As topsy-turvy as global politics has been over the past several years –Brexit, Trump, the rise of anti-establishment leaders in France, the Philippines, Italy, Pakistan, and Brazil, the surge of the European far right and so on – it's all unfolded during a time when the global economy was actually doing pretty well.
So what happens when the inevitable recession hits? Earlier this week, markets suffered their worst day of the year as investors confronted that question.
Germany's economy, the world's fourth-largest, is shrinking. China's factories are churning at their slowest rate in 17 years. The trade fights between the US and China, the US and Europe, and South Korea and Japan involve countries that together account for half the global economy. And worries about a chaotic British exit from the EU aren't helping either.
Even more worrying than these individual trends, through, is that the zero-sum politics driving all this disruption might also make a global economic swoon harder to get out of.
During the last big economic crisis in the wake of the 2008 financial meltdown, the world's major economies were able to compromise and coordinate their responses to the recession in ways that avoided an even deeper downturn.
In today's more cutthroat political environment, that kind of cooperation is a lot less likely -- particularly if a downturn fuels even more of social and political polarization within countries that has empowered economic nationalists in the first place.
We're not in a recession yet. But buckle up, because when the next downturn hits, politics is going to make it harder to contain the pain.
Internationally, food security is under threat from drought, while agriculture is subject to thin margins and complex global trade. There is also pressure to do more with less to ensure food security for the global population. Because of this, farmers are driven to get the most out of every harvest, even if that short-term focus may have long-term ill effects on the soil and their yield. Farmers in the U.S. are now turning to Ag-Analytics, a leader in AI solutions, to help address these concerns. Sharing Microsoft's goal to help monitor, model and manage Earth's natural resources with cloud and AI, the company brings precision agriculture to fruition in a platform that helps farmers leverage data to make decisions. Read more on Microsoft on the Issues.
A pivotal weekend in Hong Kong – Some 300,000 demonstrators are expected at Hong Kong's Victoria Park on Sunday, in the 11th straight week of protests. Chaotic and partly violent demonstrations shut down Hong Kong International Airport this week, and tensions are high. Chinese paramilitary forces are reportedly drilling on the mainland close to the Hong Kong border. Xi Jinping, the president of China, knows a military crackdown would cripple Hong Kong's reputation as a stable financial center and could hurt the Chinese economy more broadly. But he may eventually conclude he has little choice but to snuff this out before other restive regions of China get similar ideas. The tenor of the marches this weekend will offer a clue about which way it's likely to go.
Maduro's crackdown on the military – One reason Venezuelan President Nicolas Maduro has survived an economic collapse, a popular revolt, assassination attempts, and a failed coup by opposition leader Juan Guaido is that the military brass has stuck with him. For one thing, they are tied to the regime's lucrative illegal businesses and black market schemes. But there's also now a stick to go along with that carrot: The New York Timesdescribes Maduro's "growing reliance on torture" and purges of military officers – including alleged coup-plotter Captain Rafael Acosta, who died after being beaten and electrocuted to in a Venezuelan military hospital. We are watching closely to see if there is a point where Maduro screws up the calibration of carrots vs sticks and finds himself at the business end of a rifle in the Miraflores palace.
Trudeau's woes – In many ways Nicolas Maduro's polar opposite, Canada's prime minister has a lot going for him: dreamy good looks; a decent – if not overwhelming – majority for his Liberal Party in Parliament; and a generally safe, resource-rich country with millions of lakes, friendly people, big skies and (relatively) small problems. But earlier this week, an independent ethics commissioner ruled that the prime minister had breached the country's conflict of interest laws earlier this year when he pressured prosecutors to ease off of a bribery investigation of a major Canadian construction firm, because of fears about job losses. Trudeau has accepted the report's findings, but isn't resigning. We're watching to see how this simmering scandal affects Canada's upcoming national elections in October.
Something your salmon friends will never believe – You are a salmon. You are trying to get upriver so you can mate and die. Also you must avoid bears and bald eagles. Now there is a dam in your way of your favorite river. This is a problem. You pause an— WHAT IS HAPPENING. SUDDENLY YOU ARE BEING SHOT THROUGH A PNEUMATIC TUBE AND… just look at this thing.
What We're Ignoring
Japanese robotic tails – Researchers at Japan's Keio University have developed a wearable robotic tail that they say could help elderly people and others with balance problems steady themselves. Look, we know that managing an ageing population is one of Japan's most pressing challenges. We also know that automation is one way that countries with shrinking workforces can better support a growing population of retirees. But giving people tails seems like a less efficient way to address these problems than, say, tweaking immigration policy ever so slightly to bring in more young workers, no?
145,000 – Companies have announced plans to relocate 145,000 jobs to the united states over the past two years. Some 30,000 of those "reshored" jobs are directly the result of President Trump's bare-knuckle trade policies, according to a report by the Reshoring Initiative. For perspective, 145,000 jobs is roughly one month's worth of average job gains in the US over the past decade.
900 – if you thought the politics of Brexit were wooly already, consider this British farmer who is fattening up his 900 sheep extra fast so that he can sell them before October 31st, the date when the UK is supposed to leave the EU, deal or not. He's worried that without a deal, EU tariffs could decimate sheep exports to the continent, creating glut that craters prices in the UK.
83 – The implementation of Colombia's Nobel Prize-winning peace deal with FARC rebels has been spotty – of the more than ten-thousands ex-combatants slated for reintegration into society, 83% are still without productive work, raising the risk that they take up arms again.
50 – Africa's population boom and rising living standards are putting pressure on the continent's higher education systems. African universities currently feature 50% more students per professor than the global average, even as rising enrollment rates still rank last among the world's regions.
Is the Gannet GateHouse merger good or bad news for local journalism?
It's probably bad. So it's the two biggest newspaper chains in the U.S. combining. They're going to own 1 in 6 newspapers in America. The problem is we're not seeing much of a strategy here, it's really mostly a financial deal and an expensive one at that with a lot of pressure to cut costs. They're looking to save about $300 million annually. That means layoffs. That means centralizing some functions like ad sales or design editing, consolidating regionally possibly selling off newspapers, selling off real estate. The problem is a lot of these things have already happened to American newspapers and more than once. So you're really getting blood out of a stone at this point. It's not good news for the communities they cover or the people who work there.
What does the CBS Viacom merger mean for consumers?
Ultimately, it's going to further divide up the content that you love across multiple platforms. The streaming war is on! CBS and Viacom felt they had to merge in order to stand up to the bigger players in the game like Disney, Netflix, Amazon. Viacom was so far quite happy to put their content on whatever platform would have them That's probably going to change. For you, it means you have to get more subscriptions and pay more to see all of the shows that you love especially the Star Trek franchise, in this case. So unfortunately, just more expensive bills just like back in the days of cable.
That's it for this week. It's a special episode of Media in 60. It's the last one produced by the wonderful Adam Pourahmadi, who's moving on to bigger and better things. Thank you, Adam. You were a joy to work with. Godspeed. We'll take a short break and we'll be back in September with more Media in 60 Seconds.
How big of a threat are Hong Kong protests to global markets?
Well less the protests than the almost certain Chinese crackdown that is going to come against the more violent protesters, who tried to basically divide the Hong Kong population that way and make them much less effective as a conduit for international finance. There will be a negative market reaction against mainland China as well. And Singapore will do a little bit better. But my God. How horrible for Hong Kong.
Is Russia developing a new nuclear missile?
It certainly seems that way. But more importantly it's just good to remember that there is this existential threat out there in terms of these major nuclear arms race. The Russians have a tiny economy today but doesn't stop them from being able to wipe away the planet. And on balance the fact they're in decline should make us worry.
Pretty much anything other than self-promotion. There's a lot of evidence that when people toot their own horns it tends to backfire. People will judge them as arrogant, narcissistic, and especially as insecure. They know that if you were really amazing you wouldn't have to work so hard to tell other people how amazing you are. Research suggests that instead of promoting yourself it's more effective if other people promote you because after all you're not a credible judge of your own abilities and accomplishments. But if other people think highly of you and they're willing to talk about that that can go a long way. And so, if you're in a situation where you feel like you have to self-promote, then it's worth asking, "OK, over my career, who are the people that I've really impressed?" "Who are not only willing but maybe even excited to sing my praises." And then, "how can I invite them to do that in an honest and genuine way?"