Green Shoots? Dr. Doom Sees No Call for Optimism

Last Updated Apr 21, 2009 8:12 AM EDT

  • The Find: The business press may see reason to hope that an economic recovery is on the way but, predictably, Dr. Doom says such optimists are fools.
  • The Source: The latest report from economist Nouriel Roubini, aka Dr. Doom, excerpted on Clusterstuck.
The Takeaway: Amongst a business press understandably sick of churning out gloom and doom headlines for the last six or seven months, an outbreak of (limited) optimism is in evidence, at least according to the Economist: "For many commentators, a hunt for the green shoots of recovery is on. Search among a selection of British and American newspapers, for example, and mentions of 'green shoots' in articles about the economy have increased enormously in the past couple of months."

But just as these tender buds of hope are daring to peak their heads above ground, here comes Roubini, the New York University economist famous for accurately predicting the current collapse, to stomp on fond but unfounded hopes:

This consensus optimism is, I believe, not supported by the facts. Indeed, I expect that while the rate of US contraction will slow from -6 percent in the last two quarters, US growth will still be negative (around -1.5 to -2 percent) in the second half of the year (compared to the bullish consensus of +2 percent).

Moreover, growth next year will be so weak (0.5 to 1 percent, as opposed to the consensus of 2 percent or more) and unemployment so high (above 10 percent) that it will still feel like a recession.

If you'd like more rain on your parade, the complete article by Roubini can be found here.

(Image of green shoots by pfly, CC 2.0)

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    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.