One who intends to leave others better off for his having existed.

8/17/11

Why economics is broken

“The basic idea that if you increase government spending or you cut people’s taxes
that stimulates the economy and lowers the unemployment rate,
is a very widely accepted idea.

But not true lately.

It’s in every economics textbook, that’s what we teach our undergraduates,
and I certainly try to teach them the truth.

But not the truth lately.

It is a very known and accepted idea and fact
and the empirical evidence is definitely there,
and people just want to say the sky is green.”

Christina Romer, August 2011

“And what I’m saying to you is, yes, I found a flaw.

I don’t know how significant or permanent it is,
but I’ve been very distressed by that fact.

[A] flaw in the model that I perceived is the critical functioning structure
that defines how the world works, so to speak.

That is — precisely.

No, that’s precisely the reason I was shocked,
because I had been going for 40 years or more with very considerable evidence
that it was working exceptionally well.”"

Alan Greenspan, October 2008

“There is no question that, somewhere in this terrible mess, many laws were broken.

Right now, the criminal authorities and the civil authorities,
not only in the federal government and the state governments,
but in other countries, because this is now, as you know,
a matter of intense international focus,
are working to make sure that lawbreakers are held accountable
and people are brought to justice.”

Christopher Cox,
Chairman, Securities and Exchange Commission, October 2008

“I think when people take a look back at this moment in our economic history,
they’ll recognize tax cuts work.”

George W. Bush, March 12, 2008

“Financial innovation has improved the capacity to measure and manage risk.

Risk is spread more broadly across countries and institutions.”

Tim Geithner, May 15, 2007

“At this juncture, however, the impact on the broader economy
...of the problems in the subprime market seems likely to be contained.”

Ben Bernanke, March 28, 2007

“Now, we’ve got a problem here in America that we have to address.

Too many American families, too many minorities do not own a home.

...Freddie Mac will launch 25 initiatives to eliminate homeownership barriers.”

George W. Bush, June 17, 2002

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