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Roubini Says We Ran Out Of Rabbits But Don’t Despair!! He Can Save The World

Politics / Economic Theory Aug 21, 2011 - 01:24 PM GMT

By: Andrew_Butter


Best Financial Markets Analysis ArticleRunning out of rabbits to pull out of hats in the Year of the Rabbit sounds a bit far-fetched, but apparently that’s the situation right now. At least that’s what Nouriel Roubini says in a recent post “Marx was right: Capitalism may be on brink of doom”.

He should know; because, as we keep hearing, he predicted everything in sight from as early as 2003 and if only anyone had listened to him disaster might have been averted. Oh well, perhaps someone will listen to him now, and perhaps if they do another disaster can be averted?

According to Roubini, unless we do what he says, there will be:

1: Unending stagnation.
2: Depression.
3: Currency and trade wars.
4: Financial crisis.
5: Sovereign insolvencies.
6: Massive social and political instability.
Uh-huh…that sounds ominous, better do what he says. This is what he says must happen for disaster to be averted in “advanced-economies”.

1: Abandoning Anglo-Saxon laissez-faire voodoo economics.
2: Abandoning the European model of deficit-driven welfare States
3: Creating jobs through additional fiscal stimulus aimed at productive infrastructure investment.
4: More progressive taxation (it’s not clear if that’s “more” taxation or that taxation should be “more progressive”)?
5: More short-term fiscal stimulus with medium and long-term fiscal discipline.
6: Lender of last resort support by monetary authorities (Central Banks?) to prevent ruinous runs on banks (i.e. presumably more TARP and TALF and ECB bailouts?).
7: Reduction of debt burden for insolvent households and others “in distress”.
8: Stricter supervision of financial system run amok.
9: Breaking up too-big-to-fail banks and oligopolitical trusts.
10: Invest in human capital, skills and social safety nets.

Whew, that doesn’t sound too hard!!

And the good part is that according to him if “advanced-economies” do that, the next thing that will happen will be an “increase in productivity which will enable workers to compete, be flexible and thrive in a globalized economy”.

Fantastic, wonderful, that sounds like a PLAN!!

I can just see it, rows and rows of happy workers all competing (but not too hard), practicing Yoga, and “thriving”!! Happy days, I can’t wait!!

Just so I got that straight, a few questions:

1: Anglo-Saxon voodoo economics will be replaced with Roubini voodoo economics?
2: Deficit-driven welfare will be replaced with surplus-driven welfare?
3: Fiscal stimulus for productive infrastructure means borrowing money to spend on bridges to somewhere instead of bridges to nowhere?
4: Progressive taxation means “soak the rich”?
5: More short term fiscal stimulus means governments borrowing or printing money in the short-tem, but with a promise to be good later?
6: Lender of last resort – well what’s new?
7: Throwing money at anyone who is “distressed”, that’s nice but where does it come from?
8: Stricter supervision …does that include spanking?
9: Breaking TBTF, OK that’s not laissez-fair, not quite sure what an “oligopolitical trust” is…is that like IKEA?
10: Invest in human capital, skills and social safety nets…presumably spend more money on teachers, unemployment benefits (not that those will be needed), and state-health-care?

Well I’m glad someone has a plan.

Here’s my plan.

I figure that if Roubini can get $150,000 a shot for spouting that nonsense, all I can say is good luck, and my plan is to get $300,000 a shot for spouting even more impractical nonsense and taking off all my clothes at the same time.

Perhaps I should do an IPO?

Anyone want to see my business plan?

By Andrew Butter

Twenty years doing market analysis and valuations for investors in the Middle East, USA, and Europe; currently writing a book about BubbleOmics. Andrew Butter is managing partner of ABMC, an investment advisory firm, based in Dubai ( ), that he setup in 1999, and is has been involved advising on large scale real estate investments, mainly in Dubai.

© 2011 Copyright Andrew Butter- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Andrew Butter Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


22 Aug 11, 09:32
Even a stopped clock tells the right time twice a day.

And a busted time piece isn't worth $150,000 either.

Roubini had the incentive to break from the mainstream with his predictions, possibly because the 'it's boom time forever' room was overcrowded - the economics world was short on doomsters back then.

Is he a great economist? No.

Blaise Pascal
29 Aug 11, 02:32

Your comments about Roubini are the drooling rants of a .... Also, you think that you're being cute, and that is truly sad.

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