Not much rattles financial markets these days. But Michael Flynn’s guilty plea did, with stocks falling abruptly on news that President Donald Trump’s short-lived national security adviser admitted lying to the FBI, and may now provide new evidence of improprieties on Trump’s presidential campaign, and perhaps even at the White House after Trump took office.
This is the worst news Trump has received so far, and it revives the prospect of a constitutional crisis that could involve Trump firing special prosecutor Robert Mueller. If that happens, it would be the gravest political scandal since Watergate in the early 1970s, with pressure mounting on Congress to hold a vote to impeach the president. And if that actually happened, Vice President Mike Pence would replace Trump, becoming the 46th president of the United States.
We’re not there yet, and even if there were an impeachment vote, Trump could survive it, given that fellow Republicans control both houses of Congress and impeachment requires an imposing three-quarters of the votes in the Senate. Still, markets are all about anticipating the future, and the prospects now include a new degree of political turmoil unprecedented even for the Trump administration.
