a rapid contraction of the credit markets are the poor. They're the ones who actually end up hungry and on the street when companies start failing and they can't get jobs.--Megan McArdle

To backtrack a couple thousand years, the general assumption regarding the fall of Rome is that the contemporary leadership was characterized by the same kind of ignorant as POTUS. The historical record, however, clearly displays that the intelligentsia of the time was well aware of Rome’s failings, they just couldn’t figure out a way to fix them. Pointedly, the corruption of the Senate and political control by wealthy elite paved the way for the dissolution of democracy and the onset of empire. They were not ignorant, contrary to popular belief, just overrun by socioeconomic trends too powerful to harness.

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Returning to modernity, it is clear from McArdle’s post that Netflix CEO Reed Hastings was, with the spin-off strategy, attempting to address very real structural issues within his firm. The plan clearly ended up as an online Bay of Pigs, but the drivers behind it are completely explicable with a modicum of research. I would argue that the behavior of politicians is similarly intelligible, with electoral money-raising, pandering to constituents and poll-watching replacing rising digital streaming rights as major motivational culprits.

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Labeling corporate or political celebrities “idiots” is to some extent to self-identify as part of the problem. Getting rid of these “idiots” will solve nothing, except to provide new vessels for sneering, self-congratulatory scorn. Focusing on the forces that makes these people appear to be morons, and widely publicizing these drivers to the point where they enter the general consciousness, actually provides an avenue for progress.--Interloper

Local McDonald's employees tell SF Weekly the company has devised a solution that appears to comply with San Francisco's "Healthy Meal Incentive Ordinance" that could actually make the company more money -- and necessitate toy-happy youngsters to buy more Happy Meals.--Joe Eskenazi

Photo links here and here.

Quotes of the day

Ironically, the topic of [my Harvard economics] lecture that the protesters chose to boycott was economic inequality, including a discussion of recent trends and their causes.

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like most economists, I don’t view the study of economics as laden with ideology. Most of us agree with Keynes, who said: “The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions.”

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That is not to say that economists understand everything. The recent financial crisis, economic downturn and meager recovery are vivid reminders that we still have much to learn. Widening economic inequality is a real and troubling phenomenon, albeit one without an obvious explanation or easy solution. A prerequisite for being a good economist is an ample dose of humility.

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My fervent hope is that any students who are still protesting the class will return — and that, while recognizing our limitations, they will learn from us what they can. A few might choose to become economic researchers themselves. Their contributions will surely be welcome. They might even improve the next generation of textbooks.--Greg Mankiw

"Veritas Christo et Ecclesiae" which translated from Latin means "Truth for Christ and the Church."--Harvard motto, adopted in 1692

If there’s any strong ideological undercurrent in Mankiw’s teaching, I would say that it’s Nerdism: the belief that people should listen to, and learn from, nerds…. Because believe me—and I say this with genuine respect and affection—Mankiw is a nerd’s nerd.--Connel Fullenkamp

Down-on-her-luck protester Tracy Postert spent 15 days washing sidewalks and making sandwiches at Zuccotti Park — then landed a dream job at a Financial District investment firm thanks to a high-powered passer-by who offered her work.--CYNTHIA R. FAGEN

I'm in the sort of sustainability space around kind of bringing synergistic value-add to other people's work around this kind of space.--Dan Palotta's Valley Girl 2.0

You should meet this guy with the SIO. He's sort of this kind of social entrepreneur thinking outside of the box in the sustainability space and working on these ideas around sort of web-based social media, and he's in a round two capital raise in the VP space with the people at SVNP.--Dan Palotta, again

It was fifeteen years ago today that Fed Chairman Alan Greenspan gave his famous "irrational exurberance" speech, suggesting that U.S. equities were overvalued.

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Between then and now, on an annualized basis,
the return on the U.S. stock market has been 5.55 percent.
the return on the U.S. bond market has been 5.98 percent.
Score that as one point for Alan.--Greg Mankiw

America looks like Mexico of the 70’s – 90’s. The last election cycle brought us the biggest economic crisis in 70 years. The next election will be no different. Dozens of landmines have been planted. They are timed to go off in 2013. Some may be fixed, others kicked further down the road. However the odds of the country addressing all of the things that have been programmed to explode is, in my opinion, close to zero. One or more of these things is going to trip us up. There are too many big issues to confront. When history looks at this period it will point to the incredible mismanagement of the economy that has taken place. A crisis is being programmed. It will go off like clockwork; it is now set on autopilot. I blame the partisan politics in D.C. for setting the country up for a big fall. But the reality is that the politicians are deeply divided because the voters are equally divided.--Bruce Krasting

Why are men less willing to work with a woman who attempts to negotiate?--John Carney

1) Does imprisonment reduce crime? Yes.
2) Do many crimes cause considerable harm and hardships to victims? Yes.
3) Does America imprison too many people?  In light of my answers to 1) and 2) you might expect my answer to this question to be “no”, but it is a strong “yes”.--Gary Becker

Hang up some stained glass windows. Where? I don’t know. I’m not in charge of logistics. My job is awesome ideas. And nothing says old school like a 3,000 pound stained glass window.--Jon Acuff

Image links here, here, here and here.

Quotes of the day

My more liberal friends argue, based on Keynesian principles, that we need dovish fiscal policy as well. They often argue for short-run fiscal expansion coupled with long-run fiscal contraction. The problem is that fiscal policymakers cannot bind their future selves. It is hard to make commitments to future fiscal contraction credible, especially as short-run actions expand the budget deficit.

...

My more conservative friends argue, based on monetarist principles, that a dovish monetary policy risks future inflation. In my view, however, there are bigger risks than inflation just now. They include prolonged high unemployment and meager growth.--Greg Mankiw

People talk about Main Street vs Wall Street. It should be Main Street vs the Beltway.--David Friedman

Professors are terrible at evaluation. Their method of judging student work is very simple: How close is it to what I would have done? The better you can imitate the professor, no matter what the class, the higher your grade.--Seth Roberts

In short, education becomes little but a vast public subsidy for private ambition. ... The result is a spiral of credential inflation; for as each level of education in turn gradually floods with a crowd of ambitious consumers, individuals have to keep seeking ever higher levels of credentials in order to move a step ahead of the pack. In such a system nobody wins. Consumers have to spend increasing amounts of time and money to gain additional credentials, since the swelling number of credential holders keeps lowering the value of credentials at any given level. Taxpayers find an increasing share of scarce fiscal resources going to support an educational chase with little public benefit. Employers keep raising the entry-level education requirements for particular jobs, but they still find that they have to provide extensive training before employees can carry out their work productively. At all levels, this is an enormously wasteful system.--David Labaree

Today Lipitor, the world's best selling drug and Pfizer's single most profitable product, loses patent protection and goes generic. If Lipitor (generic name atorvastatin) holds true to form for other generic transitions, Pfizer can expect to lose much of its market share and the price of atorvastatin will eventually plummet by as much as 80%. But while everyone is celebrating the "birth" of yet another cheap generic from an expensive blockbuster, it would be good for policymakers and the press to pause and reflect on where generic drugs come from.

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The stork doesn't bring them to your local pharmacy. They are often the products of years or even decades of enormously expensive and painstaking research by innovative (and yes, profit-driven) companies.

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What is the proper response to Lipitor going generic? Thank God for blockbuster drugs.

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Because without those drugs we wouldn't have the tremendous health gains from statins and other widely used drugs to treat stroke and hypertension - or the cheap generics that the health care system gains once those drugs lose patent protection.--Paul Howard

A corporate CEO's pay is determined by how well he or she manages two entities: the company; and the board. If you manage your board well, you can manage your company poorly and still make a lot of money. Conversely, I thought that Leland Brendsel managed Freddie Mac pretty well, but several years after I left he got ousted by the board in an accounting "scandal" that consisted of holding down accounting earnings to more closely reflect economic earnings. His successor, Richard Syron, managed the board well, but he was a disaster for the company--and for the whole financial system.--Arnold Kling

... I see [Adam Smith's] two preeminent works amounting to a unified theory, a blueprint for a more stable and sustainable version of capitalism; a conscious capitalism. The Wealth of Nations presupposed actors in the capitalist system operating on the moral framework he laid out in the Theory of Moral Sentiments. The free market has no conscience of its own: it is made up of billions of people transacting. Though Smith asserts that each of these people are guided by their self interest, he presupposes that each of the actors in the marketplace are guided by some internal morality and an awareness of one's place within the broader context of his community — locally and globally.

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The current version of capitalism is not the one envisioned by Smith at all. He was seeking to create a system defined by efficient allocation of resources driven by self-interest, but guided by self-restraint. This is conscious capitalism.

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The current version of capitalism's guidance from self-interest in the corporate world is evidenced in the legal duty to maximize shareholder value, which opens directors up to a lawsuit from their shareholders if they make a decision that fails to make the highest possible profit for their shareholders. Thus, the duty to maximize shareholder value handcuffs directors that want to make decisions that seek to create benefit for people and planet as well as financial returns.
There is debate whether this duty exists, but it is such a dominant perception among directors that it is the practical reality. In order for corporations to be free from the shackles of maximizing shareholder value, the fiduciary duties must be broadened.--Kyle Westaway

Westaway's thoughts on Adam Smith really inspired me, but I was sorely disappointed when he put his hope on legislating forward. Let's look at the track record, Kyle!--Cav

Earlier this year, some very smart people in Washington even suggested that states, which cannot place themselves in bankruptcy, be allowed to do so to solve their pension and employee compensation problems. One argument repeated over and over by advocates of this option was that a bankruptcy judge would void onerous union contracts and pension obligations. In Greek theater, critics once called this the "deus ex machina" ending, where a god in a chariot descended on the stage and untangled all of the complications of a plot that the playwright couldn't resolve in any other way.

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But there is no deus in municipal bankruptcy law; instead, parties involved must do exactly what they have failed to otherwise do, which is to sit down and negotiate their way to a settlement with the judge serving as a referee. And elected officials who somehow think that bankruptcy will give them political cover when they have to cut services and raise taxes are just kidding themselves. Taxpayers rarely blame the consequences of a municipal bankruptcy on the judge.--Steven Malanga

If you wouldn't object to China sending products to the United States for free, then on what basis would you object to currency “manipulation” that allows you to purchase undervalued Chinese imports at a huge discount and great bargain?--Mark Perry

If you're married, and you have a wife, and you really love your wife, is it good enough to only say to your wife 'I love her' the day you get married? Or should you tell her every single day when you wake up and every opportunity?--Tim Tebow

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