It is simply bad economics to impose our preferences on individuals whose lives are much, much different.

Per capita income in the United States is higher than per capita income in France; the United States also has a higher proportion of children living in poverty.

Burton Malkiel, who was kind enough to write the foreword for this book, has written one of the best: A Random Walk Down Wall Street. Rather, this chapter is about what a basic understanding of markets—the ideas covered in the first two chapters—can tell us about personal investing. Any investment strategy must obey the basic laws of economics, jus

One crucial role for government in a market economy is dealing with externalities—those cases in which individuals or firms engage in private behavior that has broader social consequences.

Good policy uses incentives to channel behavior toward some desired outcome. Bad policy either ignores incentives, or fails to anticipate how rational individuals might change their behavior to avoid being penalized.

Governments can also benefit in the short run from what economists refer to as the “inflation tax.”

The market rewards scarcity, which has no inherent relation to value. Diamonds are worth thousands of dollars a carat while water (if you are bold enough to drink it out of the tap) is nearly free. If there were no diamonds on the planet, we would be inconvenienced; if all the water disappeared, we would be dead. The market does not provide goods t

The Federal Reserve regulates commercial banks, supports the banking infrastructure, and generally makes the plumbing of the financial system work.

Taxes that fall more heavily on the poor than the rich, so-called regressive taxes, often offend our sense of justice.