What Does Government Do Best?
Pierre Sprey being interviewed on The Fifth Estate
Fifth Estate: So you're telling me [the
F-35] is a bad airplane: it can't do dogfights, it can't protect troops
on the ground, it's a lousy bomber, and despite everything the
manufacturer is saying, it's not stealth.
Pierre Sprey: Correct -- you're exactly
Fifth Estate: So what is the point of this
Pierre Sprey: The point is to spend
money. That is the mission of the airplane: for the US
Congress to send money to Lockheed. That's the real mission of the
Which of These Circles Isn't Changing?
So many channels, so little time ....
Yet Unbundling Would Destroy the Industry
"Our calculations conclude that $80 billion to $113 billion of
U.S. consumer value would be destroyed by this shrinking channel
choice," [said Needham & Co. media analyst Laura] Martin.... In
other words, if Bravo -- which is currently in about 100 million
homes -- was suddenly available only in half as many homes, it
would have to double what it charges distributors to cover its
programming costs. If Bravo didn't double or triple its fees, it
would have to greatly reduce what it spends on original and
"A La Carte TV Pricing Would Cost Industry Billions, Report Says
04 Dec 2013]
Some Say the System Is Rigged
High-frequency trading isn't providing more efficient, liquid markets;
it is a technological arms race designed to pick the pockets of
legitimate market participants.
discussing High-Frequency Trading
, 03 Apr 2014]
Regulatory Capture: Our Favorite Drug?
The FDA's cumbersome, expensive approval process essentially creates a
cartel. Only deep-pocketed companies can play the FDA game, and that's
why [these companies are] glad the FDA is around to stave off
competition from small businessmen like [AIDS victim] Ron Woodroof.
"How the Oscar-Winning Libertarian Favorite 'Dallas Buyers Club' Exposes the FDA
," 05 Mar 2014]
EconPop takes a look at the Dallas Buyers Club
Are Most Published Research Findings False?
[C. Glenn Begley] and his colleagues could not replicate 47 of 53
landmark papers about cancer. Some of the results could not be
reproduced even with the help of the original scientists working
in their own labs.... Maybe the researchers deeply believed that
their findings were true. But that is the problem. The more
passionate scientists are about their work, the more susceptible
they are to bias.
"New Truths That Only One Can See
," 20 Jan 2014]
Tax-Free NY: Textbook Case of Crony Capitalism?
This proposal is one of the most disingenuous I've ever heard.
It acknowledges that New York's tax structure is crippling
business and then does nothing to address it. The fundamental
flaw with this proposal is that it allows [NY Governor Andrew]
Cuomo and [NY Assembly Speaker Sheldon] Silver appointees to pick
and choose which businesses get sweetheart deals, as every other
existing business in this state suffers. This is a slap in the
face to thousands of Staten Island business owners who have been
squeezed for decades and have got nothing but empty rhetoric from
state government.... It's blatantly unfair to the tech
businesses already struggling in office buildings along Arthur
Kill Road and South Avenue. In sum, this allows a politically
connected panel to pick winners and losers ... [those] losers are
every one of the state's 2 million existing businesses. This
could correctly be called crony capitalism.
[NY Assemblyman Joe Borelli, explaining why he voted against
the Tax-Free NY proposal,
14 Jun 2013
If you're tired of the same old recipe of over-taxation,
over-regulation, and frivolous litigation, get out [of New York] before
you go broke. Texas is calling. Your opportunity awaits.
[Texas Governor Rick Perry,
letting New Yorkers know they can vote with their feet
, 19 Jun
Economics 101: Uber and Surge Pricing
To understand the economics of surge pricing from Uber's point of view,
think of drivers as supply and riders as demand. Especially in bad
weather, demand goes up: Would-be passengers don't want to be out in the
snow and rain. Meanwhile, supply goes down: Drivers don't want to be out
in the snow and rain, either.
In that scenario, higher prices are meant to accomplish two things.
First, by offering drivers more money, it gives them more incentive to
get out on the streets — at least in theory — thereby
increasing supply. Second, higher fares price out some riders, and
demand goes down. Calibrating supply, demand, and price to get the most
people the most rides for the least money is the math problem that [Uber
CEO Travis] Kalanick says Uber is always trying to solve....
If Uber can truly make itself the most reliable way to get around, its
popularity may eventually end up forcing prices down overall. Even as a
$175 SUV gets all the attention, in several cities Uber is aggressively
pushing its Uber X service, where drivers in their own private vehicles
offer rides at rates competitive to regular taxis. In San Francisco,
Kalanick says, Uber X drivers make more money than higher-priced Uber
limo drivers. The reason, he says, is that more rides trump higher
"Uber Boss Says Surging Prices Rescue People from the Snow
17 Dec 2013]
Newsflash: U.S. Cities Seize Vehicles, Throwing the Environment
under the Bus Union
The funny thing is that many cities supported ride-sharing as part of
"eco-concious" initiatives when it was on a smaller scale and largely
greenwashing. But once it expanded and money became involved many
cities had seen enough....
In 2013 the Philadelphia Parking Authority (PPA) -- a city authority
that derives its revenue from taxicab licensing -- decided it was time
to put a stop to the [carpooling] business, which hadn't paid its toll.
It conducted a sting, seizing cars, ticketing drivers, and shutting down
At this point quite literally the risk of carpooling is becoming that
you will get your car impounded/seized and be forced to pay steep fines.
"Cities to Carpoolers: Sharing Your Car is Illegal, We Will
Seize Your Cars
," 04 Apr 2014]
ObamaCare: Don't Sign Up until You Get Sick
I've run the numbers. There's no scenario, when you can buy
insurance after you get sick, in which buying it before you get
sick makes economic sense. Open enrollment isn't year round, so
you might face part of a year paying for your own treatment if
things go wrong, but with the deductibles on many of these plans,
that's true even with coverage.
"Obamacare, Beyond the Glitches
," 12 Nov 2013]
Hacking in 1980: Kids Have It Easy Today!
You counted every CPU cycle because as the [screen refresh] scan was
moving, so was the CPU clock; and for every three of those 160 pixels
you had one microprocessor cycle. You can't do anything in one
microprocessor cycle: the minimum is two, sometimes three, sometimes
five. So, fifteen pixels have gone by before you do a single five-cycle
instruction. So there's not a lot of time to be messing around up there
changing these bits. And it had to go into ROM so we counted every
single byte. Sometimes we would be at 6K when we were ready to be done
with a 4K game. Now you have to go back and re-write every single line
of the game; re-write an algorithm and say, "I did it and I did it in
three less bytes. So I saved three out of thirty." We would have
people -- you'd see graphics on the screen that was actually code
because it was easier to do that. Sometimes we would have graphic
tables that ended in a byte that was an op code that we could use as the
end of a routine -- anything -- anything to get one byte out of the
whole thing. [We'd] build our own ROM emulators to plug into the 2600;
wrote our own debugging software to be able to set breakpoints and such;
this was everything we had to do to make one of these lousy games.
Pitfall Classic Postmortem
, Game Developers
Everyone's on the Take
I think the American people today feel that the system isn't working for
them. And I think they're largely right. I think what they've not
internalized is that big government is invariably, primariliy, a servant
of the strong -- of the organized, the educated, the affluent, the
lawyered-up. That's why Washington is what it is today.... It's the
old law of concentrated benefits and dispersed costs -- a kind of
constant shell game. Two-thirds of the federal budget today is transfer
payments. So transfer payments are twice as big as everything else --
the Marine Corp, the National Parks, the FBI -- everything. So
everyone's on the take, as it were.
"George Will's Libertarian Evolution
," 13 Sep 2013]
Too Many Laws?
And that goes to [Mark] Cuban’s starkest point, which anyone living in a
democratic society should appreciate. Law-abiding citizens should be
afforded ex ante
notice of what is permitted behavior if they
inquire. Cuban said if you call up the SEC and ask "am I allowed to do
this, they will ignore you." He is right. Rule makers and rule
enforcers should at least be capable of articulating the rule and afford
average people the ability to interpret it. When that’s not the case,
there is a problem, and it is an increasingly big problem in our
over-legislated, over-regulated, and over-criminalized society. Luckily
for Mark Cuban, that’s not his problem anymore. He did people a service
though by showing why it could be yours.
"Mark Cuban, The People's Billionaire
," 18 Oct 2013]
If you laid all of our laws end to end, there would be no end.
Washington: Addicted to Goverment Shutdowns
If your metric for quality governance is "ability to avoid
shutdowns," then [Ronald] Reagan is absolutely the worst
president of the modern era. The government shut down eight
times under his watch, more than any other president,
representing nearly half of all shutdowns that have occurred
under the modern budget process. And [Tip] O'Neill is an even
worse speaker, if that's our criterion. He presided over 12
funding gaps or shutdowns, or almost 71 percent of all shutdowns
"Sorry, Chris Matthews: Tip O'Neill and Ronald
Reagan were terrible at averting shutdowns
," 26 Sep 2013]
Senate Says: Time to Shut Up, Peasant
Whom would the Senate's definition [of a journalist] protect?
Journalists employed at established publications, who are mainly white
men from privileged backgrounds -- a category of people who may have
little interest in critiquing the establishment that benefits them. The
Senate's definition of journalist protects the people who need it least.
"Who Is a 'Journalist'? People Who Can Afford to Be
17 Sep 2013]
Today's Special: Corruption in Garlic Sauce
The deal by which the [Chinese Communist] Party guarantees economic
growth, plus rising incomes, in exchange for a politically docile urban
population is unraveling. The now-widespread knowledge that the system
is rigged to benefit those in charge -- that officials and their
families have illicit opportunities to amass fabulous wealth unavailable
to most of China's citizens -- could push the Chinese to demand an end
to the collusion between princelings, their families, and business.
What might emerge to replace this network of power, if anything, is
Six Take-Aways for China from the Bo Xilai Trial
28 Aug 2013]
Where Would We Be Without Troublemakers?
We know through painful experience that freedom is never voluntarily
given by the oppressor; it must be demanded by the oppressed.... [O]ne
has a moral responsibility to disobey unjust laws. I would agree with
St. Augustine that "an unjust law is no law at all."
[Martin Luther King, Jr.,
to a group of clergymen who called him
an "outsider" disobeying the principles of law and order
16 Apr 1963]
What Fourth Amendment?
Unlucky Rabbit's Foot
Not too long ago, I told Marty Hahne’s story. He is a long-time
children’s magician who got in trouble with the USDA for using an
unlicensed rabbit in his shows. Among other things, he also had to give
the agency proof that he was making regular vet visits, and submit to
random inspections of his home. The topper was that he had to submit a
28-page disaster plan covering how he would care for his rabbit under at
least 21 different calamities....
"Pulling a Rabbit Out of a Hat
," 31 Jul 2013]
Microsoft Windows 8 Suction Whirlpool Sinks Entire PC Market
Hidden in IDC's analysis was an unusual assertion; namely, that Windows
8 had not only not helped PC sales, but actually depressed
. This statement reflects IDC's belief that market dynamics
are turning treacherously against Microsoft operating systems.... It
would be wrong to dismiss Microsoft as a dinosaur incapable of moving
with the times.
"Pulling Back from Windows 8
," 16 Apr 2013]
Micro-Managing Your Ride
The people of Denver don’t need a government agency deciding
whether they have too many transportation options any more than they
need a government agency deciding whether the city has too many
restaurants or shoe stores.
[Robert McNamara, senior attorney with the Institute for Justice,
22 Apr 2013
Municipal Debt: Nothing to See Here
Due to problems arising from outdated computer systems, schools in
Arizona spent $125 million a year on students that had already
transferred out of the state.
General contractors have been charging the state, and ultimately the
taxpayers, $45 per hour for janitors on public works projects, but only
pay their subcontractors $10 to $15 per hour for the actual work.
Two roofing companies sued the Delaware Department of Labor claiming an
office run by Senate President Pro Tem Anthony DeLuca was not properly
enforcing labor laws and preventing contractors from appealing
prevailing-wage decisions; DeLuca's office has reportedly forced
companies to pay sheet-metal workers a rate of $61 an hour versus the
average rate for the job of $21 an hour.
Miami-Dade County officials "discovered" a fleet of 300 brand new Toyota
vehicles, mostly Prius hybrids, that the office had purchased between
2006 and 2007.
The state paid $2 million in unemployment benefits to inmates last year;
in fact, one Cook County inmate collected almost $43,000.
$189 million in taxpayer money and tax breaks were given out by a board
to give new businesses incentives to move to Iowa, but the majority of
these companies had a deep connection to board members and were already
The state spent about $1.3 billion and $1.2 billion on tax credits for
Chrysler and GM respectively for the year.
The University of Southern Mississippi must pay out $2.1 million to
fired football coach Ellis Johnson for his remaining three-year
Forty-five superindendents collect over $4 million in retirement checks
each year, on top of their regular salaries.
The heads of Pennsylvania s four largest taxpayer-funded universities
told members of the state Senate that they see no reason for their
institutions to abide by Pennsylvania s open records laws after
receiving upwards of $500 million in total from taxpayers.
According to a report from the Legislative Auditor s office, 30
prisoners filed over 700 weeks of claims and received over $150,000 in
unemployment benefits, with one inmate receiving benefits for 135 weeks
while behind bars.
"How Broke Is Your State?
" 11 Apr 2013]
Ethanol: Environmental Disaster?
U.S. farmers converted more than 1.3 million acres of grassland into
corn and soybean fields between 2006 and 2011 ... Grasslands are key
breeding grounds for ducks and other wildlife ... [and] grassland soil
captures carbon better than cropland.... Corn, moreover, is one of the
most profligate water-using crops on the planet. Under drought
conditions, as experienced across the Midwest and Great Plains in recent
years, groundwater levels are plummeting, falling by six feet or more in
some parts of the corn belt.
[William F. Shughart II,
"Think Ethanol is Environmentally Friendly? Think Again.
18 Mar 2013]
The Sky Is Falling!
A Wall of Separation
I contemplate with sovereign reverence that act of the whole American
people which declared that their legislature should make no law
respecting an establishment of religion, or prohibit the free exercise
thereof, thus building
a wall of separation between church and state
[Thomas Jefferson, letter to the Baptists of Danbury,
K-12 Schools: Headcount Skyrockets Relative to Students
Since 1950, America’s public schools have seen a 96 percent increase in
students but a staggering 702 percent increase in administrators and
other non-teaching staff.
Between 1992 and 2009, the states with the most
disproportionate increases were:
|| Non-Teaching Headcount
|| + 2.7%
|| + 68.9%
|| + 1.9%
|| + 44.4%
|| + 8.1%
|| + 68.2%
| New Hampshire
|| + 11.7%
|| + 80.2%
Whom Will Obama Drone Today?
Oddly, under current law, Congress and the courts are involved when
presidents eavesdrop on Americans, detain them or harshly interrogate
them -- but not when they kill them.... Mr. Obama should declassify and
release, to Congress, the press and the public, documents that set forth
the detailed constitutional and statutory analysis he relies on for
targeting and killing American citizens.
"Who Says You Can Kill Americans, Mr. President?
16 Jan 2013]
HSBC: Do the Banksters Own Our Government?
Federal and state authorities have chosen not to indict HSBC, the
London-based bank, on charges of vast and prolonged money laundering,
for fear that criminal prosecution would topple the bank and, in the
process, endanger the financial system. They also have not charged any
top HSBC banker in the case, though it boggles the mind that a bank
could launder money as HSBC did without anyone in a position of
authority making culpable decisions.... Once criminal sanctions are
considered off limits, penalties and forfeitures become just another
cost of doing business, a risk factor to consider on the road to
profits.... If banks operating at the center of the global economy
cannot be held fully accountable, the solution is to reduce their size
by breaking them up and restricting their activities -- not shield them
and their leaders from prosecution for illegal activities.
[New York Times,
"Too Big to Indict
," 11 Dec 2012]
When you decide not to prosecute bankers for billion-dollar crimes
connected to drug-dealing and terrorism, it doesn't protect the banking
system, it does exactly the opposite. It terrifies investors and
depositors everywhere, leaving them with the clear impression that even
the most "reputable" banks may in fact be captured institutions whose
senior executives are in the employ of (this can't be repeated often
enough) murderers and terrorists. Even more shocking, the Justice
Department's response to learning about all of this was to do exactly
the same thing that the HSBC executives did in the first place to get
themselves in trouble -- they took money to look the other way.
"Outrageous HSBC Settlement Proves the Drug War is a Joke
13 Dec 2012]
For the crime of laundering terrorist and drug money, HSBC will be fined
$1.92 billion, which represents less than 10% of HSBC's 2011 profits.
Afghanistan: A Seething Morass of Corruption and Ineptitude
The United States is currently spending $28 million a day to rebuild
Afghanistan. This is the largest reconstruction effort ever --
the US has now spent more money to rebuild Afghanistan than it spent to
rebuild Germany after World War II.
John Sopko speaking at the Stimson Center, 2013-Jan-10
A typical US-funded Afghanistan project: the Kunduz Army Garrison
- $70 million facility
- Target completion date: Apr 2010. A year later the facility is
still not ready.
- Roofs collapsing due to improper welding and priming.
- Buildings placed on unstable soil; no proper foundation created;
- 2010: After IG inspection, DoD promises to fix site.
- 2011: Follow-up inspection reveals site still a disaster.
- DoD decides to release contractor from all obligations, including
all warrantees to fix any problems, and pays contractor in full.
This outcome is the rule, not the exception.
Key reconstruction failure areas:
- Inadequate planning
- Poor Quality Assurance
- Poor Security
- Questionable Sustainability
- Corruption / Widespread Lack of Accountability
How Do You Define Theft?
In 2000, John Doe buys 100 shares of XYZ stock for $100 each. Mr. Doe
holds onto XYZ for ten years, paying taxes on whatever dividends are
thrown off by XYZ (from earnings that have likely already been taxed).
At the end of ten years, Mr. Doe sells his 100 shares for $101 each.
The IRS claims that Mr. Doe has income of $100, but everyone knows this
is nonsense: thanks to inflation, Mr. Doe actually lost money.
Lesson learned by Mr. Doe: even if his long-term investment had done
well, the game is rigged in favor of the government. Eschew long-term
investments; live for today.
The World's Largest Buyer of Junk!*
* Audits not allowed
Throwing the Children Under the Bus
There's now solid evidence that there are huge differences in the
effectiveness of teachers, even within high-poverty schools.... Get a
bottom 1 percent teacher, and the effect is the same as if a child
misses 40 percent of the school year. Get a teacher from the top 20
percent, and it's as if a child has gone to school for an extra month or
two.... Unfortunately, the union in Chicago is insisting that teachers
who are laid off -- often for being ineffective -- should get priority
in new hiring. That's an insult to students.
[Nicholas D. Kristof,
"Students Over Unions
," 12 Sep 2012]
n. Modern Educational Systems of the 21st Century.
The organizational culture of eduction ... is very regimented. It's
organized a bit like an assembly line. Children are divided into age
groups, for example, as if the most important thing they have in common
is their date of manufacture.... We divide each day up into 40-minute
periods for the same reason. And then the day is divided into separate
subjects. We have standardized testing at the end of it. It's very
much like an industrial process, and it's not an accident because our
systems of mass education were developed in the 19th century to meet the
needs of the new industrial economies -- and they were designed for
efficiency, like other systems of mass production.
[Sir Ken Robinson
"Teach Your Children Well
," Aug 2012]
Judicial Activism or Judicial Abdication?
Is the Supreme Court really running roughshod over the other branches of
government and systematically thwarting their legitimate attempts to
- Congress passed 15,817 laws from 1954 to 2002. The Supreme Court
struck down 103 -- or just two-thirds of one percent.
- State legislatures passed 1,006,649 laws over the same
period. The Court struck down 452 -- or less than one twentieth
of one percent.
- The federal government adopted 21,462 regulations from 1986 to
2006. The Court struck down 121 -- or about a half of a
- In any given year, the Court strikes down just three out of every
5,000 laws passed by Congress and state legislatures.
- The Supreme Court overturned earlier precedents in just two
percent of the cases it considered from 1954 to 2010.
Decades of the Supreme Court abdicating its duty to enforce the
have made possible the incredible growth in the size and
scope of government we see today.
[Clark Neily and Dick Carpenter,
," Sep 2011]
Housing Rebound? The Shadow Knows ...
The 97% of mortgage loans that have not been foreclosed on but probably
will be makes up the largest percentage of what is known as shadow
inventory. This number is so horrifically high that even the pundits
aware of the issue won't discuss it publicly -- probably because their
own livelihoods could be at stake for doing so.... This is the biggest
financial and economic disaster in U.S. history -- nothing else even
comes close by comparison.... If the probable losses associated with
these loans had to be absorbed quickly by way of foreclosure and resale
of the collateral property, the losses would almost certainly render all
of these [Too Big to Fail] institutions insolvent....
"U.S. Housing Cannot Recover
," 14 May 2012]
Why Aren't We Building
How Patents Hinder Innovation
Why do firms in some industries ignore patents when developing new
products? This paper posits a simple but novel answer to this
long-puzzling question: firms ignore patents because they are unable to
discover the patents their activities might infringe. The costs of
finding relevant patents, which we call discovery costs, are
prohibitively high.... In software, for example, patent clearance by
all firms would require many times more hours of legal research than
all patent lawyers in the United States can bill in a year
result has been an explosion of patent litigation.
[Mulligan and Lee,
"Scaling the Patent System
," 06 Mar 2012]
Washington: No Speed Limit on Revolving Doors
We hang the petty thieves and appoint the great ones to public office.
What's That Buzzing Sound?
Look at the latitude. Military budget, foreign wars, empire, Patriot
Act, corporate welfare -- for starters. When you add those all up,
that's a foundational convergence. Progressives should do so good.
[Ralph Nader, referring to the potential for cooperation between
libertarians and the left,
The American Conservative
, 28 Sep 2011]
In Government We Trust
Government is significantly different from anything else in society. It
is the only institution that can legally threaten and initiate violence;
that is, under color of law its officers may use physical force, up to
and including lethal force -- not in defense of innocent life but
against individuals who have neither threatened nor aggressed against
anyone else.... That's not a controversial description of the State.
Even people enthusiastic about government would agree.
Given this unique feature, then, why isn't everyone wary of the State?
Whether or not one thinks it's necessary, it's dangerous by its very
nature, and we ought to assume it will remain so no matter how many
paper checks and balances and bills of rights are thought to contain it.
, 16 Sep 2011]
The Right to be Idle
Grand Valley State University economist Hari Singh found that if
Michigan had been a right-to-work state, the auto industry would have
seen a 25 percent gain in jobs since 1965. Instead, it lost 56.6
percent just between 2002 and 2009, shrinking its work force by 165,777.
In a functioning market, high unemployment would lead to lower wages.
But in Michigan's auto industry, Singh found, wages actually rose 18.1
percent during that time. Unions congratulate themselves for protecting
workers' wages, but they have imposed a heavy price on everyone else.
Not a single foreign automaker has ever taken advantage of Michigan's
legions of out-of-work but highly trained employees, preferring to train
novices in right-to-work states.
"Unions: The Cause of Michigan's Malaise
27 Sep 2011]
Please Pick the Side of this Coin You Don't Like
To Print or Borrow: Selecting the Worst of Both Worlds
It is absurd to say that our country can issue $30,000,000 in bonds and
not $30,000,000 in currency. Both are promises to pay; but one promise
fattens the usurer, and the other helps the people. If the currency
issued by the Government were no good, then the bonds issued would be no
good either. It is a terrible situation when the Government, to increase
the national wealth, must go into debt and submit to ruinous interest
charges at the hands of men who control the fictitious values of gold.
denouncing the issuance of bonds for a public
works project when the printing of currency would be a better
deal for the US taxpayer
, Dec 1921]
The Effects of Inflation on $100
currently [Jul 2011] has inflation running at 11%. Benjamin Franklin
believed in the power of compounding interest. To see this run in
reverse, witness the following chart where the value of $100 is halved
twelve years sooner when the inflation rate raises just one percent,
from 2% to 3%. At 11% inflation, $100 will halve its value in just six
This Is Leadership?
High Tech Org Charts
Conflict of Interest.
n. The Federal Reserve.
The non-partisan, investigative arm of Congress also determined that the
[Federal Reserve] lacks a comprehensive system to deal with conflicts of
interest, despite the serious potential for abuse. In fact, according
to the report, the Fed provided conflict of interest waivers to
employees and private contractors so they could keep investments in the
same financial institutions and corporations that were given emergency
loans. For example, the CEO of JP Morgan Chase served on the New York Fed's
board of directors at the same time that his bank received more than
$390 billion in financial assistance from the Fed. Moreover, JP Morgan
Chase served as one of the clearing banks for the Fed's emergency
[Senator Bernie Sanders,
, 21 Jul 2011]
The Republican Congressional leadership should have ensured that it did
not appoint individuals [to the Financial Crisis Inquiry Commission] who
would be in the impossible position of judging themselves. Even if the
leadership failed to do so and proposed such appointments, the
appointees to the Commission should have recognized the inherent
conflict of interest and displayed the integrity to decline appointment.
There were many Republicans available with expertise in, for example,
investigating elite white-collar criminals regardless of party
affiliation. That was the most relevant expertise needed on the
Commission. Few commissioners had any investigative expertise and none
appears to have had any experience in investigating elite white-collar
crimes. These Republicans, former Assistant U.S. Attorneys (AUSAs) and
FBI agents would have played no role in the financial regulation or
deregulation policies in the lead up to the crisis. They would not have
had to judge their own policies and they would have brought the most
useful expertise and experience to the Commission -- knowledge of
financial fraud schemes and experience in leading complex investigative
and analytical skills.
[William K. Black, explaining the Republican whitewash of the
"How can the Architects of the Crisis
" 28 Jan 2011]
Most Americans know about [the national] budget. What they don't know
is that there is another budget of roughly equal heft, traditionally
maintained in complete secrecy. After the financial crash of 2008, it
grew to monstrous dimensions, as the government attempted to unfreeze
the credit markets by handing out trillions to banks and hedge funds.
And thanks to a whole galaxy of obscure, acronym-laden bailout programs,
it eventually rivaled the "official" budget in size -- a huge roaring
river of cash flowing out of the Federal Reserve to destinations neither
chosen by the president nor reviewed by Congress, but instead handed out
by fiat by unelected Fed officials using a seemingly nonsensical and
apparently unknowable methodology.
"The Real Housewives of Wall Street
," 12 Apr 2011]
If your point is: "Does Wall Street have unbelievable power over what
goes on in Washington?" of couse they do! Why should anyone be shocked
about that -- that's the case.... When they fought for deregulation
... do you know how much money [Wall Street] spent in a ten year period?
It is estimated that they spent $5 billion. Of course they have
[Senator Bernie Sanders,
, 07 May 2010]
The mottos for american corporate executives and american politicians are
By the Time They Figure Things Out, I'll Be Gone and You'll Be Gone.
[George L. Roman, 2011]
The U.S. now accounts for nearly 75 percent of NATO members' overall
military spending. What are we doing in NATO anyway? ... Today, the
alliance's main functions seem to be forcing the U.S. taxpayer to
subsidize Europe's generous welfare states, and periodically embroiling
us in conflicts, like Kosovo and Libya, that we'd be smarter to avoid.
There are lessons to be learned from the Libyan debacle. For us, the
main lesson is that NATO long ago outlived its usefulness. For Europe,
it's that foreign adventurism doesn't come cheap. If you think these
things are worth doing, pay your own way, and finish the fights you
"Time for the U.S. to Get Out of NATO
," 26 Apr 2011]
It's no secret that early generations of Social Security beneficiaries
got more out of the system than they paid into it. Beneficiaries in the
1940s and 1950s paid very low Social Security taxes for only a few
years, then retired and received benefits for the rest of their
lives. Until recently, in fact, almost all generations of retirees fared
rather well. After all, the combined employer and employee tax rate for
Old Age, Survivors, and Disability insurance, or OASDI, was kept low
relative to benefits that would later be received. That combined rate
equaled only 3.0 percent of earnings in 1950 and 6.0 percent in 1960,
and it didn't rise to its still-inadequate level of 12.4 percent until
the late 1980s. Since most of these revenues weren't saved, the
increased OASDI tax rate supported ever-rising transfers to
The most recent waves of retirees getting Social Security can make a
stronger case that they have paid for their benefits. The complication
is that their Social Security taxes mainly supported their parents in
retirement, and the only way they can do as well in a money-in-money-out
(at times partially funded) system is to foist higher tax rates on their
[C. Eugene Steuerle, explaining how a Ponzi scheme works,
"Are You Paying Your Fair Share for Medicare?
" 06 Jan 2011]
We believe there is a material risk that US policymakers might not reach
an agreement on how to address medium- and long-term budgetary
challenges by 2013; if an agreement is not reached and meaningful
implementation is not begun by then, this would in our view render the
U.S. fiscal profile meaningfully weaker than that of peer 'AAA'
[Standard & Poor's,
the outlook on US Treasury bonds -- which
were disasterously impacted by the grossly inaccurate
ratings issued by Standard & Poor's on US housing bonds in the
previous decade, 18 Apr 2011]
We don't want to change the bankers, because if we do, if we put honest
people in who didn't cause the problem, their first job would be to
find the scope of the problem. And that would destroy the cover up....
Geithner was one of our nation's top regulators during the entire
subprime scandal that I just described. He took absolutely no
effective action. He gave no warning. He did nothing in response to
the FBI warning that there was an epidemic of fraud. All this pig in
the poke stuff happened under him. So, in his phrase about legacy
assets -- he's a failed legacy regulator.... Until you get the
facts, it's harder to blow all this up. And, of course, the entire
strategy is to keep people from getting the facts about how bad the
condition of the banks is. So, as long as I keep the old CEO who caused
the problems, is he going to go vigorously around finding the problems?
Finding the frauds? ... Instead you're covering up the bank losses,
because you know, you say you need confidence. And so, we have to lie
to the people to create confidence. And it doesn't work. You will
cause your recession to continue and continue. And the Japanese call
it the lost decade -- that was the result. So, now we get in trouble,
and what do we do? We adopt the Japanese approach of lying about the
assets. And you know what? It's working just as well as it did in
[William K. Black; explaining the Washington cover up of the
fraud committed during the housing crisis,
"Bill Moyers Journal
," 03 Apr 2009]
I meet -- very rarely -- musicians who take what they do as seriously as
I do, and I'm kind of fanatic about it. There's a part of me in my
journey that always keeps reminding me: "Don't forget where you came
from; don't forget what first inspired you; always honor that stuff" and
I look for that in other players, and when I find it I'm attracted to
them. Steve [Winwood] is one of the first people I met with that
commitment -- and there's not that many.
[Eric Clapton, describing his commitment to excellence,
"Road to Madison Square Garden
If people don't stand up for their little rights, all their big rights
will be gone.
[Cynthia Willis, a medical marijuana user
why she fights to keep her Second Amendment rights,
04 Apr 2011]
Not all regulations are created equal. A 1980 ban on unvented space
heaters cost around $100,000 per life saved (in 1995 dollars), according
to an article in the Fall 2002 issue of Regulation magazine. By
contrast, a 1991 rule governing the chemical 1,2-Dichloropropane in
drinking water cost $1.9 billion per life saved. Since money is finite,
it makes sense to spend regulatory dollars where they will do the most
good. The platitudinous statement that "if it saves one life, it's
worth it" is not only wrong, but tragically wrong if the resources used
to save that one life could have saved 500 others. And sometimes,
regulations actually have the opposite effect of that intended. There
is even a term for the phenomenon -- the Peltzman Effect, named after Sam
Peltzman, a University of Chicago economist who found that seat-belt
laws and other safety measures often encourage more reckless driving.
(This has been demonstrated in, among other places, Drachten, Holland,
where the frequency of accidents at a particular intersection declined
after lights and traffic signals were removed.)
[A. Barton Hinkle,
"Government's Work Is Never Done
," 22 Mar 2011]
My initial reaction to this was outrage. I sat at my computer, heart
pounding, eyes tearing, because when you peel off all the layers, you
have this: a woman (who works with special education children and was
attending school for her teaching degree) is being vilified because she
wanted something better for her children. And we can't possibly ignore
the racial aspect of this situation. A poor BLACK woman on public
assistance is being jailed for sending her kids to the rich white
school. I'm not arguing whether this is how it should be looked at; I'm
saying that is how it is looked at. It's questionable at this
point whether the teaching degree she's been working toward will be
allowed, because she has a felony charge against her. A family's life
is in virtual ruins because of this situation.
[Elon James White, describing the results of one mother's
frustration with her government-owned-and-operated school
"Kelley Williams-Bolar: Mom jailed for wanting to give kids
a better life
," 25 Jan 2011]
We passed this Dodd-Frank reform legislation last year and we
applauded and patted ourselves on the back for having fixed the
problem. That legislation didn't fix anything! It wouldn't have
prevented the last crisis; won't prevent the next one and we are
exposed to another crisis. If we don't get proper reform
legislation in place, we will not have done anything but address
some symptoms and we will be back in the soup again....
That's the danger of passing a bad bill.... The problem is it
takes all of the momentum out of the reform effort... they think
we're done on financial reform, so I'm not optimistic that we're
going to get this addressed....
I don't think we've reformed Wall St in a meaningful way. I'm
very concerned that we have a huge amount of concentration of
risk and economic and political power in our financial system:
The five largest banks in the country control more than 50% of
the banking system? I think we all ought to be concerned about
that. Dodd-Frank didn't address that at all -- that is something
that must be addressed and Dodd-Frank punted on that issue. I
think all Americans ought to be upset that Congress did not take
seriously this financial crisis and respond to it appropriately.
[Bill Isaac, former chairman of the FDIC,
11 Mar 2011
A security is a contract in law. It can only be as good as the legal
system that stands behind it. Some fraud is inevitable, but in a
functioning system it must be rare. It must be considered -- and
rightly -- a minor problem. If fraud -- or even the perception of fraud
-- comes to dominate the system, then there is no foundation for a
market in the securities. They become trash. And more deeply, so do
the institutions responsible for creating, rating and selling them.
Including, so long as it fails to respond with appropriate force, the
legal system itself....
There must be a thorough, transparent, effective, radical cleaning of
the financial sector and also of those public officials who failed the
public trust. The financiers must be made to feel, in their bones, the
power of the law. And the public, which lives by the law, must see very
clearly and unambiguously that this is the case.
[James K. Galbraith,
testifying before the Senate Judiciary Committee
, 04 May 2010]
All Government employees should realize that the process of collective
bargaining, as usually understood, cannot be transplanted into the
[Franklin D. Roosevelt,
on the Resolution of Federation of Federal Employees Against
Strikes in Federal Service
, 16 Aug 1937]
UNIX is a simple language, easy to understand, easy to get started with.
It's great for students, great for somewhat casual users, and it's great
for interchanging programs between different machines.... It is our
belief, however, that serious professional users will run out of things
they can do with UNIX. They'll want a real system and will end up doing
VMS when they get to be serious about programming. With UNIX, if you're
looking for something, you can easily and quickly check that small
manual and find out that it's not there. With VMS, no matter what you
look for -- it's literally a five-foot shelf of documentation -- if you
look long enough it's there. That's the difference -- the beauty of
UNIX is it's simple; and the beauty of VMS is that it's all there.
[Ken Olsen, founder of Digital Equipment Corporation,
DECWORLD Vol. 8 No. 5, 1984]
[It's a] severance program with an involuntary methodology.
[Digital Equipment Corporation, avoiding the word "layoff" in a
formal R.I.F. statement, Electronic News, 14 Jan 1991]
"Chaos," "a headache," "turmoil," "craziness," "confused," "wild,"
"uncontrolled" are just a few of the words the Washington press corps
has used to describe the ensuing late-night debates. There's a far
better word for what happened: democracy. It has been eons since the
nation's elected representatives have had to study harder, debate with
such earnestness, or commit themselves so publicly. Yes, it is
messy. Yes, it is unpredictable. But as this Presidents Day approaches,
it's a fabulous thing to behold.
[Kimberley A. Strassel,
"Congress Finally Earns Its Pay
," 18 Feb 2011]
If the Bush/Cheney regime had really believed that Saddam Hussein had
world-threatening weapons of mass destruction, it would have been a
criminal act to concentrate America's invading force in a small area of
Kuwait where a few WMD could have wiped out the entire U.S. invasion
force, thus ending the war before it began. Some Americans are so
thoughtless that they would say that Saddam Hussein would never have
used the weapons, because we would have done this and that to Iraq, even
nuking Baghdad. But why would Saddam Hussein care if he and his regime
were already marked for death? Why would a doomed man desist from
inflicting an extraordinary defeat on the American Superpower, thus
encouraging Arabs everywhere? Moreover, if Saddam Hussein was unwilling
to use his WMD against an invading force, when would he ever use them?
It was completely obvious to the U.S. government that no such weapons
existed. The weapons inspectors made that completely clear to the
Bush/Cheney regime. There were no Iraqi WMD, and everyone in the
U.S. government was apprised of that fact.
[Paul Craig Roberts,
"The Shame of Being an American
," 17 Feb
To understand the scrape we are in, it may help, a little, to understand
the system we left behind. A proper gold standard was a well-oiled
machine. The metal actually moved and, so moving, checked what are
politely known today as "imbalances." Say a certain baseball-loving
North American country were running a persistent trade deficit. Under
the monetary system we don't have and which only a few are yet even
talking about instituting, the deficit country would remit to its
creditors not pieces of easily duplicable paper but scarce gold bars.
Gold was money -- is, in fact, still money -- and the loss would set in
train a series of painful but necessary adjustments in the country that
had been watching baseball instead of making things to sell. Interest
rates would rise in that deficit country. Its prices would fall, its
credit would be curtailed, its exports would increase and its imports
decrease. At length, the deficit country would be restored to something
like competitive trim. The gold would come sailing back to where it
started. As it is today, dollars are piled higher and higher in the
vaults of America's Asian creditors. There's no adjustment mechanism,
only recriminations and the first suggestion that, from the creditors'
point of view, enough is enough.
"Requiem for the Dollar
," 05 Dec 2010]
War is a racket. It always has been. It is possibly the oldest, easily
the most profitable, surely the most vicious. It is the only one
international in scope. It is the only one in which the profits are
reckoned in dollars and the losses in lives. A racket is best
described, I believe, as something that is not what it seems to the
majority of the people. Only a small "inside" group knows what it is
about. It is conducted for the benefit of the very few, at the expense
of the very many. Out of war a few people make huge fortunes.
[Major General Smedley Butler, USMC,
The way to increase the concentration of [your] wealth is to partner
with the State so the Central State functionaries and agencies funnel
ever-larger shares of the national income to your cartel or
quasi-monopoly while the State suppresses or marginalizes [your]
potential competitors. The more wealth you concentrate, then the more
political power you can purchase.
[Charles Hugh Smith,
Wealth and the Purchase of Political Power: Democracy's Death Spiral
29 Oct 2010]
The Obama administration is continuing the Bush administration policy of
refusing to comply with the Prompt Corrective Action (PCA) law....
[R]egulators have twisted the term ["too big to fail"] into immunity.
Massive insolvent banks are not placed in receivership, their senior
managers are left in place, and the taxpayers secretly subsidize their
risk capital. This policy is indefensible. It is also unlawful. It
violates the Prompt Corrective Action law. If it is continued it will
cause future crises and recurrent scandals.
[Prof. William Black
, explaining why the United States is now a
"Black's Proposal for Systemically Dangerous
," 10 Sep 2009]
The United States Patent and Trademark Office grants patents for vague
ideas, obvious processes and usage models and even the most mundane
software user interface conventions. Our patent system is so
under-funded, its mission, criteria and processes so broken and
ill-suited to today's economy that the best solution is to just
dismantled the patent office and start over.
"Why Mobile Patents are Such a Mess
," 28 Apr 2010]
With low growth, low birthrates and longer life expectancies, Europe can
no longer afford its comfortable lifestyle, at least not without a
period of austerity and significant changes. The countries are trying to
reassure investors by cutting salaries, raising legal retirement ages,
increasing work hours and reducing health benefits and pensions.
"We’re now in rescue mode," said Carl Bildt, Sweden’s foreign minister.
"But we need to transition to the reform mode very soon. The ‘reform
deficit’ is the real problem," he said, pointing to the need for
[Steven Erlanger on the end of government-sponsored social Ponzi
schemes in Europe,
"Europeans Fear Crisis Threatens Liberal Benefits
," 23 May 2010]
The Legacy of the Federal Reserve
Yeah, my -- my fear is that, uh, the whole island [of Guam] will,
uh, become so overly populated that it will tip over and, uh, and
[Congressman Hank Johnson, collecting $174k a year while
a gross lack of understanding about simple
geographic formations, 31 Mar 2010]
We have, I think, an excessive degree of concern right now about home
ownership and its role in the economy.... We are talking here about an
entity -- home ownership, homes -- where there is not the degree of
leverage we have seen elsewhere.... Homes that are occupied may see an
ebb and flow in [their] price at a certain percentage level, but you're
not going to see the collapse that you see when people talk about a
, and so those of us -- on our committee in particular -- will
continue to push for home ownership.
[Congressman Barney Frank, oblivious to the massive leverage being utilized by Wall Street and the GSEs at the time, in a
speech on the House floor
, 27 Jun 2005]
Hugh McCulloch, our first Comptroller of the Currency in 1863,
... proposed that the National Bank Act "be so amended that the failure
of a national bank be declared prima facie fraudulent, and that the
officers and directors, under whose administration such insolvency shall
occur, be made personally liable for the debts of the bank, and be
punished criminally, unless it shall appear, upon investigation, that
its affairs were honestly administered." Under such a regime, moral
hazard surely would not exist.
," 09 Mar 2010]
Around the same time that finance reform was being watered down in
Congress at the behest of [Treasury secretary Timothy Geithner], Obama
was making a pit stop to raise money from Wall Street. On October 20th,
the president went to the Mandarin Oriental Hotel in New York and
addressed some 200 financiers and business moguls, each of whom paid the
maximum allowable contribution of $30,400 to the Democratic Party. But
an organizer of the event, Daniel Fass, announced in advance that
support for the president might be lighter than expected -- bailed-out
firms like JP Morgan Chase and Goldman Sachs were expected to contribute
a meager $91,000 to the event -- because bankers were tired of being
lectured about their misdeeds.
“The investment community feels very put-upon,” Fass
explained. “They feel there is no reason why they shouldn't earn
$1 million to $200 million a year, and they don't want to be held
responsible for the global financial meltdown.”
"Obama's Big Sellout
," 09 Dec 2009]
Increasing America's debt weakens us domestically and internationally.
Leadership means that ``the buck stops here.'' Instead, Washington is
shifting the burden of bad choices today onto the backs of our children
and grandchildren. America has a debt problem and a failure of
leadership. Americans deserve better. I therefore intend to oppose the
effort to increase America's debt limit.
speech on the Senate floor
, 16 Mar 2006]
Because this massive accumulation of debt was predicted, because it was
foreseeable, because it was unnecessary, because it was the result of
willful and reckless disregard for the warnings that were given and for
the fundamentals of economic management, I am voting against the debt
speech on the Senate floor
, 16 Mar 2006]
Listen, I had a point of view when I was bashing business and won 19
Emmys as a consumer reporter. None of my colleagues were bothered by
that. It only became bothersome to people when I became a libertarian
and began criticizing government.... Every TV reporter has a point of
view. Did Edward R. Murrow have a point of view? When he was bashing
Senator [Joseph] McCarthy, which is what everybody loves him for, he
Describing media bias at ABC
, 08 Dec 2009]
Anything that is too big to fail is too big to exist.
"The Quiet Coup
," May 2009]
At this juncture, however, the impact on the broader economy and
financial markets of the problems in the subprime market seems likely to
Testimony before the Joint Economic Committee,
, 28 Mar 2007]
There is no crowd in crowdsourcing. There are only virtuosos, usually
uniquely talented, highly trained people who have worked for decades in
a field. Frequently, these innovators have been funded through failure
after failure. From their fervent brains spring new ideas. The crowd
has nothing to do with it. The crowd solves nothing, creates nothing.
"The Myth of Crowdsourcing
," 29 Sep 2009]
When thievery is resorted to for the means with which to do good,
compassion is killed. Those who would do good with the loot then lose
their capacity for self-reliance, the same as a thief's self-reliance
atrophies rapidly when he subsists on food that is stolen. And those
who are repeatedly robbed of their property simultaneously lose their
capacity for compassion.
[F.A. Harper, Essays on Liberty, 1952]
The computer industry is the only industry that is more fashion-driven
than women's fashion. Maybe I'm an idiot, but I have no idea what
anyone is talking about. What is [cloud computing]? It's complete
gibberish. It's insane. When is this idiocy going to stop?
[Larry Ellison, Oracle CEO,
, those who continually blame insufficient regulation
for our present plight offer little or no evidence. They rely instead
on the implicit assumption that if only the regulations had been much
stricter, the bankers and other business-sector malefactors never would
have perpetrated their evil deeds. This faith in the regulators is
touching, to be sure, but it is also extremely naïve. We now have --
and long have had -- miles of regulations on the books and legions of
regulators at work in scores of government agencies. What specific
power did they lack? And had they been given even greater powers,
budgets, and staffs, what enchantment would have transformed these
ostensible guardians into smart, dogged champions of the public
interest, rather than the time-serving drones and co-conspirators with
the regulated firms that they have always been?
"Did Small Government Cause Our Current Problems?
09 Sep 2009]
We only support three operating systems: Windows, Apple Macintosh, and
[Comcast Internet Tech Support engineer; Confusing operating systems, browsers, and pizza in the same sentence; 09 Jun 2009]
When I was young, First Boston Company was an honorable and constructive
firm and very much served the surrounding civilization. Investment
banking at the height of this last folly was a disgrace to the
," Spring 2009]
In moving, even tentatively, into this new area of lending [sub-prime
mortgages], Fannie Mae is taking on significantly more risk, which may
not pose any difficulties during flush economic times. But the
government-subsidized corporation may run into trouble in an economic
downturn, prompting a government rescue similar to that of the savings
and loan industry in the 1980's.
[Steven A. Holmes, predicting the sub-prime meltdown nine years
before it happened,
"Fannie Mae Eases Credit To Aid Mortgage Lending
30 Sep 1999]
War is not the answer to the challenges we face ... and to persist in
following that path is to invite inevitable overextension, bankruptcy,
[Col. Andrew Basevich,
"The Limits of Power; The End of American Exceptionalism
We rate every deal. It could be structured by cows and we would rate
[Shannon Mooney, an employee of Standard & Poor's ratings
agency, in an
to a colleague, Apr 2007]
I hope that you have re-read the Constitution of the United States in
these past few weeks. Like the Bible, it ought to be read again and
[Franklin D. Roosevelt,
, 09 Mar 1937]
Public pension promises are huge and, in many cases, funding is woefully
inadequate. Because the fuse on this time bomb is long, politicians
flinch from inflicting tax pain, given that the problems will only
become apparent long after these officials have departed.
[Warren Buffett, letter to Berkshire Hathaway shareholders,
I thought there would have been at least 200 [banks] closed down in '08.
There were only about 25 or 30. They're going at a very slow pace
because they know how deep and ugly the problem is. They're terrified
to have the American public know just how many banks out there are
insolvent. And they're afraid of a panic if they start closing down
hundreds of banks.
[John Jacquemin, Manager of Mooring Capital,
"Why The Street Hates Geithner
," Forbes, 18 Feb 2009]
As we have seen over the past few weeks, the country's biggest banks --
Bank of America and Citigroup -- are deteriorating rapidly. They will
need far more bailout money beyond the $350 billion of taxpayer cash and
guarantees they have already received.
Note that the money already dumped into the black holes of these two
financial institutions far exceeds their net worth. And in exchange for
this foolish investment, taxpayers have received just 6% of Bank of
America, and 7.8% of Citigroup. This is absurd. How [an investment
equaling] 120% of a company's market cap yields a single digit ownership
stake is beyond my comprehension.
," 26 Jan 2009]
What Wall Street Wants, Wall Street Gets
the act of taking money from people and
businesses that didn't make mistakes and giving it to businesses that
made lots of them.
"Washington's Wealth Boom
," 14 Jan 2009]
If any private corporation employed the same accounting tricks Congress
and the White House use to hide the government's massive debt and
financial liabilities, its board and executive officers would all be in
prison. In the government, it's common practice.
"Corporatism, Not Capitalism
," 24 Sep 2008]
As long as you've got $3 trillion being taxed and spent by the federal
government, people are going to want to get control of that.
"The System Is Rigged for Incumbents
," 17 Oct 2008]
The Fed's real objective here is to promote a combination of fear
mongering about deflation to justify keeping interest rates at zero,
while at the same time promoting as much inflation as possible in an
attempt to orchestrate a massive stealth devaluation of the U.S. dollar
and short-changing of all foreign investors in U.S. assets.
"Is It Twilight in America?
" 06 Jan 2009]
We hate you guys. Once you start issuing $1 trillion - $2 trillion ...
we know the dollar is going to depreciate, so we hate you guys but there
is nothing much we can do.
[Luo Ping, a director-general at the China Banking Regulatory
10 Feb 2009
Five days before [Treasury Secretary Henry] Paulson struck his deal with
the banks, British Prime Minister Gordon Brown negotiated a similar
bailout -- only he extracted meaningful guarantees for taxpayers: voting
rights at the banks, seats on their boards, 12 percent in annual
dividend payments to the government, a suspension of dividend payments
to shareholders, restrictions on executive bonuses, and a legal
requirement that the banks lend money to homeowners and small
In sharp contrast, this is what U.S. taxpayers received: no controlling
interest, no voting rights, no seats on the bank boards and just five
percent in dividend payouts to the government, while shareholders
continue to collect billions in dividends every quarter. What's more,
golden parachutes and bonuses already promised by the banks will still
be paid out to executives -- all before taxpayers are paid back.
No wonder it took just one hour for Paulson to convince all nine CEOs to
accept his offer -- less than seven minutes per bank. Not even the
firms' own lawyers could have drafted a sweeter deal.
"The Bailout Profiteers
," 31 Oct 2008]
You never want a serious crisis to go to waste.
[Rahm Emanuel, Barack Obama's Chief of Staff, 18 Nov 2008]
So when [Treasury Secretary] Henry Paulson argues that it is necessary
to pump money into credit markets to prevent them from freezing up, he
doesn't bother to realize that the money he pumps into the credit
markets is coming directly out of the very same credit markets. He is
doing little more than rearranging the deck chairs on the Titanic;
shuffling the money from one set of financial intermediaries to another
does not increase either liquidity or solvency. It merely delays the
problem for a few brief moments.
Even the failing banks pay lip service to their fiduciary
responsibility, but any privately funded firm that took money from
more-productive people to give it to less-productive people would soon
go out of business. Only the government can violate Hazlitt's logic and
survive, because only government can socialize its losses through the
[Scott A. Kjar,
"Henry Hazlitt on the Bailout
," 15 Oct 2008]
Not only have individual financial institutions become less vulnerable
to shocks from underlying risk factors, but also the financial system as
a whole has become more resilient.
[Alan Greenspan, Chairman of the Federal Reserve,
It's a safe banking system, a sound banking system. Our regulators are
on top of it. This is a very manageable situation.
[Treasury Secretary Henry Paulson, less than two months before
asking Congress for an emergency $700 billion in bailout funds,
20 Jul 2008
In late June, when I tried to sign up on McCainSpace -- the analogue to
MyBO [Barack Obama's networking site] -- I got error messages. When I
tried again, I was informed that I would soon get a new password in my
in-box. It never arrived.
"How Obama Really Did It
Technology Review, Sep/Oct 2008]
Ask yourself: how has "elitism" become a bad word in American politics?
There is simply no other walk of life in which extraordinary talent and
rigorous training are denigrated. We want elite pilots to fly our
planes, elite troops to undertake our most critical missions, elite
athletes to represent us in competition and elite scientists to devote
the most productive years of their lives to curing our diseases. And
yet, when it comes time to vest people with even greater
responsibilities, we consider it a virtue to shun any and all standards
of excellence. When it comes to choosing the people whose thoughts and
actions will decide the fates of millions, then we suddenly want someone
just like us, someone fit to have a beer with, someone down-to-earth --
in fact, almost anyone, provided that he or she doesn't seem too
intelligent or well educated.
29 Sep 2008]
Cherish public credit. One method of preserving it is to use it as
sparingly as possible, avoiding occasions of expense by cultivating
peace ... avoiding likewise the accumulation of debt.
[George Washington, Farewell Address, 26 September 1796]
When a country is not on a gold standard, when its citizens are not even
permitted to own gold, when they are told that irredeemable paper money
is just as good, when they are compelled to accept payment in such paper
of debts or pensions that are owed to them, when what they have put
aside, for retirement or old age, in savings banks or insurance
policies, consists of this irredeemable paper money, then they are left
without protection as the issue of this paper money is increased and the
purchasing power of each unit falls; then they can be completely
impoverished by the political decisions of the 'monetary managers.'
Under a fiat money standard, governments (or their central banks) may
obligate themselves to bail out, with increased issues of standard
money, any bank or any major bank in distress. In the late nineteenth
century, the principle became accepted that the central bank must act as
the 'lender of last resort,' which will lend money freely to banks
threatened with failure. Another recent American device to abolish the
confidence limitation on bank credit is 'deposit insurance,' whereby the
government guarantees to furnish paper money to redeem the banks' demand
liabilities. These and similar devices remove the market brakes on
rampant credit expansion.
[Murray Rothbard, "Man, Economy, and State," 1962]
We are in our present position because government has burdened us with
taxes, spending, debt, regulations, subsidies, guarantees (to lenders,
for example), trade restrictions, fiat money, and other impositions.
Between the endless domestic schemes and war, we are being crushed by
the weight of the state. We don't need a stimulus. We need freedom.
[Sheldon Richman, "An Unstimulating Idea," 25 Jan 2008]
The United States is a democratic nation. Here, the people rule. We
build no walls to keep them in, nor organize any system of police to
keep them mute. We occupy no country -- the only land abroad we occupy
is beneath the graves where our heroes rest.
What is called the "West" is a voluntary association of free nations,
all of whom fiercely value their independence and their sovereignty.
And as deeply as we cherish our beliefs, we do not seek to compel
others to share them.
When we enjoy these vast freedoms as we do, it's difficult for us to
understand the restrictions of dictatorships, which seek to control each
institution and every facet of people's lives -- the expression of their
beliefs, their movements and their contacts with the outside world.
It's difficult for us to understand the ideological premise that force
is an acceptable way to expand a political system.
We Americans do not accept that any government has the right to command
and order the lives of its people; that any nation has an historic
right to use force to export its ideology.
to the UN General Assembly, 24 Oct 1985]
All of us have heard this term 'preventative war'
earliest days of Hitler. I recall that is about the first time I heard
it. In this day and time... I don't believe there is such a thing; and,
frankly, I wouldn't even listen to anyone seriously that came in and
talked about such a thing.
[Dwight D. Eisenhower, Press conference, 1953]
The problem in defense is how far you can go without destroying from within
what you are trying to defend from without.
[Dwight D. Eisenhower]
Un-American activity cannot be prevented or routed out by employing
un-American methods; to preserve freedom we must use the tools that
[Dwight D. Eisenhower, "The White House Years," p. 331]
A people that values its privileges above its principles soon loses
[Dwight D. Eisenhower, Inaugural Address, 20 Jan 1953]
I made my arguments and went down in flames. History will prove me
right. This is an exercise in folly.
[George W. Bush, casting the lone vote against Major League
Baseball Wild Card expansion, 1994]
It is no accident that, with the Wild Card in full flower, Major League
Baseball is headed toward its fourth straight season of record
[Mike Bauman, Baseball Perspectives, 06 Sep 2007]
Those who are to conduct a war cannot in the nature of things, be proper
or safe judges, whether a war ought to be commenced, continued, or
concluded. They are barred from the latter functions by a great
principle in free government, analogous to that which separates the
sword from the purse, or the power of executing from the power of
[James Madison, "Helvidius" No. 1 [August 24, 1793],
from James Madison: Writings (Library of America, 1999)]
What strikes me as ridiculous is the right-wing view that government is
incompetent and dangerous domestically -- at least in economic and
social affairs -- but has some sort of Midas Touch internationally such
that it can bring freedom, democracy, and justice to any land its troops
deign to invade. Not that the right wing is principled enough to pursue
its domestic views, but I'm speaking here of its campaign rhetoric and
higher-level of critique of government that you find in their
periodicals and books. The precise critique of government that they
offer for the welfare state and regulatory measures -- they are
expensive, counterproductive, hobble human energies -- applies many
times over to international interventions.
[Llewellyn H. Rockwell Jr.,
"The Foreign Policy of Ron Paul
," 21 May 2007]
When a private individual meditates an undertaking, however connected it
may be with the welfare of society, he never thinks of soliciting the
cooperation of the government; but he publishes his plan, offers to
execute it, courts the assistance of other individuals, and struggles
manfully against all obstacles. Undoubtedly he is often less successful
than the state might have been in his position; but in the end, the sum
of these private undertakings far exceeds all that the government could
[Alexis de Tocqueville, "Democracy in America," Book 1, 1835]
But it would be a simpler and less dangerous remedy to grant no
privilege to any, giving to all equal cultivation and equal
independence, and leaving every one to determine his own position.
Natural inequality will soon make way for itself, and wealth will
spontaneously pass into the hands of the most capable.
[Alexis de Tocqueville, "Democracy in America," Book 1, 1835]
Of the 56 banks that failed in the U.S. between 1959 and 1971, 34 had
passed their most recent examination in a 'no-problem' category, and 17
of the 34 had been given an 'excellent' rating!
[Rep. St Germain (D-RI), commenting on the failure of government
regulations, quoted in Stephen Pizzo's "Inside Job: The Looting
of America's Savings and Loans," p. 475]
What could account for the weakness of our credit markets? Why does the
Fed need to intervene at the drop of a market? The reasons have to do
with an idea set firmly in place in the 1930s and expanded at every
crises up to the present. This is the notion that, while the risks
inherent in the business of lending and borrowing should be borne by the
public, the profits of that line of work should mainly accrue to the
lenders and borrowers.
[James Grant, The Fed's Subprime Solution, NYT, 26 Aug 2007]
Actually, my views are probably leaning toward a libertarian point of
view ... Not liberal. Liberal always has the connotation of somebody
that wants to spend somebody else's money. And conservatives don't want
to spend any of their own money. But libertarians love independence,
and I like everyone leaving everyone else alone. I've never approved of
government meddling. Whatever people want to do is fine as long as
you're not bothering anybody else.
[Clint Eastwood, Rolling Stone Magazine, 17 Sep 1992]
Broadly speaking, Democrats want to protect you from the physical
threats posed by habits such as smoking, overeating, and crossing the
street while listening to an iPod. Republicans are more interested in
protecting you from the moral threats posed by temptations such as
drugs, gambling, and pornography. Between them, they've got you
covered, body and soul.
[Jacob Sullum, "Who's Your Nanny?" 28 Feb 2007]
If you can't explain something to a six-year-old, you really don't
understand it yourself.
The only justifiable purpose of political institutions is to insure the
unhindered development of the individual.
The prestige of government has undoubtedly been lowered considerably by
the Prohibition law. For nothing is more destructive of respect for the
government and the law of the land than passing laws which cannot be
enforced. It is an open secret that the dangerous increase of crime in
this country is closely connected with this.
[Albert Einstein, "My First Impression of the U.S.A.," 1921]
Guard with jealous attention the public liberty. Suspect everyone who
approaches that jewel. Unfortunately, nothing will preserve it but
downright force. Whenever you give up that force, you are inevitably
[Patrick Henry, During Virginia's ratification convention, 1788]
In private, you got what you got in public. He treated everyone the
same. He was just a very warm man, and he worked hard to impress upon
his children the value of kindness. He was biologically incapable of
gossip. There was no smallness in him.
[Ron Reagan, about his father Ronald Reagan, New York Times, 27
The concept is interesting and well-formed, but in order to earn better
than a 'C,' the idea must be feasible.
[A Yale University management professor in response to Fred
Smith's paper proposing reliable overnight delivery service.
(Smith went on to found Federal Express)]
Great things will never happen with VCs or professional managers. They
have high drive, but they don't have the creativity or the insight.
Some do, but most don't.
[Elon Musk, Entrepreneur of the Year, Inc. Magazine, Dec 2007]
It's OK to have your eggs in one basket as long as you control what
happens to that basket. The problem with the Silicon Valley financing
model is that you lose control after the first investment round.
[Elon Musk, Entrepreneur of the Year, Inc. Magazine, Dec 2007]
See, when the government spends money, it creates jobs; whereas when the
money is left in the hands of the taxpayers, God only knows what they do
with it. Bake it into pies, probably. Anything to avoid creating jobs.
The recruiters-who-use-grep are riduculed here, and for good reason. I
have never met anyone who can do Scheme, Haskell, and C pointers who
can't pick up Java in two days, and create better Java code than people
with five years of experience in Java, but try explaining that to the
average HR drone.
[Joel Spolsky, "The Perils of Java Schools," 2005]
Combined with effective business processes, technology lets you
accomplish four basic things: reduce cost, reduce cycle time, increase
quality and increase flexibility. If you can do all four at the same
time, you're a winner.
[Lawrence D. Runge, "Experience Pays," Software Development
Magazine, Jan 2004]
To say that competition is going to improve education? It's just not
gonna work. You know competition is not for children. It's not for
human beings. It's not for public education. It never has been, it
never will be.
[Public school teacher Ruth Holmes Cameron, arguing against
The moment a person forms a theory his imagination sees in every object
only the traits which favor that theory.
[Thomas Jefferson, Letter to Charles Thompson, 20 Sep 1787]
There is not that much talent in the world. There are very few people
in very few closets in very few rooms that are really talented and can't
get out. People with talent and expertise at making entertainment
products are not going to be displaced by 1,800 people coming up with
their videos that they think are going to have an appeal.
[Barry Diller, when asked if he was concerned about the threat of
broadband to the entertainment industry, Web 2.0 Conference, 06
Well now home entertainment was my baby's wish
So I hopped into town for a setellite dish
I tied it to the top of my Japanese car
I came home and I pointed it out to the stars
A message came back from the great beyond
There's fifty-seven channels and nothin' on.
Every time the president comes up with a new secret tactic to down al
Qaeda, the media blows its cover: torture, monitoring our phone calls,
monitoring our e-mails, secret prisons. All perfectly reasonable
temporary concessions of freedom that will only be in effect as long as
our never-ending war on terror.
[Stephen Colbert, Jul 2006]
I have little interest in streamlining government or in making it more
efficient, for I mean to reduce its size. I do not undertake to promote
welfare, for I propose to extend freedom. My aim is not to pass laws, but to
repeal them. It is not to inaugurate new programs, but to cancel old ones
that do violence to the Constitution, or that have failed in their purpose,
or that impose on the people an unwarranted financial burden. I will not
attempt to discover whether legislation is 'needed' before I have first
determined whether it is constitutionally permissible. And if I should later
be attacked for neglecting my constituents' "interests," I shall reply that
I was informed that their main interest is liberty and that in that cause I
am doing the very best I can.
[Barry Goldwater, The Conscience of a Conservative, 1960]
If you need a dozen lawyers involved every time you want to do
something, it's going to be a huge barrier. We need to make sure that
intellectual property is not used as a barrier to growth in the future.
[IBM CEO Samuel J. Palmisano, explaining why IBM will be
publishing its patent filings on the web for public review, Sep
In a few hundred years, when the history of our time will be written
from the long-term perspective, it is likely that the most important
event historians will see is not technology, not the Internet, not
e-commerce. It is an unprecedented change in the human condition. For
the first time -- literally -- substantial and rapidly growing numbers
of people have choices. For the first time, they will have to manage
themselves. And society is totally unprepared for it.
[Peter F. Drucker, Managing Knowledge Means Managing Oneself,
Leader to Leader, Spring 2000]
For there to be a problem here, you're basically assuming a premise
where you have some evil and nefarious election officials who would
sneak in and introduce a piece of software. I don't believe these evil
elections people exist.
[David Bear, a spokesman for Diebold Election Systems, on the
likelihood that election results will be manipulated, despite the fact
that candidates spend hundreds of thousands of dollars to win elections,
New York Times, 12 May 2006]