Best paragraph I've read this past weekend

...is the following part from Rob Shimer's letter to Greg Mankiw (posted on Mankiw's blog):

In closing, let me mention one other issue that I take very seriously. I recognize that this might not matter much to my Congressman, but in my view it may be the most important issue for global welfare. The U.S. has long been a beacon of free markets. When economic conditions turn sour in Argentina or Indonesia, we give very clear instructions on what to do: balance the budget, cut government employment, maintain free trade and the rule of law, and do not prop up failing enterprises. Opponents of free markets argue that this advice benefits international financiers, not the domestic market. I have always believed (at least since I began to understand economics) that the U.S. approach was correct. But when the U.S. ignores its own advice in this situation, it reduces the credibility of this stance. Rewriting the rules of the game at this stage will therefore have serious ramifications not only for people in this country but for the future of global capitalism. The social cost of that is far, far greater than $700 billion.

Indeed (paraphrasing Orwell...), time is high that smart people restated all these otherwise obvious things (at least within the Econworld...). I've already linked, in a previous post (last bullet point), to the letter where most serious US economists, including Shimer, are openly worried about the massive bailout plan.

PS. Rob Shimer will be the discussant of one of my co-authored papers in beginning November, within the conference on Structural Models of the Labour Market and Policy Analysis from IFS, in London. Already looking forward to the best possible comments (including toughest criticism...): given the letter mentioned above, Shimer looks clearly in top shape :-).

Econlinks (old and new)

• To blurb or not to blurb, this is the new question...

• Pigovian taxation on everybody's understanding, by Greg Mankiw

• Denmark at the frontier once again (with Tyler Cowen spotting it very fast): free gym membership as long as you show up every time...

• Beer or wine and science (this is really fun, by the way and perhaps expected? :-)). I guess they don't separate serious drinkers of Belgian beer from the rest of beer drinkers, though, so that my friends still stand a chance :-).

• Jim Heckman on early interventions and importance of early child environment (his Marshall keynote lecture at the EEA-ESEM in Milano about a month ago was linked to this and much more detailed, by the way-- in my opinion the best keynote at the EEA-ESEM this year).

• Necessarily on the mother of all bailouts proposal-- Zingales with the best perspective so far. More bailout: most serious US Economists united against it. One prominent economist did not sign this, however, and sees it justified (in a way),

A bit of (interesting) Aarhus University history

I was away, in Amsterdam, on the occasion of the 80 years anniversary of the Aarhus University (AU); hence I've only read now the AU rector's speech . It turns out to be quite informative and most of it has got a lot of sense, while remaining at the same time concise, rare species in terms of public speeches nowadays :-). In particular, it's interesting to learn how one of the very young good universities (youngest European university in the updated Shanghai world top 100) got started (though-- nota bene-- a "top/good university", in general, should not say much without further info; if your specific department / institute within that university is currently topping all charts, now that is something else; a lot of decent people I know seem to be quite confused over this issue).

PS. Now that I've read this, I am actually very glad that some people were reasonable enough not to have this university in Kolding. Does not mean that I start adoring Aarhus as yet, but still: Kolding?!-- maybe for fishing....

For a Bailout Press 1

This is too good not to be mentioned: Alan Neff in the Washington Post on the automated bailout hotline.

Via Greg Mankiw, who is---obviously--- pretty pissed off with the recent massive bailout proposal.

The phrase of the day

Thanks goodness we bailed out Bear Stearns back in March if we hadn't we might have lost Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch and who knows what else. Oh wait...

From Alex Tabarrok, on MR.