Paul Krugman Quotations

Debt is one person's liability, but another person's asset.

I think so long as fossil fuels are cheap, people will use them and it will postpone a movement towards new technologies.

As I've often said, you can shop online and find whatever you're looking for, but bookstores are where you find what you weren't looking for.

I admit it: I had fun watching right-wingers go wild as health reform finally became law.

The great thing about fiscal policy is that it has a direct impact and doesn't require you to bind the hands of future policymakers.

Social Security is a social insurance program - it is not designed to be the same thing as a 401(k).

I have friends, political scientists, sociologists, who all share an interest at least in certain kinds of science fiction.

But Wall Street people are in fact very smart; they're funny, they're not company men who work their way up the chain.

The science fiction world has a lot of people doing seriously imaginative thinking.

The problem isn't that people don't understand how good things are. It's that they know, from personal experience, that things really aren't that good.

I don't think I've had any great success in predicting politics or social change, nor have I really tried.

We know that advanced economies with stable governments that borrow in their own currency are capable of running up very high levels of debt without crisis.

The real danger with debt is what happens if lots of people decide, or are forced, to pay it off at the same time.

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 vitriol also reflects the fact that many of the people at the Republican National Convention, for all their flag-waving, hate America. They want a controlled, monolithic society; they fear and loathe our nation's freedom, diversity and complexity.

When they eliminated the bond, it was already obvious that the prospect of paying off the debt was evaporating before our eyes.

Those tax cuts, rather than the spending binge, are the primary cause of the (federal) deficit.

There's not a hint in his work of support for the right-wing supply-side doctrine.

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.

I think if you're a liberal, you believe that we all are, at least to some extent, our brothers' keepers, you really believe that we have a sumptuary responsibility to make sure that life is decent for everybody in America, that you believe that society out to be broadly shared, and you believe that you can't have a real democracy unless you have a little bit, at least, of economic democracy.

There's one thing that the Fed has been really good at cracking down on, and that's inflation.

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.

Asset bubbles have happened even without not-so-easy money. And, in a depressed economy, where alternative uses of money are not great, people are going to bid up the prices of profitable corporations and stuff like that.

The world economy is in a nosedive, and understanding what I call "depression economics" - the weird world you get into when even a zero interest rate isn't low enough, and a messed-up financial system is dragging down the real economy - is essential if we're going to avoid the worst.

I'm especially baffled by the idea of taking insurance against a U.S. default. If America defaults, we're talking about a chaotic world - Mad Max, more or less - in which case, who imagines that insurance claims will be honored?

Tax cuts were not going to be effective at creating jobs, and the job creation record is lousy.

What the Depression teaches us is that when the economy is so depressed that even a zero interest rate isn't low enough, you have to put conventional notions of prudence and sound policy aside.

I really think that people have to think safety; taking risks for higher yield is a bad idea once you're in late or latish middle age.

Anyone who thinks that the last 80 years, ever since FDR took us off gold, have been a doomed venture, that strikes me as kind of cranky.

I think Stockman is an interesting sort of amalgam.

You really have to go searching desperately to find any contemporary examples of good, old-fashioned runaway inflation.

People who are complaining about the Fed are people who've been predicting runaway inflation for five and six years, and it hasn't happened.

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.

Seven habits that help produce the anything-but-efficient markets that rule the world. 1. Think short term. 2. Be greedy. 3. Believe in the greater fool 4. Run with the herd. 5. Overgeneralize 6. Be trendy 7. Play with other people's money

[The US] budget is dominated by the retirement programs, Social Security and Medicare - loosely speaking, the post-cold-war federal government is a big pension fund that also happens to have an army.

These days, however, the main problem comes from the right - from conservatives who, unlike most economists, really do think that the free market is always right-to such an extent that they refuse to believe even the most overwhelming scientific evidence if it seems to suggest a justification for government action.

The United States in particular and the West in general should be feeling a little embarrassed about all that lecturing we did to the Third World.

Our popular economics writers, however, are not in the business of giving their readers a ringside seat on the research action; with no exception I can think of, they use their books to do an end run around the normal structure of scholarship, to preach ideas that few serious economists share. Often, these ideas are not just at odds with the professional consensus; they are demonstrably wrong, and sometimes terminally silly. But they sound good to the unwary reader.

Yes, over the centuries economic progress has reduced some gross disparities - modern Americans are relatively unlikely to simply starve to death (though it can happen), so in that sense the gap between rich and poor has narrowed. But the question isn't whether society is, in some sense, more equal than it was in 1900. It's whether it is radically more unequal than it was in 1970. And of course it is.

Can we break the machine that is imposing right-wing radicalism on the United States? The scariest part is that the media is part of that machine.

The public has no idea that the deficit has been falling like a stone.

[W]e have a lot of evidence on what happens when you raise the minimum wage. And the evidence is overwhelmingly positive: Hiking the minimum wage has little or no adverse effect on employment while significantly increasing workers' earnings.

In short, what the living wage is really about is not living standards, or even economics, but morality. Its advocates are basically opposed to the idea that wages are a market price-determined by supply and demand, the same as the price of apples or coal. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for a living wage is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away.

Are you, or is someone you know, a gadget freak? If so, you doubtless know that Wednesday was iPhone 5 day, the day Apple unveiled its latest way for people to avoid actually speaking to or even looking at whoever they're with.

A snarky but accurate description of monetary policy over the past five years is that the Federal Reserve successfully replaced the technology bubble with a housing bubble

But where will the Fed find another bubble?

To the extent that sacrifices need to be made, shouldn't the people who've made out like bandits this past generation be first in line? The problem with getting out of the slump is that we need to spend more. It's not that somebody needs to spend less. We have idle workers who have the skills and the willingness to work. We have idle factories. Dealing with this is not about saying somebody needs to suffer. It's saying that we need to be prepared to open the taps.

as an economics professor I am by nature inclined to the view that the truth isn't out there, it's in here - that usually you learn a lot more by thinking really hard about the data than you do by sniffing around for supposedly inside information.

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?

Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes. It's going to be that we're actually going to take Medicare under control, and we're going to have to get some additional revenue, probably from a VAT. But it's not going to happen now.

There has been plenty to criticize about President Obama’s handling of the economy. Yet the overriding story of the past few years is not Mr. Obama’s mistakes but the scorched-earth opposition of Republicans, who have done everything they can to get in his way - and who now, having blocked the president’s policies, hope to win the White House by claiming that his policies have failed.

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.

Whenever you see some business person quoted complaining about how he or she can't find workers with the necessary skills, ask what wage they're offering. Almost always it turns out what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short.

Bad ideas flourish because they are in the interest of powerful groups

...instead it seems that business - like weight loss - is a subject wherein hope and fear inspire limitless gullibility.

I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society.

A message to progressives: By all means, hang Senator Joe Lieberman in effigy.

Most people, I suspect, still have in their minds an image of America as the great land of college education, unique in the extent to which higher learning is offered to the population at large. That image used to correspond to reality. But these days young Americans are considerably less likely than young people in many other countries to graduate from college. In fact, we have a college graduation rate that's slightly below the average across all advanced economies.

The Obama campaign seems dangerously close to becoming a cult of personality.

Raising the minimum wage and lowering the barriers to union organization would carry a trade-off - higher unemployment. A better idea is to have the government subsidize low-wage employment. The earned-income tax credit for low-income workers - which has been the object of proposed cuts by both President Clinton and congressional Republicans - has been a positive step in this direction.

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.

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.

The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.

However, the fact that an economist offers a theoretical analysis does not and should not automatically command respect. What is needed is some assurance that the analysis is actually relevant.

Every once in a while I feel despair over the fate of the planet. If you've been following climate science, you know what I mean: the sense that we're hurtling toward catastrophe but nobody wants to hear about it or do anything to avert it.

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.

The trouble with poverty, as an issue, is that it has basically exhausted the patience of the general public.

Now, it’s true that some of the protesters are oddly dressed or have silly-sounding slogans, which is inevitable given the open character of the events. But so what? I, at least, am a lot more offended by the sight of exquisitely tailored plutocrats, who owe their continued wealth to government guarantees, whining that President Obama has said mean things about them than I am by the sight of ragtag young people denouncing consumerism.

Political figures who talk a lot about liberty and freedom invariably turn out to mean the freedom to not pay taxes and discriminate based on race; freedom to hold different ideas and express them, not so much.

In fact, I'd say that the sources of the economy's expansion from 2003 to 2007 were, in order, the housing bubble, the war, and - very much in third place - tax cuts.

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.

It should be possible to emphasize to students that the level of employment is a macroeconomic issue, depending in the short run on aggregate demand and depending in the long run on the natural rate of unemployment, with microeconomic policies like tariffs having little net effect. Trade policy should be debated in terms of its impact on efficiency, not in terms of phoney numbers about jobs created or lost.

I'm not sure that the current value of the NASDAQ is justified, but I'm not sure that it isn't.

So, very early reports are that Obamacare exchanges are, as expected, having some technical glitches on the first day — maybe even a bit worse than expected, because it appears that volume has been much bigger than predicted. Here’s what you need to know: this is good, not bad, news for the program. Lots of people logging on and signing up on the very first day is an early indication that it’s going to be fine, that plenty of people will sign up for the first year of health reform.

You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers.

Friedrich Hayek is not an important figure in the history of macroeconomics.

The habit of disguising ideology as expertise has created a deficit of legitimacy.

The economic expansion that began in 2001, while it has been great for corporate profits, has yet to produce any significant gains for ordinary working Americans. And now it looks as if it never will.

Close the weak banks and impose serious capital requirements on the strong ones...You see, it may sound hard-hearted, but you cannot keep unsound financial institutions operating simply because they provide jobs.

Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn't sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets.

What Republicans have actually put on the table is almost nothing. All of the rest is just big talk. So how is the president supposed to negotiate with people who say, 'Here's my demands. By the way, I can't give you any specifics. Just make me happy'?

When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.

By rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

We should try to create the society each of us would want if we didn't know in advance who we'd be.

Something terrible has happened to the soul of the Republican Party. We've gone from bad economic doctrine. We've even gone beyond selfishness and special interests. At this point we're talking about a state of mind that takes positive glee in inflicting further suffering upon the already miserable.

...academic credentials are neither a necessary nor a sufficient condition for having your ideas taken seriously. If a famous professor repeatedly says stupid things, then tries to claim he never said them, there's no rule against calling him a mendacious idiot - and no special qualifications required to make that pronouncement other than doing your own homework.Conversely, if someone without formal credentials consistently makes trenchant, insightful observations, he or she has earned the right to be taken seriously, regardless of background.

Simple doesn't mean stupid. Thinking that it does, does.

What happened after 9/11 - and I think even people on the right know this, whether they admit it or not - was deeply shameful. [The] atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neo-cons wanted to fight, for all the wrong reasons....The memory of 9/11 has been irrevocably poisoned; it has become an occasion for shame. And in its heart, the nation knows it.

The French, unfortunately, actually believe what they say, and that has been very destructive.

When stock prices are rising, it's called “momentum investing”; when they are falling, it's called “panic”.

Not all private equity people are evil. Only some.

Under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.

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

The important thing to understand is that the case for pollution control isn't based on some kind of aesthetic distaste for industrial society. Pollution does real, measurable damage, especially to human health.

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.

Unsustainable situations usually go on longer than most economists think possible. But they always end, and when they do, it's often painful.

And when the chickens that didn't hatch come home to roost, we will rue the day when, misled by sloppy accounting and rosy scenarios, we gave away the national nest egg.

Most work in macroeconomics in the past 30 years has been useless at best and harmful at worst.

Evidence and expertise have a well-known liberal bias.

Where's that toxic rhetoric coming from? Let's not make a false pretense of balance: it's coming, overwhelmingly, from the right. It's hard to imagine a Democratic member of Congress urging constituents to be "armed and dangerous" without being ostracized; but Representative Michele Bachmann, who did just that, is a rising star in the G.O.P.