Morning Links: 2009-08-24

In theory, the public overwhelmingly supports reform—earlier this year, polls showed big majorities in favor of fundamental change. But, when it comes to actually making fundamental change, people go all wobbly…What this suggests about health care is that, if people have insurance, most will value it highly, no matter how flawed the current system… More strikingly, talk of changing the system may actually accentuate the endowment effect.

As greed has the upper hand in Chinese society, the same story repeats itself time and again. A stock market bubble is a negative-sum game. It leads to distortion in resource allocation and, hence, net losses. The redistribution of the remainder, moreover, isn’t entirely random. The government, of course, always wins. It pockets stamp duty revenue and the proceeds of initial public offerings of state-owned enterprises in cash. And, the listed companies seldom pay dividends.

Several of Germany’s biggest public sector banks are likely to reveal steep rises in loan loss provisions this week even as optimism grows that the country is pulling out of its economic crisis.

Call this the sellout meme: "A funny thing happened on the way to blogosphere dominance of the global conversation. Many of the most prominent bloggers have hitched their wagons to the traditional mainstream media (MSM). Yes, the same MSM that bloggers, or Internet diarists, ceaselessly ridiculed as slaves to conventional wisdom."

Of more than 500 senior policymaking positions requiring Senate confirmation, just 43 percent have been filled — a reflection of a White House that grew more cautious after several nominations blew up last spring, a Senate that is intensively investigating nominees and a legislative agenda that has consumed both.

late last year, policymakers who had been behind the curve finally started to use most of the weapons in their arsenal. That effort worked and the free-fall of economic activity eased. There are three open questions now on the outlook. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse?

Every week, Goldman analysts offer stock tips at a gathering the firm calls a "trading huddle." But few of the thousands of clients who receive Goldman’s written research reports ever hear about the recommendations…Critics complain that Goldman’s distribution of the trading ideas only to its own traders and key clients hurts other customers who aren’t given the opportunity to trade on the information. Securities laws require firms like Goldman to engage in "fair dealing with customers," and prohibit analysts from issuing opinions that are at odds with their true beliefs about a stock.