Anyone who keeps up with America’s CNBC 24-hour financial news channel and at the same time devours US political commentary could not but be aware of bitter divergences.
On CNBC there is relentless optimism about stock indices and releasing the animal spirits.
In the pages of the New York Times the columns of Nobel Prize-winning economist Paul Krugman complain of the lies and disaster of Donald Trump and his tax cuts.
New face: Janet Yellen was replaced by Jay Powell as chair of the federal reserve
The Wall Street narrative is forget the ugliness of politics and focus on fundamentals. Trump delivered on his dramatic corporate tax cut, down from 35 per cent to 21 per cent, and engaged in a ferocious amount of economic deregulation which sent American share prices soaring.
Krugman and former US Treasury Secretary Lawrence Summers argue that the Trump tax cuts with their bias to companies and better-off Americans are a ghastly mistake which damages the middle classes and will add £962million to the deficit.
At the start of 2018 this is a debate which no one in Britain can afford to ignore. The 27 countries of the European Union may be our most important trading partners. But Britain’s biggest single trading partner is the United States and remarkably we actually run a substantial trade surplus (around £40billion a year) with the Americans.
Indeed, as we saw after the financial crisis of a decade ago, the British economic cycle moves more in lockstep with that of the US than the EU.
No one can be absolutely sure how the Trump tax cuts will play out. Wall Street in the shape of the Dow Jones and Nasdaq (up 25 per cent and 27 per cent respectively in 2017) assume it must be good. Analysts expect lower taxes and less regulation to fuel earnings.
Amid the optimism the change in US economic leadership at the Federal Reserve has been little discussed. The removal of the veteran economist Janet Yellen from the Federal Reserve and her replacement by Jay Powell is viewed as a smooth transition.
But is that really the case? In recent times the White House has preferred not to interfere with the Fed even if the chairman comes from the other party. Republican Alan Greenspan worked with Bill Clinton. Similarly, Ben Bernanke, a Republican, was able to co-operate with Barack Obama. In both cases their skills as monetary experts overrode all over considerations.
Powell, it is argued, worked alongside Yellen at the Fed so nothing much will change. But Trump clearly felt that with Powell at the helm he would have more control of the monetary and banking agenda.
An establishment banker and lawyer, Powell lacks the scholarly background of his three predecessors. It is naively assumed that he will continue the Yellen path on interest rates, with three rises scheduled for 2018, which would bring the range up from 1.25 per cent to 2.25 per cent.
But what if the economy overheats, credit standards deteriorate and inflation picks up? How bold will Powell be in publicly challenging a president who could come firing back and disturb stability?
With economic confidence already high, there must be questions as to whether 2018 will be the right year to ease financial regulation in the US. In 2017 American companies went on a borrowing binge, raising the volume of corporate debt to £740billion, higher than before the financial crisis.
After the monetary blast which pulled the US and the world out of the financial crisis comes the fiscal blast from the Trump tax cuts. The Fed’s task in such circumstances is to be politically brave and make sure that the punch bowl is removed before the party gets out of hand.
The combination of the crypto-currency bubble, sharply rising stock prices and a corporate debt bonanza suggest that moment may be arriving. Fear must be that the new Fed leadership will lack the intellectual muscle and willpower to battle it out with the politicians.
Tragic: Cousins died in a seaplane crash in Australia
The tragic death of Richard Cousins and his family in a seaplane crash in Australia deprives the FTSE 100 of one of its most unassuming and effective bosses. He took charge of global caterer Compass in 2006 at a moment of crisis, restored stability and turned it into a cash generating machine.
He more recently bravely resigned from the board of Tesco because he disagreed with the takeover of wholesaler Booker. He will be greatly missed.