Republican smiles may soon turn to grimaces

 Trump's parade of US heroes will quickly be forgotten if the economy stalls

Sometimes an agonised facial expression speaks louder than a thousand words. As President Donald Trump delivered his first State of the Union address last week the Democratic side of the House of Representatives was one big rictus of pain.

Television viewers saw more of Vice-President Mike Pence and Paul Ryan, the Speaker of the House. But the reason their faces grew steadily more gleeful had less to do with what Trump was saying than with how their opponents were looking.

House minority leader Nancy Pelosi, in particular, was a portrait of acute political discomfort. At one point, it appeared that a large piece of lemon rind had become trapped between two of her teeth. New Jersey senator Cory Booker was shooting for gold in the frown Olympics.

Trump's speech was not great, but it was good. A year ago, in his inaugural address, he had painted a grim picture of "American carnage". Last week he radiated Reaganesque optimism. Thanks to his administration, he declared, a "new tide of optimism" had been "sweeping across our land."

His predecessor often used these occasions to tell emblematic stories of "ordinary folks". Yet Barack Obama was too aloof to make this work: somehow, the individuals in question always sounded like plaintiffs in a Harvard Law School case. For all his solipsism, Trump pulled off the "shout-out" trick again and again. There was the coastguard officer who saved at least 40 lives after Hurricane Harvey hit. There was the firefighter who rescued almost 60 Californian kids from wildfires. There was the 12-year-old boy who volunteered to put thousands of US flags on veterans' graves.

In his acceptance speech at the Republican national convention in 2016 Trump had spoken of the "forgotten men and women" he wanted to represent. Here they were. The army staff sergeant who rescued a comrade wounded by an Isis booby trap in Raqqa. The North Korean defector who limped thousands of miles to freedom on rough crutches. Most memorable of all were the grief-stricken Hispanic parents of two teenage girls slain by the notorious MS-13 gang in 2016.

The official theme of Trump's speech was "our new American moment". But what made it work were these carefully chosen American heroes, who appeared genuinely moved by the applause they received.

The Republican applause, that is. For only very occasionally were their opponents willing to concede some desultory handclaps. (If Bernie Sanders could have clapped Trump's heroes with only one hand, he would have done.) Contrary to the media message that this was a "bipartisan" speech, Trump's address was the very reverse. Everything - especially his insincere invitation to work with the other side on immigration reform and infrastructure - was calculated to inflict political pain on the Democratic Party.

"Americans are dreamers too," Trump declared, goading those on the other side who use that term to refer to illegal immigrants brought to America as children who now face deportation since the repeal of the Obama-era programme known as Deferred Action for Childhood Arrivals. As if to rub it in, one of Trump's all-American heroes was an immigration officer named . . . Celestino Martinez.

It worked. Three-quarters of viewers who watched the speech approved of it, according to a CBS News poll. Two-thirds said it made them feel "proud". Only 14% thought the policies Trump talked about would hurt them. True, the TV audience skewed rightwards, but only 42% were Republicans while 33% were independents. If they were lapping this up, then the Democrats were right to look agonised. The only thing that has fallen faster than bitcoin this year has been the Democrats' lead over the Republicans in the generic ballot that offers a rough indication of who will win November's congressional mid-term elections. Five weeks ago the Dems led 50% to 37%. Their lead is now down to five percentage points (46% to 41%).

Two forces are now at work, both of which hurt the Democrats. The first is the slow, far from steady but nevertheless perceptible stabilisation of Trump's administration as chief of staff John Kelly has tightened his grip on the post-Steve Bannon White House. The second is the economy. The employment report last week seemed to vindicate Trump's tub-thumping: not only were 200,000 new jobs created in January, but average hourly wages were 2.9% higher than a year before, the strongest since 2009.

If these trends were to continue for the next nine months, Republicans might just beat the traditional curse of incumbency - that a new president's party nearly always does badly in the mid-terms. If they continue for another three years, Trump 2020 ceases to become the impossibility most commentators currently assume it to be.

Will they? Well, probably not. First, I doubt that Trump will be helped much by the release of the House intelligence committee's memo accusing the FBI and the Department of Justice of "abuses" in the case of Carter Page, the former Trump campaign volunteer targeted for FBI surveillance.

Second, there's the economy. As I wrote on this page in November, the monetary policy party has officially ended. The Federal Reserve is raising interest rates and shrinking its assets and liabilities. And demographic factors - reduced workforces, less saving and more consumption as populations age - mean the end of the 35-year bond bull market. Last week the bond market cracked. And with 10-year rates passing the 2.8% mark, the stock market - for so long Trump's favourite measure of his own stable genius - rolled over. Rising wages are a double-edge sword: good news for workers, bad for investors.

As for "the memo", it's not the "nothing burger" alleged by Democrats, but nor is it wagyu steak. Yes, it seems odd that the Foreign Intelligence Surveillance Court was not informed that the basis for the FBI's surveillance request, former MI6 agent Christopher Steele's Trump dossier, was partly paid for by the Democratic National Committee and Hillary for America, via the research firm Fusion GPS.

It seems odd that the application cited as corroboration a story in Yahoo! News for which Steele himself was the source. It seems odd that Steele was in direct contact with then associate deputy attorney-general Bruce Ohr and that Ohr's wife was employed by Fusion GPS. All these people, plus two members of the FBI (agent Peter Strzok and lawyer Lisa Page), seem to have been pretty keen to see Trump lose to Clinton.

But was Steele's dossier the only reason for the FBI to wonder what was going on between Trump Tower and various Russians? No. Has Trump been entirely candid about his campaign's dealings with Russia? No. Does this memo do anything to derail special counsel Robert Mueller's investigation into those dealings? Doubt it.

I still don't think it's Watergate. Nor do I think the economy is heading for Richard Nixon-style "stagflation". Still, look carefully at the facial expressions of leading Republicans over the coming days. Democrats may not be smiling, but they won't be the only ones grimacing.

Niall Ferguson is Milbank Family senior fellow at the Hoover Institution, Stanford

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