全球经济的新反常态

Feb 4, 2016 Nouriel Roubini

纽约—今年以来，全球经济面临了一系列新的严重金融市场波动，表现为股票和其他风险资产价格剧烈下跌。多重因素在起作用：担心中国经济硬着陆；担心美国增长萎靡而美联储开始升息；担心沙特-伊朗冲突升级；全球需求表现出严重疲软信号——最显著的表现便是石油和大宗商品价格暴跌。

还有其他因素。石油价格的下跌——以及市场流动性紧缺、美国能源公司以及石油出口经济体能源企业杠杆率上升、石油出口经济体脆弱的主权等——正在引起人们对严重信用事件（违约）和信用市场系统性危机的担忧。此外还有没完没了的欧洲隐忧，英国退出欧盟可能性越来越大，而右翼和左翼民粹主义政党正在整个欧洲得势。

一些糟糕的中期因素预示着平庸的增长前景，这进一步放大了这些风险。事实上，从产出、经济政策、通货膨胀和重要资产价格和金融市场的行为看，2016年将又是一个新反常态（New Abnormal）之年。

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Nouriel Roubini

Writing for PS since 2007
166 Commentaries

Nouriel Roubini, Professor Emeritus of Economics at New York University’s Stern School of Business, is Chief Economist at Atlas Capital Team, CEO of Roubini Macro Associates, Co-Founder of TheBoomBust.com, and author of the forthcoming MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them (Little, Brown and Company, October 2022). He is a former senior economist for international affairs in the White House’s Council of Economic Advisers during the Clinton Administration and has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank. His website is NourielRoubini.com, and he is the host of NourielToday.com.

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0 Comments on this paragraph, 33 Comments on this article

buzz gillis Feb 13, 2016

If all you say and, by the way I agree with, is true doesn't it scream out loud and clear that we are stuck in a worldwide "paradox of demand cycle". Most everyone (economists) who continue to disagree with each other on how to fix this ongoing crisis acknowledge that fiscal intervention is the only remaining mechanism that by and large governments around the world have available to them but have resisted embracing mostly out of fear of alienating their voters and are afraid or don't have the courage to implement because of the inherent paradox of demand ( increase government debt when the consumers (business and public) doesn't believe it is the right thing to do). What governments and sadly many traditional classical economists, as opposed to Keynes, believe we should do is to cut government spending(decrease total market demand) to pacify the bond vigilanties and all the demand problems will disappear. Courage for government to intervene when markets fail even at the risk of being considered unwise by the general consumer public is what I believe is an essential first step if our world macro situation is to change.
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Code Man Feb 10, 2016

Markets will continue to ignore the real economy as long as the programs of the automated trading systems remain unchanged...
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Frans Verhagen Feb 9, 2016

Is feeling at home in the new abnormal not a defeatist attitude? Why not point to the grassroots and political efforts in bridging the gap between Wall Street and Main Street and the demand for profound social change as proposed by Senator Sanders and others? People start to thin big about inequality, but many economists do not seem to be among them. As a sustainability sociologist I have presented in Verhagen 2012 a monetary transformation that would at the same time propose a pathway in structurally dealing with the climate challenge. Cf www.timun.net
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Pat McClung Feb 9, 2016

With apologies to John Kenneth Galbraith, the problem now appears to be that the Rich have too much money, and the Poor have too little.
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Robert Mullen Feb 9, 2016

Therefore phase out interest paid on excess reserves.
In other words, don't do more stuff, just stop doing the
stupid stuff.
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Charles Estes Feb 8, 2016

These are all problems of a shortage of demand. They could easily be corrected with money-financed deficits. Central banks should make newly created money available to their governments to spend on worthwhile projects or distribute as helicopter money to their people. The European Central Bank could do the same with its member governments. The problems you outline would disappear and the world's long-run potential economy would get a boost from reverse hysterisis effects. Too bad this is unthinkable; it's the only immediate solution to a shortage of demand in a situation where policymakers are so afraid of increasing national debts.
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M A J Jeyaseelan Feb 8, 2016

Performance indicators of the financial markets can never be reliable indicators of the true health of the global economy.

In fact, financial markets have always been the source of all global economic problems. Central banks and governments invariably end up creating more and deeper problems whenever they attempt to solve any problem via monetary or fiscal measures..

The root cause of all our economic problems is our failure to distinguish healthy growth from unhealthy growth. Even high rates of GDP growth can be unhealthy if these are the result unhealthy factors and practices

https://www.linkedin.com/pulse/20140718210034-17589031-healthy-vs-unhealthy-economic-growth?

Compounding all these is the problem of obduracy with which monetary economists believe that the real economy can be remote controlled with the help of a few financial or fiscal parameters. Nothing could be more myopic than this approach
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Farid Novin Feb 7, 2016

Mr. Roubini offers a somewhat comprehensive and interesting list of abnormalities. I am pretty sure that he must be aware that these abnormalities are not independent of each other. I have used the term abnormal in a recent article, and now I regret it. What I had in mind was that because of the poor central banks policies, encouraged by IMF, the global economy has trapped in a prolonged "disequilibrium" state. This has created the correlated imbalances that we are observing, and in this sense they are not 'abnormal'. As for away out of this predicament I have suggested we need to go back to Gustav Cassel's suggestions in Brussels conference of 1937. See : http://fn-post.blogspot.ca/2016/02/what-will-trigger-next-global-bust.html ; http://fn-post.blogspot.ca/2015/09/where-us-economy-is-headed-for.html and http://fn-post.blogspot.ca/2016/01/global-market-volatility-and-negative.html
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TERRY TAERUM Feb 7, 2016

The marvelous thing about economy is while it's never the same, the underlying principles (apparently) remain the same - the challenge being to figure out which ones are at work. There's little doubt there are "new attractors". The fear is that there are few places for the economy to move which will put us into a more positive circumstance, so we drift aimlessly into an abyss.
The greatest fear is deflation of such severity that we have no influence over it. Between plummetting oil and steel prices, and sharply diminishing demand, the lesson of the last year was, "hang on to your money because tomorrow everything will be cheaper". There is too much fear to lend, no incentive to borrow, and too little inflation for there to be a reason to buy now as a hedge against future increase in prices. We are stuck in an economic pergatory being unable to take the economy off life support but uncertain what stimulant will jolt it to life without damaging it.
There is inflation out there but no, we don't want an economy like Russia, Argentina, Brazil, Ukraine, Sudan... And there is deflation - Japan, Switzerland, UAE, Kuwait... And there are the economic engines of the world - China and the United States, beginning to chill. But worst of all, prices keep on falling and the best strategy is "hang on to your money".
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Philip George Feb 7, 2016

Actually there is nothing abnormal. What we are seeing is an exact repetition of what happened in the first decade of this century. First, the Fed expands money supply creating asset bubbles. Then it contracts money supply, bursting those bubbles and causing a recession.

See the graph on http://www.philipji.com/item/2015-12-05/the-fed-is-set-to-squeeze-during-a-monetary-contraction to see history repeating itself. The fall in commodity and then equity prices is a result of the relative monetary contraction that has been on since the beginning of 2014.

The growth rate of money supply on 1 December 2015 (before the Fed hiked rates) was 2.5%, a sharp fall from the high of 23.8% on 1 December 2013. Even if the Fed does not hike interest rates further, I do not see how a massive crash in one or more asset markets can be prevented, probably before the end of this year.
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Vaidyanathan Purushothaman Feb 7, 2016

Is it the best time for Central banks to work together on some common theme goals? I am also worried, not only conflicts in the middle east but its economic development with respect to lower oil prices, and the consequences it can bring into this region in the next decade. Technologies are also playing a big part in changing business strategies and models, although it improves productivity but impacts the job creations. I think We are all in a great transition mode and need a new and next level of economic and monetary integration.
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Angel Gavieiro Feb 7, 2016

Hidden behind the problems of banks' cash accumulation in excess reserves, corporate CEOs short-termism leading to low investment and high buy-backs/dividends and even the traditional reckless culture in banks & financial markets, resides an underlying mechanism that is utterly broken in capitalism: the large Conveyor Belt that should align the interest of long-term savers (i.e. insurance policy holders and pension plan holders)[principals], with its institutional investors trusts [agent 1], the later with its respective asset managers [agent 2], the later with the Board Directors of companies in their portfolios [agent 3], the later with the CEOs (ultimate asset allocation decision makers) [agent4]... and that Conveyor Belt is fully broken (if ever existed since the Entrepreneur-Owner converted into Public Plc... as very well know the Private Equity industry, since this is a key to their financial success).
This is the ultimate Governance Conveyor Belt of the Financial Economy, that results in public-listed corporations' decisions in the Real Economy. And, again I repeat my thesis: it is broken!

Now, 8 years after the crisis beginning, we see first efforts towards pointing at this problem, interestingly, guess from whom? ... Politicians? no, Regulators? no, WB/IMF? no,... from not other than Mr. Larry Fink at Blackrock ($4.5tr of AuMs), Mr. James Dimon at JP Morgan ($2.25 tr. assets and $1.5tr of AuMs), who along other top-shots of the I-Banking & Asset Mgmt. industry met recently to discuss what they can do to get everyone to focus on the Long Term. Effort welcome, the question is, Why They?... I would speculate that is because they have FEAR, fear that the whole system, facing the New Abnormal scenario described by Prof. Roubini, will break apart, and they (their institutions) got the most to lose this time (as there is not much more public cushion left to bail out anyone!).

The main role of the Financial Economy is, put it simply, to bring those Long Term savings where are required for L.T. investment as efficiently as can be done. Leveraging 2011 MGI numbers, this means globally managing the flows from a stock of $150tr. of household financial assets either via (1) Bank deposits ($40tr), (2) Insurance/Pension/Mutual funds ($75tr) and (3) Direct security holdings ($35tr). Focusing only on (2+3), just a fraction of that stock requires allocation in a given year, (let's assume 10-20%) $11-22 tr. Well, for doing that job ("primary market"), we (They?) have created a gargantuan financial system where the ratio of "primary market" vs "secondary market" is something like 1:4 or 1:5 (depending on the metrics you use), only because of the supposed requirement of "liquidity" in secondary market by investors... only that when real crisis arrives that liquidity stops to flow (i.e. Sep.08). As an example of size, just the OTC Derivative global stock amounts to $710tr (2013) notional amount (OTC Derivatives began to exist in early 70s! and its stock was small per comparison in the 80s!... still back then we could efficiently allocate capital without them !!!).
I would hypothesize that if the Conveyor Belt were in place, this huge distorted expansion of secondary vs primary market would not have happened, why? because it has a huge cost (i.e. the revenues of the I-Banking & Asset Management industry, which 80% depend on secondary market), which the Principals would not allow their Agents to freely get away with.
If an effective Conveyor Belt is ever restored, the magnitudes above would dramatically change (over time)... however the business for Mr. Fink and Mr. Dimon would not be ever the same again, reason why I do not believe for a second that they have the real incentive to actually, really, fully restore that Belt (I guess is clever to be in the driver sit to do so, if you were them!).
Thus, any long-lasting solution to the nightmare we live in requires to fix the Conveyor Belt so to effectively refocus all agents in the Financial System on the Long Term, but we need radically Other Leaders & Sponsors for this tremendous effort, not the I-Banking & Asset Management industry.
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george sos Feb 7, 2016

Maybe i am reading it wrongly ,but isnt he trying to say the truth about the financial system today?(that it is all made up by few,and doesn't offer anything but suffering to the many).
Isnt he in fact uncovering (discretely the truth is)the lies of the "globalisation school" economists and other analysts ?Isnt he saying that they created a new "language" to communicate between them their preoccupations and their false view of the world?Isnt he saying that they have been taking over the academia and the government ,lawmaking and the rest with these fake "theories"?And isnt he saying that the few have corrupted globally the political life and that they are imposing their ill beliefs on us all ,through their money power.?
As for reaction,who did you expect to react?
those who organised and created and keep feeding the monster of war/destruction of the civil society ?>?
Those who ,for profit would be prepared to sacrifice human lives?..right,yes,reaction..
Only one reaction i can see that would lead to good for the many.
Today ,all withdraw your trust from the fakes,from the bankers ,from those who threaten you with total annihilation if you dare to demand your rights,your wealth and your work to be paid justly.
Those who threaten you (successfully i must admit)that the "economic" life will stop if you dare touch them,and without their system you will die!!!(in fact they should be the only ones worried,they might die if they dont find another way to make a living,rather than exploiting the rest of us.)
Those who have had it easy al these years ripping off the world ,of its common wealth,of its global inheritance ,of our wealth that is.
Those who somehow,managed to grab ownership of natural resources as if their fathers were the ones who built this earth.
Need i go on?I think not.We all know who is the culprit and how to fix our world.We just need to find the strength to stand up on our own feet and stop being the fearful little men and women ,who price their materials more than their own lives.Those who are prepared to sacrifice their own freedom (our s too),only to be able to have a chance to eat some left overs from the rich man's table(even that is not certain for all of them,only few will reach the table close enough).
We need to find our dignity back as humans.And our humanism.And stop this mad consumerized world from becoming our own grave.
Unless we are all self destructive in which case i d suggest we take up heroin or something.at least heroin addicts are pretty honest about their state.their are addicted ,sick.they know it admit it and die of it.would you do the same?...are you a least as honest as a junkie?.. ..(hope so.for our own sake.)
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David Neunuebel Feb 7, 2016

"The unemployment rate remains high"? The U.S. just reported a 4.9% unemployment rate, so from over 10% to now under 5.0% and wage gains reported substantial gains. When what this article written?

And, by the way, 10 years ago no one knew what an iPad was and there was no such thing as a Tesla.

As for banks hoarding money, I wonder if Japan's negative interest rates where banks had to pay to hoard their cash would help the velocity of money?
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Simon Glossop Feb 7, 2016

There are some bright spots away from the Developed World debt ponzi scheme. Its obvious there is too much debt (public and private) and all the tools barring bank deposit confiscation have been exhausted in the desperate attempt to stimulate growth. The West made a mistake all the public funds were ploughed into the banks, at least part of these funds should have gone into infrastructure and capital investment projects. We have avoided banking implosion but the banks are hoarding the funds. Africa is one the bright spots, they were not allowed to employ excessive leverage by the market during the last 2 cycles, and now have the the young population, growth, growing prosperity and more importantly tangible raw commodity assets.
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Frederic Darthenay Feb 6, 2016

In 2008, Nouriel Roubini’s dire predictions turned out to be vindicated by reality, which greatly increased his reputation.
It was the well earned glory of a Cassandra (long doubted by everybody, and finally proven right… especially clearly because not believed before).

But this article is much more in the style of the Pythia. The estimated diagnosis and outlook for the future are very unclear indeed.
Could this “abnormal” be a durable (sustainable ?) situation, some new normal (even if a strange one) to some extent ? (see last sentence of the article)
Or should we rather expect a rapid burst (divergence between Main Street and Wall street, once perceived, should result in that, and geopolitics, as mentioned, could easily provide triggers) ?

Mr Roubini, is it in full awareness to avoid been proven wrong that you end with such open or ubiquitous conclusions “Pithya’s style” ?
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Luke Ho-Hyung Lee Feb 5, 2016

There have been many kinds of factors that changed the economic environment in the Modern Information Age. Unfortunately, economists have never considered the changed supply chain environment in their ruminations about the economy. The supply chain process is just like the human blood vain in the market, and it has suffered from something like human arteriosclerosis. If we do not first fix this problem, there will be no sustainable economic recovery.
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Avraam Dectis Feb 5, 2016

.
"Rapid Aging" bears more scrutiny.

Rapid aging is a sign of a population that is not replacing itself.

A population that is not replacing itself is dying.

There can be no greater indictment of economic and social policy when the population living under those policies is dying off.

Focus on GDP is a great error when the focus should be on the quality of life and the self-rejuvenation of the population.

Allow me to be redundant: There is no greater indictment of economic and social policy when the population living under those policies is dying off.
.
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G. A. Pakela Feb 5, 2016

The new abnormal is likely largely a demographic phenomena. Western societies emerged from WWII having children. The resultant population bulge worked its way through the intervening decades powering real GDP growth, productivity and inflation. Now that those post-war babies are moving lockstep into retirement, there is no impetus for population growth. However, there are several potential sources of economic growth. The Japanese can encourage more women to enter the work force - by establishing hiring and promotion quotas. The Europeans can tackle its unemployment with structural changes. Finally, there are places in the world like Africa and India where demographics are favorable for growth and an "economic miracle" similar to what Asia experienced.
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Steve Pressl Feb 5, 2016

welcome to the debt/rent seeking economy. I am glad I probably wont still be around when this all comes home to roost.
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Steve Hurst Feb 5, 2016

I sometimes wonder if any economist has ever been in a sector that has suffered a reccession. I guess not because there is constant demand for the models they weave and the oft implausable comment they make supporting failing goverment strategy. Experience says anybody questioning government strategy gets shot down as a party pooper

So- This is the way reccession works historically for a business. Bearing in mind all an economy is a collection of businesses. There is a localised downturn in an economy, carnage and bankruptcy in that sector - for example clothing manufacture in the UK in the 90s. A 'minority' impact. Meanwhile, often just down the street another sector in the same economy can be on the up and vibrant, eg finance and IT services.

The jolly ol' politicians presiding over this theatre of income death say deary me, its a shame but can't be helped, but look over there enough people are busy and the problem will soon clear with a vee notch uptick as confidence returns. (This was the grand plan in the UK circa 2008). In fact governments quite happily sacrifice lambs if it suits them. Sacrificing lambs can be undertaken with enthusiasm

Critically enough voters are vaugely ok to keep voting for mainstream politicians whether incumbents or major opposition parties, So the reality is policy does not change very much. This has got quite ludicrus on occassion - for example in 1996 Blair committed himself to using Conservative financial policy. Labour again recently said that they would be frugal and very much like Conservative financial policy

Anyway to return to the downturn -This neighbourly sector economic uptick that is happening alongside the carnage largely localised in another sector helps overall. Its there again and again, reccession after reccession. The downturn sector however never returns to its former glory. As each reccession affects another sector you gradually run out of sectors to strip. This has happened in the UK and USA

However if the mechanism instead of being local is all pervasive and occurs in all sectors in an economy there is nothing to provide an uptick. If the downturn affects the global economy there is no uptick, no vee notch recovery, just slight uoward creep as debt is gradually cleared. Its a very simple reality.

In the UK public spending cuts were implemented on plan with the idea tax revenues would uptick and public debt would then be inboard of income. The tax revenues have not picked up, they have flatlined. As the meeting of the graphs has not occurred further cuts have to be implemented

The grand maestros of all pervading debt got us here and took a short term profit and addittionally offshored activity aka asset stripping. Both of these are negative economic mechanisms

There will be no recovery in the traditional sense. The USA has only just crawled back to the horizontal axis after 8 years and has colossal debt accumulated in the process, hardly a situation to rejoice. As the USA is more effective at clearing fire damage thru bankruptcy than most developed nations its a fair bet other developed nations remain further stuck in the quadmire of their own policy creation

Rather than years you have to think in terms of decades and further problems will arise along the way, for example the steadily aging demographic

Its nothing abnormal. The only thing abnormal about is the idea what was solved by national economic models can be applied to a global failure model

The very real risk facing the UK is if anything severly affects the Financial sector (Fintech) which along with the service sector has been the main engine of the remaining economy. Hence the concern with HMG re the City and EU regulation which is usually devised by France and Germany to suit themselves
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Zsolt Hermann Feb 5, 2016

It is not the global economy that is abnormal.
We are in the wring paradigm. We are incompatible with our evolutionary conditions.

Humanity has evolved into a globally interconnected and interdependent network.
Humanity has always been existing in Nature's integral, interdependent system, which we evolved from. Until now we did not sense it so sharply thus we could pretend we were independent from it.
But now we reached maturation and saturation, we cannot ignore our multi-level dependence on each other and our collective dependence on nature's system.

We can only solve our problems and survive if we accept that fundamental natural laws are binding for us too.
And the most fundamental of those laws is "selfless, mutually complementing cooperation".
Without it the all important balance and homeostasis crucial for life and positive development is not possible.

Our present "abnormal human paradigm" is opposite as we thrive on ruthless, exclusive competition against each other and "against Nature" exploiting everything we can for our selfish interest.
Moreover instead of the natural necessity and available resources based paradigm that is prevalent in nature we are stubbornly pursuing a paradigm that is based on excessive, artificial demand fully ignoring available resources.

Without correcting the above "aberrations", without consciously adapting to Nature' system we will not be able to survive and continue our evolution.
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Luke Ho-Hyung Lee Feb 5, 2016

I believe the current worldwide liquidity trap is caused by an economic arteriosclerosis, more specifically, a supply chain arteriosclerosis. That supply chain arteriosclerosis could be easily healed by a new Inter-Supply-Chain-Net (ISCN). The Inter-Supply-Chain-Net is also known as the 3D Supply Chain Process System or the Uber of Supply Chain Networks.
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Robbie Jena Feb 4, 2016

Super bad business and social practices coupled with rise of Eastern Civilization is causing this mess. Take it or leave it. Either way, it is the Collapse of Western Civilization when you add Middle-East stuff.
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dan baur Feb 4, 2016

Dr. Doom, are you proposing anything useful, or just re-stating what we can all see?
- Neil Gundel Feb 5, 2016
  
  My reaction exactly.
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Michael Public Feb 4, 2016

Fails to address why main street is struggling. Main street is struggling because capital is not flowing to entrepreneurs but rather to rent seekers, i.e. the elites, the insiders or whatever you want to call them. Change the system, capital must be loaned to high value add activities and not into assets like property and stocks. For money to have velocity the things people devote their time to need to provide primary value and not be leeches on the backs of others, like most hedge funds and so on are. Fix the way capital is allocated and flows and you will boost economic growth dramatically.
- Marc Sargen Feb 4, 2016
  
  You talk of about the need to change the system so capital gets loaned/invested into hight value added activities. But capital is not getting invested because of constant change & intrusions by government entities that makes investors leery of risky long term value added investments. Every few months, investors hear how the Bank of Japan will push negative rates, or how Clinton wants a supplemental high earner tax on capital gains, or how the bank of China or Switzerland will shift a long-term policy to allow currency depreciation or appreciation buy changing non-market intervention policy.
  People can deal with these changes but when they come frequently & out of the blue to cause a shock response, then investors, businesses, & even every day workers who might become entrepreneures become gun shy. The constant call for extraordinary changes to "do something" means that most people are afraid to take the long-term risks needed to improve the world economy.
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Cam Jennings Feb 4, 2016

Nouriel this is an interesting article and follows on from the article by MOHAMED A. EL-ERIAN - The End of the New Normal? The fragility of the global economy has various contributing factors and the “new normal” or as you say here "New Abnormal" creates a concern for many. US monetary policy from the Fed Reserve will be interesting this year as it tackles the question of how many BP up or down to move rates.

The first quarter of this century appears to be a transitional period where economics is applying pressure politically to the old normal and creating a new normal. Which side of the globe will be the dominant one with global development the West or the East remains to be seen as both have strengths and weaknesses.

Your points about technological innovation and structural reform when looking at the US - assumptions were made that technological innovation would assist the US retain a healthy position seem to be flawed and the retarded process of structural reform whilst not wholly responsible for the anemic growth, have contributed to it.

Economic policy, monetary or fiscal does indeed seem to be in a murky mess with new acronyms being invented every year. My limited understanding of economic policy leaves me to think of the economy much like a ship which only has port and starboard direction to move. Monetary or fiscal policy is applied to the economy in the attempt to sail safely around, past, through or over threats and challenges that maybe encountered in uncharted waters.

The lifeboats appear to have holes and abandoning ship is not an option for some of us can not swim and so we hope and pray that academics, analysts and advisers can assist the captain in finding the necessary effective solutions to the challenge of safe passage for the passengers and crew.

The word unconventional is used and I wonder what future unconventional changes there will be in an attempt to create stability in either local, regional or in the global economy. Those of us who live on or close to main street, those of us who live in the West, do not want to have our lifestyle and standard of living deteriorate and yet we do not seem to be concerned that this will be the new abnormal.

We have become fat dumb and happy in the West and the stupefied majority are oblivious and or in denial about the New Abnormal and how to make the necessary change. We are going to be here for a while as the world struggles through this shift in global order and the mulitpolar world. In some ways the world was much easier to navigate when it was bipolar and in the event that the alarm sounds I have purchased a life vest.
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Per Kurowski Feb 4, 2016

The global economy is becoming abnormal as a result of bank regulators abnormally being more scared of what bankers ex ante believe to be risky, than of what they could ex ante believe to be very safe.

http://subprimeregulations.blogspot.com/2016/01/for-regulators-whats-rated-aaa-is-more.html
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Jerry hough Feb 4, 2016

I think Roubini needs to look at politics.

Trump, Merkel, Europe suggest we are near a breaking point. And what if the stock market has been a bubble like oil and we get a recession?

The issue is why CPI is stagnant. The inflation of the 1970s (when the market went no place) was wage driven (or maintained). But huge immigration and outsourcing that began around 1980 created an infinite supply of labor and stagnant wages and no CPI inflation.
The previous period had had a very different supply-demand ratio because of the immigration law of 1924.

But excess money seemingly has gone into asset inflation. And was meant to with "asset stimulus"--first, housing under Bush, and then the market under Citigroup. It was a deliberate, officially announced policy of pushing savings into risky investments. Developing world, junk bonds, stocks, etc etc. Stock buybacks were encouraged to inflate PE ratios. High flyers were encouraged to route profits through Ireland to have higher post-tax profits. Keep wages down to increase profits.

It was all supposed to trickle down (this was officially announced). But it didn't work because demand was insufficient.

So what happens if there is now another bubble and recession as the US is the only strong currency, if EU begins collapsing, if the emerging countries keep weakening? Europe of the 1920s and 1930s?

The ruling generation since 1992 have been the libertarian Goldwaterites and New Left of the 1960s who learned from the draft that government is bad. The next ruling generation from 2020 to 2050 were the milennials born after 1980 who learned that the anarchism since 1990 has high costs. Look how they vote for Sanders who is even older that Hillary.

We have a very different politics and ecconomic system coming
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