Jack’s 2017 Forecast, December 2016

TAG President Jack Devine provides his 2017 forecast, including his predictions for Trumpism, increasing growth, a big power showdown, the Middle East mess, ISIS, and more.

Jack’s 2017 Forecast

Enter Trumpism. Trumpism will be the coin of the realm for at least the next four years. Despite their current protestations to the contrary, many political and government officials will adopt his traits and positions. His slogans, policies and values will permeate American society. Public figures will increasingly use social media/Twitter and plain/tough talk in supporting the “forgotten man”. This will drive the media and establishment political elites up the wall, and they will be hamstrung on how to deal with it.

Social Media President. President Trump will continue to tweet. This needs to be recognized as the revolution and danger it might be. President Andrew Jackson once was hailed as the flag carrier for democracy when in the early 1800s he opened the White House to the public and allowed “the people” to traipse through. Today, everyone in America with a cellphone will be able to receive communications directly from the President, bypassing the media and political elites and even his own administration. This will be a new and powerful way for the President to set the agenda. However, for the good of the country, self-discipline will be needed to prevent this powerful tool from becoming a means of bypassing the policy vetting process or from becoming an instrument of demagoguery.

Potential Pitfalls. In getting his sea legs, Trump could step into a major political gaffe or run afoul of a conflict of interest in his business enterprise. But as he has shown during the campaign, he has an amazing ability to ride out major snafus.

United Front. With Congress behind him, Trump will have a virtually clear runway to carry out his policies. Despite the pundits’ doubts, Trump will try to deliver on his major campaign promises. He will build a wall along the border with Mexico and try to put the brakes on globalization and liberal trade agreements. At the same time, he will work with Congress to develop legislation to punish companies that take jobs abroad. He will try to muscle foreign competitors into more favorable trade arrangements and press US interests. They will bend for the most part, including China and Russia.

Hacking, Yes; Meddling, No. Russian hacking will remain a front line story for the next several weeks, but gradually will fade into the back pages as Trump assumes office, and Russia and the US try to sort it out behind closed doors. They will reach a modus vivendi. Hacking will continue, but interference in internal politics will dissipate. However, because of the politics driving the hacking issue here at home, it will spike from time to time over the next year.

Domestic Trends. Obamacare will be overhauled, but some of the key provisions will remain in place. The Supreme Court balance will move right during the next four years, during which time Trump may be able to select 1-2 more judges beyond the replacement of Judge Scalia. This will set the Supreme Court direction for a generation.

Increasing Growth. The US economy is already showing signs of renewed health, and Trump may well find ways to further stimulate the economy and GDP growth, perhaps above 3% per annum.

Big Power Showdown. There will be a greater emphasis on big power relationships, and Trump will try to use carrot and stick diplomacy with the top competitors, especially Russian President Vladimir Putin and China President Xi Jinping. They both will agree to a reset, but will quickly test the Trump Administration’s resolve. It will come sooner than expected. Putin and Xi’s nationalist agenda are built on expansion and competition with the West. Because of this, Trump, before too long, will find himself needing to continue the post-cold WWII war policy of “containment,” albeit with a more aggressive stance.

Bumpy Road Ahead. Despite relative economic stability in Russia and China, serious cracks could develop in their internal leadership control. There are greater political and economic problems below the surface than generally recognized, which could threaten stability.

Foreign Entanglements. Trump will try to lower our military footprint around the world, but the circumstances on the ground in the Middle East will make this a slow and problematic effort. Foreign leaders will be careful in probing him, and rightfully worry he will respond with force wherever he perceives an attack on US interests.

Ideologues vs. Pragmatists. The Trump Administration will be fraught initially with debilitating infighting, especially in the national security arena. There will be much tugging and pulling between the State, Defense, CIA and NSC establishments and the arch-conservative political appointees who joined the Trump camp early. There will be seemingly unending conflicts within the Administration between the pragmatists and the ideologies.

Pragmatists Win Out. This will be especially the case on policies relating to the Middle East and particularly Iran. The policies surrounding the Middle East could well turn out to be the Achilles’ Heel of the Trump Administration. A misstep that puts the Administration outside of legal lines, à la the Iran Contra Affair during the Reagan Administration, would inspire the Democratic Party to clamor for impeachment. However, this situation is unlikely to develop in the near term. This struggle will be tamped down with the inevitable personnel changes that will come about during the first two years of the Trump administration, as it shifts toward a more pragmatic foreign policy.

EU and NATO Persist. Europe will continue to feel the pangs of nationalism and resistance to liberal immigration policies. Virtually all the governments in Europe will feel strong pressure to move to the right, but the EU, led by German Chancellor Angela Merkel, will hold together albeit frayed around the edges, and NATO will persist. Negotiations over Britain’s exit from the EU will continue to dominate headlines, and the legal separation of Great Britain from the EU will take more time than many may want.

Afghan and Middle East Mess. Afghanistan will drift and a Taliban comeback is in the offing. Afghanistan, like the Middle East, will remain a mess for a decade or more. Iran will continue to exercise great influence in Iraq, Lebanon, Syria and Yemen. Syria will remain largely a quagmire with Assad steadily gaining the upper hand. Trump may try to cut a deal with Putin that accepts a Russian foothold and enduring influence in Syria in exchange for easing Assad toward the door. But, this is likely to fail unless an unexpected “Black Swan” event occurs in Russia which weakens Putin at home and pushes him to relax his aggressive posture. The weakening economy in Egypt and Saudi Arabia, and terrorist incidents in Turkey, may cause additional stability problems in the region.

ISIS Lashes Out. While ISIS will increasingly wither on the ground in Iraq, Syria and Libya, there will be a commensurate increase in the terrorist risk across Europe and the US as ISIS, in desperation, attempts to pull off high profile attacks. We will need to remain alert for threats at home. ISIS will want to undertake a sophisticated multi-pronged operation, but may well have to settle for stirring up self-radicalized domestic terrorists.

Democratic Party Vacuum. On the Democratic Party front, the departure of Hillary Clinton from center stage will create a deep vacuum which will be difficult to fill. Neither Democratic House representative Nancy Pelosi, Senator Bernie Sanders nor the firebrand Senator Elizabeth Warren will fill the bill. The Democrats’ inability to bring back Reagan Democrats into the fold will set the Democratic Party on a fractious and weak path for some time. Because of this, and the lack of a fresh and compelling message, the Democrats could take serious losses again in the 2018 Congressional races.

Happy New Year!