Quotes of the day

I've never been 100% sure whether patents help or hinder technological progress. When I was a kid I thought they helped. I thought they protected inventors from having their ideas stolen by big companies. Maybe that was truer in the past, when more things were physical. But regardless of whether patents are in general a good thing, there do seem to be bad ways of using them. And since bad uses of patents seem to be increasing, there is an increasing call for patent reform. The problem with patent reform is that it has to go through the government. That tends to be slow. But recently I realized we can also attack the problem downstream. As well as pinching off the stream of patents at the point where they're issued, we may in some cases be able to pinch it off at the point where they're used. One way of using patents that clearly does not encourage innovation is when established companies with bad products use patents to suppress small competitors with good products. This is the type of abuse we may be able to decrease without having to go through the government. The way to do it is to get the companies that are above pulling this sort of trick to pledge publicly not to. Then the ones that won't make such a pledge will be very conspicuous. Potential employees won't want to work for them. And investors, too, will be able to see that they're the sort of company that competes by litigation rather than by making good products.--Paul Graham

The Buffett investment just might turn out to erode, not increase, confidence. And not only for Bank of America, but for the banking sector as a whole.--Jesse Eisinger

To show her support for American workers, President Obama's labor secretary, Hilda Solis, has junked the standard black limo and purchased a new Chevrolet Equinox to ride around Washington in. The problem: the crossover SUV is built and assembled in Canada from parts also made in Canada.--Paul Bedard

Let's hope that labor economist Alan Krueger, as he assumes his new position as Chief Economist to the President, remembers that demand curves really do slope downward, despite his original flawed findings based on faulty survey data.--Mark Perry

If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap," he says. "That's our true indebtedness.--Laurence Kolitkoff

Bias matters not because liberals deliberately slant their stories, but because they are much more likely to interrogate the facts that contradict their ideological beliefs, than the ones that support them.  When they come across an uncomfortable fact, they'll go out of their way to figure out why it isn't really true.  When they come across a fact that confirms what they believe, they'll be more likely to accept it at face value.  I'm not claiming that liberals do this more than conservatives (I think that being human, they're equally prone to this phenomenon)--only that in the media, liberal bias is mostly what matters, because the media is overwhelmingly somewhere to the left of the American center.  Even if you have a conservative reporter prone to insufficient interrogation of convenient facts, those same facts are going to set off alarm bells with his editors, who are quite likely to question the whole story.  This is why I think liberal media bias is worrisome--not because it's a vast conspiracy, but because it creates a giant store of pseudofacts that "everyone knows", like all those ludicrous statistics about abortion and domestic violence that used to appear everywhere.  And new pseudofacts are being created, or resurrected, all the time.  Longtime readers of the blog have endured my jeremiads against Republicans who say that cutting tax rates raises revenue.  A few weeks ago I was flabbergasted to find out that a very smart left-of-center blogger I admire seemed to think it was common knowledge that there's really no evidence that tax cuts provide stimulus . . . a belief that I then find out seems to be common among some of the left commentariat.  This is not at all what any mainstream economist I'm aware of believes (the debate is over the relative size of secondary and tertiary effects of various kinds of stimulus, not whether tax cuts are stimulative at all.)  But somehow this belief had become common . . . presumably because in the milieu where it was transmitted, no one was disposed to question something that fit so neatly with what they already believed.  Add in a few hundred repeitions from people you like, and voila, "Everyone knows . . . "--Megan McArdle

Everything here [in Afghanistan] was difficult, and the longer we remained the more army officials from air conditioned lairs on high pronounced an increasingly complex series of edicts, lest someone had to explain the actions of a unit actually in contact with the enemy. Winning in the traditional sense, any one could see was not the goal. The months here, had resolved the entire project into the madness of so-called “nation building.” Trouble was there was no nation to build. There never really had been. ... With absolute clarity I see the awful meaning of war. The sand is bright red. Discarded crimson stained bandages fly away in the wind and we hold no illusions about what has happened here. Governments and chains of command are pale compared with these events. Philosophical discourse is of no consequence. It is a confusing moment of sadness and urgency.--Michael Woodard

Quotes of the day

... something that nobody can demonstrate is taken as a norm, and any deviation from that norm is somebody's fault!--Thomas Sowell

In a move of stunning hypocrisy, the United Federation of Teachers axed one of its longtime employees -- for trying to unionize the powerful labor organization's own workers, it was charged yesterday.--Tom Topousis

In 1993, just after Democrats won the White House, Reid filed a bill that would have done exactly what some Republicans now demand — end birthright citizenship for children of illegal immigrants.--Ed Morrisey

The first rule of the (old) Upper Class Club always was that you don't talk about the Upper Class Club.--Peter York

... just because a tax is levied on the rich, that doesn't mean the rich are the ones most hurt by it; luxury taxes on yachts put working-class boatmakers out of a job, not corporate CEOs. ... So the right question to me is not "where do we maximize [tax] revenue", but "where do we maximize utility [between workers and employers]?" Obviously, that's not an easy question to answer. But when you add in deadweight loss, and the long-run drag on economic growth it implies, I think it's pretty clear that the right answer is well short of the rate where we collect the most taxes.--Megan McArdle

... according to Matthew Yeager, a data storage expert who works for the UK data services and solutions company Computacenter, emails—especially those with attachments—still use energy and create greenhouse gas emissions, even if you don't print them. Last month, Yeager told the BBC that sending an email attachment of 4.7 megabytes—the equivalent of about 4 photos taken on a point-and-shoot digital camera—creates as much greenhouse gas as boiling your tea kettle 17.5 times. I called Yeager to find out the whole story.--Kiera Butler

Over the past few years, Sun has been one of the more outspoken companies against abusing the patent system, with former CEO Jonathan Schwartz explaining that real companies innovate, not litigate. However, Sun and its patents are now owned by Oracle, and apparently Larry Ellison feels otherwise. Oracle is now suing Google for patent infringement, using a bunch of patents that Sun owns around Java, claiming that Google's Android implementation of Java is done without a license.--Mike Masnick

... the best paid athlete of all time—was a Lusitanian Spaniard named Gaius Appuleius Diocles, who had short stints with the Whites and Greens, before settling in for a long career with the Reds. Twenty-four years of winnings brought Diocles—likely an illiterate man whose signature move was the strong final dash—the staggering sum of 35,863,120 sesterces in prize money. The figure is recorded in a monumental inscription erected in Rome by his fellow charioteers and admirers in 146, which hails him fulsomely on his retirement at the age of “42 years, 7 months, and 23 days” as “champion of all charioteers.” His total take home amounted to five times the earnings of the highest paid provincial governors over a similar period—enough to provide grain for the entire city of Rome for one year, or to pay all the ordinary soldiers of the Roman Army at the height of its imperial reach for a fifth of a year. By today’s standards that last figure, assuming the apt comparison is what it takes to pay the wages of the American armed forces for the same period, would cash out to about $15 billion.--Peter Struck

Quotes of the day

... [the Obama] administration ... can imagine the world without the internal combustion engine but not the world without the Chrysler corporation ...--George Will

I hope Dr. ["Hide The Decline" Michael] Mann does sue us. The legal discovery process would give us an opportunity to expose Dr. Mann’s research – or lack thereof to public and legal scrutiny.--Jeff Davis, of Minnesotans 4 Global Warming

Never Hire Job Hoppers. Never. They Make Terrible Employees. ... It’s like a woman who is dating a man who has had 6 wives and cheated on all of them before divorcing them but she somehow thinks SHE will be different.--Mark Suster

Hire the best. Hire people that can leave your startup at any minute if they wanted to because they're so kick ass that they're constantly getting contacted by interested parties. Then it becomes your job to ensure that you're creating an environment that is equally as good as your people. Create a company that gives your people the most room for growth, creativity, a sense of ownership, and fun. And if you can't hire the best then hire people with any level of experience (novice, intermediate, advanced) that have promise. Then help them become the best so that they can leave any time they want. Hint: they won't. They'll be loyal because you helped them become the best. Your goal should be to help every single employee get to the point where they're the best in their field and are constantly getting job offers. And what if they aren't loyal once you've helped them become the best? People will eventually leave no matter what you do. Don't view it as a character flaw on their part. Just know that you can pick up more people because you've created a work environment that breeds the best and the word will spread. And as any job hopper can tell you, there are plenty of companies where your skill, ambition, and talent can go to die, but there are very few that help you become the best and give you real reasons to be loyal.--Paul Dix

Your parents loved you, and they did their best. But they created a false reality. Everyone isn’t above average in all they do. And in real life, only the winner gets the trophy. It’s important you understand this before we award that diploma, as there’s a good chance your boss will be just like me. Scary thought, huh?--Bill Sledzik

... children’s gender role stereotypes were more restrictive for males, than for females.--Sex Roles, DOI

Men indicate a higher interest in high-status products (study 1) and more readily noticed high-status products (study 2) after exposure to sexily, rather than plainly, dressed women. The effects are restricted to single men, suggesting that the acquisition or consumption of a luxurious product functions as a mate attraction mechanism.--Universiteit Gent working paper, March 2009

Goldman didn't do a good job defending themselves. You have to be a 'bright young thing' to get a job there, but I think their brand name and massive connections, make them appear much smarter than they really are. ... Blankfein is a crony capitalist, begging for more 'regulation' because he knows that a 1300 page bill basically only helps those with connections and extant massive legal infrastructure, and hurts potential competitors who merely have good ideas. I'd miss them as much as I'd miss Drexel, a giant which died with much schadenfreude.--Eric Falkenstein

Basically, the McCarthy era never ended. The objective of every Congressperson at every hearing is to get on the evening news by bullying a witness. The only question I have is whether McCarthy is the one who started it, or whether he happened to be the one guy who got called out on it. Too bad somebody at Goldman could not have called out a Senator. It must have been tempting to say, "Look. You can't make a market by bending over backwards giving buyers every reason not to buy and sellers every reason not to sell. Sophisticated investors understand how we operate. Just like everybody who goes to play blackjack understands that some of the cards are dealt face down. You can complain that you think all the cards should be face up, but that would totally change the game. Do you hold to such high standards in your election campaigns? Do you think your disclosure of the consequences of your votes is honest? Do you disclose how lobbyists told you to vote? Do you go out of the way in your campaigns to give people all the possible reasons not to vote for you? You want to tell me about my responsibility to my clients? How would you like to hear my opinion about your responsibility to your constituents?" Blame deflection. That is what this whole financial "reform" theater is all about.--Arnold Kling

The second big event in Washington this week is the jostling over a financial reform bill. One might have thought that one of the lessons of this episode was that establishments are prone to groupthink, and that it would be smart to decentralize authority in order to head off future bubbles. Both N. Gregory Mankiw of Harvard and Sebastian Mallaby of the Council on Foreign Relations have been promoting a way to do this: Force the big financial institutions to issue bonds that would be converted into equity when a regulator deems them to have insufficient capital. Thousands of traders would buy and sell these bonds as a way to measure and reinforce the stability of the firms. But, alas, we are living in the great age of centralization. Some Democrats regard federal commissions with the same sort of awe and wonder that I feel while watching LeBron James and Alex Ovechkin. The premise of the current financial regulatory reform is that the establishment missed the last bubble and, therefore, more power should be vested in the establishment to foresee and prevent the next one.--David Brooks

How blind dates are like jury selection

or vice versa, from Mark Bennett. I'm still mulling over The Shrek Rule: Better out than in. For example, take belching.

Via Tyler Cowen.

So that's what really burns Derek Lowe's toast

Ben Domenech's view of pharmaceuticals:

So Pharma is interested in making money as their primary goal — that should surprise no one. But they’re also interested in avoiding litigation. Suppose for a moment that Pharma produces a drug to treat one non-life threatening condition, and it’s a monetary success, earning profits measured in billions of dollars. But then one of their researchers discovers it might have other applications, including life-saving ones. Instead of starting on research, Pharma will stand pat. Why? Because it doesn’t make any business sense to go through an entire FDA approval process and a round of clinical trials all over again, and at the end of the day, they could just be needlessly jeopardizing the success of a multi-billion dollar drug. It makes business sense to just stand with what works perfectly fine for the larger population, not try to cure a more focused and more deadly condition.

To which Derek responds:

Ummm. . .isn't this exactly what happened with Vioxx? Merck was trying to see if Cox-2 inhibitors could be useful for colon cancer, which is certainly deadly, and certainly a lot less common than joint and muscle pains. Why didn't Merck "stand pat"? Because they wanted to make even more money of course. They'd already spent some of the cash that would have to have been spent on developing Vioxx, and cancer trials aren't as long and costly as they are in some other therapeutic areas. So it was actually a reasonable thing to look into. If you're staying in the same dosing range, you're not likely to turn up tox problems that you didn't already see in your earlier trials. (That's where Merck got into real trouble, actually - the accusation was that they'd seen signs of Vioxx's cardiovascular problems before the colon cancer trial, but breezed past them). But you just might come up with a benefit that allows you to sell your drug to a whole new market.

And that might also explain why, in general, drug companies look for new therapeutic opportunities like this all the time with their existing drugs. In fact, sometimes we look for them so aggressively that we get nailed for off-label promotion. No, instead of standing pat, we get in trouble for just the opposite. Your patented drug is a wasting asset, remember, and your job is to make the absolute most of it while it's still yours. Closing your eyes to new opportunities is not the way to do that.

The thing is, Domenech's heart seems to be mostly in the right place. He just doesn't understand the drug industry, and neither do his NIH sources. Talking to someone who works in it would have helped a bit.

Justice is served

at least for now.