Burgess COMMENTARY

Peter Burgess

Fareed The 3 Letters Key to America’s Economic Health Aren’t D-O-W

The Dow may have soared during the Trump administration, but for a glimpse of America’s economic future, it may be better to look at how businesses view its long-term economic appeal, writes Adam Posen in Foreign Affairs. Foreign direct investment (FDI) is tumbling, and that signals trouble ahead.

‘[B]usiness decisions about large, long-term investments, such as the building of major production facilities; foreign takeovers of, and mergers with, US companies; and investment in research facilities and workers…are reliable indicators of how markets really see Trump’s policies affecting the future,” Posen writes.

For FDI in “the first quarter of 2016, the total net inflow was $146.5 billion. For the same quarter in 2017, it was $89.7 billion. In 2018, it was down to $51.3 billion…The falloff is a result of a general decline in the United States’ attractiveness as a place to make long-term business commitments.”