Tuesday, December 30, 2008

The Wonderful Optimism of Dr. Doom

Or, How I Stopped Worrying and Learned to Love the Apocalypse

I'm just waiting around for the Minister of National Defence to file his Respondent's Record in T-680-08.

OK, so Nouriel Roubini, “Dr. Doom”, has been right on the money, literally. He’s called it from the beginning, giving the lie to “no one saw this coming”, Dr. Doom having spelled it out in words of one syllable. Not only that, he’s got a prescription, which also makes sense, even to the uninitiated, the prescription having been tried out by Sweden some ten years ago, for which there is evidence, evidence being in short supply in the current febrile climate in Washington and New York.

Some parts of the world like Canada and Europe started off by viewing the current strife as a purely American problem, but that delusion lasted only days, perhaps hours. Here in Canada we’re in the midst of a Federal Election, the governing Conservative Party having deigned to release its “platform” some 7 days before the vote – if you don’t have a platform, why did you call an election? – and our feeling of safety is disintegrating by the hour as it becomes clear that our own stock market is going south and there is no telling where the “bottom” of the American export market is going to be, and therefore the commodities market, and the North American car market is already a disaster which lands Ontario in Deep Serious from the get-go. What is a get-go?

The thing is, I’m a doctor myself, and I constantly have to explain technical things to patients so that they can make informed decisions, not that we doctors necessarily understand the technical things ourselves, but we do have experience and we try. Dr. Doom explains things so even I can understand the gist of what he says – which in medicine is a mark of talent, anybody can be obscure – and even though I don’t know the difference between a Credit Default Obligation and the London Interbank Overnight Rate, I get what he says.

The basic problem is, as I understand him, that the American economy is currently built on Funny Money, the United States spending more than it makes. This is not an advanced concept. At some point, as I understand Dr. Doom, somebody suggested that the Emperor Had No Money, at which point the Funny Money disappeared, and it got down to basics like food, essential services, and shelter. That point is right now. The thing is, the world can probably come up with food, essential services, and shelter for its population, but there happens to be a small group of people in the world who want a whole lot more than the basics (which is also fine, I have no desire to live in a 36 room mansion in the Hamptons or Muskoka, or fly falcons in Afghanistan from an air-conditioned tent while drinking champagne) but as it turns out this group is not interested in the large number of people who are hungry, without essential services, and homeless.

But back to Dr. Doom, who in my opinion shows the signs of an expert clinician. I mean, I’m all for a holistic approach to health, but if I develop Hairy Cell Leukemia say, just to pick a random example of horrible things that can happen to people without explanation, I don’t want some guy coming at me with magic crystals and acupuncture. I accept that the placebo effect is real, but I don’t happen to believe that crystals are gonna fix leukemia so I’ll take the advice of a hematologist who has been there and done that. I’m only saying that Dr. Doom shows signs of a clinician I’d trust. He’s not judgmental, although he’s been quite caustic in his analysis of the Economic Powers That Be, the Fed, the Hapless Henry, and so on, and he’s not smugly righteous either: as all his predicted disasters come to pass, he’s got a prescription. Even though the patient has ignored competent economic advice up to now, Dr. Doom is still in there slugging with the patient’s best interests at heart, rather than his own reputation.

He also, dear to a clinician’s heart, cites evidence. As with medicine, this disaster is not a bolt from the blue, it’s happened before, and there is evidence – clinical experience – as to how to deal with it. What stands out is that banks have to be re-capitalized before normal interbank lending resumes. This seems to be fundamental – like having a patent airway in cardio-pulmonary resuscitation – but yet ignored by Henry Paulson and the financial gurus who increasingly appear to be wizards who have relied on smoke and mirrors.

Here in Canada the turkeys are also coming home to roost, Canadian Thanksgiving occurring, in parallel with the two federal elections, some weeks earlier. Dr. Doom’s prescriptions, like all good treatments, don’t recognize national boundaries.