New York City -
We met with Citi Chair & CEO Jane Fraser at the Council on Foreign Relations here on Thursday. She’s an impressive figure leading an institution that moves six trillion dollars annually. Yes, that’s greater than Germany’s annual GDP.
A Scotswoman, Fraser is a true globalist with informed perspectives across the board. For example, presaging her later comment about German GDP, she indicated that Germany is losing a staggering 10,000 jobs a month and the decline is not just within the automotive sector. She also mentioned that the German work week now averages 26 hours and that German employees lead the OECD in taking sick time. Cause and effect, for sure.
On the other hand, Fraser reminded us that China is “the manufacturing juggernaut of the world.” For example, China produces fifty percent of global robotics and their products are better and cheaper than the rest of the world. Of course, she readily admits that China is sorely in need of massive structural reform.
On Europe in general Fraser said, “They’re not making the bigger structural adjustments that are needed." In her eyes, Europe is more focused on protecting what they have but, in doing so, they risk reducing the value of what they have. When asked whether there was anything good to say about Europe, she quipped, “Yes, the food.”
It’s not uncommon for very smart people in high leadership positions to live in bubbles. For example, Fraser spoke of Americans being “affluent” consumers” who are showing great “resilience” economically. This is true within the bubble, of course, but let’s never forget that Americans are suffering mightily in the current economy. Bloomberg, The Los Angeles Times, and others tell us that 40 percent of Americans cannot come up with $400 in cash to deal with an unexpected expense. Furthermore, the U.S. Census tells us that 36 million Americans live below the poverty line. Membership in the bubble certainly comes with rose-colored glasses.
Fraser also said she wanted “to see people in lower-income levels saving more.” Hello? If it was only that easy. Single moms are working two jobs to feed their kids; saving more is a luxury for them and not a realistic prospect. Instead, how about tech titans and their mega-corporations actually paying their fair share - any share at all - of personal and corporate taxes?
