Torn in the USA

The USA is very important to Ireland. It is our single most important trading partner, accounting for 31% of our total exports. However, the commercial relationship is far more embedded than just traded goods. The CSO tell us we import almost €50 billion worth of services from our American friends on an annual basis. Well, we did. In the middle of a global pandemic it is understandable to wonder about the future. Or maybe not.

As a technology focused economy one can only be encouraged by the massive rebound of the tech-heavy NASDAQ 100 index in US equities markets over the past month. The Nasdaq is now within 7% of all time highs. Check out the following chart from

It is quite incredible to witness such market enthusiasm when one considers the latest PMI economic activity indices from the likes of France and India plummeting to single digits from expansionary norms above fifty. Perhaps, as Warren Buffett reiterated this week, it is wise not to bet against America. And yet, there’s something not quite right. Despite President Trump’s best efforts, it is extremely difficult to ignore the inexorable march of C19 across the US. Here’s a chart of C19 case growth in the US over the exact same one month period as that covered in the Nasdaq chart:

There are a few other things that are not quite right in the US right now. Take your pick from the following:

• 30 million US jobs lost in the last 6 weeks

• The US Treasury expecting to borrow $4.5 trillion to support a C19-crippled economy

• The State of Illinois, already burdened with a huge debt mountain, forced to cancel a bond sale

• Armed demonstrators bedecked in Confederate and Nazi paraphernalia storming Michigan’s state capitol

Of course, there are other countries where tensions are rising as the economic costs of pandemic lock-downs bite. However, not every country accounts for 50% of the world’s capital markets. And, not every country is cursed with a leader so unsuited to lead. President Trump believes he needs an economy back at work to win another term in the White House. The election is all that matters to Trump and he is not shy about letting the world know where he sits on the wealth vs health debate. Unfortunately, without a vaccine, one can’t bend nature to your electoral will, or call the Kremlin.

A polarised political climate, a dysfunctional media, woeful education standards and severe social inequality are all revealing themselves in this tug-of-war between public health protection and wealth preservation. There is a real risk that a failure to control the Covid-19 virus in the US could have explosive social repercussions. The truth is that the virus is the only new element in the social decline of the US. Arguably, the USA is searching for its true heart. Somewhere along the way ‘patriot’ , ‘true American’, ‘war’, ‘religion’, ‘heartland’, ‘great’, ‘united’ and ‘homeland’ all lost their true meaning in a cultural battle waged by chyrons, charlatans and cheerleaders.

Thirty six years ago next month Bruce Springsteen released a rock album flagging the betrayal of America’s working class veterans of the Vietnam war in the recessionary early 1980s. It was an uncomfortable truth but it’s time had come. With no little irony, over the last few decades the awkwardly critical lyrics of the title track, “Born in the USA”, have been ignored by multiple politicians who have used the song during rallies, campaign events and victory celebrations. The album is often credited with popularizing heartland rock in the mainstream which raises another awkward question. Will the multi-decade political hijacking of the “heartland” ultimately rip Main Street USA apart? If so, those Wall Street charts and our trade figures will probably look very different.

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