Fidelity to blind justice and institutional integrity made the U.S. economy exceptional. No more.
Gene Sperling was director of the National Economic Council under Presidents Bill Clinton and Barack Obama and was a senior adviser to President Joe Biden.
Ever since Alexander Hamilton established the full faith and credit of the U.S. government as ironclad, generations of Americans have benefited from exceptional trust in our country’s economic integrity. This stellar economic reputation has helped make America a magnet for long-term innovative, job-creating investments. Trust in the American brand has led to the dollar being the global reserve currency and to U.S. Treasurys being a safe haven in any global storm. And that has led to lower borrowing costs for our government, businesses and citizens.
A major component of this American economic exceptionalism has been our demonstrated fidelity to serious economic norms, nonpolitical economic institutions and the rule of law. These elements explain roughly 40 percent of the variation in average income across countries, according to research by Daron Acemoglu, Simon Johnson and James Robinson that won the 2024 Nobel Prize in economics.
While President Donald Trump’s tariffs, and his indifference to mounting deficits, are causing zigzags in the stock and bond markets, it is his disregard for rigorous economic decision-making and the rule of law that may create the most long-term damage to the country’s economic reputation.
