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Is the global economy finally on the right track?
How’s the global economy doing… really? When it comes to the world’s post-COVID recovery, it’s a tale of two economies: the United States and everyone else. On GZERO World, Ian Bremmer sits down with economist and author Dambisa Moyo for a hard look at the health of the world’s finances and the impact of geopolitical crises in Europe and the Middle East on trade flows and inflation.
Right now, US indicators are strong, but Germany and the UK are slipping into mild recessions, and China’s collapsing real estate sector, local government debt, and exodus of foreign investment is dragging the world’s second-largest economy into stagnation. Not to mention, Global South countries are holding record amounts of debt. So what does it all mean moving forward? Is the global economy still shaking off its post-Covid hangover or are some of these problems more entrenched?
“We need to be growing at 3% per year in order to double per capita incomes in a generation which is 25 years,” Moyo says, “Most of the global south is growing below that number, materially.”
Ian Bremmer and Dambisa Moyo unpack the confusing state of the global economy, China’s economic woes, and where they see the biggest potential for growth in developing economies during the next decade.
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
- China’s economy in trouble ›
- Ian Explains: Why China’s era of high growth is over ›
- Struggling for economic progress as global recession looms in 2023 ›
- Dambisa Moyo: Europe's energy transition needs more than a "band-aid solution" ›
- The unintended effect of US-China economic breakup ›
- What saved the global economy from another Great Depression? ›
- Global economy headed to a recession ›
- What geopolitics stories could still blow up the global economy? ›
Ian Explains: Is the US economy good or bad?
What’s going on with the US economy? On Ian Explains, Ian Bremmer breaks down the confusing state of America’s financial health.
Trying to make sense of economic indicators right now can be an exercise in illogic: unemployment is down, but inflation is still stubbornly sticky. Interest rates are higher than they’ve been in two decades, but stock indexes are closing at record highs. Adding to confusion, the upcoming US presidential election means that the economy is front and center, but Democrats and Republicans have a partisan interest in making things seem worse or better than they actually are. So what’s really going on?
When you look at the world’s post-Covid recovery, America is an outlier. US GDP grew faster than any other advanced economy last year. Wages are rising faster than they have in years, inflation, while sticky, is nowhere near its 2022 highs, and unemployment has been under 4% for the longest stretch since the 1960s. So why do only 28% of US voters have a positive view of the economy right now? Some economists are calling this moment “vibe-cession,” warning the negative “vibes” could have a major impact on the presidential election in November.
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
The US vs TikTok (and China)
Ian Bremmer shares his insights on global politics this week on World In :60.
Four years since the US declared COVID a national emergency, how did it permanently reshape the world?
Well, a couple of things. First, it meant that US-China relations got worse, not better. The World Health Organization, the one global organization meant to deal with pandemics, got delegitimized. This was not a crisis that led to greater cooperation. It led to greater mistrust and greater polarization, in part because it wasn't a big enough crisis. Thankfully, we had vaccines really fast, and it also turned out that COVID really affected mostly the super elderly and those with serious preexisting conditions. All of that allowed the geopolitical rifts that already exist to get worse. One good thing, aside from the fact that technology really works, is that the Europeans got stronger on the back of this crisis. They now have more coordinated capabilities to respond to health crises than they did before the pandemic hit. And that has been the EU response to a lot of crises recently, Brexit, the Russian invasion of Ukraine, you name it.
As the US House goes after TikTok, does it speak to a broader US-China battle?
Well, it speaks to significant mistrust between the two countries. Espionage by the Chinese against the United States, by the way, that goes both ways of course. The Americans just aren't concerned about US espionage into China. Also, the fact that the Chinese don't allow Western social media companies to have access to the Chinese population and data. So no one should be all that surprised that the Americans are interested in forcing ByteDance to spin off TikTok. Having said that, the Chinese are pretty unhappy about it and have said that they're not going to spin it off. We'll see if their bark is equivalent to their bite. Assuming this passes in short order in House and Senate. Biden has said that he would sign it and then there's the broader question of does it undermine what has been a pretty strong effort by both the Americans and Chinese to communicate more thoroughly in the relationship and stabilize the baseline so that we don't have conflict that scales out of control and that has worked reasonably well since the APEC summit back in San Francisco in November? But that doesn't mean it will hold if the Americans start throwing more punches. On balance, I think forcing China to spin off TikTok is a reasonable thing for the Americans to do, but it will be one more straw on the camel's back. Let's see what happens in terms of Chinese response.
Finally, Princess Kate and the photoshop-fail heard around the world!
Big deal? Well, look, I mean, I am someone, as you know, that tries to keep a much lower profile than Princess Kate. So I don't like to necessarily share all the things that I'm doing around the world. But, I mean, you know, given everyone focusing on Kate's photo, I will share that in the last few days, I was there with Sweden, of course, and the prime minister, who I know well when they formally joined NATO. There was, of course, also the State of the Union, which, you know, I was doing live commentary on and right there from the gallery. But you probably are surprised that I was also right behind the scenes at the Oscars. I don't usually show for that. And it's not because I don't wear a tie, but they gave me dispensation. And also let me bring Moose, which is very important. Don't fall asleep on Princess Kate, right? I mean, you know, she has a hard enough time and she's got to distract away from King Charles. We don't know what's going on with him either. We don't really care. At least I don't.
- Sen. Mitt Romney on TikTok: Shut it down ›
- The Graphic Truth: The world's other royals ›
- Monarchies that matter ›
- China's COVID lockdowns made its people depressed and hurt its economy ›
- Should Putin get a Nobel in Medicine for ending talk of COVID? ›
- TikTok "boom"! Could the US ban the app? ›
- Graphic Truth: The world is crazy for TikTok ›
- TikTok is the ultimate propaganda tool, says tech expert Scott Galloway ›
US ends federal mask mandate; COVID protection is personal responsibility
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, discusses the end of federal mask mandates:
What are the implications of the end of the federal mask mandate?
A federal judge in Florida this week ruled that President Biden's order requiring masks, facial coverings on federally regulated forms of transportation, including planes, buses, and trains is unlawful and should not be enforced. The mask mandate was the most visible and impactful mandate handed down by President Biden, who campaigned in 2020 on doing more than his predecessor, Donald Trump to stop the spread of the virus, but was really limited by the limited authorities the federal government has to take drastic measures to control public safety, most of which are controlled by the states. This is the latest setback to Biden's pandemic policies. Earlier this year, a federal judge said that he did not have the ability to impose a vaccine mandate for large employers. And at this point, Biden lacks both the policy tools and the political standing to do much else.
Polling indicates that Americans are done with the pandemic. The pandemic has dropped precipitously as a number one concern for voters who now say, they're more worried about things like inflation, immigration, crime, and more broadly healthcare. Air travel's hovering at about 90% of where it was from pre-pandemic levels and mobility data suggests that people are largely returning to their pre-pandemic routines.
One thing that has not happened, however, is a return to office: data from the largest cities shows that fewer than half of workers nationwide are returning to their pre-pandemic commuting patterns, which could end up being one of the more enduring shifts on public behavior coming out of the pandemic.
When it comes to masks, there's massive partisan splits in the polling, as there is many things, with Democrats and the vaccinated generally saying they support mask mandates when you're out and about with other people, and Republicans and the unvaccinated saying that they're largely against them.
Regardless, the Biden administration is unlikely to appeal this ruling and the mask mandates on planes is unlikely to come back. Case counts are low. The new variants are relatively mild. Biden has bigger political fights to fight. And the benefits of universal indoor masking are too tenuous to make this worth his while. The US has now firmly pivoted to the view that protection from the virus is a personal responsibility, which is why you're going to see vulnerable people and people who worried about the virus continue to mask and social distance. And the rest of the population will continue to try to return their lives as normal. The US is still on track to record its one millionth death from COVID sometimes soon and most of these deaths, sadly will have come under President Biden, despite his campaign promise to get the virus under control.
COVID's lessons on humanity for Annabelle Santos, small business owner
Inspiration struck Annabelle Santos when she struggled to find any products that could help soothe her baby girl’s eczema. Having grown up around plants and flowers, and with a background in biochemistry, Santos set out to make her own formula to help her daughter. Now she brings her mixtures of fruits, olive oils, and herbs to customers through her company, Spadét, which she founded in 2014. For years, she worked on her products from her home kitchen in New York City. Then, just before the pandemic hit, she got her big break: product placement in the whole northeast region of Whole Foods. In fact, her products shipped out to the stores just a week before lockdown. The pandemic was really tough on her business, but grants helped her keep afloat, and she’s looking forward to meeting with and healing customers now that restrictions have lifted.
Watch more from our conversation on how small businesses can thrive after COVID, which was recorded live on March 22, 2022.
Biden administration's COVID response likely to impact midterms
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, discusses the Biden administration's response to the omicron variant:
How is the Biden administration's response to omicron?
Well, it hasn't been great. It started with the travel ban from affected countries that was already probably behind the curve given how widespread the variant was and the administration admitted they did not see this new variant coming. They were caught flat-footed on the surge in demand for testing over the holidays. And while they first promised to make tests reimbursable by insurance, which is, of course, a real pleasure for Americans who love to deal with their insurance companies, they then said they were going to make 500 million tests available for free, but this isn't even enough to have two tests for every American. And news came out that they were instead of investing in increased manufacturing capacity, what they were doing was going to purchase surplus tests, which could exacerbate private sector shortages. But probably, more importantly, it means that the new free tests were going to arrive probably after the current surge in cases is over.
The CDC changed its guidance last month to say that instead of isolating for 10 days, people should isolate for only five. And this was done in order to minimize economic disruptions instead of for public health reasons, which led to criticisms of the administration that they were no longer following the "science" as they promised to at the beginning of the administration.
The administration's top infectious disease specialist, Anthony Fauci, this week made headlines for sparring with Republican Senators at a congressional hearing and not for his public health advice. And the CDC Director seems to only get attention for her missteps and misstatements at this point. The administration's strategy seems to boil down to hope that this thing goes away quickly. Their vaccine mandate looks like it could be overturned by the courts any day now and it's unclear if the mandate's even worth doing given how many vaccinated people are catching the omicron variant and then being forced to isolate anyway. The US is probably running up against its natural limit of who's willing to get vaccinated at this point and it's unclear how many more people are going to get their first shot.
Now, at the same time, the fiscal response is starting to slow as some of the extraordinary pandemic measures start to run off and it doesn't look like the Biden administration's going to be able to push a lot of new spending through Congress with the Build Back Better agenda stalled. Biden's approval has dragged all year because of COVID and right now he's in the low 40s and high 30s, which is right around where President Trump was, even though he started last year at about 55% approval. So this has been a real problem for him but at this point the pandemic response comes down to individual caution and states, who have been doing a much better job getting out free tests to individuals but are saying they are not going to impose any new lockdown measures because of the political unpopularity of this. Rough time for President Biden, probably going to affect the Democrats in the midterm elections.
Were the Aussies right to ban Djokovic?
You’ve probably read this week that Novak Djokovic, the world’s number-one ranked tennis player, was caught in an awkward standoff with Australian border police.
A quick catch up: Upon arriving in Melbourne for the Australian Open, one of the world’s four Grand Slam tennis tournaments, the unvaccinated Serbian tennis star was denied entry by federal authorities who said he did not meet the criteria for a vaccine exemption and so does not satisfy entry requirements.
Djokovic explained that he was previously granted a vaccine exemption by Tennis Australia and the Victorian state government. The feds were unmoved.
Djokovic is no stranger to whacky health and conspiracy theories. He is a proponent of holistic healing (nothing wrong with that), but he has also said that you can make toxic water drinkable simply by using “the power of your mind.”
If you are pro-science – and/or a person who has missed out on family milestones over the past 24 months by honoring travel rules – it’s easy to criticize Djokovic, who seems to think his trophy case entitles him to special consideration. But this flare-up isn’t really about the tennis star’s predilections for natural (or unnatural) remedies.
As the highly transmissible omicron sweeps the globe, perhaps redefining the trajectory of the pandemic, many argue that vaccine mandates for cross-border travel are superfluous. Others say these requirements remain crucial to protect public health.
Here are some good arguments on both sides.
The pro-mandate camp
Preliminary data suggest that omicron is much less likely to hospitalize or kill the infected, thanks in part to the most effective vaccines. Still, the variant’s unprecedented rate of transmission means that even if a smaller percentage of infected people need medical care, the overall larger number of infected people can still fill a city’s hospital beds.
In the US and parts of Europe where vaccination rates remain sluggish, mandates would prevent non-vaccinated foreigners coming in who might place even more burden on already-swamped healthcare systems. Vaccine mandates for border crossers aren’t foolproof. But they are the best protection we’ve got in speeding the shift to endemicity.
Moreover, some vaccines still offer some protection against the antibody-evading omicron strain. This is particularly true for those who have been fully vaccinated and boosted with an mRNA shot. Indeed, the more people that get vaccinated, the less opportunity the virus will have to spread and mutate, threatening those who are vulnerable to severe illness. Requiring vaccines for all international travel will force many fence-sitters and skeptics to get the shot. Consider this: If Djokovic was told from the get-go that exemptions weren’t an option, would he still have resisted the mandate and given up his spot in four Grand Slams this year?
The anti-mandate camp
A majority of the world’s vaccinated people has received a non-mRNA shot from Johnson & Johnson, Oxford-AstraZeneca, Russia’s Sputnik V or China’s Sinopharm or Sinovac. These vaccines don’t appear to block omicron as effectively as mRNA vaccines. Sinopharm and Sinovac, which account for roughly half of all shots delivered globally, provide no protection against infection at all (though they still appear to provide some protection against severe illness). Vaccine mandates for travel become obsolete when even vaccinated people have a high chance of turning up a positive result.
Some have argued that to give Djokovic a special tennis pass when Australian citizens living abroad weren’t able to return home for close to two years is a slap in the face to those who respect rules. But public health policy should be based on science-based reasoning and logic – not driven by political principle.
Additionally, there have been some studies that show that virus acquired immunity provides broader protection from reinfection than vaccination immunity. If so, exposure to omicron, which comes at low personal risk, coupled with vaccination – a concept known as hybrid immunity – could be the fastest way to reach herd immunity (and end the pandemic), a sentiment supported by Israel’s health minister.
Ramanan Laxminarayan, an epidemiologist, told the New York Times that “the combination of vaccination and exposure to the virus seems to be stronger than only having the vaccine,” adding that India and Brazil may therefore be better positioned to deal with the omicron wave than countries that have experienced lower infection rates.
So, were the Aussies right to ban the unvaccinated Novak Djokovic? Let us know what you think.
Top five US political moments of 2021
Well, I can think of five. The first and most important was probably January 6th. Historically important moment, rioters breached the Capitol building in order to stop the legal counting of the presidential election results, but also, it was an important moment because it created a dividing line for Republicans who had to decide if they were with President Trump, who had a role in instigating the riot, or if they were against him. A lot of Republicans ended up choosing to be with him creating various forms of apologies for the rioters over time, and even to some degree making martyrs out of some of them. This will be a really important defining moment, not just in American history, but also for the Republican party.
Second was the passage of the American Rescue Plan in the spring of this year. A $1.9 trillion bill that piled on top of the already $4 trillion in stimulus that Congress had passed in 2020 in order to help fight the coronavirus pandemic. Why was this significant? Because it wasn't necessary. What it ended up doing was overheating an economy that was already starting to recover from the pandemic providing households with $1,400 checks and continuing to pay people not to work and has contributed to the high pace of inflation that's been seen in the second half of 2021, which in turn has hurt the chances of President Biden's Build Back Better bill from passing into law. So this turned out to be a very significant moment even though it wasn't obvious at the time.
Third point, the withdrawal from Afghanistan. This is when you really started to see a steep decline in President Biden's approval ratings because the withdrawal got directly at the issue that he had built his campaign around, which is competence. The botch withdrawal, the headlines, the chaotic scenes at the airport really started to make it seem like perhaps the Biden administration didn't know what they were doing. That's been a drop from which they haven't recovered.
Also, something that happened over the summer I want to highlight was the CDC recommending masks indoors in response to the delta wave of the coronavirus. While I don't think this in and of itself was a politically significant moment, the return of the coronavirus in 2021 is going to be one of the defining things in Joe Biden's presidency. It's yet another reason that his approval ratings have been dragged so low and it's something that he just can't shake. This will be an ongoing storyline in 2022.
Finally, I think the fifth significant moment of the year gets at something else that's been hurting Joe Biden politically, which is inflation. He chose to renominate Jay Powell who was President Trump's fed chair because of the credibility Powell's built up as an inflation fighter helping the fed to pull out of the extraordinary measures they took during the pandemic and clear a path towards raising interest rates sometime next year. But his renomination is basically an endorsement of the fed's loose monetary policies and an endorsement of Powell's ability to keep inflation in check starting next year. This is going to be a huge story and it's a really big political priority for the Biden administration fighting inflation, and this is not the last you're going to hear about this.