there’s a good reason that human irrationality isn’t part of the standard economic models ... If you have a simple problem, you can offer a simple solution. But the economy is a hugely complex problem. So we either simplify the problem and offer a solution, or embrace the complexity and do nothing.”
Zetland on aid and warlords:
Although Baptists and Bootleggers may not be explicitly cooperating, they are seeking the same thing (a ban on legal alcohol sales) for totally opposite reasons. ...
Now, let’s reword that for aid: “The Baptists Activists are deluded into thinking that the ban aidmoney will end alcohol drinking poverty; theBootleggers warlords and corrupt politicians know that the ban aid money is good for business and their profits.”
Another fascinating line from Zetland: "I was not cynical enough to endogenize poverty."
Carswell, 94, former Texas Ranger, FBI special agent, undercover operative in Venezuela, WHO legal counsel, and divorce attorney says "I started living a new life when I joined the [LDS] Church."
This graph shows that the Swiss franc and Brazilian real may be more misaligned than China's yuan against the US dollar. Maybe.
A forgotten disease affected 4 million people, Mossy Foot (podoconiosis, a potential cause of elephantiasis) "could be entirely eliminated now, simply and at low cost." Hat tip: Barder, who points out that it can be completely prevented by wearing shoes. ... Could there be a use for all those used shoes charities?
Barnie Frank in 2003 when the Bush administration tried to regulate Fannie and Freddie: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Barnie Frank in 2010 (HT: Mankiw): he and other Democrats fought to curb predatory lending practices before the recession but were thwarted by Republicans. ... “Low-income home ownership has been a mistake, and I have been a consistent critic of it." Republicans, he said, were principally responsible for failing to reform.
NY Times on the effects of modest deflation, via Sumner:
The classic explanation of the evils of deflation is that it makes individuals and businesses less willing to use money .... But in Japan, nearly a generation of deflation has had a much deeper effect, subconsciously coloring how the Japanese view the world. It has bred a deep pessimism about the future and a fear of taking risks that make people instinctively reluctant to spend or invest, driving down demand — and prices — even further. ...
“There is no other generation like this in the world,” Mr. Matsuda said. “These guys think it’s stupid to spend.” ...
“If we only had inflation again, this sort of business would not be necessary,” said Mr. Kaiami, referring to the rising prices that are the opposite of deflation. “I feel like I’ve been waiting for 20 years for inflation to come back.” ...
“Deflation destroys the risk-taking that capitalist economies need in order to grow,” said Shumpei Takemori, an economist at Keio University in Tokyo. “Creative destruction is replaced with what is just destructive destruction.”
These graphs comparing US and 1990s-Japanese core inflation and bond yields emphasize the importance of wondering whether that is the route we want to go.