At the beginning of every Chinese New Year, AsianInvestor makes 10 predictions about economic, political and financial developments that are likely to have an impact on the way in which institutional investors assign their money. And then, one year later, we revisit these forecasts to see how well we did.
Our second Year of the Dog prediction was to decide on whether US president Donald Trump would remain in his position by the end of the following 12 months.
Will Donald Trump still be US president at the end of 2018?
Answer: Yes - correct
The answer to this question is self-evident to anybody who has not just awoken from a 12-month coma. Trump features in global news headlines on an almost daily basis, courtesy of a mixture of controversial policymaking, continual falsehoods and bully-boy tactics over almost every aspect of his job.
Trump’s disinterest in the details of governing is only outstripped by an unquenchable need to enjoy publicity and adulation. He only cares about being seen as ‘winning’, and shoulders the responsibility for nothing at all. In December the US president boasted that he would shut down the government if he didn’t get funding for a border wall with Mexico; by early January the government was partially closed and Trump was declaring that “the buck stops with everyone”. Harry Truman must be rolling in his grave.
The 72-year old Trump's self-absorption, lack of empathy, race-baiting policies and disinterest in the truth means his popularity rating has never risen above the low 40s. He’s hated internationally too, courtesy of disparagement of his allies, near sycophancy towards Russian president Vladimir Putin, and a succession of tariffs on various imports.
But, as we predicted a year ago, the president remains almost untouchable. His messaging about white victimisation, anti-immigration and restoring the US to the glories of yesteryear has found an eager audience in about 35% of the population (almost all white Republicans). They revere Trump.
Aside from an election, the only sure-fire political means to cast out a president is to impeach him through Congress. But until November 2018 the House of Representatives was Republican controlled, while the Senate remains so. And the party's politicians have baulked at opposing the president when so many of their voters love him.
Trump was also buoyed by a US economy that enjoyed a sugar-high during 2018, mostly courtesy of the (deficit ballooning) tax cuts at the end of 2017. The country enjoyed around 3% economic growth last year.
This picture is now changing. The Democratic party seized back the House in November and are likely to launch multiple investigations into Trump (including his unwillingness to declare his tax returns and the sudden desire of foreign government dignitaries to stay at his hotels). Meanwhile, for all of Trump’s cries of “Witch hunt!” the special counsel investigation of Robert Mueller continues, looking into potential ties between the Trump election campaign and Russian actors.
Signs are also emerging that the US economy could be headed into tougher times; the S&P 500 started falling during October and ended the year 9.38% lower than where it started. The US's GDP is slowing, although the International Monetary Fund still predicts it to post 2.5% in 2019.
Yet for all his controversy, Trump’s grip on Republican senators – via their voters – makes it unlikely he will be successfully impeached. It will fall to the US electorate in 2020 to judge the most controversial president in the nation's recent history.
Previous Year of the Dog reflections: