Recently, American politics has once again fallen into turmoil as President Biden announced he will not run for re-election, causing market unease. This decision not only triggered reactions on Wall Street but also revealed deeper issues in American politics: division and uncertainty.
Power Games and Market Turbulence
Biden’s exit provides new opportunities for the Republican Trump, bringing the “Trump trade” back into focus. Investors once hoped that Trump’s tax policies would boost corporate profits, but at the expense of long-term budget health. Such short-sighted actions can only lead to more severe inflation and debt issues. Although Biden’s departure temporarily weakened bets on Trump’s victory, it has not resolved the fundamental contradictions in American politics.
Divided Government: Obstacle or Opportunity?
Currently, the divided state of the American government is seen as beneficial to the market. The difficulty for both parties in pushing major policy changes reduces the risk of excessive stimulus. However, this state also means that policies cannot quickly respond to national and global challenges. The Republican-controlled House and Democrat-controlled Senate seem to maintain a fragile balance, but whether this balance can truly bring long-term stability remains to be seen.
Policy Uncertainty and Future Risks
Biden’s withdrawal not only increases uncertainty for Democratic candidates but also fills the market with anxiety about the coming months. Political uncertainty causes investors to hesitate, increasing market volatility. Whether in the stock market or cryptocurrencies, the possibility of Trump’s victory makes investors more cautious.
The division in American politics not only limits policy effectiveness but also has a profound impact on the socio-economy. In such an environment, the government struggles to focus on addressing critical issues like climate change, healthcare reform, and social inequality. Regardless of which party comes to power, if they cannot cross party lines and truly consider the people’s interests, American politics will continue to struggle in the mire. While Biden’s exit brings temporary political upheaval, deeper issues remain unresolved.