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A Divided Electorate Spells Trouble for the US Economy

Financial Times  | Wed, Nov 4, 2020

by Mohamed El-Erian


In the wake of the US presidential vote, there are three things that are clear at this stage that spell trouble for the US economy, and well beyond that. 

The 2020 election has confirmed that the US remains a deeply divided country facing mounting challenges that threaten both this and future generations. Despite a collective wake-up call in the form of a severe health and economic crisis, the country seems both unwilling and unable to embark on the decisive measures needed.

The unwillingness comes from fundamental differences of views on how best to pursue economic and financial reforms while urgently dealing with the threats from Covid-19. The inability is due to a probably divided Congress, where the damage of the past few years to the most basic of cross-party working relationships has been accentuated by the past month’s rush to approve a new Supreme Court justice. If Joe Biden does clinch the presidency, there could be a rocky period until he moves into the White House. There is not likely to be much co-operation between the Trump administration and its successor, adding to the uncertainty of the next few months.

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