Nick Paumgarten’s illuminating talk with Michael Novogratz on macro economic topics is worth watching, notably because Novogratz does not make supremely silly or outlandish predictions (as a lot of these macro-macro moguls tend to do) and because Paumgarten keeps it light. A few things bothered me, notably Novogratz’s boxing metaphor vis-a-vis his trading superiority over his Asian competitors during the Asian financial crisis. OK, so the West had a leg up in dithering around with currencies. That Western triumphalism only seems to lend credence to Mahathir Mohammad’s colorful characterization, circa 1998, that the “Gnomes of Zurich” had caused the crisis. (Certainly speculation did help the crisis along, but so did overbuilding, e.g., too many golf courses in Thailand.)
Anyway, I think Novogratz is dead on about a lot of things (and he comes across as razor-sharp smart and friendly and not as an aloof-yet-stupid-wizard), but the roots of the current crisis in the 1970s was not even mentioned, nor is Obama-endorser Paul Volcker’s responsiblity for the boom in the 80s that lead to the events of 1989 and helped to lead to what Novogratz calls “globalization 1.0” in the 90s, that some would say occured in the 1780s. Speaking of the 1780s: just as our wealth, as Novogratz notes, flows to the middle east today, in the 1780s, enormous (incalculable?) wealth flowed into Britain from India and elsewhere. Thus, Britain was able to lavish subsidies on Prussia, et al, during the Napoleonic Wars a generation later. But what did it ultimately mean? Where did most of the money really go? Was it poorly invested?