Tuesday, September 20, 2011

Nouriel Roubini Needs To Get Away From The Office

... and spend some time doing things.

Nouriel is a really cool guy. He correctly predicted the crash, he talks a lot about debt and best of all, he's got a great accent, so while he's talking about interest rates and sovereign defaults, you feel all sophisticated and worldly for listening to him. He also has a huge blind spot. Here's what he has to say about avoiding a global depression and how to restore growth.
(T)he reasons for advanced economies’ high unemployment and anemic growth are structural, including the rise of competitive emerging markets. The appropriate response to such massive changes is not protectionism. Instead, the advanced economies need a medium-term plan to restore competitiveness and jobs via massive new investments in high-quality education, job training and human-capital improvements, infrastructure, and alternative/renewable energy. Only such a program can provide workers in advanced economies with the tools needed to compete globally.
Emphasis mine. Nouriel, buddy, I love you, but you have no idea at all what you're talking about. Here's the main reason we've got slow or no growth.

A very tiny subset of the overall process by which the government buys products and services.

All that yap about infrastructure spending is just baloney. What it really means is that more money will be spent this way (government) and less money will be spent your way - pulling out your cash and making the purchase. Government stimuli don't buy infrastructure so much as they buy Integrated Process Teams, Working Group Charters and Lean Six Sigma Events.

Nouriel needs to push himself away from his desk and go work in a government contracting office for a year. Then he can come back and write things that actually have a basis in the real world.


tim eisele said...

Not really related, but I thought you might find this graph from The Economist interesting:

Two thousand years in one chart.

K T Cat said...

Great chart! Thanks for sharing that. I'd say that it shows we stand on the shoulders of giants. Just look at what they produced while living shorter, less prosperous lives.