Divas of Doom or Realists ?

Posted: February 28, 2009 in Op-Ed
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Divas of Doom Article by Ian Brown

There is an article in today’s Globe and Mail about what the author, Ian Brown, calls the “Divas of Doom.” He specifically refers to Niall Ferguson’s declarations in an interview with the Globe and Mail earlier this week (“There will be blood”) and “Doctor Doom,” Nouriel Roubini. Brown’s article is interesting and I agree with it, at least in part, but I also think there it is somewhat representative of the opposite tendency. In other words, for every merchant of doom, there is a pollyanna who professes that the rebound is just around the corner. I’m not saying Brown is one of these people, but why shouldn’t we give air time to historians who can give us some perspective?
What we’re facing right now is big… and highly unusual. Many economic and financial phenomena are currently frighteningly similar to what occurred during the Great Depression. Does that mean we’re at the beginning of another great depression? I don’t know, but that doesn’t mean we should put our heads in the sand and whistle a happy tune.
Whoever succeeds in this kind of environment has to be optimistic, but they also have to be realistic. In fact, realism about internal and external circumstances is the starting point of success, because it allows one to make appropriate decisions and focus on what is truly important.
Furthermore, when assessing the future, I prefer to put my money on the speculations of a historian, especially one so well versed in the ups and downs of financial and economic history over the last 300 plus years as Niall Ferguson, than some investment or central banker. What we need now is historical perspective.
As Winston Churchill said, “History never repeats, but it does rhyme.”
© Richard Martin 2009

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