Middle-class economics works. Expanding opportunity works. And these policies will continue to work as long as politics don’t get in the way. We can’t slow down businesses or put our economy at risk with government shutdowns or fiscal showdowns. We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve got to fix a broken system.

If each member of society can be induced or impelled to do his allotted task by associating it with some motive that appears to him adequate, then he need never know how he is contributing to the real end, and need not even be aware of the end at all. It is this problem of organization that we shall call the Economic Problem. It is in fact the real subject matter of political economy.

Economic problems have no sharp edges. They shade off imperceptibly into politics, sociology, and ethics. Indeed, it is hardly an exaggeration to say that the ultimate answer to every economic problem lies in some other field.

The political problem of mankind is to combine three things: economic efficiency, social justice and individual liberty.

The central problem of our economy for more than a generation has been that, although our productivity has grown more slowly than that of our competitors, we have seen annual wage increases of the same order as theirs. So our inflation has risen faster than in other countries and we have been able to maintain price competitiveness and full employment only by a series of devaluations which have further added to inflation and increased the pressure for excessive wage increases. In the era of North Sea oil it will be more difficult to devalue our currency to maintain price competitiveness. So unless we can keep wage increases close to the level of productivity increase we shall face rising unemployment and a further erosion of our industrial base.

are the first generation of US Americans to have life prospects worse than their parents. The astronomical means that many young people put off the major purchases and life events linked to adulthood in the US -- buying a car or a house, getting married. At the same time, in highly populated cities like San Francisco, LA, Seattle, and NYC, rents are out of control. And we don’t have national healthcare. So paying for the basics of everyday life has become impossible. And we are told repeatedly that is in crisis and won’t survive. As one young person told me: 'My retirement program is socialism'.

You know, as I do, that we face two deep-seated problems, inflation and unemployment. Both of them are still too high. ... I have to emphasize to you that if we fail to bring down inflation, we shall never succeed in overcoming unemployment. We cannot have a prosperous industry in this country if we are unable to sell our goods overseas. No one owes Britain a living, and may I say to you quite bluntly that despite the measures of the last 12 months, we are still not earning the standard of living we are enjoying. We are only keeping up our standards by borrowing, and this cannot go on indefinitely. There is no soft option. I do not promise you any real easement for some time to come. There can be no lasting improvement in your own living standards until we can achieve it without going deeper and deeper into debt as a nation.

The difficulties of economics are mainly the difficulties of conceiving clearly and fully the conditions of utility.

I strongly believe that the best economic policy
for any administration is the one that seeks to produce more entrepreneurs,
not just more minimally educated college graduates with
nowhere to go. Nothing against recent college graduates, but many
of today’s best universities are no longer providing the basics of a
classical liberal education.

That is why the single most important economic issue of our
time — and one that impacts the poor and middle class alike — will be
how we treat the entrepreneurs and wealth creators among us, from
both the government and the private-sector viewpoints.

We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men.

I realize we are not going to resolve all of our political debates over the best ways to reduce inequality and increase upward mobility this year, or next year, or in the next five years. But it is important that we have a serious debate about these issues. For the longer that current trends are allowed to continue, the more it will feed the cynicism and fear that many Americans are feeling right now -- that they’ll never be able to repay the debt they took on to go to college, they’ll never be able to save enough to retire, they’ll never see their own children land a good job that supports a family.

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them.

Political problem requires political solution.

The most serious problems lie in the financial sphere, where the economy’s debt overhead has grown more rapidly than the ‘real’ economy’s ability to carry this debt. … The essence of the global financial bubble is that savings are diverted to inflate the stock market, bond market and real estate prices rather than to build new factories and employ more labor.