February 2017

My cautious optimism of last December has been on a roller-coaster ride ever since.  The feelings expressed by people who had met Trump, that while he was a maverick he was open to argument, have been undermined by a visit to Washington DC two weeks ago, just before his executive order refusing entry to a rather arbitrary selection of Middle Eastern countries’ nationals.

The general feeling, for obvious reasons, on the Democratic front was of whole-hearted opposition, but Republicans were nervous that he could be irrational in his judgements.  What was particularly interesting, however, in a number of events that I attended involving Republicans and Democrats, was the mainly collegiate nature with which they treated each other, and I had the feeling that the constitution would stand the test.   The issuing of the executive order without warning or consultation, had a stunning effect on politicians.  It is interesting that the courts have so far suspended the order – the question now is what will Trump do?  Here the man’s character is critical.  While he remains unchallenged he has the ability to take advice, however, he is known for a pugilistic attitude towards any challenge and will strike back even at a perceived challenge to his wishes.  The real danger of this way of doing business, which may work in the casino and construction business, is that it is likely to be counterproductive in government, particularly in the highest office.  If he fails to find a face-saving way out of his impetuous border control order and ends up having a fight with the Supreme Court, he is likely to create such opposition in Congress and the Senate that the potential benefits of his reforming ideas on the tax and regulations front, will be derailed.

It is exceedingly worrying that the whole of the US administration could seize up in trench warfare between the President and the constitution’s checks and balances.  The current situation is wholly unpredictable.  If the President fails to give ground when losing a minor skirmish, he could sacrifice his whole strategy; to use a mixture of metaphors.

The uncertainty created by an administration that develops a habit of negotiating complex situations on a public platform will cause instability in markets and on the world stage.

Mrs May’s performance during her high-risk visit to Washington was brilliant.  She was able to successfully nudge the President’s policy stance on NATO and Europe into a more flexible position, but her major success in securing a favourable attitude to Britain has been dangerously undermined by the self-importance of the British Speaker, among others.

In the world of real and international politics, allies are necessary even if you may not like them and Britain, as it tries to negotiate the disengagement from a recalcitrant Europe, needs allies, as Brussels has refused to discuss negotiations prior to the triggering of Article 50, and has already announced that it is not going to negotiate.  Efforts by ‘Remainers’ to derail the Prime Minister’s negotiating stance, greatly increase the uncertainties facing GB Limited.  Sadly, in the real world, personal likes and dislikes have to take a step back from what is national interest.

In spite of the political confusion in the West, economies in general are steady to improving.  Upticks in most areas in the US and Europe are being recorded and Asian economies, in spite of the Chinese government’s deliberate downward pressure on economic growth, are holding their own,  with the possible exception of India. The economic dislocation following the financial crisis is receding and business in general seems to have adjusted to a world of growing uncertainty on the political as well as the legislative front.  Perhaps this is just the new normal.  Certainly the elections in Europe will potentially add more uncertainty but it is possible that politics are becoming less important and are regarded as less relevant by the population at large.

Damon de Laszlo 7^th  February 2017