Every spring "the International Monetary Fund (IMF) and the World Bank Group..bring together central bankers, ministers of finance and development, private sector executives, and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness." We have attended this event for the past six years.
Prior to the event, the IMF issues a Global Spring Meeting Economic Forecast, this year predicting the world's economy will grow by 3.2% in 2016, down from the 3.8% forecast issued last year. This decline was due mainly to an increase in political ( as opposed to purely economic) risks. Keep in mind that these are the same factors (austerity as an inappropriate focus on reducing deficits in a time of recession, inability to rationally address the causes and solution to the crisis) that led to the shallow global recovery in the first place.
Our analysis indicates that the key risks to the global economic forecast are all potentially self inflicted political injuries: Trump, Brexit, and the Premature Celebration of the end of the financial crisis. These are described below.
Premature Celebration 1: We questioned Clinton Treasury Secretary Larry Summers about the relevance and ability of economic policy to meet the needs of all of the world's people, especially people of African descent. We noted the inability of economic policy makers to forecast the financial crisis, cited damage done to the environment, and pointed out that key monetary policy tools are now ineffective, at least without extraordinary effort (QE1, QE2, QE Etc.). A video of the question is provided below.
His response (really a non response) cited Churchill, a man who, prior to his achievements in WWII, fought to preserve the continued exploitation of Black Africans by the British.
I think that says it all.
We believe Mr. Summers is angling for rehabilitation as Fed Chair in the Hillary Clinton Administration. Given his track record, this would be another self inflicted political injury.
Trump. During the taping of an episode of the BBC news show Hard Talk, IMF Managing Director Christine Lagarde forcefully addressed the Trump issue, saying that she thought Mr. Trump a risk to global economic stability.
Brexit. On June 23rd, Britain will decide whether or not to exit the European Union. The IMF made their opinion clear: a vote to exit will add significant volatility and risk to global markets. We think a vote to exit the EU would be suicidal for both Britain and the EU, and therefore forecast that they will not leave.
Premature celebration 2: In a session on cyber risks to financial institutions, SARAH BLOOM RASKIN, Deputy Secretary of the U.S. Department of the Treasury, (pictured in white) the Treasury point person on cyberthreats and financial institutions, seemed woefully ill informed concerning upcoming changes to the administration of the internet's root servers. She indicated this was a "new issue" for her. The ROOT SERVERS. A NEW ISSUE. This is truly problematic. Below is the video of the question posed.
Other Observations
Five years ago, most of the catering support staff were white working class people and white middle class people damaged by the recession and desperate for any employment opportunity. This year, most of the catering support staff were Black working class people, mainly from the Washington, DC area. (Thank you, Madam Director...) This tells us that the economic recovery is finally reaching the difficult to reach populations, those hardest hit by the crisis to begin with.
This means that economic growth, and the employment it generates, will continue to be strong domestically until the end of the Obama Administration.
Given his performance, Mr. Obama would be forgiven for "dropping the mike" before leaving.