Congress needs some remedial economics lessons

Maybe kick the class off with some Schumpeter: Jesse Jackson Jr. targets iPad, Apple in anti-technology rant.

Quotes of the day

One hundred fifty years ago today, Col. Robert E. Lee was offered the command of the United States army. ... But after the attack on Fort Sumter and Lincoln's call for 75,000 men, Virginia, Lee's home state, seceded. ... To many people today, it would see strange that Lee would turn down such a command and follow the apparently hopeless fate of the Confederacy. Although he was born and raised in Virginia, like Winfield Scott, he had spent much of his life serving the United States of America all over the continent. He disagreed with slavery, and believed that secession was unwise. ... It came down to his view of state sovereignty. Lee viewed himself as a Virginian more than an American. He would follow the choice of his state even though he personally disagreed with it. He viewed his service to the South not as a fight against the Union, but as a defense of Virginia.--Joshua Horn

Higher prices of foods mainly hurt the poor since poor countries and poorer families within a given country spend a much larger fraction of their incomes on foods than do rich countries, and then richer families within a country. For example, the share of national income spent on food is over 40% in India, less than that but still large in China, and under 15% in the United States. If families were spending 40% of their income on food, a 30% increase in food prices would raise by 12% the income they would need to maintain the same level of consumption of all goods. By contrast, a family spending only 15% of its income on food would only need a 4.5% increase in their income to maintain the same consumption basket. This simple arithmetic explains why the current rapid price increase in foods and other commodities, and past large increases in these prices, often caused great distress among poor families of Africa, Asia, and elsewhere in the world. ... during the current sharp run up in food prices, several food-exporting countries, such as Russia and Ukraine, have banned, or greatly restricted, the ability of farmers to export their produce. This lowers the price of food to urban consumers in these countries, and thereby helps the urban poor. However, such bans reduce the prices received by poor farmers of these countries. This reduces their incentives to raise their production of food, and makes these farmers worse off. It also raises the cost of food to families in food-importing countries, and thereby hurts the poor in these countries. Since farmers in developing countries are generally much poorer than those who live in cities and other urban communities, the poor may overall be made worse off when countries greatly restrict their food exports. ... An income subsidy approach has the advantage of allowing prices of foods and other goods to be determined by the forces of supply and demand. As a result, it encourages famers to grow more food when food prices rise, and also encourages poor (and other) consumers to reallocate their spending away from foods that rise most in price, and toward other foods and consumer goods.--Gary Becker

... many grand issues remain unresolved at the frontiers of physics: What is the origin of inertia? Are there extra dimensions? Can a Theory of Everything exist? But even at the undergraduate level, far back from the front lines, deep holes exist; yet the subject is presented as one of completeness while the holes—let us say abysses—are planked over in order to camouflage the danger. It seems to me that such an approach is both intellectually dishonest and fails to stimulate the habits of inquiry and skepticism that science is meant to engender. ... If Newton’s laws are at the bottom of everything, then one should be able to derive the second law of thermodynamics from Newtonian mechanics, but this has never been satisfactorily accomplished and the incompatibility of the irreversible second law with the other fundamental theories remains perhaps the greatest paradox in all physics. It is blatantly dropped into the first days of a freshman course and the textbook authors bat not an eyelash. ... the “God is a mathematician” viewpoint is one of selective perception. The great swindle of introductory physics is that every problem has an exact answer. Not only that, students are expected to find it. Such an approach inculcates our charges with an expectation that is, in fact, exactly contrary to the true state of the world. Vanishingly few problems in physics have exact solutions and a physicist’s career is one of finding approximations and hopefully not being too embarrassed by them. ... The equation that governs the behavior of any quantum system, Schrödinger’s equation, is as deterministic as Newton’s own, but as many people know, quantum mechanics predicts only the probability of an experiment’s outcome. How a deterministic system, in which the result is preordained, abruptly becomes a probabilistic one at the instant of measurement, is the great unresolved mystery of quantum theory, and yet virtually none of the dozens of available quantum textbooks even mention it. ... Physicists have indeed gone further than other scientists in describing the natural world; they should not confuse description with understanding.--Tony Rothman

As far as the laws of mathematics refer to reality, they are not certain; as far as they are certain, they do not refer to reality.--Albert Einstein

You want to repeal health care? Go at it. We'll have that debate. You're not going to be able to do that by nickel-and-diming me in the budget. You think we're stupid?--President Obama

Donald Trump has advocated for massive tax increases that display a stunning lack of knowledge of how to create jobs. His love for a socialist-style universal health care system and his alarming obsession with protectionist policies are automatic disqualifiers among free-market conservatives. This publicity stunt will sputter and disappear just as quickly as the ‘The Apprentice’ is losing viewers.--Chris Chocola

If the man who really should be the mayor, the next mayor of the city of New York, the great police commissioner Ray Kelly, chooses not to run, and if my former adversary [Eliot Spitzer] does run as an independent in 2013, I will run for mayor of the City of New York.--Dick Grasso

I want my son to watch "The Natural" someday, hear Roy Hobbs say, "Some mistakes you never stop paying for," and know that it's not just words in a movie. I want my son to know that you haven't lived until you've fought back, that you haven't won until you've lost, that you can't understand what it's like to relish something until you've suffered, too. I want him to understand that it's the 21st century, that we sit around picking our heroes apart all day, that we expect them to be superhuman at all times, that we get pissed off when they aren't, that it's hypocritical if you really think about it.--Bill Simmons

[Edward Wilson's] new argument, in a nutshell, amounts to a frontal attack on long-accepted ideas about one of the great mysteries of evolution: why one creature would ever help another at its own expense. Natural selection means that the fittest pass down their genes to the next generation, and every organism would seem to have an overwhelming incentive to survive and reproduce. Yet, strangely, self-sacrifice exists in the natural world, even though it would seem to put individual organisms at an evolutionary disadvantage: The squirrel that lets out a cry to warn of a nearby predator is necessarily putting itself in danger. How could genes that lead to such behavior persist in a population over time? It’s a question that bedeviled even Charles Darwin, who considered altruism a serious challenge to his theory of evolution.--Leon Neyfakh

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--Thomas Jefferson et al

We don’t think of love as a strength, but as a compromise of strength. And we certainly don’t think of the value of love in affecting mass, social change, and yet Napoleon realizes he and his work will be forgotten and other leaders will flicker and fade while the work of Christ carries on. And why? Because Jesus loved his men, and charged those men to take his message of love to the ends of the earth. I am wondering whether or not we think of the great commission as a duty, a charge, or a joyful expression of love?--Don Miller

Alexander, Caesar, Hannibal, Louis XIV strove in vain to secure this. They conquered the world, yet they had not a single friend, or at all events, they have none any more. Christ speaks, however, and from that moment all generations belong to him; and they are joined to him much more closely than by any ties of blood and by a much more intimate, sacred and powerful communion. He kindles the flame of love which causes one’s self-love to die, and triumphs over every other love. Why should we not recognize in this miracle of love the eternal Word which created the world? The other founders of religions had not the least conception of this mystic love which forms the essence of Christianity.--Napoleon Bonaparte

For three months, the Arab world has been awash in protests and demonstrations. It's being called an Arab Spring, harking back to the Prague Spring of 1968. But comparison to the short-lived flowering of protests 40 years ago in Czechoslovakia is turning out to be apt in another way. For all the attention the Mideast protests have received, their most notable impact on the region thus far hasn't been an upswell of democracy. It has been a dramatic spike in tensions between two geopolitical titans, Iran and Saudi Arabia. This new Middle East cold war comes complete with its own spy-versus-spy intrigues, disinformation campaigns, shadowy proxy forces, supercharged state rhetoric—and very high stakes.--BILL SPINDLE and MARGARET COKER

Can one person controlling an identity, or a group of identities, really shape social architecture? Actually, yes. The Web Ecology Project’s analysis of 2009’s post-election protests in Iran revealed that only a handful of people accounted for most of the Twitter activity there. The attempt to steer large social groups toward a particular behavior or cause has long been the province of lobbyists, whose “astroturfing” seeks to camouflage their campaigns as genuine grassroots efforts, and company employees who pose on Internet message boards as unbiased consumers to tout their products. But social bots introduce new scale: they run off a server at practically no cost, and can reach thousands of people. The details that people reveal about their lives, in freely searchable tweets and blogs, offer bots a trove of personal information to work with. “The data coming off social networks allows for more-targeted social ‘hacks’ than ever before,” says Tim Hwang, the director emeritus of the Web Ecology Project. And these hacks use “not just your interests, but your behavior.” A week after Hwang’s experiment ended, Anonymous, a notorious hacker group, penetrated the e-mail accounts of the cyber-security firm HBGary Federal and revealed a solicitation of bids by the United States Air Force in June 2010 for “Persona Management Software”—a program that would enable the government to create multiple fake identities that trawl social-networking sites to collect data on real people and then use that data to gain credibility and to circulate propaganda.--Andy Isaacson

My experience with my blank book, What Every Man Thinks About Apart From Sex, has lessons for all of us. It shows that if you have a clear idea, you deliver it well, and then shout about it loudly (and with the right tools), you can make anything happen – you could even get a blank book to the top of the bestseller charts. One small step for an Ideas Man, one giant leap for publishing.--Shed Simove

Perhaps [Henri] Matisse did suffer from fear and loathing like the rest of us, but there is no trace of them in his work. His studio was a world within the world: a place of equilibrium that, for sixty continuous years, produced images of comfort, refuge, and balanced satisfaction. Nowhere in Matisse's work does one feel a trace of the alienation and conflict which modernism, the mirror of our century, has so often reflected. His paintings are the equivalent to that ideal place, scaled away from the assaults and erosions of history, that Baudelaire imagined in his poem L'Invitation au Voyage.--Robert Hughes

Photo links here and here.

You da man

Ray Allen drains a 3-point shot with 12 seconds left to get the Celtics the win, after trailing the Knicks for the entire second half.

These guys are getting old, this feels like their last shot.

Photo link here.

My comment at Jon Acuff's place

The early church created one of the most sustainable and effective social programs in history, i.e. the daily distribution of food to widows. The early church also provided aid to each other in times of famine. I do not know of any other not-for-profit institution that achieved this type of aid network without the coercion of government (for example the Templars provided a sophisticated financial system in their day, but I think they took a significant vig out of that activity).

The American church of the last couple of centuries built most of the universities and hospitals of their day. As theism gradually faded from the scene (props, Nietzche?), so did the capacity of the church to feed, clothe, house, educate, and heal the neediest in local communities. And once the income tax was instituted (it was unconstitutional during the big boom in church hospital and university building), the opportunity costs became too high to compete. Churches collect 4% of the wages of their congregants; government collects closer to 10 times that amount. Now churches seem to be relieved that there are food stamps, social security, medicare and medicaid, judges and social workers from the state.

I think that if we can reform US entitlement systems, from the Ponzi schemes they currently are to something sustainable–like the food stamps program–then perhaps our democracy won’t be committing suicide in the next 100 years.

There is a moral hazard (of free riding, and of employment disincentive) that comes with an indiscriminate redistributive program, as previous commenters have pointed out. I still believe that 2 Thess 3:10 is relevant today: if a man does not work he should not eat.

Jon's post here.

A seven-year, $154 million contract extension

here.

He gets it.--TF

Jake Tapper gets it

I hope you do, too.

He compares the President Obama of January 2010 to the version of April 2011.

Reelection's in the air!

UPDATE: Greg Mankiw, too:

I must applaud the President for today's speech in which he finally and at long last takes the long-term budget imbalance seriously. There was a surprising amount of finger pointing for a person who claims to be transcending partisanship. That is especially true in light of the fact that President Obama's proposed policies, as put forth in his own annual budgets, have never shown how he would put the economy on a path with a declining debt-GDP ratio, even after the economy fully recovers from the recession.

But let's put that inconvenient truth aside for the moment. I am delighted that these fiscal issues are now squarely on the national agenda. If only someone could lock President Obama and Congressman Ryan in a seedy hotel room, turn off their access to cable, give them an endless supply of coffee and cold sandwiches, and not let them leave until they come to agreement, the nation could take a large step forward.

Cartoon of the day: Net Worth

Via Abraham Piper.

Quotes of the day

Peter over at Cleveland Frowns has a passionate post about Manny Ramirez and the Hall of Fame, and it made me think about Lyndon Johnson. This, I suspect, gives you a pretty good idea about how my ridiculous mind works and why I didn’t get many dates as a young man. In truth, I’m reading Robert Caro’s amazing and mesmerizing “Master of the Senate” about Johnson … and so just about EVERYTHING I hear at the moment makes me think about Lyndon Johnson, which makes it hard to read children’s books to the kids:

”And then the guy who wouldn’t eat Green Eggs and Ham, um, arranged for a filibuster by promising to vote with the pork states and then raised trumped up charges of Sam I Am being a communist.”--Joe Posnanski

As the NFL lockout enters its second month, players from at least 16 teams have already sought out extremely aggressive short-term loans with high interest rates, ThePostGame.com has learned. According to a financing source, these interest rates range from 18 percent to 24 percent, and upon default, they can rise as high as 36 percent.

The ability for bankers to run the show has long been an obvious flaw in the ratings system for structured products. Investment banks create the securities and benefit when they receive generous ratings. Banks pay the agencies that supply the ratings. Yet the agencies are somehow supposed to hold the line with the people who are responsible for their paychecks. ... So who is Mr. [Michael] Kanef? Before he was the head of regulatory affairs and compliance, he was in charge of ratings on residential mortgage-backed securities. Did such an executive deserve a promotion? And then there is Raymond W. McDaniel, the chief executive throughout the housing boom, the bust and the entire financial crisis. He remains at the helm. And he had to swallow the bitter pill of more than $9 million in compensation last year. Indeed, most of Moody’s top management has been in place through the crisis. --JESSE EISINGER

Two key questions are whether the credit agencies — which benefit from a unique series of government charters — enjoy too much official protection and whether their judgment was tainted.--Roger Lowenstein

According to market research, 1 out of 6 marriages that are happening in the US right now originated online, and these days nearly 30% of couples meet on the internet. But, as great as those stats sound, online dating is also utterly time consuming and competitive. The authors of “Freakonomics” discovered that 56% of men that create an online dating profile do not even get one single message while Jupiter Research found that 97% quit within 3 months.--Katherine Blodget

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record. The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.--Dennis Cauchon

As more Boomers retire, even a smaller percentage will be working (while more retirees will be collecting entitlements). This is why any plan to raise revenue by raising tax rates is irrational. It is all about reducing entitlement spending in the least painful way. There will be pain.--Cav

Republican won 24 of the 37 Senate contests last year, giving them a head start not only on winning a Senate majority in 2012 but possibly winning a 60-seat supermajority two years later. They will need to net 26 or 27 of the remaining 67 contests over the next two cycles to win a majority in 2014, or 36 of the next 67 to get to 60 seats during the next midterm elections. The Senate is always a different kind of numbers game than the House. With unbalanced classes, Senate control — to say nothing about a filibuster-proof majority — hinges on which party has more seats up for election in a particular election cycle. When one of the political parties has a huge election night, as Republicans did last year, it automatically gives that party an opportunity to take over the Senate, whether two years later or four. The 2012 Senate class includes 23 Democrats and only 10 Republicans, and the stunning imbalance means that Democrats will be on the defensive throughout the cycle unless the political environment shifts dramatically to their party.--Stuart Rothenberg

Having defended Fort Sumter for thirty four hours until the quarters were entirely burned the main gates destroyed by fire. The gorge walls seriously injured. The magazine surrounded by flames and its door closed from the effects of heat. Four barrels and three cartridges of powder only being available and no provisions remaining but pork. I accepted terms of evacuation offered by General Beauregard being on same offered by him on the eleventh inst. Prior to the commencement of hostilities and marched our of the Fort Sunday afternoon the fourteenth inst. With colors flying and drums beating. Bringing away company and private property and saluting my flag with fifty guns.--Major Robert Anderson, April 14, 1861

My 5-year-old apparently hates social justice. Have you ever had a moment like that, when you tried to teach your kids a lesson and it backfired?--Jon Acuff

Dying is easy. Comedy is hard. Making a great screen comedy is darn near impossible.--Christian Toto

Since Twitter was invented, Internet behemoths have been clamoring to buy it in the belief that it is the one social service with the potential to compete with Facebook. Last fall Microsoft, Google, and Facebook itself all considered buying the company. Microsoft never made an offer, according to sources, but Facebook is believed to have offered $2 billion for Twitter, and Google, by far the most serious, offered as much as $10 billion.--Jessi Hempel

I think it’s fair to say that Zuckerberg is lacking in conscience. Certainly, someone who had a strong conscience would feel somewhat guilty about the way he treated the Winklevoss twins and his best friend [Eduardo Saverin] when he tried cutting him out of his shares. And you never see signs of guilt over anything. ... He’s certainly chosen great talent [to surround himself with over time], but all of Facebook’s ideas seems to come from other people. There are people who passionately want to change the world for the better. I don’t hear anything like that in Zuckerberg.--Michael Macoby

... you can think about the whole capitalist system as being designed to get us to take actions and spend money now – and those businesses that are more successful in that do better and prosper (at least in the short term). And this of course continuously tests our ability to resist temptation and exercise self-control. It is in this very environment that it's particularly important to understand what's going on behind the mysterious force of self-control. ... It seems that Ulysses and kids ability to exert self-control is less connected to a natural ability to be more zen-like in the face of temptations, and more linked to the ability to reconfigure our environment (tying ourselves to the mast) and modulate the intensity by which it tempts us (filling our ears with wax). If this is indeed the case, this is good news because it is probably much easier to teach people tricks to deal with self-control issues than to train them with a zen-like ability to avoid experiencing temptation when it is very close to our faces.--Dan Ariely

A true bubble is when something is over-valued and intensely believed. Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus. ... If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates? It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.--Peter Thiel

Photo link here.

Quotes of the day

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

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

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

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

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

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

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

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

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

Chart of the day: Generational Income Mobility

Via Russ Roberts, who notes:

Notice that all of the quintiles, except the top quintile get smaller shares between 1970 and 2000, roughly the time covered by the Pew study. But the Pew Study comes to the exact opposite conclusion. The lowest quintiles got the biggest gains WHEN YOU FOLLOW THE SAME PEOPLE. Using the Census data over time tells you NOTHING about what “they” (the top whatever percent) had happen to “them” over time.

It is also worth pointing out that the pie is not constant. So you’re well-being can grow even when your share of the pie falls if the pie is getting sufficiently larger.

The Summers Heresy

Suggesting that there are important gender differences.

Quotes of the day

The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity. For whatever the reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.--Judge Alex Kozinksi

Bank of America Corp.'s internal auditors are reviewing why two top finance and accounting executives weren't consulted before the bank disclosed to investors that a dividend increase had been rejected by regulators, according to people familiar with the situation. The March 23 filing with the Securities and Exchange Commission was more explicit than an earlier news release. It showed that the Federal Reserve had "objected" to the proposed dividend increase following a "stress test" of all major U.S. financial institutions. Shares of Bank of America, the only bank to disclose the Fed's outright objection, dropped almost 4% in three days after the filing. But Chief Financial Officer Chuck Noski and Chief Accounting Officer Neil Cotty didn't see the filing before it went to the SEC, people familiar with the matter said. Head of investor relations, Kevin Stitt, found out late the night before, according to one of these people.--DAN FITZPATRICK And JOANN S. LUBLIN

Depression may make a wide swath of Wall Street workers worse at their jobs. A new study from the INSEAD international business school shows that people who are down in the dumps are much worse at making accurate predictions.--Kyle Stock

The arrival of the internet caused a large decline in both the pecuniary and non-pecuniary costs of accessing pornography. Using state-level panel data from 1998-2003, I find that the arrival of the internet was associated with a reduction in rape incidence.--Todd D. Kendall

As someone who has unfortunately succumbed to internet porn in the past, I would say that there is at least one pareto improving substitute, which is characterized with the externality of children. Positive or negative, I leave as an exercise to the reader.--Cav

[Garrett Jones presented a paper] titled "A Political Coase Theorem for the Intelligent." It was on how high-IQ pairs in experimental games do significantly better on trust and cooperation. He then reasoned from that to higher IQ creating more solutions to cooperation problems and, therefore, creating more economic growth. He pointed out a number of times in his presentation that, given how many variables researchers had studied in trying to understand differences in cooperation in experiments, adding IQ to the mix should have been done in the 1960s. It shouldn't have had to wait 40 years.--David Henderson

The subjects you propose for a series of Mathematical and Metaphysical Essays are so very profound, that there is perhaps not a single subscriber to our Journal who could follow them.--Sir David Brewster, editor of The Edinburgh Journal of Science to Charles Babbage

Stumbling upon the next great invention in an “ah-ha!” moment is a myth. It is only by learning from mistakes that progress is made. It’s time to redefine the meaning of the word “failure.” On the road to invention, failures are just problems that have yet to be solved. ... Those 10,000 [failures by Thomas Edison] resulted in the Dictaphone, mimeograph, stock ticker, storage battery, carbon transmitter and his joint invention of the light bulb. In the end, 10,000 flops fade into insignificance alongside Edison’s 1,093 patents--James Dyson

A Somber Anniversary: The Civil War begins, 150 years ago today

A nice historical retelling of the Battle of Fort Sumter here.  Image link here.

Quotes of the day

Free and competitive markets aren't thought of as promoting tolerance and reducing bigotry, yet they do so far more effectively than ever-more-detailed civil rights regulations. Writing in the 1730s, Voltaire famously described the London Stock Exchange as a place "where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mohammedan, and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts." Gary Becker earned the 1992 Nobel Prize in economics in part for demonstrating that discrimination is economically detrimental -- free markets penalize an employer who discriminates for reasons unrelated to ability and productivity. Freedom of association is indispensable to making a free society work. No culture is without unfairness. But where men and women are unfettered in their freedom to form or avoid relationships with others -- socially and economically -- tolerance and cooperation increase, and ugly prejudice recedes.--Jeff Jacoby

The story does not say that "responsible lending" produced a housing bubble and a crash, resulted in millions of foreclosures, and wiped out the savings of millions of other borrowers who did not turn in the keys to their lenders.--Arnold Kling

Why do we allow the exceptions of school nurses and military doctors, but no other exceptions? One obvious common element here is that most medics and school nurses are government employees. This seems to be part of a more general pattern, whereby we often relax regulations for the government. For example, the military is also not subject to OSHA rules on workplace safety, and the worst asbestos and hazardous waste sites have been on government property. Congress has also exempted itself from rules against workplace discrimination and stock insider trading.--Robin Hanson

Suppose that in a mere three years your family’s spending – spending, mind you, not income – jumps from $80,000 to $101,600. You’re now understandably worried about the debt you’re piling up as a result of this 27 percent hike in spending. So mom and dad, with much drama and angst and finger-pointing about each other’s irresponsibility and insensitivity, stage marathon sessions of dinner-table talks to solve the problem. They finally agree to reduce the family’s annual spending from $101,600 to $100,584.--Don Boudreaux

The White House said Monday that President Barack Obama regrets his vote as a senator in 2006 against raising the debt limit — a vote he's now pressuring Congress to take.--ERICA WERNER

Leaders eat last.--military correspondent

I know, as you must know, that SecDef Gates recently spoke at West Point and expressed his view that the personnel system must be reformed. I was gratified by that. But I've also heard in the months since my article first appeared too many voices making noise to hide the signal. The nation we have sworn to protect deserves better.--Tim Kane

... I do realize that we in sportswriting and sports broadcasting set the genius bar pretty low for coaches and athletes. The only people who set it lower are the people at Apple, who essentially take a bunch of ordinary people, have them take two Macbook Pro classes and one on the iPhone, and then immediately graduate them to geniuses. These geniuses even get their own bars. But I still maintain that Manny Ramirez was a hitting genius. ... In my own romantic view of baseball and the world, I tended to see Manny as baseball’s Mozart — an often vile personality who did one thing so beautifully that you could not turn away.--Joe Posnanski

How many times have you been told to start with a little stretching? Yet multiple studies of pre-workout stretching demonstrate that it actually raises your likelihood of injury and lowers your subsequent performance. Turns out muscles that aren’t warmed up don’t really stretch anyway, and tugging on them just firms up their resistance to a wider range of motion. In fact, limbering up even has a slackening effect on your muscles, reducing their stability and the amount of power and strength they’ll generate. ... If you’re in the fitness-equipment business, free weights are a loser. The 2010 model looks too much like the 1950 model, and they both last forever. Far better to create gleaming $4,000 contraptions that can be reinvented every two years, and then hire a PR firm to promote some made-up training theory claiming that machines are the answer ... Commercial health clubs need about 10 times as many members as their facilities can handle, so designing them for athletes, or even aspiring athletes, makes no sense. ... It can be hard to believe a true strength coach the first time he tells you that by pressing and dead-lifting on even days, squatting and doing chin-ups on odd days, avoiding all other exercises, and adding a little to the bar each time, you’ll be stronger than you’ve ever been in only a month’s time.--Daniel Duane

... parents under 30 are decidedly less happy than their child-free peers. Then, once parents hit 40, the relationship reverses and people with children are cheerier than those without.--PAMELA PAUL

Photo link here.

Manifesto of the Week

Why We Should Separate Health and State.

Chart of the day: Budget differences

John Taylor writes:

From a macroeconomic perspective, perhaps the biggest difference is that the House Budget brings outlays as a share of GDP back close to 2007 levels as a share of GDP, thereby removing the large spending increase of the years 2008-2009-2010, while the Administration budget effectively locks in that increase.

Via Arnold Kling, who observes:

Somehow, we could ratchet up spending by hundreds of billions at the drop of a hat. Reducing spending by less than $100 billion becomes Armageddon.

Quotes of the day

The young woman just told the plain, straight, truth: I want to be her friend but she doesn’t want to be mine. She went on, I’d like her to be my friend. I think I’m a good friend. Talk about the real language of a real heart. Talk about truth telling. I don’t know where my heart learned to translate it’s sentiments into such false sophistication, but after hearing this conversation, I think false sophistication is akin to lying, and I don’t think lying is the right way to get what you want.--Don Miller

It's almost as if the muni salesmen are reading from the script written by the mortgage bond guys in 2005. Remember them? They were the people who insisted that all the "talk" of a housing bubble was irresponsible.--John Carney

Two things I would strongly suggest the [Securities and Exchange] Commission look at is the 500 shareholder rule and the requirements to be a qualified and/or accredited investor to invest in privately held companies. Both of these rules directly or indirectly keep small investors, ie the general public, from investing in privately held companies. Most people do not qualify as accredited or qualified investors so their ability to invest in privately held companies is significantly restricted. And because privately held companies cannot have more than 500 shareholders, most companies prefer institutional investors who can invest large sums of money to small investors who cannot. Some of the most exciting companies to emerge in the past decade have decided to stay private for longer periods of time. There are many reasons why that is the case, but one of the reasons is that founders, Boards, and senior management realize that being public and having your employee equity go up and down every day has a cultural impact that is not always good for the organization.--Fred Wilson

Ryan has moved us off Unreality Island. He is forcing Americans to confront the implications of their choices. With a few straightforward changes, his budget could be transformed into a politically plausible center-right package that would produce a fiscally sustainable welfare state while addressing the country’s structural economic problems. I suspect the process Ryan has started will take us back toward the moderate framework the Simpson-Bowles deficit commission proposed a year ago. Great journeys begin with one bold step.--David Brooks

I don’t want to be alarmist but it is important to be sensitive to cracks in your paradigm. If you wait until it is obvious that you are wrong then it is too late.--Karl Smith

... nobody who writes what Krugman wrote should be mistaken for a person who is being reasonable.--Steve Landsburg

An Oxfam study found that when carpet makers in Bangladesh were pressured to fire their child laborers, the kids went to their next best alternatives: prostitution or starvation.--Bryan Caplan

War: What is it good for? Well, minority rights for one thing. Regardless of what you think of America’s overseas military adventures during the last century, they’ve all had positive domestic outcomes: Minority groups that have contributed to war efforts have been rewarded with expanded rights.--Robert Saldin

A longitudinal analysis suggested that shifting into more committed relationships was followed by improvements in subjective well-being. Little support was found for the assumption that people with a high level of well-being select themselves into more committed relationships.--Journal of Social and Personal Relationships

The slums of Chicago are full of first-round leaders.--Peter Jacobsen

On the train ride home—with the bailout check in your pocket—you think about how the hot tears scalded your cheek when you had to explain to your parents how bad things had gotten. You tell yourself it was all for theatrics: Crocodile tears for their sympathy. But in your most secret heart you know you weren't lying to them: You were only lying to yourself.--Ash Bennnington

Who’s going to get butt-naked right now and stand on a stool and start clapping their hands? I don’t know. Do they have that guy?--Kevin Millar

We’re going to get home right now and my wife’s going to look at me and say [Expletive], you’re 0-6. You guys stink. We all bring this [expletive] home with us, man. We care. We’ll figure it out. We have to. We don’t want to let anyone down. That’s it.--Dustin Pedroia

“I want to feel everything,” Nick [Charles] told me, and I thought I knew what he meant. I thought he meant that he wants to breathe in the mountain air, and really taste the calamari, and take in every reaction from his beautiful little daughter Giovanna. And I know that he did mean all those things and more. But I also think that he means he wants to feel EVERYTHING. He does not want to lie to himself. He wonders if he has spent too much time lying to himself. He does not want to withdraw even for moment. He knows that people are watching, and they can be inspired. He knows that his wife and daughter are with him, and every moment is precious. He knows that he has so few good days left, and as he told me: “I don’t have time for the BS. I just don’t. I’m dying.” And if we are honest with ourselves, truly and devastatingly honest, maybe we should ask: Is it really so different for any of us?--Joe Posnanski

Quotes of the day

... I'm not allergic to religion. I would say two things. One is that I think all of us are concerned about fanaticism and fundamentalism and we need all the allies we can muster against it. And I would see Rowan Williams et al as being on our side. I admire them more than want to rubbish them. Another point is if you are teaching Muslim sixth formers in a school and you tell them they can't have their God and Darwin, there is a risk they will choose their God and be lost to science. So those are two respects where I would disagree with the emphasis of the professional atheists, as it were. ... I think just as religion is separate from science, so is ethics separate from science. So is aesthetics separate from science. And so are many other things. There are lots of important things that are separate from science. ... I know Stephen Hawking well enough to know that he has read little philosophy and less theology, so I don't think his views should be taken with any special weight. ... biology is a harder subject than astronomy, because it deals with more complex things and we don't understand how life began on Earth.--Martin Rees, winner of the 2011 Templeton Prize, which honors a living person who has made an exceptional contribution to affirming life’s spiritual dimension, whether through insight, discovery, or practical works

... money is never (save in the psychopathic cases of misers) what ultimately matters to anyone.--Don Boudreaux

Ironically, the outstanding performance of some of these university endowments seems to defy the basic tenets of market efficiency, whose principles many of these universities contributed to develop.--Keith Brown, Lorenzo Garlappi, Cristian Tiu

A confusopoly is any group of companies in a particular industry that intentionally confuses customers about their pricing plans and products. Confusopolies do this so customers don't know which one of them is offering the best value. That way every company gets a fair share of the confused customers and the industry doesn't need to compete on price. The classic examples of confusopolies are phone companies, insurance companies, and banks.--Scott Adams

... women in the armed forces are now more likely to be assaulted by a fellow soldier than killed in combat.--Jesse Ellison

Do the benefits of a gender-integrated military outweigh the risks (and costs)?--Cav

When New York City couldn’t find investors for its debt in the 1970's, the best and the brightest all urged a bailout. David Rockefeller, the head of Chase Manhattan Bank (one of the largest holders of NYC debt), warned that if New York City defaulted, the entire financial system would come crashing down. Others said it would mean capitalism had failed. Well, New York did default. And the world didn’t end. Even the financial system managed to eek its way through the 1980's. Capitalism—or something like it—kept on keeping on for a couple decades more. So what’s my definition of financial Armageddon? It doesn’t exist.--John Carney

I do not want to see the government shutdown. But this is different than the government shutdown in 1986. We have a President stone walling. The President and the Democrats are saying they are not going to budge on a couple of billion dollars in order to pass a [continuing resolution]. This just shows you where their priorities are. They are willing to shut down the government to protect a couple of billion dollars. They are not serious in getting the budget under control.--Dick Armey

... [President Obama] should not wait for a long-term budget solution until after the 2012 election. This looks expedient, especially given the bitter standoff over this year’s spending, and need for entitlement cuts and revenue increases. Waiting two years is unsound, however, both in terms of financial market risks and domestic political factors. In particular, Mr Obama doesn’t want a grand bargain to happen without him.--Roger Altman

I wanted to hear more about phone-hacking and the whole business of tabloid journalism. It occurred to me just to interview him straight, as he has, after all, been a whistleblower. But then I thought I might possibly get more, and it might be more fun, if I secretly taped him, The bugger bugged, as it were.--Hugh Grant, actor turned investigative journalist

... it would be nice to find a way for people to lose weight without having to wait for them to get rich first.--Matt Ridley

Photo link here.

I'm not sure that those ethics classes in law schools

are working. Photo link here.

I think you can trust a Wall Street dunkie like me more than Uncle Warren, now

The controversy surrounding a Berkshire Hathaway Inc. executive's stock trading before an acquisition by the firm shines a light on what some say could be a gap in securities disclosure: There is no rule requiring that executives' holdings in an acquisition target be revealed.--LESLIE SCISM, JEAN EAGLESHAM and ERIK HOLM

I didn't say I was smarter than the guy. Certainly, I'm less folksy.

Well, maybe my marriage history is a bit more folksy.

Photo link here.

Does our democracy have the cajones?

Stay tuned. Via MMB.

I cannot believe that so many of my friends and neighbors

were pulling for this man to be President.

On second thought, yeah, I can.  A college degree speaks more to regurgitation and brainwashing than sense.

Intrade contract pricing predicts a toss up on the US Government Shutdown

Source here.

Ross Douthat and Alan Jacobs spank Bill James

A cool breeze just wafted over from Sheol.  Photo link here.

Quotes of the day

I never make predictions and I never will.--Paul Gascoigne

I thought the people who wrote off Tiger — depending on what we mean by “write off” — were more likely right than wrong, and anyway I never thought Tiger Woods has done well in an “us against the world” scenario. I don’t think he’s a guy who feeds of disrespect. I think he likes it best when everyone knows that he’s the best player going. At that time, my opinion was a pretty distinct minority. I certainly wasn’t alone on the “Tiger will probably never be the same” airplane, but I do know there were plenty of empty seats and plenty of overhead storage available. In the last year, though — a year in which Tiger spit on the green, threw clubs, blew a four-shot lead in his own tournament … when his average finish was 25th (not even counting the time he missed the cut or the time he withdrew) — the conventional wisdom has certainly shifted. ... The years tend to go in only one direction.--Joe Posnanski

... children are forced to go to school. In other words, school goes beyond child labor. It is forced child labor. ... my conclusion is that the law against child labor is really a law against children making money. Thanks, government.--David Henderson

There is nothing wrong with being tough. There is something wrong with only looking out for No. 1 when you pretend to be a team player.--Michael Lissack

Democracy can be a contact sport, but policy should be decided by legislative officials - not the judiciary. This is the fundamental difference between liberal and conservative judicial philosophies. A constitutional conservative jurist does not decide a case based on policy preferences—an honest liberal jurist admits to it. --Carrie Severino

A large, growing and diverse group of allies interested in consumer, small bank and credit union protections are pressing Congress to delay and study the Durbin amendment. We are encouraged that Congress is taking a closer look at the regulation and examining the unintended consequences. ... Remember, the Durbin Amendment was never debated publicly or the subject of a hearing before being adopted as part of the Dodd-Frank bill. As a result, the potential harm to consumers, small banks and credit unions is not known. If the regulation is implemented as written, consumers will likely see higher costs, fewer choices and reduced benefits—as consumers in Australia have experienced after similar regulations were imposed there.--Credit card insider

Detroit’s population plunged by 25 percent over the last decade, according to data recently released by the Census Bureau. This means fewer people are shouldering the nearly $3 billion of debt that Detroit, its public schools, the surrounding Wayne County and Wayne County Community College have accumulated. It works out to around $4,137 per person, according to the bond research firm MMA-Research. The per capita income of Detroit is just a little over $15,000.--John Carney

A lot of people think of janitors as a group that’s not particularly well paid. Those people might be surprised to learn that in the last five years alone, American janitors earned over $250 billion! That’s billion! With a B! Despite that enormous income, janitors pay no taxes whatsoever — or at least no taxes whatsoever over and above the taxes that are paid by you, me and other ordinary Americans. And shockingly, it appears that the U.S. Congress would rather cut spending than institute a new tax on janitorial income. ... The problem with democracy is that these people get to vote.--Steve Landsburg

... I think it's no longer credible to complain that the GOP has not put forward any sort of meaningful solution for the budget. At this point, they're the only ones who have put forward a detailed outline; the Democrats still seem to be hoping that if they kind of mill around long enough, eventually an angel will float over the horizon and deposit a plan that doesn't annoy anyone (and/or allows them to pay for the entire thing by raising the marginal tax rate on the Koch brothers and Richard Mellon Scaife to 110%). ... What the Ryan plan really shows is not where we're going, but how long it's going to take us to get there. The vengeful, partisan spirit of the times is not conducive to coming to any sort of bipartisan agreement, however grudging. And it is going to have to be a bipartisan agreement. --Megan McArdle

Everyone knows that what the president and his allies really want to do is raise taxes. They might agree to some tinkering around the margins on entitlements for show. But in their heart of hearts they believe the solution is higher rates of taxation. The problem is they don’t have the guts to say so in public. They know that’s the surest way to permanent minority status. And so they are hoping for a more indirect route to their goal, using guile to lure gullible Republicans (see here) into agreeing to their approach without ever having to sell it to a tax-averse electorate. The Ryan plan blows this kind of plotting by Democrats to smithereens. There’s no tax increase in the Ryan plan, and there’s no debt crisis. What’s required is far-reaching entitlement reform and serious spending discipline. By staking out that position, Ryan and his comrades have improved their leverage immensely. There’s no need to agree to tax hikes to solve the budget problem. What’s needed is for Democrats to get serious about spending reform, as Ryan has.--James Capretta

You do not have to like the long-term budget that Paul Ryan and the House Republicans have released this morning. There’s plenty in the plan for liberals to hate, moderates to doubt, and conservatives to question. But you do have to respect it. As my colleague David Brooks writes today, it is “the most comprehensive and most courageous budget reform proposal any of us have seen in our lifetimes.” It puts flesh on the bones of the standard-issue conservative pledge to limit government’s growth, and it does so not with evasive pledges on process (like the risible idea of a balanced budget amendment) or dishonest suggestions that the deficit can be erased by defunding N.P.R. and slashing foreign aid, but by attacking entitlement spending deeply and directly. ... This is how we should want all our legislators to approach the people’s business, whether they’re liberal or conservative or somewhere in between — putting what they consider good policy above what everyone else in their party considers good politics. Too few of them do. But for the ones who try to make real substance their touchstone, rather than just partisan advantage, today should be a hopeful day.--Ross Douthat

Although [John] Milnor is famous for many results, the one for which he is best known is his construction of a seven-dimensional “exotic sphere”. This means a differentiable 7-manifold that is homeomorphic to a 7-sphere but not diffeomorphic to a 7-sphere.--Tim Gowers

Sequencing the human genome isn't really like being able to read the assembly instructions for the human body. The instructions are in a nucleic acid code that gets acted on by lots of different agents to turn them into a final product like a protein, and we don't really know the code yet. Sequencing the human genome was more like getting an instruction manual for something important--in a dead language for which we have no Rosetta Stone. But I didn't have that skepticism at the time, and neither did a lot of people in the biosciences. The human body keeps turning out to be way more complicated than we hope or expect.--Megan McArdle

In a symbiotic union more complete than any previously found in vertebrates, the common spotted salamander lives with algae inside its cells.--Brandon Keim

Why is Sean Penn doing so much better than his ex-wife? Can comparing their stories provide any lessons for aspiring celebrity humanitarians? ... While Madonna visited Malawi for some photo ops, she wasn’t involved in the day-to-day operation of the project. From the Times: “She and her aides offered no explanation of why, given her high interest in the project, she had not noticed the problems as they began unfolding.” In contrast, Sean Penn appears totally hands-on, living in Haiti and learning by doing--Laura Freschi

Photo link here.

Quotes of the day

Practitioners care about what works, what gets things done. They have to agree because there are projects on the line. Educators don’t have to agree at all. They can fight and debate and write papers against each other because, well, the product they are churning out is just thought, not action.--Don Miller

Nobody can really think that Butler and Connecticut — two teams that were not ranked in the Top 20 for part of the year — are the two best teams in America. And, at exactly the same time, nobody can really think that Butler and Connecticut are NOT the two best teams in America. That’s the wonder of March Madness. It has redefined what “best” even means. It has turned basketball unpredictable.--Joe Posnanski

That would make me a

frienditute.

Now a website is poised to monetize the concept.--Scott Adams

Quotes of the day

The tragedy of the commons occurs when no one has the right to exclude users of a resource and, as a result, the resource is overused. The tragedy of the anti-commons occurs when many people have the right exclude users of a resource and, as a result, the resource is under-used.--Alex Tabarrok

There are two obvious features about American inner cities and neither are talked about very much (see the NYT discussion, no mention). First, most have long and deep Democratic political rule. That is, not only the mayor, but the police chief, school superindendent, and every other head bureaucrat is a Democrat. Five of the 10 cities with the highest poverty rates (Detroit, Buffalo, St. Louis, Milwaukee, Philadelphia and Newark) have had a Democratic stranglehold since at least 1961, and most dangerous big US cities are strongly Democratic. Why isn't this relevant? ... American minorities don't need money, pity, or special rights, they need temperance, diligence, thrift and other bourgeois virtues, exactly what their community leaders are telling them are orthogonal to their position. The last thing you should tell someone in really bad straights is that his problem is the indifference, if not cruelty, of others, because it doesn't help him.--Eric Falkenstein

... the urban underclass and lower middle class will never find opportunities until cities figure out how to deliver decent services at a viable price: the high taxes and tangled regulations of our big cities are walls that emprison the poor more than protecting them. This is true even though the poor don’t pay income tax. Sales taxes (and crushing ‘sin taxes’ on some of the pleasures they enjoy and perhaps need most) cut into their disposable incomes. Sky high property taxes jack up their rents. High wage scales for unionized public servants, inflated by collective bargaining madness and the generally high cost of living and elevated tax levels in blue America, mean that the poor get less from the state: fewer (and often, worse) teachers, fewer cops on the beat, fewer firefighters, fewer and more crowded health services. Worse than all this, small business is crushed by high taxes, intrusive and often irrational regulation, which means that new jobs aren’t created and new businesses don’t start. That reduces demand for workers in the neighborhoods that need jobs most; it also curtails the ability of inner city residents to develop the entrepreneurial skills and experience that could fuel the rebirth of the Black middle class. Disaster is too kind a word for what the blue social model has (inadvertently) built in America’s cities. No wonder that to be young, gifted and Black today means fleeing the consequences of blue social policy as fast as you can.--Walter Russell Mead

To rely upon a reserve requirement for the meeting of cash-withdrawal demands of banks' customers is analogous to trying to protect a community from fire by requiring that a large water tank be kept full at all times: the water is useless in case of emergency if it cannot be drawn from the tank.--unsourced

Responding to a court ruling, [the Fed] made public thousands of pages of confidential lending documents from the crisis. The data dump arose from a lawsuit initiated by Mark Pittman, a reporter at Bloomberg News, who died in November 2009. Upon receiving his request for details on the central bank’s lending, the Fed argued that the public had no right to know. The courts disagreed. The Fed documents, like much of the information about the crisis that has been pried out of reluctant government agencies, reveal what was going on behind the scenes as the financial storm gathered. For instance, they show how dire the banking crisis was becoming during the summer of 2007. Washington policy makers, meanwhile, were saying that the subprime crisis would subside with little impact on the broad economy and that world markets were highly liquid. ... Protecting global lenders and investors from the effects of their financial decisions was exactly what the Fed decided it had to do. Bankers and investors on the receiving end of this largess have long known the extent to which the Fed rescued them in their time of need. Now, thanks to these Fed documents, the rest of us can see it, too.--GRETCHEN MORGENSON

The Pecora Commission investigation into the sources of the 1929 stock market crash began two and one-half years after the event, lasted over two years, and helped shape the regulatory environment for decades. In contrast, the underfunded, marginalized Financial Crisis Inquiry Commission lasted one year, at a time when the size, complexity, and interconnectedness of the global financial system has grown exponentially from 1934. In terms of academic interest, regulatory concern, and social impact, understanding the sources of the recent financial crisis must rank as one of the most important socioeconomic research projects of our time. From my perspective, it's time to stop dicking around and start trying to understand it.--Epicurean Dealmaker

Mercantilism, "economic nationalism for the purpose of building a wealthy and powerful state,"1 is based on this logic: "The richer the nation, the stronger the nation; the stronger the nation, the better for every member of that kingdom."2 It wasn't until the 17th century that mercantilism was seriously challenged, and Adam Smith finally drove a stake through its heart when he published The Wealth of Nations 235 years ago. Perhaps most economists hold this clean view of history, but it seems that the rest of the world never got the memo. Unfortunately, the archaic and counterproductive ideas of mercantilism are alive and kicking in 21st-century America. ... Mercantilism is an economic theory from the perspective of exporters, protectionists, politicians, and money hoarders, and its primary beneficiaries are big business and big government. Basically, the more goods you sell outside your country and the more gold and silver you bring in and store safely in your vaults, the better. The corollaries are that exports are good, imports are bad, a weak currency is wonderful, and trade surpluses are the bees' knees. Whether they realize it or not, many modern politicians of various stripes are mercantilists. ... Unfortunately, the reality of protectionism is downright ugly. First, there is the effort put into lobbying Congress instead of making tough choices and creating a productive industry. Second is the direct cost of the protected jobs. For example, to save 226 American luggage manufacturing jobs, American consumers have been forced to pay an additional $290 million annually for their luggage, which translates to an outrageous $1.285 million for each job saved.8 (No one, especially the American consumer, would argue that those jobs are worth that much.) Third, more workers typically are employed in industries that use the output than in industries that make the protected output. Workers in steel-using industries, for instance, outnumber those in steel-producing industries by 57 to 1.9 Making steel more expensive hurts the 57 workers who use the steel, while only one steel-producing worker is helped, and that's in addition to all the consumers who are hurt.--Charles Hooper

That adorable skunk, Pepé Le Pew, is one of my wife Sue’s favorite cartoon characters. There’s something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It’s easy to love a skunk – but only on the silver screen, and if in real life – at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn’t been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed.--Bill Gross

... after we get through spending our $1 trillion under ObamaCare, there is no convincing reason to believe that the bottom half of the income distribution will have more care, better care, or better access to care than they have today.--John Goodman

The thing that fascinated me is that somehow [the lead plaintiff in the Walmart class action] managed to discern that the discrimination she experienced was because of her gender and not the fact that she's also obese, unattractive, and African-American. Based on the interview, she also seems to have a sketchy command of grammar. I couldn't judge her height or personality, but those are two more factors that have a big impact on career advancement. I make this observation as a short, hair-challenged, nearsighted, unattractive, over-the-hill individual who was pushed out of two different careers (banking and the phone company) explicitly for being male and white. In my case, my bosses explained it to me directly, as in "You're our most qualified candidate for promotion, but we can't promote a white male in the foreseeable future." This happened in the context of finishing my MBA at night so I could overcome discrimination against me based on the reputation of my school. I'm not complaining. It's just context. We live in a world with so many triggers for bias that it seems simplistic to divide things along gender lines. So I propose a simple test to determine if you, individually, are a victim of gender unfairness. If a genie gave you the chance to magically switch your gender, and become a member of the other sex, would you do it? And let's say the new you would be about the same as now on the scale of attractiveness, intelligence, ethnicity, circumstance, and health. The only real change would be gender. Do you take the offer? If your answer is no, then maybe fairness isn't what you really want. Maybe what you want is all the advantages you have now plus the good stuff that other people have. I totally understand. I want the same thing.--Scott Adams

In a unanimous vote, Congress named former "Two and a Half Men" actor and self-proclaimed "Vatican assassin warlock" Charlie Sheen the inaugural director of the Consumer Financial Protection Bureau. "[Expletive] and [expletive] to you all!" proclaimed Sheen before a crowd of cheering lawmakers. "For my first act as Director, I am renaming the CFPB to be called Charlie's Financial Protection Bureau. Second, I plan to hire 1,224 goddesses as my staff and to make all consumers [expletive]." Spotted shedding tears of joy was Special Treasury Department Adviser and consumer advocate Elizabeth Warren, who had been working to get the CFPB up and running. "Charlie Sheen's 'winning' ways and tiger blood are just what this organization needs to get started on the right foot," said Warren. "Unlike myself, he is a uniting force for lawmakers."--Pymnts.com

Tokyo Electric Power Co. began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to make room to store more toxic liquids that have hampered efforts to restart cooling systems. The release of the water, which has low levels of radiation, will make space for more dangerous fluid in the basement of turbine buildings at the Nos. 2 and 3 reactors. The government approved the plan, the first deliberate toxic discharge into the ocean, the chief cabinet secretary said.--Ichiro Suzuki and Tsuyoshi Inajima

He was like the guy going through a cafeteria, and he wanted to take everything and put it on his tray. That concerned people. ... I was tired of bumping my head against a wall.--Hank Paulson on Jon Corzine

... the NCAA sharply limits the number of athletic scholarships, and even more importantly, limits the size of the scholarships that schools can offer the best players. NCAA rules also severely restricts the gifts and housing players are allowed to receive from alumni and others, do not allow college players to receive pay for playing for professional teams during summers or even before they attended college, and limits what they can be paid for non-playing summer work. The rules are extremely complicated, and they constitute hundreds of pages that lay out what is permitted in recruiting prospective students, when students have to make binding commitments to attend schools, the need to renew athletic scholarships, the assistance that can be provided to players’ parents, and of course the size of scholarships. It is impossible for an outsider to look at these rules without concluding that their main aim is to make the NCAA an effective cartel that severely constrains competition among schools for players. The NCAA defends these rules by claiming that their main purpose is to prevent exploitation of student-athletes, to provide a more equitable system of recruitment that enables many colleges to maintain football and basketball programs and actively search for athletes, and to insure that the athletes become students as well as athletes. Unfortunately for the NCAA, the facts are blatantly inconsistent with these defenses. ... In 1984 the U.S. Supreme Court declared the NCAA’s restrictions on the televising of college football games an illegal conspiracy in violation of the Sherman Antitrust Act. The court said, “good motives alone will not validate an otherwise anticompetitive practice”. Since that decision, the televising of college football and basketball games has rapidly increased. It is time for the court to apply the same valid reasoning to the restrictions on scholarships and other aspects of the competition by colleges for athletes, and to declare these restrictions also a violation of the Sherman Act. Were that done, both student-athletes and schools with greater concern for academic performance of their athletes would gain at the expense of colleges that put athletic competition before academic achievements.--Gary Becker

You have one identity. ... Having two identities for yourself is an example of a lack of integrity. ... the level of transparency the world has now won't support having two identities for a person.--Mark Zuckerberg

Photo link here.

Many dangerous things

in Australia. Via Bess Levin.