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The Wealth Of The Nation
The most influential economist in the United States talks about prudence, productivity, and the pursuit of liquidity in the light of the past
December 1982 | Volume 34, Issue 1
That is a philosophy that would have carried one through a great inflation in Germany or through other economic times of turbulence. But it is not a philosophy that was popular in very stable times like Victorian England.
Stable times are difficult to define. If you had lived between 1910 and 1920, would you have had a valid vision of what was going to happen in the 1920s? If you were in the middle of the 1920s, what would your vision have been of the middle of the 1930s? Or in the early 1960s, when the U.S. Treasury bill rate was 2.5 percent and long-term government bonds were 4 percent, if I had said that in the 1980s the bill rate is going to be 16.5 percent and the long bond 15.25, what would you have said?
We could not survive. Well, projecting ahead to 1985 or 1990, what can you see?
I would think, given the kind of economic and financial turbulence we have, that there will be a move to financial reregulation rather than more deregulation, even though most are talking about deregulation.
Let me end by asking what is it that motivates you?
I think that we’re put on this earth to make a contribution, and it’s a terrible waste not to try to do your best. I know people who are very smart and talented, but they’re operating at 50 percent of capacity. I find that a waste. Also, it seems to me that you cannot stand still. The moment you feel that you’re standing still, you are really going backward, and so the need always is to push on.