Do Unprecedented Times Make It Different This Time?
I find the recent standoff in Washington on the budget process fascinating on several levels. Let me count the ways.
Like a kids’ soccer game every player thinks they are a winner and deserve a trophy for their efforts. But unlike soccer running the country is not a game of competition; it’s an exercise in compromise. Without it not much gets done. So Washington, take a note and cancel that trophy order. Nobody is going to reward you for losing our confidence.
The recent drop in the U.S stock market was not an isolated incident. We saw foreign markets around the world dropping in similar fashion. So what was behind all the nervousness? In one word, China. Investors have been worried for some time that the Chinese economy has been slowing down. Since China is a significant part of the world economy investors figure a slowdown may have a ripple effect on other countries that do business with China. But why the sudden reaction to a slowdown that has been unfolding for a long time?