The other day, the Congress party uploaded a 28 minute long, valuable interaction between Rahul Gandhi and Raghuram Rajan on the impact of Wuhan Coronavirus on the Indian economy and the possible way forward. This exercise could only be described as “unprecedented.” And not just because Dr. Rajan provided astonishing insights such as this one.
Dr. Rajan also outlined key strategies such as this:
“We have to be cleverer about opening up… We need to open up in a measured way but as fast as possible so that people start having jobs. We don’t have the capacity to support people across the spectrum for too long. Being a relatively poor country, people start out with significantly lower reserves,”
In case you missed it, here are the four important (let’s say “strategic”) observations in what Dr. Rajan said there.
(1) Be clever
(2) Be measured, but fast
(3) Govt cannot support people for long
(4) Many Indians are poor
Those observations, unprecedented in their depth, gave me chills. For I could hear in them the echoes of his most famous 2005 paper predicting the 2008 financial crisis. Here is the final slide from his presentation based on that paper.
Ah! Regulation should be light, facilitate competition and innovation, while not trusting participants to always get it right. Who knew? Last time, he told us to be smart. This time, he is advising us to be clever, which is a whole new and innovative way of saying the same thing.
In the conclusion of his 2005 paper, Dr. Rajan also told us to be prepared for “the low probability but highly costly downturn.”
Now if you cannot put together that sentence with the slide above and convince yourself that this constitutes a “prediction” of the 2008 financial crisis, that is just your fault.
Sort of like when the plane is about to takeoff and the crew gives you instructions on what to do in the “unlikely event of a water landing.” As and when the next aircraft has to make a water landing, be sure to credit the crew for “predicting” it accurately.
What is perhaps even more unprecedented is that Dr. Rajan missed a chance to “predict” the coming Coronavirus recession.
In 2013, he seemed to suggest that a recession is coming.
In 2014, he seemed to suggest that a recession is coming.
In 2015, he seemed to suggest that a recession is coming.
In 2017, he seemed to suggest that a recession is coming.
In 2018, he seemed to suggest that a recession is coming.
But, I could find no such thing for 2019 from him.
Seems Dr. Rajan eventually got bored of predicting recession and gave up. That’s when the recession really arrived. No worries Dr. Rajan. It happens. If it is any consolation, most astrologers also failed to predict this one.
Speaking of strategies, there are two key strategies that so called psychics use when communicating with souls of the dead. I’m not saying Dr. Rajan does anything similar with his observations on the economy. You make up your mind about that. I’m just talking about psychics.
The first is when a psychic walks into a room with hundreds of people does something like this:
Psychic: Why am I getting a J? Has anyone here lost a friend or family member with a J : Jack, John, James, Joe, anything…
Someone: James was my husband.
Psychic: Exactly. James says Hi.
In other words, you keep throwing predictions until one sticks. The human mind is programmed to remember the hits and forget the misses.
The second strategy is to say blank stuff that contains no actual details.
Widow : What else is my husband James saying.
Psychic : James says he still loves you.
Audience: Wow! Simply amazing! How is the psychic doing this? Truly supernatural powers, must be.
Actually, there is a third strategy that psychics use. You take the tape of the whole interaction and edit it to remove as many misses and blank statements as possible. Say, you cut down an hour long interaction to around half an hour.
Which might leave you wondering. If the part that was released was so unimpressive, how bad was it in the remaining parts that were not released?
For once I would say social media was quite unfair yesterday. In the interaction between Rahul ji and Raghuram Rajan, perhaps the wrong person was called Pappu.