John Komlos

"[T]his book is dedicated to a new kind of economics that promotes Capitalism with a Human Face."

"George Akerlof, Kenneth Arrow, Daniel Kahneman, Paul Krugman, Thomas Schelling, Herbert Simon, Robert Shiller, Joseph Stiglitz, , and Oliver Williamson... these Nobel Prize winning economists... are usually excluded from mainstream Econ 101 textbooks or relegated to obscure footnotes. ...[I]ntroductory textbooks hype a free-market utopia ...Hence ...do not help to understand the essentials of the real existing market economies... Rather, they present a caricature at a level of abstraction that creates a fantasy world and distorts the student's vision... [A] stereotype that markets are efficient... automatically leading to a blissful life, and they continue to sing the praises... keeping any demurrals muted."

"was supposed to be good for the economy. It meant small government, low taxes, trickle down economics, , and all of these turned out to be bad... The slogan was to starve the beast... the government..."

"Reagan lowered the taxes on the top bracket and that made the [top] 1%... super rich."

"Today 21% of [total] annual income goes to 1% of households. ...That cannot be the basis of a good democracy."

"Blackboard economists said that globalization would be good for Americans. ...It had a few winners and... many losers. ...It ...led to an epidemic of Deaths of Despair in which so much was destroyed in America. Hyper-globalization destroyed... neighborhoods and cities and everything in the ... It was like an atomic bomb hit... Alcohol poisoning, drug overdoses accelerated... the destruction of human lives."

"Deregulation was supposed to make the economy more efficient... but instead it led to the financial crisis... and Blackboard Economists did not even see the crisis coming when it was around the corner."

"[H]ousing prices had doubled by 2005 in 10 years time, which would have made sense if incomes had also increased substantially, but they didn't."

"[H]ousehold incomes... weren't going up. You don't need a Ph.D. in economics to figure out that something's not right with that."

"[I]n 2016. ...Trump ...said ...this is a good economy ...tremendous, we've never had it so good... but... people do not kill themselves [or kill strangers] to the extent of 150,000 people per annum in a good economy. You've got to generate a lot of despair in order to do that..."

"They were also disregarding the real true unemployment rate... even in January of 2016, among African Americans 16%... were unemployed... so this is not full employment... and by education, among African Americans [those who did not finish high school] 32% were unemployed. Now you know why the George Floyds get into trouble with the law. They are not able to find their place in the legal labor market. ...So this is what Marty Feldstein and Donald Trump think of [as] a good economy. Not in my view!"

"[W]ith 250 years of growth... we... have 78% of the US workers living from paycheck to paycheck. No savings. ...40% of adults do not have $400 for an emergency expense."

"The Gallup poll says that half of the population is doing well, 52%... thriving, but the rest are either struggling or suffering... 44% struggling means that they have a very difficult time meeting their obligations. That's not a good economy."

"The meltdown of 2008 was a wasted crisis... because the homeowners were not bailed out. The financial sector was bailed out, the banks... the bankers... but... 8 million homeowners were thrown out of their homes."

"Usually the relationship between the true unemployment rate and the official unemployment rate is 2:1."

"The new normal is what I call Bailout capitalism because Ben Bernanke put a lot of money [creation of $trillions by the Federal Reserve] into the financial sector."

"Here is the , 2008... the assets of the Federal Reserve is under $1 trillion... and within weeks you have more than a doubling of the assets of the Federal Reserve, and then comes 2 and... 3 and by that time you're at $4 1/2 trillion... and then... comes the Covid crisis and we're up to $7 trillion. Now... that kind of a Capitalism is unsustainable. ...[N]o wonder that there is asset inflation as a consequence... and the stock market went through the roof."

"The US became a dual economy... which generated a lot of despair. Half the population is doing well and the other half is getting by... or getting by in very difficult circumstances... Trump would not have won otherwise in 2016. That's the basis of the Trump revolution... against... the political elite, the foreign policy elite, the intellectual elites."

"So why were economists so wrong? The problem is that economics is an axiomatic theory, it's deductive, based on assumptions almost all of which are false [with] too many omitted factors, and they don't care about contradictions. They don't care about people killing themselves... That's not an economic problem."

"The economic playing field is not level."

"With [incomplete or] assymetric information [and that's practically always the case]... Stiglitz and Greenwald proved... markets are inefficient, and that should be the default model."

"[Imperfect information is ubiquitous.] People with more [or better] information can take advantage of people with less information, so exploitation becomes a real possibility."

"People who are cheaters, swindlers who can take advantage, especially of poor people... [who] do not have the education... the information. They cannot afford to buy the information so they get the short end of the stick... [O]pportunistic behavior is a big problem in the economy, and economists are not paying... attention..."

"People are not rational. Mainstream economics is pre-Freudian... because they don't think about the subconscious mind. Daniel Kahneman... has proven that rationality is impossible for mortals, human beings [with finite minds]... We're not superhuman."

"[F]our economists have received Nobel Prizes for Behavioral economics... [T]hat should be the default model. ...Forget about rationality. That's a silly assumption."

"IQ, intelligence quotient is normally distributed. ...The smart can take advantage of those with low IQ. That's not going to be the basis of a good economy and a good democracy if if people take advantage of one another. ...That's especially true of an educational system that is mediocre for a goodly portion of the population."

"Economists disregard the... crucial result that people can be conditioned and... corporations can take advantage of that."

"The character is formed during the first few years of life, and the corporations have an impact on the way we think... so ... is not realistic, because producers spend an incredible amount of money in order to condition children and youth to drink Coca-Cola, to depend on the iPhone, to go to hamburger joints, to McDonald's... So adult economics, forget it! You've got to start the analysis with children, and that means that tastes are endogenous [determined within the economic system! ...The assumption of exogenous tastes is toxic.]"

"Status seeking is important. Relative incomes matter... Mainstream... economists said inequality was not a problem, and that's how we got an oligarchy [and populism]."

"We're not s. We live in a society and we're influenced by social forces, social processes, and that's not included in the DSGE models."

"Wealth is... political power... and that's how we got from a democracy, to an oligarchy, to a plutocracy. Economists forgot completely about the need for countervailing power... and the oligarchs have taken over..."

"Power is the ability to control the action or thought of others. ...The oligarchs use their power also to control the thinking. They invested heavily... to control the thinking of the population."

"[Oligarchs] are spending a lot of money on lobbies to influence government, and... the laws are made to benefit those that already are privileged."

"Future generations cannot influence our decisions today unless we approach the problem from a moral perspective."

"[The need for [j]ustice [and morality] is innate in human beings, and mainstream economics neglects [ethics,] justice [and morality]."

"[J]ustice is as important as efficiency."

"Most of the models pertain to perfect competition. Forget about it! The default model should be or monopoly."

"means that many processes are non-reversible... Poor people who go to poor schools... can't get into college and their whole life course is messed up..."

"Taxes are not all bad. ...[T]axes are used for infrastructure investments, for schooling, for basic research, and to bail out markets when they go haywire."

"[M]arkets were not made in heaven... and they are helping the privileged, as they are constituted today."

"[M]ainstream economics is fundamentally flawed [and] ignores the elephant in the room, which is the real existing economy."

"I am advocating... a new paradigm of humanistic Rawlsian economics which puts human beings at the center... and not income, not growth, not GNP..."

"[T]he current system depends too much on luck. If you choose your parents right and you live in a decent neighborhood, you can grow up and become a productive member of the society... and John Rawls argues that... [luck] cannot be the basis of a just society."

"Rawls says... let's design an economy... in such a way that you would be willing to enter that society at random. That's a just society... You don't know your position in it. You don't know whether you're smart or dumb. You don't know your skin color. You don't know your gender. You don't know your parents. You don't know anything about yourself. ...[In that case] we wouldn't design a society like it is today. You would make sure that there is an equitable distribution of power.... that the power is not concentrated... that there is countervailing power, that wealth is not concentrated..."

"[I]f we're not able to shift our paradigms, if we are stuck in the Arrow–Debreu world, then we're going to become the neoserfs of the oligarchs. Just like Aldous Huxley predicted in his novel, a Brave New World"

"Friedrich Hayek made a tremendous mistake in arguing that The Road to Serfdom leads through tyrannical governments... because there are multiple roads to serfdom... [A]nother... leads through the tyranny of oligarchs."

"[[w:Humanistic economics|[H]umanistic economics]] advocates a creation of a capitalism with a human face. That requires a paradigm shift... away from a rat race, [away from] a social Darwinistic economy with a few winners and many losers."

"Capitalism with a human face would require the elimination of poverty... the reduction of inequality... the establishment of real true... ... a less stressful life. ...Economists disregard stress."

"Less anxiety, less insecurity and less crime. That's Capitalism with a human face, and you can read more about it in my textbook..."

"Prof. emeritus John Komlos... lecture... "The Economic History of Trumpism"... [H]e used his lecture to show that the... U.S. had entered a path of deconstruction of its own system starting with the watershed moment of and leading to the election of Trump... Desperate voters make desperate decisions, in this case, for Trump. ...People have slipped down the social ladder ...Reagan’s administration turned away from the New Deal ...benefitting the rich ...[I]nequality rose immediately, which has not been reversed ...GDP growth stayed exactly where it was... Reagan... [set] the path towards today’s economic and societal malaise. ...Additionally, and hit ...[and] areas in the American heartland were destroyed, according to Komlos. ...For him, it is natural that the losers of globalization... would lash out... Workers were not reskilled, or trained. They were not helped to bridge the gap... Flash forward to the 21st century... Obama turned to the 'old guard' of economists and experts that had helped to create the crisis... For Komlos, this led to Wall Street being saved and Main Street being ignored... The desperation that followed the last Great Recession, including... so many... lost... homes... led many... to believe that the establishment politicians... could never right the wrongs... Komlos... thinks that the U.S. is still marching down the bleak [unsustainable] path... entered in the 1970s and 80s."