by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
October 24, 2019
THE KEY TO DONALD TRUMP’S FATE is in the Senate and the polls, which is why Republicans launched a public relations drive yesterday to portray the process as unfair. And, frankly, they have a point. The process — in secret, followed by selective leaks — has to change soon, as many Democrats agree, in private.
THE EVIDENCE, IRONICALLY, IS NOT THE ISSUE: It seems that there was a quid pro quo — no arms sales to Ukraine unless there was a probe of Joe Biden’s son. But the Republicans are focusing on the impeachment process, which has largely excluded them.
DEMOCRATS RESPOND THAT their closed-door hearings are similar to secret grand jury proceedings, and they’re convinced the Republicans want to muddy the narrative, dragging out the process, perhaps well into spring. And, importantly, a trial would compel all Senators to participate, keeping several Democrats (Elizabeth Warren, Amy Klobuchar, Bernie Sanders, etc.) off the campaign trail.
IN THE FINAL ANALYSIS, this will come down to whether 20 Senate Republicans could defect and vote to convict Trump. That still looks unlikely, as most GOP Senators tend to agree with their House colleagues that the transgressions don’t justify Trump’s removal, and the process is unfair. Accordingly, Democrats may open up the hearings by mid-November, the Washington Post reports this morning.
THIS WON’T SATISFY MOST REPUBLICANS, who want the opportunity to directly interrogate witnesses, a process that could last for many weeks (the Democrats prefer to have legal experts, many of them former prosecutors, conduct most of the interrogation).
AS A TRIAL DRAGS WELL INTO THE WINTER, leading to a likely acquittal, there will be at least two major wild cards — the first is whether Mitch McConnell might conclude that the GOP could lose the Senate in the general election, which can’t be ruled out if there’s a tidal wave. McConnell knows the Senate is the firewall that blocks liberal legislation, and he wants the Senate to continue confirming young conservative judges. He has been more outspoken in his criticism of Trump, but McConnell won’t waiver unless his Senate majority is in real jeopardy.
THE OTHER WILD CARD is whether there will be explosive new developments that could alter the impeachment narrative — testimony from John Bolton, for example. And Trump himself could roil the process, as he did this week when he compared his treatment to a “lynching.” He can’t help himself; he can’t resist self-inflicted wounds.
AS THIS DRAMA UNFOLDS, we will carefully watch the polls. We’re suspicious of individual polls because the methodology is far from perfect, but an aggregate of polls on the Real Clear Politics web site is important. For now, the public narrowly supports the impeachment probe, but a persistent argument by Republicans that the process is unfair could take hold, which is why Democrats have to open up the hearings — soon.
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