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Opinion | Niall Ferguson

Has Trump peaked?

President Trump gives “Peas,” a National Thanksgiving Turkey, a pardon during a ceremony in the Rose Garden of the White House on Tuesday, joined by Jeff Sveen, chairman of the National Turkey Federation.Manuel Balce/AP Photo

Thanksgiving is a wonderful festivity. Unlike Christmas, it has somehow eluded commercialization. The formula remains the time-honoured one: Get your family together, eat turkey, count your blessings.

Asked on Thursday what he was thankful for, President Trump replied: “For having a great family and for having made a tremendous difference in this country. . . . This country is so much stronger now than it was when I took office that you wouldn’t believe it.”

Now, not everyone thinks this ludicrous. In the most recent Economist/YouGov poll, 40 percent of respondents said they approved of the way Trump is handling his job as president, of whom 24 percent said they “strongly approved” of his performance. Among Republican voters in the same poll, 62 percent expressed strong approval. He still has his base.


Yet it is impossible not to sense a change in the air. On the day that Brett Kavanaugh was confirmed by the Senate as the newest Supreme Court justice — a day many Republicans celebrated as a tremendous victory over their Democratic opponents — I offered the following thought to my wife: “This is peak Trump.” That was on Oct. 6. Nothing that has happened in the intervening seven weeks has led me to change my mind. Since then, it has been all downhill.

First, take another look at the results of the congressional midterm elections. Now that all but a handful of races have been settled, it is clear that this was a serious defeat for the president’s party. In the House of Representatives, the Democrats gained 37 seats, more than enough to give them control for the next two years.

The most concerning trends for Republican strategists must be their poor performance with women voters, particularly those with college degrees, and with younger voters. According to exit polls, college-educated women preferred Democratic candidates by a margin of 59 to 39. Clear majorities of voters ages 18 to 29 (67 percent) and 30 to 44 (58 percent) favored the Democrats. Partly because of these demographic differentials, Republican candidates lost in key districts in two of the states that decided the 2016 presidential election in Trump’s favour: Michigan and Pennsylvania.


Second, let’s talk about the economy. By most standard measures, it’s in robust health. The International Monetary Fund expects that growth this year will be just under 3 percent, the highest since 2005. The official unemployment rate is 3.7 percent, the lowest since December 1969, when Richard Nixon was president. (More about him later.)

Yet only Republican voters give Trump any credit for the economy’s strength. According to the polls, around 70 percent of Democrats disapprove of his handling of the economy. That helps explain why the economy didn’t help Republican candidates in the midterms. Immediately prior to the vote, pollsters found that health care beat the economy into second place as the most important issue. You may recall the Republicans’ epic failure to reform or repeal Obamacare.

Now ask yourself what would happen if the economy took a turn for the worse. For investors in both stocks and bonds, that has already happened. On the day before Thanksgiving, the S&P closed at just under 2,650, 1.3 percent below where it began the year. Bond yields have risen significantly this year, from below 2.5 percent to above 3 percent, inflicting losses on bondholders.


It is hard to see where respite could come from. The Federal Reserve seems on course to keep raising interest rates and unwinding the expansion of its balance sheet that occurred in response to the financial crisis.

The Republicans gave the economy the fiscal equivalent of a sugar rush with the tax cuts they passed this time last year. The glucose level in the bloodstream is now falling and the full scale of the fiscal irresponsibility is beginning to sink in.

Third, President Trump and his inner circle are about to be hit not just by the report of special counsel Robert Mueller, but also by a barrage of attacks from congressional committees soon to be chaired by Democrats. Control of the House gives Trump’s political foes two powerful weapons. First, congressional committees have an arsenal of investigative tools that the majority party can wield. The most important is Congress’s subpoena power to compel the production of documents or the sworn testimony of witnesses in furtherance of a congressional investigation.

Second, Congress has the power to make public the results of any investigation. In short, you can expect 2019 to feel a lot like 1973, as every liberal legislator and journalist sets out to reenact Watergate, casting Trump in the role of Nixon.

For a time, it seemed to me that Trump might be able to transcend all these threats with foreign policy successes based on his primal, intuitive grasp of the relative weaknesses of America’s foes. I no longer believe he has the discipline or patience necessary to exploit this advantage. Policy on North Korea is a mess: Kim Jong Un now openly flouts the constraints that were supposedly placed on him in Singapore. Policy on Iran is an even bigger mess: The administration’s cack-handed defense of its Saudi ally’s murder of Jamal Khashoggi has been shameful. And policy on China may well become a mess if the president opts for a photo opportunity rather than meaningful concessions on trade when he meets Xi Jinping in Buenos Aires on Wednesday.


Finally, a caveat. I have called “peak Trump” before and been wrong. In January 2016, I foolishly predicted that he would flop in the Republican primaries. So I could be wrong again. One of the things that make me thankful to live in America is that this country is so wildly unpredictable. Except, that is, on Thanksgiving.

Niall Ferguson is a senior fellow at the Hoover Institution at Stanford University. An updated edition of his book “The Ascent of Money” will be published early in 2019.