FT:The real threat to American prosperity
American economic success in the era after the second world war depended on innovation, which in turn relied on strong institutions that encouraged people to invest in new technologies, trusting that their inventiveness would be rewarded. This meant a court system that functioned, so that the fruits of their investments could not be taken away from them by expropriation, corruption or chicanery; a financial system that would enable them to scale up their new technologies; and a competitive environment to ensure that incumbents or rivals couldn’t block their superior offerings. These kinds of institutions matter under all circumstances, but they are especially critical for economies that rely heavily on innovation.
The most significant was the crumbling of American institutions. This happened both because of structural problems that long predated Biden and Trump, and also, importantly, because the actions of both presidents crushed belief in these institutions.
