The reason that the invisible hand often seems invisible is that it is often not there.

You saw on your TV what happened in New Orleans after Hurricane Katrina. The Reserves or National Guard are usually the people we use for those national emergencies. They weren't here, they were over in Iraq, and so we were less protected.

If you get a flow of credit increasing, as we've seen in the last few years - that flow of credit didn't go to more wealth accumulation as we normally use the term in economics, as capital goods. What you got is an increase in bubbles of one kind or another.

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.

International lending banks need to focus on areas where private investment doesn't go, such as infrastructure projects, education and poverty relief.

I think that for the developing world there are many versions of capitalism, and countries have to choose one that's appropriate.

The extra curricular activity in which I was most engaged - debating - helped shape my interests in public policy.