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The Arab world has witnessed at least one big Brexit-like event every decade since 1948 – and these political, economic, and social ruptures never seem to heal. The impact of these self-inflicted disasters is now painfully evident, and ongoing street protests in several countries suggest that a moment of reckoning may have arrived.
The old central-bank playbook of slashing interest rates to spur consumption, investment, and employment has become less effective since the 2008 financial crisis. Yet without effective tools and the public's confidence, central banks will be unable to rise to the occasion when the next recession arrives.
French President Emmanuel Macron has drawn criticism for describing NATO as brain dead and pursuing a rapprochement with Russian President Vladimir Putin. But now that a wayward America could abandon the continent at any moment, Macron's argument for European defense autonomy is difficult to refute.
NEW YORK – For 15 years, I have attended the World Economic Forum in Davos. Typically, the leaders gathered there share their optimism about how globalization, technology, and markets are transforming the world for the better. Even during the recession of 2001, those assembled in Davos believed that the downturn would be short-lived.
But this time, as business leaders shared their experiences, one could almost feel the clouds darkening. The spirit was captured by one participant who suggested that we had gone from “boom and bust” to “boom and Armageddon.” The emerging consensus was that the IMF forecast for 2009, issued as the meeting convened, of global stagnation – the lowest growth in the post-war period – was optimistic. The only upbeat note was struck by someone who remarked that Davos consensus forecasts are almost always wrong, so perhaps this time it would prove excessively pessimistic.
Equally striking was the loss of faith in markets. In a widely attended brainstorming session at which participants were asked what single failure accounted for the crisis, there was a resounding answer: the belief that markets were self-correcting.
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