John Cochrane: belief

Transcript context

…Last question: after you finish your 600-page book on The Fiscal Theory of the Price Level, what is it you think you will do next? [laughs] My problem in life is that my list of great projects, earthshaking projects, is growing as I get older and try to bite them off, so I have to pick one or the other. Which one do I want to pick? Of course, one should finish what one has started. The Fiscal Theory of the Price Level was going to be something that included the theory and how it explains all of historical experience with inflation, money, and so forth. I’m at 600 pages. I haven’t finished the theory part, so one should do that. One needs to understand. I still don’t know that I have a good story for the inflation of ’70s and ’80s, which is a gaping hole. So I should finish that, but I probably won’t. I did mention, I think, that why that takes so much trading to get information into prices — that’s a big unknown thing about asset markets, so I’m tempted to go back to that. Part of me wants to go into political philosophy. The danger of libertarians is . . . Oh, what was the question you asked me? Make me king for a day. Well, make us king for a day, and we could solve most of the problems of the American economy in about 10 minutes flat, yet our Congress doesn’t do it. What is there about our political system that is unable to come to these sensible cause-and-effect, obvious solutions to obvious problems? Interesting — America had this amazing flowering of political engineering in 1790, and we seem to have just lived in the building ever since and not really done a great job of thinking about it. In any scientific pursuit, you need to start with answers, not with questions. If you start with big questions, you’re never going to get anywhere. I think I have some answers, but that certainly strikes me as a question. How can we better engineer our political organization — kind of a constitutional moment — to produce the better economic outcomes that you and I know are there and just sitting — You and I are techno-optimists, where I think we think that the US, the world could be vastly wealthier, healthier, and cleaner if just the regulatory state would get out of the way. And that’s a political question — a political economy, political structure, constitutional question, I think, so I’m tempted to turn my attention to that. John Cochrane, thank you very much.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.