Posts Tagged ‘nouriel roubini’

Bad tidings

16 January 2012

200 posts later, I’m still agreeing with Nouriel “Dr. Doom” Roubini, whose prognosis for the U.S. economy in 2012 is not good.

The best I can say, and this is better than it sounds, is that recovery has a way of taking us economists by surprise. The 1991 and 2001 recessions look short and shallow in hindsight, but they seemed pretty bleak at the time, like classic “liquidity traps” where monetary policy was powerless to prime the pump. And the economy in 1980-82 seemed to be in absolute shambles. Most of the business cycle literature I’ve read deals with the causes of recessions and depressions, but I’m told there’s a substantial literature on the forces of recovery. I plan to acquaint myself with it this year, and to blog a fair bit about where recovery — especially a genuine, non-bubble-driven recovery — might come from.

Should Bernanke stay or should he go?

1 August 2009

His term ends in early 2010.  Obama’s decision on his fate will probably come much sooner. I tend to think he should be reappointed, not least because the apparent alternative is Larry Summers.  I’d like to see some other macro/policy economists get consideration — Brad DeLong, for example — but I’ve heard basically no other names mentioned besides Bernanke and Summers.

I think many if not most economists would give Bernanke about a D for his handling of the housing bubble and the expansion of 2005-2007 but at least a B for his handling of the financial crisis and macroeconomic fallout.   (It would be an A if not for the mixed signals in bailing out “little” Bear Stearns and not “big” Lehman Brothers.)  It seems like he’s learned that bubbles are not a benign phenomenon and that the Fed can act to stop them.

Last Sunday’s NYT had an excellent point-counterpoint on the question of Bernanke’s reappointment, a true heavyweight matchup between Nouriel (“Dr. Doom”) Roubini, arguing for, and Monetary History of the United States co-author (with Milton Friedman) Anna Jacobson Schwartz arguing against.  Both columns are well worth reading and re-reading over the next few months.

(This time you’ll have to find the Clash video yourself.  Sorry.)

Much ado about nationalization

25 February 2009

The word “nationalize” has at least one great use, in the punchline of a hilarious Winston Churchill story.

But in the current media firestorm over bank nationalization, maybe it’s time to abolish the word as harmful to thought.  (David Paul seems to agree.)

I’ve used the term myself and like the idea of the government temporarily seizing control of the big zombie banks, but “nationalization” has been bandied about so loosely that it’s lost its meaning.  Many people described the Bush-Paulson capital injections (via purchases of preferred stock that gave the government small nonvoting stakes in some banks) as nationalization, when they were really just crude subsidies (as Willem Buiter pointed out).  And if it’s nationalization for the government to temporarily take over a failing bank so as to help depositors and creditors,  avoid systemic risk and arrange for the orderly sale of its assets, then we’ve been doing it for over 75 years, ever since the creation of the FDIC.  In fact, by some compelling accounts, Sheila Bair’s FDIC has been the one shining light in this crisis.