Okay, this is priceless — and anyone who wants to understand not only our economic calamity but also why we’re still screwed has to watch it. Oh, and don’t worry — it’s also absolutely, laugh-out-loud hilarious (in a bittter sort of way).
Nouriel Roubini and Nassim Taleb are two of our most trenchant and learned commenters on finance. It’s time to start listening to them — if Obama is serious about running a centrist administration, it’s a scandal that he tapped Robin Rubin acolytes Summers and Geithner, not Roubini and Taleb, to run economic policy.
For years, the two men have been making the point that the U.S. economy is way too hinged on debt, speculation, obsession with short-term gain, and philistine optimism — the very things raised to the level of fetish by the Rubin crowd. Roubini and Taleb predicted a cataclysmic tumbling of the house of cards built on that shaky foundation. They gained a small following, but were widely ignored — particularly by the TV financial media, which became a craven, self-parodying machine for turning Wall Street and corporate hucksters into folk heroes.
Now the calamity is upon us; I write this a day after Citigroup, the megabank Rubin helped run for ten years until his retirement a month ago, saw its share price plunge 22 percent in a single day and now trades at a level last seen in 1991.
Now Roubini and Taleb are beling listened to — sort of. Here they are on CNBC — a finance news network that has never seen a financial bubble it didn’t try to puff air into. (Hey guys, I have a hot tip for ya’ — Dutch tulips!) Watch how the network hauls out no fewer than five interlocutors to patronize Roubini and Taleb and treat them like exotic animals — some unheard of species of bear.
Rather than use the opportunity to teach their viewers a thing or two about the unfolding financial mess, they harangue Roubini and Taleb for … stock tips! And signs that "the worst is over" and the cash-grab can begin again.
The segment taught me just how little our financial press, at least the TV side of it, has learned from the lessons of the past year. They cling to the idea that the system has encountered a hiccup — and just needs a swift kick to start a new round of rapid growth and easy stock market profits. Worse, I fear that that’s precisely the task that Summers, Geithner, and Bernanke have set for themselves.
I think this is a vast error, and it matters for the environment. A system built on maximizing short-term growth doesn’t just require mind-numbing amounts of financial leverage; it also sucks in vast amounts of resources and spews out nearly as much waste. Climate change is only one sign that our ecosystem can no longer absorb all of it.
What’s needed, as Taleb says in this interview while the hosts shout him down, is a new system built on maximizing robustness, not short-term growth. That’s speaking an alien tongue to the vulgarians who staff our finance-news networks — and also, I fear, with those with their hands on the levers of our economic system.
