Markets work best when there's lots of information available and a historical track record to go on; they excel at predicting things like horse races, election outcomes, and box-office results. But they're bad at predicting things like who will be the next Supreme Court nominee, as that depends on the whim of the president.

Auto repair, piloting, skiing, perhaps even management: these are skills that yield to application, hard work, and native talent. But forecasting an uncertain future and deciding the best course of action in the face of that future are much less likely to do so. And much of what we've seen so far suggests that a large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled "decision maker."

Bubbles and crashes are textbook examples of collective decision making gone wrong. In a bubble, all of the conditions that make groups intelligent - independence, diversity, private judgement-disappear.

A general principle of good taxation is that similar jobs, and similar kinds of compensation, should be taxed the same way: otherwise, the government is effectively subsidizing some jobs over others.

On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough.

Of course, politicians always say they're just describing their opponents' positions, even if they are in fact offering absurd caricatures, if not outright lies.

Speculators get a bad rap. In the popular imagination they're greedy, heedless, and amoral, adept at price manipulations and dirty tricks. In reality, they often play a key role in making markets run smoothly.