American Consequences - November 2020


for political and social instability, the country’s financial markets gyrate with each election poll... It could be any of several dozen scenic developing world destinations, many of which would fall under the American president’s affectionate “shithole country” classification... emerging and frontier markets from Argentina to Nigeria to Turkey, where weak institutions and social unrest – overseen by leaders fueled by conspiracy theories and gut instinct – are periodically interrupted by electoral chaos. But no, this is of course the United States today. One of the hallmarks of developed countries is that the institutions of government – including courts, the parliament, the electoral infrastructure, the bureaucracy, and the executive – can stand above the push-and-pull of politics, so that even election losers have sufficient faith in the system to accept defeat. But as the recent presidential election has shown, that’s no longer true in the U.S. “Welcome to the United States’ first modern-era election as an emerging market,” Foreign Policy said. In a lot of ways, though, the U.S. was already an emerging market. Political risk expert (and my former boss) Ian Bremmer, who founded political risk consultancy Eurasia Group, defines emerging markets as countries where “politics matter at least as much as economics for market outcomes.” This means that the usual suspects investors look at for signs of market trajectory – economic growth, inflation, and interest rates

In just four years, Trump dramatically changed the tone and tenor of the U.S. government. He made policy U-turns on the environment, regulation, taxation, trade, and international relations. He upended America’s relationship with the rest of the world – forever changing the image of Uncle Sam on the global stage. But markets have a memory like an elephant – and they’re not going to forget what American voters are capable of. One of the many consequences of the Great Man is that Pandora’s boxes aren’t so easily closed. President-elect Joe Biden can repair alliances, change policies, and play a sober, healing president right out of central casting... But markets have a memory like an elephant – and they’re not going to forget what American voters are capable of. Meet the World’s Biggest Emerging Market What country is this Foreign Policy magazine excerpt describing? An incumbent leader refuses to commit to a peaceful transfer of power. While his political allies rail about an attempted coup, he calls for his opponents to be arrested. Expectations of political violence grow as the leader calls for his supporters, who include armed vigilantes, to man polling stations. As investors brace


November 2020

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