With all the focus on this over-the-top election campaign here in the US, it’s refreshing to hear from someone who has a global perspective.
Dambisa Moyo is a Zambian-born global economist and author who’s worked at World Bank and Goldman Sachs. Moyo, who now lives in New York City, has been in leadership roles at a number of high-profile companies and is currently on the boards of Chevron and Barclays, among others. In a recent interview she discusses how income inequality, European turmoil and the very contentious US election are just some of the headwinds global markets are contending with.
I started off by asking Moyo how she expects the global economy to behave in the aftermath of the US election—no matter who wins. “No one has been able to credibly predict the situation we’re currently in or can really say anything sensible at this point,” she says. “We don’t really know what the public policy trajectory is whomever wins. From a global perspective, there is a tension. In terms of trade protectionism, both candidates have intimated that is the direction they are heading. I think the regulatory environment remains burdensome for a lot of corporations, which for the global economies to recover becomes a big issue.”
Does Moyo think that if Trump wins there will be a market shock?
“I think that’s pretty much priced in,” she says. “I think people will be surprised but only because the polls showed [Clinton winning] by a wide margin. I’m not entirely of the mind that the whole world comes to an end [if Trump wins.] We’ll wake up on the ninth and come to work.” What does worry Moyo is that “neither candidate has articulated a very clear idea of the path of economic growth and a lot of the issues we’re dealing with today.”
As for income inequality, Moyo suggests we “probably need to tear up the old manual.” The problem she says is, “We’ve tried both solutions: Tax and spend favored by the left and also trickle down economics favored by the right, and neither of these has really worked. We’ve seen income inequality widen in the US to such an extent that it is now equal to income inequality in China. And social mobility has deteriorated in the United States. So these two things at the extreme have not worked. What might a solution look like? Probably a little bit of both. In the US now, we’re so polarized that no one wants to hear both. But in the short term I do feel that we need some minimum interventions to assist people in terms of minimum wage reform. I’m not a not a big believer in all these types of interventions, but at the same time we need long term implementation to make sure we get social mobility back.”
We are at risk of creating a jobless underclass in this country because of technology changing the job market, Moyo says, citing a study that says 47% of the American workforce might be out of work because of technology in the next 20 years. But if you go to Silicon Valley she points out, you hear a different story. To wit she says: “Just because we don’t what’s around the corner doesn’t mean that we don’t know that something amazing is coming in terms of job creation.”
Moyo is uncertain in terms of the fallout from Brexit—or even if there will, in fact, be any fallout. We don’t know yet, she says. “It’s not just about derivatives contracts. It’s about immigration, visas, trade across borders, capital flows.” It’s going to be “challenging” to get this done in two years, she says.
As far as diversity and inclusiveness, she says, “The question I always ask is: Is everybody in the room? Is there, for instance, a young Latino male, an older black male, and a white woman who stays home? All of our stakeholders diverse now, and so should we.”
For Americans about to go the polls, they might want to think a little global before they act local.