Paul Krugman Quotes
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I don't want a job in the administration; I think I'm more effective carping from the sidelines.
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Governments do not necessarily act in the national interest, especially when making detailed microeconomic interventions. Instead, they are influenced by interest group pressures. The kinds of interventions that new trade theory suggests can raise national income will typically raise the welfare of small, fortunate groups by large amounts, while imposing costs on larger, more diffuse groups.
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Wealthy individuals bought themselves a radical right party, believing - correctly - that it would cut their taxes and remove regulations, but failed to realize that eventually the craziness would take on a life of its own, and that the monster they created would turn on its creators as well as the little people.
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The next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you'll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we're bad and the confidence fairy will reward us if we're good. And real-world policy - policy that will blight the lives of millions of working families - is being built on that foundation.
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Consumer spending is now plunging at serious-recession rate ... even if the rescue now in train succeeds in unfreezing credit markets, the real economy has immense downward momentum. In addition to financial rescues, we need major stimulus programs.
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The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.
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The raw fact is that every successful example of economic development this past century every case of a poor nation that worked its way up to a more or less decent, or at least dramatically better, standard of living has taken place via globalization, that is, by producing for the world market rather than trying for self-sufficiency.
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Surely I'm not the only person to ask the obvious question: How different, really, is Mr. Madoff's tale from the story of the investment industry as a whole?
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But Wall Street people are in fact very smart; they're funny, they're not company men who work their way up the chain.
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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.
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Economists don't usually make good speculators, because they think too much.
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Simple doesn't mean stupid. Thinking that it does, does.
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One way in which Americans have always been exceptional has been in our support for education. First we took the lead in universal primary education; then the “high school movement” made us the first nation to embrace widespread secondary education.
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You really have to go searching desperately to find any contemporary examples of good, old-fashioned runaway inflation.
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The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and control many of the perks that board members count on. So it's not the invisible hand of the market that leads to those monumental executive incomes; it's the invisible handshake in the boardroom.
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People respond to incentives. If unemployment becomes more attractive because of the unemployment benefit, some unemployed workers may no longer try to find a job or may not try to find one as quickly as they would without the benefit.
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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.
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In short, it's a great economy if you're a high-level corporate executive or someone who owns a lot of stock. For most other Americans, economic growth is a spectator sport.
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The goal in the end is not to win elections. The goal is to change society.
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It's a funny thing, by the way, how people who love free markets are also quite sure that they know that investors are being irrational.
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Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.
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On the political as on the economic front it's important not to fall into the "not as bad as" trap. High unemployment isn't O.K. just because it hasn't hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.
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Coming up with a good idea, with an insight into the way the world works that is really new and that you really believe in, is a deeply satisfying experience.
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When the Fed decides that inflation is too high, they have the tools, and they've shown historically that they have the will, to bring it down. And, it might be painful.