Much has been written about globalization, often with a negative slant. It’s refreshing to have a more upbeat take on the topic. As the title of Michael Mandelbaum’s latest book underlines, the most likely though not inevitable outcome of Globalization is global prosperity, meaning economic growth for most of the nations involved.
Mandelbaum is one of America’s leading authorities on international affairs and many of his 13 earlier books also tackled global macroeconomics. The Road to Global Prosperity is divided into four parts, with intriguing sectional titles like The Roof, The Gates, the River and the BRICs. The latter is the familiar acronym for Brazil, Russia, India and China, the four leaders of Emerging (or arguably Emerged) Markets.
Roof, Gates, River
The Roof is a reference to “Protection” and the role the United States has played in providing a measure of security to the global economy. The Gates refers to global trade, free markets and protectionism or efforts to eliminate it in order to grow the global pie for all nations. The River is money and national currencies.
Mandelbaum reviews the causes of the 2008 financial meltdown, the troubles facing Europe and the Euro, and the reduced growth of even the four BRIC nations in the aftermath of 2008; and yet he remains optimistic about the future prospects for the global economy. Despite the obvious challenges in the Middle East, China, Russia and other global hot spots, he nevertheless says “there are powerful reasons to believe that globalization will continue to make the world richer.”
Globalization is irreversible and positive
Warts and all, globalization is “both irreversible and a positive force for the United States and the world.” Technology and the Internet are bringing nations together (though he doesn’t use the term global village) and national leaders are increasingly aware that maintaining political power will depend on giving the electorate prosperity. As a result, he expects war to be muted and countries will try to cooperate more, with their economies growing as the connections to other nations and trading partners increase.
In short, it’s an optimistic view and one that is a welcome alternative to the depressing tidbits of daily news spewing out of all corners of the globe and into the 24/7 news cycle. Not that there aren’t tremendous vexing challenges ahead. The short concluding chapter is titled Fault Lines, and Mandelbaum makes no bones about the fact the global economy ultimately depends on the fortunes of his own country: “The public good of security will be provided to the world by the United States or it will not be provided at all.”
In particular, in order to keep productive economic activity going in the Middle East and East Asia, the U.S. will have to keep in check North Korea and Iran. If it fails, “the world will be a less stable, less prosperous place.”
He closes by reminding us that Globalization “will surely continue on its upward path; but for the billions of people on board, the ride will just as surely be a bumpy one.”
As any investor is well aware, keeping up with global politics, macro-economics, regional currency fluctuations plus the vagaries of sectors and individual stocks is almost a full-time job. The wealth of digital sources available on the web and through iPads, smart phones and the like is both a blessing and a curse.
Of course, if you’re strictly a purist “index” investor, you can largely ignore the noise as it relates to making individual portfolio adjustments, apart from occasional rebalancing of asset classes. However, based on the feedback MoneySense got from Preet Banerjee’s article on Core and Explore investing, I suspect more investors — even occasional indexers — are much more active in making tactical portfolio adjustments.
Bottom line is most of us need to make some effort to keep up with economic and financial developments around the world. But I’ve found the very ubiquity of information and technology can be harnessed to our advantage, no matter how busy we are. In my own case, I have a commute of almost an hour in each direction, much of it on the subway.
I’ve found that various financial audio (and video) podcasts downloaded to an iPhone (and most other devices) is a useful way to absorb information while commuting or exercising, or even waiting in the many lineups life can subject us to over time. Here’s a rundown of some daily and/or weekly podcasts I find useful:
BBC World Service Global News: This is a handy global affairs roundup of 20 to 30 minutes that is available every 12 hours.
BBC World Business Report: a less frequent podcast of different durations more focused on economics, business and investing.
BBC Documentary Archive: long (25 to 40 minutes) audio documentaries that are indepth on a single topic (a recent one was on Hillary Clinton)
Bloomberg on the Economy: Usually single-source summaries of between 5 and 20 minutes with various economic and investment experts around the world. Alternative is Bloomberg — All Podcasts.
FT Money Show: Weekly 20-minute podcast from the Financial Times
The Economist All Audio: 7 to 15 minutes most days often on single world political events and occasional financial topics. Those who subscribe to the iPad edition of the Economist can also download audio of the entire weekly magazine: good for absorbing world events on long walks or treadmill sessions!
60 Minutes Podcast: Weekly 45-minute full-audio podcast of the famous TV show.
Jim Cramer’s Mad Money; 45-minutes daily in the week: full video of Cramer’s manic but often insightful take on (primarily) the U.S. stock market. This guy is the “anti-indexer” but does sometimes recommend ETFs outside the US market. He’s been preaching diversification and lately has been positive on both gold (the GLD ETF) and Canada broadly.
Motley Fool Money: Weekly audio show just under 40 minutes: excellent wrap-up of the week’s major events in the U.S. stock market, usually with 3 or 4 guests. Good to listen to while exercising on weekends: most recently I listened to it while grocery shopping!
The Disciplined Investor: Weekly hour-long podcast by Andrew Horowitz, usually with special guests.
NPR Planet Money: 20 minutes or so every few days on quirky topics like “why buying a car is so awful”
The Suze Orman Show: Weekly 45-minute full video of Twitter’s most-followed personal finance guru.
The Dave Ramsey Show; 40 minutes but not having listened to this one yet, can’t comment further.
Mostly Money, Mostly Canadian: 20 to 40 minute occasional podcast by Preet Banerjee and the title aptly sums it up. Various guests, including an appearance by myself.
Financial Post: Various audio podcasts from staff writers from Canada’s daily financial newspaper.