GeoLegal Weekly #27 - Trump & political scenario planning
An assassination attempt on former President Donald Trump raises serious questions about how we engage with and advise our clients about uncertainty. I sketch three scenarios for the future.
On 13 July, there was an attempt on the life of former President Donald Trump. By now all the details around the event itself are well-known, so I won’t recount them. I remain emotionally shaken by the event - both for the individuals whose lives were lost or threatened and for a political system that is now on even shakier ground than I would have imagined two weeks ago when I wrote about it.
When I wrote then that it felt like the integrity of the US political system was on the line in this election, that might have seemed hyperbolic. Had I written that such an environment of hysteria, hypercharged rhetoric and political divisiveness in a country with ready access to semi-automatic weapons could lend itself to assassination attempts or the like, you would have accused me of trying to overegg for attention.
Unfortunately, we are now in a world where startling forecasts are more useful than traditional forecasts. But we can’t run around predicting every outlier. That means we need to spend more time on scenario planning and on the impact of events rather than on prediction itself in order to deliver value for our organizations and our clients.
Forecasting
I spent the entire Obama administration forecasting politics and policy for an audience of CEOs and hedge fund traders. My track record was pretty decent but measuring correct forecasting is an imprecise science. Whenever challenged, I would just say “If I didn’t get more calls right than wrong, I wouldn’t have a job.” Surely, that would have convinced you to keep paying the retainer, right?
Joking aside, I took my forecasting seriously and would often obsess about one or two big policy calls a year such that I knew more about the politics around them than many of the politicians involved. My beat usually involved forecasting debt ceiling defaults and the like, and on the big calls I was able to get ahead of the curve through a few tactics. My favorite trick was to understand who the key stakeholders were and to talk to all their staff about issues happening 6 months in the future. I would sketch out their reaction functions so that when events unfolded and stakeholders went into lockdown mode, I had a better view of all the maneuvering that was likely to play out in every scenario.
The big difference between that world and today’s political world is that Obama-administration era politics was actually forecastable. That is to say that it existed in the “normal curve” such that knowledge of prior events made it easier to forecast future events. When I wanted to understand pathways for bipartisan cooperation, I could project models from the 80s or 90s onto the 2000s. That feels quaint today.
What we are living through now is a world at least one standard deviation away from normal. This is due to increased fragility in the system. A lot of that is because of things I’ve been banging on about for 26 weekly issues so far, like an erosion of rule of law, a politics of emotion, and the rise of technology that can be used to manipulate and accelerate politics in previously unthinkable ways.
In such a world, forecasting is much harder and, consequently, of much less value. What value is it to forecast who the next president will be months out from the election when either candidate is old enough for a debilitating health event to be a material possibility? When the possibility lurks that the incumbent president who won the Democratic primaries might not actually be the candidate after all? When the election itself could well end up for the Courts to decide?
Which brings us to the assassination attempt. Was such a thing really that unlikely, considering the events of recent years? The Speaker of the House’s husband was attacked by an intruder; the US Capitol was stormed by an angry mob; a man traveled to Supreme Court Justice Brett Kavanaugh’s house to kill him; and both parties increasingly use violent and military rhetoric to talk about enemies.
No, it was not hard to imagine. Many people thought about it. Still, most of us were not saying it. When I reflect on this, I think I probably over-indexed on the same assumption that Trump or Biden might implicitly make every time they walk on stage, which is to say that the world is full of threats but the Secret Service / FBI / law enforcement have the biggest ones under control. A news story that a gunman was “neutralized” while trying to climb in position would not have been that startling. That he successfully struck the former president via a volley of shots from a position overlooking Trump’s podium is much more so.
For me the big analytical takeaway is that in a fragile system where hyperpartisanship drives more threats than ever before, more of those threats will break through than we expect. While much ink has been spilled about political violence being part of American politics (some analysts are starting their analysis with the American revolution or one could read how a Senator was caned in Congress by another legislator 75 years ago with no consequences) the fact is that assassination has not primarily been a tool of wresting political control in the US as it has been in other countries. That’s because the presidency and the Republic has always been bigger than one man. If a presidential candidate on either side was killed in a normal election, I’d be shocked but have little doubt about the system carrying on. If the bullet had been a few inches closer to Trump, all hell might have broken loose.
That’s a world that is much harder to predict.
Prepare for the unthinkable
Is Trump more likely to be president as a result of the assassination attempt? I could certainly make the case that he is. Americans like winners and fighters - here’s a guy who almost gets killed and stands up to show just how strong he is when his opponent at times has trouble getting through a press conference. But I could also remind you that most undecided voters don’t start paying attention until September and many don’t make up their mind on who to vote for until two weeks out from election day. And when you don’t know who Trump is potentially running against, it’s hard to know if he’ll win. Or if health or terror or state-based cyber attacks will strike in a way that changes the election.
The impossibility of prediction makes planning more important, not less. President Eisenhower is credited with the aphorism that “plans are useless but planning is indispensable,” which perhaps best captures the moment we are in.
This is not a good environment for a single plan. In the past, businesses might choose which candidate or party to back and feed that endorsement with campaign contributions and press. Today the level of confidence any business would have around such a selection is necessarily less than in the past.
In a world of dozens of scenarios, the simple act of planning develops organizational muscle memory that will be used again once scenarios are live. Crucially, we should focus on the impact of the scenarios, not just the probability. And for lawyers whose job it is to help clients work through the intricacies of regulatory choices and an evolving environment, the impact story is tantamount to the whole story.
Here are three scenarios to start with.
Scenario 1-Republican landslide: Trump defeats Biden in a landslide: In this scenario, public sympathy shifts to Trump in the wake of the assassination attempt. This could be either because Trump shifts his tone to be more magnanimous in the wake of the shooting. Or because Trump goes on the attack knowing that Democrats have to tread lightly so can’t really fight back. Or because Biden is saddled with blame for his rhetoric and the fact that the Secret Service is a government organization under his watch. It really doesn’t matter why, but in this scenario Republicans land full control of the congress.
Core implications are:
Significant rollback of regulation across all areas of government, especially climate. Many businesses will be winners from a lighter touch. Others will simply be caught in the mix trying to comply with past laws while waiting to see what Trump will ultimately do; for instance, the FTC non-compete rule will eventually be scrapped but it won’t be a day one priority.
International trade will become more costly and conflictual as Trump implements a watered-down version of across the board tariffs but particularly aimed at China. The Trump-Vance administration attempts to generate a weak dollar climate to boost exports (my colleague Karthik wrote a great piece on this on his own Substack and the NYT has a nice run down too).
Taxes will be reduced, which will cheer markets but doesn’t necessarily make managing a corporate enterprise easier.
The Democratic opposition is completely neutered and can’t act as a bulwark against unpredictability from a personality-led White House seeking to expand its power.
The federal-state partisan dynamic flips to blue states passing laws running contrary to administration priorities and challenging new federal rules in court.
Geopolitical ruptures will result in a defiant and undiplomatic response from an emboldened America-first administration. Support for Ukraine and firmness on Russia sanctions will be weakened; unconditional support for Israel will be reaffirmed.
All businesses will need significant legal advice to comply with a volatile regulatory and legislative landscape.
Scenario 2 - Democrats without a Mandate: In such a scenario, Trump uses the assassination attempt to go further on the attack, smelling success within reach. Democrats try to put a line under the news story by saddling Biden with the reputational baggage of the security lapse and aggressive rhetoric, choosing instead to nominate VP Kamala Harris. Harris strikes a tone of bipartisan unity that resonates with voters who are terrified about what the current political moment has created and are turned off by Trump continuing on the attack. In such a scenario, Harris wins but lacks a mandate to govern.
Core implications are:
Legislative agenda mimics the last four years. Businesses need to do less planning as this is status quo. But it’s basically gridlock, with little confidence that Congress or the President can act in sweeping ways if the geopolitical environment worsens or a new pandemic (or the like) occurs.
The policy agenda plays out through the courts as a line of defense where Republicans increasingly have the advantage. News stories of nationwide injunctions and the reconsideration of bodies of settled law at the Supreme Court become commonplace.
Businesses need to adapt to unpredictable court decisions that they also are unable to influence unless they are parties to the case. Their advisors can help them develop strategies to use the legal system to generate different policy outcomes.
Scenario 3 - Political Warfare: In this scenario, the election plays out until a monster October surprise. That surprise could be any number of threats breaking through. Maybe it is a health deterioration of one of the candidates weeks before the polls. Maybe it is another security threat. Maybe it is a state-based attack on the integrity of the election system or on a candidate (by Iran, for instance). Maybe it is an Electoral College snafu like 2000 that’s resolved by a partisan Court. In any case, it results in a sense among at least one major party’s voters that the results delivered in the election do not reflect the will of the people, triggering a full fledged attempt to reject results.
Core implications are:
The government in power faces an opposition bent on slash and burn tactics. The government itself may be tempted to pursue its own retribution against that opposition.
Violent rhetoric increases and we see a replay of violent protests or attacks on members of government.
The government becomes all consumed in the battle and businesses are unable to get government support on policy initiatives or on their global agenda.
America’s ability to be a check on geopolitical advances of enemies declines. Borders and sovereignty of smaller powers are tested by larger aggressors. The US is unable to get simple legislation passed to come to the defense of allies or friends.
Growth becomes less of a focus for companies than preserving their current footprint in a world of threats. Legal advice becomes more about defense and retrenchment than about new opportunities.
Some of these scenarios are scarier than others. But most importantly, the world is less scary if you plan for it.
–SW
Scenario #4. Republican take the White House and retain the House, but the Democrats retain the Senate.
Schizophrenic voters get a schizophrenic government.