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Of liberty I would say that, in the whole plenitude of its extent, it is unobstructed action according to our will. But rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add “within the limits of the law,” because law is often but the tyrant’s will, and always so when it violates the right of an individual.

Thomas Jefferson
(Letter to Isaac H. Tiffany, 4 April 1819)

All over the world, Governments to-day are actively engaged, on a scale unprecedented in history, in restricting trade and enterprise and undermining the basis of capitalism. Such a policy is not confined to the Socialists. Indeed the political power of the socialist parties in many parts of the world may be said to be waning. But their opponents, the dictators and the reactionaries, are inspired by the same ideas. It is a complete misapprehension to suppose that the victory of the Nazis and the Fascists is a defeat for the forces making for the destruction of capitalism. They have the same fanatical hatred of economic liberalism, the same hopes of a planned society. The differences are hierarchical. In Germany it is a crime deserving of torture or exile to be a Jew; in Russia, to possess two cows. In our own more tranquil community ... it seems to make a world of difference whether agriculture is planned by [Tweedledum or Tweedledee]. From the economic point of view there is continuity of policy. Such policies, as we have seen, have a cumulative tendency. They lead to an order of society which is likely to be less stable, less free, less productive, than our own.

Lionel Robbins
The Great Depression (1934)

I’m the commander in chief, see, I don’t need to explain, I do not need to explain why I say things. That’s the interesting part about being president. Maybe somebody needs to explain to me why they say something, but I don’t feel like I owe anybody an explanation.

The Deluded Decider
Quoted in A Rare Glimpse Inside Bush’s Cabinet
(17 November 2002)

Of High P/Es, Low Yields, Raging Inflation and Overstretched Asset Prices

The end of one calendar year and the beginning of the next is an appropriate time to reflect upon the outgoing year’s twists and turns, triumphs, trials and tribulations. It is also a good time to place these things into a broader context, consider their possible causes and consequences, learn one’s lessons and set a course for the twelve months to come. With this objective in mind, and taking into consideration the year’s financial, economic and other developments in Australia and the U.S. (and less directly in Britain, Canada, New Zealand), it seems to me that a focus upon the downside, what has gone awry and what can go wrong is presently far more sensible than the continued expectation of upside and what will continue to go right.

The more the prices of securities exceed cautious assessments of their values, the lower the rewards from owning those securities will subsequently tend to be. Today, the prices of most stocks, bonds and titles to real estate are, relative to their underpinnings’ long-term averages, much too dear. Prices were already too high for my (and, it is vital to note, Mr Buffett’s) liking before the very mild bear market of the early 2000s. Since then, of course, they have risen dramatically – and to what, from the point of view of venerable and therefore unfashionable standards, are often dangerous levels. If so, then an ugly reckoning beckons. Clearly, the past five years have mocked this expectation. But no matter: assuming that there’s rarely anything new under the sun and that it’s not different this time, the law that equilibrates prices and values will eventually reassert itself.

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