Capital Commerce

Nouriel Roubini and a Defense of Optimism

By James Pethokoukis

Posted: April 8, 2009

Maybe the bears like Roubini and Meredith Whitney are right. Maybe not. But have a look at some great stuff from the great Tom Barnett that may inform your analysis:

I made a decision a long time ago not to make my career a bet on bad things happening. I think that approach simply corrodes your strategic thought capacity. Human history is progress, so if you're constantly having to screen out the good to spot the bad, your vision will unduly narrow. If you bet on progress, you can easily contextualize the bad, because progress is never linear. But if you bet on retreat, you must consistently discount advances as "illusions" and "buying time" and so on, and after a while, you're just this broken clock who's dead-on twice a day.

Right

Optimism is human nature (e.g., playing the lottery), but it isn't objective.

Luther of IL @ Apr 08, 2009 20:22:57 PM

Roubini, Cagliostro, whatever

Roubini predicted imminent disaster since *at least* 2005. That means if recovery happens by 2011, anyone predicting imminent recovery today will be just as "right" as Roubini. That's why I predicted retail sales less autos would lead the way out of this slump (four days ahead of the February figures). Do I get to hang out with supermodels at Manhattan cocktail parties now?

Roubini is the economic equivalent of a fortune teller, a modern day Cagliostro trading on his "predictions" for glitz and glamour.

Tom Hanna of MO @ Apr 08, 2009 15:36:28 PM

Roubini vs. Barnett

If you are a careful reader of Roubini you will come to understand he is no perma bear. Rather he is a skeptic and an empiricist. As he says, when the data

supports a more optimistic outlook he will be among the first to point it out (and I as a reader of his website will take serious note).

I also have a deep respect for Barnett - - as a broad-brush, future thinking analyst

who is careful to avoid the myopic view common to the media. He does not predict events but instead sketches out larger historical trends. I wouldn't look to him to call

or predict anything short term - - much less anything as quixotic as our economy. But I think he gets the big stuff right.

Lastly, if you want to think critically, read and re-read Nassim Taleb and become your own man.

Steve Rank of CA @ Apr 08, 2009 14:10:40 PM

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