After the Storm
Has the global economic crisis bottomed out, or will conditions grow worse due to inadequate government responses? Does anyone know just how big the global mountain of toxic assets really is? Are financial derivatives a thing of the past?
As the global credit crunch grinds on, more than businesses and economies have been ruined. So, too, have many a once-glowing reputation. Lauded for decades as a virtual magician of the world’s long boom, Alan Greenspan, for example, now speaks of his lifelong beliefs being as shattered as his legacy. Indeed, few economists have emerged from the current global crisis with their reputations and professional standing intact, much less enhanced.
According to Lionel Barber, editor of Financial Times, "Only a few – such as Nouriel Roubini, now celebrated as the thinking man’s prophet of doom – identified pieces of the puzzle" before the crisis hit. A Professor of Economics at New York University’s Stern School of Business and Chairman of RGE Monitor, Roubini dared to resist the tide of market euphoria. While others waxed Panglossian about “financial innovation” and the supposedly beneficent but increasingly abstruse "risk-management" tools that it spawned, Nouriel Roubini was the proverbial canary in a coal mine, warning in ever-sharper tones of the explosion to come.
Not surprisingly, Nouriel Roubini - once marginalized, if not altogether ignored, for his heretical views – has now become one of the world’s most sought-after voices on the causes and consequences of the failure of a decades-long economic orthodoxy. Time after time, and in market after market, Roubini’s clear-eyed judgments have been vindicated, often painfully so.
Every month in After the Storm, written exclusively for Project Syndicate, Nouriel Roubini pulls no punches in exposing the biases that continue to taint economic analysis.Read More Read Less