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2004 — Challenges for the Global Economy

Why did the global economy baffle observers in 2003?

December 29, 2003

Why did the global economy baffle observers in 2003?

If anything, the global economy in 2003 seemed to defy predictions. It did not melt down, but neither did it rise to impressive heights. Economists were divided on whether inflation was looming — while others were concerned about deflation. And while the U.S. economy is still the biggest, many thoughts are turning to China's meteoric rise. Our Read My Lips captures the debate.

“India and the United States — nations that barely interacted 15 years ago — could turn out to be the ideal economic partners for the new century.”

(Steve Hamm, Business Week reporter)

“Thirty percent of all software for Motorola’s latest phones is written in India.”

(Sammy Sana, managing director of Motorola India Electronics)

“We stopped living in silos long ago. We are a global village now — and when we look at geopolitics, there is no part of the world that is immune.”

(Anthony Muh, head of investment in Asia for Citigroup Asset Management)

“Fifty years from now, few of us will be apt to say we work in the U.S. economy or the Japanese economy. We live in the United States or Japan, but we work in a global economy.”

(Lester Thurow, author of “Fortune Favors the Bold”)

“The global economy was always a power game — and currencies are becoming weapons of choice.”

(Hazel Henderson, futurist and economist)

“No one is especially waiting for us. No one is especially going to help us. We ourselves will have to struggle for a place under the economic sun.”

(Russia’s President Vladimir Putin)

“Good morning, Venezuela.”

(Headline in the Russian newspaper Vedomosti, after Russia froze 40% of Yukos Oil’s shares in October.)

“If optimism speaks a language these days, it’s probably Chinese.”

(David Ignatius, Washington Post columnist)

“A symbiotic relationship exists between China and the United States. The latter spends, while the former lends. The United States pursues aggressive monetary easing — while China curbs U.S. inflation. Both sides obtain what they want.”

(Martin Wolf, columnist at The Financial Times)

“The biggest threat to the U.S. economy is not the cheap labor pools of China and India. It’s the spending addicts in the U.S. Congress.”

(Jim McTague, writer for Barron’s)

“Congress is not an ATM.”

(Robert Byrd, U.S. senator (D-WV))

“Spreading globalization has fostered a degree of international flexibility that has raised the probability of a benign resolution to the U.S. current account balance.”

(Alan Greenspan, chairman of the Board of Governors of the Federal Reserve System)

“We are not departing one iota from our strong dollar policy.”

(U.S. Treasury Secretary John Snow)

“The European Central Bank can huff and puff — but what can it do?”

(Analyst at Barclays Capital)

“Inflation is a lot like Elvis. Lots of reported sightings — none confirmed.”

(David Rosenberg, Merrill Lynch’s chief economist)

“Don’t you think it is deflationary when municipalities fire people?”

(Seth Glickenhaus, investment manager)

“Government bonds are an IOU on future tax revenues.”

(Philip Coggan, columnist at the Financial Times)

“The NYSE has always been about as transparent as the Kremlin.”

(Thor Valdmanis, USA Today’s Wall Street reporter)

“Businesses are the strategic center of any civil society. If businesses don’t honor their moral responsibility, who will?”

(U.S. Secretary of Commerce Donald Evans)

“Why are you losing so much money?”

(Chinese Premier Wen Jiabao, speaking to Ford Chairman Bill Ford)

“Will Wal-Mart steal Christmas?”

(Time magazine headline)

“Our biggest challenge is that Japanese people think if it’s too cheap, the quality is bad.”

(Masao Kiuchi, Seiyu president)

“Is Google God?”

(Thomas Friedman, New York Times columnist)

“Am I surprised that job growth still seems very weak? Not one bit. But this, of course, is the difference between economists and real people.”

(Carl B. Weinberg, chief economist at High Frequency Economics)