A panel discussion at the Global Cities Initiative, which convened at USC on March 21 at USC in Los Angeles. On the agenda was the shift from trade between countries to trade between cities.
We're accustomed to thinking about global trade as being between countries or large political and economic entities, like the European Union. The U.S. trades with China. China trades with Europe. Australia trades with Japan. And so.
But that wasn't the story presented at the Global Cities Initiative conference I attended last week at USC. The event was put on by the Brookings Institution and J.P. Morgan Chase and featured a series of panels structured around the transformation of trade for something between countries to something between cities.
The big driver here is that the world's emerging middle classes, in countries as divergent as China and Brazil (to name two of the real heavy hitters), are increasingly moving to cities, rather than staying in the countryside or establishing urban alternatives.
It's often noted that California has the world's eight largest economy. This depends on how you do that math. At $1.9 trillion, the Golden State is just south of Italy on the IMF list (at number 9). But...Italy is having some rather severe financial difficulties at the moment. So if its GDP slips — and it's already slipped pretty far — and California's increases, will California move up? Then we can lock Brazil in our sights! Then the UK!
Actually, before we get too excitied, we should remember that if California were in Europe, we'd be in serious trouble.
LOUISA GOULIAMAKI/AFP/Getty Images
People walk by a National Bank of Greece in Athens on October 27, 2011. Greece reacted with measured relief on Thursday after European leaders sealed a deal to contain the eurozone debt crisis that slashes the country's huge debt by nearly a third. LOUISA GOULIAMAKI/AFP/Getty Images
Has Europe finally solved its debt-crisis problem? Well, that depends on who you talk to. Yesterday, hot on the heels of the announcement that European financial leaders had labored into the wee hours to finally get their act together to rescue Greece and save the Euro, I heard an economist say she was pleased that Europe had finally agreed on a plan...to agree on a plan!
Yeah, not exactly a ringing endorsement of Europe's ability to right its listing ship of states.
Meanwhile, around the blogspshere, various voices weighed in. At Reuters, Felix Salmon took a deep dive into the matter of credit default swaps (CDS) on Greek debt (although it wasn't nearly as deep as some). You're not going to want to wade into this debate unless you're prepared to induce a pounding financial headache, but the topline summary is fairly simple.