The president of New York City-based River Twice Research, which analyzes economic and political trends, as well as River Twice Capital Advisors LLC, a hedge fund management firm, Karabell is also the author of 11 books, including the recent Sustainable Excellence: The Future of Business in a Fast-Changing World, as well as a frequent commentator on CNBC and CNN and contributor to The Wall Street Journal, Time and The New York Times.
Karabell kicked off his remarks by noting that when the topic of his speech at SMU International was being planned in late November, “there was a viable and legitimate concern that we were about to re-experience whatever set of global panics, near-crises, and potential near-collapses that existed in the fall of 2008,” he said. “How might the global economic crisis impact the global travel industry, and how might bank defaults and a wave of credit problems impact meeting planning and global tourism were the sort of questions that were absolutely trenchant and were driving people throughout the world.”
What a difference four months can make! Karabell added: “The American economy seems to be recovering, growing at an anemic but still decent two-plus percent a year, the unemployment rate is dropping, the sun is shining, and global warming--while highly negative for the planet in century terms--is extremely pleasant if you live in the Northeast. The world seems to be a much more benign place.”
The point he said, was that given how quickly we “go from pessimism to optimism and back again, how do any of us get a read on the world that is not just of the moment and dictated by 24/7 news flow—which has a profound need and/or interest in magnifying those emotions?”
The answer Karabell provided was that we should remember that the world has actually experienced more economic growth in the last 50 years than at any other time in history. America is still a dominant economic power and likely to remain one for quite a while. In the developing world, from Shanghai to Sao Paulo to Abu Dhabi, there is an optimism about the future similar to what America experienced during the booming growth of the 19th century.
And ultimately, that is because, despite a pessimistic climate in the U.S. and Europe, the world economy is doing well and there will be a lot of business—and business travel—done in the coming months and years, from and to countries like Chile, Brazil, India, Indonesia, Russia, and China, as well as the United States and Europe.
“Thirty years ago, 300,000 Chinese traveled abroad annually,” Karabell noted, because that was all that had the freedom and financial ability to do so. “Now it is 75 million to 100 million.”