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SMERCONISH

Michael Avenatti Discusses the Contractual Agreement Between Stormy Daniels and President Donald Trump and It's Legalities and Execution; Art Laffer Discusses the Effect of Imposing Tariffs on the U.S. Economy; Dr. Anthony Carnevale Discusses the Importance of Considering Career and Technical Education as a Viable Option For Many Students; Panelists Discuss the Recent News from the White House Including Trump's Scheduled Meeting With Kim Jong-un, Midterm Elections, and the Stormy Daniels Allegations. Aired 9-10a ET

Aired March 10, 2018 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[09:00:00] MICHAEL SMERCONISH, CNN ANCHOR: I'm Michael Smerconish in Philadelphia. We welcome our viewers in the United States and around the world. Beware of the bubble. Donald Trump has been President for about 400 days now and despite a lot of hand ringing the world has not come to end.

It looks like we'll survive this Presidency. Although there's going to be an enormous void as to how we'll be entertained post-Trump Administration whenever that might come. Last December, "The New York Times" reported that before taking office Mr. Trump told top aids to think of each Presidential day as an episode in a television show in which he vanquishes rivals.

For entertainment value, this Administration is a hit. Look at this week, Monday we we're introduced to the full Nunberg. Former Trump campaign staffer Sam Nunberg said on virtually every TV show that exists that he would defy a request to testify in front of Special Counsel Robert Muller. By the way by Friday he was spending six hours testifying.

Tuesday a porn star filed a complaint against the President. She wants a courts permission to tell her story. And two hours after President Trump said everybody wants to work at the White House, Economic Advisor Gary Cohen resigned.

Wednesday embattled Attorney General Jeff Sessions scolded California over immigration.

Thursday we learned that Trump had spoken to witnesses who'd already appeared in front of Mueller about their testimony. And the pre- inauguration Erik Prince, the Blackwater founder, led efforts in the Seychelles to open a back channel communication with Russia.

Thursday came the stunning news that the President would soon meet with Kim Jong-un the North Korean Dictator that he derided as Little Rocket Man.

And Friday, we learned that Trump's personal attorney, Michael Cohen, says he used his own home equity line to pay $130,000 to Stormy Daniels. He negotiated this settlement from his trump.org e-mail account but maintains he never told the President.

Keeping up is exhausting and sometimes misleading. There's a tendency to focus on the chaotic, the turn over, the personalities, the inter White House warfare, the salacious. And while it's certainly true that it's been a bumpy ride, it would be a mistake to see the President only through a media lens. Not while the Dow is still climbing. It closed Friday up 441 points; it has gained 38% since Trump took office.

American's are seeing more of their paycheck due to the tax cut. The Jobs numbers increase 313,000 last month, the unemployment rate remains low at 4.1%, and while the economists might not be happy with his protection as policy with regards to steel and aluminum. I can tell you who is. High school educated working men, most responsible for putting him in the White House.

Those same Americans who might determine the outcome of the Pennsylvania special Congressional Election on Tuesday, and control of the entire House come November. As Mike Allen pointed out this week at Axios, remember that Democrats are defending 10 Senate seats in states Trump won in 2016, and in 6 of them the President's approval rating is higher than 50%; that's nearly 10 points above where he is nationally.

That doesn't bode well for the Democrats getting the two seats that they need to win control of the Senate. Plus Quinnipiac this week had Democrats up 48-38 on which party should control the House. That gap has narrowed.

Last month the Ds were up 53-38. The only thing that's certain is that this wild disruptive ride will continue for as long as Donald Trump is President, a tenure ultimately to be decided by voters or maybe Robert Mueller. In the mean time, the continued reports of the President's political demise seem greatly exaggerated to me.

And that's today's pole question at smerconish.com. Go vote and answer this question, do you think reports of the President's political demise are greatly exaggerated? I'll give you the results at the end of this show.

Joining me now Salena Zito the writer for "The Washington Examiner" and "The New York Post", by the way she lives in Pennsylvania's 18th Congressional district.

Steve Cortez is a former Trump campaign advisor, by the way, he vacations in Pennsylvania's 18th Congressional district. Jeff Greenfield, I don't think he has any connection to the 18th but he is an award winning - Emmy Award winning television journalist who has served as Senior Political Correspondent for CBS, a Senior Analyst for CNN, and a Political and Media Analyst for ABC News.

Jeff I begin with you. Are the reports of the President's political demise greatly exaggerated?

[09:05:00]

JEFF GREENFIELD, AMERICAN TELEVISION JOURALNIST: Yes, first I went to summer camp in Pennsylvania about 60 years ago, so there.

SMERCONISH: Thank you.

GREENFIELD: Yes it is - there are two enormous disconnects. One is the one that you just recited which is that in the face of conduct that would have gotten any other President never elected or booted out of office and the stories of the White House chaos, and the Mueller investigation.

If you are a certain kind of conservative, this President has delivered more than any President including Ronald Regan. A revamp federal bench, a consumer and environmental approach 180 degrees removed from Obama, very pro industry. You've got tax bill that rewards what is laughing called the investor class, or as I call them rich people.

And so from that point of view, in spite of the fact that he - historically low approval ratings, with the help of the Congress he has delivered in that area. Now whether what he has delivered is going to ultimately look good, that's a different question. And one more quick point. Given the state of the economy that you've described, given the fact that we are not yet at war with anybody, the President's approval ratings and the climate of the mid-terms it's historically unique.

This - if it hurts the Republicans it's not because of any issue. It is because of the conduct and the character and the temperament of this President. Just as people say every week, this is not normal. This is not normal. But it's what we're living through.

SMERCONISH: Steve, we may as well get used to it is what I'm trying to say. We're more than a year in --

STEVE CORTEZ, FORMER TRUMP CHAMPAIGN ADVISOR: Right.

SMERCONISH: -- and unless, unless Robert Mueller does something to throw him off course, this is the way it will be for either an entire four years or an entire eight years.

CORTEZ: Right and by the way get used to it. I hope so. You mentioned in your intro that we're surviving this Presidency. It think we're thriving under this Presidency. And far away from the Acela Corridor where I think a lot of media and lot of political cognoscenti like to focus on palace intrigue in the West Wing or supposed chaos in the White House.

And I'll be the first to admit this has been a very disruptive Presidency, and it should be. He's an outsider. The first outsider, true outsider ever elected to that office. But far away from that scene, the reality in America is optimism, security, and prosperity; small business optimism at an all time high, fantastic jobs report just yesterday, construction jobs at an 11 year high. So the country is thriving in an era of optimism, deregulation, and reduced taxation. So I think that the reality on the ground in flyover states like where I live is very, very different from what's going on in the salons of Georgetown.

SMERCONISH: Salena what happens on Tuesday in Pennsylvania's 18th?

SALENA ZITO, WRITER FOR WASHINTON EXAMINER AND NEW YORK POST: Its jump ball. It could go either way. Here's why I think people, think people need to pay attention to this race and not - and learn something's from it but not everything. This is not a race of contrast which is typically what a race is.

You have a candidate on one side who believes one ideal, and one on the other side. These two gentlemen, the Democrat and the Republican, are on the same page on almost everything including the tariffs and including the on gun control. That is - that makes this unique in that it's almost like a Republican primary. The other thing is this race, this seat also does not, it no longer exists. Because of the ruling by the State Supreme Court it has been gerry -- it has been re- gerrymandered and it's a zombie. It no longer exists.

It's interesting to me that I think the biggest lesson in this race is the Democrats need to pick individually candidates that suit the district. Conor Lamb clearly suits the district. He's a moderate Republican. And so he fits well and that's why this is a race. If he was progressive Rick Saccone would be miles ahead of him.

I -- this is a two point race in either direction. Lamb has for his sort of benefit he's young and charming. And Rick Saccone is not young. And I can say that because I'm the exact same age as him. So that - that's what we have going on here.

SMERCONISH: Jeff is it worth all the hype? There's tremendous interest in this. A ton of money has been spent, as Salena points out, Jeff Greenfield for a district that will not exist at years end.

GREENFIELD: Yes and this is a kind of race, where we're coming up to the 50th anniversary of the McCarthy showing in New Hampshire which he lost. And the psychological impact of that New Hampshire race was enormous.

[09:10:00] And the reason I raise that is that it should Lamb win, despite everything that Salena says, all of which is accurate, the psychotically impact I think of that victory by a Democrat will be enormous. It used to be said that when Louis the XVI was guillotined, every monarch in Europe reached for his throat.

And the fear, I think, that this will engender among Republicans is enormous. I would make one other quick point. I talked to a Democratic consultant who was involved in the Alabama Senate race. And he said one of the interesting things was that the white working class that you would have expected maybe to stay with the Republican, they were fed up with Trump's behavior.

They we're angry with him not about any issue, they we're just exhausted. And one of the potential dangers for Trump, even if Mueller doesn't indict him and even if this Stormy Daniels story doesn't resonate, which I think there's a chance that it will, is that the sheer exhaustion that people feel with the cavorting of this President may in and of its self become an issue that will hurt him and the Republicans even if the economy stays good.

SMERCONISH: Steve, I did a commentary on CNN here in January where I raised the question of whether President Trump is deserving of credit for bringing the North Koreans to the table. I said among other things, might it be that those bellicose tweets about Little Rocket Man had the consequence of causing him to say I better sit down with the South Koreans, unlike I've been willing to do in the past.

So I've given him his props in that regard. Victor Cha in "The New York Times" today, more credential than I, former National Security Council Director for Asia said this; put it up on the screen.

The announcement at the White House on Thursday evening that President Trump will meet the North Korean leader, Kim Jong-un, within two months raises more questions than it answers. While the unpredictability of a meeting between these two unconventional leaders provides unique opportunities to end the decades old conflict, its failure could also push the two countries to the brink of war. Might the risk outweigh the benefit of these two sitting down? Which is his point.

CORTEZ: Sure, you know listen I think it's possible but I would also point out that the National Security apparatus, the establishment apparatus of Washington, D.C. which has been pretty bipartisan for a quarter century, I think, quite frankly, has not served us very well. They haven't given us a secure world. So I'm certainly willing to try very new things.

And this President, you know as I mentioned before, is incredibly unorthodox in so many ways. But that's exactly why he was elected because the status quo, whether its security or prosperity was not working for most Americans. And so I think he's willing to do something daring. I do think that Kim Jong-un, I mean look we don't really know what he's thinking, but I think it's a reasonable guess to suspect that he -- North Korea for a long time hasn't feared the United States.

They did not fear Obama; they certainly didn't fear George W. Bush. I think they fear President Trump. And part of that is because he's unpredictable. I believe in a good way, and so I think Un is coming to the table now for self preservation, and that's what he wants most of all. And if President Trump can convince him if you denuclearizes, he will be preserved. We won't over throw him or attack him. Then that will be a wonderful thing for the world.

SMERCONISH: Jeff Greenfield very quickly, is it a Nixon Goes to China move or is that too much drama?

GREENFIELD: It would be. I was thinking about that, Michael, because one thing that nobody argued was the bona fides of Nixon and Kissinger in terms of their understanding of diplomacy and the subtleties of how this could work and how you consult with allies. Whatever you can say about Donald Trump, his bona fides in terms of the foreign policy area are not Nixon's.

And apparently since he left the Secretary of State out of even knowing about this, the analogies have been flawed.

SMERCONISH: Salena I have Stormy Daniels lawyer in a couple of minutes right here. You're the Trump whisperer; does his constituency care at all about this issue, quickly?

ZITO: Look after "Access Hollywood" they understand and they knew who they voted for. They looked past his charter flaws, they looked past his virtue flaws, and they supported him. I don't think this is what dislodges him. What dislodges him is if he becomes part of the swamp. And he certainly hasn't exhibited any of that behavior with how he's handled tariffs, how he's handled North Korea, or pretty much how he's handled anything.

SMERCONISH: Gang thank you. Great panel I appreciate your being here. Tweet me @smerconish, go to my Facebook page I'll read some during the course of the program. Catherine, what do you got from Facebook?

Trump demise is near Smerconish please do not be blinded by the obvious meeting KJU is a set up. I cannot believe you are turning your cheek, wake up. No David Chang , what I am trying to do is get out of the bubble. As I promised I would do at the end of the 2016 cycle when I didn't see it coming and I thought I was too caught up in the group think, so in this circumstance, and don't miss read this for carrying someone's water, or being for or against them.

[09:15:00] I'm trying to offer a fair appraisal which is to say that this negativity day in and day out that we tend to dwell on, might not be resonating at all in the states that put him in office. That was my point.

Continue to go to smerconish.com and answer the poll question of the day which is, do you think reports of the President's political demise are greatly exaggerated?

Each day this week brought more revelations about Stormy Daniels. You may thing that you've heard everything about this case but as an attorney, I've taken the time to read all the publically-available documents and I think a few questions to remain for Ms. Daniels' attorney who is about to join me and then an article in the "Wall Street Journal" is sparking an interesting debate this week, an honor student decision to skip college to become a diesel mechanic. Mistake or the smarter choice economically?

(COMMERCIAL BREAK)

[09:20:00] SMERCONISH: And the U.S. economy is on a roll with more jobs added last month than since July of 2016. Low unemployment and a strong job market combined with the declining value of a college degree and the rising cost of tuition present parents today with a dilemma, whether to push their children toward a college career or pursue a vocational path. Dr. Anthony Carnevale is the director of Georgetown University's Center on Education and the Workforce. He served in the Administration of President George W. Bush.

Dr. Carnevale, I was fascinated with the "Wall Street Journal" story this week that showcased this young woman, put her up on the screen. Raylee Nicholson (ph) she lives outside of Pittsburgh, Pennsylvania, earns A's in her honors classes, is in the 88th percentile of her college boards, she's right there rebuilding a 1987 Pontiac Trans Am in her own garage, and surprised some of the educators who are responsible for her work by saying, I want to go to a vocational school, not college. Is she a one off or is this a trend?

ANTHONY CARNEVALE, DIRECTOR OF GEORGETOWN UNIVERSITY'S CENTER ON EDUCATION AND THE WORKFORCE: It is a trend. There are lots of ways now, lots of pathways to the middle class. And the four-year college degree is not the only one by a long shot. There are a bunch of one year certificates available now and she is talking about one of them that will make you more than a four-year college degree. Thirty percent of two-year degrees, because of their field of study, make more than a four-year college degree, and in fact, 40% of four-year college degrees make more than people who get graduate degrees. It all depends on what you take that determines what you make.

SMERCONISH: I'm a hypocrite. I'm not wearing a watch today, I don't know if you can see my wrists. I'm not wearing a watch today because son umber three is right now sitting for the SATs. If you were to say to me that your son or daughter was contemplating by passing a college career to go to vocational school, I would say that makes economic sense. But if you asked it about one of our four, I'd say, oh no, I want them to go to college first and then pursue a vocational path. I guess that makes me not only a hypocrite but probably an education snob.

CARNEVALE: We know if you ask Americans whether everybody needs to get a four-year college degree, 70 percent of them will say no. If you ask the same Americans whether their kids need a college degree, 70 percent of them will say yes. So, in a sense, most Americans don't think other people's children need a college degree, they think theirs do. And therein lies the rub; I mean the push to get through high school and on to Harvard is really the American model and it will be very difficult to break that in American suburbs.

SMERCONISH: By the way, he needs my watch because they don't allow them to take digital time with an iPhone, so he had to borrow mine. In 1990, 24 percent of high school students were concentrating on vocational subjects. By 2009, only 19 percent. I remember the day, Dr. Carnevale, when as an athlete in high school I shared the after school bus with students coming back from the vo-tech school. Have we gotten away from that and do we need to return to those roots?

CARNEVALE: Yes, we've gotten away from that in a big way. In 1983, with the big national report endorsed by elites in business, government, and elsewhere, we decided that every American child would get a purely academic education all the way through high school. We threw away what was called vocational education, got so bad it had to leave town, came back with a new name which was a very watered down version of vo-tech called career and technical education.

So nowadays there are 27 credits in a high school degree; 22 are taken up by math, English, foreign languages, history and other academic subjects. So all job training, all vocational preparation, is now shifted to two-year and four-year colleges pretty much.

SMERCONISH: Something else I've learned from you, many who enroll in college do not complete and many who do complete end up in jobs that didn't require that four-year degree.

CARNEVALE: So we set a noble standard that as we decided that we were no longer going to track black, Latino, working class, low income students and women into secondary curriculums, non-college curriculums, and that is really the great gain in the change in our high school curriculum. But we're still -- we built the system in which it assumes that everybody will go to college. But the fact is that 40 percent of the kids who graduate from high school, having taken all those academic courses, never get a college award of any kind. So the other half are not getting what they need. So we have a problem in that we've built a college for all system, but only half the kids ever make it.

SMERCONISH: And the bottom line, college is not for all. That is what I hear Dr. Carnevale saying.

CARNEVALE: There are lots of ways to make it. There are lots of pathways. The economy is now one in which the relationship between earnings and education is very specific with respect to what you study. It is not just about getting a degree or which college you go to. It is more and more about what you take after you get out of high school.

SMERCONISH: Dr. Carnevale, thanks so much for being here; it's a fascinating subject.

CARMEVALE: Thank you.

SMERCONISH: What are you saying on my Smerconish twitter and Facebook pages? Catherine, what have you got? We own a construction company and can't get skilled workers even at $20 an hour starting pay. Yes, and let me tell you something else, Melissa, about your construction company, and I hope this applies to you.

I remember reading a book by now 25 or so years ago, "The Millionaire Next Door," and it talked about the people who in a particular neighborhood who really have money and not a lot of debt are those who like you, I hope, own the construction company, own the roofing company, are the skilled plumber who has built a business, et cetera, et cetera, et cetera. And yet there are many like me, who know that, and then still say for their kids, "Uh Oh, go take the SAT and hope you do well."

The Stormy Daniels situation. Her lawyer, Michael Avenatti, has appeared everywhere this week. But as an attorney, I have a couple questions that he has not yet been asked, and he is next.

[09:30:00]

(COMMERCIAL BREAK)

SMERCONISH: The President continues to be dogged by the Stormy Daniels scandal. On Tuesday, the adult film star whose real name is Stephanie Clifford sued the President. She wants the court to give her permission to sell her story, the same story for which she accepted $130,000 to remain silent. Her lawyer has appeared all over this week, but as an attorney myself, I think there's still a few questions remaining to be answered by Michael Avenatti. Counselor, thank you so much for being here.

MICHAEL AVENATTI, LEGAL COUNCIL FOR STORMY DANIELS: Thank you for to having me Michael. Good morning.

SMERCONISH: So Michael Cohen has been hammered all week long I think in connection with this litigation and this particular episode. I have to say as an attorney who has settled many cases for amounts that include a lot more zeros than this one, I found the paperwork surrounding the settlement to be pretty sophisticated.

AVENATTI: Well Michael quite honestly, I don't agree. I think on its face it is sophisticated, but this was not handled appropriately based on my experience. I mean this -- this was not buttoned up properly starting with the missing signature of his client, Mr. Trump.

SMERCONISH: But I think it was not buttoned up because perhaps of the representation you didn't provide it, your predecessor did, but the representation that was afforded to your client.

AVENATTI: Well, no, it wasn't the representation afforded to my client that required Mr. Trump to sign it. I mean that was Mr. Cohen's job and Mr. Trump didn't sign it. And under California law, and that's what this will be decided under, under California law, we are highly confident the contract will be thrown out, and more importantly there is an express provision -- I've watched a lot of legal pundits that are opining on this document and its enforceability, and you know, unfortunately, a lot of people aren't actually reading the document before they appear on television.

SMERCONISH: I agree.

AVENATTI: And that is a real problem --

SMERCONISH: I agree.

AVENATTI: -- and that's a real problem. You know and I know --

SMERCONISH: All right.

AVENATTI: -- you got to actually read the document.

SMERCONISH: All right. So listen, look at my copy. I have read it. It's all tabbed.

AVENATTI: You read the document, excellent. Excellent. SMERCONISH: So let's go through it. Let's go to the signature page to begin with. This is at the tail, tail end and folks can there see David Dennison's line AKA, presumably would have been filled in Donald Trump not signed. And, and you believe Counselor, it's because he did not sign it that the whole document should be held null and void, true?

AVENATTI: Absolutely.

SMERCONISH: Okay. So now let me take you to the settlement agreement, paragraph 1.1 that identifies the parties Because I noted something and I've circled it on the screen. The settlement agreement and mutual release, yada, yada, yada, by and between ECLLC and/or David Dennison DD. Doesn't the and/or mean that EC was capable in and of itself as resolving and settling this action? Why else would there be an and/or clause?

AVENATTI: No, because and/or is a term of art in the legal profession and under California law, it is found to be a plural use of the term. It is in the conjunctive and furthermore, if you look at paragraph 8.6 of the agreement, it specifies if the agreement is not signed by all parties, it is invalid.

SMERCONISH: OK, therefore I come back to where I began which is; shouldn't she refuse to have taken the 130k until there was full execution?

AVENATTI: Well, I mean that certainly was an option. That is not what happened. And so we look at where we stand now and where we stand now is that we've got an agreement that was never signed by all parties which is required under California law and expressly required under paragraph 8.66 the agreement. We are highly confident that this agreement is going to be tossed out, and if it's toss out, she is prepared to return the money.

[09:35:00] SMERCONISH: I -- I don't want people's eyes to glaze over but to me it seems like the question is one you and I learned the first day of contracts: offer, acceptance, consideration. I think you have all three. Let me show you something. Go to exhibit number three. Each page of this agreement needed to be initialed. And on the initials line, I'm putting it up on the screen, instead of David Dennison, it is EC, which is that other entity that was created by Michael Cohen presumably to settle this case. In other words, all throughout the document, EC signed, not David Dennison. I think by virtue of that language that said that it could be either of them -- and/or.

AVENATTI: I disagree. And we'll have the court decide. But I want to address something you just said. Offer, acceptance, consideration: there was no acceptance by DD of this agreement. He never signed it. Furthermore, where is the consideration from DD? The agreement and, as you know, there has to be consideration from DD.

Everybody talks about the $130,000 Michael, but you know, based on your detailed review of the agreement and the tabs that you have on the side of the page, you know that my client bargained for not just money. My client bargained for other consideration from Mr. Trump. It is in the document that he was required to provide, and by not signing it, my client did not get the benefit of the bargain.

SMERCONISH: Let me talk to you about the arbitration process which I know that you think was bogus. I note that the notice 8.8, the notice provision, the service provision required email or facsimile and telephone of your predecessor Keith Davidson. Was Keith Davidson notified in advance of the arbitration?

AVENATTI: Not -- not that we're aware of, but it's simpler than that. Mr. Cohen could not -- EC could not proceed with the arbitration. It required only DD. If you look at who was able to get a temporary restraining order, Mr. Cohen nor EC had standing or the right to do that pursuant to the express terms of the agreement, Only DD. Only Mr. Trump. And we believe that the reason why they didn't have Mr. Trump proceed in arbitration is because they wanted to continue to keep this quiet and continue to basically hide his involvement.

SMERCONISH: Okay. Another question based on the documents. Put up exhibit four if we may. This is 3.1 c, and there is a lot of language, Mr. Avenatti, throughout the agreement about this. Here's what it essentially says. It essentially says your client needs to return to DD, let's just say President Trump all evidence relative to what went on here and that includes e-mail messages, text messages, instragram messages, Facebook posting or any other type of creation. Question, did Stormy Daniels hand over whatever evidence she's got of this liaison?

AVENATTI: I'm not going to answer that question but here's what I'm going to say. Mr. Trump and Mr. Cohen and others better be very, very careful relating to statements publically as to whether this actually happened or not. That is what I'm going to say.

SMERCONISH: But she had a contractual obligation to hand over whatever she was in possession of before she took the 130k.

AVENATTI: And I didn't say that she didn't. And I didn't say that she did. What I've said is, I'm not going to answer the question.

SMERCONISH: OK, one other question if I might. There is another paragraph I don't think I blew it up, but 5.11, disgorgement. What this essentially says is that if she violates it, she owes $1 million for every episode that she goes out and speaks in violation of the confidentiality. It occurs to me that Michael Cohen may have made a wide business decision. Everybody is laughing about him giving her 130k, if it came from him, but he will get a tenfold return on that money, if in fact, she speaks and violates this agreement. That is not a bad return.

AVENATTI: Michael, you know based on your experience that term even if everyone agreed to it, it is so unconscionable, meaning so beyond the pale that there is not a court that would enforce that at that level with $130,000 at the front end and a $1 million liquidated damage clause per instance. No court in California is going to ever enforce that. SMERCONISH: OK, if that is the case, then why doesn't she come on a

program like mine right now and tell whatever the story is that she is dying to tell?

AVENATTI: Well, I mean I think we may see that. I think we may see her provide a very detailed explanation of what happened. She is going to discuss what happened. Let Mr. Trump come forward and provide his version of events. And let's the American people decide who is shooting straight with them and who is covering things up.

SMERCONISH: Has anyone offered, has anyone, including Larry Flint, but I want to ask this in universal sense, has anyone offered to pony up the million dollars to protect her and say here, I'm good for it, go tell your story?

[09:40:00]

AVENATTI: At least ten individuals in the last three days alone.

SMERCONISH: Ten individuals in the last three days alone? Are any of them Larry Flint?

AVENATTI: Not that I know of.

SMERCONISH: Is she contemplating taking any of those ten offers?

AVENATTI: No.

SMERCONISH: Does she think in retrospect that 130k was chump change because after all, he was elected President. I'm really asking whether that amount was determined by her perhaps believing the polls a week out from the election, hey, he's not going to win anyway, I may as well take the money.

AVENATTI: No, I think when and if she is able to tell her story the American people are going to learn how that amount was arrived at among the parties. But this isn't about her having buyer's remorse. It really isn't.

SMERCONISH: OK, final question. I'm just intrigued. Peggy Peterson, how do you come up with Peggy Peterson, how do you come up with David Dennison?

AVENATTI: Well, you're going to have to ask Mr. Cohen because he is the one that came up with these aliases. We have no idea.

SMERCONISH: All right. I hope you get the chance. Thank you. Appreciate you being here.

AVENATTI: So do I. I hope you get that chance today.

SMERCONISH: He can call me right now. I'd love to hear exactly what his reaction might be. Thank you counselor.

AVENATTI: I'd love to hear it as well. Thanks for having me.

SMERCONISH: Michael Cohen, pick up the phone.

Up ahead, tariffs and trade, the President's surprise announcement caused panic within the GOP. Why are they so worried? I've got, by the way, a prop her for you for this segment? Do you know what that is? That is a napkin with a Laffer curve on it because the Godfather of supply side economics, Art Laffer is here next.

(COMMERCIAL BREAK)

SMERCONISH: President Trump seemed to catch his own Administration by surprise when he announced a 25% tariff on steel imports and 10% tariff on aluminum imports. So what could these tariffs mean for the American economy and why is the GOP so worried? Joining me now to discuss is Art Laffer, the Godfather of supply side economics, former economics adviser to President Reagan. In your honor at the dinner table last night, my own Laffer curve on a napkin. What is your beef, Dr. Laffer, with the President's tariff policy?

ARTHUR LAFFER, ECONOMIST AND MEMBER OF PRESIDENT RONALD REAGAN'S ECONOMIC POLICY ADVISORY BOARD: I don't know that I have a beef with the policy. If he puts on tariffs, I do have a beef. But I think he just may be negotiating, Michael, to get better deals on NAFTA, get better deals on these other transactions and treaties.

And by the way, those transactions, those treaties are pretty flawed. I got involved with TPP very heavily and all sorts of things were taken off the table that are extraordinarily anti-free trade like nontariff barriers in Japan, currency manipulations, all those, and if he is using this as a negotiation ploy, which he obviously cannot tell anyone ahead of time, then it is great and we'll get a lot better treaties.

SMERCONISH: OK, but I read the piece that you wrote with Larry Kudlow and Stephen Moore. If he means what he says, then you think this is flawed. Why would it be flawed?

LAFFER: Because you are depriving Americans of high quality products at low cost and consumers are just as important as producers. Anytime you do any impediments to the free trade, you hurt both the country that is exporting to you and yourself. It makes no sense whatsoever and I don't see any logic literally for putting on tariffs in this country today at all. It will hurt the economy and it will hurt people too. Just normal every day people and I'm from Youngstown, just so you know, I'm from a steel town, steel family.

SMERCONISH: So if not by protectionist policies, then what is the response to those foreigners who flood our market with cheap steel or cheap aluminum?

LAFFER: If you want to do something, if you want to protect the steel industry in some way, shape, or form, write them a check. Subsidize them in the ways that you want them to be subsidized, but don't use accrued blunt poorly-designed tool like a tariff to try to protect the steel industry. Go in there and do the job; just go in correctly and do it. Tariffs hurt everyone and you can make sure that you protect the

industry, but I would even go, Michael, even further, I'd say don't protect them because when we protected the color television industry, I mean no sooner than we did that, we destroyed the entire industry in the U.S. They were fat, lazy, and uncompetitive and so none of the color televisions were produced in the U.S.

You know, competition is good for the steel industry. It's good to America. It is good for all of us. And American steel if they weren't located in those high state, anti-growth states like Pennsylvania, like Ohio, like Michigan, like Illinois, they could be much more competitive like they are in Tennessee where he live now where we have no income tax and our industries are flourishing here.

SMERCONISH: And a final thought, it's actually a regressive tax, right? People talk about the political benefit that he might derive from a protectionist policy, but it would come back to harm those responsible for putting him in office.

LAFFER: Exactly. If I could use one example with you just to make it -- if we discovered a cure for colon cancer and Japan discovered a cure for Alzheimer's. And let's imagine Japan, true to form, prohibited us from selling our cure for colon cancer in Japan. Should we get even with them and not allow them not to sell their cure for Alzheimer's here in the U.S.? Of course not. Trade benefits everyone and retaliation is wrong, wrong, wrong. it hurts everyone, and I just hope no one comes to that point. Now, if he's negotiating points to get better deals, now I'm all for it.

SMERCONISH: I'm kind of bummed. You said nothing about my Laffer curve, but OK.

LAFFER: I loved your Laffer Curve. It looked -- Michael --

SMERCONISH: Thank you for being here Doctor.

LAFFER: -- it looks like my profile. Thank you very much.

[09:50:00]

SMERCONISH: Thanks Dr. Laffer. Still to come, your best and worst tweets and Facebook comments and the final results on the survey question. Go vote right now. Do you think reports of President Trump's political demise are greatly exaggerated?

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SMERCONISH: So hit me with the survey result. What do we got? From smerconish.com, here it is; 55% of 10,443 voters say no. Reports of the President's political demise are not greatly exaggerated; a relatively even divide.

[09:55:00]

How about other reaction from social media? I know I don't have much time. What do you have, Catherine? Smerconish, this all happened before Trump was President. This is gossip is what you degenerated into, Michael, since you started working for CNN, a gossip reporter. Hey Bill, Bill, I'm the guy who took the time to read the whole document and understand it as a lawyer and to apply some critical thinking, by the way, to the claim against President Trump. Did you miss that part?

7:00 tonight, CNN brings you a live campaign rally in western Pennsylvania where the President will appear. I'll see you Tuesday night with Anderson Cooper.

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