The U.S. economy has sailed through a presidential impeachment before.

In 1998, as the GOP-controlled House moved to impeach President Bill Clinton, the stock market soared and the economy grew nearly 5 percent.

But economists and Wall Street analysts note that conditions are very different now as Democrats push toward a possible impeachment of President Donald Trump.

During the Clinton impeachment, the dot com boom was making Americans exuberant about the economy. Today, the economy is slowing, consumer confidence is dipping and corporate America faces a gauntlet of worries including the trade war with China, the future of the North American Free Trade Agreement and slowing growth around the world.

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And now investors, consumers and corporate executives face the prospect of a Washington consumed for months by impeachment drama and the uncertain reactions of a volatile president with a penchant for lashing out under stress.



This complex stew could damage an economy already showing signs of flagging. That in turn could further erode Trump’s standing on the economy, up to now his strongest issue.

In 1998, senior Clinton aides took heart that a rocking economy would provide a floor for the president no matter how bad things got. “The president was popular because things were going pretty well and people felt Clinton was working for them,” said Joe Lockhart, an adviser and press secretary under Clinton.

In 2019, that may not be the case.

“Back then you had an economy that was still a couple of years away from the end of the cycle,” said Paul Christopher, head of global market strategy at the Wells Fargo Investment Institute. “We do not think a recession is imminent right now, but we are much further into the cycle now than we were in 1998.”

Trump and his advisers inside and outside the West Wing dismiss all of this and argue that warnings about the economy are dramatically overblown. And they blame the media for hyping signals of weakness and ignoring more positive signs like a strong housing market, wage growth and solid consumer spending.

They also strongly dispute the idea that an impeachment fight will make any difference to the economy, and maintain that the president will continue trying to strike trade deals and cut regulations to ease the path for businesses.

“It’s like the entire media is trying to push us into recession,” said Larry Kudlow, Trump’s top economic adviser. “If you look at the housing data the numbers are much better. I don’t think impeachment, even if they do vote, will have any impact on the economy at all. It doesn’t have anything to do with it.”

Kevin Hassett, who recently departed as chairman of Trump’s Council of Economic Advisers, said data on housing and sales suggest that while third-quarter growth might be slow, the fourth could bounce back close to 4 percent.

Economists and market analysts don’t fully agree with this sanguine view, though many acknowledge the economy retains significant strengths. Here are a few areas where economists say the impeachment saga could make a difference.

Gridlock in Washington

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