Musings on the future of US politics

As a futurist and two time failed political candidate for party pre-selection in Australia I am still fascinated by politics and have always had a strong interest in American politics.

Having read several interesting pieces on the current situation in the USA I have been thinking about the possible future scenarios we might see in the USA. As a basis for understanding these possibilities better I recommend you read Rules for a constitutional crisis by Lawrence Lessig and In this case, resistance is futile by Simon Wardley.

Lawrence Lessig calmly and clinically argues that the rule of law will assert itself and that the Congress and the Senate should do their job. That job is country before party. The premise is very well argued and if the rule of law does not assert itself then there are major constitutional problems to face. I argue below that more is needed.

Simon Wardley argues cogently and persuasively that Trump should be allowed to do what he promised to do to the American people but other things should be resisted. The argument rests on a view that Trump wants strong resistance for political reasons. If the situation in the USA worsens then he can point to people not allowing him to carry out his plans and call for more support from the people to allow him more power. If things in America improve despite everything then he will take credit (as every politician in power always has regardless of cause). Another facet of this view is Yonatan Zunger and his description of resistance fatigue. This essentially is that a master political strategy is being run by Trump and Bannon et al that is looking to exhaust the capacity of the people to resist by throwing out red Herrings until the general population is sick of the protests. While I think the arguments are well thought through the political reality of people mostly sitting back and waiting for 4 years seems very unlikely.

So lets look at some scenarios  with a HT to Jim Dator and his four scenario story structure). The scenarios are limited to the political situation but obviously can form the basis for effects on the rest of society and the world. The scenarios are not very detailed in order to fit them into  a reasonable post length but I would welcome input and comments to flesh them out:

Stability/Discipline

This is really the Lessig story and the view that the strength of the institutions of the US political system which were designed to bring stability.

The USA system is designed to limit the power of any one of the Executive, Legislative, or Judicial branches of the government.

Generally these act as shock absorbers although Presidential nominations to the Supreme Court with a compliant legislative branch can change the overall flavour significantly.

The story here would really be one of a long grind of tempering of Presidential actions by the Congress and Senate, and multiple court actions at a Federal and State Level.

This would slow any significant change, remove the excesses and provide time for the rest of the world to adapt. Assuming that there are not significant populist successes in other places such as France which cause rolling change.

This would lead to the next Presidential election being more of a conventional battle between Trump and a new candidate from the Democrats.

While this may create political stability of a sort it is hard to imagine it being good for the USA overall

Transformation

This is essentially a story of significant political change and is premised on a few basic statements (not of fact of course):

  • That the changes that are happening with the Trump Presidency mark the start of a great re-awakening of the political involvement of the centre/left of the American people. Examples such as the current protests and the significant raising of money by the ACLU (Donations to A.C.L.U. and Other Organizations Surge After Trump’s Order) in recent days support this possibility.
  • That political pressure of the sort that has shown success for the Tea Party in America puts pressure on members of Congress and the Senate. We have seen Eric Cantor unseated by an insurgent tea party candidate selection process. Can the same happen from the sort of resistance and political commentary we are seeing now? This requires far more discipline and organisation than what is happening right now and would have to be focused on the mid-term elections (where all 435 Congress Members, 1/3 of the Senators and 36 State governors are up for election).
  • A new leader emerges from the centre left of politics for the public outrage and political operations to coalesce around ( My pick would be Elizabeth Warren but I do not know enough about the next layer of leaders to be adamant about that).
  • A new leader emerges from the Republican side of politics to split the support that currently underpins Trump.

Nothing concentrates the political mind more than the possibility of losing an election. The mid terms are some way off, but if significant numbers of politicians are frightened of either not being selected to run again or not being elected then political opposition to the extremes of the Trump Presidency will grow.

In the USA this is complicated by the political gerrymandering of the seats ( which has meant the Tea Party concentrated on political candidate selection rather than elections) and the issues of levels of voter turnout in a voluntary voting system. This means that it is more difficult to get changes in representation in seats and that hot button issues that increase voter turnout can have a significant effect.

If we extend the scenario to the next Presidential election then it is possible to see a scenario where there is a four way competition for the Presidency:

  • A new Democrat leader
  • Trump but not with the Republican nomination
  • A new Republican leader
  • A popular independent – possibly being far more influential than ever before

An even greater departure from politics as normal would be the creation of  a new political party of the centre.

Side Note: Politicians of all stripes have always used “the enemy” to galvanise support. The picture I have briefly described above needs more – it needs a cogent story of action and policy, not just opposition. It also needs to bring large swathes of the Trump supporters on board , either to new Republican leadership or to the Centre/Left. As Lessig has pointed out the vast majority of the Trump voters are not evil and there are significant and legitimate claims and concerns that they have which need to be addressed. Not the least of these is the income and outcome disparities that exist.

Transformation Counter Scenario

If the Centre Left of American politics creates significant resistance to the Trump Presidency but fails to create a disciplined political operation on the ground we could see almost the opposite of the scenario above:

  • In reaction Trump supporters and the Tea Party put more pressure on sitting members of Congress and the Senate to not oppose the actions of the President by threatening to pile into the selection processes of the Republican Party. Possibly supported by people like the Koch brothers who have been running all sorts of polical activity over the last decade.
  • The economic situation of the USA appears to worsen through a range of factors, one of which may be change in trade and political allegiances structured around more isolationist policies and the desire of China to play a larger role in World affairs.
  • This galvanises Trump supporters even further as they are convinced the limits that are being placed on the President are the cause of these problems.
  • From both the selection processes and the mid term election the Congress and the Senate become more pro Trump.

Collapse

It is a truism in futures work that people commonly find it easier to find ways that disaster can occur than any other type of scenario. This situation is no different. Disaster politically could occur with:

  • Impeachment of President Trump due to multiple causes. Examples include findings of collusion with the Russians in the election campaign, hardening of evidence in the Steele dossier from multiple investigations or breaching the emoluments rules through all sorts of way through the Trump businesses due to his lack of willingness to divest.
  • Mounting debt levels if tax cuts are delivered, significantly cutting revenue (Budget office sees small deficit dip in 2017, then $9.4 trillion in 10 years). Market panics on debt problems could trigger a political crisis that Trump is unable to address.
  • Trade wars erupt with China and Mexico , causing rising reduced US growth and rising prices and cost of living squeezes on the very people that voted Trump in in the first place
  • An actual major war (China military official: War with US under Donald Trump ‘becoming practical reality’).

All of these possibilities and others can cause significant political upheaval. I think that in most people’s minds this can result in politics going back to “normal”. I would not be too sure. Impeachment would lead to a Pence Presidency, someone who most people do not know at all. There is also a real risk that people are too focused on sorting out the political structures and ignore the causes that created the issues in the first place. A political response that does not address the legitimate concerns of huge numbers of the American electorate will lead to rolling political crises.

Growth

  • Despite the current turmoil Trump manages to get most of his own way.
  • Tax cuts to the wealthy and infrastructure spending stimulate the economy causing an increase in GDP.
  • Re-negotiations of trade arrangements benefit the USA

The Trump way of doing politics is seen as the new way and a new breed of politician rises up to take advantage of the changes.

Twenty years of Billionaire Presidents or Billionaire backed Presidents ensue.

Australia

As I am an Australian (although I was born in England) it could be argued that these scenarios (and the many more that could be constructed)  are a bit irrelevant to me and the community in which I live. I would argue that both thinking about them and their implications is vital to us because of several key issues:

  • America is still a major economic powerhouse and what they do affects the whole world.
  • We are caught between a long and strong alliance with the USA and a trading and economic dependence on Asia, and China in particular. Changes in the political balance between China and the USA affect us more than most countries in the world.
  • We have our own populist political person in Pauline Hanson and her One Nation party as well as some fringe right wing elements. While to date they have been pretty chaotic and disorganised (and I would argue inherently so), the changes in the USA and Europe could both embolden them and give them access to people, tools and money to pursue their aims. What is about to happen in the USA could be played out here in the future so thinking deeply about them is well worthwhile.

One More Thing

Finally I think it is worth looking at the worldview of one of the main protagonists Steve Bannon. As a futurist I am constantly talking to people about how the mental models they use to construct their view of the world determine how they see strategy. In the link below Steve Bannon shows that he has a very particular worldview as stated in his own words rather than being interpreted by someone else . His views may significantly shape US policy in the next few years and therefore understanding them is important when thinking about the future. I personally find that a very scary thought but watch the video and read the transcript and come to your own view:

This Is How Steve Bannon Sees The Entire World

The soon-to-be White House chief strategist laid out a global vision in a rare 2014 talk where he said racism in the far right gets “washed out” and called Vladimir Putin a kleptocrat. He also outlined the view that we are at the early stages of a global war with Islam

Paul Higgins

Why is the EU Acting Like a Meat Wholesaler?

lamb carcase from WA agriculture carcass

For a long time I was on the board of an unlisted public company that wholesaled meat. The Chairman had a very simple attitude to debt collection. If someone owed us $20,000 then he would spend $50,000 trying to get it back. That may not seem to make economic sense but it made sense when you think of debtors as a network. He simply wanted to send a message that we were not to be screwed with, and that we would chase you to the end of the earth. In the meat industry if you got even a whiff of a reputation that you would not collect your debts then people very quickly stop paying you. This very simple strategy worked very well. On annual turnover of $80-$100 million a year we very rarely had bad debts in total over $25,000 and there were years where we had none at all.

This strategy seems to be echoed in the approach the EU is now taking to Greece. I have done quite a bit of reading and thinking about the issue over the last week or so as understanding geopolitical and economic risk is important to my work as a futurist. I am going to use some of the details in a workshop on uncertainty that I am running later in the month. One standout feature seems to be that the EU is concerned that if they go soft on Greece then Spain. Portugal, Italy and others may feel emboldened not to pay back some of their debt and the problem will spread.

However the story is much more complex than that and the details are an object lesson in the fact that social, political and economic issues are intertwined in these sorts of issues, often at a very personal level of the decision makers. They also demonstrate that once stories are embedded in the collective consciousness they are hard to shift. The first rule of politics is that it is always easier to convince people of something they already believe. I am writing this as the Greek referendum is taking place and I think it is worth putting some of the facts on the table.

When I have spoken to people in Australia about the Greek situations they have defaulted completely to the story that the Greeks over borrowed and have been profligate and undisciplined in a fiscal sense. That story is certainly true but it is the facts of a long time  ago and the lenders were certainly complicit in lending the money. When you tell people that most of the bailout money has gone to pay out private lenders and that over the last five years the following has happened they are totally surprised:

“Since 2009 the Greek state’s deficit has been reduced, in cyclically adjusted terms, by a whopping 20 per cent, turning a large deficit into a large structural primary surplus. Wages contracted by 37 per cent, pensions by up to 48 per cent, state employment by 30 per cent, consumer spending by 33 per cent and even the current account deficit by 16 per cent.Alas, the adjustment was so drastic that economic activity was choked, total income fell by 27 per cent, unemployment skyrocketed to 27 per cent, undeclared labour scaled 34 per cent, public debt rose to 180 per cent of the nation’s rapidly dwindling GDP”

From: http://www.irishtimes.com/opinion/yanis-varoufakis-a-pressing-question-for-ireland-before-monday-s-meeting-on-greece-1.2256339 

This is even more dramatically shown in the following graph:

 Greekovery from interfluidity

via Interfluidity (see below)

This is all part of the argument around whether austerity works or whether austerity contributes more to the problem. Apart from the fact that if you are measuring risk as a ratio of debt to GDP then crashing the GDP makes the problem worse, it is obviously very hard to pay back debt if your economy is suffering in this way. This is compounded when the predictions by the lenders are continually optimistic and completely wrong:

troika-forecasts-large from interfluidity

Via interfluidity – see below

It is easy to see from these graphs and the reality of unemployment and economic depression why the general person in the street in Greece might be disillusioned at the moment.

If I was a Greek voter right now I would be inclined to vote against the proposal to agree to the new lending and austerity measures because I think there is still a path of negotiation via that route. My concern about the opposite vote is that we will see significant political disintegration in Greece that will feed into radical political movements and that the long term future of the EU will be threatened both from without and within.

Beyond the financial implications of being “soft” on Greek debt I think that there is a large piece of decision making that is occurring here because of personal political considerations and entrenched positions of bias. That is always a poor environment for clear decision making and  timely reminder when we try to analyse these issues we must always ask the question of a story that is being told :  “who benefits from the story being told now or in this way?

If you wish to be further informed on these issues I suggest you read:

Where did the Greek bailout money go?

interfluidity » Greece

Schaeuble Popularity Soars as Germans Doubt Greece’s Euro Future

The Road To Grexit

I would encourage people to point out where they think the information I have provided here is incorrect or presented in a biased way. We are all better off when we see issues from multiple points of view.

Paul Higgins