“Economists make a distinction between positive and normative that closely parallels Popper’s line of demarcation, but which is far older. David Hume explained it well in 1739, and Machiavelli used it two centuries earlier, in 1515. A positive statement is a statement about what is and that contains no indication of approval or disapproval. Notice that a positive statement can be wrong. “The moon is made of green cheese” is incorrect, but it is a positive statement because it is a statement about what exists. A normative statement expresses a judgment about whether a situation is desirable or undesirable. “The world would be a better place if the moon were made of green cheese” is a normative statement because it expresses a judgment about what ought to be. Notice that there is no way of disproving this statement. If you disagree with it, you have no sure way of convincing someone who believes the statement that he is wrong.”

“To put the proposed Wall Street bailout into perspective, $700bn:
* Would clear the accumulated debt of the 49 poorest countries in the world ($375bn) twice over
* Is almost 5 times the annual amount of extra aid needed to achieve all the Millennium Development Goals on poverty, health, education etc ($150bn a year)
* Is about 7 years of current global aid levels ($104bn in 2007)
* Is enough to eradicate all world poverty for over two years (UNDP calculates it would take $300bn to get the entire world population over the $1 a day poverty line).
On the other hand it’s:
* Only a quarter of the cost of the Iraq war ($3 trillion on Joseph Stiglitz’ calculation)
* Half of annual global military spending ($1339 bn)”

“So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch. As a friend said last night, we’ve become a banana republic with nukes.”

“The real problem is, regardless of which theory you espouse, the financial system has too little capital and as a result is running into funding difficulties. And the response to that will be to shrink assets and therefore lending, which means we will see a credit crunch that can have a widespread effect in the U.S. economy—car loans, corporate loans, student loans, credit cards. The works.”

“Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.”