Mark Halperin

August 14, 2019

The Fundamentals

Much of Thursday is in suspended animation until President Trump speaks at what is likely to be a memorable rally scheduled for 7pm ET in beautiful downtown Manchester, New Hampshire, at the very place at which he appeared on the eve of his New Hampshire primary win in 2016, and again on election eve that November.

There literally might not be a venue in America that makes Trump feel more MAGA-y than the SNHU Arena at 555 Elm Street, right across the way from El Rincon Zacatecano Taqueria (pro tip: have the guac).

In one of his worst political moments ever, in September of 2008, during a financial crisis brought on by more than a big Dow drop, John McCain infamously said, “The fundamentals of our economy are strong, but these are very, very difficult times.”

For many Americans, economically and politically, these are indeed very, very difficult times.

But how about the fundamentals of our economy?

Wagering on what Donald Trump will say at any event is more foolish than Mike Pence betting on a cricket match, but it seems safe to say that the president will give his own, extended version of “the fundamentals of the economy are strong” tonight.

Arguing against that position: trade wars, including uncertainty over tariffs and unratified trade deals; massive debt and deficits; weakening Asian and European economies; uncertainty caused by Brexit and other populist-driven dynamics; Hong Kong protests; tepid American business investment and manufacturing; the waning sugar high of the Trump tax cuts.

Beyond what we would normally view as “fundamentals,” there are the “meta fundamentals” of the Era of Trump that ALWAYS show weakness in the eyes of the Gang of 500 and the International Masters of the Universe whose decisions impact the economic outcomes that drive headlines: Trump’s iconoclastic and chaotic behavior (the only certainty is uncertainty); Trump’s war with the Fed; Trump’s war with Democrats; Trump’s poor won-loss record to date on striking challenging international agreements.

And the Washington Post makes this important point: “But unlike during the Great Recession, global leaders are not working in unison to confront mounting problems and arrest the slowdown. Instead, they are increasingly at one another’s throats.”

And this: “Several White House officials have become concerned that the economy is weakening faster than expected, but they are not working on proactive plans to change its course.”

Two questions:

Where could one most sensibly place the blame for the lack of world unity?

Can mere words counteract all this?

Along with the boss, all the president’s women and men (except for the ones talking to the Washington Post, as above) are trying to talk the world out of crediting the negative fundamentals and into looking elsewhere.

For instance, Politico: “Trump administration officials strongly reject the notion that the U.S. is heading for a recession. They say that continued strong jobs and wage growth will overcome any slowdown caused by uncertainty over trade. And they continue to maintain that Trump is working hard to overcome long-standing cheating by China on trade.”

“‘There is no recession coming,’ a senior White House official said on Wednesday. ‘The consumer is way too strong as are jobs and wages. I just don’t buy it.’”

The Wall Street Journal news department provides this additional backup: “The good news is that the U.S. isn’t confronted with severe excesses to unwind, as it was in the mid-2000s with the housing boom or the late 1990s with tech-stock gains. Because of that, some economists said any downturn might be mild.”

“[W]ith unemployment low, incomes rising and household saving rates higher than in the late 1990s or mid-2000s, many consumers are in better shape to weather a storm.”

When McCain uttered his famous words, meant to reassure, they ironically had the opposite effect, both for his political standing and on the economy.

Trump, of course, can’t come off of vacation and change the fundamentals with one MAGA rally. And he will probably exacerbate most of the meta fundamentals when he opens his mouth.

The Wall Street Journal, in its lead, we-told-you-so editorial, deviates from its cold-headed and clear-eyed view of the occupant of the Oval Office by offering advice that will never be taken: “The key to avoiding the worst is to restore a sense of policy calm and confidence. [HA!] Stop the trade threats by tweet. [HA!} Call a tariff truce with China, Europe and the rest of the world while negotiations resume with a goal of reaching a deal by the meeting of Pacific nations in November.” [HA! HA! HA!]

What’s a man whose job security depends on turning around perceptions about the economy actually going to do about all this, besides tweet about China?

Get out the Jiffy Pop and the Mike and Ikes for tonight’s potentially historic Granite State rally.

While you wait, you can monitor markets (non-U.S. trading is mixed at this writing), and, per the Wall Street Journal, wait for this data to unspool and watch the Dow (over)react:

“Investors will look to fresh U.S. economic data for further indication about the strength of the economy. The Commerce Department will publish July retail sales data Thursday, after June saw the fourth consecutive uptick in American spending, a sign that consumers are a source of strength in the U.S. economy.”

“The Labor Department also will release second-quarter figures on productivity and costs, showing whether a recent increase will continue, and the Federal Reserve will give new figures on industrial production in July.”

Also: Walmart earnings.

In other news:

New Hampshire rally subplot: What will Trump say about Corey Lewandowsky?

Extraordinary quotes from establishment Republicans who oppose U.S. Senate bid by former campaign manager in a Politico rocket.

My take: It seems like Lewandowsky wants to run. It is hard to imagine Trump won’t support his guy running if his guy wants to run. If his guy wants to run, he will be favored to win the Republican nomination to face Democratic Senator Jeanne Shaheen. Shaheen, like most incumbents in Purple States, always worries about her re-election. Shaheen is a worrier. There are reasons for her to worry about a Lewandowsky candidacy. First and foremost: if he is the nominee, it is more likely funds will flood the state in the fight over those four electoral votes. But my guess is she isn’t too worried.

Jeffrey Epstein

The Washington Post: “Among the bones broken in Epstein’s neck was the hyoid bone, which in men is near the Adam’s apple. Such breaks can occur in those who hang themselves, particularly if they are older, according to forensics experts and studies on the subject. But they are more common in victims of homicide by strangulation, the experts said.”

My take:It is bad for America for any of this to be coming out by leak. The country needs a thorough, FAST public accounting of what happened. The Posts (Washington and New York) have a lot of credibility, but they are not official organs.

Fox News poll: Trump close to record-high disapproval rating.

POTUS drops to near-Fox record 43-56 on approve/disapprove.

President’s approval for response to El Paso/Dayton at 37%; 46% percent say he has made the country less safe from mass shootings.

59% of voters say they are unhappy with the way things are going in the country.

My take: It is better than even money that Trump will attack the Fox poll on Twitter and/or at the New Hampshire rally.

The Economist/YouGov poll: Biden, Warren tied nationally.

Biden 21
Warren 20
Sanders 16
Harris 8

My take: Warren remains more popular with voters than she does with the Gang of 500; Harris remains more popular with the Gang of 500 than she does with voters. At some point, voters matter more. At some point, Harris’ straddle between left and right might have to end, some Democratic strategists say, and she will need to make an argument against Sanders and Warren from the right (because she surely won’t outflank them on the left).

Post and Courier poll: Biden has big South Carolina lead.

Biden: 36
Warren: 17
Sanders 16
Harris 12
Buttigieg 5
Booker 4

My take: At some point, Biden’s Democratic rivals need a plan to overtake him. His poll standing here is growing, not shrinking. August isn’t the time to try to head him off, for obvious reasons. But as Yogi Berra said in a slightly different context, it gets late early out there.

Hickenlooper reportedly ready to ditch presidential run for Senate bid.

My take: Good news for Chuck Schumer and for those who want to topple Mitch McConnell. Impact on the presidential race: nil.