Global Change May Drive Agendas In US, China
Global Politics May Drive Second-Term Agenda
It is likely that some of the most senior faces leading Barack Obama’s foreign and economic policy will change in the coming months, as is generally the case in a president’s second term. The course of the second term, however, may be determined more by world events and emerging nations than by the individuals in those roles, says Philip Stephens in the Financial Times.
“The rest of the world will not wait on budget talks in Washington. The pace of global change has never been so tumultuous. Whether it’s the political awakening in the Middle East, a new leadership in China or austerity politics in Europe, it is a fair bet that many of today’s assumptions will be overturned during Mr Obama’s second term. There are some things he cannot change. US power is increasingly contested,” asserts Stephens.
Will US Encounter A Recession In 2013?
Jeff Cox of CNBC spoke with several analysts who say the possibility of a recession in 2013 is not out of consideration. One analyst notes that while the economy in the late 1980s was strong enough to withstand the stock market crash, and, in the late 1990s, strong enough to weather the storm of the Asian financial crisis, today’s lackluster 2 percent growth may be too weak to cope with Hurricane Sandy, the fiscal cliff, and global crises.
However, blogger Jeff Miller cautions against fully subscribing to that notion.
Congressional Budget Office Weighs In On Fiscal Cliff
The Congressional Budget Office released an analysis of the impact of fiscal tightening and determined that if all the fiscal cliff tightening occurs “real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013. This reflects a decline in the first half of the year and renewed growth at a modest pace later in the year.
After next year, by the agency’s estimates, economic growth will pick up, and the labor market will strengthen, returning output to its potential level and shrinking the unemployment rate to 5.5 percent by 2018.
In the wake of its own vote, albeit quite different from America’s elections, China’s own leadership is preparing to deal with a changing world.
Hu Jintao, China’s Communist Party leader, according to the New York Times, told members of his party that the world and “the party are continuing to undergo profound changes. We are confronting unprecedented development opportunities and challenges. The gap between rich and poor is growing.”
Hu is facing repeated calls from within China’s academia and economists to move toward a greater liberalization of its economy.