Nouriel Roubini on Threats to the Global Economy

A professor at New York University and chairman of a consulting firm that bears his name, Roubini earned the nickname Dr. Doom for predicting hard times before the financial crisis began in 2008. He talks with Peter Coy about his current outlook.

Who’s to blame for the economic mess we’re in? Or is it all the fault of impersonal forces?
The underlying economic forces are partially independent of policy choices. I don’t think that if [John] McCain had been elected, the economy would be any better than it is today. Maybe even worse. And therefore, I think that once you have a crisis, once you have too much debt or once you have painful deleveraging, that cost of deleveraging has to occur over a period of many years, and economic policy is not going to make much of a difference. However, policymakers do make a difference, because the Great Recession could have ended up a great depression if we had not learned the lessons of the Great Depression. The case of deleveraging, whether it’s ugly or semi-ugly or less ugly, depends on doing some of the right things. I think that having massive monetary easing, having massive fiscal easing, having backstopped the financial system properly—sometimes not totally properly—made a difference. In Europe, in fact, where policy has been to accelerate the private- and the public-sector deleveraging, we are already double dipping. So policy can make a difference.