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Quick Edit | Markets and leaders

Quick Edit | Markets and leaders

Clearly, markets need leaders too. Recent events show leadership has been found wanting.

In less-than-oblique criticism of US political leaders, World Bank president Robert Zoellick said there are dangers ahead. He was referring to the acrimonious debate in the US Congress on the debt ceiling issue.

In any open economy, the task of coordination is best performed by markets. But in times of great uncertainty, markets lack mechanisms to carry out this task. At such moments they need a steady hand. But instead of doing that, US politicians delivered a shock that led to a huge amount of investor wealth being wiped out.

Short-sighted behaviour is normal in markets, but it is less expected in politics. But perhaps it was too much to hope from leaders: like profits, the hunt for power is narrowly focused, perhaps more so. Today, that poses a bigger danger than any market crash.

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