It looks like the real economy is hosed for a decade

Economist Nouriel Roubini was one of the few who predicted the Great Recession. In an interview a couple days ago with New York Magazine he lays out why any recovery will be anemic and short-lived and how the world economy is in the toilet with the US leading the downward spiral of inequity, centralization of capital, and a population that will be poorer, sicker, and with fewer tools to fight for its own interests.

The market, as currently ordered, is going to make capital stronger and labor weaker. So, to change this, you need to invest in your workers. Give them education, a social safety net — so if they lose their jobs to an economic or technological shock, they get job training, unemployment benefits, social welfare, health care for free. Otherwise, the trends of the market are going to imply more income and wealth inequality. There’s a lot we can do to rebalance it. But I don’t think it’s going to happen anytime soon. If Bernie Sanders had become president, maybe we could’ve had policies of that sort. Of course, Bernie Sanders is to the right of the CDU party in Germany. I mean, Angela Merkel is to the left of Bernie Sanders. Boris Johnson is to the left of Bernie Sanders, in terms of social democratic politics. Only by U.S. standards does Bernie Sanders look like a Bolshevik.


Presumably when you say “real” economy, you’re talking buildings and land, not the economy that exists outside of paper fictions?

We knew that there was a version of this economy going to be doomed when all the easiest-to-extract-oil had been sucked out of the ground. We knew it again when global warming started to deliver on its promise of uninhabitable biomes ahead of schedule.

This economy was never sustainable, and there’s a part of us, all of us, even the Koch brothers and Trump and the rest, who understood this before Covid. “Take the money and run” was Enron’s business model, and that of the banking industry in 2008, and resellers of medical equipment today.

It’s not fun to think about, but the species can bounce back from covid far more quickly than we will ever be able to recover from a ruined biosphere. It’s horrible now, but future generations may well look back at Covid 19 as the germ that saved us from far worse. Like how the Martian forces were defeated in War of the Worlds, global capitalism needs something smaller and more ubiquitous than rule of law to reign it in.


That’s right, I mean buildings, arable land, potable water, household economies, the works. Not pieces of paper being traded in arcane rituals. Capitalism is rapacious and destructive. We were able to ignore that for a while, but not anymore. It needs to be replaced with something that takes people and the world they live in into consideration.


Food for thought here.


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