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 Fareed Zakaria. Bio: http://en.wikipedia.org/wiki/Fareed_Zakaria
Challenges we face as county, society. One way to think of looking problems. Through eyes of our new president. Obama. Dilemma. How many are new and unexpected. Young senator who was trying to decide to run for the presidency. Walking on beach Hawaii. Wife was against it. At that point. Dow Jones was 14000. Global boom. Only question was How do we get out of Iraq? It will take sophistication and skill. Safely say, only item 27 on to do list for Obama. North Korea, pirates, etc.
Only two and half years? What happened? From there to here? Not see this world? Easy to get obsessed of the moment. Lose sight of what's happening, of the problems coming toward us. Any job. The urgent will crowd out the important.
At the end of the day. What did I accomplish? Knowing what's going on around. Be aware. Got into it because of greed. Simplistic view. Any complicated phenom won't happen that simply. What is the solution? Find better bankers?
World we know now started in the 70s. Few years after Vietnam, Watergate. America's enemies are emboldened. Indian perspective. Two models: 1 free market (US), other closed system (Soviets). India was closer and most countries to the Soviet model. Canada, Singapore a few others followed the US. Then one end of spectrem. Soviet system began to collapse. So there was only one game in town.
World of political conflict to one of low political conflict. We're living in a peaceful world. But what you see is terrorism. But reality, total deaths as a result of conflict.
Television has a fundamental bias. Not left wing or right wing. But I want to keep you watching bias. Nature of new beast. 24/7 media coverage revolution. Hyperbole. We have to read the important. Also, economic stability. Everyone had a problem of inflation. True everywhere in the world. But everyone else had problem with hyper inflation. Inflation is the most disruptive thing socially. Robs you of future earnings. Robs you of what you have now. Kills your savings and kills the middle class.
Hyper inflation in the 1920s of German Class. Led to rise of Nazis. Even though unemployment was at 25 percent. Hyperinflation was evident with the number of coups, social turmoil. Look at Iran. Fall of Shah was a result of hyper inflation. 1979. How many countries had inflation of over 15 percent? 35. Today, 1. Powerful trend. Collapse of inflation begets drop in interest rates.
Third shift. Technology. Recent. 1989. Soviet Union collapses. No cell phones, No Internet. Most radical? Fax machine. 1990. Saddam invades Kuwait. Country most worried was Saudi Arabia. Not a country known for speedy action. Invite Americans in? Not tell the people. 20 million. For 9 days, didn't know that this had happened. Nowadays, that would be a few minutes.
Mobile phones are the PCs of the third world. Twitter is so important. If you can socially network with a mobile phone, then 2 billion people are network. Difference between computer and mobile is collapsing. You are plugged into the global grid. Bill Clinton is the first president of this new world order.
Root cause of financial crises. Producing lots of cash. Surplus. What's the safest country in the world? Buy American debt (Treasury Bills). You buy it, you lower the interest rate. Orgy of consumption. Average American has 13 credit cards. Look at it for consequence of failure. We built the fastest racing car ever known but no one knew how to drive it. No one knew how it worked. It ain't over yet!
Even if we get through all this, we still have massive imbalances. If you didn't have vast pools of resources, we would have gone bankrupt. While we continue to contract as economy, while China and India continue to rise, we realize they can have self-sustaining growth. These societies are coming to life! Economics produces culture. More sense of pride and satisfaction. Where you sit powerfully affects your perspective.
Russians. World War II discussion. US view – Europe plunges itself into deep crises. US nobly enters war. Russian view – 75 percent of German troops were on Eastern Front. Stalin's war against Hitler was the decisive war. We only had 25 percent of the story. Not a lot on the battle of Kursk. However, much about battle of Sicily. Kursk – 1.56 million german troops. You can look at any country, their perspective is much more important. That's the change you see. Affects trade negotiations, politics, etc.
Cricket. Dominated by Britain and Australia. Indian creates own league. End of first league, transformed the cricket world. 1.2 billion people who are cricket crazy. Without India, only 300 million. A game you have historically associated with Britain, will eventually be thought of as Indian. India and China loom large.
First Zakaria law. If you take a small number and multply by 2.5 billion people, it becomes a very large number.
Question is. Can we come to grips by this phenom. World not dominated by America. Difusion of knowledge and power. This is the central question. When you try to face the challenge of running your organization, you need to face the new reality. Now the natives have gotten very good. Global means being global. Knowing what is going on in those countries.
Principal reason is likely not to suffer the fate of Japan. They had decent economic system (health care), but one thing going for us is we have immigrants. Japan is losing population. In five years, it'll look like Florida. You can't build a society on this. Immigrants infuse hunger. Kid who comes in from another country, who is dirt poor, will work harder. Strangely, US is turning its back on some of these things that make it great. Dynamic, flexible. We don't care where something care from. We are not interested in origins, we are interested in destinations. We need to learn from this. Again, could we have done anything about what's happened? Let's apply the brakes, calm down everybody. Fed to raise interest rates. Fannie Mae – slow rate of mortgage loans, etc. Rather, we applied the pedal to the medal. Whether people could afford things was not the question. Everyone needed a home. India and China raised interest rates, credit card companies restricted consumer credit. They put on the brakes. We as a society have one final challenge. If we are going to get out of this mess, we have to impose short term pain for long term gain. We don't have room to maneuver. They are catching up cause they've learned tricks from us!
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