Fareed Zakaria GPS – CNN 05-17-15

Salient to Investors:

Fareed Zakaria said:

  • Globalization and the information revolution is unstoppable. China cannot be stopped from growing and trading, and Africa from deepening its integration into the global system.
  • The average tariff in the developed world is 3%. China’s average tariff is under 10% versus 40% in 1985. It’s been too late to compete against low-wage countries for decades.
  • Mexico is a core component of the world’s most vibrant regional bloc, chiefly thanks to NAFTA.
  • In voter turnout. America ranks 31 out of 34 OECD developed countries according to PEW research, while only 65% of the voting population is registered.

Bill Gates said:

  • The US economy is very strong and GDP growth is better than it seems, because it does not capture massive improvements that take place, especially digital innovation, including services such as listening to music, finding videos.
  • The dollar is stronger than it should be which holds back export growth.
  • The middle-class lifestyle has immeasurably improved since 20 years ago – comparisons overstate the lack of progress. The ability to read books, find information, contact friends is not reflected in the equivalent income levels.
  • There is no direct connection between innovation and tax rates. The highest economic growth decade was the 1960s when income tax rates were 90 percent.
  • Corporate profit as a percent of US GDP is down to 2%.
  • Water shortage is about the cost of energy.  Desalination is very expensive and energy intense and so would benefit from any breakthroughs in energy.
  • Solar is still not competitive with natural gas, electricity production. We will only be able to convert the energy system to a zero CO2 system through big innovation in storage and reducing costs. Middle-income countries won’t pay a huge premium for their energy.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

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