How did Raghuram Rajan miss his chance to “predict” Corona recession?

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.

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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.

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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.

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In 2014, he seemed to suggest that a recession is coming.

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In 2015, he seemed to suggest that a recession is coming.

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In 2017, he seemed to suggest that a recession is coming.

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In 2018, he seemed to suggest that a recession is coming.

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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.

9 thoughts on “How did Raghuram Rajan miss his chance to “predict” Corona recession?

  1. He is rightly called a winter migratory bird by Dr Swamy. Only difference this time is its not winter yet. This RR is such a big joke and he made a fool on an entire country during UPA and is now looking for a day job. He and RG look for each other to become relevant

    Liked by 2 people

  2. It seems Congress is desperate to project Pappu as some post-Corona messiah. Few days back he was mumbling something about being strategic. Now he has invited RRR to the party as if to show that someone can compete with him in Pappuness.You can put a country in lockdown but you can never put foolishness into lockdown. This is what RRR and Pappu are saying in the interview.

    As it is liberals never make much sense because intellect and reasoning is not their strong point. It is not even their weak point. On forums like Twitter, the liberal stupidity just becomes comic relief. But atleast it is restricted to few characters. But to come on TV and carry out a ridiculous conversation like this is like slapping peoples brains many times over.

    Here is something the Congress doesnt get. India is a deeply intelligent country with a long history of philosophical thinking. The best way to antagonize Indians is to carry out inane and stupid conversations like Pappu and RRR did. Indians forgive lots of flaws but they dont forgive such high levels of stupidity.

    Liked by 3 people

  3. How unfair that the wrong person was called Pappu ! Being a G, he should have been called Pappu G – that would have also differentiated him from the other Pappu 😉

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    1. It appears, not all will be sacked. Still, a crisis brewing. Given the scale of Indians in the Gulf, even bringing them back will be a huge effort

      Liked by 1 person

      1. Perhaps we may see a repeat of Edi Amin’s removal of all Indians from Uganda when he found out that locals had no talent for the administration of the government work, banking system, or business running. (By the way, let me say what precipitated Edi Amin’s anger. My friend’s daughter-in-law was shopping when Edi Amin saw her and sent his people to fetch her. My friend informed them that she is in a period and can come after three days and bought time for three days. During these three days, my friend’s entire family migrated to Canada. This is what made Edi Amin go berserk)

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  4. The Congress party desperately trying to install Rahul Gandhi on a totem pole. This time the party is using RRR to do just that. When it came to the “Pappu-giri” Rahul Gandhi own the patent. RRR will have to pay much heavier price to snatch this patent away from the authentic Pappu. RRR will have to establish many factories to convert potatoes into gold and find questions for all answers.

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  5. Mr. Rajan, in his 2005 paper warned of a economic downturn in the USA, and also predicting that a fall in USA will have impact in the world economy. He said that the possibility of this is low (pg 318, para. 2 of the Paper). It took 3 years to happen and happened with the fall out that he predicted it to be.

    Surely his conclusion in an academic paper based on 3 decade of US-Economic data turning true must be Coincidence, rather than qualified deduction.

    Surely his degree and expertise in Economics made him particularly qualified to predict a Pandemic first, before he could have predicted the consequent economic downturn. What a chance that he truly missed out on.

    I will give one example of how this Article is meaningless.
    The Bloomberg (2018) screenshot that has been put in this post is an piece by Bloomberg on a piece written by Mr. Rajan on the Financial Express where Mr. Rajan says that the figures are mostly indeterministic in pointing towards a recession, and he seems hopeful of better economic outcome and he was talking about the US Economy.

    Maybe he missed pointing to the world about a recession in 2018 as well as 2019.

    But I could not be bothered to pick apart the 2013-17article referred here.

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  6. A section of Twitter liberals is suddenly tweeting how RRR would make a great finance minister, be the next MMS etc. Everything seems orchestrated.

    RRR stood by watching banks give loans to Congress cronies. After BJP came to power, he started crying intolerance. Apart from being a Pappu crony, RRR is one of the most dangerous Lefties out there and will wreck India if he comes anywhere near power.

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