Seven weeks of travel in the past ten weeks spread across three trips to the UK & France, within Colombia, and 9 days in New York, has left lasting impressions on the current differences in outlook and sentiment in the world today.
The hot button issue everywhere is the rising cost of living, but each place is approaching the challenge in a starkly different manner.
Colombia recently followed suit with much of the rest of Latin America and elected a left wing government into office, the first true left wing government in Colombia’s history. The region was devastated economically during the global pandemic and the existing extreme inequality worsened even further. A strong economic rebound has ensued, but Colombia’s populace rejected the status quo candidate and June’s presidential runoff was ultimately won by the Bernie Sanders-type politician in Gustavo Petro over the Trump-esque candidate, Rodolfo. It remains to be seen how much of his agenda Petro can enact, but there is an excitement amongst my personal Colombian friend group that real change is coming for the better. I am hopeful that Petro’s presidency can bring a bit of the magic X factor that I felt in Washington D.C. while President Obama was in the White House.
That said, Colombia’s emerging middle class, which includes my 20 employees, are still struggling with rising food and rent costs, a global problem exacerbated by the peso’s 10% year to date depreciation against the dollar (and 33% depreciation since the beginning of 2020). There are some odd shortages of products like sugar as market forces lead to Colombia exporting more to countries that will pay more to ensure supply. But there is no state of panic here – this current crisis is a fraction of how bad it was in the pandemic, with no social security net – and the government finances have improved somewhat with the price of oil, while many farmers of cash crops or export crops like coffee, tobacco, and flowers are benefitting from the depreciated peso. Colombia has been through much worse in it’s recent past.
The UK, on the otherhand, felt much closer to suffering a real crisis. Europe as a whole throughout the summer was a disaster when it came to travel, by plane or train, with extreme weather and strikes causing chaos. I had a wonderful time getting to know the South of France, Brussels, and a bit more of Scotland. I was reminded of how great seasons can be, with the sun setting in Edinburgh at 11pm and wedding evenings going until the early morning.
And yet as I write this, the British pound is in freefall as the new government’s kneejerk reaction to the energy crisis spooks global investors who think that the British economy is destabilizing. The circus surrounding Boris Johnson’s removal and Liz Truss’s promotion to Prime Minister was more reality TV than even the US Political election cycle, with no real substance discussed, and ultimately decided by a tiny minority of the population with views that skew far to the right of the majority. The lack of a real, competent opposition party for the last decade has led to a decline in progress of any real kind, and I have had friends who have returned to the UK after an extended stint elsewhere comment on how there is a visible decline in the quality of public services.
I want to believe that the UK comes out of the other side of this crisis leaner and stronger than before. Brexit has been a disaster if only for how it has been a 6 year distraction, but it hasn’t killed the UK (yet) in the way that I thought it might. Had Rishi Sunak become the new prime minister I might even have believed that there was a chance to use our new regulatory flexibility to foster innovation through our immigation policy and encourage new markets like Crypto/Web3 in London. Unfortunately, I can’t say I’m thrilled at our prospects.
And then there’s the US, which is honestly just on a different playing field to the rest of the world right now. The inflation crisis is as real there as anywhere else, but as an energy independent nation in control of the price of money through the Fed’s interest rate lever, it just hits differently. As recently as June of this year, the US seemed to be facing its own form of decline, with mass shootings including one of 19 children at a school in Texas, a Supreme Court intent on stripping Americans (especially women) of their personal rights, a moral debate about how involved the US should be with Ukraine, and similar supply chain shortages as the rest of the world.
But when I visited in late August 2022, everything had changed. The US had refound its swagger. Joe Biden had somehow pulled off one of the most productive legislative sessions of any first-term president, with a gun control measure swiftly followed by a well developed manufacturing bill and then out of nowhere the biggest Climate legislation in US history, which genuinely could turn the tide and unlock the next wave of climate tech. Late summer in NYC is always special, but this year I felt a sharp disparity between New Yorkers who were earning enough to endure (crazy) rent increases and the rest of the world. Yes the stock market is down, but wages are up, and the dollar is at all time highs against many global currencies. Part of me is kicking myself for leaving the well paid job I had in NYC…
The US has always benefitted from its diverse economy and its ability to produce its own energy, food, tech, entertainment, leveraging the world’s deepest pools of talent and capital, allows it to mitigate many external risks. For my entire lifetime the US’s biggest risk to it’s prosperity has always been itself, and that remains the case today; but it’s hard to argue with the job the Fed and and Biden administration are doing right now. The midterms will decide whether the American people agree with me or not.
It takes travel and being on the ground to see the stark contrasts between the countries. And while contrasts have always existed, the difference between the panic in the UK right now and the optimism in the US was jarring to experience firsthand.
If I’ve learned one thing over the course of my adult life, it’s that geopolitics rarely plays out the way it seems it will. Let’s revisit this piece a year from now and see what happened…
Until next time!