US looks less like 'developed economy' as political risk, volatility rise: FT

LONDON -- As political risk, volatility and social divisions increase in the United States, public trust hits a record low, which makes the country start to look less like a developed economy, a recent Financial Times opinion piece said.

Public trust in American institutions is at a record low, due to policy decisions made by both Democrats and Republicans, including the bailout of banks rather than homeowners and big corporate tax cuts, since the 2008 financial crisis, the article titled "Is the US starting to resemble an emerging market" cited Gallup as saying.

The country will be further weakened and divided by recent court judgments, in particular the overturning of Roe v. Wade, the 1973 landmark ruling that established the constitutional right to abortion, and the new curbs on the ability of federal agencies to act at a national level, the article said, noting that all these are against a backdrop of increasing mass shootings, rampant inflation and televised congressional hearings about the Jan. 6 riot in 2021.

"All of this raises a larger question currently being discussed by some investors. When it comes to issues of political risk and volatility terms, is the US starting to more closely resemble an emerging market than a developed economy?" said the article.

Regarding political risk, though the United States ranks 85 out of the 127 countries and regions tracked, which is relatively low, it is now the highest among developed countries, according to Mark Rosenberg, founder and co-head of the research firm GeoQuant, who has been tracking various measures of political risk in numerous countries.