we’ve just had the u.s. midterm
elections again very very interesting
and it’s populism in action and you know
this is something that I think has
become extremely interesting so what I
want you to do now I want if you can is
tell me what’s all of these people on
this on this slide what do they have in
common does anyone know any answers
basically they are all what are termed
populist politicians so of course you
have the most obvious one on there and
the most recognizable is President Trump
but if you go across all of that slide
there are politicians from the extreme
left and the extreme right you know
you’ve got for example you know Oh Diwan
in turkey use and extreme politician now
you have even in the Philippines duterte
you have Italian five-star leadership
the Northern League and then you have
builders in in the Dutch politician you
have marine lepen extreme right French
politician there are no Modi Prime
Minister of India also a nationalist
politician and Bernie Sanders on the
extreme left in the US so you can see
that populism isn’t just extreme right
or extreme left it’s actually both but
what we’re seeing at the moment the tide
of populism certainly seems to be
shifting towards the extreme right so
you’re probably asking what’s populism
what does it mean yes these are all
strong leaders we hear about these
people Trump of course we hear about the
most well what is populism a dictionary
definition of populism is that it
supports the concerns of ordinary people
well that sounds all right that’s pretty
innocuous ordinary people it’s good to
have politicians that support ordinary
people but what’s happened is that a lot
of population policy shion’s have
hijacked the term in a sense to say that
they are embodying this populist spirit
it’s them against us
it’s the populist the people against the
elite it’s these elite politicians that
need to be taken away and we
to work for the people and that’s these
are the words of people like President
Trump if you look at that last quote on
a slide we are transferring power from
Washington DC and given it back to you
the people well he said this on his
ignore inauguration in November 2016 and
since then it’s always been about giving
power back to the people
the reason I’ve got a picture of Bane
there by the way from Batman is actually
Bane kind of said a similar thing he
said let’s give power from people of
Gotham to the people but anyway clearly
it’s a very very populist tone and we
see this and a populist leader is
essentially it’s a quintessential form
of populist mobilization these are
leaders that say they act for the people
in an extreme way whether it’s extreme
left or extreme right
the rise of population why and how did
populism gain such a foothold the
reality is actually there’s a populist
party in the u.s. in the 1880s so it’s
populism has been around for a very very
very long time
but only in the last few years as
populism really intensified and
accelerated you could argue the election
of President Trump in 2016 and brexit
are both consequences of populism
it’s a disaffection with elitist and and
many people see these politicians who
have lost touch with the people as
elitist pop politicians it’s a
resentment of immigration the amount of
anti-immigrant rhetoric that we see
nowadays we haven’t seen for years and
years
look at this caravan of immigrants
coming from Central America towards and
through Mexico and ultimately trying to
get into the US and a lot of the
rhetoric against this train of
immigrants coming through has been
really quite aggressive and used as a
tactic in the midterm elections in the
u.s. to push the right wing message in
in in the US political spectrum
it’s a resentment of immigration and
also it’s in income inequality we’ve
seen
Automation technology trade
globalization these are things that have
happened over the last several years
probably several decades but the reality
is that it’s left a lot of people
untouched it may have helped some it may
have helped people get out of poverty
overall globalization you could argue as
an economist does help global growth it
helps to bring the world out of poverty
but there are elements of societies that
have not benefited from this and that
have seen a divergence between in some
cases of rich and poor multiculturalism
and globalism are two also two causes
that have led to an increase in populism
the other thing that has been a
particular cause in recent years is the
financial crisis in 2008 we had a
massive financial crisis it caused some
banks to go under it caused recessions
in many countries it caused market
collapses across the world and it had a
significant impact on wealth but did it
hit the bankers did it hit the financial
sector yes some banks went out of
business
yes you know some banks merged but the
reality was that the massive economic
impact of the economic crisis and
financial crisis was really on the
people and this had a huge impact in
driving populism even more stronger so
the consequences have been the election
of populist and even alpha torreón of
Victorian governments and leaders across
the world and you could argue that you
know President Trump is again an
elements of this its policies advocating
trade protectionism what we’re seeing
and it’s pretty important for Asia by
the way because Asia is a trading nation
Singapore actually 200 percent of
Singapore’s GDP or over 200 percent is
trade so it’s very very important if you
suddenly start to see restrictions to
trade barriers to trade it has a massive
impact on growth and on certainly on the
Asian region anti-globalization again
restrictions on immigration that’s some
again we’re seeing all over the place
and if you remember that first slide I
showed you with all these populist
leaders they’re just a handful of the
populist leaders that have been elected
globally in the last few years I could
have added several more I could have
added podemos in Spain a very very
left-wing party I could have added in
Austria part of the government is a
right-wing party in Poland very
similarly in fact today in Poland there
was supposed to be a march of 60,000
extreme right-wing nationalists not just
from Poland but all over the world
getting together again anti-immigration
anti trade but very very very very
right-wing elements of society that was
actually stopped at the last minute by
the mayor of Warsaw but again you can
see that this is something that’s
building up across the world not just in
a few countries it’s something we have
to live with in reality that’s happening
across the world again growing
resistance of societies to other races
and religions and belief systems you
know somewhere again sitting in
Singapore where you have a multicultural
society it’s not obvious that that’s the
case in the rest of the world where you
seeing such a massive shift in
particular to the extreme right and it’s
been used in elections you know I
mentioned the midterm elections a lot of
people thought that the Republican Party
or certainly President Trump standing
would be lowered several notches by the
midterm elections that really wasn’t the
case it wasn’t a blue wave of Democrats
populist politicians actually did well
in the US Senate in particular even if
the Democrats won the highest of
Republicans so you can see that sorry
House of Representatives so you can see
populism is still very much alive and
well and pushing even stronger so what’s
the economic fallout of populism there’s
definitely a sense of more nationalism
less integration in society as I
mentioned restrictions on immigration
free movement of labor goods and
services all of this actually hurts
growth you know I’ve my economic studies
have shown clearly that you know
globalization is good for growth trade
should be good for growth it lowers
costs in countries it reduces wages
because you have free movement between
countries of labor you have again higher
productivity because you can specialize
one country can specialize in certain
goods another country can specialize in
another good and global trade will grow
but when you close off the barriers to
trade that’s not necessarily the case
you suddenly drive wages higher which is
good you might enjoy higher wages but it
reduces productivity ultimately it hurts
companies profits and ultimately filters
down to us the people trade driven
economies as I mentioned a particularly
at risk and again I would say that Asia
as a region globally is one of the most
trade driven regions globally so you
know we are going to feel this as a
region in the next few years and you
know you probably hear a lot in the news
about trade tariffs this is the US
administration putting tariffs against
Chinese exports
they’ve already levied significant
tariffs on China’s exports in other
words a u.s. importer has to pay more
money to import goods from China that
could even escalate even further as we
go into next year and again this trade
war is escalating it’s not improving and
again you can see that this is another
consequence of populism
another another issue is inflation
because if you are raising prices on
goods that come into your country we
will feel that in our pockets we have to
pay more for goods we have to pay more
for food we have to pay more for
groceries we have to pay more for
televisions and everything else that we
buy on a daily basis so initially it
looks great you know I’ve got more money
in my pocket I have higher wages but
ultimately those wages disappear when
you’re paying more for goods and it
costs more to produce and it hurts the
economies that we live in and ultimately
that hurts all of us and I put on a
slide it contributes this Diocletian
what stagflation stagflation is actually
lower growth and higher inflation that’s
a very very bad
and combination for economies to have
that lower growth higher inflation it
hurts us again so ultimately you know
all of this means short-term gain
long-term pain as I said we all like tax
cuts I would love to pay less taxes but
ultimately less taxes will only be a
short-term boost to growth in fact in
the u.s. the administration cut taxes
the US economy is flying it’s doing
really well but we’re looking at an
economy that ultimately is going to next
year might to slow down quite sharply
because these tax cuts are only a
one-off they don’t help from a long-term
perspective unless investment picks up
on productivity growth picks up and
that’s something that’s not been
happening higher prices for goods result
in higher import bills wider trade and
fiscal deficits a fiscal deficit is
effectively when the government is
spending more than it’s receiving from
taxes again it’s not good for an economy
it’s not good for our future generations
because ultimately to pay for that
deficit you have to issue more debt to
issue more debt you have to pay for that
debt ultimately you raise taxes and it’s
a vicious cycle and ultimately
generations going forward will have to
pay for the higher levels of debt that
have been issued so our children and our
children’s children and our children’s
children children will be paying more
and more for this debt issuance because
of these higher fiscal deficit financial
markets so if you buy equities stock
markets have been doing really well in
the US again because of these tax cuts
so they do well because of that but it’s
a sugar high once a sugar high
disappears things start to look much
more negative and then growth starts to
come under more pressure the rest again
we talk about reduced immigration you
know there are it’s not surprising to
hear about immigration pressures you
know people worry about their jobs at a
time of crisis you don’t want to hear
about foreign labor coming in and taking
your job right and that’s why you’ve had
this immigration pressures but reduce
immigration ultimately means you reduce
the labor force when you have an aging
population as
countries in the world do you need
immigration you need younger people to
push up the labor force again otherwise
you have an increased dependency ratio
there’s less people working for the
amount of people who are getting older
and so those people have to either work
harder and pay more tax or people have
to die more quickly but ultimately it’s
not a good thing having reduced
immigration in that sense so how does
this work from a domino effect
perspective now those leaders that I
showed at the beginning these aren’t a
few these are many this is something
that is not going to disappear it’s not
a fad populism is something that can is
continuing and it’s only growing and you
know as I said the midterm elections in
the u.s. to me didn’t show an end to
populism all these elections globally
aren’t showing an end to populism in
fact it’s a very significant political
force and we have to live with it
because I don’t think it’s gonna die
quickly so how do you live with populism
it could lose momentum now that’s
interesting how does it lose momentum
well if individuals are able to cope
with technological change that’s helpful
because if you give people if you
empower people to help with the
technological transfer they feel less
alienated they feel less pressured they
feel less against immigrants or they
feel less against the government’s who
are trying to help inequalities can be
addressed both income and social
inequalities and again it could be down
to the government because as I mentioned
earlier one of the things that’s
happened is people have felt that the
government’s have shifted away from them
that there’s been a big disassociation
between governments and the people the
government’s need to get closer they
need to become more accountable to their
people how do you have a billionaire
president in the US who many people in
the US feel that is closer to them than
the average politician it shows you you
have to talk like the people you have to
be like the people and you have to
connect like the people so you have to
become more accountable you focused on
policies that general
inclusive growth and rising wages
reassessing income and tax policies are
important and finally you got to keep an
open mind all of us you’ve gotta allow
people to speak their mind and you’ve
got to talk to people in the way that
they can understand not above people and
if you’re open and you are now allow
free speech you allow people to say
their concerns and that they feel that
you’re listening to their concerns the
need for populism extreme politicians
around the world may no longer be necessary
elections again very very interesting
and it’s populism in action and you know
this is something that I think has
become extremely interesting so what I
want you to do now I want if you can is
tell me what’s all of these people on
this on this slide what do they have in
common does anyone know any answers
basically they are all what are termed
populist politicians so of course you
have the most obvious one on there and
the most recognizable is President Trump
but if you go across all of that slide
there are politicians from the extreme
left and the extreme right you know
you’ve got for example you know Oh Diwan
in turkey use and extreme politician now
you have even in the Philippines duterte
you have Italian five-star leadership
the Northern League and then you have
builders in in the Dutch politician you
have marine lepen extreme right French
politician there are no Modi Prime
Minister of India also a nationalist
politician and Bernie Sanders on the
extreme left in the US so you can see
that populism isn’t just extreme right
or extreme left it’s actually both but
what we’re seeing at the moment the tide
of populism certainly seems to be
shifting towards the extreme right so
you’re probably asking what’s populism
what does it mean yes these are all
strong leaders we hear about these
people Trump of course we hear about the
most well what is populism a dictionary
definition of populism is that it
supports the concerns of ordinary people
well that sounds all right that’s pretty
innocuous ordinary people it’s good to
have politicians that support ordinary
people but what’s happened is that a lot
of population policy shion’s have
hijacked the term in a sense to say that
they are embodying this populist spirit
it’s them against us
it’s the populist the people against the
elite it’s these elite politicians that
need to be taken away and we
to work for the people and that’s these
are the words of people like President
Trump if you look at that last quote on
a slide we are transferring power from
Washington DC and given it back to you
the people well he said this on his
ignore inauguration in November 2016 and
since then it’s always been about giving
power back to the people
the reason I’ve got a picture of Bane
there by the way from Batman is actually
Bane kind of said a similar thing he
said let’s give power from people of
Gotham to the people but anyway clearly
it’s a very very populist tone and we
see this and a populist leader is
essentially it’s a quintessential form
of populist mobilization these are
leaders that say they act for the people
in an extreme way whether it’s extreme
left or extreme right
the rise of population why and how did
populism gain such a foothold the
reality is actually there’s a populist
party in the u.s. in the 1880s so it’s
populism has been around for a very very
very long time
but only in the last few years as
populism really intensified and
accelerated you could argue the election
of President Trump in 2016 and brexit
are both consequences of populism
it’s a disaffection with elitist and and
many people see these politicians who
have lost touch with the people as
elitist pop politicians it’s a
resentment of immigration the amount of
anti-immigrant rhetoric that we see
nowadays we haven’t seen for years and
years
look at this caravan of immigrants
coming from Central America towards and
through Mexico and ultimately trying to
get into the US and a lot of the
rhetoric against this train of
immigrants coming through has been
really quite aggressive and used as a
tactic in the midterm elections in the
u.s. to push the right wing message in
in in the US political spectrum
it’s a resentment of immigration and
also it’s in income inequality we’ve
seen
Automation technology trade
globalization these are things that have
happened over the last several years
probably several decades but the reality
is that it’s left a lot of people
untouched it may have helped some it may
have helped people get out of poverty
overall globalization you could argue as
an economist does help global growth it
helps to bring the world out of poverty
but there are elements of societies that
have not benefited from this and that
have seen a divergence between in some
cases of rich and poor multiculturalism
and globalism are two also two causes
that have led to an increase in populism
the other thing that has been a
particular cause in recent years is the
financial crisis in 2008 we had a
massive financial crisis it caused some
banks to go under it caused recessions
in many countries it caused market
collapses across the world and it had a
significant impact on wealth but did it
hit the bankers did it hit the financial
sector yes some banks went out of
business
yes you know some banks merged but the
reality was that the massive economic
impact of the economic crisis and
financial crisis was really on the
people and this had a huge impact in
driving populism even more stronger so
the consequences have been the election
of populist and even alpha torreón of
Victorian governments and leaders across
the world and you could argue that you
know President Trump is again an
elements of this its policies advocating
trade protectionism what we’re seeing
and it’s pretty important for Asia by
the way because Asia is a trading nation
Singapore actually 200 percent of
Singapore’s GDP or over 200 percent is
trade so it’s very very important if you
suddenly start to see restrictions to
trade barriers to trade it has a massive
impact on growth and on certainly on the
Asian region anti-globalization again
restrictions on immigration that’s some
again we’re seeing all over the place
and if you remember that first slide I
showed you with all these populist
leaders they’re just a handful of the
populist leaders that have been elected
globally in the last few years I could
have added several more I could have
added podemos in Spain a very very
left-wing party I could have added in
Austria part of the government is a
right-wing party in Poland very
similarly in fact today in Poland there
was supposed to be a march of 60,000
extreme right-wing nationalists not just
from Poland but all over the world
getting together again anti-immigration
anti trade but very very very very
right-wing elements of society that was
actually stopped at the last minute by
the mayor of Warsaw but again you can
see that this is something that’s
building up across the world not just in
a few countries it’s something we have
to live with in reality that’s happening
across the world again growing
resistance of societies to other races
and religions and belief systems you
know somewhere again sitting in
Singapore where you have a multicultural
society it’s not obvious that that’s the
case in the rest of the world where you
seeing such a massive shift in
particular to the extreme right and it’s
been used in elections you know I
mentioned the midterm elections a lot of
people thought that the Republican Party
or certainly President Trump standing
would be lowered several notches by the
midterm elections that really wasn’t the
case it wasn’t a blue wave of Democrats
populist politicians actually did well
in the US Senate in particular even if
the Democrats won the highest of
Republicans so you can see that sorry
House of Representatives so you can see
populism is still very much alive and
well and pushing even stronger so what’s
the economic fallout of populism there’s
definitely a sense of more nationalism
less integration in society as I
mentioned restrictions on immigration
free movement of labor goods and
services all of this actually hurts
growth you know I’ve my economic studies
have shown clearly that you know
globalization is good for growth trade
should be good for growth it lowers
costs in countries it reduces wages
because you have free movement between
countries of labor you have again higher
productivity because you can specialize
one country can specialize in certain
goods another country can specialize in
another good and global trade will grow
but when you close off the barriers to
trade that’s not necessarily the case
you suddenly drive wages higher which is
good you might enjoy higher wages but it
reduces productivity ultimately it hurts
companies profits and ultimately filters
down to us the people trade driven
economies as I mentioned a particularly
at risk and again I would say that Asia
as a region globally is one of the most
trade driven regions globally so you
know we are going to feel this as a
region in the next few years and you
know you probably hear a lot in the news
about trade tariffs this is the US
administration putting tariffs against
Chinese exports
they’ve already levied significant
tariffs on China’s exports in other
words a u.s. importer has to pay more
money to import goods from China that
could even escalate even further as we
go into next year and again this trade
war is escalating it’s not improving and
again you can see that this is another
consequence of populism
another another issue is inflation
because if you are raising prices on
goods that come into your country we
will feel that in our pockets we have to
pay more for goods we have to pay more
for food we have to pay more for
groceries we have to pay more for
televisions and everything else that we
buy on a daily basis so initially it
looks great you know I’ve got more money
in my pocket I have higher wages but
ultimately those wages disappear when
you’re paying more for goods and it
costs more to produce and it hurts the
economies that we live in and ultimately
that hurts all of us and I put on a
slide it contributes this Diocletian
what stagflation stagflation is actually
lower growth and higher inflation that’s
a very very bad
and combination for economies to have
that lower growth higher inflation it
hurts us again so ultimately you know
all of this means short-term gain
long-term pain as I said we all like tax
cuts I would love to pay less taxes but
ultimately less taxes will only be a
short-term boost to growth in fact in
the u.s. the administration cut taxes
the US economy is flying it’s doing
really well but we’re looking at an
economy that ultimately is going to next
year might to slow down quite sharply
because these tax cuts are only a
one-off they don’t help from a long-term
perspective unless investment picks up
on productivity growth picks up and
that’s something that’s not been
happening higher prices for goods result
in higher import bills wider trade and
fiscal deficits a fiscal deficit is
effectively when the government is
spending more than it’s receiving from
taxes again it’s not good for an economy
it’s not good for our future generations
because ultimately to pay for that
deficit you have to issue more debt to
issue more debt you have to pay for that
debt ultimately you raise taxes and it’s
a vicious cycle and ultimately
generations going forward will have to
pay for the higher levels of debt that
have been issued so our children and our
children’s children and our children’s
children children will be paying more
and more for this debt issuance because
of these higher fiscal deficit financial
markets so if you buy equities stock
markets have been doing really well in
the US again because of these tax cuts
so they do well because of that but it’s
a sugar high once a sugar high
disappears things start to look much
more negative and then growth starts to
come under more pressure the rest again
we talk about reduced immigration you
know there are it’s not surprising to
hear about immigration pressures you
know people worry about their jobs at a
time of crisis you don’t want to hear
about foreign labor coming in and taking
your job right and that’s why you’ve had
this immigration pressures but reduce
immigration ultimately means you reduce
the labor force when you have an aging
population as
countries in the world do you need
immigration you need younger people to
push up the labor force again otherwise
you have an increased dependency ratio
there’s less people working for the
amount of people who are getting older
and so those people have to either work
harder and pay more tax or people have
to die more quickly but ultimately it’s
not a good thing having reduced
immigration in that sense so how does
this work from a domino effect
perspective now those leaders that I
showed at the beginning these aren’t a
few these are many this is something
that is not going to disappear it’s not
a fad populism is something that can is
continuing and it’s only growing and you
know as I said the midterm elections in
the u.s. to me didn’t show an end to
populism all these elections globally
aren’t showing an end to populism in
fact it’s a very significant political
force and we have to live with it
because I don’t think it’s gonna die
quickly so how do you live with populism
it could lose momentum now that’s
interesting how does it lose momentum
well if individuals are able to cope
with technological change that’s helpful
because if you give people if you
empower people to help with the
technological transfer they feel less
alienated they feel less pressured they
feel less against immigrants or they
feel less against the government’s who
are trying to help inequalities can be
addressed both income and social
inequalities and again it could be down
to the government because as I mentioned
earlier one of the things that’s
happened is people have felt that the
government’s have shifted away from them
that there’s been a big disassociation
between governments and the people the
government’s need to get closer they
need to become more accountable to their
people how do you have a billionaire
president in the US who many people in
the US feel that is closer to them than
the average politician it shows you you
have to talk like the people you have to
be like the people and you have to
connect like the people so you have to
become more accountable you focused on
policies that general
inclusive growth and rising wages
reassessing income and tax policies are
important and finally you got to keep an
open mind all of us you’ve gotta allow
people to speak their mind and you’ve
got to talk to people in the way that
they can understand not above people and
if you’re open and you are now allow
free speech you allow people to say
their concerns and that they feel that
you’re listening to their concerns the
need for populism extreme politicians
around the world may no longer be necessary
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