I will skip the weekly breakfast and instead dig into a partner’s balanced comments regarding the potential ramifications of Trump’s conviction on the upcoming US election. Yeah, yeah, if you are wondering, I’m not one of those die-hard Trump supporters.
Eric Lach, in his piece for The New Yorker, described the moments leading up to the verdict: “The twelve jurors filed in through a side door at the front of the room. Trump stood and watched as they passed mere feet from him, but none of them met his gaze.”
Here is a section:
The US election is still more than five months away, but last week saw a significant milestone on the campaign trail. Former President Donald Trump had been waylaid by the inconvenience of a trial for allegedly falsifying business records, in a case that stemmed from efforts to pay hush money to an adult film star.
The jury unanimously found him guilty on 34 separate counts, prompting celebrations from many of his adversaries. The outcome and the circumstances leading to the case would surely have been terminal for the electoral prospects of a conservative candidate for a government position, however, it is unclear whether they will have a material adverse effect on the former president’s odds of success.
It would be unusual for a convicted felon to serve as president, but it is not prohibited by the constitution. It would also be impractical for a jailed president to discharge his duties, but jail time seems unlikely for a first-time offender and would likely be deferred in the event that this was the sentence.
While Trump cannot argue his case in the conservative leaning Supreme Court, he does have a path and realistic grounds for appeal, so the conviction may yet be overturned. If the conviction doesn’t provide any legal impediments to a second Trump presidency, would it provide political ones?
There was a flurry of activity on the PredictIt site, an online prediction market that allows users to buy shares for or against an event such as the US presidential election. This activity briefly saw President Biden overtake his rival but since then, the gap has returned in Trump’s favour for now, though a little smaller than it was.
With the impact of Trump’s conviction on the electoral race uncertain, there was no discernible market reaction. It remains difficult to say with confidence which candidate the markets would prefer.
Neither offers a path to fiscal sustainability, although President Biden would be expected to allow Trump’s temporary tax cuts to expire. At the same time, Trump’s erratic and unpredictable execution of foreign and trade policy creates risks which investors won’t welcome.