Roubini on weaknesses in political-economic systems

A good essay by Nouriel Roubini.  I liked his line that “as everyone kicks the can down the road, the can is getting heavier.”  But this is section that caught my eye:

Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices. In autocracies like China and Russia, leaders resist the radical reforms that would reduce the power of entrenched lobbies and interests, thereby fueling social unrest as resentment against corruption and rent-seeking boils over into protest.

3 responses to “Roubini on weaknesses in political-economic systems

  1. Nouriel on the US scene – “given America’s political polarization and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether President Barack Obama is reelected in November.” Simply put – Mitch McConnell will continue to stonewall any reasonable centrist proposal from a Democratic White House.

    • The likelyhood that the 2012 election will result in stalemate is high. The result will be wider acceptance and belief that “Obamacare” will be the new medical service model for future generations. The Bush tax policy will be the remaining large roadblock to certainty needed for planning.

  2. Blatant manipulations of markets by government are continuing to misallocate capital. Housing supply on may local markets has been aritifically lowered to inflate home prices. Result, rents have risen while wages have stagnated. Excess capital is being artifically spent on required housing when it should be available for other enterprises such as the “start-ups” article mentioned on another part of this blog.

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