Michele Wucker was interviewed by Market Watch on her insights on the possible “Gray Rhinos” scenario in the world. Below are a few of her observations:
The biggest one, globally and for China specifically, are the unintended consequences of the very loose monetary policy of the last 10 years and the way that has created asset bubbles all over the place. China has actually been much more proactive about dealing with these than the U.S.
In 2017, after a big five-year policy planning conference, during which the concept came up repeatedly, the People’s Daily wrote a big editorial warning of gray rhinos in China. It defined them as general financial risk, but specifically shadow banking, unexpected market volatility, high debt levels, real estate, and new financial products that weren’t sufficiently regulated. The markets rightly saw this as an indicator that regulators would start cracking down on financial risk and risky stocks fell by 5% in a single day on the back of that.
On the most dangerous gray rhino in the world:
I think the biggest one — and it’s very closely intertwined with the global economy — is the increasing wealth inequality and the way that impacts the social and political environment. A lot of people ask me if President Donald Trump is a gray rhino. Yes! But behind him, there are a whole bunch of other ones. And that’s about social dynamics.
Why do you think people often don’t react to gray rhinos?
There are psychological reasons, perverse incentives in the system, human biases, we are programed to pay more attention to information that we like than information that we don’t like. It depends a lot on the groups that are around us.
Groups that are very homogenous are less likely to engage in constructive debate. So much depends on decision-making structures.
And then there are big structural issues that can differ from country to country. In the U.S. and in much of the West there is a big bias toward short-term decision-making and kicking the can down the road. We tend to make heroes out of people who clean up messes, but we don’t hold those accountable who let them happen in the first place and that needs to change.
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An award-winning global thought leader with experience in strategy, immigration policy, finance, globalization, turnarounds, and crisis management, Michele Wucker draws on three decades in media and non-profit management and policy development. Her third book is THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore, which grew out of a presentation at the World Economic Forum annual meeting in Davos, Switzerland in which she coined the term “gray rhino” for highly probable, high impact crisis events. The book has received praise from business, policy, and thought leaders around the world and influenced policy debates at the highest levels. Michele founded Gray Rhino & Company in 2015 to help leaders and organizations to identify and strategize responses to gray rhino risks that are neglected despite -and all too often because of- their size.
Michele has been recognized as a Young Global Leader of the World Economic Forum and a Guggenheim Fellow, among other honors. Her previous leadership positions include Vice President for Studies at The Chicago Council on Global Affairs; President of the World Policy Institute, which she re-launched in 2007 in a dramatic turnaround; and Latin America Bureau Chief at International Financing Review. She also has taught master’s students at the School for International and Public Affairs at Columbia University, of which she is an alumna. An engaging keynote speaker, moderator, panelist, and facilitator, she has delivered presentations in 16 countries on five continents. She lives in Chicago.
Michele‘s speaking topics are:
- Gray Rhino-Proofing Your Future: A New Way To Think About Risk And Response
- Demographic Gray Rhinos: Robots Meet Aging And Migration
- Beyond Kicking The Can: How To Stop Muddling And Innovate