According to conventional wisdom, US President-elect Biden will find himself immediately paralyzed because Republicans will follow the same obstructionist playbook they used to sabotage Barack Obama’s administration. But there are five new features of US political dynamics that this argument has overlooked.
LONDON – The US election has passed without any big surprises, and the enthusiastic reaction in global financial markets has been exactly what any economics textbook would predict if a predictable, conventional centrist replaced an erratic, extremist populist as US president. Beyond investor psychology, there are several fundamental reasons that justify a Biden rally: the near-certainty of further fiscal stimulus in the short term; the high probability of pro-growth Keynesian demand management in the medium term; and the possibility of a global investment boom in new energy and transport technologies in the long term.
LONDON – The US election has passed without any big surprises, and the enthusiastic reaction in global financial markets has been exactly what any economics textbook would predict if a predictable, conventional centrist replaced an erratic, extremist populist as US president. Beyond investor psychology, there are several fundamental reasons that justify a Biden rally: the near-certainty of further fiscal stimulus in the short term; the high probability of pro-growth Keynesian demand management in the medium term; and the possibility of a global investment boom in new energy and transport technologies in the long term.