Are we too pessimistic about America?

Recently, I started to think that I may be Too much gloom and condemned On the American economy and its place in the world. I was recently struck by a few pieces, One by Joel Kotkin On Unherd, arguing that we should not confuse the American government with the American people, or America, the place. The first can be dysfunctional very well now, but he has not stopped the dynamism of American companies, entrepreneurial zeal in America (still much higher than in Europe), or the fact that the controls and balances of the American system (which are certainly tested at the moment) remain the best alternative to Chinese authoritarianism.

I would agree with this (unless Europe reunites its act, launches the Eurobonds and is really integrated and becomes a political entity capable of anchoring the global economy and defending liberal democracy). I was struck by a conference on investors I attended last week in which, despite political disturbances in the United States, American affairs do only things: reassess the risk, reassess the supply chains and realize that Donald Trump is temporary (except a real constitutive crisis in which he refuses to leave after his second mandate).

Of course, there were huge concerns about pricing uncertainties and the rule of law and general economic and political uncertainty created by the American president. But there was also the attitude of Dunette which has always made the United States the most dynamic country in the world, a place where you can still fight, fail, fall, dust yourself, get up and try again tomorrow with the conviction that things will be better. By the way, the conference I attended was in Florida, and people did not seem as pessimistic there as in New York. I plan to devote more time this summer to go out and speak to companies on the main street and to real people in Red State America on the way they see the current moment.

I was also struck by Andy Haldane's play in the FT last week entitled “The rise of panicans“, Which postulates that we have all become too hysterically negative about the state of the world, and the United States in particular. Haldane, which I would put up there as one of the most intelligent economists in the world, rightly stresses that many of us in the media and in financial circles have become” 24/7 catastrophizers “. much stronger than expected. Now we know that jobs are a rear indicator. And we also know that the real effects of prices, including inflation and supply shortages, do not really strike for a few weeks (the last pre-tail ships Navigate in the port now). Finally, China is more open to commercial negotiations, which Markets raised at the end of last week.

I'm lucky to have my colleague Ed Luce in the headquarters as my respondent today (do not be too excited, it's a single off!). So, Ed, my question for you is as follows: do you think that the predictions of a dismal summer during which inflation points and the economy fall into the recession can be flat? I know you, like me, has broken down on Trump for a long time, but do we offer him too little credit here? Could we see him draw a positive rabbit from the hat in the coming months? Or is this whole column just a desperate effort on my part to say something contrary?

Recommended reading

• Despite my questions above, it is worth reading Andrew Marantz's play in the New Yorker to find out if the United States slip towards autocracy. Marantz interviews people in Hungary and elsewhere who are closer to the question and compare their answers to what is happening in America.

• Also on the edifying side of things, our colleague Gillian Tett explores the Crunch of upcoming liquidity. Catche: It really depends on how the prices take place.

• If you're in Washington next week, be sure to go to the Ftweekend Festival! I will be there (with Ed and many others), speaking of trade, the rise of the Catholic right, where the Democrats go from here, and many other things. In preparation, Discover our advice from initiates For what to do and where to go to the Beltway.

• In the meantime, I look forward to the new Metropolitan Museum fashion exhibition on the history of the black male dandy. See the FT exam, here.

Edward Luce answers

Rana, I do not think at a distance that it is a desperate effort of contractualism on your part. I also admired the characteristic piece of Andy Haldane. What I have withdrawn was the positive role of the panicked markets and in fact commentators of sadness in Trump's persuasion to suspend his declaration of economic war in the world. In this sense, panicans play a constructive role. As Haldane said: “The irresistible force of self-importance has contributed to provoking the American rate, but the real estate object of self-service will be its loss.” Obviously, the markets bet that Trump's ascent is real and will continue.

I am much more skeptical than the feeling of the market. My problem is not necessarily with the theory of rebalancing but with the person in charge. In simple terms, Trump is a chaos agent. He thinks that lightning strikes and unpredictability increases its negotiation lever effect. This fundamental part of Trump's psychology is never likely to change. This means that even if market optimism turns out to be correct, and it retires with a bunch of Kabuki in front of Kabuki, no one will trust him to stick. In the short term, America’s business partners will throw some symbolic bones to Trump – a LNG purchase agreement here, has restored Boeing's orders there, and many improbable American investment figures from Japan and the Gulf. But in the medium term, they will seek other offers and other markets.

I don't know if the United States will have a disastrous summer because it involves looking in Trump's mind. But the recession can easily be avoided if it goes down.