Good morning. Here’s your Early Warning for Monday, 25 March 2019.
Mueller Report: According to a summary published by Attorney General Bill Barr, special counsel Mueller “did not find that the Trump campaign, or anyone associated with it, conspired or coordinated with the Russian government.” Furthermore, while the Mueller report “does not conclude that the President committed a crime, it also does not exonerate him.”
Lastly, Barr writes: “The investigation did not establish that members of the Trump campaign conspired or coordinated with the Russian government in its election interference activities.” Speaking yesterday, President Trump characterized the investigation as an “illegal takedown that failed.” Trump continued, “It’s a shame that our country had to go through this. To be honest, it’s a shame that your president has had to go through this.”
Next steps: Congress will continue to demand access to the full Mueller report while many Republicans are requesting that all the data be released — interviews, forms, files, memos, and other information that points to a conspiracy against President Trump. Democrats may also subpoena both Robert Mueller and Attorney General Bill Barr to testify on the report. And the Southern District of New York still has criminal probes directed towards President Trump, his campaign, his inauguration, and Trump Organization associates.
Meanwhile: Democrats are zeroing in on Mueller’s (or perhaps AG Barr’s) conclusions that the report did not exonerate President Trump of potential obstruction of justice. In a joint statement, House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) said, “Given Mr. Barr’s public record of bias against the Special Counsel’s inquiry, he is not a neutral observer and is not in a position to make objective determinations about the report.” Congressional Democrats may independently take up an investigation into obstruction of justice.
The Big Question: Democrats are reportedly saying behind closed doors that putting Mueller’s findings on life support may be politically toxic. Some Democrats have accused the Party of litigating 2016 instead of planning for 2020. But the Mueller report and at least 17 ongoing Congressional investigations into the Trump administration will likely continue to be central to the Democrats’ efforts to harrangue President Trump going into 2020.
Early Warning (?): I’m seeing a lot of takes that Trump will go on the offensive after the Mueller report. Here’s one that came across this morning: “Historically there will be a pre-Mueller Trump Presidency and a post-Mueller Trump Presidency… [The deep state and the media] lost-we are now in a new world,” tweeted Newt Gingrich this morning.
Politics & Governance
President Trump is scheduled to meet with Israeli Prime Minister Benjamin Netanyahu today.
Appearing in Houston over the weekend, former Obama attorney general Eric Holder told a gathering of Democratic activists, “Texas is a critical state… it’s among the most gerrymandered states in the country. To be successful in the efforts we are going to be doing nationwide, we have to be successful here in Texas.” Holder chairs the National Democratic Redistricting Committee and is charged with leading efforts to give Democrats major advantages in the U.S. House and state houses across the country, potentially overturning Republican majorities in key states like Ohio, North Carolina, and Wisconsin. Holder described Barack Obama’s involvement as “the chief political involvement of his post-presidency, this whole effort of the NDRC.” [source] (AC: This is worth the read, considering that Holder and the NDRC will be active in numerous states through 2022. This is going to be a big fight and a big deal after the 2020 census.)
Far Left Daily
“I think all of a sudden, the 2020 election went from a slam dunk for Democrats to something where we’re going to have trouble beating this guy because he’s going to make Democratic socialism swing to the left, which I don’t think is real, but he’s going to make it into the issue. AOC does not speak for the Democratic party.” – Former Democratic Governor of Pennsylvania Ed Rendell
“You can hurt [Trump] more without impeaching him. If you’re going to go after him, it has to be a kill shot. But otherwise, you can keep cutting him over and over again, and then beat him in 2020.” – Unidentified Democratic aide, as reported by Politico
“There’s a difference between compelling evidence of collusion and whether the special counsel concludes that he can prove beyond a reasonable doubt the criminal charge of conspiracy… But that doesn’t mean, of course, that there isn’t compelling and incriminating evidence that should be shared with the American people.” – Rep. Adam Schiff (D-CA), House Intel chair
“In light of the very concerning discrepancies and final decision making at the Justice Department following the Special Counsel report, where Mueller did not exonerate the President, we will be calling Attorney General Barr in to testify… in the near future.” – Rep. Jerry Nadler (D-NY), Chair of the House Judiciary Committee
“If subpoenas are denied, we will haul people before Congress. And yes, we will prosecute in court as necessary to get this information. We will win that litigation.”- Rep. Adam Schiff (D-CA), speaking about prosecuting AG Barr and the Justice Department if they fail to respond to Congressional subpoenas
“This is not the end of anything! This is the— well, it’s the end of the report and the investigation by Mueller. But those of us who chair these committees have a responsibility to continue with our oversight.” – Rep. Maxine Waters (D-CA)
The Mueller report “exposes some of those early calls [for impeachment] for being premature and not based on the evidence at hand. And I think it sets that back. It doesn’t let [Trump] off the hook, but you cried wolf way too early.” – Rep. Gerry Connolly (D-VA)
“It’s also worth pointing out that an impeachment case still exists. Several of us have argued that the president is surely guilty of at least some ‘light’ obstruction.” – Jonathan Bernstein, New York Times Opinion writer
With last week’s news of an inverted yield curve (the 10-year crossed the 3-month), some economists are renewing recession forecasts, potentially within 18 months. (The cross over essentially says that investors see more volatility in the short term than the long term, which typically precedes a recession.) But that’s at odds with Trump administration officials (and some other economists) who still maintain an outlook of 3 percent GDP growth for the next several years. As Q1 comes to a close next week, we can likely expect very low growth once the final numbers are published, but economic growth is widely expected to pick back up for Q2. You’re going to see a lot of news on how low Q1 growth is. The partial government shutdown contributed, but lower Q1 growth is a cyclical pattern (Christmas effect) which typically picks up in Q2.
Speaking this morning in London, Philadelphia Fed President Patrick Harker said, “I still see the outlook as positive, and the economy continues to grow in what is on pace to be the longest economic expansion in our history.” Harker outlined his expectations of one interest rate hike this year and one in 2020.
The Federal Housing Authority (FHA) warned mortgage insurers earlier this month that it would begin flagging risky home loans. FHA regulators are concerned that some lending institutions are extending too many high risk loans which are backed by the federal government. This could be one indicator that regulators are trying to avoid another 2008 housing crisis as they try to decrease the number of high-payment loans to borrowers with lower credit scores.
Lastly, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are headed to Beijing this week to continue to work towards a trade deal. The Trump administration previously showed they’re willing to walk away from any deal and continue to push for a good deal. My outlook remains the same: I’m hard pressed to believe that a good deal can be made if it doesn’t include the cessation of Chinese economic and industrial espionage. Still, President Trump may want to extend a positive news week with a trade deal later this month.
Strategic/Defense Situational Awareness
Last night, the Israeli Defense Force (IDF) called up reserve units following a rocket attack into Israel from Gaza that wounded seven Israelis. Troops are reinforcing the Gazan border. Prime Minister Netanyahu announced his early departure from Washington after meeting with President Trump this morning, and has promised a ‘forceful’ response.
“There’s a rare moment here for Donald Trump to get a bit of a reset. He’s got a chance to reconnect with more Americans than he even did previously.” -Matt Schlapp, chairman of the American Conservative Union