At the dawn of a new decade, Rutgers Today challenged university scholars across half a dozen disciplines – economics, American studies, history, political science, law, science, and sociology – to predict what the next few years hold in store. Based on the opening years of the new millennium, we asked, what trends do you see evolving, and what might life look like when this newly hatched decade draws to a close? In this article, we interview Farrokh Langdana, professor of finance and economics at the Rutgers Business School-Newark and New Brunswick.
The greatest challenge in the years just ahead will be two-fold, Langdana believes: grappling with a budget crisis already approaching 13 percent of gross domestic product – the highest in the country’s history – and finding its way back to the innovation that traditionally has made America strong. The Newark-based director of the Rutgers Executive MBA Program is the author of four books, the most recent of which is Macroeconomic Policy: Demy stifying Monetary and Fiscal Policy.
When deficits become non-sustainable and inflation reaches what he describes as “monster level,” the economy “basically goes into intensive care,” Langdana explains. The natural urge on a government’s part at that point is to print more money – but danger lies there, he cautions.
“My analogy is that if your house is cold and you want to warm it up, you’re tempted to douse the whole house in gasoline. But then all it will take is one tiny match to make your house go up in flames,” the economist says.
Coupled with the crisis in the pocketbook is a crisis in the national psyche, Langdana adds. Americans feel they have lost their edge, their ith ability to find “the next big thing,” whether it’s in the field of biotechnology, biopharmaceuticals, alternative fuels, or artificial intelligence.
But the rest of the world doesn’t share that perception of the United States, Langdana believes. He sees optimism in the classes he teaches in Singapore, Beijing, and Iceland, where his students are basically upbeat about America’s role in the global marketplace. “The rest of the world still looks up to us, the Chinese in particular. We have lost faith in ourselves, but the rest of the world still thinks we have what it takes,” he says.
Langdana is hopeful current public sentiment against the financial sector will not stand in the way of America’s traditional can-do attitude.
“I know that the suits on Wall Street have misbehaved, but we don’t have to punish all sectors because of it,” he says. “Excessive bureaucracy, taxes, and regulation are weighing against innovation right now, but the atmosphere has to be conducive to experimentation in order for us to get our leadership back.
"The atmosphere (low taxes, less regulation) has to foster innovation and to recreate a climate in which the venture capital (the smart money) meets the smart ideas. It is from marriages such as these that America will once again bring the next big thing to the planet."
– Fredda Sacharow