Sputnik: Bloomberg's pessimist guide asserts that US would fall into a deep recession. What is the likelihood of this happening and what could trigger this recession?
David O'Brien: A couple of years ago everybody was predicting the decline of the Republican Party. Due to demographic changing nature of the American society the Republican Party was finished. Along comes Donald Trump and everything changed. This prediction always has to be incapable of seeing what's around the corner. With Donald Trump in office we have seen real political instability in the United States. To some degree that's what he wants, he works through chaos, he has brought instability to the system but political instability cannot be good for an economy in the long run. And we could see in the very near future a government shutdown if Congress can't agree to a budget and that is a real possibility. There is a serious trade deficit with China which could trigger a trade war. We have the possibility of international conflict on the Korean Peninsula, which would have very serious repercussions for the world economy, American economy, Chinese economy, environmental disaster or perhaps America's long slow decline, perhaps, similar to Japan.
READ MORE: Glass Half Full? Bloomberg's ‘Pessimist's Guide' Too Bleak, Expert Says
Sputnik: Which of those scenarios you actually went through? Which you think is the most likely scenario of doom under Mr. Trump?
David O'Brien: All the indicators are up — GDP, the markets are doing well, unemployment is down, employment is up, people have more money in their pockets. American economy seems to be in the best shape it's been since before the financial collapse [of] 2008. But can Donald Trump take any credit for that? Is he responsible for that or is this a recovery that was already taking place? Lots of commentators and academics would argue it was already taking place before Trump came to office and that the economy moves slower than that. If we do see any increase in the political instability, if we do see a government shutdown you know that could very quickly come to a halt. I mean Donald Trump has brought a degree of chaos to the American political system. The political system and the economic system are obviously deeply entwined. The economy doesn't like chaos it doesn't like uncertainty, it doesn't like the potential for uncertainty. It's a real possibility that the political chaos could have an economic impact…or maybe not.
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Sputnik: Is 2018 going to be a turning point? Trump started with the majority support in Congress, we are going to see elections; we are going to see, perhaps, a change in the makeup of Congress and the Senate in 2018.
David O'Brien: Donald Trump came into office with a huge, very strong hand. He had both houses and he has struggled to take full advantage of that. He's had very little success in getting his legislative agenda passed. Now as he begins to see a decline in the numbers in the Senate, the Republicans have just lost Alabama. There is an indication that he [Trump] is becoming weaker on that front. In mid-term elections are coming up, if Donald Trump performs badly his whole narrative, that of a winner, and if he encounters a situation where he is a loser that could be very tricky for the whole Donald Trump agenda and the whole Donald Trump narrative. So yes, maybe 2018 will be a turning point. But Donald Trump is like nothing we have ever seen before in American politics, hold on to the seats, who knows [what will be].
The views and opinions expressed by David O'Brien are those of the speaker and do not necessarily reflect those of Sputnik.
