Sure, you might think: Donald Trump isn’t exactly a competent president. But it’s a long-standing truism of U.S. politics that, at the end of the day, presidents really don’t have immediate and severe effects, for better or worse, on economic performance or jobs. Instead, what really matters are larger-scale forces — say, the growth or stall of productivity, something that politicians have very little effect on in the short term. We can all play games with economic statistics and where presidencies begin and end, but most of the claims involved are partisan fictions. 1
But that truism was never tested by Donald Trump.
Few seem to have adequately priced in the possibility of large, unusual downside risks from having Trump in the White House. I’m not talking about normal policy differences, such as Trump’s withdrawal from the Paris climate deal, in which some will argue (just in terms of economic development) that he’s freeing U.S. businesses while others will maintain that focusing on coal mining while the future is in renewables is a poor trade-off. I’m focused here on the possibility that his chaotic presidency could produce devastating results just because normal governing might prove impossible.
Here are the five biggest scenarios I’m aware of, and how the chances of each have changed since Trump won the presidency in November.