Solutions with Henry Blodget How to Stop a Global Economic “Doom Loop”
Jan 19, 2026
In this discussion, economist Eswar Prasad, a professor at Cornell and author of The Doom Loop, dives into the complexities of globalization and its consequences. He explains the 'doom loop'—a negative cycle driven by economic disparities and rising populism. Prasad critiques solutions like tariffs and emphasizes the need for strong social safety nets and institutional reforms. He offers a hopeful vision for escaping this cycle through civic engagement and cooperation, arguing that a balanced global economy can promote stability despite current tensions.
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Politics Of Resentment Fuels A Doom Loop
- Globalization created winners and losers and fueled a "politics of resentment" that erodes trust in elites.
- That resentment feeds a negative feedback loop between economics, domestic politics, and geopolitics.
Economics Stopped Offsetting Geopolitics
- Economic interdependence no longer cushions geopolitical rivalry because trade and finance are now seen as zero-sum.
- That shift removes the balancing force that once moderated great-power competition.
Use Alliances To Reset Trade Rules
- Rebuild multilateral coalitions and lead in creating trade standards to pressure China to follow fair rules.
- Use partnerships like a revived TPP-style approach rather than unilateral tariffs.
