passed away two weeks ago. The Old Mongoose was one of the "greatest of all times," to expropriate a self-description of
. He was a crafty boxer who reigned in the light heavyweight division until well into his middle age. He was also a devastating finisher, a champion who seldom let his opponent get away when going for the knockout. It may prove to be too bad for the
, and perhaps for the market, that his years did not stretch long enough for him to coach the
leadership in the tactics, and the dangers, of the sweet science.
The intersection of the issues of impeachment and the bombing of Iraq makes it worthwhile to double-check one's thinking about the likely impact on the market. I had been relatively unconcerned about impeachment's effect, first because I had guessed wrongly that it would never get this far, and second because I reasoned that the market would, in any case, see very little uncertainty in the outcome of a trial in the Senate.
Low uncertainty means low impact. The impeachment drama had begun to appear as a political form of Kabuki theatre -- formalistic, not particularly entertaining (for most Americans, anyway), and with no deep mystery about the ultimate outcome. The electorate has been irritated or amused, or both, by the process, but "Where's the outrage?" has been a question that has been much more pertinent inside the beltway than outside.
Last week, suddenly, angry politics seemed to jump the boundary of the beltway. Americans picketed and demonstrated both for and against impeachment, against bombing, and against each other. Divisiveness leapt from latency to actuality. The sudden certainty of impeachment and the surprise onset of bombing happened almost simultaneously, so it was not possible to separate conclusively the motivations for the outbreak of political demonstrations. Whatever the motivation, it's been a long time since Americans have taken to the streets, and that's not an encouraging development for the market outlook.
Motivation is certainly a critical question in all of this. For haters of
, it is not difficult to see wag-the-dog distraction as a motive for choosing last Wednesday to strike at
. But perceiving a dishonorable motivation and saying it aloud are two different things. The tradition of "politics stops at the water's edge" may be somewhat malleable, but it is a high political risk to be seen as not supportive of troops in the field. The words of several key Republican leaders may be reflected back to haunt them and their party in the congressional campaign of 2000.
The Old Mongoose was cagey enough to keep his guard up while throwing the shots intended to knock out an opponent he had on the ropes. He understood that if he did not take care a desperate fighter might land a wild punch that could put him on his back. By not loosing sight of self-defense while going on the attack, Archie Moore was a clinically efficient knockout artist.
The allegation that President Clinton sent troops in harm's way for the purpose of distracting attention from his political and legal difficulties is a devastating knockout blow. But only if it lands. A wild roundhouse that misses leaves the chin exposed. For a wag-the-dog allegation to hit its mark, it will be necessary to make a persuasive case for a conspiracy involving much of the U.S. national security team.
That's a punch the Mongoose probably would have chosen not to throw. It must be maddening for dedicated Clinton-phobes to see Slick Willie appear to pull yet another last minute escape. But in trying to ensure that he does not slip away, GOP congressional leaders may have loosed wild swings that will leave them exposed to telling counter-punches.
Now that the President has been impeached on two of four articles, there may be little uncertainty in a Senate impeachment trial. In a highly charged partisan environment, it is hard to see the
finding a two-thirds majority in favor of conviction and removal when the body has a 55-to-45 nose count in favor of Republicans. But there is distinct uncertainty about the likely duration of the trial, just as there is a great deal of ambiguity about American political and military objectives in Iraq. On Sunday morning, politicians offered everything from a potentially quick settlement in the Senate to a lengthy trial. In Iraq, the bombing has ended, but the military and foreign policy questions have only become more complex. It is possible to imagine that both the Iraqi problems and a Senate trial will drag on well into 1999, thereby drawing ever closer to the election campaign of 2000. The longer either process persists, the higher will be the frustration of the American electorate, and the higher the stakes for their elected representatives.
Up until just last week, the impeachment process seemed to me to be in the nature of political theatre, alternately high drama and low farce. Its implications for the market were not easy to see. But with the recent shooting war and wild accusations from the Congress, the nature of the activity seems to have shifted from show biz to deadly combat. This could get really bloody before it's over.
Jim Griffin is the chief strategist at Aeltus Investment Management in Hartford, Conn. His commentary on the financial markets is based upon information thought to be reliable and is not meant as investment advice. Aeltus manages institutional investment accounts and acts as adviser to the Aetna Mutual Funds. He welcomes your feedback.