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The Niceties Of Existence Were Not A Matter Of Concern, Yet Everything Around Was Closed Down Most Of The Time. If You Lived In A Middle-class Community In Chicago, Children And Adults Came Daily To The Door Saying, 'we Are Starving, How About A Potato?' I Speak From Poignant Memory.

-Paul Samuelson

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The Niceties Of Existence

Paul Samuelson

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The Niceties Of Existence Were Not A Matter Of Concern, Yet Everything Around Was Closed Down Most Of The Time. If You Lived In A Middle-class Community In Chicago, Children And Adults Came Daily To The Door Saying, 'we Are Starving, How About A Potato?' I Speak From Poignant Memory.

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Let Those Who Will Write The Nation's Laws, If I Can Write Its Textbooks.

Macroeconomics, Even With All Of Our Computers And With All Of Our Information - Is Not An Exact Science And Is Incapable Of Being An Exact Science.

Economists Are Said To Disagree Too Much But In Ways That Are Too Much Alike: If Eight Sleep In The Same Bed, You Can Be Sure That, Like Eskimos, When They Turn Over, They'll All Turn Over Together.

There Is Something In People; You Might Even Call It A Little Bit Of A Gambling Instinct… I Tell People Investing Should Be Dull. It Shouldn't Be Exciting. Investing Should Be More Like Watching Paint Dry Or Watching Grass Grow. If You Want Excitement, Take $800 And Go To Las Vegas.

The Problem Is No Longer That With Every Pair Of Hands That Comes Into The World There Comes A Hungry Stomach. Rather It Is That, Attached To Those Hands Are Sharp Elbows.

Self-deception Ultimately Explains Japan's Plight. The Japanese Have Never Accepted That Change Is In Their Interest - And Not Merely A Response To U.s. Criticism.

Man Does Not Live By Gnp Alone.

The Failure Of Market Catallactics In No Way Denies The Following Truth: Given Sufficient Knowledge The Optimal Decisions Can Always Be Found By Scanning Over All The Attainable States Of The World And Selecting The One Which According To The Postulated Ethical Welfare Function Is Best. The Solution 'exists'; The Problem Is How To 'find' It.

Even Fans Of Actively Managed Funds Often Concede That Most Other Investors Would Be Better Off In Index Funds. But Buoyed By Abundant Self-confidence, These Folks Aren't About To Give Up On Actively Managed Funds Themselves. A Tad Delusional? I Think So. Picking The Best-performing Funds Is 'like Trying To Predict The Dice Before You Roll Them Down The Craps Table,' Says An Investment Adviser In Boca Raton, Fl. 'i Can't Do It. The Public Can't Do It.'

Self Confidence

Perhaps There Really Are Managers Who Can Outperform The Market Consistently - Logic Would Suggest That They Exist. But They Are Remarkably Well-hidden.

Contrary To What Many Skeptics Had Earlier Believed, The Soviet Economy Is Proof That A Socialist Command Economy Can Function And Even Thrive.

Still, I Figure We Shouldn't' Discourage Fans Of Actively Managed Funds. With All Their Buying And Selling, Active Investors Ensure The Market Is Reasonably Efficient. That Makes It Possible For The Rest Of Us To Do The Sensible Thing, Which Is To Index. Want To Join Me In This Parasitic Behavior? To Build A Well-diversified Portfolio, You Might Stash 70 Percent Of Your Stock Portfolio Into A Wilshire 5000-index Fund And The Remaining 30 Percent In An International-index Fund.

Forsake Search For Needles That Are So Very Small In Haystacks That Are So Very Large.

Our Ideal Society Finds It Essential To Put A Rent On Land As A Way Of Maximizing The Total Consumption Available To The Society. ...pure Land Rent Is In The Nature Of A 'surplus' Which Can Be Taxed Heavily Without Distorting Production Incentives Or Efficiency. A Land Value Tax Can Be Called 'the Useful Tax On Measured Land Surplus'.

Politicians Like To Tell People What They Want To Hear - And What They Want To Hear Is What Won't Happen.

The Consumer, So It Is Said, Is The King Each Is A Voter Who Uses His Money As Votes To Get The Things Done That He Wants Done.

Asia's Governments Come In Two Broad Varieties: Young, Fragile Democracies - And Older, Fragile Authoritarian Regimes.

It Isn't That Greed's Increased. What's Increased Is The Realization That You've Got A Free Field To Reach Out For What You'd Like To Do.

When The Economy Was Going Up, [milton Friedman And I] Both Gave The Same Advice, And When The Economy Was Going Down, We Gave The Same Advice. But In Between He Didn't Change His Advice At All.

Mea Culpa, Mea Culpa. Mit And Wharton And University Of Chicago Created The Financial Engineering Instruments, Which, Like Samson And Delilah, Blinded Every Ceo. They Didn't Realize The Kind Of Leverage They Were Doing And They Didn't Understand When They Were Really Creating A Real Profit Or A Fictitious One.

That's What I Would Like To Do Until The End Of Time, To Go On Scribbling My Articles On The Third Floor Of The Sloan Building, In Between Playing Tennis And Drinking Coffee At My Other Study In The Concord Avenue Branch Of Burger King.

In Every Mutual Fund Prospectus, In Every Sales Promotional Folder, And In Every Mutual Fund Advertisement (albeit In Print Almost Too Small To Read), The Following Warning Appears: "past Performance Is No Guarantee Of Future Results."

Reasonable Men Are Not Reasonable When You're In The Bubbles Which Have Characterized Capitalism Since The Beginning Of Time.

An American Economist Of Two Generations Ago, H. J. Davenport, Who Was The Best Friend Thorstein Veblen Ever Had (veblen Actually Lived For A Time In Davenport's Coal Cellar) Once Said: "there Is No Reason Why Theoretical Economics Should Be A Monopoly Of The Reactionaries." All My Life I Have Tried To Take This Warning To Heart, And I Dare Call It To Your Favorable Attention.

Investing Should Be More Like Watching Paint Dry Or Watching Grass Grow. If You Want Excitement, Take $800 And Go To Las Vegas.

The Stock Market Has Predicted Nine Of The Last Five Recessions.

First, Those Who Disagree With Market Efficiency Simply Assert That It Stands To Common Sense That Greater Effort To Get Facts And Greater Acumen In Analyzing Those Facts Will Pay Off In Better Performance Somehow Measured. (by This Logic, Cure For Cancer Must Have Been Found By 1955).

The Recent Market Run-up That Appreciated Run-of-the- Mill Shares Also Chanced To Send Up Those Token Gold Holdings. Pure Luck, Undeserved And Unlikely To Reoccur. Good Questions Outrank Easy Answers.

Suppose It Was Demonstrated That One Out Of Twenty Alcoholics Could Learn To Become A Moderate Social Drinker. The Experienced Clinician Would Answer, 'even If True, Act As If It Were False, For You Will Never Identify That One In Twenty, And In The Attempt Five In Twenty Will Be Ruined.' Investors Should Forsake The Search For Such Tiny Needles In Huge Haystacks.

What We Know About The Global Financial Crisis Is That We Don't Know Very Much.

Financial Crisis

By Keeping Labor Supply Down, Immigration Policy Tends To Keep Wages High. Let Us Underline This Basic Principle: Limitation Of The Supply Of Any Grade Of Labor Relative To All Other Productive Factors Can Be Expected To Raise Its Wage Rate; And Increase In Supply Will, Other Things Being Equal, Tend To Depress Wage Rates.

I Couldn't Reconcile What I Was Being Taught At The University Of Chicago, The Lectures And The Books I Was Being Assigned, With What I Knew To Be True Out In The Streets.

I Spent The Four Years I Was An Undergraduate Working On The Beach. And It Wasn't Because I Was Lazy; It Was Because My Freshman Class Would Go To A Hundred Different Employers And Wouldn't Get A Nibble.

Anyone With Special Abilities Earns A Differential Return On That Flair, Which We Economists Call A Rent. Those Few With Extraordinary P.q. (performance Quotient) Will Not Give Away Such Rent To The Ford Foundation Or The Local Bank Trust Department. They Have Too High An I.q. For That.

Economics Never Was A Dismal Science. It Should Be A Realistic Science.

Funeral By Funeral, Theory Advances.

This Message (that Attempting To Beat The Market Is Futile) Can Never Be Sold On Wall Street Because It Is In Effect Telling Stock Analysts To Drop Dead.

What Good Does It Do A Black Youth To Know That An Employer Must Pay Him $2 An Hour If The Fact That He Must Be Paid That Amount Is What Keeps Him From Getting A Job?

The Sad Truth Is That It Is Precisely Those Who Disagree Most With The Hypothesis Of Efficient Market Pricing Of Stocks, Those Who Pooh-pooh Beta Analysis And All That, Who Are Least Able To Understand The Analysis Needed To Test That Hypothesis.

Kelsoism Is Not Accepted By Modern Scientific Economics As A Valid And Fruitful Analysis Of The Distribution Of Income But Rather It Is Regarded As An Amateurish And Cranky Fad.

Good Questions Outrank Easy Answers.

Asking Questions

Profits Are The Lifeblood Of The Economic System, The Magic Elixir Upon Which Progress And All Good Things Depend Ultimately. But One Man's Lifeblood Is Another Man's Cancer.

I Don't Care Who Writes A Nation's Laws - Or Crafts Its Advanced Treaties - If I Can Write Its Economics Textbooks.

The Debate Can Be Put In The Form Of The Question: Resolved, That The Best Of Money Managers Cannot Be Demonstrated To Be Able To Deliver The Goods Of Superior Portfolio-selection Performance. Any Jury That Reviews The Evidence, And There Is A Great Deal Of Relevant Evidence, Must At Least Come Out With The Scottish Verdict: Superior Investment Performance Is Unproved.

Two Factors Explain Our Success. One, Mit's Renaissance After World War Ii As A Federally Supported Research Resource. Two, The Mathematical Revolution In Macro- And Micro-economic Theory And Statistics. This Was Overdue And Inevitable, Mit Was The Logical Place For It To Flourish.

We're A Me-me-me Generation. We're Borrowing The Savings Of Every Nation In The World. We're ... Piling Up A Big Tab. Now, I May Think We're Too Big To Have A Run On Us. You May Think That. But It's Possible That God Does Not.

If We Made An Income Pyramid Out Of A Child's Blocks, With Each Layer Portraying $1,000 Of Income, The Peak Would Be Far Higher Than The Eiffel Tower, But Almost All Of Us Would Be Within A Yard Of The Ground.

Globalization Presumes Sustained Economic Growth. Otherwise, The Process Loses Its Economic Benefits And Political Support.

Companies Are Not Charitable Enterprises: They Hire Workers To Make Profits. In The United States, This Logic Still Works. In Europe, It Hardly Does.

Economics Has Never Been A Science - And It Is Even Less Now Than A Few Years Ago.

I Don't Care Very Much For The People Magazine Approach To Applied Economics.

But The Trouble Is That He [alan Greenspan] Had Been An Ayn Rander. You Can Take The Boy Out Of The Cult But You Can't Take The Cult Out Of The Boy.

A Growing Nation Is The Greatest Ponzi Game Ever Contrived.

Thousands Of Important And Intelligent Men Have Never Been Able To Grasp The Principle Of Comparative Advantage Or Believe It Even After It Was Explained To Them

What Counts Is Results, And There Can Be No Doubt That The Soviet Planning System Has Been A Powerful Engine For Economic Growth...the Soviet Model Has Surely Demonstrated That A Command Economy Is Capable Of Mobilizing Resources For Rapid Growth.

To Prove That Wall Street Is An Early Omen Of Movements Still To Come In Gnp, Commentators Quote Economic Studies Alleging That Market Downturns Predicted Four Out Of The Last Five Recessions. That Is An Understatement. Wall Street Indexes Predicted Nine Out Of The Last Five Recessions! And Its Mistakes Were Beauties.

Econometrics May Be Defined As The Quantitative Analysis Of Actual Economic Phenomena Based On The Concurrent Development Of Theory And Observation, Related By Appropriate Methods Of Inference.

Marshall's Crime Is To Pretend To Handle Imperfect Competition With Tools Only Applicable To Perfect Competition.

Sooner Or Later The Internet Will Become Profitable. It's An Old Story Played Before By Canals, Railroads And Automobiles.

The Growth Of A Nation's Productive Potential Is The Central Factor In Determining Its Growth In Real Wages And Living Standards.... High Rates Of Investment And Saving Usually Have A Big Payoff In Promoting Economic Growth.

In This Age Of Specialization, I Sometimes Think Of Myself As The Last 'generalist' In Economics, With Interests That Range From Mathematical Economics Down To Current Financial Journalism. My Real Interests Are Research And Teaching.

Even If This Advice To Portfolio Decision Makers To Drop Dead Is Good Advice, It Obviously Is Not Counsel That Will Be Eagerly Followed. Few People Will Commit Suicide Without A Push. And Fewer Still Will Pay Good Money To Be Told To Do What Is Against Human Nature And Self-interest To Do.

We Are Like Highly Trained Athletes, Who Never Run A Race.

An Intriguing Paradox Of The 1990s Is That It Isn't Called A Decade Of Greed.

Every Good Cause Is Worth Some Inefficiency.

It Is Not Easy To Get Rich In Las Vegas, At Churchill Downs, Or At The Local Merrill Lynch Office.

I'm Not Sure Most Of The People That Get Caught Up In The Middle Of A Bubble Can Be Described As Irrational. It Seems Pretty Rational To Buy A House And Flip It In The Next Few Weeks At A Profit When That's Been Happening For Along Time.

Second, They [those Who Disagree With Market Efficiency] Always Claim They Know A Man, A Bank, Or A Fund That Does Do Better. Alas, Anecdotes Are Not Science. And Once Wharton School Dissertations Seek To Quantify The Performers, These Have A Tendency To Evaporate Into The Air - Or, At Least, Into Statistically Insignificant T-statistics.

Two-thirds Of A Century After [the Road To Serfdom] Got Written, Hindsight Confirms How Inaccurate Its Innuendo About The Future Turned Out To Be.

Investing Is Like Waiting For Paint Dry And Grass Grow So. If You Like Fun, Let Handle 800 Usd And Headed To Las Vegas

Economists Have Much To Be Humble About.

You Could Be Disqualified For A Job [at Harvard] If You Were Either Smart Or Jewish Or Keynesian. So What Chance Did This Smart, Jewish, Keynesian Have?

You Know What Happiness Is: 'having A Little More Money Than Your Colleagues.' And That's Not So Tough In Academic Life.

The Niceties Of Existence Were Not A Matter Of Concern, Yet Everything Around Was Closed Down Most Of The Time. If You Lived In A Middle-class Community In Chicago, Children And Adults Came Daily To The Door Saying, 'we Are Starving, How About A Potato?' I Speak From Poignant Memory.

For Better Or Worse, Us Keynesianism Was So Far Ahead Of Where It Started. I Am A Cafeteria Keynesian. You Know What A Cafeteria Catholic Is?

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