Thursday, July 2, 2009

Paul Samuelson Interview

An interview with Paul Samuelson is published on the web here
Some of his views / quotes on some prominent economists / policy makers are -

1. Ben Bernanke and Greg Mankiw
The 1980s trained macroeconomics - like Greg Mankiw and Ben Bernanke and so forth - became a very complacent group, very ill adapted to meet with a completely unpredictable and new situation.
However Greg was quick to respond to Paul's comments (see Defamation article in his blog here) "Paul is factually wrong here, or at least out of date. If you look in the most recent edition, the 6th, of my intermediate macro book (or in the new 7th edition, which will be released next month), you will find term "liquidity trap" in the index. And it will point you to an extended discussion of the topic."

2. Robert Lucas and Thomas Sargent
These guys were useless at Federal reserve meetings

3. Alan Greenspan
I regarded as one of the best young business economists. But the trouble is that he 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. He actually had instruction, probably pinned on the wall: 'Nothing from this office should go forth which discredits the capitalist system. Greed is good.'

4. On financial instruments
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. There 's a lot of causality in economics, even though it's very far from an exact science.

5. India and China
I don't want you to think that I think that everything for the next 15 years will be cozy. I think it's almost inevitable that, with a billion people in China wide awake for the first time, and a billion people in India, there's going to be some kind of a terrible run against the dollar. And I doubt it can stay orderly, because all of our own hedge funds will be right in the vanguard of the operation. And it will be hard to imagine that that wouldn't create different kind of meltdown.

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