It's the economy, stupid!
Panelists talk about how students should understand our economy
“I hope you cannot go through an international business school and think that tariffs are a good idea,” said David P. Kelly, the chief global strategist and head of the global market insights strategy team for J.P. Morgan Chase, to a room of wide-eyed Brandeis students. The audience had gathered for an hour of conversation about the state of the economy, and while words terms like “treasury securities” and “normalization path” don’t usually raise eyebrows, on Thursday evening, talk of “rising debt” and the “gig economy” had some Brandeis students on the edge of their seats.
At the event, called “Global Growth” former Brandeis International Business School professor and current managing director and global chief economist at Citi Catherine L. Mann joined David P. Kelly for a discussion about what Brandeis students need to understand about the economy. The conversation was moderated by Prof. George Hall (ECON) in the Wasserman Cinematheque in IBS.
Both Mann and Kelly spoke to the concerns of students and faculty in attendance and agreed that the economy is growing more slowly, but dissagreed on whether that was a bad sign or not. The central thesis of Kelly’s presentation was that “in the long run the global economy is going to grow more slowly, but there will be fewer recessions and more stability.” He pointed to countries whose economies are in decline, such as Argentina and South Africa, and argued that they only marginally affect the global economy. He believes the U.S. economy is as stable as it’s ever been, pointing to the rebound of the U.S. housing marking and growth in manufacturing jobs as two key indicators of a trend upward.
In contrast, Mann cautioned students, saying, “Young people are bearing the burden of the failure of the global economy to rebound.” She noted that while Kelly invoked the virtues of what he called a “slow and steady” economy, she said that she didn’t believe in such a thing, and instead would like to see more rapid economic growth, even if it comes with more volatility. The big question on the minds of economists today is whether or not there is “one policy rate hack that can satisfy all our objectives for the U.S. and global economy?” Mann believes the answer is no. She lamented that too many firms are conservative in their investments, following a “herd” mentality. She argued that firms that employ a contrarian attitude, on the other hand, sometimes make the most money. Kelly agreed, saying economists need to be more creative in finding sensible ways to invest in emerging technologies like solar and wind power. He cautioned students to be careful in judging the health of the U.S. economy by simply looking at the stock market, which he said “is just really a system by which wealthy investors shuffle money around.”
The panelists acknowledged that this event is being held in the context of an important moment in the history of the U.S. economy — at a time when the “gig economy” is transforming the transportation and hospitality industries with companies like Uber and Airbnb and the Trump administration is slapping billions of dollars of tariffs on imports from countries like China. Kelly worried that institutions that protect the economy from volatility are under threat from a rising tide of populism sweeping Europe and the U.S. “Populism is like shutting of the left side of your brain and just doing whatever feels good, and in the economy, that’s almost always a bad thing,” he noted.
After the presentations, the floor was opened up for questions from the audience. One by one, IBS students voiced their concerns to the panelists about their prospects of gaining employment after graduation and what types of economic sectors are seeing the most growth in wages. Unsurprisingly, artificial intelligence, which has made the headlines in media outlets from Wired to the Wall Street Journal, took center stage during the questioning. Hall noted that artificial intelligence has changed how many firms operate and opened doors for smaller companies to compete with their larger corporate rivals. Echoing the words of Mann, he stressed that there isn’t a “silver bullet” but that at a regional level, both corporate leaders and politicians are ultimately responsible for how the economy affects the average American.
As if to provide some relief to the students who had voiced their anxiety about the market, Kelly ended the evening by telling the audience that ultimately the economy doesn’t have to dictate their lives, saying “You could be born into the worst of depressions or the best of economies, but your future is going to be determined by you.”
Please note All comments are eligible for publication in The Justice.