Take your pick: the free markets are in their death throes, or we are in the middle of the biggest bull market we’ll ever see.
Opposing views from global free-market bear Ian Bremmer and U.S. equities bull Richard Bernstein kicked off the sold-out Investment Management Consultants Association (IMCA) conference in New York on Monday.
Eurasia Group founder Ian Bremmer started the morning’s events on day one of the two-day conference with his gloomy prediction that the future of the free markets is threatened by state capitalism of the sort used by the political leadership in China, Russia and the Arab monarchies of the Persian Gulf. Such authoritarian states are now successfully using markets to create wealth that helps them achieve political goals, said Bremmer, author of The End of the Free Market: Who Wins the War Between States and Corporations?
How has the United States responded? By investing in state-owned companies’ enormous investment funds, which have become vitally important sources of capital for Western governments and banks weakened by financial crisis, Bremmer said.
As for banks’ position within the U.S., Bremmer pointed out that “bankers don’t look like the rest of the U.S.,” and the forces of globalization are changing the political landscape at home—which explains why President Barack Obama got re-elected.
U.S. Changing as Fast as Rest of World
“The world is changing so much that Americans are much more likely to vote for people who look different from us,” said Bremmer (left), who teaches at Columbia University in New York. He added that the greatest challenge for American society is the growing gap between rich and poor.
As an antidote to Bremmer’s gloom, IMCA board director Tony Davidow introduced Bernstein with the guarantee that he would take a more positive view of the world—“and let’s face it, we can all use some good news here,” Davidow said.