Academics From The United States

"No, the problem that the politicians have with the professors is not one of failure to communicate; it is one of failure to say what politicians want (need) to hear, especially when they are trying to seize power from other politicians. And necessity is the mother of invention: a different group, the policy entrepreneurs, has arisen to fill the gap."

"Where do ideas about economics come from? They come, of course from economists—where by an "economist" I mean someone who thinks and writes regularly about economic issues. But not all economists are alike, and in fact the genus includes two radically distinct species: The professors and the policy entrepreneurs."

"Why did the magic economy go away? Hundreds of books have been written on that topic. This isn't one of them ― although I'll devote part of a chapter to some plausible stories and take a number of stabs at the issue along the way. But let me cut to the chase: the real answer is that we don't know. There are a lot of stories out there. Most of them, including the ones that have achieved the widest currency, are dead wrong on logical or factual grounds. There are some less popular stories that could be right ― but if you are honest with yourself, you will admit that nobody, yourself included, knows which if any of these stories actually is right."

"As the example of Ronald Reagan shows, real political success comes not simply from appealing to the interests that people currently perceive but from finding ways to redefine their perceived interests, to harness their discontent in favor of changes that you can lead."

"Economics is harder than physics; luckily it is not quite as hard as sociology. Why is economics such a hard subject? Part of the answer has to do with complexity. The economy cannot be put in a box. [...] Another reason economics is hard is that the critical sociologist is right: it involves human beings, who do not behave in simple, mechanical ways."

"I do not think this is a permanent condition. The craziness comes more from cultural ethnic issues than anything else, because you have a… A lot of the real craziness come from, if you like, from rural who feel that they’re losing their country, they’re losing ownership of the country. And they are right—we are becoming more diverse, more multicultural. And in the end... they are not the future. In the end, the power they still have will go away. But it’s a very difficult time until then. So the future is Mayor Deblasio of New York, but Ted Cruz is still out there with the ability to do a lot of damage."

"When the economy is in a depression, scarcity ceases to rule. Productive resources sit idle, so that it is possible to have more of some things without having less of others; free lunches are all around. As a result, all the usual rules of economics are stood on their head; we enter a looking-glass world in which virtue is vice and prudence is folly. Thrift hurts our future prospects; sound money makes us poorer. Moreover, that's the kind of world we have been living in for the past several years, which means that it is a kind of world that students should understand. […] Depression economics is marked by paradoxes, in which seemingly virtuous actions have perverse, harmful effects. Two paradoxes in particular stand out: the , in which the attempt to save more actually leads to the nation as a whole saving less, and the less-well-known , in which the willingness of workers to protect their jobs by accepting lower wages actually reduces total employment. […] In times of depression, the rules are different. Conventionally sound policy—s, a firm commitment to —helps to keep the economy depressed. Once again, this is not normal. Most of the time we are not in a depression. But sometimes we are—and 2013, when this chapter was written, was one of those times."

"This is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."

"More than four years after the financial crisis began, the world's major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s. And the reason is simple: we are relying on the same ideas that governed policy in the 1930s. These ideas, long since disproved, involve profound errors both about the causes of the crisis, its nature, and the appropriate response. These errors have taken deep root in public consciousness and provide the public support for the excessive austerity of current fiscal policies in many countries. So the time is ripe for a in which mainstream economists offer the public a more evidence-based analysis of our problems."

"in goods and services has expanded steadily over the past six decades thanks to declines in shipping and communication costs, globally negotiated reductions in government s, the widespread outsourcing of production activities, and a greater awareness of foreign cultures and products. New and better communications technologies, notably the Internet, have revolutionized the way people in all countries obtain and exchange information."

"...and Newt [Gingrich] — although somebody said "he’s a stupid man’s idea of what a smart person sounds like," but he is more plausible than the other guys that they’ve been pushing up."

"If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. … There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time, we don't need it, we need it in order to get some fiscal stimulus."

"It’s a great honour to be asked to give this talk, especially because I’m arguably not qualified to do so. I am, after all, not a Keynes , nor any kind of serious intellectual historian. Nor have I spent most of my career doing macroeconomics. Until the late 1990s my contributions to that field were limited to international issues; although I kept up with macro research, I avoided getting into the frontline theoretical and empirical disputes."

"… politics determine who has the power, not who has the truth."

"I know that when I look at today’s Mexicans and Central Americans, they seem to me fundamentally the same as my grandparents seeking a better life in America. On the other side, however, open immigration can’t coexist with a strong ; if you’re going to assure health care and a decent income to everyone, you can’t make that offer global. So Democrats have mixed feelings about immigration; in fact, it’s an agonizing issue."

"So let’s bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing."

"Whether the influence of increasing returns on trade and geography is rising or falling, one thing is clear: much was learned from the intellectual revolution that brought increasing returns into the heart of how we think about the world economy. It wasn't just that economists could make sense of previously puzzling data, we found ourselves able to see things that had previously been in an intellectual blind spot. Many people contributed to this process of enlightenment; I'm proud to have been a part of the journey."

"It’s a tribute to the importance of Friedman’s work that questions about his legacy bear so directly on contemporary policy issues. But for that reason it’s also important not to engage in . Friedman was a great economist, but like every other great economist in history, he was also wrong about some important things."

"...Exxon Mobil is a worse environmental villain than other big oil companies...Exxon, headed by Mr. Raymond, chose a different course of action: it decided to fight the science....And that's just what Exxon Mobil has done: lavish grants have supported a sort of alternative intellectual universe of global warming skeptics....the fact is that whatever small chance there was of action to limit global warming became even smaller because ExxonMobil chose to protect its profits by trashing good science."

"There is no economic policy. That's really important to say. The general of the Bushies is that they don't make policies to deal with problems. They use problems to justify things they wanted to do anyway. So there is no policy to deal with the lack of jobs. There really isn't even a policy to deal with terrorism. It's all about how can we spin what's happening out there to do what we want to do."

"The whole subject of the liquidity trap has a sort of Alice-through-the-looking glass quality. Virtues like , or a known to be strongly committed to , become vices; to get out of the trap a country must loosen its belt, persuade its citizens to forget about the future, and convince the that the government and central bank aren’t as serious and austere as they seem."

"So you can take your pick as to which Mundell you prefer; but the Nobel committee basically honored Mundell the younger, the economist who was iconoclastic enough to imagine that Canada, of all places, was the economy of the future--and was right."

"The serious lesson of the antics in Argentina, then, is that the big issues of --fixed vs. flexible exchange rates, whether countries should have independent currencies at all--are still wide open. It's an eternal controversy, and not even the pope can resolve it."

"The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone—horrors!—printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms—especially when it gives them a chance to lecture others on their failings."

"In short, the success of macroeconomic activism, in both theory and practice, has made it possible for free market microeconomics to survive--again both in theory and in practice."

"Here, then, is a revised version of Marshall's rules: (1) Figure out what you think about an issue, working back and forth among verbal intuition, evidence, and as much math as you need. (2) Stay with it till you are done. (3) Publish the intuition, the math, and the evidence - all three - in an economics journal. (4) But also try to find a way of expressing the idea without the formal apparatus. (5) If you can, publish that where it can do the world some good."

"So the story of the baby-sitting co-op is not a mere amusement. If people would only take it seriously—if they could only understand that when great economic issues are at stake, whimsical parables are not a waste of time but the key to enlightenment—it is a story that could save the world."

"Now I’m not saying that Keynes was right about everything, that we should treat The General Theory as a sort of secular bible - the way that Marxists treat Das Kapital. But the essential truth of Keynes’s big idea - that even the most productive economy can fail if consumers and investors spend too little, that the pursuit of sound money and s is sometimes (not always!) folly rather than wisdom - is as evident in today’s world as it was in the 1930s. And in these dangerous days, we ignore or reject that idea at the world economy’s peril."

"By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

"There is nothing that plays worse in our culture than seeming to be the stodgy defender of old ideas, no matter how true those ideas may be. Luckily, at this point the orthodoxy of the academic economists is very much a minority position among intellectuals in general; one can seem to be a courageous maverick, boldly challenging the powers that be, by reciting the contents of a standard textbook. It has worked for me!"

"The idea of comparative advantage—with its implication that trade between two nations normally raises the real incomes of both—is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed."

"It is a bit funny, but also quite sad: Those who preach the doctrine of global glut are tilting at windmills, when there are some real monsters out there that need slaying."

"If economists ruled the world, there would be no need for a World Trade Organization. The economist's case for free trade is essentially a unilateral case—that is, it says that a country serves its own interests by pursuing free trade regardless of what other countries may do."

"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God."

"But the honest truth is that what drives me as an economist is that economics is fun. I think I understand why so many people think that economics is a boring subject, but they are wrong. On the contrary, there is hardly anything I know that is as exciting as finding that the great events that move history, the forces that determine the destiny of empires and the fate of kings, can sometimes be explained, predicted, or even controlled by a few symbols on a printed page. We all want power, we all want success, but the ultimate reward is the simple joy of understanding."

"I do not mean to say that formal economic analysis is worthless, and that anybody's opinion on economic matters is as good as anyone else's. On the contrary! I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight. In particular, I have no sympathy for those people who criticize the unrealistic simplifications of model-builders, and imagine that they achieve greater sophistication by avoiding stating their assumptions clearly. The point is to realize that economic models are metaphors, not truth. By all means express your thoughts in models, as pretty as possible (more on that below). But always remember that you may have gotten the metaphor wrong, and that someone else with a different metaphor may be seeing something that you are missing."

"In the course of describing my formative moment in 1978, I have already implicitly given my four basic rules for research. Let me now state them explicitly, then explain. Here are the rules:1. Listen to the Gentiles 2. Question the question 3. Dare to be silly 4. Simplify, simplify"

"If there is one single area of economics in which path dependence is unmistakable, it is in economic geography – the location of production in space."

"If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'"

"The only true journey of knowledge is from the depth of one being to the heart of another."

"The energy of American Jewish writers was so charged, so buoyant, that for a time they appeared to dominate American fiction. But there was so little Jewish energy in this art that one could invent parlor games over the ethnic or religious identity of its authors: Edna Ferber? Waldo Frank? Lillian Hellman? Nathanael West? Norman Mailer? E. L. Doctorow?"

"He was interesting, because he was interested. … I went to Provincetown a year or two ago and stayed with him and Norris. It was very pleasant. He was in good form. We both dislike the same things about our native land so we had lots to talk about."

"Mailer is no Balzac of the twentieth century. And he is engrossed in his own grim effort of self-validation...Mailer's adversary disposition recalls D. H. Lawrence, his predecessor in the line of literary minds dedicated to the renovation of society by means of a revolution in the individual consciousness. But of the two, Lawrence is actually closer to our present literary spirit, for he is not only the more subjective writer but also the more abstract."

"One night, we had a dinner party for the express purpose of introducing Mailer to Neil Gaiman. Neil, as was his habit, was so charming that Norman wanted to read The Sandman. He liked the series enough to provide a cover blurb for the next trade paperback collection. Neil later reported that bookstore buyers told him that the Mailer quote persuaded them to stock graphic novels. And the rest, as they say, is history."

"The crazy uncle of American literature … endearing and obnoxious, graceful and loutish, shrewd and clueless … his own biggest fan and his own worst enemy."

"He could do anything he wanted to do — the movie business, writing, theater, politics. He never thought the boundaries were restricted. He'd go anywhere and try anything. He was a courageous person, a great person, fully confident, with a great sense of optimism."

"In high school, I'd devoured the works of Philip Roth, Saul Bellow, and Norman Mailer, moved by stories of men trying to find their place in an America that didn't welcome them. Later, studying the early civil rights movement in college, I'd been intrigued by the influence of Jewish philosophers like Martin Buber on Dr. King's sermons and writings."

"In the beginning, Mailer spins publicity for convict and murderer Jack Abbott, helps get Abbott's prison book published and Abbott paroled. The con with the prose style of a Doberman (all speed and teeth) obeys his muse again. Six weeks after parole, Abbott kills a man in New York City's East Village. … It was common to hear New Yorkers say that he should be tried as an accessory to murder. Mailer barged around giving interviews and suing a newspaper for libel, looking truculent and stricken. In one way it was unfair: Mailer had had the courage to sponsor a talented pariah, and then something in Abbott's transition from prison went disastrously wrong. Mailer was personally aggrieved and pained, not only for Abbott but for Abbott's victim. It is true that certain writers adopt convicts: criminals, sinister, romantic and stupid as sharks, become the executive arms of intellectuals' violent fantasies. For some reason, intellectuals rarely understand that they are being conned: convicts are geniuses of ingratiation. Still, Mailer after all was not promoting a killer but a prose stylist and what he judged to be a salvageable human being. He miscalculated: he overrated the writer in Abbott and underestimated the murderer."

"I was inventing it as I went along. And I didn't know where I was going to end up, and I did not have a large shape in mind. I felt that I was making the path as I was going along. I like Armies of the Night, Norman Mailer writing the novel as history, history as novel. I teach Armies of the Night; I use it to show students how we make history in the same way we write a novel. And as we narrate what's going on, we shape history. I also like that book a lot because he writes about the responsibility of the writer. Does the writer actually go out in the street and perform politics and"

"men write about their life all the time. You know, Norman Mailer would put himself in his books, and no one made it seem that he was doing something less."