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Nouriel Roubini the Mercantilist

Here’s a question: why is economist Nouriel Roubini so popular again? The man is syndicated in the financial press. He has a number of best-selling books on the ebb and flow of the global economy. And he teaches at New York University’s Stern School of Business.

But how did he ascend to this level of influence? Roubini supposedly forecasted the collapse of the American housing market back in 2008. His negative outlook on the economy has since earned him the nickname “Dr. Doom” by the financial media; that’s the same media that was broadsided by Wall Street’s collapse.

His prescient call of economic collapse gave him a voice commentating on global economic affairs. But as Forbes editor John Tamny points out, Roubini isn’t the grand wizard he fancies himself to be. He saw the housing bubble deflating in 2008 by monitoring data on home consumption. That’s it. He made the prediction that housing prices would soon tilt downward, and that would put pressure on the construction and financial industries. If homes weren’t being built at the same rate, that meant builders need employment elsewhere. And if the mortgages that made home-buying possible were losing value, they were worth less on the bloated secondary market.

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