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

Quotes of the day

Your hands should not, together with the face,
be drawn with the brush
You reveal them in your work
And hide them in the painting.--François Malherbe

It is difficult to say what will happen for Google, but a good dose of self-doubt that they are somehow above it all is a good place to start. Oh yes, and Facebook, if you are listening, all of the above applies to you too.--Joshua Gans

In China, the year is traditionally divided into periods based on the moon’s orbit around the earth and the sun’s path across the sky. This lunisolar calendar is laden with myths and celebrated by rituals that allowed Chinese to mark time and make sense of their world. So too the modern political calendar in China. It takes shape around the mysterious workings of the Communist Party, which rotates its top leaders every decade at a Party Congress, a comet-like event that awes onlookers as a portent of change and renewal. The next congress is set to take place in the fall of 2012—the 18th occurrence in the party’s 91-year history—and is already being associated with unusual phenomena. The most spectacular was last week’s eclipse of Bo Xilai.--Ian Johnson

The CSS Virginia, a.k.a. the Merrimack, makes a splash

A couple of splashes, actually, 150 years ago today.

She meets the USS Monitor, tomorrow.

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.

...

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.

...

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.

...

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.

...

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.

...

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.

...

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

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."

...

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.

...

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.

...

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.

...

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.

...

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.

...

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.

Video of the day: Spouses arguing via Siri

here.  Warning:  colorful PG-13 language.

Via Joshua Gans.

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.

...

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.

...

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

...

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.

...

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.

...

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.

...

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.

Government program of the day: The Chevy Volt

is turning out to be a bit of a hazard.

I would expect nothing less from a product that is being subsidized by the taxpayer, at $7,000 a pop.

Quotes of the day

Will the “Occupy” movement develop into a significant political force? I am doubtful: the movement is already losing supporters in most places where it has been active. Cold weather will accelerate the decline. The movement is losing ground not because the issues it raises are unimportant, but rather because the great majority of Americans and those in other countries with Occupy groups do not sympathize with most of the people doing the occupying.
...
Although, on the whole, I believe that most members of the top 1% provide useful services to society, I share the concern of “occupiers” and Tea Party members about many of the bailouts. The rich bankers and others who took large risks should have taken much larger haircuts. I have also supported from the beginning of the recession higher capital requirements for banks, especially for the large “too big to fail banks” that will be bailed out if they get into financial difficulties.
...
Nevertheless, the overall earnings inequality has far greater relevance for the vast majority of occupiers and Tea Party supporters than do the earnings of men and women at the very top of the financial sector. The most effective way for the US to reduce overall inequality that will help the largest number of young persons is by finding ways to bring American high school and college graduation rates up to the levels achieved by the other nations, such as South Korea and some European nations, that have replace the US as worldwide leaders in education achievements.--Gary Becker

Why are liberals so desperately unhappy with the Obama presidency? There are any number of arguments about things Obama did wrong. Some of them are completely misplaced, like blaming Obama for compromises that senators forced him to make. Many of them demand Obama do something he can’t do, like Maddow’s urging the administration to pass an energy bill through a special process called budget reconciliation—a great-sounding idea except for the fact that it’s against the rules of the Senate. Others castigate Obama for doing something he did not actually do at all (i.e., Drew Westen’s attention-grabbing, anguished New York Times essay assailing Obama for signing a budget deal with cuts to Medicare, Social Security, and Medicaid that were not actually in the budget in question).
...

Liberals are dissatisfied with Obama because liberals, on the whole, are incapable of feeling satisfied with a Democratic president. They can be happy with the idea of a Democratic president—indeed, dancing-in-the-streets delirious—but not with the real thing. The various theories of disconsolate liberals all suffer from a failure to compare Obama with any plausible baseline. Instead they compare Obama with an imaginary president—either an imaginary Obama or a fantasy version of a past president.
...
the liberal failures of Obama and Clinton are but tiny potholes next to the vast gulch of failure that was the Carter presidency. Today, Carter is remembered as a president anchored in liberal values, a revision of history both conservatives and Carter himself are happy to leave uncorrected. But the truth is that Carter’s domestic agenda carried only small bits of liberalism, and those small bits (a consumer-protection agency, tax reform) met with total failure in the Democratic Congress.
...

Roosevelt did not run for office promising to boost deficit spending in order to stimulate the economy. He ran castigating Herbert Hoover for permitting high deficits, then immediately passed an austerity budget in his first year. Roosevelt did come around to Keynesian stimulus, but he never seemed to understand it, and in 1937 he reversed himself again by cutting spending, helping plunge the economy into a second depression eventually mitigated only by war spending.--Jonathan Chait

Neither the politics of polarization nor those of noblesse oblige on behalf of the fortunate will serve to protect the interests of the middle class in the post-industrial economy.--Lawrence Summers

The great thing about an experience like this is that you learn who your friends really are.--David Frum

I was happier when I didn’t know.--David Frum's wife

... what seems beyond argument is that the U.S. political system becomes more polarized and more dysfunctional every cycle, at greater and greater human cost. The next Republican president will surely find himself or herself at least as stymied by this dysfunction as President Obama, as will the people the political system supposedly serves, who must feel they have been subjected to a psychological experiment gone horribly wrong, pressing the red button in 2004 and getting a zap, pressing blue in 2008 for another zap, and now agonizing whether there is any choice that won’t zap them again in 2012. Yet in the interests of avoiding false evenhandedness, it must be admitted: The party with a stronger charge on its zapper right now, the party struggling with more self-­imposed obstacles to responsible governance, the party most in need of a course correction, is the Republican Party. Changing that party will be the fight of a political lifetime.--David Frum

In my capacity as an independent candidate for President of the United States, I feel it's my job to offer specific suggestions for getting people back to work. I don't know what those other candidates were doing today, but it probably involved sexual harassment, lobbying while calling it something else, dodging blame, being ineffective, worshipping the wrong god, and that sort of thing. I did most of those things today too, but I also came up with this job bunching idea, and that's not nothing.--Scott Adams

The article quotes Beane as saying that Lewis understood what he was doing within minutes: "You’re arbitraging the mispricing of baseball players". And I don't think that it can be put in fewer words: that's exactly what someone with a Wall Street background would make of it, and it's exactly right. Now to our own business. Can you think of an industry whose assets are mispriced more grievously, and more routinely, than drug research?
...
Think about it. All those preclinical programs that never quite work out. All those targets that don't turn out to be the right target when you get to Phase II. All those compounds that blow up in Phase III because of unexpected toxicity. By working on them, by putting time and effort and money into them, we're pricing them. And too much of the time, we're getting that price wrong, terribly wrong.
...
That's what struck me when I read Moneyball several years ago. The problem is, drug research is not baseball, circa 1985. We're already full of statisticians, computational wizards, and sharp-eyed people who are used to challenging the evidence and weighing the facts. And even with that, this is the state we're in. The history of drug research is one attempt after another to find some edge, some understanding, that can be used to correct that constant mispricing of our assets. What to do?--Derek Lowe

... we are at the dawn of “neuroeconomics.”--Robert Shiller

... the people who do not devote themselves to the words of God eventually lose them. The loss is catastrophic. The only adequate analogy is a desperate famine. It is easy to see how this judgment works out in history. For complex historical reasons, France turned on the Huguenots and persecuted them almost out of existence, so the Bible and the Reformation never took hold in France as it did in England. Sometimes the antipathy toward the Bible has arisen from drift, rather than from persecution. In many Western countries, the public sense of morality was until a few decades ago largely tied to the Ten Commandments. Nowadays very few even know what the Ten Commandments are. The result is not freedom and integrity, but a lilting scorn that flaunts its superiority over something no longer even understood, much less respected—and what shall the end of these things be?--Don Carson

Quotes of the day

Genuine courage presupposes fear that is overcome. If there is no fear at all, there can be no courage. Similarly, if there is no wrath, forbearance is no longer a virtue; it dissolves into some strange alchemy of niceness and moral indifference.--Don Carson

Being frank burns too many bridges.--Eric Falkenstein

If what such girls experience isn’t slavery, that word has no meaning. It’s time for a 21st-century abolitionist movement in the U.S. and around the world.--Nicholas Kristof

Every province in China is Greece.--Larry Lang, chair professor of Finance at the Chinese University of Hong Kong

We need reform that provides real transparency. Congress should be subject to the Freedom of Information Act like everyone else. We need more detailed financial disclosure reports, and members should submit reports much more often than once a year. All stock transactions above $5,000 should be disclosed within five days.
...
We need equality under the law. From now on, laws that apply to the private sector must apply to Congress, including whistleblower, conflict-of-interest and insider-trading laws. Trading on nonpublic government information should be illegal both for those who pass on the information and those who trade on it. (This should close the loophole of the blind trusts that aren't really blind because they're managed by family members or friends.)
...
No more sweetheart land deals with campaign contributors. No gifts of IPO shares. No trading of stocks related to committee assignments. No earmarks where the congressman receives a direct benefit. No accepting campaign contributions while Congress is in session. No lobbyists as family members, and no transitioning into a lobbying career after leaving office. No more revolving door, ever.
...
This call for real reform must transcend political parties. The grass-roots movements of the right and the left should embrace this. The tea party's mission has always been opposition to waste and crony capitalism, and the Occupy protesters must realize that Washington politicians have been "Occupying Wall Street" long before anyone pitched a tent in Zuccotti Park.--Sarah Palin

It’s hard to believe how much damage Bush did to the US economy in 8 short years.--Scott Sumner

But the way it’s structured here is, I’ll take responsibility for all the plays that are called. I have the final say on it. If I don’t want to run the play, then I can call it off – that’s my right as a head coach. Any of the bad ones, you can blame me for because ultimately I could change them if I wanted to.--Bill Belichick

On the budget, I propose a plan to cut every Federal government expense by 10% and increase every Federal tax by 10%. I'd call that the default plan, meaning I prefer a better plan, but I wouldn't expect anyone to come up with one. The advantage of this plan is that it's bad for every American. That's a little something I call "fair."--Scott Adams

As the deadline looms for the congressional super committee, there's seems to be a growing sense that tax revenue for the government is like income for the household. That's wrong. Raising taxes is nothing at all like earning income. Instead, it's a lot more like visiting the ATM. The government's debt is the American people's debt. If we pay down that debt through higher taxes, we will, for the most part, pay those taxes by drawing down our savings. That's no more "responsible'' than drawing down those savings to finance overconsumption within the household. If you buy a kayak you don't need and can't afford, you're unlikely to placate your spouse by saying "Don't worry, dear, I withdrew the money from our retirement account.'' If your government insists on maintaining social programs we don't need and can't afford, nobody should be placated by a congressional agreement to finance that program with money withdrawn from those same accounts.--Steve Landsburg

I remember learning, in one of the few West Wing episodes I watched, that Aaron Sorkin had awarded President Bartlett the Nobel Prize in economics. No doubt this sounded super-awesome to Sorkin, but if you've ever met a Nobel prizewinner, it's ludicrous. The talents required to win the Nobel prize in economics include things like incredibly single-minded focus on one idea at a time, a willingness to ignore the opinions of others, and a positive enjoyment of the vast amounts of time you will spend alone in your office, thinking. I understand why Sorkin thinks that these would be very admirable qualities for a president to have . . . but I doubt he'd actually hire this person as, say, a producer on one of his shows. The type of person who is good at the one is not good at the other--and being president probably looks slightly more like producing a television show than winning the Nobel Prize.--Megan McArdle

My only regret is not suggesting that it would be a “worthwhile Canadian initiative” for our northern neighbors to “test drive” the [NGDP targeting] policy before we tried it here in the much more important American economy.--Scott Sumner

You know how things end for Sonny Corleone — he ignores his consigliere, makes it personal and ends up gorging on a bowl of bullets parmigiana. His brother, Michael, assumes command and remains all-business for his first few years, slowly losing perspective and becoming more and more paranoid. He stops trusting his inner circle, grows apart from his family and murders his bumbling brother. Killing Fredo is strictly business for Michael, a warning that nobody should ever cross him. He can't see anything beyond making money and keeping power. He's dead inside. No different than Sonny, really. What does this have to do with the NBA lockout? The owners wanted to blow up their current model; the players gave them gas and matches. But why? I think the answer lies in that Godfather scene. The owners treated these negotiations as a natural extension of their business, only caring about their bottom line and nothing else. The players took the proceedings much more personally.--Bill Simmons

In short, grade inflation in the humanities has been contributing to college students moving away from science, technology, engineering, and math fields, as well as economics, for the last half century. It's time for the pendulum to start swinging back. A gentle starting point would be to making the distribution of grades by institution and by academic department (or for small departments, perhaps grouping a few departments together) publicly available, and perhaps even to add this information to student transcripts. If that answer isn't institutionally acceptable, I'm open to alternatives.--Timothy Taylor

I expect the medical profession to undertake an all-out effort to raise fear, uncertainty, and doubt about technology to replace the doctor, until eventually people realize that they have more fear, uncertainty, and doubt about doctors themselves.--Arnold Kling

A new experiment appears to provide further evidence that Einstein may have been wrong when he said nothing could go faster than the speed of light, a theory that underpins modern thinking on how the universe works. The new evidence, challenging a dogma of science that has held since Albert Einstein laid out his theory of relativity in 1905, appeared to confirm a startling finding that sub-atomic particles called neutrinos could travel fractions of a second faster. The new experiment at the Gran Sasso laboratory, using a neutrino beam from CERN in Switzerland, 720 km (450 miles) away, was held to check findings in September by a team of scientists which were greeted with some skepticism.--Kate Kelland

The American Farm Bureau Federation (AFBF) recently reported that Americans will pay more to feed 10 people for Thanksgiving dinner this year than since the mid-1980’s. The average turkey feast for 10 this year will cost $49.20 – that’s $5.73 more than it cost just last year. Shoppers at Walmart will pay 1/3 (31%) less for the same Thanksgiving groceries and will have an extra $15 in their wallet with this savings.--Walmart

Photo links here and here.

Quotes of the day

The larger point is that we don’t just eat to fill the void in our belly. Instead, we eat excessively to fill all sorts of empty spots, one of which is a chronic lack of status.--Jonah Lehrer

The conviction among OWS activists is that the rich have improved their lot by taking money from the not so rich — that wealth has been cruelly redistributed upward. What they overlook is that the real gains come from the creation of new wealth. Steve Jobs did exceptionally well for himself, but he made the broad mass of consumers, here and abroad, better off in the process. Same for Sam Walton. What Oprah Winfrey created made her rich, but without her, those creations wouldn't have existed to entertain and gratify her audience. Ten years ago, the richest person on Earth couldn't buy a device that does what the iPhone does. Today, anyone can get one free upon signing a two-year carrier contract. Entry-level cars are vastly better in amenities and reliability than your father's Cadillac decades ago. Lifesaving and life-changing medicines and therapies once unknown are now commonplace. Food costs a fraction of what it once did. TV viewers used to have three channels to choose from. Now they have hundreds.
...
The wealthy are far better off than they used to be. But their improvement has not come at the expense of those down the economic ladder. Economists Bruce D. Meyer of the University of Chicago and James X. Sullivan of the University of Notre Dame find that over the past three decades, both the poor and the middle class have made substantial material progress. "Median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009," they reported last month in a paper for the conservative American Enterprise Institute in Washington. Those in the bottom tenth of the income ladder enjoyed comparable gains.--Steve Chapman

Jobs, we learn, was a bully. “He had the uncanny capacity to know exactly what your weak point is, know what will make you feel small, to make you cringe,” a friend of his tells Isaacson. Jobs gets his girlfriend pregnant, and then denies that the child is his. He parks in handicapped spaces. He screams at subordinates. He cries like a small child when he does not get his way. He gets stopped for driving a hundred miles an hour, honks angrily at the officer for taking too long to write up the ticket, and then resumes his journey at a hundred miles an hour. He sits in a restaurant and sends his food back three times. He arrives at his hotel suite in New York for press interviews and decides, at 10 P.M., that the piano needs to be repositioned, the strawberries are inadequate, and the flowers are all wrong: he wanted calla lilies.
...
In the eulogies that followed Jobs’s death, last month, he was repeatedly referred to as a large-scale visionary and inventor. But Isaacson’s biography suggests that he was much more of a tweaker. He borrowed the characteristic features of the Macintosh—the mouse and the icons on the screen—from the engineers at Xerox PARC, after his famous visit there, in 1979. The first portable digital music players came out in 1996. Apple introduced the iPod, in 2001, because Jobs looked at the existing music players on the market and concluded that they “truly sucked.” Smart phones started coming out in the nineteen-nineties. Jobs introduced the iPhone in 2007, more than a decade later, because, Isaacson writes, “he had noticed something odd about the cell phones on the market: They all stank, just like portable music players used to.” The idea for the iPad came from an engineer at Microsoft, who was married to a friend of the Jobs family, and who invited Jobs to his fiftieth-birthday party.
...
Even within Apple, Jobs was known for taking credit for others’ ideas. Jonathan Ive, the designer behind the iMac, the iPod, and the iPhone, tells Isaacson, “He will go through a process of looking at my ideas and say, ‘That’s no good. That’s not very good. I like that one.’ And later I will be sitting in the audience and he will be talking about it as if it was his idea.” Jobs’s sensibility was editorial, not inventive. His gift lay in taking what was in front of him—the tablet with stylus—and ruthlessly refining it.
...
Jobs was someone who took other people’s ideas and changed them. But he did not like it when the same thing was done to him. In his mind, what he did was special.--Malcolm Gladwell

No, I still haven't forgotten Gladwell's ineptitude for the massive 'igon' typo when describing 'eigen' values. But he's a good writer.--Cav

We do not admit the [SEC] allegations. But if it’s any consolation, we don’t deny them.--Brad Karp, Citigroup attorney

Even rank-and-file members are getting fed up with their unions' political spending. So last spring, as part of a package of controversial union reforms, Wisconsin Gov. Scott Walker gave government workers the right to opt out of paying union dues.  Reformers have tried to encourage that right elsewhere, claiming that many union members aren't happy with how their dues get spent -- and that claim is bolstered by a recent poll. Taken over the summer by Harris Interactive, the poll found that 62 percent of Americans, and a remarkable 47 percent of respondents from union households, believe that union members don't get their dues' worth from their unions.  One reason, clearly, for the dissatisfaction is the unions' expensive investment in political campaigns. In the Harris poll, 60 percent of those in union households said that labor groups were too involved in politics; 72 percent of all Americans agreed.  These views suggest that many union members must really be unhappy about the staggering resources that unions pour into politics -- or, better put, Democratic politics. According to the Center for Responsive Politics, the dozen biggest unions have spent some $384 million on federal political campaigns alone over the last 20 years, and only 3 percent of that money has gone to Republicans. By contrast, about 40 percent of union members typically vote Republican.--Steven Malanga

... it became suddenly, vividly clear: democratic governments cannot do even obvious right things if the public will not tolerate it. Even dictators have interest groups whose support they must buy. This has come home to me forcefully several times over the last few years, but never more than now. The leaders of the eurozone have a dual mandate to keep the euro intact, and to not do the things which could keep the euro intact. They cannot fiscally integrate to the extent necessary because, as I wrote for the Daily the other day, the Greeks do not want to act like Germans, and the Germans do not want to share their credit rating with anyone who won't.--Megan McArdle

There is mounting capital flight, and multinationals are seeking to repatriate capital.  A confiscatory devaluation may be in the works.  Yes I do know all the good numbers they have put up in the last few years, but I also know Austro-Chinese-Soya business cycle theory!  It’s also the case that Argentina will send economists to jail for trying to calculate the correct rate of inflation.  In short, I am crying for Argentina.  File also under “Yet another reason not to take IS-LM models too seriously.”--Tyler Cowen

In all of American history I can think of only one example where punitive trade barriers against foreign countries were appropriate; Japan and Germany during WWII. Otherwise sanctions usually make problems worse, not better. In WWII we wanted sanctions to hurt their economies, but that shouldn’t be our policy in anything but the most dire scenario. ... The only even semi-respectable argument against China’s [capital account] surplus is the Keynesian paradox of thrift argument used by Krugman. What’s so comical about this situation is that the average “man on the street” China-basher would be totally perplexed by the claim that saving is bad. “You mean we are attacking the Chinese for being too thrifty, not following the foolhardy low-saving policies of our government?” Yup.--Scott Sumner

Western Civilisation is unlikely to go out of business any time soon, but the neoimperialist gang might well face redundancy. In that sense, [Niall] Ferguson’s metamorphoses in the last decade – from cheerleader, successively, of empire, Anglobalisation and Chimerica to exponent of collapse-theory and retailer of emollient tales about the glorious past – have highlighted broad political and cultural shifts more accurately than his writings. His next move shouldn’t be missed.--Pankaj Mishra

Quotes of the day

Right now the social networking sites occupy a similar position to CompuServe, Prodigy, or AOL in the mid 90's. At that time each company was trying to figure out how to become a mass-market gateway to the Internet. Looking back now, their early attempts look ridiculous and doomed to failure, for we have seen the Web, and we have tasted of the blogroll and the lolcat and found that they were good.  But at the time no one knew what it would feel like to have a big global network. We were all waiting for the Information Superhighway to arrive in our TV set, and meanwhile these big sites were trying to design an online experience from the ground up. Thank God we left ourselves the freedom to blunder into the series of fortuitous decisions that gave us the Web.  My hope is that whatever replaces Facebook and Google+ will look equally inevitable, and that our kids will think we were complete rubes for ever having thrown a sheep or clicked a +1 button.--maciej

... labor market opportunities for college grads have been eroding — except for the elite — in absolute terms since 1997-2000, well before the collapse in AD. If those same grads are highly willing to be geographically mobile, highly willing to consider actuarial training, and highly willing to take tougher courses and study where the jobs are (doesn’t have to be tech subjects, some of those are failing too), the unemployment response to a given AD shock will be much lower. But they aren’t, so it isn’t.--Tyler Cowen

Protesting is one thing, but those Harvard protestors who walked out of Greg Mankiw's class have to be some of the laziest protestors around.--David Henderson

The wealth gap between younger and older Americans has widened to its largest ever, exacerbated by the slow economic recovery that has hit young Americans disproportionately hard, a new study shows. With high youth unemployment and mounting student debt, the typical U.S. household headed by a person 65 years of age or older is 47 times wealthier than that of a household headed by someone under 35, according to a new Pew Research study. The median net worth of households headed by someone 65 years or older was $170,494, up 42 percent from 1984. Meanwhile, households headed by someone 35 or younger had a median net worth of $3,662, down 68 percent from that same year. In fact, 37 percent of the younger group had a net worth of zero or less, nearly double the percentage from 1984. But the percentage of the older group with less than zero net worth has remained unchanged in 27 years, at 8 percent.--Tim Mak

American households in the top income quintile have almost five times more family members working on average than the lowest quintile, and individuals in higher-income households are far more likely than lower-income households to be well-educated, married, and working full-time in their prime earning years. In contrast, individuals in low-income households are far more likely to be less-educated, working part-time, either very young or very old, and living in single-parent households.--Mark Perry

... combining salaries, fringe benefits and job security, we have calculated that public school teachers receive around 52% more in average compensation than they could earn in the private sector.--ANDREW G. BIGGS And JASON RICHWINE

Well there is no, you know, Grand Wizard in the party right now who can really force the [Herman Cain] issue.--David Gregory

If Jerry Sandusky starts directing films, what he did will be considered ok.--#OCCUPYHOLLYWOOD

A problem with modern politics is that as only dissembling narcissists can succeed, politicians at all levels become such pathetic losers. ... These aspiring politicians are afraid of saying anything that people might actually disagree with, but then if everyone agrees with you, you really aren't saying anything interesting. As George Orwell noted in his classic Politics and the English Language, the great enemy of clear language is insincerity. It's a dominant strategy. Remember Barack Obama's response to Rick Warren's question as to what he thinks about abortion: 'that's above my pay grade.' This was a stupid answer (he has an opinion and it would affect policy), but it probably worked out better for him than articulating his true beliefs. In a democracy the winner has to pander to a rabble--though there are better and worse among them. This is a major reason why I prefer a smaller government, because at least businessmen pursues their own advantage more openly and honestly, whereas government workers pursue their self interest hypocritically and under false pretenses. Petty school board nominees are now aping our betters, and bringing the level of discourse down to a point where everyone is afraid of a Kinsley gaffe.--Eric Falkenstein

A gaffe is when a politician tells the truth.--Michael Kinsley

The judiciary is no replacement for a competent Congress.--Stephen Green

[Clint] Eastwood long ago gave up celebrating men of violence: the mysterious, annihilating Westerners and the vigilantes who think that they alone know how to mete out justice. But Clean Edgar [Hoover], working with an efficient state apparatus behind him, is a lot more dangerous than Dirty Harry. As the filmmakers tell it, the roots of Hoover’s manias lie in his nature. The movie bears a thematic resemblance to Bernardo Bertolucci’s “The Conformist” (1970), in which a repressed homosexual (Jean-Louis Trintignant) in the nineteen-thirties, longing for “normality,” joins the Italian Fascist Party and operates as an amoral bullyboy. “J. Edgar” is the story of how a similarly repressed personality might operate in a democracy. The answer is privately, by accumulating secrets and blackmailing anyone who is even remotely a threat to his standing; and publicly, by making himself and his outfit pop-culture icons and then bending the government to his whim. The frame for the movie is the Director, in old age, dictating the story of his career to a series of young men from the Bureau. Black and Eastwood use this plot device ironically: Hoover is an exceptionally unreliable narrator, and the way Eastwood stages the actual events suggests that Hoover is pumping up his own role and stretching the truth.  ... Hoover, we realize, is obsessed with keeping America safe because he feels unsafe himself. Internal subversion is a personal, not just a political, threat to him. No stranger man—not even Nixon—has ever been at the center of an American epic.--David Denby 

Now let’s discuss how “we” think about the surpluses for Norway and China. (Of course by “we” I mean us white people):
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1. Norway: What’s not to like? Finally there’s a country that isn’t blowing all its oil wealth like those more “backward countries.” By backward, I mean cultures that don’t have that enviable Nordic patience, whose governments don’t have the ability to defer instant gratification. The Norwegians are smart; they are socking away hundreds of billions of dollars in a sovereign wealth fund, which they will be able to draw on when the money runs out. What an inspiring model for the world!
...
2. China: You just can’t trust those inscrutable Chinese. Their government doesn’t play fair, they are socking away hundreds of billions in international reserves. Look at those huge trade surpluses (no less than 4% of GDP!! [v.s 12.9% for Norway])--Scott Sumner

Wherever I go, I speak Uncle Ho
and think Uncle Sam.--Engineer in Miss Saigon

That chick was harassing me. With her hotness.--Ta-Nehisi Coates

The story [Daniel Kahneman] tells has two characters—he names them “System 1” and “System 2”—that stand in for our two different mental operations. System 1 (fast thinking) is the mental state in which you probably drive a car or buy groceries. It relies heavily on intuition and is amazingly capable of misleading and also of being misled. The slow-thinking System 2 is the mental state that understands how System 1 might be misled and steps in to try to prevent it from happening. The most important quality of System 2 is that it is lazy; the most important quality of System 1 is that it can’t be turned off. We pass through this life on the receiving end of a steady signal of partially reliable information that we only occasionally, and under duress, evaluate thoroughly. Through these two characters the author describes the mistakes your mind is prone to make and then explores the reasons for its errors.--Michael Lewis

I think with the talent [the Philadelphia Eagles] have on their football team, they can be one of the most dangerous teams in the league. When they put it together, the thing I was quoted saying is, 'You can't buy championships.' And what I meant by that is, you've got to build chemistry. You can have all the talent in the world, if you're not out there playing as one, if you're just 11 individuals, you're not gonna beat anybody in this league. And I think right now that's some of the issues that they're having. Nobody can question how talented they are, nobody can question how good of a coach Andy Reid is. Everybody knows that. You need more than talent in this league, because every team has talent.--Justin Tuck

Wag More, Bark Less.--a bumper sticker

Photo link here.

Quotes of the day

The first Adam was the death-bringer, the second Adam is the death-cheater, and now here are you and me, each of us faced every moment with the choice about which we will be, who we will be. I sped down a country road with these life-bringing, death-cheating boys of mine, and I understood, maybe for the first time ever, that my cup overflows in the valley of the shadow. It’s not an empty promise. Look into your own cup and see. Taste, and see.--Tony Woodlief

America's future depends on others following the example Bill Niskanen set for us.--Gene Healy

I'd like the people teaching my kids to be good enough that they could get a job at the company I work for, making a hundred thousand dollars a year. Why should they work at a school for thirty-five to forty thousand dollars if they could get a job here at a hundred thousand dollars a year? Is that an intelligence test? The problem there of course is the unions. The unions are the worst thing that ever happened to education because it's not a meritocracy. It turns into a bureaucracy, which is exactly what has happened. The teachers can't teach and administrators run the place and nobody can be fired. It's terrible.--Steve Jobs

There are no "rules," and even if there were, you don't get an extra pat on the head for playing by them. Your "Debt Jubilee" will not be a party, unless your idea of a wild time is to eliminate consumer credit as we know it. And if you have any intention of building up a political case for bailing out your bad decisions, you might start with taking even one percent responsibility for them.--Matt Welch

The modern Malthusians were looking very foolish in the 1990s: the price of skilled labour was rising inexorably and the price of most commodities, notably oil, was low. But in recent years there’s been a distinct rise in these prices. Perhaps this is a temporary thing: the rising prices could spur energy-saving innovations. Or perhaps Malthus’s ghost will come back to haunt us, even if not this Halloween. It’s hard to say: population growth is a funny thing. Malthus himself had three children – but no grandchildren.--Tim Harford

Instinctive dislike of markets extends far beyond long-haired dropouts in St Paul’s Churchyard or Zuccotti Park. An intellectual class tends to feel that, if acquiescence in the unpleasantness of market economics is the price to be paid for the comforts of modern life, one must hold one’s nose. The apparent practical success of capitalism is matched only by the failure of its public relations. ... The inventors of social networking sites resemble the occupiers of St Paul’s Churchyard tents more than the occupants of boardrooms. The besuited Winkelvoss twins, lobbying and litigating for a share of Mark Zuckerberg’s business, embody the deformed view of market economics which confuses business interests with free enterprise. Perhaps the “something nicer” which should replace capitalism is a more nuanced – and more accurate – account of capitalism itself.--John Kay

Both the left and the right have been consistently peddling the wrong prescriptions for our economy. Most liberals are focused on the need for additional fiscal stimulus, and dead-set against any premature moves toward what they consider “austerity.” Spending cuts, they say, would weaken the economy. Most conservatives are equally insistent that spending cuts need to begin now—and claim that by reducing expectations of future tax increases these cuts would help the economy. At the same time, they consider monetary policy dangerously inflationary and want the Federal Reserve to tighten it, or at least not loosen it any further. Both sides are mistaken: the right on monetary policy, the left on budget policy, both on the relationship between them. What the economy needs now, contrary to the right, is a permanent monetary expansion. If the Federal Reserve delivers one, the economy, contrary to the left, won’t need new federal spending—and won’t suffer from spending cuts.--David Beckworth and Ramesh Ponnuru

Rivaled only by the ‘get tough on Netanyahu’ fiasco and the Gunwalker scandal, the ‘Green Jobs’ meltdown is the most comprehensive and conspicuous policy failure of the Obama administration to date. What three months ago was widely hailed by the establishment press as a sign of the futurism and forward-thinking of the Obama Administration now, post-Solyndra, is increasingly seen for the bone headed blunder it was. ... A lot of money was spent; precious few jobs were created and the failure damages the Obama brand in three distinct. First, poor jobs growth is the root of all the administration’s other woes. Second, the story undercuts the idea that the stimulus was a good idea and supports the narrative that special interests hijacked it for a porkfest. Third and most deeply, the story reinforces the belief that government planning and industrial policy don’t work. The administration needs to come to grips with this policy failure; when something isn’t working it is time to change course.--Walter Russell Mead

I found that the House Members are routinely less intelligent than the Senate and they were much more kneejerk to their constituencies -- which I found initially quite offensive but came to understand later to be a really good idea. Maybe that's what the framers wanted. They weren't supposed to think too much, they were supposed to represent. The Senators are supposed to think a little more. The Bill passed the House with the largest favorable majority of any tax bill in the history of this country. What happened was it was in during Carter's lame duck session and Bob Dole who was then Speaker of the House killed it. He would not bring it to the floor and we ran out of time. We would have had to have started the process over in the next year and I gave up. However, fortunately something unique happened. California thought this was such a good idea they came to us and said "You don't have to do a thing. We're going to pass a bill that says 'Since you operate in the State of California and pay California Tax, we're going to pass this bill that says that if the federal bill doesn't pass, then you get the tax break in California'. You can do it in California, which is ten thousand schools". So we did. We gave away ten thousand computers in the State of California. We got a whole bunch of the software companies to give away software. We trained teachers for free and monitored this thing over the next few years. It was phenomenal. One of my great experiences and one of my biggest regrets was that really tried to do this on a national level and got so close. I don't think Bob Dole even knew what he was doing but he really unfortunately screwed up here.--Steve Jobs

Memo to Fed: Your job isn't to change your forecast, it's to change your policy in such a way that you don't need to change your forecast.--Scott Sumner

The idea that the space is suffused with unobservable dark matter fixes this problem, but it's a fudge, because it 'appears' only as a solution to this problem. Perhaps gravitation doesn't scale at that dimension.--Eric Falkenstein

Quotes of the day

One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.--Thomas Sowell

... Steven Pinker’s The Better Angels of Our Nature: Why Violence Has Declined is a doorstop of a book about the progress of non-violence and humanitarianism in Western civilization whose index contains no references to Francis of Assisi, Bartolome De Las Casas, or William Wilberforce, and whose author betrays not even the slightest interest in the various sympathetic and provocative accounts of religion’s role in the development of the modern West and modern world.--Ross Douthat

We must hit the QB hard and often. QB's are over-rated, over-paid, pompous bastards and must be punished. Great pass coverage is a direct result of a great pass rush, and a great pass rush is simply a relentless desire to get to the QB.--Buddy Ryan

Steven Jobs, the late co-founder of Apple Computer, and Steven Chu, the current secretary of Energy, are both examples of super-achievers. Jobs created an innovative company that is currently among the most valuable in the world as measured by stock market capitalization. Chu earned a Nobel Prize in physics and sees himself as a leader in the battle against global warming. At this point, it seems likely that Jobs will be remembered as having contributed significantly to human progress. Chu's historical legacy is more problematic. Assuming that Chu's efforts at promoting solar power and electric automobiles are no more successful than the Carter-era effort to build a breeder reactor, they will end in dismal failure. Is there a lesson to be learned from this about where society should want its super-achievers to perform?
...
The U.S. Constitution was designed to thwart super-achievers in the public sector. However, by the middle of the 20th century our culture venerated super-achievers in office, and we no longer look to the Constitution to impose the restraints it once seemed to enumerate. Unless our culture changes, Constitutional restraints on power will not be resurrected. The longing for super-achievers in government is dangerous and misguided. The power that has accumulated in Washington, state capitals, and local governmental units is more than can be exercised responsibly. We have set ourselves up for disappointment and failure. What if, instead of doling out loan guarantees as secretary of Energy, Steven Chu were to set up a private venture capital fund to invest in the sort of projects he thinks are worthwhile? As a private venture capitalist, Chu might not be able to exert as much leverage on the industry as he can in his role as dispenser of taxpayer-funded guarantees. Power in the private sector is more dispersed. Most of the people who exercise it do not have credentials as impressive as Chu's Nobel Prize in physics. Still, the United States would be better off if super-achievers like Chu felt driven to pursue their goals in the private sector rather than through the institution of government. I would like to see a culture where super-achievers look to the (non-banking) private sector as the arena for attempting to realize their visions. Government should be an arena for quiet competence, not for those who aspire to great achievement.--Arnold Kling

The price black people pay for being free thinkers in this country is a very, very cruel one. Ask Clarence Thomas.--John Nolte

Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show. The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.
...
Last year Washington also had the most lawyers per capita in the U.S. compared with the 50 states, with one for every 12 city residents, according to figures from the American Bar Association and the Census Bureau. In New York State the figure was one out of every 123 residents, while in California the ratio was one in 243. Associate attorneys in the Washington area who have worked between one and eight years had a median salary of $186,250, compared with the national median for their peers of $123,521, according to a survey by the Washington-based National Association for Law Placement.  Lobbyists play a prominent role in the Washington economy. In 2010 there were 12,964 registered lobbyists, with most working in or around the nation’s capital, according to figures compiled by the Center for Responsive Politics, a Washington- based research group that tracks political spending. Spending on lobbying efforts reached a record $3.51 billion last year, up from $3.49 billion in 2009.
--Frank Bass and Timothy R. Homan

A New England Journal of Medicine article this morning really gets at this tension, between the good of job creation and bad of growing health costs. It suggests that a key driver behind our health-care job growth is a decline in productivity. We’re adding more workers, the article argues, because, in the aggregate, each health-care worker is doing less. And that’s the opposite of every other industry sector that’s growing right now.--Sarah Kliff

There may be a trade-off between practicality and conveying status. Apprenticeships offer the former, but internships offer the latter.--Arnold Kling

How Does Your Kindergarten Classroom Affect Your Earnings? is one of the most impressive empirical papers ever written. The data collection is amazing. The empirical analysis is clear and careful. Above all else, the authors' methods are transparent. Lesser authors would have buried the conflicting findings. Chetty et al. took the high road. Unfortunately, the world is so eager for stories about the power of early education that their paper is being badly misinterpreted. Chetty et al. don't confirm romantic hopes about teachers that change young minds forever. Despite their pro-education tone, they expose these hopes as wishful thinking.--Bryan Caplan