Salient to Investors:

Daniel Altman at NYU and BigThink says the biggest threat facing the global economy is short-term thinking, which has swept over the world in the past few decades.

One cause is we can’t plan for the long-term as easily as we used to because of the growing complexity of the global economy.

Another cause is that structural aspects of the global economy are magnifying the problem, like:

  • the quarterly earnings culture of financial markets
  • political campaigns that have lengthened considerably while legislative cycles haven’t changed – little time to focus on anything except reelection.
  • Narcissism – a lack of empathy with others today and others in the future including themselves – among cohorts of college students has been rising steadily since the late 1970s into today’s self-absorption of the Internet age. As a result, individuals fail to plan adequately for their retirement because they simply don’t care enough about their future selves. while pushing their debts into the future.
  • Corporate managers focus only on things that produce benefits before they retire.
  • Politicians who won’t focus on infrastructure, scientific research, and education that payoff after they leave office.
  • Living standards for the younger generation in wealthy economies are starting to fall short of those of their parents, so the young compensate by borrowing – from the oceans of cheap money supplied by the world’s central banks.

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