Dr Doom for Treasury Secretary?

Nouriel Roubini has spent the past few days in Cannes, enjoying the premiere of Wall Street: Money Never Sleeps, in which the economist known as Dr Doom appears as himself. Although Oliver Stone’s sequel to the movie that gave the world Gordon Gekko’s “greed is good” speech changed plot halfway through filming – the hedge funds suddenly ceasing to be the main villains as the investment banks moved centre stage – Roubini’s role as a Cassandra voice prophesying economic disaster remained unchanged.

Roubini’s emergence as the world’s leading celebrity economist, replacing Jeff Sachs (who only got to hang out with Angelina Jolie, not appear in her movies), is great news. We have long bemoaned Hollywood’s failure to put economists in a leading role. The movie business loves lawyers, but not, until now, dismal scientists: the closest it came was in “A Beautiful Mind”, though its hero was notable primarily for being paranoid and anyway (Nobel prize in economics notwithstanding) was actually a mathematician. Perhaps Dr Doom can now be expanded into a movie franchise in his own right; the name certainly has something of the Marvel comics super-hero (or super villain) about it. Surely here is the man to save the world from the giant vampire squid known as Goldman Sachs?

Failing that, how about rescuing the economy in real life? In their conversation last week at the 92nd St Y in New York, Matthew asked Roubini if he would take the job of Treasury Secretary. In many ways he would be a great candidate. As Gillian Tett mentioned in her review in this weekend’s FT of Roubini’s new book (with Stephen Mihm), “Crisis Economics”, and The Road From Ruin, the two books argue for many of the same policies. And Larry Summers has already proved that being an economist untroubled by self-doubt need not stop you being an effective Treasury Secretary.

Alas, Roubini said he is not interested. He has already done public service – including as an official in the Treasury under Summers. And living in Washington DC would ruin his social life - New York’s cultural activities are much more to his taste.

These seem rather thin excuses for turning down the chance to put his ideas into practice. Perhaps the real reason is that Roubini’s genius is for economics, when, given the depth of the curent economic crisis, we need a Treasury Secretary who is blessed with both economic and political genius. One of the big ideas in The Road From Ruin that is not addressed in Crisis Economics is that we are facing a crisis of governability in democracies such as America, that is making it extremely hard or perhaps impossible for even the best politicians to garner the political capital needed to make the necessary reforms to capitalism. (Another idea not much discussed in Crisis Economics is that corporate governance needs an overhaul, to move capitalism away to its excessively short-term orientation – not least by redefining the notion of fiduciary responsibility for pension funds – so Roubini would probably be unlikely to want to be CEO either.) As we argue in our chapter, We Are The Change: “Today’s world of complex financial choices that affect individual lives and the collective prosperity of society means that perhaps the most important challenge to come out of this latest crisis is the building of an economically competent citizenry.”

The road out of this mess will need more than technical wizards like Dr Doom. We need some political superheroes, too. Sadly, they seem to be even rarer than economists on the silver screen.

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