By Ned Myers, Head of Product at AlphaPoint
Just as “Read my lips, no new taxes” remain the most famous words of George Bush Senior’s successful 1988 presidential run, so Bill Clinton’s 1992 campaign to unseat Bush is remembered for “It’s the economy, stupid.” Political analysts as a class rarely agree on anything, but most believe that Bush’s disappointing handling of the economy ultimately made him a one-term president.
As the 2020 campaign begins in earnest, both Republicans and Democrats should seek innovative approaches to the economy. Although the markets and the employment numbers seem healthy, there’s a reason that economics has a reputation as “the dismal science.” Forecasts could change in 2019, but many economists already predict a 2020 recession.
For more than a century, ever since Teddy Roosevelt sat in the Oval Office, every Republican president has faced a first-term recession; in some cases, those first terms were also final terms. As The New York Times put it at the tail end of Bush’s tenure, “recession and re-election don’t mix.” The political class certainly understands this; witness the competing efforts of Democrats and Republicans to claim responsibility for the past few years’ relative stability.
Should one paper find that Democratic presidents have been better for the economy, even if that article is not certain why their results have been better, a conservative think tank will promptly issue an article alleging the opposite. Of course, there’s good reason for these arguments: everyone wants to claim economic success as their doing, and no party dare accept blame for a downturn.
As I write, there are some advisers and political operatives in the Republican Party evidently more concerned about the prospect of a recession than they are distressed by the possibility of special counsel indictments.
Two-thirds of business economists predict a recession in the next two years, thereby conjuring up visions of the shuttered factories, closed mines, foreclosed houses and vacant storefronts that so haunted the country in 2008. No one, whatever their politics might be, wants a return to those days, and so it’s a relief to consider the many avenues of development currently opening in the United States. The great revelation of 2008 was that much of the country’s apparent prosperity derived from a housing price bubble. Diversification of investments is a wise strategy for individuals, institutions, and companies: It’s the rare investment advice that everyone agrees on.
Blockchain is one example of a technology that has already diversified investment portfolios. The technology, which uses computer networks to securely store and verify information, has attracted attention from entrepreneurs, Fortune 500 companies, and major universities. Some argue that distributed ledgers, had they been employed by big banks circa 2008, might have lessened the impact of the financial crisis.
While over-regulation or market collapse might threaten the future of this technology, a robust blockchain industry could serve as an additional hedge against economic uncertainty. And despite the technology’s embrace by corporations and colleges, blockchain holds promise for everyday individuals as well, who may use the technology to take control of their personal data or remove middlemen from financial and commercial transactions. Other emerging sectors include artificial intelligence (sometimes called deep learning), the Internet of Things, drones, and virtual reality.
As new technologies graduate from obscurity to ubiquity, let’s hope that American leaders work to understand the tools that are changing their constituents’ lives. Whoever sits in the Oval Office come January 2021 and whether or not the threatened 2020 recession arrives, politicians and policymakers — not always one and the same — should make the promotion of emerging technologies central to their visions of the future.