Trump’s One-Way Economy
If these were normal times, recent global developments would be showing up as sharply rising risk premia. But with monetary policymakers trying to sustain the current growth cycle in the face of disruptions from an incompetent US administration, these are anything but normal times.
LONDON – Nowadays, when people ask me how I am, I answer, jokingly, that I’m doing great, so long as I ignore Donald Trump’s presidency in the United States, Brexit, the crisis of the United Kingdom’s major political parties, and the performance of Manchester United.
But recently, the litany of unfortunate circumstances has gotten so long that the joke is hard to pull off. One now must also list the political crisis in Hong Kong, a burgeoning diplomatic and economic dispute between Japan and South Korea, the Indian government’s revocation of Jammu and Kashmir’s autonomy – and India-Pakistan tensions more generally – and growing turmoil within South Africa’s ruling African National Congress.
Making matters worse, this has been a particularly rough summer in terms of the weather: heat waves across Europe and the US have served as a forceful reminder of the growing effects of climate change on our everyday lives. Add to all this other persistent sources of global uncertainty – from the Middle East and Russia under President Vladimir Putin to social-media disruptions and antimicrobial resistance – and you have a recipe for despair.