April 3, 2013
Today the United States and other countries are emerging from the Great Recession and related capital markets crisis. But even if economic recovery is taking hold, there is unusually high uncertainty about its breadth and durability. In all countries, what economic strength there is, is due largely to massive government intervention to end the crisis. Central banks have printed trillions of dollars worth of new currencies, and fiscal authorities have increased spending and cut taxes by trillions of dollars more. This monetary and fiscal stimulus has clearly helped. But it is also clearly unsustainable. What forces can sustain economic recovery? What forces might restrain it? Are certain companies, industries and countries better positioned to lead a recovery? This talk does not provide a single set of omniscient answers guaranteed to be right. The recent crisis has laid bare how inherently difficult is economic forecasting is at all times—and especially now, amidst so many forces at play with few if any historical precedents.
Instead, this speech provides framework for answering these and other pressing questions with probabilities and scenarios, all based on key facts and insights from recent history with a conversation about three alternative scenarios of recovery—strong, tepid or none. Indeed, many insights can be better gained by talking about the childhood-favorite Winnie the Pooh characters rather than about complicated mathematical models.
Today it appears that the United States and other major economies may be emerging from deep recession. A return to economic growth would be very welcome. But regardless of the near-term prognosis, the United States now faces a collection of business policy challenges the likes of which have not been seen since the Great Depression—if ever. Some challenges stem from the unprecedented actions taken by the U.S. government amidst the capital markets crisis and deep recession. Others stem from long-building pressures in the global economy that predate the recent crisis and persist beyond it. In particular, the size and scope of the government in the U.S. economy, the absence of widely shared economic growth, and the stagnation of American skills are of considerable concern.
Whether and how the United States addresses these challenges—by choice or by the forced hand of international investors—will carry dramatic implications for America’s future vitality. Addressed creatively and constructively, these challenges will give way to strong productivity growth, rising average standards of living and continued global leadership. Ignored or addressed poorly, these challenges will give way to slow and poorly distributed growth, deeper political divides and an accelerated decline in America’s global stature. Focused on meeting these challenges and finding nonpartisan ways to overcome them, Matthew Slaughter helps business and civic leaders think strategically about the medium and
long-term prospects for their organizations—and more generally what the future holds for their children and grandchildren.
The recent crisis in global capital markets and broader economy focused many business and civic leaders on the immediate term challenges of surviving to the next day, the next week, the next quarter. But as the crisis fortunately recedes, these leaders are again turning to consider the longer-term opportunities and challenges presented by the global economy. To successfully lead companies into the future, executives need to understand both the underlying economics at hand and also the strategies that can create truly global organizations in terms of customers, resources and talent and overall mindset.
Two questions are central. One question is, How can you lead your firms amidst the challenges and opportunities presented by globalization? On both the revenue and the cost side of the ledger, globalization can have big impacts. The second question is, How should you lead your firms amidst the challenges and opportunities presented by globalization? Answers to these two questions might be very different. The should question cannot be answered without an answer to the can question, but answering the can alone is not sufficient. And answering these two questions is much harder today as the world continues to struggle with the ongoing capital markets crisis and deep recession. The global economic landscape in 2020 will be markedly different from today. This talk offers facts, frameworks and insightful examples to help business and civic leaders determine what vision they will bring to their organizations to formulate and implement a sustainable long-term strategy.
With a keen eye focused on the future, Matthew Slaughter makes practical sense of the global economy and how government policy can—and will—affect prospects for future growth.
As Associate Dean of the MBA Program and the Signal Companies Professor of Management at the Tuck School of Business at Dartmouth and former Member on the Council of Economic Advisers in the Executive Office of the President, Matt Slaughter’s expertise is the economics and politics of globalization. In his speeches, he outlines the near and long-term outlook for the U.S. and overall global economy. How will the global economy look in 2020 and what factors will shape this future? What are the long-term business policy challenges facing today’s corporate and civic leaders? Professor Slaughter is a frequent keynote speaker to many audiences in the business and policy communities and he has testified before both chambers of the U.S. Congress. He regularly contributes op-eds to the Wall Street Journal and Financial Times; he is a regular guest on radio and TV; and his ideas are widely featured in business media such as BusinessWeek, The Economist, Financial Times, New York Times, Newsweek, Time, Wall Street Journal and Washington Post. He is co-author of The Squam Lake Report (2010).