William A. Brewer III Writes for Texas Lawyer on the Price Markets Pay for Political Volatility

In a Texas Lawyer commentary, partner William A. Brewer III examines a new study by Felix Stolze analyzing the economic consequences of populism and looking beyond the ballot box to how political volatility reverberates through markets, boardrooms, and commercial agreements.

Using the recent electoral gains of Germany’s Alternative for Germany as his starting point, Stolze analyzed 129 elections across the EU and OECD, finding measurable economic, climate, market, and corporate consequences following right-wing electoral victories. 

The broader lesson from Stolze's analysis, Brewer argues, extends beyond any one election or political movement. Changes in energy, tax, and trade policy can reshape investment decisions, disrupt supply chains, and upend the assumptions underlying commercial agreements.

“Markets are constantly repricing the world politicians create,” Brewer writes. “A change in energy policy can alter the economics of an industrial plant. A change in tax policy can move millions in capital across borders. A change in trade policy can upend supply chains.”

For companies and their counsel, that volatility can ultimately become a legal problem. “Contracts, after all, possess no built-in shock absorbers for sudden ideological warfare,” Brewer observes.  

Ultimately, Brewer argues that political rhetoric may offer simple answers, but markets are governed by the cold arithmetic of risk and return: “So if you want simple solutions to complex problems – be careful what you wish for.” 

Read more here.