Munk Debate on the North American Economy

MUNK DEBATE ON THE NORTH AMERICAN ECONOMY Rudyard Griffiths: Ladies and gentlemen, welcome to Toronto, Canada, to Roy Thomson Hall for the Munk Debate on the North American economy. My name is Rudyard Griffiths, I’m the co-organizer of this debate series with my colleague Patrick Luciani. It is my privilege to once again be your moderator. I want to start your evening off by welcoming the over 4000 people who’ve logged onto the internet right now to watch this debate live on BNN.ca and the Globe and Mail.com. Hello also to the North American- wide audience that’s tuning in to the debate in Canada on the Business News Network, on CBC-Radio’s Ideas, and on CPAC and throughout the continental United States on C-SPAN. Finally, I’d like to say hello to the 2700 people that have filled Roy Thomson Hall to capacity, for the third time in a row, for a Munk Debate. Those of us responsible for organizing the series would like to claim credit for coming up with the topics and selecting the presenters that sold out this hall in a little under 72 hours. But don’t worry, we know better. Let’s face it everybody, we’re here for one simple reason, one simple fact. We’re worried. We’re worried about the impact of the European debt crisis on our own economic recovery; we’re concerned about the slow pace of our recovery, the slow pace of job creation and economic growth, fully three years after the financial crisis. I’ll bet some of you in this audience are starting to worry at a more fundamental level: have we seen the prosperity that we’ve enjoyed in North America, incredible prosperity for going on five decades, have we seen this come to an end? Are this continent’s best days now behind it instead of ahead of it? As vexing as these economic concerns are, they need to be set against one simple fact: we are all North Americans. We live and work in one of the most open, prosperous and technologically advanced regions of the world. You know, each of us has the ability to live in a society that enjoys an incredibly resilient workforce, an incredible capacity for innovation, and as a result we have an economy that is envied by developed and developing nations alike. Ladies and gentlemen, for your organizers, this is the crux of tonight’s debate. Can the longstanding and considerable strengths of our economy adapt to the new challenges it faces both internally and internationally, thereby powering a new era of growth and prosperity? Or, are the economic anxieties that we are feeling today somehow predictive of the future, thereby making this evening’s motion – we’ll have that on the screen now – Be it resolved that North America faces a Japan-style era of high unemployment and slow growth, an accurate forecast of our common economic future? In a moment I’m going to introduce the roster of world-class presenters that we’ve assembled for you to weigh in on this all- important debate. But let me first recognize the two people who alone are responsible for staging these debates. It’s really thanks to their generosity and their public-spiritedness that we are able to bring to Toronto some of the brightest thinkers, some of the sharpest minds to weigh in on the big questions, the big problems facing Canada and the world. So please join me in a round of appreciation and applause for our hosts tonight, Peter and Melanie Munk. Bravo, you two. Now the moment you’ve all been waiting for. We’ve got our resolution before us; let’s get our debaters out onto centre-stage. Please join me in a big round of applause for the two debaters arguing for tonight’s motion, Nobel laureate Paul Krugman and David Rosenberg. And now let’s get their opponents out onto the stage, arguing against the motion; ladies and gentlemen, please welcome Ian Bremmer and Lawrence Summers. Let me briefly introduce our debaters to this audience. Paul Krugman is the 2008 Nobel laureate for Economic Sciences. His highly influential New York Times column is a must-read for anyone interested in U.S. politics and economics. In addition to his massive body of scholarly work – 20 books and 200 papers, but who’s counting – he is the author of numerous best-selling books, including The Return of Depression Economics and the Crisis of 2008. Equally important to us tonight, Dr. Krugman has a longstanding interest and policy engagement with the causes and consequences of Japan’s lost decades. Ladies and gentlemen, Paul Krugman. Canadian David Rosenberg definitely has the hometown advantage coming into tonight’s debate. He is the ubiquitous chief economist and strategist of the Toronto-based wealth management firm, Gluskin Sheff and Associates. Prior to joining Gluskin Sheff, David was the chief North American economist at Bank of North America, and since David is too modest to say it, I will: he is one of only a handful of economists to predict both the anaemic pace of the post-crisis recovery and the economic reversal in stock valuations. Ladies and gentlemen, David Rosenberg. Now, let me introduce our con debaters. Ian Bremmer is an acclaimed author and the founder and head of the Eurasia Group, the world’s leading global risk research and consulting firm. Two of his internationally best-selling books are especially important to tonight’s debate: the J Curve: A new way to Understand why Nations Rise and Fall, and The End of the Free Market: Who wins the War between States and Corporations? Ian writes a regular column on geopolitics for the Financial Times of London and the influential “The Call” blog for Foreign Affairs. Ladies and gentlemen, Ian Bremmer. Our final debater tonight was hailed by the Globe and Mail this weekend as being to the economics profession what previous Munk debater Henry Kissinger is to the practice of international diplomacy. He is one of North America’s most respected economists, having published widely in the areas of public finance and macro-economics. His public service career spans a variety of posts, as Chief Economist to the World Bank, U.S. Treasury Secretary under Bill Clinton, the President of Harvard – yes, we saw that movie together – and most recently, the head of Obama’s influential National Economic Council. Ladies and gentlemen, Lawrence Summers. For the benefit of our debaters and first-time attendees and all of you watching online, let me briefly run down how the next hour and a half is going to unfold. Each debater has been given six minutes for opening statements to make their case for and against the motion before this house. And speaking of timing, I’m going to need the help of this group, this audience, to make sure that our debaters stay on time. So when you see the clock on the screen count down to zero, please join me in a loud round of applause and that will ensure that we move through this evening quickly. After opening statements, we’re going to have our debaters challenge each other’s key arguments and tackle pointed questions from some notable people in the audience. Our debate will conclude with short closing statements from each debater – this time only three minutes each – and a second audience vote on the motion. Speaking of votes, let’s find out now for the first time how this audience of 2700 people voted on the motion going into this evening’s debate, Be it resolved North America faces a Japan-style era of high unemployment and slow growth. We can see those numbers up on the screen: pro-55%, a somewhat pessimistic group, con-25% and undecided is at 20%. The second question we asked you this evening was depending on what you hear during the debate are you open to changing your vote? How much could opinion in this room shift over the next hour and a half. Wow – 95%! This is an indecisive audience. Ninety-five percent of you could change your vote. Only 5% of you are committed. Ladies and gentlemen, we officially have a debate on our hands. We’ve agreed on the order of speakers with our debaters, and Mr. Krugman, I’m going to start with you. You have six minutes, sir. Paul Krugman: I hope you’ll let me start with a judgment. If 95% of the audience says they are open-minded, at least 50% are lying. Also, I’ve been asked if this is about North America. It’s all going to be about the United States. I apologize for that. Canada doesn’t really fit in for two reasons. One, it’s small and second, it has not messed up enough to be interesting, so this is going to be a U.S.-centred discussion. With that, let me say I actually find it quite strange, at this point, that people are still wondering whether things can go as badly in the United States as they have in Japan; because the fact is that things in the United States have already gotten much, much worse than they ever did in Japan. It’s actually quite startling to look back on what Japan’s troubles are, and they’re real, but Japan never had the kind of drastic slump in employment that has afflicted the United States. It never had a decline in real GDP comparable to what the United States is experiencing until the world as a whole went into crisis in 2008.

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