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Hunter Biden's convictions won't derail his father's re-election bid
Ian Bremmer shares his insights on global politics this week on World In :60, live from the Toronto US-Canada Summit.
What are the implications of Hunter Biden's convictions for his father's presidential campaign?
You know, it's a little bit of tit for tat. You're going to see a lot of Republicans saying, “See the Biden crime family! Look at this guy. I mean, he's a convict.” It's ugly. It's embarrassing for the Biden family, of course. But at the same time, it's not very significant charges and it certainly doesn't link directly to President Biden. Five months away, are people going to be talking about this or Trump's 34 convictions, the weakest of the cases that he's actually facing? I suspect neither of them are going to matter very much, even though, on balance, Trump's is the one that should matter more.
Will recent EU elections bring a dramatic shift to Europe or more of the same?
Well, overall, the European Parliament looks a lot like the old European Parliament. A few more seats for the right wing, but the far-right is not very aligned, doesn't work cohesively. I still think Ursula von der Leyen is going to be, yet again, European Commission president. And in many countries the populist, the anti-establishment did a lot worse. In Sweden, for example, in Portugal and others. On balance, there's not much change here. Two things that matter one a little bit is that Schulz and his Social Democrats really underperformed. The German economy not doing well, he's not seen as much of a leader. A three-party coalition, Germany, largely centrist and pretty stable no matter what. Much bigger: France. Macron's party, historically, got pasted. That's why he's called for parliamentary elections in just a few weeks. And when they happen, if Le Pen's party, the National Rally, wins and they're able to put forward a prime minister, there's is a major, major problem for governance in France and for the need of anything that the EU has to have parliamentary approval in France to get done, and that includes the Ukraine problem going forward.
How Canadians viewing the impending Biden Trump rematch?
You know, in some ways a little more comfortably than they did the last time around because the US-Mexico-Canada agreement's already in place and Trump got it done with this Canadian government. So, I think that they feel a little like, “Hey, we dealt with them once, we can deal with them again.” There's much more strategy and strategic alignment in the importance of the US-Canada relationship today than there was five, 10 years ago, in part because on China they're much more aligned, on things like, major wars outside of this part of the world, they're much more aligned, on Haiti, they're much more aligned. But also keep in mind that Canada's also facing an election in a year. And right now, it looks like the Tories, the conservatives in Canada, would win big, ahead by over 20 points. In which case you'd have a Canadian government and a US government, if Trump were to win, that would be very aligned. Just on a very different part of the political spectrum. Either way, very friendly and very stable relationship, which is more than we can say for most of them around the world.
Learnings from working post-COVID: economy, work-life, leadership
Kevin Sneader, Global Managing Partner at McKinsey, shares his perspective on corporate business leadership on Business In 60 Seconds:
What do we know now that we did not know four months ago when the coronavirus struck with vengeance?
I think there's a lot. First, we've learned about our economy. We know that we've now taken the elevator down and we're taking the stairs back up. We're seeing a return, as I observe what's happening across the world, but from a very low base. And the letter of choice is not an L, a V or a U, but I think it's a big question mark.
Secondly, we've learned about what we like in the workplace and what we do not. Indeed, much that has proven attractive about remote working has stuck. Time with family. The ability to source expertise wherever it may be located. But there's much that's not. After all, as many have said to me, there's a fine line between sleeping at the office and working from home.
Third, we've learned about leadership. As one CEO suggested, all the traditional stuff does matter. Being a good listener. Being aware of the details, able to see the big picture. But perhaps the most valuable capability is one that's not often associated with CEOs, it's being able to show some love, to show some love. We've learned that first and foremost, this is a humanitarian crisis and one where empathy and understanding have really proven to be the leadership qualities that matter.
Historic EU COVID recovery fund deal; Turkey and Greece Aegean dispute
Ian Bremmer shares his insights on this week's World In (More Than) 60 Seconds:
How will the EU coronavirus recovery fund work and are there winners and losers?
How it's going to work? Hundreds of billions of euros being distributed between, its collective redistribution from wealthy countries to poor countries. And that money has been now unanimous agreement between all 27 members of the European Union. Not 28, the Brits are no longer a part of the table. And it's historic. It's by far the biggest political success that we've seen anywhere around the world in providing real multilateral leadership to help make it easier for those countries that are suffering the most. In the case of Europe, that means the poorer countries that don't have the ability to bail out their devastated economies. Again, you are seeing double digit contractions across Europe economically this year. Now you're seeing hundreds of billions of euros, half of that will be grants, don't need to pay back, half will be loans. That was a big part of the of the debate, of the controversy.
And who's it going to go to? It's going to go to the southern Europeans, like Italy, like Spain. It's going to go to the Eastern Europeans. And part of that, that's where you have some of the problems that some of those East Europeans do not actually support. All of the mandated rule of law, independent judiciary that you're supposed to, to be a part of the EU, the EU has not been able to sanction them. Countries like Hungary and Poland precisely because you need unanimity to do so and it's hard to get unanimity. Some of the wealthier countries are saying, "well, we're not going to give that money unless we can ensure that everybody that gets it actually is aligned politically." Well, that didn't work. So, countries like Poland and Hungary will continue to have their political systems diverge from those of the west and the north. That's bad for Europe long term, but for the short term, Euroscepticism is actually on the decline, not on the rise, because even if you're a Eurosceptic in a country like Italy or Greece or Hungary, if they're saying they're going to give you money to help bail you out, mutualized debt, something that no one thought could have happened before the pandemic, you're reasonably happy with that. I mean, you know, you're not going to give up free money. That's how I like Ayn Rand Institute accepting cash from the US government. You know, I mean, you read "Atlas Shrugged." I mean, I suppose, though, it was horrible, but that doesn't mean you won't take free money from the government. That's just your ideology. Who cares about that?
What is going on with Turkey and Greece in the Aegean Sea?
Well, the Turkish government is now sending a bunch of military vessels, looks like towards this Greek economic exclusion zone, which is where the Greeks are saying they have the right to exploit resources in the Aegean Sea. The Turks are contesting that. It's kind of like the dispute you've seen in the South China Sea, where the international community clearly supports one set of norms in the fishing and mineral rights that are off of countries borders. But the more powerful country militarily in the region, China, is trying to subvert that. That is what we are potentially now seeing with Turkey and the Greeks. With the Turks saying they have the right to exploit and providing licenses for doing so and suddenly a bunch of military ships showing up. Very interesting because Greece and Turkey are both NATO allies. The Americans are supporting the Greeks, as the international community broadly does here, in terms of their definition of what their territoriality actually implies, where it expands to. But that doesn't mean the Turks are going to listen. And the fact there's been a bit of a bromance between President Trump and Turkish President Erdogan complicates this. So, we should watch this very closely. Big win for the Greeks in terms of the EU deal, potentially big problems in terms of the fight with Turkey.
Finally, is Russian influence in UK politics really the "new normal?"
I'm going to say no. I think people continue to exaggerate what the Russians are actually able to accomplish. It is true that they provided lots of disinformation and certainly weren't saying, they weren't open about it, they weren't saying "this is coming from Russia." It wasn't state propaganda. It was pretending to be local actors with the Brexit referendum, with the Scottish independence referendum, and of course, in the United States with the US elections. But the amount of money is relatively limited. And the outcomes, I would argue, are much more divisive because of problems in these countries themselves. The Russians tried to have that same kind of impact on the German elections and it failed. Why did it fail? Because the German people were generally happier with their social contract, generally weren't prepared to listen to crazy extremist conspiracy theories. In the US, in the UK, where lots of people increasingly feel like their own systems are delegitimized and rigged, they're more willing to listen to wackos. And so, they're more susceptible to delegitimization efforts, whether they're domestic or international. So, if you really want to fix this, I mean, yes, the US needs to respond and show that if the Russians hit us on cyber, we're going to hit them on cyber. That tit for tat is completely understandable and appropriate. But you're not going to fix the problem until you actually build your own resilience at home and that's what we need to be doing. Certainly true for the UK.
How should business leaders manage the return to work?
As workplaces reopen, how should leaders manage the return to work?
Well, let me start by saying that first, return is not a date, it's a muscle. We've seen cities with the tightest of rules and disciplines experience a second or third wave of the coronavirus. Indeed, Melbourne and Hong Kong bring this life today, for all of us. Therefore, it's not a question of announcing a date for return and saying everything is done. Instead, it's about a process, one that will have a series of ups and downs. In fact, two steps forward, one step or more back, maybe the story of our times. We need to be able to live with disruption as usual and respond with a tailored, relevant set of actions.
As one CEO said to me, "it's really a combination of fast twitch and slow twitch." Fast twitch characteristics include the willingness to change plans and adjust based on refreshed data and insights. Slow twitch features include managing fundamental shifts that must impact the long term thinking of any business. And indeed, this will be the true test of leadership. After all, for many, this has been the real leadership moment for business leaders everywhere.
Twitter hack mystery; does two-factor authentication make you safe?
Nicholas Thompson, editor-in-chief of WIRED, helps us make sense of today's stories in technology:
Whoa Twitter! What happened this week?
Well, on Wednesday, a whole bunch of prominent Twitter accounts, Jeff Bezos, Bill Gates, Elon Musk, Apple, started tweeting out a Bitcoin scam. The same one. It said, "send money to this address and we'll send you back twice as much." Clearly a fraud. But what was interesting about it is that it wasn't like one account that had been compromised. A whole bunch of accounts have been compromised. Meaning most likely someone got access to a control panel at Twitter. The big mystery is how they got access to it? And why, if they had so much power, all they did was run a stupid Bitcoin scam?
How can we keep ourselves safe? Is two-factor authentication the only option?
Two-factor authentication, you need two things to get into your account, your cell phone and your password, is absolutely essential. With this hack, though, that wouldn't have helped you. The only thing you could possibly have done is have deleted your Twitter account. Which is a reminder, remove all the accounts you don't use, all the accounts you don't want, move all the applications with access to the accounts that you want. Basically, constantly, constantly clean out your barn.
A deal on the EU Recovery Fund? North Macedonia and the EU
Carl Bildt, former Prime Minister and Foreign Minister of Sweden, with the view from Europe:
Is it likely that there will be a deal on the EU Recovery Fund at the summit this weekend?
That remains to be seen. There's a huge amount that needs to be decided, both concerning the immensely big recovery fund and also the entire seven-year budget for the entire European Union. And there are significant divergences between views, so far. So, there might be a deal, but it might also be somewhat delayed. I'm quite certain at the end of the day there will be the deal.
Does the result of the North Macedonia election make it more likely that the Balkan country will start to enter the European Union?
Yes, in the sense that I think that there will be the start of negotiations for accession of North Macedonia to the European Union starting by the end of this year. And that is a significant breakthrough for a country that has been in a difficult situation prior both to the agreement on Greece, with Greece on the name, and this election. So, it's a positive sign for the region.
What to expect for second-quarter earnings season; H2 2020 outlook
Betty Liu, Executive Vice Chairman for NYSE Group, provides her perspective:
What are analysts expecting, going to the second quarter earnings season?
So, this earnings season has just started this past week, you saw banks kick off their reports. And as you can well imagine, analyst estimates are pretty much all over the place. And part of that is because a good number of companies did not provide guidance. Now, according to some estimates, some analysts estimates, we could see an earnings season decline or earnings decline as much as 44% this time around. That would be one of the biggest declines since 2008, the prior crisis.
What is the outlook for the second half of 2020?
Well, that's the million-dollar question. What is going to happen the rest of the year? So, nobody knows, right? But there's a few factors that we're going to be watching to see how companies perform. One is going to be watching the number of coronavirus cases across the country. And the second, of course, is watching the results of the November presidential elections.
Trump vs Fauci; UK bans Huawei; South China Sea pushback
Ian Bremmer shares his insights on this week's World In (More Than) 60 Seconds:
Number one, Trump vs Fauci. What's going on here?
Well, I mean, you know, it's a health leader who is quite popular across Dems and Republicans in the United States and an environment where President Trump is looking for folks to blame. And, you know, it's hard. China's been a big piece of this but hasn't been adequate in explaining why the red states are now doing so badly, for example. And why it continues to persist beyond Europe. And so, he's looking for others. And Fauci has been the most coherent, the most credible in the Trump administration, but has made mistakes. And certainly, also has been willing to come out and speak independently of the Trump administration, including criticizing the Trump administration in a way that Dr. Birx, for example, or the head of the CDC has not. And that's why you're starting to see anonymous opposition against Fauci. You're seeing some of the campaign proactively say they think Fauci has been a cold shower on the economy and has been Dr. Doom, Mr. No. It's funny, Larry Summers, my friend, was called Dr. Kevorkian by Obama when he was secretary there, because he was always providing the negative outlook. I can't imagine how Larry Summers would survive in the Trump administration right now.
But clearly, at the same time, Trump understands that getting rid of Fauci would be a huge mistake. So the question is, if the opposition gets significant, if it starts looking like they're taking serious shots at the guy, will he stay? And he's been around for a long time. He's worked under Republican and Democratic administrations. You go to Fauci's office, you see photos of him with all the presidents, and all the House speakers, and all the accolades he's gotten. He can handle it, right? So, I think he's willing to stay a lot longer than a lot of others would, and I don't see Trump forcing Fauci out the way Bolsonaro has basically forced out two health ministers that were both popular and scientifically credible the way that Fauci is.
So, first of all, the United States is handling this better than Brazil and, you know, thank goodness for small benefits. But also, it is showing that Trump understands that his popularity on handling the coronavirus is in the toilet. It's about 30 percent compared to 40 percent overall support. And he needs to show a better result, especially in terms of a core red states and purple states, some of which are where you're seeing the biggest explosion of cases right now. I mean, Texas, Florida, Arizona, Georgia, not California. That's on the blue side. But those others are all a lot of solid Trump supporters that are taking it on the chin now directly from coronavirus. That's not where he was even a month ago.
Why did the UK, United Kingdom, reverse course and ban Huawei and where does that leave China?
Well, the interesting thing is that the United Kingdom had decided to include Huawei in 5G. That was Boris Johnson. The Americans were very angry about it. You may remember that's when the Trump administration said, well, maybe we're not going to share Intel with you if you decide that you're going to work with China on 5G and on Huawei, their most important tech company. Now the UK has completely reversed their decision. And there's a few reasons for it. First, it's the United States. I mean, we've got new foreign product rules that not only will sanction those that work directly with Huawei, but also makes Huawei's own future much less certain. Are they going to be able to get the inputs, the semiconductors, the other critical pieces of their supply chain that would allow them to roll out 5G effectively? It's a much worse bet than it was even six months ago.
There's also the fact that the Chinese are not seen to be transparent around coronavirus. I've talked about this quite a bit before, the original cover up for the first month while this disease was exploding inside China. They weren't being in any way forthcoming about human to human transmission with their own people or internationally. That's angered not just the US, but a lot of allies, too. And, of course, China's actions in Hong Kong. So, there's been a lot of backlash against the Chinese and that is hurting them ultimately. And that's what's behind the UK decision. It's a big hit on China. They had major plans for the United Kingdom, including growing the connections between stock exchanges and London and Shanghai, crafting a new post-Brexit FTA (free trade agreement), invest heavily in UK infrastructure. Certainly, there's going to be retaliation of some kind from China. But this is one of the bigger strategic wins of the Trump administration and foreign policy since they've actually come into office.
Finally, with the US rejecting China's maritime claims in the South China Sea, how will this further escalate tensions?
Well, a little bit. I mean, it's not a military move. It's a diplomatic move. This is more symbolic. It's United States officially aligning itself with the 2016 ruling in The Hague instead of supporting it abstractly, which is what the Obama administration did. The alignment means the United States is formally denying specific claims, most importantly, this nine-dash-line that says that China basically has sovereignty over everything in the water going right down to the borders of South East Asian littoral states. Which is, you know, kind of crazy. Anyone looks at the map and sees what China is laying claim to, it's ludicrous. And it's only because China has such outsized power militarily in the region and of course, economically, that they can kind of get away with it. But again, it's not military escalation. The Pentagon could follow up with more aggressive exercises in the region, and that's certainly possible, especially as we get closer to election, and Trump wants to show his anti-China bona fides, the risk of accident is going up. But for now, this is a diplomatic move, not a military one. That's what I'd focus on.