in April, Roubini predicted a Greater Depression

In April, before he wrote The Main Street Manifesto, Nouriel Roubini predicted a Greater Depression. His analysis has induced me to resume study of political economy. I'll list the books I am reading at the end. Meanwhile here are Roubini's 10 reasons:

The Coming Greater Depression of the 2020s
April 28, Nouriel Roubini

1) Debt – public and private
The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the COVID-19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.

Worse, the loss of income for many households and firms means that private-sector debt levels will become unsustainable, too, potentially leading to mass defaults and bankruptcies. Together with soaring levels of public debt, this all but ensures a more anemic recovery than the one that followed the Great Recession a decade ago.

2) Health care in aging societies
A second factor is the demographic time bomb in advanced economies. The COVID-19 crisis shows that much more public spending must be allocated to health systems, and that universal health care and other relevant public goods are necessities, not luxuries. Yet, because most developed countries have aging societies, funding such outlays in the future will make the implicit debts from today’s unfunded health-care and social-security systems even larger.

3) Debt deflation
A third issue is the growing risk of deflation. In addition to causing a deep recession, the crisis is also creating a massive slack in goods (unused machines and capacity) and labor markets (mass unemployment), as well as driving a price collapse in commodities such as oil and industrial metals. That makes debt deflation likely, increasing the risk of insolvency.

4) Currency debasement produces stagflation
A fourth (related) factor will be currency debasement. As central banks try to fight deflation and head off the risk of surging interest rates (following from the massive debt build-up), monetary policies will become even more unconventional and far-reaching. In the short run, governments will need to run monetized fiscal deficits to avoid depression and deflation. Yet, over time, the permanent negative supply shocks from accelerated de-globalization and renewed protectionism will make stagflation all but inevitable.

5) Accelerated automation
A fifth issue is the broader digital disruption of the economy. With millions of people losing their jobs or working and earning less, the income and wealth gaps of the twenty-first-century economy will widen further. To guard against future supply-chain shocks, companies in advanced economies will re-shore production from low-cost regions to higher-cost domestic markets. But rather than helping workers at home, this trend will accelerate the pace of automation, putting downward pressure on wages and further fanning the flames of populism, nationalism, and xenophobia.

6) De-globalisation / Protectionism
This points to the sixth major factor: de-globalization. The pandemic is accelerating trends toward balkanization and fragmentation that were already well underway. The United States and China will decouple faster, and most countries will respond by adopting still more protectionist policies to shield domestic firms and workers from global disruptions. The post-pandemic world will be marked by tighter restrictions on the movement of goods, services, capital, labor, technology, data, and information. This is already happening in the pharmaceutical, medical-equipment, and food sectors, where governments are imposing export restrictions and other protectionist measures in response to the crisis.

7) Xenophobia
The backlash against democracy will reinforce this trend. Populist leaders often benefit from economic weakness, mass unemployment, and rising inequality. Under conditions of heightened economic insecurity, there will be a strong impulse to scapegoat foreigners for the crisis. Blue-collar workers and broad cohorts of the middle class will become more susceptible to populist rhetoric, particularly proposals to restrict migration and trade.

8) Decoupling USA - China
This points to an eighth factor: the geostrategic standoff between the US and China. With the Trump administration making every effort to blame China for the pandemic, Chinese President Xi Jinping’s regime will double down on its claim that the US is conspiring to prevent China’s peaceful rise. The Sino-American decoupling in trade, technology, investment, data, and monetary arrangements will intensify.

9) New cold war
Worse, this diplomatic breakup will set the stage for a new cold war between the US and its rivals – not just China, but also Russia, Iran, and North Korea. With a US presidential election approaching, there is every reason to expect an upsurge in clandestine cyber warfare, potentially leading even to conventional military clashes. And because technology is the key weapon in the fight for control of the industries of the future and in combating pandemics, the US private tech sector will become increasingly integrated into the national-security-industrial complex.

10) Environmental disruption
A final risk that cannot be ignored is environmental disruption, which, as the COVID-19 crisis has shown, can wreak far more economic havoc than a financial crisis. Recurring epidemics (HIV since the 1980s, SARS in 2003, H1N1 in 2009, MERS in 2011, Ebola in 2014-16) are, like climate change, essentially man-made disasters, born of poor health and sanitary standards, the abuse of natural systems, and the growing interconnectivity of a globalized world. Pandemics and the many morbid symptoms of climate change will become more frequent, severe, and costly in the years ahead.

FURTHER SUGGESTED READING
Books I am currently reading:
Graeber, David. Debt: The First 5,000 Years (2014 edition)
Graeber, David. Bullshit Jobs: A Theory (2019)
Hudson, Michael. Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy (2015)
Hudson, Michael. J is for JUNK Economics: A Guide to Reality in an Age of Deception (2017)
Piketty, Thomas. Capital in the Twenty-First Century (2013)

Interviews and links to his books at Michael Hudson's blog

The Main Street Manifesto

The Main Street Manifesto
Jun 24, 2020 Nouriel Roubini

The mass protests following the killing of George Floyd by a Minneapolis police officer are about systemic racism and police brutality in the United States, but also so much more. Those who have taken to the streets in more than 100 American cities are channeling a broader critique of President Donald Trump and what he represents. A vast underclass of increasingly indebted, socially immobile Americans – African-Americans, Latinos, and, increasingly, whites – is revolting against a system that has failed it.

This phenomenon is not limited to the US, of course. In 2019 alone, massive demonstrations rocked Bolivia, Chile, Colombia, France, Hong Kong, India, Iran, Iraq, Lebanon, Malaysia, and Pakistan, among other countries. Though these episodes each had different triggers, they all reflected resentment over economic malaise, corruption, and a lack of economic opportunities.

The same factors help to explain populist and authoritarian leaders’ growing electoral support in recent years. After the 2008 financial crisis, many firms sought to boost profits by cutting costs, starting with labor. Instead of hiring workers in formal employment contracts with good wages and benefits, companies adopted a model based on part-time, hourly, gig, freelance, and contract work, creating what the economist Guy Standing calls a “precariat.” Within this group, he explains, “internal divisions have led to the villainization of migrants and other vulnerable groups, and some are susceptible to the dangers of political extremism.”

The precariat is the contemporary version of Karl Marx’s proletariat: a new class of alienated, insecure workers who are ripe for radicalization and mobilization against the plutocracy (or what Marx called the bourgeoisie). This class is growing once again, now that highly leveraged corporations are responding to the COVID-19 crisis as they did after 2008: taking bailouts and hitting their earnings targets by slashing labor costs.

One segment of the precariat comprises younger, less-educated white religious conservatives in small towns and semi-rural areas who voted for Trump in 2016. They hoped that he would actually do something about the economic “carnage” that he described in his inaugural address. But while Trump ran as a populist, he has governed like a plutocrat, cutting taxes for the rich, bashing workers and unions, undermining the Affordable Care Act (Obamacare), and otherwise favoring policies that hurt many of the people who voted for him.

Before COVID-19 or even Trump arrived on the scene, some 80,000 Americans were dying every year of drug overdoses, and many more were falling victim to suicide, depression, alcoholism, obesity, and other lifestyle-related diseases. As economists Anne Case and Angus Deaton show in their book Deaths of Despair and the Future of Capitalism, these pathologies have increasingly afflicted desperate, lower skilled, un- or under-employed whites – a cohort in which midlife mortality has been rising.

But the American precariat also comprises urban, college-educated secular progressives who in recent years have mobilized behind leftist politicians like Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts. It is this group that has taken to the streets to demand not just racial justice but also economic opportunity (indeed, the two issues are closely intertwined).

This should not come as a surprise, considering that income and wealth inequality has been rising for decades, owing to many factors, including globalization, trade, migration, automation, the weakening of organized labor, the rise of winner-take-all markets, and racial discrimination. A racially and socially segregated educational system fosters the myth of meritocracy while consolidating the position of elites, whose children consistently gain access to the top academic institutions and then go on to take the best jobs (usually marrying one another along the way, thereby reproducing the conditions from which they themselves benefited).

These trends, meanwhile, have created political feedback loops through lobbying, campaign finance, and other forms of influence, further entrenching a tax and regulatory regime that benefits the wealthy. It is no wonder that, as Warren Buffett famously quipped, his secretary’s marginal tax rate is higher than his

Or, as a satirical headline in The Onion recently put it: “Protesters Criticized for Looting Businesses Without Forming Private Equity Firm First.” Plutocrats like Trump and his cronies have been looting the US for decades, using high-tech financial tools, tax- and bankruptcy-law loopholes, and other methods to extract wealth and income from the middle and working classes. Under these circumstances, the outrage that Fox News commentators have been voicing over a few cases of looting in New York and other cities represents the height of moral hypocrisy.

It is no secret that what is good for Wall Street is bad for Main Street, which is why major stock-market indices have reached new highs as the middle class has been hollowed out and fallen into deeper despair. With the wealthiest 10% owning 84% of all stocks, and with the bottom 75% owning none at all, a rising stock market does absolutely nothing for the wealth of two-thirds of Americans.

As the economist Thomas Philippon shows in The Great Reversal, the concentration of oligopolistic power in the hands of major US corporations is further exacerbating inequality and leaving ordinary citizens marginalized. A few lucky unicorns (start-ups valued at $1 billion or more) run by a few lucky twenty-somethings will not change the fact that most young Americans increasingly live precarious lives performing dead-end gig work.

To be sure, the American Dream was always more aspiration than reality. Economic, social, and intergenerational mobility have always fallen short of what the myth of the self-made man or woman would lead one to expect. But with social mobility now declining as inequality rises, today’s young people are right to be angry.

The new proletariat – the precariat – is now revolting. To paraphrase Marx and Friedrich Engels in The Communist Manifesto: “Let the Plutocrat classes tremble at a Precariat revolution. The Precarians have nothing to lose but their chains. They have a world to win. Precarious workers of all countries, unite!”

REFERENCES, from the article
The Precariat: The New Dangerous Class by Guy Standing

Deaths of Despair and the Future of Capitalism by Anne Case and Angus Deaton

Decades of rising economic inequality in the U.S.
Testimony by Elise Gould, 2019

Hired: Six Months Undercover in Low-Wage Britain by James Bloodworth

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite By Daniel Markovits

The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon

FOOTNOTE: For more about Roubini's background and economic ideas see Nouriel Roubini (wikipedia)

poetry that fits today's world

This era is growing a heart
The burden is too much, it will die of pain.
We need to hurry to help
Because the future is breaking in every part of the world

Thanks to Sally for helping with this part of the translation
See a rather mangled translation by Google translate below
LA ERA ESTÁ PARIENDO UN CORAZÓN - Silvio Rodríguez
Original:
Le he preguntado a mi sombra
A ver cómo ando, para reírme
Mientras el llanto, con voz de templo
Rompe en la sala regando el tiempo

Mi sombra dice que reírse
Es ver los llantos como mi llanto
Y me he callado, desesperado
Y escucho entonces
La tierra llora

La era esta pariendo un corazón
No puede más, se muere de dolor
Y hay que acudir corriendo
Pues se cae el porvenir

La era esta pariendo un corazón
No puede más, se muere de dolor
Y hay que acudir corriendo
Pues se cae el porvenir
En cualquier selva del mundo

Mi sombra dice que reírse
Es ver los llantos como mi llanto
Y me he callado, desesperado
Y escucho entonces
La tierra llora

La era esta pariendo un corazón
No puede más, se muere de dolor
Y hay que acudir corriendo
Pues se cae el porvenir

Debo dejar la casa y el sillón
La madre vive hasta que muere el sol
Y hay que quemar el cielo
Si es preciso, por vivir
Por cualquier hombre del mundo
Por cualquier casa

Google translate (mangled)
I have asked my shadow
Let's see how I go, to laugh
While crying, with a temple voice
Break in the room watering the time

My shadow says to laugh
Is to see the crying as my crying
And I've been silent, desperate
And I listen then
The earth cries

The era is giving birth to a heart
He can't take it anymore, he dies of pain
And you have to run
Well the future falls

The era is giving birth to a heart
He can't take it anymore, he dies of pain
And you have to go running
Well the future falls
In any jungle in the world

My shadow says to laugh
Is to see the crying as my crying
And I've been silent, desperate
And I listen then
The earth cries

The era is giving birth to a heart
He can't take it anymore, he dies of pain
And you have to run
Well the future falls

I must leave the house and the chair
The mother lives until the sun dies
And you have to burn the sky
If necessary, to live
For any man in the world
By any house

The Hippocratic oath of activism: First educate yourself

Coleman Hughes argues that the Black Lives Matter movement is based on a half truth. True that the police treat blacks worse. Not true that they murder disproportionately more blacks than whites. The videos where the police murder whites don't go viral. The problem with the police is corruption (not being independently investigated) not disproportionate murder of black people:

YouTube link: The Same Drugs: Coleman Hughes on race, racism, police violence, and Black Lives Matter.

Ok, it's 45 minutes, but well worth it to find out what is actually happening, rather than relying on mainstream media, which likes to highlight the conflagration, looting etc.

"The Hippocratic oath of activism: First educate yourself"