Big Think Editors @ bigthink.com
New York University economics professor Nouriel Roubini famously predicted the most recent global financial crisis well before most of his peers did. He says he did this simply by looking at the data and considering it in the context of past bubbles. Roubini recently spoke with Big Think about how to see what’s really happening—even when most people don't agree with you.
The economic bubble (and burst) can be a lesson in avoiding group think, explains Roubini. “The issue is not why myself or a few others got them, but why most the people, not just economists, don’t see them coming,” he says of the data of a looming economic collapse that should have set off more alarms. The key problem, he says, is when there is a an economic bubble, “everybody lives in a bubble ... They don’t live in reality and they delude themselves.”
To see a bubble from the inside, Roubini adds, it’s important not to get blinded by your own incentive. "It’s very hard to be independent and speak the truth, even if you can be very smart," he says, if your pay is tied to the results you are expected to produce. Independence from the results provides a clearer picture, he notes.
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