Nouriel Roubini, one of the very few economists to warn about the growing debt bubble in the US that would lead to the 2008 crash, warns again of another disturbing development of that same crisis.
The adoption of inadequate "austerity" policies, frequently denounced by Krugman, is creating the conditions for the (re)emergence of very disturbing political movements, which, quite honestly, completely freak me out. Read it and see for yourselves: Economic insecurity and the rise of nationalism.
"In the 1930s, the failure to prevent the Great Depression empowered authoritarian regimes in Europe and Asia, eventually leading to the second world war. This time, the damage caused by the Great Recession is subjecting most advanced economies to secular stagnation and creating major structural growth challenges for emerging markets.
This is ideal terrain for economic and political nationalism to take root and flourish. Today’s backlash against trade and globalisation should be viewed in the context of what, as we know from experience, could come next".
Will the world hear the warnings now?