Part 3/13:
Regime Uncertainty and Its Impact on Investment
A distinctive aspect of Hanky’s analysis is the concept of "regime uncertainty," which refers to the unpredictable shifts in economic policies and regulations that create a climate of hesitation among businesses and investors. Unlike traditional cyclical downturns, regime uncertainty causes companies to halt long-term investments, issue less guidance, and adopt more conservative strategies.
He draws a historical parallel to the Great Depression, noting that regime uncertainty during the early 1930s—exacerbated by New Deal policies—slowed economic recovery. Today, the rapid and significant policy shifts, tariff debates, and regulatory changes under the current regime are similarly dampening economic momentum.