The Cold Light of Day

By Jim Whitt

Three years ago Nouriel Roubini played the role of a modern-day John the Baptist — a voice crying in the economic wilderness. He prophesied the world-wide financial crisis, the U.S. housing market crash and the partial collapse of the banking sector. He not only was ignored but derided by other economists who played the role of modern-day Caesars who fiddled while Rome was burning.

“People asked me why I saw there was a bubble and my question was why others didn’t,” Roubini said in an interview. But then he answered his own question, “During the bubble everybody was benefiting and losing a sense of reality.”

We all should have seen the bubble — and known that it would burst — but we didn’t want to. Yes, Rome was burning but we were blinded by the brilliance of the flames because we all — corporations, governments and individuals — benefitted from the warmth of the financial fire. Then the bubble burst and put the fire out.

Now, in the cold light of day, we are once again reminded of what happens when we live beyond our means. We create a bubble. The bill comes due someday. When it does the bubble bursts.

I wonder if we’ve learned our lesson — or have we lost all sense of reality?

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