Thanks for Todd Davenport's instructive series on "fair-value" accounting [Dec. 28, Dec. 31, and Jan. 2], which is a very good review of the complexities and controversy about this latest creation of the metaphysical accountants in their quest for the One True Way of bookkeeping.

It becomes ever more apparent that a set of financial statements, based on no matter what rules, can never reveal more than a certain aspect of the relevant facts. Truth is found in multiple perspectives, not a single official one.

The series also contains some entertaining quotes. "You can't complain about the market making a mistake. It is wrongheaded thinking, and it can get you into trouble," says Professor Duffie. But everybody in the world agrees that the market made incredible mistakes that lasted a couple of years during the subprime mortgage boom.

We should remember the great dictum of Benjamin Graham that although the market is a weighing machine in the long run, in the short run it is merely a voting machine.

Then we have the third article's observation that "investors have learned the hard way that dealers' incentives are quite different from those of their clients." Now there's a surprise! The salesman's motivation is different from the buyer's--imagine that.

Recently I was at a discussion of the subprime bust. A senior economist intoned, "What we have learned from this crisis is the importance of liquidity risk."

"Yes," I replied, "that's what we learn from every crisis."

The tendency of financial markets to relearn the same lessons every decade or so is one of the most intriguing things about them.

Alex J. Pollock is a resident fellow at AEI.