I had the chance to spend time with a senior strategist from the Boston Consulting Group. Among the things he told me was that he believes we are entering a period of significant inflation that could last 10 - 15 years. The inflation will be driven by demand for basic commodities thanks to the growth of China, India, and other emerging economies as well as our own lust for consumption.
We've already begun to see it with rising prices for gasoline and many food products. What was interesting was his forecast that it could last for more than a dozen years. We haven't had an inflationary spell like that since the 1970's. I'm old enough to remember those days (and was getting my undergraduate degree in Economics at the time) but many business leaders have never been through these conditions. It's going to be a rough ride.
This got me thinking about the upcoming election and Barack Obama's options for vice president. I'd like to suggest that he consider Robert Rubin. In case you've forgotten, Rubin was a senior advisor and then Secretary of the Treasury in the Clinton administration. He's about the smartest people I've seen on economic matters, has a passion for building economic literacy, and has great credibility on Wall Street.
The next President is going to inherit an economic mess and, according to my BCG colleague, it isn't going to get better for quite awhile. S/he'll need solid financial advice from a trustworthy source. Rubin would also add a bit of gray hair that an Obama ticket could use.
Obama/Rubin '08. It has a ring to it.
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Given Rubin's aggressive role quashing any regulation of derivatives trading and resultant mess it's led to (as noted in this New York Times story), I'd say that Rubin might, in hindsight, have been the worst possible choice. Not only would that have given McCain an angle to attack, it would have been a perfectly legitimate one.
My guess is that the Obama campaign did their homework.
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