A contrarian view suggests a new political administration might deliberately implement growth-negative policies at the start of a term. This strategy, likened to a new CEO "kitchen sinking" results, clears the deck and establishes a low baseline, making subsequent growth appear more robust.

Both Democrats and Republicans avoid the boring, complex solutions to inflation—like housing density, healthcare reform, and aggressive antitrust. Instead, they opt for politically palatable but ineffective measures like tariffs (Republicans) or short-term subsidies (Democrats), ensuring the core problems remain unsolved.

Rajan suggests that a central bank's reluctance to aggressively fight inflation may stem from a fear of being blamed for a potential recession. In a politically charged environment, the institutional risk of becoming the 'fall guy' can subtly influence policy, leading to a more dovish stance than economic data alone would suggest.

Contrary to expectations of radical change, Giorgia Meloni has maintained stability by avoiding major actions that could upset the public or her coalition. This calculated lack of activity is a key reason for her government's endurance in a typically volatile political landscape.

The German government's reform agenda centers on internal issues like welfare and pensions. However, these are generational problems. The immediate crisis of stagnation is driven by more urgent threats, including Chinese export dumping, stifling bureaucracy, and severe labor shortages, which remain largely unaddressed.

Despite Javier Milei's iconoclastic image, his economic program is run by a highly respected, conventional team of technocrats, many from the previous reformist administration. This creates a separation between his "Trumpy" political style and the orthodox, IMF-style stabilization policies being implemented.

Despite accurately identifying severe economic and social challenges facing Britain, Keir Starmer's Labour government has proposed policies considered too small and shallow. There is a significant mismatch between the gravity of his diagnosis and the scale of his proposed solutions, leading to criticism that his administration is not meeting the moment.

The current expectation for legislative stalemate could be completely upended by a significant economic downturn. A recession would make fiscal stimulus more politically appealing to both parties, consistent with historical patterns, creating an environment for policy action that otherwise seems unlikely given the political landscape.

Mainstream German parties refuse to form coalitions with the far-right AfD. While this keeps the AfD from power, it also removes any incentive for them to moderate, potentially encouraging radicalization and leading to legislative gridlock among centrist parties.