Behold the bonfire of the certainties. In combination with June’s Brexit vote, the political reaction that many assumed would hit in 2009 has finally come to pass. The US wants to reverse globalisation, as does the UK, while France, Germany and Italy all have a chance to upend the status quo at the ballot box in the coming months.
The certainties that had reassured investors and financiers since the era of Thatcher and Reagan, and that are now in question, include a global commitment to free trade, independent central banks, a financialised version of capitalism, and relatively limited social safety nets. Although many of those voting for British exit from the EU, and for a Donald Trump presidency, have a deep distrust of governments, the likely result is more interventionist governments.
Mr Trump’s character adds a layer of uncertainty. As President Barack Obama argued, to no avail, it is worrying when someone who will now have control of the nuclear codes cannot be trusted with their own Twitter account. This uncertainty will itself damage securities prices and shake confidence.
Putting Mr Trump’s personal character to one side, in the broader picture the result should not have been a surprise. Back in 2008, as the financial crisis broke, many thought a political crisis would ensue within months. Capitalism appeared broken, and some form of populist reaction an inevitability. The surprise is that the denouement has been so long delayed.