Another great commencement speech, this time by Ben Bernanke to the Princeton graduating class.
My favourite snippets:
Some years ago I had a colleague who sent three kids through Princeton even though neither he nor his wife attended this university. He and his spouse were very proud of that accomplishment, as they should have been. But my colleague also used to say that, from a financial perspective, the experience was like buying a new Cadillac every year and then driving it off a cliff.
How much do Cadillacs run? My agency could have amassed a whole fleet of them and started a taxi service.
The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others. As the Gospel of Luke says (and I am sure my rabbi will forgive me for quoting the New Testament in a good cause): “From everyone to whom much has been given, much will be required; and from the one to whom much has been entrusted, even more will be demanded”
I do agree that it is completely unfair, because in singapore, the govt seems to assume that the people who do the best have worked the hardest and therefore deserve the most rewards. I can assure you that that is a bald faced lie. To reward the most hardworking, you’ll need a completely different set of tests. Say, being graded on the number of lines you’ve written, or other sorts of menial labor. The thickness of the notes you’ve made in class. Your participation. We’d be the new outcasts.
On political indifference
In regard to politics, I have always liked Lily Tomlin’s line, in paraphrase: “I try to be cynical, but I just can’t keep up.” We all feel that way sometime. Actually, having been in Washington now for almost 11 years, as I mentioned, I feel that way quite a bit. Ultimately, though, cynicism is a poor substitute for critical thought and constructive action.
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. However, careful economic analysis does have one important benefit, which is that it can help kill ideas that are completely logically inconsistent or wildly at variance with the data. This insight covers at least 90 percent of proposed economic policies.
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