My remarks in the WSJ interview on "Karl Marx was right": "WSJ: So you painted a bleak picture of sub-par economic growth going forward, with an increased risk of another recession in the near future. That sounds awful. What can government - and what can businesses - do to get the economy going again, or is it just sit and wait and gut it out?

Roubini: Businesses are not doing anything. They're not actually helping. All this risk made them more nervous. There's a value in waiting. They claim they're doing cutbacks because there's excess capacity and not adding workers because there's not enough final demand, but there's a paradox; a Catch-22. If you're not hiring workers, there's not enough labor income, enough consumer confidence, enough consumption, not enough final demand. In the last two or three years, we've actually had a worsening because we've had a massive redistribution of income from labor to capital, from wages to profits, and the inequality of income has increased and the marginal propensity to spend of a household is greater than the marginal propensity of a firm, because they have a greater propensity to save, that is, firms compared to households. So the redistribution of income and wealth makes the problem of inadequate aggregate demand even worse. Karl Marx had it right. At some point Capitalism may destroy itself. You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand. That's what has happened. We thought that markets worked; they're not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else's income and consumption. That's why it's a self-destructive process."

In late July of 2009 he warned that if no clear exit strategy is outlined and implemented there is the potential of a perfect storm: fiscal deficits, rising bond yields, rising oil prices, weak profits, and a stagnant labor market - which combined could "blow the recovering world economy back into a double-dip recession."

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