In the U.S., you couldn't have job creation with interest rates of 30 or 40 percent. They had a philosophy that said job creation was automatic. I wish it were true. Just a short while after hearing, from the same preachers, sermons about how globalization and opening up capital markets would bring them unprecedented growth, workers were asked to listen to sermons about "bearing pain." Wages began falling 20 to 30 percent, and unemployment went up by a factor of two, three, four, or ten.

My teachers helped guide and motivate me; but the responsibility of learning was left with me, an approach to learning which was later reinforced by my experiences at Amherst.

World War II was really unusual, because America was in the Great Depression before. So the war did help the US economy to get securely out of this decline. This time, the war [in Iraq] is bad for the economy in both the short and long run. We could have spent trillions in research or education instead. This would have led to future productivity increases.

The war in Iraq has been very, very expensive - partly because the Administration tried to keep the apparent costs down. But the benefits have been elusive at best - partly because the ostensible reasons for going war were unconnected with reality - no weapons of mass destruction, no connections with 9/11.

Most people think the Iraq war has increased the probability of an attack. However, it's difficult to put this aspect into financial terms.

During my three years as chief economist of the World Bank, labor market issues were looked at through the lens of neoclassical economics. A standard message was to increase labor market flexibility. The not-so-subtle subtext was to lower wages and lay off unneeded workers.

American inequality didn't just happen. It was created.