March 2016

March 2016

warns Das. “They prefer to do the wrong thing righter, rather than doing the right thing wrong.” Unlike other developed countries, the U.S. has more time to deal with these mounting challenges, but that time frame is not unlimited, he writes. The real concern in the U.S. is not that the debt is unmanageable, but rather there has to be a program to gradually address it. He

The biggest dilemma for post-financial crisis global economies is the inability of governments and central bankers to restore growth and prosperity, he claims. “The financial problems are compounded by lower population growth and ageing populations; slower increases in productivity and innovation; looming shortages of critical resources, such as water, food and

worries there is no political will to reform pension schemes, entitlement schemes and the U.S. tax system. “It was the grifter’s long con, a confidence trick with a potentially large payoff but difficult to pull off,” he writes. “House prices and stock markets have risen, but growth, employment, income, and investment havebarely recovered to pre-crisis levels in most advanced economies.”

energy; and man-made climate change and extreme weather conditions,” he argues. “Slower growth in international trade and capital flows is another retardant.” Das, selected by Bloomberg Markets as one of the 50 most influential financial thinkers, believes the current world economy mirrors Japan, which has been mired in debt for decades. He was also featured in Charles Ferguson’smeticulous and infuriating Oscar-winning documentary

Satyajit Das

Still, the U.S. economy is growing, albeit slowly at about 2 percent annually. But that is subpar. Even if you disagree with the author’s dystopian vision of the “new normal” — a constant state of low growth, soaring debt and rising political tensions—this important book challenges the false narrative in the media and in political circles regarding the global economic “recovery.” In the final analysis, Das warns that without significant policy changes, dire consequences lie ahead. It’s a hard message that deserves a wide audience. For Das, there are only two outcomes for not only the U.S. economy, but for the global economy as well: stagnation or collapse. Pick your poison.

“Inside Job,” which chronicled the causes and consequences of the financial and housing crisis of 2008. He has worked in financial markets as a derivatives trader for over 35 years as well as a banker and now as a consultant. He lives in Sydney, Australia. “The GFC showed that perpetual growth and progress is an illusion,” writes Das in the epilogue. It exposed the high debt levels, credit-driven consumption, global imbalances, excessive financialization, and unfinanced social entitlements that underpinned an unsustainable economic model.” He fears that the problem may be the economic model itself. Das believes policy makers may not have the necessary tools to address deep-rooted structural problems in the current economic models. Das worries that policy makers don’t understand the deep economic hole they have created. Policymakers assume their models and ways of thinking are somehow going to work. But Das suspects there are going to miscalculate really badly. “Unwilling to admit failure, policymakers vacillate about the correct solution, or spend money on faux strategies unlikely to accomplish anything significant or lasting,”




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