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Amash May Hurt Biden More than Trump

Pundits have been speculating for weeks about how the likely entry of Rep. Justin Amash (I-MI) into the presidential race as a Libertarian will affect the major candidates' vote totals in November. Now we have some data, due to a new Monmouth University poll released yesterday. In a two person race, Joe Biden has the support of 50% of registered voters, to 41% for Donald Trump. But in a three-way race with Amash, it is Biden 47%, Trump 40%, and Amash 5%. So Amash takes 3 points away from Biden and only 1 point away from Trump. The poll didn't ask "how come?" but the most likely answer is that some Republicans hate Trump so much that if forced to choose between Biden and Trump, they will hold their noses and vote for Biden. But if Amash is a third possible choice, he will get their vote as a way to express their distaste for Trump without having to vote for a Democrat.

That said, there is a huge caveat here: Support for third party candidates always drops over time. In March 2016, a Monmouth poll had Gary Johnson (L) polling at 11%. In October, he had dropped to 5%. He actually got 3%. This year the stakes may be much higher due to the coronavirus and the battered economy, so people may be less inclined to throw away their vote to make a point.

The poll also asked whether the respondent believed the allegations made by Tara Reade that Biden did something untoward. To start with, 86% have heard about the charge, with 37% saying it is probably true, 32% saying it is probably not true, and 31% having no opinion. These results break sharply along partisan lines. Republicans say it is true 50% to 17%. Democrats say it is not true 55% to 20%.

However, many voters are aware that Donald Trump's record on this front is far worse than Biden's, even if Reade is telling the truth. Among people who believe Reade, 59% support Trump but 32% still support Biden. It is very hard to separate belief from pure partisanship here. There are plenty of Republicans who are saying: "I am voting for Trump and nothing either he or Biden does will change that." And there are plenty of Democrats who are saying: "I don't care what Biden did 30 years ago, Trump must go." But the key thing to remember is that we have had dozens of stories that looked like game changers and, a month later, they were forgotten because there was another big story. How many people even remember who Volodymyr Zelensky is and why he was in the news last year? We even have an item about a potential June game changer below (Trump's taxes).

Another thing to keep in mind is that when a candidate is running for reelection, the election is probably 90% about whether the incumbent should be fired and 10% about whether the challenger is an improvement. If people like the incumbent, he or she will probably win, even if they like the challenger more. But if people dislike the incumbent, even a weak challenger can win.

The Monmouth poll isn't the only one this week. A Reuters/Ipsos poll released on Tuesday has Biden ahead of Trump by only 43% to 41%. It's hard to reconcile these two polls, one that has Biden up 9 points and the other that has him up 2. This one seems to disagree with most other polls, though, so it is most likely just a statistical fluke. That happens 5% of the time and is normal. (V)

Trump Is Planning to Call the Number of COVID-19 Deaths Fake News

It was inevitable. What we don't know is why it took so long. Now that Donald Trump's estimate of "at most" 60,000 COVID-19 deaths has long been surpassed (it is currently 75,000), the obvious tactic for him is to call the numbers produced by his own administration fake news. Sure enough, at least one senior official expects him to start questioning the numbers very soon and saying the number of deaths is far lower than what has been reported. Most experts think the number of deaths reported is a major undercount because people who have died with all the symptoms of COVID-19 but who weren't actually tested don't count as COVID-19 deaths.

The argument that the number of deaths is an overcount is this: Hospitals get a 20% bonus for treating coronavirus patients to compensate for their loss of patients who have decided that they don't want elective surgery right now. So in Trump's view, the hospitals pump up their numbers to get more money, even though that would be fraud. To Trump's way of thinking, if you can make more money by simply lying about something, it is a no-brainer to do it. So far, there is no evidence that anyone is cooking the books. However, if Trump decides the best way to reduce the PR hit from too many deaths is simply to attack the data, sure as night comes after day, Fox News will echo the view and 40% of the country will believe it. Welcome to the post-fact world. (V)

Trump Doesn't See Eye to Eye with His Campaign

It is rare when a candidate and his campaign are seriously at odds over campaign strategy. However, Donald Trump's campaign manager, Brad Parscale, wants to milk the Tara Reade story for all it is worth, in part to split the Democrats. The candidate, by contrast, appears to be defending Joe Biden. What's up?

Part of it may be a new Morning Consult poll that shows 25% of Democrats want to replace Biden on the ticket. Parscale probably has his own polls showing the same thing. If a pollster were to ask "If the allegations that Joe Biden had bacon and eggs for breakfast last week are true, would you want to see him replaced as the nominee?" we know that 25% of the Democrats would say: "YES!" Parscale wants to drive a wedge between the Democrats who really don't like Biden and the rest of the Democrats and make it look like the DNC is up to no good by refusing to dump him. He knows they won't vote for Trump, but if they can be made angry enough, some will surely refrain from voting in November. This is politics at its finest.

But Trump isn't on the same page as Parscale here. In a recent interview he said: "All of a sudden you've become a wealthy guy, you're a famous guy, then you become president. And people that you've never seen, that you've never heard of, make charges. I would just say to Joe Biden: 'Just go out and fight it.'"

In other words, Trump is siding with Biden over Reade. Why? One possibility is that he really and truly believes that when you are a famous guy, women owe it to you to do whatever you want with them. It mostly worked for him his whole life, so he feels Joe is entitled to treat women as he wishes. In other words, he sees Joe a member of the club, along with himself, Harvey Weinstein, and Jeffrey Epstein, and doesn't see the problem here.

A second explanation is that he is afraid that talking about this topic too much will make his behavior toward women a major campaign issue, and he knows there is far, far more evidence against him than against Biden. The former veep has one woman, who is a die-hard Sanders partisan, with an inconsistent story she keeps changing, against him. And the story alleges that Biden did something reprehensible in a very public place (a Senate hallway). In contrast, there are dozens of women who have accused Trump of everything up to and including rape in private places. Trump probably senses that having the campaign be about which candidate is more disgusting is not a battle he can win. Most likely, Parscale will try to get whatever mileage he can out of this, probably by getting women to condemn Biden and not mention Trump. But there is the danger that in the fall, the Democrats will start replaying the Access Hollywood tape over and over to remind people that Biden denied the allegations against him and Trump literally bragged about grabbing women by the pu**y. (V)

Trump Doesn't See Eye to Eye with His Attorney General

Several Republican-led states have sued to get the Supreme Court to void the Affordable Care Act, also known as Obamacare. The Trump administration joined the lawsuit long ago. The legal argument is that the Supreme Court ruled that the penalty people have to pay if they are not insured is a tax, and Congress has the power to tax, so the law is okey dokey. After Congress reduced the penalty to zero, Texas and other states argued that a tax of $0 is no tax at all, so now the entire law can be thrown out.

AG William Barr has enough political sense to realize that denying millions of people health care in the middle of a pandemic is probably not a good way to get votes. His view is to take it easy and not push the Supreme Court to strike down the entire law, at least not right now. But yesterday, his boss said it was full speed ahead with trying to get rid of the ACA. The Supreme Court won't hear the case until the fall and there won't be a decision until after the election. That probably works more in favor of the Democrats than the Republicans. If the case is still pending in October, Joe Biden's new slogan will be: "Republicans want to take away your health care in the middle of a pandemic." Will that resonate with some voters? We think so.

Donald Trump thinks so, too, and doesn't care. He is making a massive bet on the recklessness of his own voters. He is betting that by telling them how awful the ACA is and how it will lead to socialism and all kinds of horrors, they won't mind losing their own insurance and dying for the cause if need be. And remember, his base is poorer than the population at large and so more dependent on the ACA than the population at large. And many of his voters will be recently unemployed, so no matter how wonderful they think employer-based health insurance is, they know that currently they don't have any. Most pundits would say that trying to take away people's health insurance in the middle of a pandemic is a colossally dumb idea, but Trump doesn't care what pundits say. He believes he can convince his base that fighting "socialism" is a winner, even with people who will go bankrupt and perhaps die from his actions. Trump can certainly not be accused of playing small ball. (V)

Trump Doesn't See Eye to Eye with Senate Republicans

Donald Trump is champing at the bit for another COVID-19 relief bill in the form of a payroll tax cut. Never mind the fact that cutting payroll taxes won't be of much help to the 30 or 40 million or so people who suddenly find themselves not on a payroll. For Republicans, there is no such thing as a bad tax cut.

Unless there is. When asked what he thought of a payroll tax cut, the powerful chairman of the Senate Finance Committee, Sen. Chuck Grassley (R-IA), said: "Right now, not much." Without Grassley's full support, the tax cut is going nowhere. So now Trump is fighting with his campaign manager, with his attorney general, and with one of the most powerful Republicans in the Senate.

Meanwhile, House Democrats are working on their own relief bill v5.0, which gives more money to states. Senate Republicans are likely to reject this approach. And Trump wants something different from each chamber. Will there be another bill? If each camp sticks to its guns, no, but the initial PR isn't the end of the process. If both parties really want another bill (because the first four didn't do the job at all), in the end, Democrats will probably get some money for state and local governments and Senate Majority Leader Mitch McConnell (R-KY) will probably get some money for tobacco farmers or whatever else he wants. This is how the sausage is made. And most likely, with Grassley opposed to a payroll tax cut, Trump will get nothing. (V)

Private Payrolls Dropped 20 Million People in April

Payroll processing company ADP has reported that private payrolls dropped by 20.2 million people in April. To put this in perspective, this is more than double the total losses during the Great Recession. The previous record for job losses in a month was 835,000 for Feb. 2009. April beat that by a factor of 25. Furthermore, due to the way the measurement was made, 20.2 million may be an underestimate.

The job losses were worst in the services and hospitality sectors, especially in bars and restaurants. Trade, transportation, and utilities took the second worst hit, followed by construction. Broadly speaking, services lost 16 million jobs and manufacturing companies lost 4 million jobs.

The official Bureau of Labor Statistics numbers will be out tomorrow, but economists don't expect them to be very different from ADP's projections. As unemployment moves toward 20% and maybe beyond that in May, the political fallout is going to be enormous. Donald Trump will blame Hillary Clinton, China, and others, but the reality is always that when times are good, the president gets the credit (deserved or not) but when they are bad, the president gets the blame (deserved or not). And in this case, it is deserved because when the coronavirus was discovered in January, rapid and powerful action could have greatly stopped its spread. Trump not only took no action, but denied there was a problem. Expect Democrats to point this out a few times in the fall. (V)

Temporary Layoffs Are Becoming Permanent

Everyone is hoping that life will return to normal soon. Especially the 20 million people who lost their jobs in April, not to mention the millions who lost theirs in March. However, that hope is increasingly faint. In particular, companies that "temporarily" laid off workers are starting to go under and close permanently, meaning the "temporarily" laid off workers will never get their jobs back because the jobs themselves will be gone.

The problem is that many businesses have fixed expenses, like rent, utilities, and insurance, that have to be paid even if they are closed and not making any money. Very few small businesses have enough money in the bank to keep paying their fixed costs for more than a couple of months, at most. When the money is gone, if they can't reopen, they are gone and the jobs are gone forever.

But even large businesses are downsizing and are very unlikely to upsize any time soon. Alcoa, Boeing, and U.S. Steel already announced major cuts in employment. Uber said yesterday that 3,700 jobs would be eliminated. Airbnb said it was cutting 1,900 jobs. Earlier this year, forecasts called for the auto industry to sell 16 million cars. That has been revised to 11-12 million, with the corresponding loss in jobs not only at the assembly plants, but for thousands of small suppliers as well. And, of course, if lots of people are out of work, then even fewer people will buy cars next year, and the cycle perpetuates itself. (V)

Walker Sails Through Confirmation Hearing

Mitch McConnell called the Senate back into session yesterday, not to take up legislation relating to the pandemic, but to approve his 37-year-old protégé, who has less than a year's experience on the bench and who got an ABA rating of "not qualified" last year, to a lifetime position on the nation's second most powerful court. Democrats were furious, but McConnell couldn't care less as they have no power to block the confirmation.

A number of the Democrats complained that having them come back and risk catching the coronavirus in order to ram through a court nominee was really inexcusable as there is no hurry. A few of the senators didn't want to take the risk and attended by video.

The hearing was very partisan. Democrats attacked Walker for once saying that the Supreme Court's decision to uphold the ACA was an "indefensible decision." Walker responded by essentially saying that his earlier comments were a joke. The Democrats didn't think it was funny.

The entire confirmation process is completely broken. Every nominee before the Judiciary Committee swears up and down that his or her only allegiance is to the law and the Constitution. All the senators smile, even though every one of them knows the nominee is lying. Then the final vote is completely along party lines.

The Founding Parents got a fair number of things wrong, and one of them is the idea that by giving judges lifetime appointments they could be neutral and fair. Oops. Not so much. All it does is allow them to legislate from the bench for 30, 40, or 50 years. We recently saw an election in Wisconsin, which elects its state Supreme Court justices for 10-year terms, in which the voters didn't like a sitting justice, so they kicked him out. Maybe the Constitution should be amended to give judges and justices 10 year terms, after which they would have to be renominated and reconfirmed. At a reconfirmation hearing, senators could get out the transcript of the previous confirmation hearing and ask the candidate to explain how so many votes seemed to violate what was said to the Senate last time around. (V)

Supreme Court Will Hear Arguments about Trump's Tax Returns Next Week

A 1924 law states clearly that when the chairman of the House Ways and Means Committee requests anyone's tax returns, the treasury secretary "shall" turn it over to the Committee. Chairman Richard Neal (D-MA) made a request for Donald Trump's recent tax returns, but Treasury Secretary Steven Mnuchin said: "Nope." The case ended up in the Supreme Court, which will hold hearings on May 12. In addition, Manhattan District Attorney Cyrus Vance has also issued a subpoena for them in what is actually a routine tax evasion case. Vance wants to know if Trump claimed hush money payments to a porn star and a Playmate as business deductions, which would be tax fraud. Again, Mnuchin said: "Nope." Now the Supreme Court will have to decide who's right.

The firm that prepared the tax returns, Mazars, is not just any old accounting firm. It has a long and not-so-glorious history. ProPublica has written a long exposé on the firm. Back in the 1950s, Trump's father, Fred, began using a small accounting firm in Queens that specialized in the taxes of wealthy real-estate investors and knew all the loopholes backwards and forwards. After a series of mergers, the small firm became part of Mazars USA, the American branch of a big multinational accounting firm.

The firm is not exactly clean as a hound's tooth. The key partners and the firm itself have repeatedly been accused of fraud, misconduct, and malpractice going back 30 years. Back then, Fred Trump's team was led by a man named Jack Mitnick, who was only 27 but was as inventive as he was pugnacious. In one of his schemes, in 1992 he had Fred Trump create the All County Building Supply & Maintenance Corporation, which was owned by Donald Trump and his siblings. The firm sold materials to Fred for his apartment buildings at outrageous prices, far, far, above their market value. The consequence of this deal was twofold. First, Fred's company didn't make any money because when you are paying thousands of dollars for each toilet you buy, it's tough to make a buck. Since Fred wasn't making any money, he naturally didn't have to pay taxes. In addition, since the little Trumps owned a corporation that was making money hand over fist, they effectively got lots of money from their father without paying any gift or estate taxes. How's that for creative accounting? Mitnick was regarded as a tax god within the firm. Neither Fred nor later Donald would make any move without getting it cleared by Mitnick first. Mitnick's guiding principle was "If you can't find me where the law says you can't do it, then you can do it." He always took very aggressive positions and if he lost in court, would just keep appealing. He never backed down.

Mitnick and his team developed all of Trump's tax avoidance strategies. As Donald acquired more and more businesses, the schemes grew more and more complicated. When Trump began losing money on casinos, an airline, a football team, vodka, steaks, and more, Mitnick and his little band made sure the losses wiped out all of Trump's tax liabilities for years to come. The IRS was aware of the shenanigans, but Mitnick was very clever and used property appraisers who lowballed Trump's properties by as much as 40% to lower taxes. In the end, Mitnick's behavior became too much for the firm and he was kicked out and fell on hard times, in part because he tried some of the same stuff on his own behalf and it didn't always work.

But Mitnick's departure didn't change the firm's attitude. He was replaced by a new leader, Donald Bender, who was even more aggressive and more dedicated to Trump than Mitnick. He tightened security so nothing about Trump's finances would leak out. Internally, he was called "the other Donald." One of the things he loved to do (and which Donald #1 heartily approved of), was inflating Trump's apparent wealth. At one point, just after four of Trump's companies had gone bankrupt, he prepared a statement saying that Trump had $139,326,000 in cash and equivalents. That seems unlikely after four bankruptcies, but Trump loved it. By 2012, the firm was claiming that Trump was worth between $4.2 billion and $4.5 billion, but the statement had many obvious false claims, including one saying that Trump Tower is 68 stories (it is 58). Also it said that a property he bought in Westchester for $7.5 million was worth $291 million. When he announced his run for president, Trump waved a piece of paper from the accountants that said he was worth $8.7 billion, but he didn't mention the footnote on it that said the accountants were just taking his word for it and hadn't actually checked.

Mazars also did the tax returns of the Donald J. Trump Foundation. They were prepared and signed by Bender, until the foundation was shut down by New York State for fraud. To say that Mr. Bender is especially good at bending the law (until it breaks and then keep going) is a gross understatement.

The firm has said it will comply with whatever the Supreme Court rules, but given its decades long devotion to the Trumps, it may already be searching for creative ways to "comply" if Trump loses the cases. Suppose it turns over Trump's returns to Congress on an encrypted USB stick but refuses to turn over the password, claiming that the ruling didn't mention anything about passwords. Will AG William Barr prosecute? Who knows.

For that reason, the more dangerous case for Trump is the one from the New York DA. If Mazars (a New York State partnership) refuses to turn over the tax returns to Cyrus Vance, he has the power to indict Bender and potentially put him in prison. And Vance doesn't need Barr's approval. The Supreme Court normally issues decisions in June. If it goes against Trump, expect fireworks. If you are into the legal and accounting ins and outs of the cases, and the (mis)behavior of the accountants, the ProPublica article is worth reading. (V)

The Streisand Effect, Part II

Yesterday we pointed out that when Donald Trump attacked the Lincoln Group's "Mourning in America" ad, it got the ad 6 million views, something it would never have gotten if Trump had not mentioned it. Now it appears that there was another effect as well. Trump's attack on the group brought in $1 million the day after Trump's tweets. So the net effect of Trump's attacking the group and one of its leaders, George Conway, the husband of Kellyanne Conway, was to give the ad massive publicity and to bring in enough money for them to make many more such ads.

The group also announced yesterday that it was going to target some of Trump's top allies in the Senate. We eagerly await how the targeted senators will react. Will they keep their cool and say nothing about them or will they say something to generate massive publicity and raise lots of money for yet more ads? (V)

Today's Presidential Polls

Quinnipiac University released polls of three states in the Northeast yesterday. They don't contain any surprises, though. (V)

State	Biden	Trump	Start	End	Pollster
Connecticut	56%	33%	Apr 30	May 04	Quinnipiac U.
New Jersey	54%	35%	Apr 30	May 04	Quinnipiac U.
New York	55%	32%	Apr 30	May 04	Quinnipiac U.

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