Opinion

Chrystia Freeland

Politics makes a comeback

Chrystia Freeland
Dec 13, 2012 20:43 UTC

Prepare for the revenge of politics. For the past few decades, the quants – mathematicians, physicists and technologists – and their younger brothers, the economists, have been in the ascendant. With their mathematical models and their ability to crunch vast quantities of data, they have shaped the way businesses understand the world and operate within it.

But politics is making a comeback. That was one of the persistent themes at an invitation-only high-powered international conference about systemic risk in the financial services convened by the Global Risk Institute in Toronto this week (I was the rapporteur). As one of the bankers put it, if you want to understand the world economic outlook for 2013, and where your company should invest, you can’t just talk to economists anymore: “You need to talk to political scientists.”

I tested that idea with two thinkers – one an economist, the other a political scientist – who make their living helping businesses understand the world. Perhaps not surprisingly, Ian Bremmer, the political scientist and founder of the Eurasia Group, instantly agreed.

“When I started the firm in 1998, I had to convince people about the importance of political science, and I was not always successful,” Bremmer said. Making that pitch is getting easier – Bremmer now has some 150 employees and 400 clients around the world.

That trend is growing, he believes, and he thinks a major driver is the rise of the emerging markets. Bremmer defines emerging markets as “countries where politics matters at least as much as economic outcomes;” he also points out that over the past five years emerging markets have been responsible for two-thirds of global growth. Put those together and you have a world in which politics matters more.

Davos Today with Chrystia Freeland, January 27th Edition

Chrystia Freeland
Feb 3, 2011 20:09 UTC

On last Thursday’s edition of Davos Today, Chrystia interviewed a top Google executive about the internet giant’s recent management shake-up; chatted with President Obama’s former chief economic adviser about the State of the Union; heard from America’s principal union leader on what lessons Germany and Japan can teach the U.S. economy; and more.  Here’s the video and the guest list:

* Nikesh Arora, Senior Vice President and Chief Business Officer, Google

* Larry Summers, Former Director of the National Economic Council and Former Secretary of the Treasury

* Min Zhu, Special Advisor to the Managing Director, International Monetary Fund

Nouriel Roubini sees ‘the roots of the next crisis in the current one’

Chrystia Freeland
Dec 8, 2010 18:03 UTC

Nouriel Roubini is #12 on on Foreign Policy’s list of the 100 Top Global Thinkers of 2010. Over the past few years, the economist at New York University says he’s been thinking most about why financial crises occur and whey they are occurring more frequently than we have expected.

Contrary to the conventional notion that crises are random and infrequent events, Roubini has been arguing for the better part of a decade that financial crises can be predicted based on macroeconomic and policy mistakes. In fact, they occur every few years in some country around the world, he says. Roubini characterizes these financial crises as a “white swan” event. He emphasizes their regularity in his recent book Crisis Economics. Roubini says the pattern of crises is always the same: initially there is an economic boom, which drives up asset prices, leading to an excessive build-up of debt and leverage, which eventually leads to a downturn and then a market crash and bust.

The co-founder of Roubini Global Economics, Roubini credits his 20 years of experience studying financial crises in emerging markets — he published a book about their causes and consequences in 2004 — for enabling him to spot the risks for a crash. He also notes that others who foresaw the crisis, such as Morgan Stanley Asia’s Steve Roach and then-Merrill Lynch economist David Rosenberg, share a global view of economic dynamics, intellectual courage and a certain outsider status, a characteristic that fellow FP Global Thinker Mohamed El-Erian said was vital for his own success.

Video: The next big ideas of six financial luminaries

Chrystia Freeland
Dec 1, 2010 15:49 UTC

In conjunction with her essay in Foreign Policy‘s Top Global Thinkers issue, Chrystia interviewed six of the financial luminaries that made the list:

MIT’s Daron Acemoglu, Yale’s Robert Shiller, PIMCO’s Mohamed El-Erian, Columbia’s Joseph Stiglitz, the University of Chicago’s Raghuram Rajan, and NYU’s Nouriel Roubini.

Reuters and Foreign Policy will be showing these interviews over the next coming days.  This one is a compilation of the above six global thinkers.

‘We can’t say they didn’t warn us’

Chrystia Freeland
Nov 29, 2010 17:54 UTC

Chrystia wrote an essay for Foreign Policy’s Top 100 Global Thinkers Issue on the economists and financiers whose ideas survived the financial crisis:

In a letter to shareholders written just after the dot-com bust, Warren Buffett observed, “You only find out who is swimming naked when the tide goes out.” The 2008 financial crisis had a similar effect on our economic and financial gurus: It revealed whose thinking was based on whiggish, End-of-History assumptions about the essential triumph of Western democratic capitalism and whose mental framework admitted the possibility of radical disruption. The thinkers whose intellectual — and maybe even psychological — starting point was that Western market democracy is neither perfect nor eternal turned out to be much better at foreshadowing the financial crisis, and it is those thinkers whose ideas are the most relevant today, in the uncertain, post-crisis world.

These specialists in uncertainty are a broad church: They range from academic economists who saw the crisis coming, like New York University’s Nouriel Roubini and the University of Chicago’s Raghuram Rajan, to philosophers of finance like George Soros and Mohamed El-Erian, who have made huge market bets, as well as intellectual ones, on how bubbles are formed and how they burst. One striking similarity between many of them is that they have seen regime change up close.

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