Morsi supporter on street lamp 370.
(photo credit: REUTERS)
Time flies when you’re having fun. It is both heartening and frightening to
discover that this column celebrated its 10th anniversary this week. Apart from
the undeniable fact that this makes me 10 years older than I was then (and you,
but let’s not get personal), it raises the question of just how much has changed
– on the global stage, which is the column’s focus — in that period.
the one hand, it’s easy to claim that there have been massive changes: in the
context of individual behavior, back in 2003 there was no Facebook or Twitter
and even the iPhone hadn’t yet arrived. A few business types had Blackberrys,
but ordinary people somehow got by without texting incessantly. At the global
level, not only had the crash of 2007-09 not yet taken place, even the housing
bubbles in the US and elsewhere were in their early stages.
Some of the
issues that concerned the financial markets and were reflected in early columns
sound decidedly jaded now, or just plain odd. The very first “Global Agenda”
column remarked that the price of gold was “looking to cross the $400 level, for
the first time since 1996” – and that meant crossing in an upward direction!
Meanwhile, the price of oil was “above $30 a barrel today, not below $20 – as
had been hoped/expected/predicted, following the conquest of Iraq.”
other words, $30 was disappointingly high! And that was before anyone had heard
of shale oil and the Bakken field, fracking was barely feasible and the idea
that the US could be “energy independent” was patently absurd.
linked to the price of oil was the widespread concern over the stability of the
rulers of Saudi Arabia, the House of Saud, who were being subjected to attacks
in their own cities and oil-fields by al-Qaida terrorists. In those faroff days,
the United States – itself governed by the House of Bush and engaged in a war
against terror focused (for whatever reason) in Iraq, cared greatly about the
Saudi royal family and its survivability. No one, mind you, was concerned about
the stability and survival of the regimes in Libya, Egypt or Syria...
there is much that is, if not “the same,” then surprisingly familiar. The
currency markets were, as ever, a source of fascination and confusion. Column
after column in late 2003 observed the ongoing weakness of the dollar; in “The
Buck Stops Where?” the glaring discrepancy between the strong macro-economic
data from the US versus the very weak data out of Europe were contrasted with
the weakness of the dollar and the strength of the euro. Ten years later, the
Europeans would give a great deal to have economic data of the sort
characterized as a “weak” performance in 2003, while the Americans have largely
given up hope of generating the growth levels of 2003 – despite having interest
rates even lower than the “record-low” rates that prevailed 10 years ago. As for
the currencies, the problem of which is the worst among the leading currencies
remains the dominant theme in the markets...
The very first “Global
Agenda” column contained the very first major blooper (there were many more to
come...) and it related to the home front. The Israeli economy underwent its
longest and fiercest recession, from late 2000 to mid- 2003, but even in
November 2003, it was far from obvious that the incipient recovery had staying
I clearly didn’t believe it had, and poured scorn on the
still-quite-new and big-talking finance minister, a Mr. Binyamin Netanyahu, for
claiming that, despite the ongoing intifada, the economy had turned the corner:
“Even our own finance minister has jumped on the ‘Make-believe Express,’ pumping
up glimmers of recovery into fatuous remarks about ‘the end of the recession.’”
But at that point, no one – not even Bibi in his most soaring rhetoric – had the
slightest suspicion that the Israeli economy had begun the longest period of
unbroken expansion in its history...
Unfortunately, Israel provides one
of the very few solidly- based economic success stories of the past decade. The
main global themes have been of excess and imbalance, domestically and between
nations and blocs, and the underlying trends have been negative. The current
data, the key trends and the prevailing sentiment all point in the wrong
direction for the global economy – so that the only plausible reason to expect
that the next 10 years will be better than the previous 10 is that it seems so
unlikely. We can but hope.