First published: Prospectmagazine.co.uk, 23/10/2017
Political chaos could come to undermine America’s economic strength
I referred somewhat flippantly in a recent column here to America becoming an emerging market. You might say correctly that the world’s largest economy is in a different league. I meant it differently, though, and not, of course, as a compliment. For along with things that investment managers assure us of, including high economic growth and better prospective investment returns, emerging markets also present higher risks. These normally boil down to some combination of a dysfunctional political system and weak standards of economic governance.
So, while the US is at the moment economically head and shoulders above the likes of Brazil, Turkey, Russia, and in most respects China, the question is whether it is converging with them politically. And if so, will that eventually threaten to compromise America’s economic heft? Is the US, in effect, compromising political and institutional progress made over many years?…..Read more: