Ian Bremmer: Silver Linings in the COVID-19 Pandemic
This article is based on a presentation from John Mauldin’s 2020 Virtual Strategic Investment Conference, which is being held from May 11 to 21. To register for this conference, click here. The Strategic Investment Conference was just approved by CIMA and CFP for 14 hours of continuing education credits.
On May 18, at approximately 3:40pm ET, this article was corrected. In the followiing sentence, the reference to Iran was changed to India: "We produce those people. When we don't produce them, when they come from other countries like India, they want to come to the United States. I don't see that changing.”
Political scientist Ian Bremmer says there are silver linings in the “depression” brought on by the COVID-19 pandemic. In fact, he said, the world may have needed this crisis to happen.
He spoke on May 15 at John Mauldin’s Virtual Strategic Investment Conference 2020.
Bremmer, president and founder of Eurasia Group, a global political risk research and consulting firm, said it’s very clear that the crisis will be a lot worse than the Great Recession in the scope of its impact and timeframe. “Until we get a vaccine, we’re not coming back to the new normal. And you know, when you think about what a depression is – it's global, it's greater in duration and larger in scale than a recession –this hits all those boxes for me,” he said.
A lot of people don’t want to call it a depression, Bremmer said, because they think back on the Great Depression of the 1930s and they say today’s environment doesn’t feel like that. “But, in part, that's because 100 years ago, we had a lot less wealth. … Even in middle-income economies, the new middle class is today wealthier at an absolute level than the middle class in the U.S. at the time the Great Depression. So our resilience, our ability to respond to that kind of shock and contraction today is far greater than it was. And that is a silver lining.”
Another silver lining is that it takes a crisis of this magnitude to correct major structural issues that are standing in the way of world progress, he said. The 2008-09 Great Recession and 9-11 were not powerful enough to change them, he added.
“Eight years of Obama and three years of Trump, and inequality in the U.S. is still growing. Anti-establishment sentiment, populism, is still growing in Europe and even in some of the middle-income democracies around the world because the crises that we had weren't large enough to make us respond to them,” Bremmer said. “This time around, the crisis is a lot bigger, and we have the potential to actually respond to some of these broader structural issues.”