Quotes About Economics

Investment bankers make money for a living.

It said something about the ability of the free marketplace to mold people's behavior into a socially acceptable pattern. For this was capitalism at its most raw, and it was self-destructive.

There was one sure way, and only one sure way, to get ahead, and everyone with eyes in 1982 saw it: Major in economics; use your economics degree to get an analyst job on Wall Street; use your analyst job to get into the Harvard or Stanford Business School; and worry about the rest of your life later. So

The entire health industry lies about what things cost to make," she said. "I know what things cost because I made them.

Making profits on Wall Street is a bit like eating the stuffing from a turkey. Some higher authority must first put the stuffing into the turkey. The turkey was stuffed more generously in the 1980s than ever before.

And [Thaler] noticed that when he had his fellow economists to dinner, they filled up on cashews, which meant they had less appetite for the meal. More to the point, he noticed that they tended to be relieved when he removed the cashew nuts, so they didn't ruin their dinners. The idea that it could make you better off to reduce your choices—that idea was alien to economics.

Textbooks in economics, which explain the economic purpose of money (a unit of account, a store of value, and a means of exchange), usually neglect to mention the chief role of money in America: a source of entertainment.

Liquidity. When an executive said his bank had plenty of liquidity it always meant that it didn't. At

Investing well was all about being paid the right price for risk.

How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.

Charles Kindleberger's 1978 classic, Manias, Panics, and Crashes.

At the end of the day, what do I think they are going to do?" she said. "Take all the money and give it to their banker friends. Do things like privatize water—so people in rural Florida will be paying seventy-five dollars a month for it instead of twenty dollars.

But as revenues subsided, costs all of a sudden mattered, too.

The only inexplicable aspect of the process was that economic theory (which is, after all, what economics students were supposed to know) served almost no function in an investment bank. The bankers used economics as a sort of standardized test of general intelligence.

New Growth Theory argued, in abstruse mathematics, that wealth came from the human imagination. Wealth wasn't chiefly having more of old things; it was having entirely new things. 'Growth is just another word for change

The entire health industry lies about what things cost to make

Engineers created the wealth. And during the 1990s Silicon Valley had created a fantastic amount of new wealth.

Glass-Steagall was an act of the US Congress, but it worked more like an act of God. It cleaved mankind in two. With it, in 1934, American lawmakers had stripped investment banking out from commercial banking. Investment bankers now underwrote securities, such as stocks and bonds. Commercial bankers, like Citibank, took deposits and made loans. The act, in effect, created the investment banking profession, the single most important event in the history of the world, or so I was led to believe.

The more money one has, the less he values each additional increment, or, equivalently, that the utility of any additional dollar diminishes with an increase in capital.

As yet, there is no final reckoning of the wealth the Valley has created. Hundreds of billions of dollars, certainly; perhaps even trillions. In any case, 'The greatest legal creation of wealth in the history of the planet,' as one local capitalist puts it. The

He had listened to an American economist talk about how so-and-so was stupid and so-and-so was a fool, then said, "All your economic models are premised on people being smart and rational, and yet all the people you know are idiots.

The Valley was a little experiment of capitalism with too much capital.

Capitalism's machinery favored these capitalists as it had never favored anyone else in its history.

Once you were let into the Great Society of Sand Hill Road, you were given first crack at these miraculous enterprises at a small fraction of the cost to Wall Street investment bankers—never mind the general investing public.