Quotes from Alan S. Blinder

Why did so many smart people believe these laissez-fairey tales? It's a good question. Some of the blame surely goes to the excessive faith in free markets that was the elixir of the day. Some goes to economists who believed and extolled the efficient markets hypothesis—and taught it to their students, many of whom wound up as financial engineers on Wall Street.

you don't get far in political discourse with counterfactual arguments that "it would have been even worse.

If your negligent neighbor falls asleep with a lit cigarette in his mouth, setting his house on fire, he's irresponsible and guilty. But you don't want him to perish in the blaze. Nor do you want his house setting the whole neighborhood on fire. So you call in the fire department, even though it will cost taxpayers money.

As Upton Sinclair sardonically noted, "It is difficult to get a man to understand something, when his salary depends on his not understanding it.

Don't overstate your likely achievements; when in doubt, understate them.

The consequences of adverse economics events are typically exaggerated by the Armageddonists--a sensation-seeking herd of pundits, seers, and journalists who make a living by predicting the worst.

Politicians use economics in the same way that a drunk uses lamp-posts—for support rather than illumination. —variation on a theme of Andrew Lang (1910)

There are far more cases in which politicians knew what they wanted to do, and then just leaned on economics—sometimes very bad economics—for support.

And why did we need both an SEC and a CFTC—which often battled each other—to regulate the securities markets? Was the profusion of agencies grounded in some underlying legal or economic logic, or was it mainly about turf? The main answer was political: If you have multiple regulators, you need multiple congressional oversight committees, each of which is a gold mine for political contributions.

But when Stigler was put in front of the TV cameras, lights blazing, and asked about supply-side economics, the iconoclastic economist opined that "it's a gimmick, or, if you wish, a slogan." Ouch. That didn't help Ronald Reagan. I presume it didn't help George Stigler either, who was quickly hustled off stage.

During a bubble, we often hear stories about how some grand new era makes previous valuation standards obsolete.

On a number of issues, a bipartisan majority of the [economics] profession would unite on the opposite side from a bipartisan majority of Congress. —Arthur Okun (1970)

Had Newton served on more faculty committees at Cambridge, his first law of motion might have read: A decisionmaking body at rest or in motion tends to stay at rest or in motion in the same direction unless acted upon by an outside force.

The full truth is that trade does create some (hopefully better-paying) jobs, but it also destroys other (lower-paying) jobs. But that's a complex, even equivocal, message.

We humans, it appears, are prone to overconfidence, herding behavior, unwarranted extrapolation of recent trends, and contagious waves of wishful thinking—all key ingredients of bubbles.

Similarly, if we ever get immigration reform, it will likely be forged in a series of political compromises with no coherent principles or philosophy. I

John Maynard Keynes, the great British economist, died in 1946. But his ghost lives on. When economies around the world contracted sharply in late 2008 and early 2009, government officials started seeing visions of the 1930s and turned

John Maynard Keynes, the great British economist, died in 1946. But his ghost lives on. When economies around the world contracted sharply in late 2008 and early 2009, government officials started seeing visions of the 1930s and turned immediately to the teachings of Lord Keynes.

At its August 7, 2007, meeting, the FOMC had concluded that 'although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.' How's that going?, many of us thought when we read the statement. The predominant concern is inflation? Many Fed watchers blinked in disbelief. What were those guys thinking?

Banker are arguing over whose profession is the oldest. The geologist points out that his science as as old as the Earth itself. The chemist scoffs at that: Long before the Earth was formed, there were masses of swirling gasses--chemicals. Before that, there was just chaos. The investment banker smiles slyly, nursing a martini: And who do you think created all that chaos?