The eurozone is stuck in permanent depression. The wheels are starting to come off the Chinese economy. The Brics, all the rage just a few years ago, have lost much of their shine – only India really seems to be in good shape right now, but you can’t create a snappy acronym with only one letter.
With commodity prices crashing, the emerging markets look about as a good a bet as Liz Kendall’s campaign for the Labour leadership. Amid a troubled global economy, the US stands out as a beacon of solid growth.
Its economy is growing at a decent rate again. A boom in shale gas has made it self-sufficient in energy for the first time in decades. Its mighty tech titans, from Amazon to Google to Apple, dominate the globe, creating a cadre of multi-nationals that are as strong as the likes of Ford, McDonald’s or Kraft from an earlier generation.
The trouble is the 2016 presidential race is likely to be a catastrophe for American competitiveness. From Donald Trump on the Right, to Hillary Clinton on the Left, all the leading candidates are pushing policies that are likely to set the economy back a decade or more.
Although it gets relatively little attention, in the background there are worrying signs that the American economy, like much of Europe, is losing its edge – and yet none of the candidates is putting forward any solutions to that. In truth, most of the policies on offer would make that much worse.
It is shaping up to be a disaster for the global economy. Why? Because no one seems interested in re-invigorating the economy.
On the Right, Trump is leading the pack. One poll at the weekend showed “the Donald” out in front for the Republican nomination, with 19pc of the vote. The more moderate Scott Walker and Jeb Bush were stuck on 15pc and 14pc respectively. Of course, Trump manages to make more horrible gaffes in the space of a single day than most candidates do in a whole campaign, insulting whole swathes of the electorate with gleeful abandon, and no doubt he will make dozens more over the next few months. And yet, despite the horror he provokes among the professional political classes, nothing seems to be denting his appeal.
But Trump is offering a buffoon-ish mix of protectionism and economic nationalism better suited to France than the US. “Trumponomics”, as the unfortunate reporters who try to make sense of his platform have taken to calling it, involves renegotiating free trade deals between the US and the rest of the world, weakening the dollar to help the manufacturing industry, and restricting immigration, all aimed at bringing back the prosperous blue-collar white working class of the 1950s and 1960s.
It might have a certain appeal among traditional Republican voters, much as Marine Le Pen’s similar pitch does to blue-collar French workers who also feel themselves left out by globalisation. But it would be toxic for the American economy. No developed nation is going to be able to compete with the emerging markets for basic manufacturing – and any attempt to do so will only make everyone worse off.
On the other side, it is hardly any better. Hillary Clinton’s husband may have governed as a pro-business centrist, but she is veering off wildly to the Left. One of her few concrete plans involves a complex set of changes to capital gains tax – the kind pious, meddling Vince Cable might have come up with on a bad day.
Investors would pay less tax so long as they held shares in the right kind of companies for the right length of time – conveniently ignoring the fact that government bureaucrats don’t have the foggiest idea what kind of investment the economy needs at any given time, and it is a sure bet that whatever type they favour will be precisely wrong.
In the end, it will just mean a near doubling of capital gains tax for most investors – in contrast to Bill Clinton, who reduced it. She is being harassed from the Left by the American version of Jeremy Corbyn, Bernie Sanders, an independent socialist from Vermont who is pushing what in American terms amounts to a far-Left platform of higher minimum wages, higher taxes and more state control.