Political risk forecasting in the age of Trump.
Former White House aide Omarosa Manigault-Newman this week triggered discussion about whether a recording exists of President Donald Trump saying racial slurs (he denies making any such slurs). Political risk analysts disagree on the controversy’s potential: some argue that if Manigault-Newman’s claims were confirmed it would not change public perceptions of Trump; others argue the alleged word used would constitute a public ‘red line’ being breached, with potentially huge political consequences. From the standpoint of analytical practice, the episode highlights the potential difficulty of forecasting political events during a presidential administration whose actions often have limited useful precedent in recent US history.
Policy entrepreneurship will be greatest in areas where the executive has the most enforcement and regulatory leeway.
Defence policy unpredictability will likely be constrained by the defence secretary’s control and Congress’s oversight.
Monetary policy will also maintain ‘normal’ procedures, given the Federal Reserve’s independence.
Analysts should avoid inferring policy from unnamed source-based reports: policies can be deliberately leaked to be discredited.
