The article discusses concerns raised by Richard Schinder, co-founder and co-CEO of Ensis Partners, regarding the emergence of “political risk” in the United States, particularly as states like California adopt extreme leftist policies. Schinder argues that such policies could create significant uncertainty for investors, leading them to demand higher returns or avoid investment altogether.
Key points include:
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Definition of Political Risk: Refers to the potential for a government to seize assets or significantly reduce their value, usually associated with foreign, unstable regimes but now seen as a risk in U.S. jurisdictions.
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Emerging Policies: Schinder highlights various proposals, such as wealth taxes and reparations task forces, which could deter business and investment.
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Impact on Decision Making: He emphasizes that unprecedented and unpredictable policies make it almost impossible for individuals and businesses to assess financial risks when considering living or investing in such jurisdictions.
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Regional Comparison: While he acknowledges Michigan is not as extreme, he notes that fluctuations in regulation can hinder investor confidence and capital formation.
Overall, the piece suggests that evolving political climates in certain U.S. states may mirror characteristics typically associated with more volatile, developing nations, affecting investors’ willingness to engage in those markets.
