Daily Ticker Asks: What keeps some of the greatest minds in economics up at night?
I don’t know, hookers and booze?
I was wrong….as always. According to the Daily Ticker it’s a lot of things. If you really want to know what keeps the “most brilliant” minds awake, you can read the article below. From my vantage point neither hookers nor economists know what they are talking about. If they did, they would be on Wall Street managing billions of dollars, not argue if the GDP of growth Zimbabwe will be 2.7% or 2.8% in 2027.
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What Do Economists & Hookers Have In Common Google
What keeps some of the greatest minds in economics up at night
The world is a scary place. Planes are disappearing, regions are seceding, countries are overthrowing governments and income inequality is growing larger everyday. There’s a lot to worry about during the wee hours of the night.
Yahoo Finance’s editor-in-chief Aaron Task asked some of the biggest and brightest economic minds today what keeps them up at night. Watch the video above and read on below for their anxiety-inducing answers.
Jared Bernstein, former chief economist for Vice President Joe Biden
“What really worries me”, says Bernstein, “is hysteresis.” That may sound like a strange medical ailment but it’s actually what happens when a cyclical economic problem morphs into a structural problem.
Related: Fed hawks are ‘out of sync with the data’: Jared Bernstein
“We’ve had a lot of long-term unemployment and if that were just a cyclical problem when the economy came back those unemployed people would come back into the job market and your labor force would grow again,” he says. “But if the down cycle lasts long enough then those folks are permanently out of the job market and that kind of a permanent restructuring of growth and livelihoods, that keeps me up at night.”
Sheila Bair, former chair, FDIC; now director, Banco Santander
Monetary policy is what keeps Bair up at night. “During the crisis we had this toxic brew of very easy monetary policy and very relaxed regulatory policy and while regulation has lightened up, monetary policy has become more aggressive,” she says.
Related: ‘Banks need more capital – the good times won’t last forever’: Sheila Bair
This could lead to excesses and imbalances. “The Fed is getting out but … can they get out? Can the markets get off of that drug and stabilize and find their own equilibrium without us having a very ugly transition?”
Richard Vague, chair, Governor’s Woods Foundation
The Chinese economy worries Vague, who chairs this non-profit philanthropic organization based in Philadelphia. He’s specifically concerned about China’s ability to deal with its overcapacity problem. “I think the effects [could] be manageable, but if they stumble it could have a ripple effect,” he says.
Alice Rivlin, former vice-chair of the Federal Reserve and senior fellow, Brookings Institute
Rivlin is bothered by the U.S. government’s inability to compromise. “We have a constitution which requires compromise across several different lines,” she says. “Nothing gets done in this country unless we compromise across political lines.”
Related: Fed guidance to become more vague under Yellen: Alice Rivlin
Compromise, says Rivlin, has gotten a bad name recently. “I think that is the most serious thing we face.”
Simon Johnson, former chief economist, IMF; now professor of entrepreneurship, MIT
“I think the Russia and Ukraine situation is very unstable,” says Johnson.
Related: Banks pass stress test but they’re not taking regulations seriously: Simon Johnson
According to Johnson the U.S. and European response has not been helpful. “This is a real flashpoint and a danger to the European economy.”
Grover Norquist, president, Americans for Tax Reform
Grover Norquist’s fears are more abstract. He is worried about electro-magnetic pulses and solar flares or “some rogue country tossing a nuke up and frying all of our cars and handhelds.”