Tuesday, October 06, 2009

WBF Economists Speak

The next 2 speakers spoke as economists. Both had a tough message for us. It was like having 2 tough love sessions right after each other.

David Rubenstein spoke quickly - too quickly to try to get everything down. I wish I had a copy of his speakers notes. He spewed tons of statistics - most depressing. Very sobering although he did have some ideas:

"If you don't love what you're doing now, do something else. You've gotta love your career"

"If I had a simple answer, I would be a politician"

"Future will be China, India, Saudi, etc. Emerging markets. You're not thinking about this, you don't have much future."

"Take Entrepreneurial risks. If you’re happy to sit at your desk and not take any risks, you’ll be sitting at your desk for the next 20 years"

"in 1969 (I might have the exact year wrong), 7% of the energy came from renewables. It is now 10%"

Rubenstein is a multi billionaire so he might know a bit about investing. He suggests investing in turn arounds, Energy, Health care, and Natural Resource (especially water)

Jeffrey Sachs, Economist, Director of the Earth Institute spoke next. He is a Columbia professor.

Although he has many claims to fame, one is the book he wrote - The End of Poverty: Economic Possibilities for Our Time. I have not read it yet but do look forward to reading it.

Sachs, like Rubenstein, speaks of economic chaos. The current crisis is a result of a break down in the financial systems. He blames the faulty derivatives for much of the crisis. The US regulatory system has also been broken down.

The climate will be irreversibly damaged within 30-40 years at the current rate. There is a looming water shortage crisis. Our meat based diets are causing huge strains on land use.

He refers to a phenomenal bi-partisan failure. Partly due to the massive lobbying money (in the Billions) spent by the financial institutions in Washington (Health care is the second largest lobby).

His solution is to help the very poor - the developing economies. The solution needs massive action now. He suggests "the good old days" will never come back. We need a new approach.

A review by Stephen of The End of Poverty on Amazon:

Jeffrey Sachs brings incredibly persuasive arguments, backed up by intelligent reasoning and empirical evidence, to convince the reader that change really is possible.

This book should be read by everyone. Sachs goes into great detail explaining the underlying factors behind poverty in different regions of the world and outlines plans on how it can be attacked according to local circumstances. He includes frank criticisms of institutions like the IMF and gives well-deserved credit to the more than 1 billion people surviving on less than $1 a day.

He implores governments of rich countries not just to do more, but to do what they have already promised to do, and shows how it is in everyones interests to help.

This book is not a manifesto for the anti-globalization movement and neither does it unreservedly sing the praise of free trade. It highlights the struggle of the poor and shows what we can do to fix it. It is a book for optimists, but surely it is worth being optimistic if we can really end extreme poverty in the next twenty years.

The book sounds optimistic, unlike most of the message he delivered.

My views:

I always look for answers. I tend to approach challenges with optimism. I do not underestimate the power of entrepreneurism.

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