“Most of the events centre on talking. But beyond lectures and panel discussions, the agenda also features more esoteric attractions. One notable event is a simulation of a refugee’s experience, where Davos attendees crawl on their hands and knees and pretend to flee from advancing armies.
It is one of the most popular events every year.”
- How Davos Brings the Global Elite Together, The New York Times, 14 January 2017.
Economists don’t necessarily agree on many things, but there is almost universal acceptance that the imposition of trade tariffs worsened the Great Depression. So it is difficult to square the ‘America First’ language of President Trump’s inauguration speech with a rosy outlook for businesses that have hitherto been the beneficiaries of globalisation. Talk is cheap, of course, but the intention seems clear:
“Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families.”
The very next word in the speech was ‘Protection’ – but it might as well have been ‘Protectionism’.
Many have made comparisons between the aspirations of the Trump administration and the economic philosophy of the Reagan presidency. But the financial market environment could hardly be more different. When Ronald Reagan was elected, the 10 year Treasury yield was over 12%. Over the following year it rose to 15.8%. When Donald Trump was elected on November 8, the 10 year Treasury yield was below 2%. It’s possible that these two Presidents will have respectively overseen the all-time high and low in US interest rates.
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