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Is Nouriel Roubini Saying Capitalism Destroying Itself?

Is capitalism destroying itself – is that what we’re seeing right now?

That was the chatter on the floor after the widely followed strategist Nouriel Roubini told the WSJ "Karl Marx was right, at some point capitalism can destroy itself.”

In case you’re not a student of Marx, in a nutshell he believed that capitalism created two classes: the bourgeois upper class and the proletariat lower class – and that over time the have-nots would rise up against its affluent.

Without speaking to Dr. Roubini about this commentary, Gina Sanchez of Roubini Global Economics tells us she doesn’t think Roubini was trying to be literal.

Instead she thinks Roubini was trying to express his frustrations with lawmakers and politicians who have thrown a lot of money at the global economic problem, but haven’t made good use of the capital.

”We need to get jobs going and we need to get people back to work to create demand in the future,” she says. “We managed to shift capital away from labor and away from households and into corporations and they don’t spend as much.”

Sanchez goes on to say that if you're looking for an economic 'tell' keep a close eye on the labor data. “Those are the numbers that really count.”

And because the labor data has been lousy, with a few notable exceptions, Dr. Roubini wories that the economy may be the precipice of falling into a global recession. (After all he is affectionately named Dr. Doom.)

And according to the Journal interview – what happens over the next 2-3 months will probably reveal the economy’s direction – and by proxy the market.

Roubini thinks the biggest concern is what comes out of the Congressional super-committee. "He thinks austerity right now is going to be very dangerous," Sanchez explains.

”We’re in a growth recession,” she adds. “We’re growing but it’s not sustainable. Either we get a policy response or we fall back in recession. But we won’t stay here.”




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CNBC.com with wires.