Will they really impeach him?

Barring a major upset – which is possible – President Trump will be acquitted by the Senate. But the real purpose of his tormentors is to swing the November elections. Why do the NY markets assume that Mr Trump is home and dry? Victor Hill inquires.

An impeachment too far

On Tuesday (21 January) the impeachment trial of Donald J Trump, 45^th President of the United States (POTUS), was formally convened by the Senate. Mr Trump is only the third incumbent president to undergo an impeachment hearing. The presiding officer over the impeachment process will be the man who sits at the very pinnacle of the US judicial system, the Chief Justice of the Supreme Court, John Roberts. But only the 100 Senators will be permitted to vote. In order to be impeached, two thirds of the votes – so 67 – would have to go against the president. But the Republicans have 53 seats against the Democrats’ 47. So about 20 Republican senators would have to vote alongside the Democrats to convict the president.

The Senate Republican leader Mitch McConnell (Kentucky) has declared that he will work to ensure that Mr Trump is acquitted and even Mr McConnell’s Democratic counterpart, Chuck Schumer (New York) seems to think that acquittal is a foregone conclusion.

Thus a conviction is extremely unlikely – unless something mind-blowingly harmful comes out of the evidence and testimony: such as Mr Trump strangling a poodle or fondling The Queen. Which begs the question of why Speaker of the House of Representatives Nancy Pelosi, who is the de facto leader of the Democratic Party, and her acolytes have initiated this process in the first place. Especially given that the business of government is likely to be paralysed for at least a month and the four Democratic presidential hopefuls in the Senate will be kept away from the campaign trail which climaxes on Super Tuesday (03 March).

Mr Trump was not even in Washington for the opening of the trial. He was strutting the boards in Davos where he arrived in a flotilla of helicopters to announce, amongst other things, that America will plant a trillion trees in years to come. (Where, how, when? Which species of trees? I would love to know the details.) He did take time out to slam the trial as a “hoax” and a “con job” and to castigate the “sleaze bag” Democrats.

Insiders estimate that after the procedural wrangling is completed the trial will last three weeks. But the actual length will depend on how many witnesses, if any, are called.

The case against Mr Trump

Mr Trump is accused of abuse of power and obstruction of Congress because he pressured the Ukrainian leader, President Zelensky, to investigate Democrat presidential front-runner Joe Biden and his son Hunter, who had business dealings in Ukraine. In a telephone call on 25 July last year he allegedly withheld $391 million in military aid, already approved by the Office of Management and Budget (OMB), in order to get leverage over Mr Zelensky. Mr Trump has maintained all along that he was justified in trying to combat corruption in Ukraine, which is widely thought to be rife.

Last weekend Vice President Pence, while campaigning in Florida, called the trial a shameful attempt to overturn the results of the last election. And it’s true that those who were most traumatised by Mr Trump’s victory in 2016 have been itching to impeach him on whatever grounds for years.

Many Republicans contend that the Democrat controlled House of Representatives has conducted a shoddy investigation which has resulted in a case that will not stick. Impeachments are supposed to remove state servants who have committed high crimes and misdemeanours. But abuse of power, even if it could be proved, which is very doubtful, is not a high crime. Mr Trump will argue, as ever, that he was just upholding America’s interests. Indeed, the idea that international aid should not be subject to any quid pro quo would have seemed laughable to many Democratic presidents such as FD Roosevelt and JF Kennedy.

The real motivation

As Ms Pelosi told Time magazine last week, short of declaring war, impeaching a president is the most important thing that Congress can do. She has initiated this gamble at the twilight of her career. She will turn 80 years old in March (incredibly – evidence of the rejuvenating power of wine, say some) and is unlikely to hold any other office of state in future. But her underlying motivation is to undermine President Trump’s chances of re-election in November.

In order to win the presidency in November, the Democrats will have to re-take three key states which voted Trump in 2016. Namely: Wisconsin, Michigan and Pennsylvania. The electoral arithmetic here is very tight. If Republican senators from key swing states can be discredited by appearing to bail out a crooked president, that is all good to the Democratic cause. Remember that about 34 senators are up for re-election this November and will be judged on their record.

Lessons from history

Andrew Johnson, the 17^th POTUS (in office April 1865 to March 1869) was hauled before the Senate for impeachment in March 1868. We should understand that Johnson, who had become president on Abraham Lincoln’s assassination, inherited a presidency and a nation in a state of extreme disaffection at the end of the Civil War. Much of the South – the former Confederacy – was being ruled as conquered territory, without representation in Washington. Johnson, exceptionally, did not even have a Vice President to replace him. The charges against him, now obscure, revolved around whether he had the authority to dismiss and replace his Secretary for War (something Mr Trump has done numerous times, without chastisement).

He was acquitted after a turgid and bitter trial by a Senate vote of 35 for impeachment against 19 votes against – thus failing to satisfy the two-thirds mandate by just one vote. By the way, Johnson was considered a radical for his support for, amongst other things, female suffrage.

Richard Nixon, the 37^th POTUS, escaped impeachment by resigning before Congress could indict him in 1974, having become doomed by the Watergate Scandal. Bill Clinton, POTUS number 42, was impeached by the Senate in December 1992 over accusations of improper conduct with an intern. (Most readers will require no elucidation.) These allegations were then bolstered by a perjury charge. On 12 February 1999, the Senate voted Not Guilty by 55 and Guilty by 55 on the perjury charge; and 50 Not Guilty to 50 Guilty on the obstruction of justice charge. Both votes fell short of the two-thirds majority requirement to convict. The final vote was generally along party lines, with no Democrats voting Guilty, and only a handful of Republicans voting Not Guilty.

Many more junior officials have been impeached by the Senate for misdemeanours over the last 230 years or so. Yet no POTUS has been successfully impeached; but then again no president who has been impeached but acquitted has successfully stood for re-election.

Political consequences

Mr Trump was always an outsider and the old dynasties who dominate the Republican Party – for example, the Bush clan – never accepted him as one of their own. But the impeachment trial has reinforced the loyalty of the Republican establishment to the president. It has super-charged his fundraising campaign with a tsunami of new money in. Those in Middle America who support Mr Trump instinctively will take a dim view of the proceedings on Capitol Hill.

There is an American epiphany underway – analogous to the recent British general election – where citizens are forced to decide whether they are ultimately for or against. The opinion polls are not really clear on this but Mr Trump has probably galvanised his support base, while those who despise him have had their prejudices reinforced. This is a fabulous opportunity for the Democrats to besmirch anybody who has sided with Mr Trump over the last four years. America is a divided country, right now. Welcome to the new normal in the West.

When Mr Trump delivers the set-piece State of the Union address to Congress on 04 February the impeachment trial will almost certainly still be underway – another first. We can expect an even more colourful speech than the one delivered in Davos.

Home food delivery: a sector to watch

I have just returned from a trip to the USA. Something I took away was – take-away (sorry: take-out). To be more specific, Americans are having food to order delivered to their homes in increasing numbers and with increasing frequency. It is odd that a nation which devours food programmes and TV chefs (just as the Brits do) seems to have no time or inclination to cook at home anymore. That has all kinds of economic and investment consequences, not least the decline of supermarkets and the rise of the champions of the sharing economy and their less glamorous suppliers (e.g. dark kitchens).

Eating in is the new dining out. The biggest players in the US in the food delivery space are: DoorDash (private) (33.8 percent market share), GrubHub (NYSE:GRUB) (32.7 percent), Uber Eats (a division of Uber (NYSE:UBER)) (16.7 percent) and Postmates (private) (10.7 percent). GrubHub also owns the Seamless office delivery brand. DoorDash and Postmates are scheduled for IPOs this year. Unsurprisingly, these outfits have regional dominance. Grubhub rules in New York City; DoorDash has more than half of sales in Houston and Dallas; while Uber Eats is strong in Miami and Atlanta.

In 2020, more than half of restaurant spending is projected to be off premises – not inside a restaurant. In other words, spending on deliveries, drive-throughs and takeaway meals will soon overtake dining inside restaurants for the first time. According to the investment group Cowan Inc., off-premises spending will account for as much as 80 percent of the industry’s growth in the next five years[i]. This is not just pizza and chow mein: the delivery giants cater to all the latest food fads like kimchi, harissa, oat milk and cauliflower gnocchi[ii].

But cooked food delivery is the epitome of the gig economy and can be challenged on environmental grounds. (Think of the literal food miles and all that packaging, much of which cannot be recycled). The internet-enabled smartphone has not only transformed dating and shopping but now also the American diet.

As they watch the impeachment of their president on TV millions of Americans this evening will be ordering their favourite foods – in little boxes delivered to their door.

Trump and Brexit

One thing that will become more apparent as January turns to February is how damaging it would be for Mr Johnson’s project if Mr Trump were to be unseated, either through impeachment or through defeat in November. A President Sanders or President Biden would have little interest in crafting a comprehensive trade deal with the UK; and, being of globalist tendencies, they would no doubt poo-poo Brexit as a quixotic error – just as Mr Obama did. The potent Trump-Johnson chemistry would be dissolved.

This is critical, as the putative US-UK trade deal is set to be the stoutest stick with which Mr Johnson will be able to beat Frau von der Leyen and her gang, come 01 February. If the Europeans sense that Mr Trump may be on their way out, they will raise the price of Brexit. And if Mr Trump were to disappear, the forces of Remain would reanimate themselves like Banquo’s ghost.

Next Friday, when I next contribute, will be a significant day whatever your politics. (I’ll steer clear from the mind-numbing, puerile conversation about whether Big Ben should bong or not.) On the day that Britain exits the EU – 1,317 days after the referendum – longer than Anne Boleyn was Queen – I’ll speculate on what can realistically be achieved by the end of the transition period on 31 December.

My best guess is that the BoJo mojo will persist. There will be a dramatic cabinet reshuffle the week after next – already being dubbed the Valentine’s Day Massacre. (One sure-fire prediction: Mr Javid will remain in situ.) That will be entertaining. And the budget on 11 March will be seminal, as I shall explain.

We are in for some pleasing surprises.

[i] See: https://www.theatlantic.com/ideas/archive/2019/08/all-food-will-be-delivered/595222/

[ii] Readers who want to know more about food fads and their consequences might enjoy my article in this month’s MI magazine available at: https://masterinvestor.co.uk/magazine/