Globalization Took Hits in 2016; Will 2017 Lead to More? | NBC Southern California
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Globalization Took Hits in 2016; Will 2017 Lead to More?

The rise of Trump and the triumph of Brexit had their roots in the global financial crisis of 2008

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    NEWSLETTERS

    AP
    Theresa May, Donald Trump and Xi Jinping will be major leaders in 2017 of the U.K., U.S. and China, respectively.

    2016 was the year when globalization, the path that the world economy has largely followed for decades, took some hefty blows.

    The election of Donald Trump as U.S. president and Britain's decision to leave the European Union have raised questions over the future of tariff-free trade and companies' freedom to move production to lower-cost countries.

    Borders are back in vogue. Economic nationalism is paying political dividends.

    "We want our country back" was the rallying cry of those backing Brexit. A sound bite that had echoes in Trump's "Make America great again."

    The rise of Trump and the triumph of Brexit had their roots in the global financial crisis of 2008. Eight years on, the world economy has still to fully get past that shock to confidence — people are nervous, some angry, and many are seeking novel solutions to their problems. Next year, there's scope for more uncertainty with elections in France and Germany to name just two.

    Trump and Brexit were just two of the year's top stories in the world of business.

    Flight Attendant's Behavior Questioned Following Altercation

    [NATL-BAY] Flight Attendant's Behavior Questioned Following Altercation

    One day after an American Airlines flight attendant became entangled in an altercation with passengers, his employer is investigating whether or not he was out of line. Thom Jensen reports.

    (Published 3 hours ago)

    BREXIT SHOCK

    In what was a sign of things to come, Britain voted to leave the EU in a referendum in June. The decision came as a surprise — certainly to bookmakers and many pollsters who had consistently given the "remain" side the edge — and means Britain has to redefine itself after 43 years of EU membership. Prime Minister David Cameron has resigned and the new government led by Theresa May is planning to trigger the formal process by which the country exits early next year.

    There are many shades of potential Brexit, from an outright divorce that could put up tariffs on goods and services, to a more amicable parting that sees many of the current trading arrangements kept in place. The pound's fall to a 31-year low below $1.20 at one point is testament to that uncertainty.

    TRUMP CARD

    Drive-Thru Pot Dispensary Opens in Colorado

    [NATL] Drive-Thru Pot Dispensary Opens in Colorado

    When you think of a drive-thru, fast food probably comes to mind. But what about marijuana? Tumbleweed Express Drive-Thru in Parachute, Colorado, is the first of its kind. After nearly a year of preparation, the drive-thru pot shop opened for business on 4/20. 

    "Their timing couldn't have been better in my opinion, I mean everybody wants to celebrate," said Kyle Steele, a customer at the drive-thru.

    (Published Friday, April 21, 2017)

    Pollsters and bookmakers got it wrong again a few months later when Trump defeated Hillary Clinton in the presidential election. Whether he translates his "America First" platform into action following his inauguration in January will help shape the global economy for the next four years at least.

    Trump has railed against long-standing trading agreements, including the North American Free Trade Agreement, punish China for the way it devalues its currency against the dollar, and tax U.S. firms that move jobs overseas. He has also laid out plans to bring America's creaking infrastructure up to 21st century standards, a new spending pitch that has the potential to boost jobs — but which could also lay the seeds of higher inflation.

    MARKETS MARCH ON

    Trump's victory did not cause the bottom to fall out of the stock market rally that's been largely in place since 2009, when the world economy started to first claw out of its deepest recession since World War II. In fact, both the Dow and the S&P 500 rallied to hit a series of record highs. Stocks have also benefited from a raft of big corporate deals this year — executives are seeing takeovers as a fast way to generate growth in what is otherwise a low-growth global economy disrupted by non-stop technological innovations.

    Protester, Official React to Arkansas Execution

    [NATL] Protester, Official React to Arkansas Execution

    Just before midnight Thursday, Arkansas announced it had executed death row inmate Ledell Lee. He is the first of four inmates scheduled to die before the end of the month when a crucial lethal injection drug is set to expire. A protester and a spokesperson for the governor reacted to the controversial execution.

    (Published Friday, April 21, 2017)

    Notable deals in 2016 included the announcement of an $85 billion merger of Time Warner and AT&T and the $57 billion takeover of Monsanto by Germany medicine and farm-chemical maker Bayer. The $100 billion takeover of SABMiller by Budweiser maker Anheuser-Busch InBev was also completed.

    FED FINALLY DELIVERS

    During his campaign, Trump criticized Federal Reserve Chair Janet Yellen, saying she should be "ashamed" of the way she's run policy since taking the helm in 2014. A year ago, the Fed appeared set to follow up its first interest rate hike in nearly a decade with three or four more in 2016. In the event, there was no move until Dec. 14, when the central bank raised its main interest rate to a range between 0.5 percent and 0.75 percent.

    Many factors explained its hesitation to raise rates, including unease over the global impact of China's economic slowdown and, yes, uncertainty surrounding the U.S. election. But with the U.S. economy continuing to do better than most developed countries, unemployment below 5 percent, and inflation on the way up, the Fed finally delivered another hike. The markets are predicting another three or four increases next year. Those expectations have helped the dollar rally, especially as other major central banks persevere with super-loose monetary policies to breathe life into their economies

    Bill O'Reilly Ousted At Fox News Channel

    [NATL] Bill O'Reilly Ousted At Fox News Channel

    Fox News host Bill O'Reilly was officially pushed out at the network. This comes after O'Reilly had paid out more than $13 million to five different women over allegations of sexual harassment. In a statement, 21st Century Fox said, "After a thorough and careful review of the allegations, the Company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel." O'Reilly has denied any wrongdoing.

    (Published Wednesday, April 19, 2017)

    CHINA'S KEY ROLE

    As the world's second-largest economy, China is playing a bigger role in the functioning of the global economy. Nowhere was that more evident than in the early months of 2016, when jitters over the scale of the slowdown in China caused wild swings in financial markets. Stocks took a pounding while commodities tanked, with oil skidding to 13-year lows, as traders factored in lower demand from resource-hungry China.

    The slump in commodities weighed heavily on economies like Australia that are big exporters of raw materials. China's economy is ending the year in relatively good health as authorities try to pivot the economy's focus from manufacturing to more consumer spending. But Trump's promises to take a tough stance in trade will be focusing minds in Beijing.

    OPEC TAKES A STAND

    Columbia Student Opens Restaurant in Dorm Room

    [NY-NATL] Columbia Student Opens Restaurant in Dorm Room

    Pith, a small bistro created by Columbia senior Jonah Reider and run out of his dorm room's communal kitchen, is the hottest restaurant in town after opening just two weeks ago. John Chandler reports.

    (Published Thursday, April 20, 2017)

    For the first time since Dec. 2008, at the height of the financial crisis, the Organization of Petroleum Exporting Countries cut its production levels. November's cut, soon followed by non-OPEC countries like Russia, helped push oil prices sharply higher. At over $50 a barrel, benchmark New York crude is markedly higher than the near 13-year lows around $30 recorded at the start of the year, when investors focused on high supply and concerns over an economic slowdown.

    The oil slump helped put several crude-producing countries into severe recessions, including Brazil and Venezuela, and even saw wealthy Saudi Arabia cut back on spending. The question for 2017 is whether OPEC — and non-OPEC — countries can deliver on their production promises. If they do and higher oil prices stick, that will push up inflation in the global economy.

    IT JUST GRATES

    One of the major reasons why popular sentiment has turned against governments has been a growing level of distrust of elites. Perhaps nothing illustrated the issue more than the so-called "Panama Papers," a leaked trove of data on thousands of offshore accounts that helped the wealthy, powerful and celebrities shelter their cash from the taxman, often without breaking the law.

    Critics say these tax schemes are the core of a system that gives an unfair advantage to big corporations and the wealthy. Outrage grew in the U.S. when it was revealed that Wells Fargo employees opened up to 2 million bank and credit card accounts fraudulently to meet sales goals. Bank employees also allegedly moved money between those accounts and created fake email addresses to sign customers up for online banking.

    It just grates.