Goldman Sachs's private wealth advisors told wealthy clients that neither President Trump nor his administration's policies are likely to trigger a decline in U.S. preeminence.
"While some of our clients have reacted to the Trump presidency with great concern and asked whether his unconventional approach and authoritarian impulses can jeopardize U.S. preeminence, we do not believe so," Sharmin Mossavar-Rahmani and Brett Nelson wrote in their 2019 outlook, a 102-page report entitled "American Preeminence in a Rattled World."
The note went to Goldman’s Consumer & Investment Management Division, which has combined the firm’s upstart consumer lending and savings business, Marcus, with its long-time asset management business that manages more than $1 trillion for institutions and ultra-high-net-worth individuals. For the tenth year in a row, Goldman advised its clients to remain overweight U.S. stocks.
In the note, Goldman discussed five other instances going back to the 1950s where so-called "declinists" have forecasted the decline of the U.S.
"None of the earlier prophecies came to pass. Nor will this one," Goldman wrote.
The report noted that, throughout history, there have been instances of anti-immigration attitudes in the U.S., presidents attempting to pressure the Federal Reserve to support their agenda, presidents pushing NATO allies to pay more, and trade spats.
"History provides perspective and enables us to evaluate whether there has been an overreaction to what the Eurasia Group has called the 'unprecedented' and 'authoritarian' Trump presidency, 'full of conflicts of interest,'" Goldman wrote. "Not all Trump administration policies, actions, and attitudes are new, and certainly they are not unprecedented."
Goldman highlighted the strength of U.S. institutions as a pillar of U.S. preeminence, pointing to instances where states or the private sector have stepped up on issues ranging from the environment to immigration.
"We conclude that the economic, political and judiciary institutions that underpin U.S. resilience remain strong and that U.S. preeminence is intact."
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
