Niall Ferguson in fact, who is an economic history professor at Harvard and an Englishman. And he recently was in New Zealand and had a seminar that was behind the pay wall so I haven’t felt that I can use it even if I subscribed to that particular service.
But this one was in the public domain and what he’s actually saying is he thinks that back in February 2016, the US economy reached its true inflection point, with the caveat around the Brexit of course, and what it’s going to do with the global economy.
But the question was asked of him and this is, you can search this on the internet, it’s there, from Barron’s: The US economy has been growing by only 2% to 3% a year. Why isn’t it firing on all the cylinders?
And he said these three theories.
- The first is the seven-year hangover theory, which will support the February 2016 inflection point.
- There’s the secular stagnation theory, the economy is in a depressed state and low-interest rates currently there, would support that. It’s a theory.
- And there’s this geopolitical theory, which says that modern American history has tended to be growth as high at times of national strength and low at times of national weakness. And that’s because US weakness affects the whole world.
And US growth isn’t low at the moment, compared with very long-term average but it is sluggish compared to the cold war days.
And that’s simply because the US perceived a threat so it lifted itself to meet that threat, and its whole economy lifted with it.
And of course, there’s a US presidential election going on at this period. Back in June 2016, when I prepared the presentation and the slides, there were still three contenders for the presidential election at that point.
Bernie Sanders had picked up on it with a slogan, picked on what we’ve been talking about, “A Future to Believe In.” As had Donald Trump with “Make America Great Again” and then Hillary Clinton had a different slogan, “Hillary for America. “
And so two out of the three remaining candidates in June touch on the subject. And effectively they’re tapping into popular sentiments around what’s going on.
And the picture, the White House there has the Marine Corps Band because I’m not American, I don’t have a political position on American politics but that seemed to be pretty neutral to me in terms of the White House.
So the thing is that what you’re seeing in the politics, of course, is that as political contenders and candidates are picking up on popular sentiment, no surprises there and tapping into this, hey, everything is not as it should be.