Really good links - FOMC - Limits of arbitrage - Director's law - Public sector employees

Paul Krugman - The FOMC has spoken - "What the FOMC announced was a slight change in policy: rather than allowing its balance sheet to shrink as the mortgage-backed securities it owns mature, it will maintain the balance sheet’s size by reinvesting the proceeds in long-term government bonds. Roughly speaking, it has gone from a completely crazy policy of monetary tightening in the face of massive unemployment and incipient deflation, to a policy of standing pat in the face of same."

Kenneth R. French - To what extent do the limits of arbitrage discredit the idea of market efficiency? - "I think there are many papers that show the limits of arbitrage framework can help us understand the behavior of financial prices. <..> Although the limits of arbitrage argument is based on the premise that prices do not fully reflect all publicly available information, it also says that mistakes in prices do not imply easy profits. In fact, I think the argument implies that almost all investors should act as if prices are right."

Eric Falkenstein - Director's law - "Friedman states that it is a common myth to think the government takes from the rich and gives to the poor. He mention Director's law--really an empirical tendency in the US circa 1960--that the rich and poor pays for programs to the middle class.
        As depressing as Friedman's argument may be, there are worse things than tyranny of the middle class: a coalition of the elites with the lowest classes. We have legislators bestowing all sorts of sinecures, pensions, and welfare on the masses, creating a coalition of the unproductive, and they grow in popularity and power by granting more entitlements. The end game is bankruptcy. " - but where is the data, Eric?

Steve Landsburg - Are public-sector employees overcompensated? - "Quit rates in the public sector are about one third what they are elsewhere. In other words, government employees sure do seem to like holding on to their jobs."