”Historical wisdom holds that US elections don’t really matter for markets. But we argue that they do matter today, given the rise of political polarization. This contentiousness leads to increasingly polarized policies and—ultimately—increasingly polarized winners and losers. That’s the focus of our most recent AB Disruptor Series podcast. Here’s a brief summary of the discussion. The Rise of Polarization and a Shifting Political Axis: The economic seeds of today’s polarization were planted in a rollercoaster experience for Americans. After the US slogged through the stagflation of the 1970s economic malaise, the 1980s saw the intersection of globalization, technology and automation, and demographics begin to take hold. Inflation fell, interest rates came down, and both stocks and bonds roared. Decades of strong capital market returns—particularly from the early ’80s through the tech bubble—drove substantial financial success for owners of capital. But a painful byproduct of the globalizing, tech- and finance-driven world was taking shape: rapidly growing wealth and income inequality.”
Morten W. Langer
