Is America Breaking the Global Economy? What an Age of Economic Uncertainty Will Mean for the World

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1. [SS from the essay by Mohamed A. El-Erian is President of Queens’ College. From 2007 to 2014, he was the chief executive officer of Pacific Investment Management Company.]

   Since the end of World War II, the U.S. economy and financial system have been at the center of global markets. Washington carries great influence in multilateral institutions. The United States has long been the only reliable driver of world economic growth, and it leads in the development and adoption of most productivity-enhancing innovations, such as artificial intelligence, life sciences, and robotics. Many foreign investors have outsourced the management of their savings and wealth to American financial markets, thanks to their deep liquidity and strong architecture. The dollar is the world’s reserve currency. If the United States slips into stagflation, other parts of the planet are at risk of doing so as well.

   Most governments seem to know this. That is why countries around the world are seeking to insulate themselves from the policy volatility emanating from Washington. Europe, for example, is striving to improve its regional standing while forging new and more robust economic relationships with Africa, Asia, and Latin America. China, meanwhile, sees an opportunity to position itself as the more reliable economic superpower. Yet so far, these efforts are running into headwinds. There is simply no other country that is as wealthy or powerful enough to step into the United States’ shoes.

   With little prospect for stability, governments, companies, and investors will need to do more to insure themselves against potential damage.

2. Is asking a leading question misleading and at best click/engagement bait? Yes. Yes it is.

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