Jeff Rubin: Boom Times Aren’t Coming Back, But That’s Not Necessarily Bad (Q&A)

Today, perhaps most people believe that the global economy would eventually recover, and individuals would become wealthier in the future as the economy begins to expand once again. However, Jeff Rubin, the former chief economist at CIBC World Market, has other thoughts about the statement. Rubin suggests that the economy growth is becoming slower no matter where you look. For example, China’s growth rate decreased from 10 percent to 7 percent each year, and the European countries are barely growing at all. As a result, unemployment rate becomes higher, and the later generations would not have the same living standards as today’s individuals.

This theory may sound negative, but Rubin suggests that it is not a bad thing. The society would generate new norms to fit the new economy. Instead of having a person losing his/her job, perhaps five people could take a 20% salary cut. Just like price would adjust itself as the equilibrium changes, so does employment. Individuals nowadays would probably view this idea as absurd, but they will have to agree if the extreme ever comes. After all, it is just changing the mindset and creating a new ‘normal’.