Lou Siegs

Nouriel Roubini, One on One: More Doom and Gloom

Roubini is just plain wrong. Real estate took us down and technology will save us from ourselves as it always has throughout history.

Moore's law may be the only economic rule we need to cite. As real estate reprices to 2002-3 values, a blip in time, technology will easily replace the value lost with its astonishing and reliable exponential gains in productivity. Unfortunately, the dismal scientists are "doomed" to dine on their hysterical models. Take comfort. We know history never repeats itself with the same people. Or, the same economists.

Green is the new color of gold. The increasing education of the world population will make hundreds of millions more productive and keep inflation low for generations. Half the planet will never be hard wired for communications, use gasoline as the primary fuel to power their vehicles, go to a bank to deposit money, pay bills by mail or visit a store to buy light bulbs that will glow brighter for ten years. How much does that save? We're not talking quarterly earnings, but decades of prosperity.

Technology's impact is best revealed when old world assets such as real estate fall behind in value creation as they always will when competing with technology. So, Intel, Apple, Cisco and Amazon roar with cash and appreciation while office buildings and homes naturally depreciate further burdened with debt.

The jobs lost represent natural selection in hyper-drive. Nothing more. Government will provide the necessary subsidy to care for and retrain the learning audiences. Revolution will be avoided; all funded with the wealth created by the technologists.

The DOW was at 10K when real estate took its write-off. It crashed to 6.5K when Chicken Littles like Roubini yelled "Fire!" in the Theatre of the Absurd. The fact that we're almost back to 10K in 6 months confirms the undeniable exponential economic juggernaut of open innovation and invention powered by the indomitable hope of the human condition.