The conference’s final day focused on the interaction between local or regional policy and global economic issues. The salient consensus as I heard it was that the world needs greater regulatory, monetary and fiscal coordination, which in most telling means that other folks need to do things differently so that I can pretty such keep doing things as I choose. Much of the world, for example, would have liked to see the U.S. begin fiscal consolidation at the end of last year rather than extending our tax cuts and unemployment spending. None of their business, you say? The response would be that growing fiscal imbalances in the world’s largest economy (by far), and the need to fund them, distort investments in countries lacking capital for infrastructure investment. As we globalize our thinking, we have to remember that much of the rest of the world has already done so.
Liking to reach for historical analogies, I found particularly intriguing several speakers’ attempts to put the revolution—their word—in the Middle East and North Africa into an historical context. Can we compare the current uprisings to the waves of popular assaults on autocratic regimes that began in 1776 and again in 1848? (By the way, a Delhi taxi driver was astonished to learn that the U.S., like India, had been a British colony and hearing so was even more surprised that we weren’t participating in the Cricket World Cup ongoing locally.) We’ll have a better answer in a century or so, and that really is the point. As the French and the American revolutions played out differently and the uprising of the mid-nineteenth century led to varying degrees of democracy and stability, so the current round may lead to differing regimes with differing domestic and international policies. From our own self-interested perspective, we get back to oil and should count on waves of price spikes and retreats as events unfold.
Perhaps the greatest benefit from meeting with foreign observers on foreign soil is the perspective on U.S. strengths and challenges. American influence remains pervasive; almost every presentation made some reference to U.S. issues. Our economic power and dominance of global financial markets—only the Europeans used a currency other than the dollar to discuss monetary value—give us more time to resolve our fiscal and indebtedness issues, but resolve them we must. Every one of us is counting on promises that may not fully be kept, whether my favorite pols run the government or not. But what most impressed me was the extent to which countries around the world are assembling the human resources, physical capital, and advanced infrastructure to create real economic value—goods and services that other folks want enough to pay for. We’d better be sure we’re doing the same.
Special risks Investing in foreign securities involves additional expenses and special risks, such as currency fluctuations, foreign taxes and political and economic factors. Investments in emerging and developing markets may be especially volatile.