A Glaswegian friend of mine recently informed me that the British refer to the study of economics as political economics. The terms have become synonymous and most university course catalogs will use the latter in the United Kingdom. While economics is the newer, more often used term, the use of political economics conveys a deeper understanding of what economics really is. The laws of economics are based on simple assumptions that are at the mercy of the body politic. In simpler times, the risk premiums associated with changes in politics would be far lower. Essentially, markets are efficient and they will figure things out. Today, however, the world economy is one indictment away from a major crisis and the markets will now need to price in further risk premiums.

As the world has held its breath, former the FBI Director, Special Counsel Robert Mueller has been hard at work. Now, the special prosecutor in charge of investigating Russia's involvement in the 2016 U.S. presidential election has played his first hand. We learned this week that not only has Mueller indicted President Donald Trump's former campaign manager, Paul Manafort, but he already has a conviction in the form a guilty plea from a foreign policy advisor to the campaign, George Papadopoulos. What is interesting is that Papadopoulos pleaded guilty on Oct. 5, but his plea was kept sealed at petition from Mueller. Now, nearly a month later, the court has unsealed his guilty plea. Why seal the guilty plea? Why the long delay?

Never a dull moment in Washington these days, the Papadopoulos plea is even by Trump standards, very big news. Papadopoulos pleaded guilty to lying to the FBI. His plea details the information he withheld. Apparently, Papadopoulos met with agents of the Russian government in April at a hotel in London. At this meeting, he was told that the Russian government had dirt on Democratic presidential candidate Hillary Clinton. The Russian agent described only as a "professor" in the court documents told Papadopoulos that "They [the Russians] have dirt on her. They have Clinton's emails. They have thousands of emails." Six weeks later, Trump's son, Donald Trump Jr., and his son-in-law, Jared Kushner, accompanied by Manafort, met with Natalia Veselnitskaya, a Russian attorney who is said to have been acting on behalf of the Russian government. They met at Trump Tower to discuss information that was allegedly damaging to the Clinton campaign.

Manafort had just joined the Trump campaign when the meeting with Veselnitskaya took place. Weeks later, Manafort convinced Trump to ditch the first major endorsement he had, Chris Christie, as his vice presidential pick and instead go with then Indiana Governor Mike Pence. Later, Manafort took the helm of Trump's campaign as chairman and campaign manager. Manafort had previously lobbied on behalf of Russian-supported Ukrainian leaders and was able to convince Trump to forego support for arming Ukraine in its armed conflict with Russian separatists. Manafort's indictment alleges he laundered money for these same Russian-backed Ukrainians. Manafort stands indicted on charges of conspiracy against the U.S. government and is currently under house arrest.

Mueller will allege, through Papadopoulos's testimony, that Corey Lewandowski, Trump's former campaign manager, was replaced by Manafort after Lewandowski disagreed with working with the Russians per Papadopoulos's suggestion. Now, the question is whether Mueller be able to get Manafort to plead guilty to the charges or offer him immunity in exchange for testimony against others in the indictment. Not only does the indictment mention Manafort and his business partner, Rick Gates, who was also indicted, it also says they conspired against the U.S. government with others.

Should Mueller flip, we will soon know who the others are. Whether or not these crimes go as high as Trump is anyone's guess, but in the event that they do, Manafort's pick as vice president would become president if Trump is removed and would be able to pardon him. Similarly, Trump may be able to do the same if Manafort is convicted.

The immediate future of the U.S. economy, the ability of the U.S. president to nominate a new Federal Reserve (Fed) chair, his ability to appoint up to four Supreme Court justices during his tenure – changing the nature of the Supreme Court for a full generation – his ability to enact tax reforms and trade negotiations and so much more are now all in question. Economics is nothing without politics but it appears politics is primarily motivated by economics.