“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

It’s the price of success: people start to think you’re omnipotent.

Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.

Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.

The economist John Maynard Keynes said that in the long run, we are all dead. If he were around today he might say that, in the long run, we are all on Social Security and Medicare.

Not all information is beneficial.

So it’s important, as it affects overall levels of production and employment in the U.S. There are many domestic industries doing well in the United States, notwithstanding a strong dollar.

I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.

Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.

The people who best use their advantages, or overcome adversity, and work honestly are those most worthy of admiration.

The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.

We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

I served seven years as the chair of the Princeton economics department where I had responsibility for major policy decisions, such as whether to serve bagels or doughnuts at the department coffee hour.

[Virtual Currencies] may hold long-term promise, particularly if the innovations Promote a faster, more secure and more efficient payment system.

Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand

Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.

The GSEs are adequately capitalized. They are in no danger of failing.

Congress is headed in the wrong direction with this bill which removes any and all incentives from the food industry to improve their products for children.

When I read a script and have my first interaction with this character, do I feel like there’s something I’m gonna’ learn here? If I feel like it’s something I’ve done before, then what’s the incentive for me to do it?

Both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.