Donald Trump’s Shadow Government is no Longer in the Shadow

Closed door politics has largely been the norm when it comes to the Oval Office and discord within the ranks of the U.S administration and has traditionally been kept away from the mainstream media. That applied, until the arrival of Donald Trump and the handpicked administration.

Till now, it’s unclear whether the revelations of the inner workings of U.S politics are part of President Trump’s desire to break down the walls of the inner sanctum or worse yet, a possible loss of control over the powers that Trump considered to be trustworthy allies.

There had been rumblings before Trump’s inauguration, with Snowden’s decision to speak out and shock the world with WikiLeaks that should have perhaps been a warning to the incoming president of what administrations were likely to face and the importance of managing communications hands on.

Unlike many of Trump’s predecessors who maintained a centralized presidency, Trump had little choice but to decentralize some of the responsibilities in a bid to offset the lack of political know-how that had been a concern for the markets since the last November’s Presidential Election.

We’ve heard many stories so far from Trump’s side. It started at the inauguration, with the U.S President labeling the photos and crowd estimates at the inauguration as fake news. Sadly, Trump seems to have an issue with freedom of speech and particularly when it comes down to voters and non-voters alike having a difference of opinion and we are certainly accustomed to seeing the media having quite different views than that of the current U.S President.

Perhaps Trump’s willingness to use his Twitter account as a Presidential communication tool has opened the door to the frequency of negative news that has hit the first year of his presidency. Trump holds an anti-media commentary that even suggested that NBC and the Networks should have their Licenses challenged. That would be an end to the first amendment as we know it today and the beginning of an Authoritarian state not too dissimilar to the ones that the administration is looking to bring down.

Much of the anti-administration news has been labeled as fake news by the administration, eventually harming Trump’s and his administration as all that the world has seen is the U.S President’s attempts to bully and silence those in opposition. However, Trump’s imagination is not that wide. Trump suffers from a media that does not support him, criticise him and probably reported a story or two that have not been necessarily true, in other words, fake news.

Without wanting to be too scathing of the U.S President, the reality is that Trump is unaccustomed to the political media and Capitol Hill way of life and the lack of thick skin needed to survive in the office is largely reflected in the reactions to media noise.

Unsurprisingly, the U.S President’s popularity has been on a decline since taking the office, with even the most hardened Trump States seeing double-digit declines according to recent polls. James Comey, the former FBI chief has said recently that Trump is morally unfit to be the president of the United States.

With the decline in popularity, the volume of negative news and leaks to the media have been on the rise in what seems to be a vicious circle for the U.S President.

The markets may have put to one side the ongoing investigations of the Senate Intelligence Committee into Russia’s possible involvement in the Presidential Election campaign, but investigations are ongoing and few will want to be standing alongside Trump should any collusion be discovered. Rex Tillerson’s resignation during the summer reached the media with NBC reports that he had spoken to more than ten current and former senior administration officials, some of them are considered to be close to the President.

Such a high number of sources across a number of sensitive media stories is a clear reflection of the U.S President’s inability to keep the White House whispers within the walls of 1600 Pennsylvania Avenue, despite warnings that those leaking will pay a big price.

A number of attempts have been made by the U.S President to bring an end to the leaks, with Communications Director Anthony Scaramucci lasting just ten days in the summer. Scaramucci had been brought in to bring an end to the leaks only to be promptly dismissed for leaking to the New Yorker.

Ironically, the U.S may become a lesser target for foreign governments that might have less need to cyber hack or spy on the current U.S administration that not only continues to leak but with even greater frequency as the number of sources for each leak reaches levels not seen before.

Social media and the increasing number of news portals may have increased the chances of the right person being at the right place at the right time, but the fact that the number of sources confirming a story has surged is in itself the problem.

Trump’s Struggles to control His Government

The leaks and the administration responses to media noise have failed to cement the U.S President a stable presidential status. This has as much to do with the alleged fake news and continued leakage from the walls of the White House as it has to do with Trump’s handling of key domestic and foreign policy issues.

Earlier in the year, the U.S administration’s creation of a business council of CEOs was considered a positive step by the markets, but following the Charlottesville remarks, CEOs were seen to be running for the door, which ultimately led to the disbanding of both business councils, as CEOs looked to distance themselves from the President.

Interestingly, Trump also found Republican support begin to wane earlier in the year, despite the U.S President managing to return the Oval Office to the Republican Party. The failings of the Healthcare Bill is perhaps the most damaging to the U.S administration, with the Republican Party seemingly disjointed on policy at the first hurdle.

Ongoing investigations, Trump’s unstateman leadership, and the leaks from the inner circles of the administration have all contributed to the decreasing popularity of the eccentric president.

With the administration struggling on, the next moment of truth for the U.S President will be on how Congress views the Iran Nuclear Agreement, which the U.S President had frequently criticized during the Presidential Election campaign.

Trump’s refusal to certify the accord at the end of last week and a call on Congress to toughen the agreement could ultimately backfire on the administration. A Congress division could lead to Trump having to pull out of the agreement and worse yet, should the administration fail to lead EU leaders into imposing fresh sanctions.

How events unfold in the coming days or even weeks and whether Iran is even willing to revisit the negotiating will likely have far-reaching implications within the Middle East, which is already a hotbed of tension, as the Kurds currently fight for independence. One of the nations watching closely will be Israel as increased concerns that Congress may fail to deliver and EU nations may decide to keep things status quo with Iran. A loss of influence by the U.S would certainly be a silent victory for the Iranians and with Trump having threatened to rewrite existing trade agreements with the EU and beyond, it’s going to need more than France’s support for the U.S administration to save face.

Hopes are that the U.S President will back down from the hard line, as he has done so before, but there is certainly some uncertainty, which has been reflected in the price of oil recently, not only supported by the unrest in the Kurdish region of Kirkuk but also with the possibility of new sanctions on Iran that could result in a slump in Iran’s production and export volumes.

Uncertainty as always is the market’s nemesis and, while the markets had initially rejoiced at the arrival of Donald Trump to the Oval Office, the lack of growth policies and collapse in popularity has left many heading for the exit door, as Trump continues to struggle to fill key positions within his administration.

To date, there have been a reported ten nominees who have eventually pulled out of their positions within the administration, with many positions continuing to remain unfilled ten months into the presidency. To put it into perspective, there are an estimated 450 key positions that have yet to be filled. Streamlining is one thing, but with only a quarter of positions requiring Senate confirmation having been filled, it’s little surprise that there has been such little progress so far. Perhaps worst of all is the fact that the nominee withdrawals have been so public, with Trump treating the White House like a Corporate. The hiring and firing have also delivered little stability to the world’s political powerhouse upon which many nations depend upon for support.

U.S equity markets may have continued to hit record levels this year, with the Dow a whisker short of 23,000, but perhaps more reflective of market sentiment towards the success and failings of the U.S administration has been the director of the Dollar, which has fallen 8.49% year-to-date. The softer Dollar and market sentiment towards the U.S administration has also provided some much-needed support to gold prices, which continues to trade at relatively higher levels and with great concern.

Trump may look to lay claim on both the weaker Dollar and the record levels enjoyed by the U.S major indexes, but he’s unlikely to want to lay claim to the fall in popularity and ongoing struggle to fill key positions that would ultimately support Trump to deliver on key growth policies, not to mention his responsibilities to the U.S and its allies. Trump has surprised us before, we all know that a presidential term can change with one action or scenario and he is yet to say the last word.