America is the land of “dysfunctional politics”, says Adrian Wooldridge in Bloomberg. Republicans and Democrats are barely on speaking terms; three-quarters of voters think the country is heading in the wrong direction. “Yet in one vital area, the US has lost none of its elan.” By almost every measure, its economy is “storming ahead”. In 1990, the country accounted for 40% of the nominal GDP of the G7. Today, it’s 58%. It has a higher GDP per capita than every EU country bar Luxembourg and Ireland, and the Irish figures are distorted by tax-avoiding US companies channelling their profits there. America’s stock market has “massively outperformed” its peers: $100 invested in the S&P 500 in 1990 would be worth $2,300 today, compared to just $510 had it gone into other rich-world stocks.
The US is not only leading the way in old industries – it’s “the world’s largest producer of oil and gas” – it’s also way ahead of its Western rivals in the industries of the future, from AI to cloud storage to driverless cars. And the dollar remains the world’s reserve currency, used in almost 90% of global foreign exchange transactions. The big worry is that the “bull elephant goes rogue” – that the combination of America’s dysfunctional politics and its economic pre-eminence leads to decisions that weaken the liberal world order. “If the mighty US economy provided a platform for the Wise Men to steer the world after 1945, today’s still mighty US economy may well provide a platform for the Wild Men to plunge it into chaos.”