Bill Rhodes and Alan Blinder: Prognosis for the World Economy
NEW YORK, March 1, 2012 — In a wide-ranging discussion centered on the global financial crisis, Bill Rhodes (Asia Society Trustee, former Vice Chair of Citigroup and author of the new book Banker to the World) and Alan Blinder (former Vice Chair of the Federal Reserve) examined European economies, China's economic successes and shortcomings and its potential effect on the U.S. and world economies.
Referring to the common misconception that the biggest threat to America's economy is the cost of oil, Blinder jokingly stated, "If this comes out of the mouth of Newt Gingrich, it sounds like a big deal, all caused by Barack Obama. But the truth is none of it was caused by Barack Obama." Blinder affirmed instead that the potential collapse of Euro Zone is "the biggest hazard to the U.S. economy."
Rhodes, examining China's upcoming leadership transition in 2012, commented, "China has its problems… the whole pollution situation has gotten way out of hand in China, both with food and water." Rhodes also pointed out China's slower-than-anticipated economic growth relative to its population size, adding, "China is still overly dependent on its export base. China has to move more rapidly on a consumer-based economy."
At the same time, Rhodes did concede that the challenges China faces as an newly-emergent power are much different from those it dealt with in years past. He also commended China in becoming the second-fastest growing economy behind the U.S., surpassing Japan, making them, as World Bank President Robert Zoellick noted, "a stakeholder."
Reported by Evan Hamzah
Watch highlights of the Rhodes and Blinder talk below (7 min., 15 sec.).
Banker to the World is now available in Japanese, Chinese and Korean.