2019 has all the makings of a very difficult year particularly for the US, and also globally, in all major aspects of society including politically, socially, and economically. The purpose of this short discussion is to consider what might happen in the coming year if the US descends into a Constitutional Crisis because of the confluence of forces impacting the Trump Presidency.
This type of thinking is often called “scenario planning,” and we’ve led many projects of this type for clients over the years, which has taught us to look at the world in terms of driving forces and possibilities. Two of our recent books, Foresight and Extreme Creativity, and The Big Shift, have both examined these and related questions in detail. The Foresight book includes about 100 pages specifically on scenario planning, while The Big Shift surveys 83 of the major forces impacting today’s world.
This is also quite timely in that the upcoming Innova-Con 2019 Conference is focused on the topic of DISRUPTION, and is sure to be a fantastic learning opportunity to consider the role of innovation in a tumultuous world. With major sessions on Emerging Technology, Innovation in Government, Blockchains, and the new ISO 56,000 Innovation Management Standard, we’re looking forward to fascinating two days. Please join us! Click here to learn more.
The scenario planning approach is based on the realization that while it’s impossible to predict the specifics, there are major themes and trends occurring about which a great deal is known, and it’s prudent for all leaders to consider the possibilities in order to prepare for whatever may occur.
Thus, the premise explored here is that President Trump is under such extreme pressure that it could lead to a major Constitutional Crisis in the US due to the threat of Trump’s impeachment or his resignation.
As the political pressure increases, how might the situation unfold?
•••
If Trump were to be exonerated by the Muller Investigation then little of what is described here is likely to happen, but if major wrongdoing and/or criminal activity is revealed to the public related to either before Trump ran for office, during the campaign, or since he took office two years ago, then the situation as described, or something much like it, will emerge. Or perhaps it would be more accurate to say, it would “erupt.”
The major variables that are currently evident which will likely impact the situation for 2019 include:
The US Government Shutdown
The resolution of this will have major repercussions, and all the players know it, so they’re being very aggressive in positioning themselves. Trump has positioned himself with no latitude, which increases the risk that he will act irrationally.
Muller Investigation into Trump Collusion with Russia
To date the investigation has resulted in 7 guilty pleas, 1 conviction, and 29 additional indictments. No one whom Muller has indicted has been exonerated. His grand jury has been extended through June 2019, which suggests that additional indictments are possible. There are rumors that a report is now in preparation, and certainly whenever the report is released it will unleash a fierce battle of partisan fighting over what it means. Some believe that more indictments will be issued this month that will further impact Trump’s inner circle, including his family.
Congressional Investigations
The House now has the power and intent to subpoena extensively to require testimony from many government officials, and they may choose to have a look at a wide range of topics including Trump’s tax returns, his communications with Putin, etc. This will create tension and controversy.
Michael Cohen Feb 7 Testimony to Congress
Apparently this will be the first major piece of public inquiry. Cohen certainly could not testify without the explicit permission of Muller, so Muller is likely going to use Cohen’s testimony as the tip of his spear, through which he intends to suggest the scope of what his report might reveal.
Cohen’s testimony could cover the following (and other) volatile topics:
The extent of Trump’s dealings with Russia prior to 2015, for which there is a lot of circumstantial evidence that the Trump organization engaged in money laundering. This would in turn place Trump’s tax returns in jeopardy of being false, and it would also expose his children, who are his business partners, to legal jeopardy.
This also will lend credibility to inferences that Trump is beholden to Putin, and that Putin has leverage over Trump that compromises his Constitutional responsibility.
Trump’s payoffs to women, while perhaps less serious legally, could expose the extent of both Trump’s philandering and his lies. It would also expose campaign finance violations, which are felonies.
Congress could call many other witnesses to possibly corroborate Cohen’s testimony, including Trump’s CFO (who has testified extensively before Muller already, and who would certainly know if money laundering was occurring), Flynn, Gates, Priebus, Kelly, Mattis, Sessions, and Tillerson. And Trump’s children. Cohen’s testimony could also reveal the prior coordination of testimonies to congress, which may be tied to Trump’s direction for those to testify falsely.
Consequences
Under all of the above scenarios, the following would likely unfold:
Threat of Impeachment
Unless all the witnesses say that nothing happened, then this threats persists. But if nothing happened then Cohen would not be coming before Congress, so clearly that’s not a real possibility. If he’s going to testify, it’s because he has very damaging things to testify about.
Therefore, the threat of impeachment will persist for at least 4 – 6 months, which will be great for the media because it will create a lot of urgent news, but it will also force media outlets to take an implicit or explicit position.
Fox News is highly influential and has already taken the explicit position that Trump has done nothing wrong. If credible evidence emerges that it’s not a witch hunt, then either Fox will be forced into chronic denial, or it will have to turn on Trump. If that were to happen then Trump’s presidency might collapse.
If Fox holds out, it will only be by constantly de-legitimizing Muller, Pelosi, the House, and all witnesses. This will appeal to the extreme right, but it will become increasingly untenable in the face of evidence. At that point, Fox would flip and turn on Trump, and clamor for Pence as the savior.
If strong evidence of money laundering or collusion does emerge, it will necessarily involve Trump’s children, and while he himself may be immune from indictment while he is president, this will not be true of his children. He may then try to negotiate a trade – his resignation in exchange for pardons for his children and no prosecution for himself post-presidency.
But it would not get to that point easily or quickly. Trump will do almost anything to avoid this, which would include threatening war, perhaps inducing a war, mass firings of his cabinet, confusing and contradictory instructions to the military, etc. His erratic tweets would severely shake up stock and bond market confidence, and he would become increasingly incoherent, to the point that Congress would be called upon to impeach him simply because of his erratic behavior.
Kelly and Mattis could not control him, and the next set of staff will not be able to either.
This would in turn shift the focus immediately to Pence. The important legal question will be “What did Pence know, and when did he know it.” If he was involved in the collusion, then a very difficult situation arises …
Because, if Pence were to leave office by resignation or impeachment, that would leave Pelosi next in line. The American right wing would become apoplectic at this prospect, and would be beside themselves and do anything to stop it. The volume of rhetoric and accusation would be deafening, and all right wing conspiracy believers (of whom there are apparently many) would certainly become passionately angry.
On the other hand, if Pence is untouched and does become president, then he will have to choose how far he would attempt to push his very conservative social views as president, and he would face huge opposition from the left. (His wife has just taken a teaching job in a school that explicitly bans LGBTQ children, which makes his position very clear.)
All of this sets up an apocalyptic 2020 election campaign that will give American society serious heartburn.
The threat of gun violence will underlie a lot of these scenarios. Muller, Pelosi, Schumer, Clinton, and many prominent Democrats will likely be threatened repeatedly. Should any of them become a victim, the polarity would worsen.
Other Variables
Brexit March 29
This unresolved crisis-in-waiting will hit British companies, currency, and stocks very hard, European stocks moderately, and will have some echo effect on the US markets, and particularly on companies with strong dependence on the European economy.
The US Withdrawal from Syria
The one who gains the most from the US withdrawal is Putin, who has the most powerful and now unopposed military in the region, and who clearly has strategic ambitions there. This again brings to question Trump’s relationship with Putin, and whether Putin’s knowledge of past misdeeds by Trump has compromised Trump.
The US Economy
The US may already be entering a recession, as the boom-let we are experiencing could be largely a result of the tax cut, as corporations have been able to repatriate so much cash that they’re boosting the economy with it. But this is equivalent to taking speed, and when the speed wears off the headache begins, which would be soon. Second, Trump’s trade war of itself could induce a recession. Third, global economic situation is not robust and we may be cyclically in for a downturn anyway; China, for example, is not booming as it was. Fourth, now that the Fed has switched from QE (buying securities to boost liquidity) from QT (selling down its multi-trillion dollar portfolio), this is pulling things down (and acting as the anti-inflation treatment obviating the need for rate increases). All of this together may compose a recession which would surely be blamed on Trump, further weakening his political position.
Conversely, should strong US growth continue and a recession not emerge, then Trump’s hand would be strengthened, as he could point to this as evidence of his leadership.
Putin and Xi
With the US, Britain, and Europe progressively pulled into these dramas, Putin and Xi will not be watching idly. Both might choose to seize on US weakness to advance their own strategic agendas. It’s quite easy to conceive of Putin seizing half or even all of Ukraine, or Belarus, or Georgia, and what would Trump do then? Start a war? Let it go? What would the Europeans do? There are no good options.
What would Xi do? Certainly he has his eyes on Taiwan, but would he risk a war? Perhaps. Any aggressive military moves he makes will put the US Navy in an extremely difficult position, and thus the 7th fleet (Pacific) command is now probably the hottest seat in the US military.
Others
Life continues on in the mean time all around the world, and there are other de-stabilizing forces. If India and Pakistan were to come to blows, or North Korea were to do something crazy, or Israel to become aggressive (as Netanyahu feels more domestic pressure), or oil stocks collapse, or another cataclysmic fire season in California …
Outcomes
So what’s the conclusion from all this?
Is it possible that little or none of this will occur? Yes.
But if some, or most of it does occur then events will trigger further events and the situation will deteriorate quickly. The present situation does not suggest that the patience and judgement exists to sort things out thoughtfully, and what’s most likely instead is a thrashing about that only makes things worse.
If Trump’s leadership becomes partially or fully compromised and he’s still in office, then this will put extreme pressure on the US Military Joint Chiefs of Staff, as they will have to make very difficult decisions with neither leadership or a national consensus behind them.
Again, the only scenario in which the crisis abates is if Trump is completely exonerated, and soon. Otherwise, the situation will progressively intensify and will only be partially resolved at the next US Presidential Election in November 2020. But even then, it will be a divisive election and no matter who wins, the social and political tension will surely remain, because the losing side will be irate, and the winners will keep the pressure on for whatever political agenda has gotten them into office.
The drama of 2019 will therefore likely extend into the foreseeable future, an era of tumult and conflict in the US and perhaps globally. Tune in early next year for another blog post, TURBULENCE 2020…
•••
From the InnovationLabs PUBLICATIONS DEPARTMENT …
Our newest book is now available: BUSINESS MODEL WARFARE is the most complete book ever written (as far as we know) about business models and business model innovation. Check it out here.
We’ll introduce it more thoroughly soon.
And if you’re in the legal field, you will surely be interested in a new anthology from Ark Group, Strategic Innovation as an Emerging (Law) Firm Function. Langdon’s chapter is Why Innovate: The Link Between Strategy and Innovation.
•••
Your comments are always welcome.