Seamanship Quotation

“In political activity, then, men sail a boundless and bottomless sea; there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination.”
— from Michael Oakeshott's
Political Education” (1951)

Thursday, October 21, 2010

Investment analysts pick their winners

Last month, Bloomberg News released a survey of fourteen hundred investors and analysts that ranked world leaders according to their efforts to create a “more favorable business climate." Click here to read more: 

Angela Merkel came in first with a “mostly favorable” rating of 56 per cent. This isn’t that surprising. Whatever you think of Germany’s incremental domestic policies, she did consent recently to bail out the Greek government and, thereby, save several European banks from possible bankruptcy. And we’ve come to understand that professional investors are bred and paid to think short-term.

Obama hasn’t saved a bank in over a year. But, is it credible to rank him almost last—at only 37 per cent, behind two appointed central bankers and Hu Jintao, President of the Republic of China and General Secretary of the Communist Party of China?

Let’s not take this too far. Those who keep small investors, economists, and entrepreneurs up at night probably aren’t, by nature, authoritarians who prefer un-elected technocrats to politicians and, when they do, they are like a lot us. But it is a bit disheartening. These people have a big say in shaping the global economy and, yet, show little regard for how the checks and balances of liberal democracy create long-term economic wealth.

Ben Bernanke could not have stopped the recession by himself and enjoys the powers he has by the consent of a duly elected senate and president. Unlike the President of China, Barack Obama cannot choose winners and decide for now that profits are more important than health services and pensions. As long as Hu Jintao gets results, no organized force can get in his way. However, surely, Western investors ought to appreciate that a superior climate for investment by capitalists requires a broad-based liberal consensus—popular support for property rights, open markets, an independent system of courts, and freedom of expression for journalists and knowledge workers, for instance.

The maintenance of that consensus in the United States and amongst its principle trading partners is surely a test of leadership that deserves to be weighed in the balance. And, in the long-term, may place Obama in a very positive light.

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