The American Brain Drain
On "What'd You Miss This Week", Scarlet Fu, Joe Weisenthal, Caroline Hyde and Romaine Bostick discussed one crucial sector that's getting left out of the immigration debate in Washington right now: higher education. Anne Krueger, a senior research professor of international economics at the Johns Hopkins University School of Advanced International Studies, came on to talk about it and the phenomenon she has dubbed "Trump's brain drain."
"America’s high-quality universities are among the key sources of its greatness," Krueger wrote in a piece for Project Syndicate. "For all of his complaints about the U.S. trade deficit, Trump is shooting himself in the foot by ordering his administration to tighten visa requirements." The higher-education system has been a crucial driver of innovation and economic growth, the former first deputy managing director for the International Monetary Fund explained. But now, the White House's immigration policies could be starting to weigh on the sector, Krueger said. Krueger explained this would inadvertently strike a blow to the President's goal of recalibrating the trade balance.
Since 2016, the number of foreign students attending American universities has dropped consistently each year. "We've had three years in a row of drops and that more or less coincides with the time when the difficulties with immigration started," Krueger said. "Some of it has to be that." Krueger explained the U.S. is now having to contend for these foreign students, who are the most likely to be paying full sticker price and keep tuition costs down for American students. There are a number of nations that are competing effectively, including China, Australia, Canada and the U.K., Kreuger said. "Other countries are recognizing it’s a good thing for them to do too."
Alberto Ramos, head of Latin America economic research at Goldman Sachs, came on to talk about why there are reasons for investors to be "carefully optimistic" about the outlook for Argentina and Brazil. As new governments are being ushered in, stocks for the region are having their best annual start in more than 30 years. "The market is inspired by the very liberal agenda of the economic team" in Brazil, he said. Ramos predicted there would be an upside in Argentina as well. "They will be able to deliver something. Not necessarily the full agenda that they were elected to implement. But I think the market will give them the benefit of the doubt." The country is "undergoing a very deep and painful fiscal adjustment," he said. "But it's needed. It's healing. It will deliver the economy to a much better place."
Bruce Linton, the founder, chairman and CEO of Canopy Growth, also joined to discuss their expansion into the new U.S. hemp market. The farm bill signed into law last month legalized hemp throughout the country, and Canopy Growth is looking to capitalize by spending up to 150 million dollars on a production facility in the state of New York. "There's a lot of a question still around the farm bill," Linton cautioned. "What will interstate commerce look like? What products will we be able to make? What approvals can we get?" But the CEO was optimistic about the future of the market, saying if the company is "able to make medical claims that the FDA would substantiate, now you're talking about a pharmaceutical market."
Atlanta will not be playing on the field in Super Bowl LIII, but the city will be in the spotlight with the game hosted at Mercedes-Benz Stadium. Steve Cannon, CEO of AMB Group, which owns and operates the stadium, came on to talk about getting ready for the big game. "We've been working for more than a year with Homeland Security, with Atlanta police department, with Georgia Bureau of Investigation, with the FBI," he said. "We've got the resources to pull this off."
Then Hans Humes, chairman and CEO of Greylock Capital Management, joined to discuss the ongoing situation in Venezuela as an increasing number of countries, including the United States, have recognized opposition leader Juan Guaidó as the country's legitimate president. Humes, who is a bondholder in both sovereign and PDVSA debt, said that "there is clearly a sense that a transition [has] to take place."
"The last time that I was in Caracas, it was sort of a surreal atmosphere there on the ground," he said. "The biggest concern for people was their immediate needs." Even Humes expressed surprise at the speed in which global leaders have begun to rally around the opposition leader and predicted regime change could happen within months. "Guaidó asserted himself as a charismatic leader quicker than we imagined," he said. "The most impressive thing is how most of the opposition in the aftermath of the January tenth inauguration consolidated itself around [him]."
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