~ T-C-W-BAHTS/HCNA? ~ The – Consumer – Who – Bought A House That She/He Could Never Afford?

~ TB-W-L-TM? ~ The – Bank – Who – Lent – The Money?

~ T-I-W-WTATLIWMTBTLI? ~ The – Investor – Whose – Willingness To Assume The Loan Is What Motivated The Bank To Lend It?

~ T-IC-W-WTUTCRIWMTITATL? ~ The – Insurance Company – Whose – Willingness To Underwrite The Credit Risk Is What Motivated The Investor To Assume The Loan?

~ T-G-WDBT-MTICSASMTCSP? ~ The – Government – Which Didn’t Bother To – Make These Insurance Companies Set Aside Some Money To Cover Such Policies?

~ TYP-TPIT-EDSW ~ Take Your Pick – The Point Is That – Everyone Did Something Wrong

~ T-S-T-LICU-TS-IOT-ETMH ~ The – Solution – Therefore – Lies In Cleaning Up – The System – In Order To – Eliminate The Moral Hazards


~ TA-FBI-YNTKIM-WYTA-‘S’:PAS/TIOE/EDUEE/CTHTAU ~ There Are – Four Big Ideas – You Need To Keep In Mind – Whenever You Think About – “Society”: People Aren’t Stupid / The Importance Of Equilibrium / Everything Depends Upon Everything Else / Certain Things Have To Add Up

~ PAS-YNTRTEEIPASAW-TMNBDAGJOI-B-TADI-A-IOFYPASTWO-YGTHTTTIC-ECT-TSDOSA ~ People Aren’t Stupid – You Need To Remember That Everyone Else Is Planning And Scheming As Well – They May Not Be Doing A Great Job Of It – But – They Are Doing It – And – In Order For Your Plans And Schemes To Work Out – You’re Going To Have To Take Theirs Into Consideration – Economists Call This – The Strategic Dimension Of Social Action

~ TIOE-UAAOTHNTTC-BPATBIRTCITE-YCPWTGTDJBLAWTACD-YHTFOHTGTRTTC-AWTRIGTCFC-ASO ~ The Importance Of Equilibrium ~ Understood As An Outcome That Has No Tendency To Change – Because People Adjust Their Behavior In Response To Changes In Their Environment – You Can’t Predict What They’re Going To Do Just By Looking At What They Are Currently Doing – You Have To Figure Out How They’re Going To Respond To The Change – And Whether This Response Is Going To Cause Further Changes – And So On

~ EDUEE-BTATALOQRDDUTATALOOQ-WSHAWWTCIE-WHTMSTWTTBFE ~ Everything Depends Upon Everything Else – Because The Answers To A Lot Of Questions Really Do Depend Upon The Answers To A Lot Of Other Questions – Whenever Something Happens And We Want To Consider Its Effects – We Have To Make Sure That We’re Tracing Them Back Far Enough

~ CTHTAU-ETSSS-SEMBS-BTOWTSSITSITSE ~ Certain Things Have To Add Up – Every Time Someone Sells Something – Someone Else Must Buy Something – Because The Only Way To Sell Something Is To Sell It To Someone Else


~ TECORWNWAITSS ~ The Economists’ Conception Of Rationality Was Never Widely Accepted In The Social Sciences

~ K(K)-ASTAPTGSTWWRFTUP ~ Kludge (Kluge) – A Solution To A Problem That Gets Something To Work Without Really Fixing The Underlying Problem

~ WHAAATIT-U-WAHVLCOI ~ We Have An Amazing Ability To Ignore Things – Unfortunately – We Also Have Very Little Control Over It

~ RWUBAASOTT-ITE-ISWNPETP ~ Reason Wound Up Being Assigned All Sorts Of Tasks That – In The End – It Simply Was Not Powerful Enough To Perform

~ SIABP-OT ~ Successful Institutions Are Built Piecemeal – Over Time

~ IBTTTMOLAG-COT-TWASWH ~ It’s Better To Take Things More Or Less As Given – Change One Thing – Then Wait And See What Happens

~ ATNOCI-TCTSWD-EIOBA-IP ~ As The Number Of Cooperators Increases – The Chances That Someone Will Defect – Even If Only By Accident – Increases Proportionately

~ HACEMPMLTCWOA ~ Having A Common Enemy Makes People More Likely To Cooperate With One Another

~ WAELITTRIMMPTIIBWIATESAKTWHCOTIOTAIIIO ~ We Are Easily Lulled Into Thinking That Reason Is Much More Powerful Than It Is Because We Ignore All The Environmental Scaffolding And Kluges That We Have Constructed Over Time In Order To Assist It In Its Operations

~ IWFCBRP-EWTNA ~ Impressions We Form Can Be Remarkably Persistent – Even When They’re Not Accurate

~ CIBOASOSTHEOBDTOTLOOTSI ~ Civilization Is Built On A Set Of Strategies That Have Evolved Or Been Designed To Overcome The Limitations Of Our Tribal Social Instincts

~ FTA-CB-IAOOTHOST ~ Failure To Appreciate – Confirmation Bias – Is Actually One Of The Hallmarks Of – “Superstitious” – Thinking

~ WTTJTQOABWONTGCTWAB ~ We Tend To Judge The Quality Of Arguments By Whether Or Not They Generate Conclusions That We Already Believe

~ NWTTAOHI ~ New Ways To Take Advantage Of Human Irrationality

~ I-ASTBTCRC ~ Increasingly – Advertising Seeks To Bypass The Consumer’s Rationality Completely

~ EIOTEOR ~ Easy Is Often The Enemy Of Reason

~ CRH ~ Classic Rationalist Hubris

~ TGD-IYFAMT-‘R’-ATJKRIOAOA-MPWCTBIROWIWT ~ The Great Discovery – If You Found A Message That – “Resonated” – And Then Just Kept Repeating It Over And Over Again – Many People Would Come To Believe It Regardless Of Whether It Was True

~ HTE ~ Hostility To Expertise

~ JKAOBDNMULSTT ~ Just Knowing About Our Biases Does Not Make Us Less Susceptible To Them

~ R-ITSORTWFWWWOBTCTR-WWWTAFITPOOO-AWWWTAOPFLLIC ~ Rationality – Is The Set Of Rules That We Follow When We Want Our Beliefs To Correspond To Reality – When We Want To Avoid Failure In The Pursuit Of Our Objectives – And When We Want To Agree On Principles For Living Life In Common

~ WIIINTHAIATPOFR-IIJAINTHAIATA ~ While It Is Important Not To Have Any Illusions About The Power Of Human Reason – It Is Just As Important Not To Have Any Illusions About The Alternative


~ PWCITPOMFTIHD ~ People Who Could Improve The Performance Of Machines Found Themselves In High Demand

~ TEOHR-UCOFAE-TTGM-NL-DATUAOL ~ The Exercise Of Human Reason – Under Conditions Of Freedom And Equality – Tends To Generate More – Not Less – Disagreement About The Ultimate Aims Of Life

~ WIAITMEMP-IDNNPACOTIE ~ When Individuals Act In The Most Efficient Manner Possible – It Does Not Necessarily Produce A Collective Outcome That Is Efficient

~ THDPAAWODWO ~ Trade Has Developed Primarily As A Way Of Dealing With Outsiders

~ CMWW-TIARS-WLU-CHATTGOOH ~ Competition May Work Well – But It Always Requires Supervision – When Left Unattended – Competitions Have A Tendency To Get Out Of Hand

~ WKACHINTGIOTC-BTSORTCTC ~ What Keeps A Competition Healthy Is Not The Good Intentions Of The Competitors – But The Set Of Rules That Constrain The Competition

~ ISR-IDTIAMTMOTUDOC ~ Industry Self-Regulation – It’s Difficult To Imagine A More Total Misunderstanding Of The Underlying Dynamic Of Capitalism

~ MANM-A-TWNSAOP-TWPOUVSIC ~ Markets Are Not Magical – And – They Will Not Solve All Our Problems – They Work Properly Only Under Very Specific Institutional Conditions

~ ‘BOTIH’ ~ “Backside Of The Invisible Hand”

~ MFITB-IITFC ~ Market Failure Is The Baseline – It Is The Fundamental Condition

~ TGWOTMSSFTVLROGTTSOPRAT ~ The Greatest Weakness Of The Market System Stems From The Very Limited Range Of Goods That The System Of Property Rights Applies To

~ MESUGWPE-ASBS ~ Market Economies Systematically Underproduce Goods With Positive Externalities – And So Beauty Suffers

~ TINAPRTTTPSBWBMETPSB ~ There Is No A Priori Reason To Think That Private-Sector Bureaucracies Will Be More Efficient Than Public-Sector Bureaucracies

~ C-DBTFSOTC-AAASOMF ~ Corporations – Despite Being The Foremost Symbol Of Triumphant Capitalism – Are Actually A Symptom Of Market Failure

~ BTASVTM-TVMOIPASTTMF ~ Because They Are So Vulnerable To Manipulation – The Vast Majority Of Insurance Products Are Subject To Total Market Failure

~ IMIGIATDGASMETTPS ~ In Many Instances Government Is Able To Deliver Goods And Services More Efficiently Than The Private Sector

~ MPASTTSOO-MOUWRNLIASTATDOUTSOFTD ~ Most People Are Sensitive To The Suffering Of Others – Most Of Us Would Rather Not Live In A Society That Allows The Disadvantaged Or Unfortunate To Starve Or Freeze To Death

~ TSOOEWMAATTOOATTCAOW ~ The Saturation Of Our Environment With Media And Advertising Threatens To Overwhelm Our Ability To Think Critically About Our World

~ TPWSIITIGACOPWSTBFTPOSB ~ The Problem With Social Inequality Is That It Generates A Class Of People Who Stand To Benefit From The Production Of Social Bads

~ OFBTARIOASTTRIAGIAILTITOEOTE ~ Opposition From Business To A Regulation Is Often A Sign That The Regulation Is A Good Idea And Is Likely To Improve The Overall Efficiency Of The Economy

~ NWITOAMOWTDW ~ Not Working Is The Oldest And Most Ostentatious Way To Display Wealth

~ PIIUU ~ Patenting Ideas Is Ultimately Unworkable

~ TINESFTROL ~ There Is No Effective Substitute For The Rule Of Law

~ TWSEFAFTPE ~ The Welfare State Exists First And Foremost To Promote Efficiency