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Trump impeachment risk rises

Trump impeachment risk rises

Comey sacking puts Russian scandal centre stage

by Brian Reading in London

Fri 26 May 2017

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President Donald Trump’s behaviour has put impeachment back on the agenda. Russia’s suspected efforts to rig the 2016 presidential election might have remained background noise had Trump not appeared to be trying to thwart investigators. Now the alleged collusion of his staff with the Russians is centre stage again. But impeachment depends on popular opinion, election arithmetic and the economy.

Opinion on the scandal is evenly divided between Democrat believers and Republican deniers. Election arithmetic makes a successful impeachment possible before the 2018 mid-term election but more likely thereafter. The long anaemic recovery since the recession is unlikely to last more than another two years. A new financial crisis is in the making as cheap and plentiful money is withdrawn. Failure to deliver pro-growth promises will not be forgiven if the economy turns sour.

While all eyes are on the White House, give a thought to President Vladimir Putin. Without doubt he wanted Trump to win. He may or may not have orchestrated a Russian campaign intervention. An unstable and unsafe president damages American world leadership. Sacking FBI Director James Comey on 9 May was not smart. It lent credence to the belief that Trump was determined to hinder investigators. Michael Flynn, the sacked national security adviser, is claiming Fifth Amendment protection in refusing to supply documents to a Congressional inquiry.

Trump met Sergey Lavrov, the Russian foreign minister, in the White House the day after Comey was dismissed. This led to allegations that the president had revealed state secrets. He initially claimed not to have and then that he had the right to do so. Putin has offered to release Russian records of the White House meeting. His is a win-win move. Denying secrets were divulged endorses Russian involvement in US politics. Admitting that they were gives weight to accusations of malfeasance. Destabilising an enemy’s control centre is a military priority.

While the media feast on Washington shenanigans, popular opinion may be less swayed. There are die-hard divisions between dedicated Democrat and Republican party supporters. Trump’s low poll ratings are misleading. If all Democrat party supporters say he is doing a bad job and 80% of Republicans disagree, he gets 40% approval. He is averaging about 38%.

If support for the Republican party slips, Congressional jobs are at risk. All lower house incumbents or hopefuls face selection and election every two years. A simple lower house majority initiates the impeachment process. Any excuse can be used and Trump is giving plenty. Republicans fearing job losses at the 2018 mid-term election may precipitate impeachment. Lost control thereafter would make impeachment odds-on.

The Senate holds the key. Two-thirds must vote for a conviction. Democrats and independent senators hold 48 of the 100 seats in the Senate. They need one-third of the current 52 Republican Senators to support an impeachment conviction. Senators serve for six years and one third come up for election every two years. But only eight Republican incumbents are at risk in 2018. An own-party rebellion against Trump is necessary for impeachment.

Trump’s promised pro-growth policies have been delayed and could be derailed. The economic recovery is now mature. Cheap and plentiful liquidity has distorted equity and bond markets, departing from economic fundamentals. Withdrawal is inevitable but risky, possibly spawning financial turmoil. Exchange-traded funds and index trackers are accidents waiting to happen when markets turn bearish. If modest growth continues and is more evenly shared, Trump could serve out his first term. But fairer means falling profit shares in national incomes. If he survives, Trump’s chances of reselection and re-election in 2020 are negligible.

Brian Reading was an Economic Adviser to Prime Minister Edward Heath and is a Member of the OMFIF Advisory Board.


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