No honeymoon period for the next US President

With both political parties in serious conflict and deeply split among themselves, regardless of who wins the election, the incoming President will be facing recession and policy gridlock.

The US economy is on the cusp of recession and, with the country divided, the incoming government faces a policy standoff believes, Dr Harald Malmgren, trusted advisor and senior trade negotiator to Presidents Kennedy, Johnson, Nixon and Ford.

Political structures are hard enough to change under normal circumstances, he explained in an interview with me recently for Real Vision TV. Every new President sets up commissions and study groups, then bureaucracy takes over and the whole process becomes highly political, but this time it could be complete chaos.

"The battle has already begun between Trump and Ryan, and Trump doesn't understand that you can't function without the Speaker's help."

In the early months, Harald advises that there's going to be a lot of talk and a lot of maneuvering for power. Who's chief of the barnyard? Which animal has the rights over all others? That's going to be pretty serious quarrel and the president can't control that. It's not in his hands.

With an imminent recession Harald believes there is virtually nothing that the parties can do about it, because it's not until the second year of a Presidency where a well organized Congress starts to act. The median household income is drifting down slightly and discretionary spending is shrinking really fast. In addition, world trade is in a slump, but with the pile of debt that the US is now sitting in, it just cannot borrow for more spending.

The US government has to find some way to channel savings and investor motivations into productive activity. So if they have to use artificial means like infrastructure bonds, it's uncomfortable. But it needs to be done with the limited current choices.

The trouble is that for a long period of rethinking, Congress is not going to work well and that means no honeymoon for the new president. He or she will also find that it takes six to nine months to assemble the 4,000 political appointees needed, Harald Malmgren said, because they all have to be vetted and if they have any money, that will have to be divested, plus the monumental task of security clearances.

Watch this fascinating interview exclusively on Real Vision TV.