Quotes from Eric A. Posner

It is not realistic to put legal constraints on war powers. Law works through general prospective rules that apply to a range of factual situations. International relations and national security are too fluid and unpredictable to be governed by a set of legal propositions that command general assent secured in advance. Laws governing war make us feel more secure but they don't actually make us more secure

Provision of liquidity by the Fed is, conceptually, no different from the government's willingness to enforce contract rights.

The logical end point of institutional investment and diversification is the coordination of all capital to extract maximum wealth from consumers and workers.

The fact that large, solvent, heavily regulated banks would not lend to each other—or would lend to each other only at historically unprecedented interest rate premiums—and not lend to each other even overnight, was persuasive evidence, universally accepted by policymakers, that the crisis was essentially one of illiquidity.

First they came for the Socialists, and I did not speak out—Because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out—Because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out—Because I was not a Jew. Then they came for me—and there was no one left to speak for me.24

Fifth, while the current mood, reflected in the Dodd-Frank Act, is to limit the LLR's powers, the right response is to increase them while subjecting the LLR to equal-treatment principles that restrict favoritism.

Once it is recognized that the role of the state in a market economy is not only to enforce property and contract rights, but to ensure liquidity, then the bailout, properly understood, is no different from the enforcement of property rights. A host of legal consequences follow from this observation. This book gives an accounting of them.

If a systemic crisis occurs, the FDIC may rescue a bank in the non-least-cost-way—for example, by paying off creditors who are not covered by deposit insurance or keeping a bank temporarily alive when it is insolvent—when nonpayment of creditors or the bank's failure would threaten the system.

Neural nets are nothing new. Researchers have been interested in them on and off at least since the late 1950s. However, until about a decade ago, neural nets were widely viewed as useless: in 1995 one of the founders of ML, Vladimir Vapnik, bet an extravagant dinner that by 2005 "no one in his right mind will use neural nets.

By contrast, in a liquidity crisis only one creditor can save the debtor: the government. There is no competitive market that offers emergency loans during a liquidity crisis. This means that the government can dictate terms. It can also neglect the interests of other stakeholders or discriminate among them for political reasons. The risk of abuse is far higher than it is in a normal bankruptcy.

While the Fed is usually identified as the Lender of Last Resort (LLR) in the United States, the LLR function is actually shared by the Fed and FDIC.