That’s the title of a book by Professor Laurence Douglas-and frankly, we can’t believe that we’re writing this. Up to now, the handover of power has usually been peaceful in the United States, even when the party changes. Think Bush- Clinton, Bush-Obama. But, because of the chronic hyperpartisanship now afflicting the United States, Professor Douglas thinks it is possible that President Donald Trump may try to hang on if he loses. Especially if the result is close. And there are precedents, none of them pretty. Think Hayes-Tilden 1876 or Bush-Gore 2000. We post a fascinating interview piece with Douglas and Sean Illing of Vox below.*
If the worse happens, there could be three Presidents by January-Trump, Biden, and Nancy Pelosi, who by law must try to hold the ring as acting commander-in-chief. But we’ll leave that to the Americans. The point for foreigners is that our own stability and economies ae still very dependent on them. The dollar is still the world’s reserve currency, and a sudden vertiginous drop could wreak untold havoc on world currency markets. If that happened, equities would be close behind. More worryingly, the enormous power and stability of the US has so far meant that Treasury Bonds are the safest thing you can buy. They act like an enormous sponge for the world economy, soaking up loose money in times of surplus, releasing it when times are bad. Real constitutional meltdown would instantly jeopardise their safe haven status. What turmoil then?
Since about the time of President Nixon, America’s power has rested more on its financial status than its industrial. Many larger powers are waiting for this moment to step in. Russia, China and India are the obvious giants, with the EU as a possible contender. But America has smaller, closely allied client states as well. Three obvious examples are Taiwan, the UK and Israel. Up to now, the relationship has been beneficial to these states. But what do you do if your patron suddenly runs out of money?
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