Economists were very well represented in Foreign Policy‘s annual roundup of 100 top global thinkers (accounting for 21 percent of the honorees). Among the dismal scientists recognized, economic consultant and New York University professor Nouriel Roubini was given due credit for his consistently bearish but prescient economic warnings over the past four years. Considering his prognostications regarding the housing market implosion, financial sector meltdown, prolonged high unemployment, and sickly economic recoveries in the advanced economies, among other fronts, Roubini’s economic insight clearly commands gravitas. As such, it’s worth highlighting Dr. Doom’s choices for the best and worst economic policy ideas:
Best idea: “Let’s start taxing the rich more—the Buffett Rule—as inequality is now at 1929 levels and increasing further.”
Worst idea: “A front-loaded fiscal austerity that will sink us in a severe recession.”
Hear, hear. There may be a visceral backlash against (or tone-deaf indifference to) these very same sentiments when espoused by progressive economic think-tanks, but shouldn’t everyone be listening to Nouriel Roubini?
It’s worth noting that Roubini recently articulated other pertinent policy prescriptions in a report The Way Forward, coauthored with Westwood Capital Managing Partner Daniel Alpert and Cornell University Law Professor Robert Hockett. Their three-pronged plan for economic recovery proposed:
- A $1.2 trillion, five-to-seven year program of heavy public investment, thereby putting Americans back to work building a more competitive economy (at relatively little cost).
- Comprehensive debt-restructuring to detoxify the real estate market and financial intermediation.
- Global reforms to re-balance the world economy, particularly reversing fiscal austerity programs in surplus nations (e.g., Germany) and increasing domestic Chinese demand (through a combination of currency appreciation, improved labor market standards, and budget reforms).
Yup, the global economy would be in far better shape if Dr. Doom was steering economic policymaking. It’s a pity the United States is heading further and further down the austerity path instead of learning from the dismal European experience.