Quotes from Naked Economics: Undressing the Dismal Science

“When I applied to graduate school many years ago, I wrote an essay expressing my puzzlement at how a country that could put a man on the moon could still have people sleeping on the streets. Part of that problem is political will; we could take a lot of people off the streets tomorrow if we made it a national priority. But I have also come to realize that NASA had it easy. Rockets conform to the unchanging laws of physics. We know where the moon will be at a given time; we know precisely how fast a spacecraft will enter or exist the earth's orbit. If we get the equations right, the rocket will land where it is supposed to--always. Human beings are more complex than that. A recovering drug addict does not behave as predictably as a rocket in orbit. We don't have a formula for persuading a sixteen-year-old not to drop out of school. But we do have a powerful tool: We know that people seek to make themselves better off, however they may define that. Our best hope for improving the human condition is to understand why we act the way we do and then plan accordingly. Programs, organizations, and systems work better when they get the incentives right. It is like rowing downstream.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“A market economy is to economics what democracy is to government: a decent, if flawed, choice among many bad alternatives.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Most economists would concede that, in theory, government has the tools to smooth the business cycle. The problem is that fiscal policy is not made in theory; it's made in Congress.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“In a basic agricultural society, it's easy enough to swap five chickens for a new dress or to pay a schoolteacher with a goat and three sacks of rice. Barter works less well in a more advanced economy. The logistical challenges of using chickens to buy books on Amazon.com would be formidable.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“At a time when we can split the atom, land on the moon, and decode the human genome, why do 2 billion people live on less than $2 a day?”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Economic development is not a zero-sum game; the world does not need poor countries in order to have rich countries, nor must some people be poor in order for others to be rich. Families who live in public housing on the South Side of Chicago are not poor because Bill Gates lives in a big house. They are poor despite the fact that Bill Gates lives in a big house. For a complex array of reasons, America’s poor have not shared in the productivity gains spawned by Microsoft Windows. Bill Gates did not take their pie away; he did not stand in the way of their success or benefit from their misfortunes.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Economics is like gravity: Ignore it and you will be in for some rude surprises.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“The real cost of something is what you must give up in order to get it, which is almost always more than just cash.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Why did the chicken cross the road? Because it maximized his utility.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Making money takes time, so when we shop, we’re really spending time. The real cost of living isn’t measured in dollars and cents but in the hours and minutes we must work to live.”1”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“I once interviewed Robert Solow, winner of the 1987 Nobel Prize in Economics and a noted baseball enthusiast. I asked if it bothered him that he received less money for winning the Nobel Prize than Roger Clemens, who was pitching for the Red Sox at the time, earned in a single season. “No,” Solow said. “There are a lot of good economists, but there is only one Roger Clemens.” That is how economists think.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Think about ethanol again. The benefits of that $7 billion tax subsidy are bestowed on a small group of farmers, making it quite lucrative for each one of them. Meanwhile, the costs are spread over the remaining 98 percent of us, putting ethanol somewhere below good oral hygiene on our list of everyday concerns. The opposite would be true with my plan to have left-handed voters pay subsidies to right-handed voters. There are roughly nine right-handed Americans for every lefty, so if every right-handed voter were to get some government benefit worth $100, then every left-handed voter would have to pay $900 to finance it. The lefties would be hopping mad about their $900 tax bills, probably to the point that it became their preeminent political concern, while the righties would be only modestly excited about their $100 subsidy. An adept politician would probably improve her career prospects by voting with the lefties.

Here is a curious finding that makes more sense in light of what we‘ve just discussed. In countries where farmers make up a small fraction of the population, such as America and Europe, the government provides large subsidies for agriculture. But in countries where the farming population is relatively large, such as China and India, the subsidies go the other way. Farmers are forced to sell their crops at below-market prices so that urban dwellers can get basic food items cheaply. In the one case, farmers get political favors; in the other, they must pay for them. What makes these examples logically consistent is that in both cases the large group subsidizes the smaller group.

In politics, the tail can wag the dog. This can have profound effects on the economy.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Meanwhile, time is one of our most scarce resources. At the moment, you are reading instead of working, playing with the dog, applying to law school, shopping for groceries, or having sex. Life is about trade-offs, and so is economics.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“We’ve built a society that values civil liberties even at the expense of social order.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Families who live in public housing on the South Side of Chicago are not poor because Bill Gates lives in a big house.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“what economic benefit smokers provide for nonsmokers (they die earlier, leaving more Social Security and pension benefits for the rest of us),”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“The authors propose “a New Deal for globalization—one thatlinks engagement with the world economy to a substantial redistribution of income.” Remember, this isn’t hippy talk. These are the capitalists who see angry workers with pitchforks loitering outside the gates of a very profitable factory, and they are making a very pragmatic calculation: Throw these people some food (and maybe some movie tickets and beer) before we all end up worse off”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“The democratic process will always favor small, well-organized groups at the expense of large, diffuse groups.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Less obviously, concern for the environment is a luxury good. Wealthy Americans are willing to spend more money to protect the environment as a fraction of their incomes than are less wealthy Americans. The same relationship holds true across countries; wealthy nations devote a greater share of their resources to protecting the environment than do poor countries.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“How much does it cost to treat leprosy? One $3 dose of antibiotic will cure a mild case; a $20 regimen of three antibiotics will cure a more severe case. The World Health Organization even provides the drugs free,
but India‘s health care infrastructure is not good enough to identify the afflicted and get them the
medicine they need.

So, more than 100,000 people in India are horribly disfigured by a disease that costs $3 to cure.
That is what it means to have a per capita GDP of $2,900.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“ethanol may actually make some kinds of air pollution worse. It evaporates faster than pure gasoline, contributing to ozone problems in hot temperatures. A 2006 study published in the Proceedings of the National Academy of Sciences concluded that ethanol does reduce greenhouse gas emissions by 12 percent relative to gasoline, but it calculated that devoting the entire U.S. corn crop to make ethanol would replace only a small fraction of American gasoline consumption. Corn farming also contributes to environmental degradation due to runoff from fertilizer and pesticides.
But to dwell on the science is to miss the point. As the New York Times noted in the throes of the 2000 presidential race, ―Regardless of whether ethanol is a great fuel for cars, it certainly works wonders in Iowa campaigns. The ethanol tax subsidy increases the demand for corn, which puts money in farmers‘ pockets. Just before the Iowa caucuses, corn farmer Marvin Flier told the Times, ―Sometimes I think [the candidates] just come out and pander to us, he said. Then he added, ―Of course, that may not be the worst thing. The National Corn Growers Association figures that the ethanol program increases the demand for corn, which adds 30 cents to the price of every bushel sold.
Bill Bradley opposed the ethanol subsidy during his three terms as a senator from New Jersey (not a big corn-growing state). Indeed, some of his most important accomplishments as a senator involved purging the tax code of subsidies and loopholes that collectively do more harm than good. But when Bill Bradley arrived in Iowa as a Democratic presidential candidate back in 1992, he ―spoke to some farmers‖ and suddenly found it in his heart to support tax breaks for ethanol. In short, he realized that ethanol is crucial to Iowa voters, and Iowa is crucial to the presidential race.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Why did the entrepreneur cross the road? Because he could make more money on the other side.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“A Random Walk Down Wall Street.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Two percent who care deeply about something are a more potent political force than the 98 percent who feel the opposite but aren't motivated enough to do anything about it.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“(Remember, human capital embodies not only classroom training but also perseverance, honesty, creativity—virtues that lend themselves to finding work.) Some”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“One of the most bizarre and intriguing findings is that people with brain damage may be particularly good investors. Why? Because damage to certain parts of the brain can impair the emotional responses that cause the rest of us to do foolish things. A team of researchers from Carnegie Mellon, Stanford, and the University of Iowa conducted an experiment that compared the investment decisions made by fifteen patients with damage to the areas of the brain that control emotions (but with intact logic and cognitive functions) to the investment decisions made by a control group. The brain-damaged investors finished the game with 13 percent more money than the control group, largely, the authors believe, because they do not experience fear and anxiety. The impaired investors took more risks when there were high potential payoffs and got less emotional when they made losses.7 This”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“During the twentieth century, communist governments killed some 100 million of their own people in peacetime, either by repression or by famine.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“الرأسمالية نظام غير عادل، أترى ؟ إنه نظام جيد !”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

“Technology displaces workers in the short run but does not lead to mass unemployment in the long run.”
― Charles Wheelan, quote from Naked Economics: Undressing the Dismal Science

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