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M. Ray Perryman

The Economist: Strength amidst chaos

Business
Wednesday, January 13, 2021

I first saw the US Capitol as a student about five decades ago. For the past 40+ years, it has been part of my professional life – testimony, hearings, meetings, meals, receptions, and crunching numbers.

Whenever I am there, I find a few moments to pause in the imposing rotunda, peruse the nearby statues, or perhaps climb to the top for a closer view of Constantino Brumidi’s breathtaking “The Apotheosis of Washington.” Even the hallways are majestic.

I marvel at the glistening white dome and recall Abraham Lincoln's words in 1862 to a young chaplain dispatched by General Grant. He spoke of the criticism of finishing it as war raged and said “If people see the Capitol going on, it is a sign that we intend the Union to go on.”

This edifice transcends a mere building. It is where the laws, both magnificent and ignominious, which govern this quarter-millennium grand experiment (quite young by historical standards) in merging democracy (via a republic) and capitalism into a great nation, are forged.

I always get chills when I enter the Capitol. It is never routine. Witnessing this hallowed ground desecrated and lives lost within its storied walls is a travesty.

When I consider these events as an economist, something truly amazing surfaces. As financial markets opened on January 6, prior to the siege, they surged upward for unrelated reasons. They remained there throughout the day and those immediately beyond, and global markets generally followed suit.

Markets collapsed after 9/11, when the House initially rejected key legislation to quell the Great Recession, and as the severity of the coronavirus first became apparent. They often fluctuate dramatically in response to an offhand remark by the Federal Reserve Chairman or even a single company missing an earnings estimate by a few cents. Yet, on this most consequential day, they scarcely noticed.

This performance can only mean one thing. The financial markets, where trillions of dollars are exchanged daily seeking to dissect the tiniest bits of information, never perceived that the US government was in jeopardy. If there had been a scintilla of doubt for a fraction of a nanosecond regarding the stability of the largest and most powerful economy on earth that supports the primary world reserve currency, there would have been a crash of epic proportions.

Markets are always forward-looking. The fact that they ignored this craven attack is compelling testament that the US has the strongest and most resilient political and economic institutions the world has seen. They will remain a source of economic leadership and technological advancement and the foundation of the global monetary system for the foreseeable future. They have often been tested, but never faltered. Lincoln was right. Stay safe.

Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.

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