Prophet of Boom (and Bust)
The worst economic cycle in more than half a century has everyone from struggling homeowners to former Federal Reserve chairmen shaking their heads in disbelief. Jobs are disappearing, retail sales are in the toilet, bankruptcies of major companies are a daily occurrence, and an unprecedented, massive government bailout has failed thus far to unfreeze the credit system that is the lifeblood of U.S. capitalism.
Even the iconic architect of the current economic system himself, former Federal Reserve Chairman Alan Greenspan, told a Congressional panel several months ago that his deregulation and debt-is-OK approach was mistaken. But what exactly is causing the current worldwide financial meltdown, Greenspan said, he's still trying to figure out.
In Dallas, Ravi Batra is also shaking his head - but for different reasons. The veteran Southern Methodist University economics professor saw this storm approaching years ago and has written several books, including a couple of best-sellers, about what the country should have been doing to handle it. He wrote Greenspan's Fraud in 2005. And in his 2006 book, The New Golden Age - The Coming Revolution Against Political Corruption and Economic Chaos, he predicted an economic depression and the rise of a charismatic leader who might help dig the country out of that hole. In fact, the 65-year-old Indian-born academic has an amazing record of economic and social forecasting going back several decades, from the rise of Islam, which he predicted in the 1960s, to the mergers booms and soaring stock prices of the '90s, and the stock market crash of 2000. In the futurist field, where a 65 to 70 percent accuracy rate is acceptable, he has a nearly 90 percent record of being right.
"Ravi is a phenomenon - the best predictive record of any economist, past or present ... and he does it all by reference to recorded, empirical facts, not paradigm [or] ideology," said Prof. Rajani Kannepalli Kanth, a visiting scholar at Harvard University who specializes in political economy and social anthropology.
His supporters think Batra should long ago have won a Nobel Prize and that President-elect Barack Obama ought to be calling him with offers of cabinet posts or at least asking for his advice.
But instead, despite his sterling record and best-selling books, Batra remains somewhat isolated in the economics field, the result of one bad call and, more to the point, an economic theory that flies in the face of today's accepted wisdom - in the face, that is, of the theories and practices that got us in the horrendous spot we're in today.
That could be very bad news for Americans and for the world. Because, despite the fact that Batra predicted the rise of a leader like Obama, he believes that much of what Obama is proposing to do to combat the economic crisis is as wrong-headed and will be as ineffective as the measures taken thus far. He thinks the massive bailouts are mostly "crisis profiteering," with government help going largely to the wrong people and institutions.
"It could get as bad as the Great Depression if they're not careful. So far, they're not showing any good signs of recovery," Batra said.
He compares the current mistaken focus on bailouts - from Wall Street to the auto industry - to the early mistakes of another president faced with economic disaster: Franklin Delano Roosevelt, whose initial rejection of the revolutionary concepts of John Maynard Keynes helped prolong the worldwide economic misery of the late 1920s and 1930s.