The responsible adult in me thinks we need to start planning for the possible slow meltdown of the 45th US presidency. While this may seem alarmist, from a risk management perspective we have what objectively seems to be flashing amber lights, which could rapidly go red if Congress declares enough is enough.
In what has turned into a real-time political reality show, the eyes of the world political and strategic community have been transfixed as President Trump has defied all conventions and now faces the real prospect of a prolonged period of administrative, congressional and judicial warfare.“Preparing for an an uncertain and unstable US seems very wise.”
His presidency is quickly being defined by the controversy over whatever links his campaign had with the Russians, and depending on what emerges in the various investigations and testimonies, Trump could find himself the focus of an impeachment action.
And if there is one thing predictable about the unpredictable Trump, it is that he would fight any attempt to remove him. With guns blazing.
And that is where countries like Australia need a plan B. At its most basic this could be to recognise the new realities of a neo-nationalist America preoccupied with its own domestic political dramas — a position the G7 leaders seemed to come to on the weekend. Or it could be a plan to deal with a full-on and prolonged impeachment process, and all the dislocation that comes with it.
Until the last few weeks, impeachment was only being discussed in far left forums, but came rocketing onto the main stage following the dismissal of FBI chief James Comey. All recent presidents have seen partisan calls for impeachment rise the longer they are in office. Around 30% of voters were typically ready to fire presidents Obama and Bush junior after six years in office. It took Trump one month to reach that 30% mark, and if a poll from last week is credible, just under 50% of American voters now want him to face impeachment.
Trump has only himself to blame. In a series of own goals, Trump has made a bunch of admissions about the removal of Comey that on face value would seem to come close to breaching federal codes that prohibit the obstruction of an investigation.
The practical requirements of that prohibition appear to be well satisfied. But assuming the facts are as reported, the key question is: did Trump have the specific intent to improperly obstruct the investigation? Intention is hard to prove, especially in a criminal case where proof has to be beyond reasonable doubt. Alternative intentions such as Comey was a “nut job” and had to be removed, would add the type of doubt that would almost certainly stop an adverse criminal finding.“If Trump went off the reservation and escalated his battle with Congress into a take-no-prisoners affair, then we could be in for a much rougher ride, as investors bail for the door.”
Which means impeachment appears to the only realistic pathway for those seeking to sanction Trump, assuming the facts are proven.
While reports suggest Trump also sought to influence two other agencies to not support the Russian investigation, the key will be when Comey testifies in public in front of the Senate Intelligence Committee.
If Comey really does have a series of memos noting Trump’s attempts to close down the FBI investigation, there is the making of a circumstantial case that starts to be very problematic for the president. The claim that Trump sought to speak to Comey alone adds to Trump’s problems.
At the same time, the investigation by former FBI director Robert Mueller will nail down the facts of whatever relationships there were between the Trump campaign and the Russians. Mueller must hand any evidence of presidential misdemeanours to the House of Representatives, which means any impeachment hearing would need the GOP majority to decide they have had enough.
The likelihood of that is difficult to gauge from this distance. But prior to Trump leaving on his first international presidential trip, a stunning series of daily leaks from the highest levels of the administration meant the tom-tom drums of impeachment were beginning to be heard around the corridors of Congress.
A well planned ‘normal’ presidential trip abroad brought a strange pause to the ferment that was palpable inside the DC beltway the week prior. But Trump’s return to Washington over the weekend saw his Twitter missives restart and the news sites were once again alight with new allegations surrounding his son-in-law and key adviser, Jared Kushner.
The Republican love-hate relationship with Trump is being tested, but to date nobody sensible is talking the nuclear option — dumping Trump into an impeachment hearing.
Hard-headed Democrats do not want to be wedged into a campaign where they are seen to be dethroning a rightfully elected President. But such is the torrent of materials coming from an intelligence community clearly angry with Trump, the timing may not be up to the Democrats to control.
The legal meanderings in Washington may continue for some time and an entirely possible scenario is this all plays out in the Congressional mid-term elections late next year. One commentator describes it as an “impeachment election“ — an epic battle between social progressives and Trump’s mid-America conservative voter base.
We know enough about Trump to be certain he will not lie down, so this suggests a continuation of the febrile politics that, until his trip, had dogged the 45th presidency.
For those charged with having to consider these things, it would seem wise to workshop how this might all play out and what actions should be taken to mitigate against what could be a very traumatic period.
The most obvious is to build some capacity to withstand a period of major market volatility. The world is swimming in debt — China had its credit rating cut last week amid fears of the massive debt overhang from its decade-long infrastructure binge. Almost all major Western economies are heavily indebted from ten years of trying to pump-prime their own economies. Low interest rates have seen households across the world borrow in record amounts. World growth is tepid at best and if the Trump presidency continues to gyrate in dangerous ways, this could well be the type of shock many economists worry could be the spark to a major correction.
In this climate, defensive investment re-positioning would seem to be sensible. Not to mention the giant housing bubble waiting to be pricked in our two largest metros.
If Trump went off the reservation and escalated his battle with Congress into a take-no-prisoners affair, then we could be in for a much rougher ride, as investors bail for the door.
(And for those of us who believe in cycles — 1987: Wall Street crash; 1997: Asian banking crisis; 2007: GFC; 2017: ???)
Strategically it is harder to read, but as Angela Merkel noted after the weekend’s G7 meeting, America’s European allies are coming to the view they need to take their fate into their own hands rather than rely on a less reliable US administration. Strong European co-operation has been a bedrock of US strategic policy since World War Two, so how this lands is going to be profound for major US allies, including Australia.
Climate policy will be an early test for many Western polities and a potential deal breaker. If in the coming week Trump pulls out of the Paris accord, many international political leaders will come under huge domestic pressure to publicly distance themselves from the US on this major economic and environmental issue.
To date Trump has stayed well on-script regarding our region, if anything strengthening US commitments after some early confusion, and taking real leadership over the need for China to contain North Korea. How the Korean peninsula is managed and contained is undoubtedly Australia’s major concern and if North Korea continues to provoke, it could be a real-world test of just how hawkish Trump can be.
For the US, Russia of course remains the wild card, both strategically and now domestically. If the torrent of high level leaks from the White House and intelligence agencies about the supposed relationships with Russian officials continues, the Trump administration is going to struggle to get any clean political air for its major domestic initiatives.
History suggests Trump will inevitably be confronted with an international situation where the US will be pressed to commit militarily and this will the best window into an administration that has been very unpredictable so far.
Finally, how all this plays for US corporate interests will be a major consideration in any risk assessment. Led by the big techs, US businesses have a huge stake in everything remaining broadly as it is. Any real-world strategic disruptions would quickly upset the global business models of these firms, most whom have enjoyed stellar bull runs over the last seven years.
If there is one truism of the Trump administration, it is that it has surprised all and it is this very uncertainty that is beginning to be endemic for the world’s decision makers. Preparing for an an uncertain and unstable US seems very wise.