Conway: Trump Didn't Know about Payment to Daniels

White House officials are having a lot of trouble making up a good story about the $130,000 payment to Stormy Daniels (Stephanie Clifford). Last week Donald Trump's new lawyer, Rudy Giuliani, admitted that Trump was the source of the money. Yesterday, presidential counselor Kellyanne Conway said Trump didn't know about the payment in real time. Not only does that contradict Giuliani, but it also contradicts a New York Times story on Friday that said Trump knew all about it months before it was made. It would be easier for the Republicans to defend Trump if everyone had the same story to tell.

It is not a hard concept to grasp: Everybody, give the media the same timeline. Harvard Professor Alan Dershowitz, at least, seems to understand. Yesterday he told Chuck Todd on "Meet the Press": "The Trump team has to speak with a single narrative. They have to get their story clearly set out." He also said that Giuliani's appearance resulted in a very bad week and that Giuliani was playing right into special counsel Robert Mueller's hands.

Of course, the simplest explanation is that both Trump and his lawyer, Michael Cohen, discussed the payment in advance and Trump made a decision to do it, leaving the details to Cohen. But that would implicate both of them in a federal crime (making a campaign contribution in kind and not reporting it), so everyone else close to Trump just freelances with alternative facts. (V)

Bad Economic News Is Looming

Whichever candidate won the 2016 presidential election was going to have to be nervous about the economy. Specifically, how long the good times would last. When Barack Obama left office, he handed off an economy that was in the third-longest period of growth in American history. April was month 106, which moves the current period of growth into second place (surpassing Feb. 1961 to Dec. 1969), and puts it within spitting distance of first place, the 120-month period of growth from Mar. 1991 to Mar. 2001. The problem, of course, is that the economy cannot grow forever. It's certainly possible that the party could last until the next presidential election in 2020, but that would put the U.S. at 138 months of growth. Politicians who count on a record-setting period of prosperity, one that outlasts the previous best by almost 20%, are likely setting themselves up for disappointment.

It now looks like the party might be coming to end, and that the chickens are coming home to roost. To start, $3/gallon gas is likely this summer. That would be the highest price in four years, and will hit just as midterm season gets underway. Voters tend to take close notice of prices at the pump, and—at least in the past—have punished or rewarded the party in power accordingly. In general, that's not entirely fair, because the president has limited control over gas prices. In this case, however, analysts believe that the spike is Trump's doing. "Most of this recent increase has to do with speculation that the Trump administration will take a hard line with Iran," said Tom Kloza, chief oil analyst for the Oil Price Information Service. Trump has shown virtually no grasp of macroeconomics, and so presumably has no awareness that his decisions in one area could be so impactful in other areas.

And then, there's the impact of the tax cut. Or, more precisely, the non-impact. Nobel laureate Paul Krugman has looked closely at the numbers, and concludes that "the tax cut is a nothing burger." It's true that he's very liberal, but it's also true that he's a serious scholar who does not cook the books to generate the results he wants. What has happened with the tax cut—and this is always what happens with supply side/trickle down economics—is that most of the money went into dividends and stock buybacks, as opposed to investment in new equipment and new jobs. Consequently, the rich got richer, while middle- and working-class Americans enjoyed fairly few benefits. And that is before many of those folks discover, in 2019, that their taxes are going to go up because of the loss of certain key deductions, like mortgage interest.

Finally, and most concerning, is that investor confidence in the stock market is cratering. In January, when the market was at its peak, 50% of Americans were bullish. Last month, that number was down to 33%. That is the steepest three-month decline since this particular indicator began to be tracked in 1987. Analysts have no doubt that talk of trade wars, and fears of inflation, are a big part of that. It is also the case that, ironically, the stock market (and Donald Trump) are victims of the same success that stoked such enthusiasm earlier this year. To wit, when the Dow Jones is in the 25,000 range, a 100 or 200 point drop is actually relatively small. But those seem like big numbers, so they trigger more unease than they really should.

History shows us that the process by which a serious loss of market confidence becomes a recession is a fairly slow one, and takes about 18 months to manifest. Black Tuesday, for example, took place in October 1929, but the Great Depression did not hit until early 1931. Trump is so mercurial, and his policies are so unpredictable, that it's particularly hard to guess what might happen with the market in the short- and medium- term. However, if a recession does hit 18 or so months from now, that would put us right at the start of 2020, and thus the start of presidential campaign season. If the U.S. economy is in the tank, then even the cultural issues that are Trump's bread and butter will not be able to save him. (Z)

Four States Will Hold Primaries This Week

Indiana, North Carolina, Ohio, and West Virginia all hold primaries tomorrow. All of them are states Donald Trump won and three of them have Democratic senators up for reelection. By Wednesday morning, those senators will know whom they are up against. Here is a rundown of the key races:

• Indiana: Three Republicans are running for the right to oppose Sen. Joe Donnelly (D-IN) in this red state that Trump won by 19 points. It has been a heated race because Donnelly is one of the most vulnerable Democrats and all three of the Republican candidates smell blood in the water. Each of the three candidates claims to love Trump the most. They are Reps. Todd Rokita and Luke Messer as well as former state representative and wealthy businessman Mike Braun. They have even given each other nicknames, like "Lyin' Todd" (for claiming Trump has endorsed him, which is not true), "Missing Messer" (because his spends his time in D.C., not Indiana), and "Tax Hike Mike" (because he voted to increase the gas tax when he was in the state House). The attacks began last August with the publication of a leaked 8-page oppo memo in which Rokita instructed his staff on how to chauffeur him around. A Rokita ad then claimed Messer was a never Trumper and besides he lives in Virginia (of course, if Messer lived in Indiana, Rokita would have said he's never in the House working for Hoosiers). Braun wasn't a factor until recently, but after he plowed $4.5 million of his own money into his own campaign, it picked up steam. His pitch is that he is not a politician, and that Rokita and Messer are carbon copies of each other. In short, any of the three could plausibly move on to the next round to face Donnelly. Donnelly is not in a hopeless situation, though. His net approval is +14 points, he has no primary opponent, he is an incumbent, and he has plenty of money and can expect more from the DSCC.
  
  
• North Carolina: There are no senatorial or gubernatorial races in the Tar Heel State. Nevertheless, there are plenty of things for people to vote on, including all of the 170 seats in the state legislature, for which a record 475 candidates have filed. Probably the most competitive U.S. House district is NC-09, represented by Robert Pittenger (R). The main Democrats are Christian Cano, who ran against Pittenger in 2016 and lost, and Dan McCready. Cano had $146 in the bank at the end of Q1; McCready had $1.3 million. The district is R+7, but in a blue wave, it could definitely be in play if there is heavy turnout in Charlotte.
  
  The other interesting district is NC-13, currently represented by Ted Budd (R). Former immigration lawyer and philanthropist Kathy Manning is the leading Democrat. She calls herself a business-oriented moderate. She faces Adam Coker, whose problem is that he was greatly outspent by the wealthy Manning.
  
  
• Ohio: Here we have a twofer: a nasty Senate race and a nasty gubernatorial race. The Republican senatorial primary features Rep. Jim Renacci (R-OH), who is worth about $34 million, and wealthy investment banker Mike Gibbons, who is worth about $90 million. Renacci is claiming to be a Trumpist, but his long career has been as a mainstream Republican. For example, he supports free trade and has voted in favor of many trade agreements, something that used to be a core Republican principle. Now it is anathema to Republican voters. Gibbons is pushing his outsider status and taking credit for being a Trump fundraiser in 2016. His pitch is that Renacci is a swamp dweller and he is a swamp drainer. (As an aside, calling Washington a swamp is offensive to swamps, which are ecologically very important.) Meanwhile, Sen. Sherrod Brown (D-OH) is watching all this quietly. He is popular and has always been anti free-trade. Gibbons, if he wins, will try to make the race insider vs. outsider, but Renacci can't do that.
  
  On the gubernatorial side, Ohio AG Mike DeWine (R) doesn't have a lot of serious competition and is expected to win his party's nomination easily. The action is on the other side. There it is the left vs. the far left. Richard Cordray, the one-time director of the Consumer Financial Protection Bureau, is naturally talking a lot about financial issues, in particular making the Ohio tax system work for working people. Not surprisingly, Sen. Elizabeth Warren (D-MA), whose idea the bureau was, backs him. Cordray's opponent is Dennis Kucinich, the one-time boy-wonder mayor of Cleveland and former congressman. Kucinich is far to the left of Cordray and has the endorsement of Sen. Bernie Sanders (I-VT). So the two heavyweight lefties (Warren and Sanders) are on different teams here. Kucinich has attacked Cordray as not being tough enough on guns, but Cordray has shot back that Kucinich is not tough enough on breaking up the big banks. Many observers think that Cordray would be the stronger candidate against DeWine in the fall.
  
  
• West Virginia: The mother of all Senate primaries is taking place in the Mountain State. The GOP establishment would be happy with either Rep. Evan Jenkins (R) or state AG Patrick Morrisey (R), but is scared to death that it might be coal baron Don Blankenship, who used to run Massey Energy, a huge coal company that made a practice of ignoring the hundreds of safety citations it got—until a mine explosion killed 29 miners and Blankenship got a nice black-and-white striped outfit and free rent for a year, courtesy of the federal government. Majority Leader Mitch McConnell (R-KY) really, really, does not want to have an ex-con who killed 29 miners as his candidate to oppose Sen. Joe Manchin (D-WV), who has won five statewide elections in West Virginia. Blankenship was behind, but has used his fortune to play catch up. Not only is Blankenship a convicted criminal, but he didn't vote for Donald Trump in 2016 and he lives in a huge house in Nevada. Democrats have been quietly spending money to help Blankenship, knowing that even in Trump's second-best state, Blankenship would be toast. The national GOP has not expressed a preference between Jenkins (a former Democrat) and Morrisey (a carpetbagger from New York). If Blankenship pulls this off, despite his opponents' getting help from Trump and McConnell, it will show that Trumpism works only if you are actually Trump.

In short, lots of excitement tomorrow and some hints of what might happen in November. (V)

California Republicans Are Afraid of Being Shut Out Statewide

Currently no Republican is a statewide officer in California, and the Democrats have huge majorities in the state Senate, the state Assembly, and the U.S. congressional delegation. Both U.S. senators are Democrats. But California Republicans are seriously afraid that they won't even have a candidate on the ballot for the top statewide races due to California's jungle primary system, which advances the top two finishers in the June primary to compete in November, regardless of party affiliation. There is a good chance that in November, the senatorial candidates will be Sen. Dianne Feinstein (D-CA) and state Senate Majority Leader Kevin de León (D). The gubernatorial candidates may well be Lt. Gov. Gavin Newson (D-CA) and former Los Angeles Mayor Antonio Villaraigosa (D). That could have the effect of demoralizing Republican voters and depressing turnout, which could end up handing the Democrats up to half a dozen House seats.

While most California Republicans are cozying up to Donald Trump as much as they can, former governor Arnold Schwarzenegger has started a movement to get the Republicans back to the center. He is getting a lot of blowback from state Republicans, though. State Assembly member Travis Allen, who is running for governor, said: "Arnold Schwarzenegger and Republicans like [former Assembly minority leader Chad] Mayes are completely wrong." He continued that Republicans like that are the reason the GOP has been cratering in the Golden State for decades. He wants full-bore, red-blooded, fire-breathing conservatives to run, thinking that doing that will pull millions of conservatives who previously stayed home to the polls. Neutral observers think he is smoking a product that is now legal in California and inhaling deeply.

The one piece of good news for California Republicans is that in quite a few House races, so many Democrats are running that they could fragment the vote badly, and if one Republican gets 15% and another gets 12%, they could be the top two finishers, so there would be no Democrat on the ballot in that district. The DCCC is worried sick about this, but whenever it tries to intervene (usually for the establishment choice), the supporters of Bernie Sanders howl that the voters, not the party pooh-bahs, should choose the candidates. (V)

Trump Appoints Oz to Sports, Fitness, and Nutrition Council

This week, Donald Trump appointed several new members to the President's Council on Sports, Fitness and Nutrition. The name that attracted the most attention was that of Dr. Mehmet Oz, the cardiothoracic surgeon who first gained fame on Oprah Winfrey's eponymous show, and who now hosts "The Dr. Oz Show."

On one hand, this is about as meaningless an appointment as it gets. This particular council is very much "for show," and the folks appointed to it tend to be celebrities rather than people who have a serious contribution to make to America's ongoing problems with physical fitness. Indeed, the same day Oz was named, so too were former bodybuilder and "Incredible Hulk" star Lou Ferrigno, and New England Patriots coach Bill Belichick. And even if we imagine that council performs some legitimate advisory function, one should not hold one's breath waiting for Trump to take proactive action in the area of sport, fitness, and nutrition, inasmuch as he is a man who eats fast food on a regular basis, and who believes that exercise is just a waste of energy.

On the other hand, the appointment of Oz makes a statement—once again—about Trump's priorities. There may be no doctor in America more worthy of the title "charlatan." Over and over, Oz has hawked all sorts of pseudoscientific products and ideas on his shows, from tanning beds that allegedly cure cancer, to Reiki energy "therapy," to psychic communication with the dead, to a plethora of "miracle" weight loss pills and supplements. A review of his show by doctors who take both science and their Hippocratic Oath seriously found that 54% of Oz's claims have no scientific basis, including 15% that go against the scientific consensus.

Still, Oz has been willing to tote the Trump administration's water, most notably going on his show to insist upon the legitimacy of the now-debunked Harold Bornstein letter about the President's health. Further, he's on television, which is basically the single-best qualification for service in this White House. Given that Oz checks Trump's two biggest boxes—does my bidding, looks good on TV—perhaps the only surprise here is that the President didn't try to nominate him as the new VA Secretary. (Z)

Trump Nominated for Nobel Peace Prize

It's official: Donald Trump has been nominated for the 2019 Nobel Peace Prize, for his "work to end the Korean War, denuclearize the Korean peninsula and bring peace to the region." Since the award is given in December of the year in question, it will be nearly two years before we find out if he's a winner or not.

On its surface, being nominated may sound impressive. However, unlike the other Nobels, the number of people qualified to make nominations for this prize is very large, and includes most university professors and all members of national legislatures. This means that there are invariably hundreds of Peace Prize nominees in any given year; the 2018 field includes more than 300 of them.

In Trump's case, the nomination came from a group of Republican politicians, of course, all of whom just so happen to be running for reelection in 2018. Signing on to the nomination paperwork gives these folks two wins for the price of one, because they can express their love for Trump, and at the same time make a statement about the hated Barack Obama, whose own Nobel is regarded as highly dubious in GOP circles.

In fairness, Obama's Nobel was a little dubious. Though he ultimately did enough to justify the recognition, between the Paris Accord and winding down the war in Iraq, it was essentially a "thanks for not being George W. Bush" award when he got it. That says a little something about the predilections of the Nobel committee, and thus the odds that Trump becomes a winner. The committee is willing to recognize some pretty questionable individuals, but they really have to earn it. So, if Trump really does negotiate peace in Korea, he will get the award. Until that time, however, he and his GOP supporters are just creating expectations that may be impossible to fulfill. (Z)

Trump Set to Get Monument

Donald Trump may not win a Nobel Prize anytime soon, but he is nonetheless set to be commemorated with a Mount Rushmore-style monument. A group in Finland is raising $500,000 in order to carve a 115-foot likeness of the Donald they call "Mount Trumpmore." By way of comparison, the faces on Rushmore are about 60 feet tall, so Trumpmore will be twice as bigly as the monument to those sad losers Washington, Lincoln, Roosevelt, and Jefferson.

That is the good news for the President. Now, the bad news. The carving will be made on the side of a glacier in the Arctic. The Finns who are organizing the project expect, with good reason, that Trump's face will melt quickly. This, in turn, is meant to draw attention to global warming and to the President's anti-science stance. So, it's unlikely that any of the $500,000 will come from 1600 Pennsylvania Avenue. On the other hand, given all the backbiting and leaking in the White House, maybe they'll get quite a few donations from that address. (Z)

Connecticut Set to Join Interstate Compact

In two of the past five presidential elections, the popular vote winner lost the election. This is beginning to grate on people, especially Democrats (who lost both of them), although if the situation had been reversed, it would probably begin to grate on Republicans. Getting rid of the electoral college would require a constitutional amendment ratifed by 3/4 of the states, something the low-population states where the buffalo roam will never agree to, since it would dilute their political power.

However, there is a work-around. Ten states have already joined the National Popular Vote Interstate Compact in which they have agreed to cast all their electoral votes for the winner of the national popular vote, not their own state's popular vote. If states with 270 electoral votes join the compact, then the winner of the national popular vote will get enough electoral votes to win the election. De facto, then, the electoral college will be eliminated and the national popular vote will elect the president. Here is the map showing which states have signed up (green) and which states are considering it (yellow):

The news today is that another state, Connecticut, is about to join the compact. The state legislature has approved a bill to join and Gov. Dan Malloy (D-CT) has said he will sign it. Connecticut will be the 11th state to join. Together the 11 states have 172 electoral votes. If additional states with 98 electoral votes join, it will be a done deal and Websites that report on the electoral vote during presidential elections (like this one) can wrap it up and go off to that great Website in the sky. (V)

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---The Votemaster and Zenger