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Inside Politics
May Jobs Report; Retaliation Over Tariffs; Trump Tweets about Jobs Report; Trump Pardons D'Souza. Aired 12-12:30p ET
Aired June 01, 2018 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:00:00] JOHN KING, CNN ANCHOR: Thank you, Kate, and welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.
A gangbusters jobs report matching a 50-year low in the unemployment rate. But is President Trump now putting that boom at risk by provoking global outrage with new trade tariffs?
Plus, irresponsible at a minimum, reckless to some. The president breaks another rule and tips off traders by offering an early hint at those new jobs numbers.
And Republicans like the law and order label or the constitutional conservative brand.
Well, forget that. In pardoning a pundit who admitting he knowingly broke the law and then tried to hide it, President Trump holds him out as a great spokesman of the GOP agenda.
(BEGIN VIDEO CLIP)
DINESH D'SOUZA, CONSERVATIVE FILMMAKER: The president said, Dinesh, you've been a great voice for freedom, and he said that, I've got to tell you, man to man, you've been screwed. He goes, I've been looking at the case. I knew from the beginning that it was fishy. But he said, upon reviewing it, he felt a great injustice had been done, and that using his power, he was going to rectify it, sort of clear the slate. And he said he just wanted me to be out there to be a bigger voice than ever defending the principles that I believe in.
(END VIDEO CLIP)
KING: Back to the conversation about the president's pardons in a moment, but we begin with giant economic news and a president too eager to celebrate. So eager, in fact, to share today's strong jobs report that he tweeted this more than an hour before the official release time, looking forward to seeing the unemployment numbers at 8:30 this morning. Who needs insider trading when you can get the cheat sheet directly from the president? Markets spiked immediately. The White House is now laughing it off, but it's not funny. And it's hardly the first time the president has broken the rules when it comes to sharing sensitive, sometimes even classified information. More on that in a moment. First, though, the numbers and what they tell us about the strength of an American jobs machine about to be tested in a global trade showdown.
CNN's Christine Romans has the details.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know, John, a record streak of job creation continues. Seven and a half years of monthly gains in jobs. And 223,000 net new jobs in the month of May. That's a strong performance. It shows you that companies are hiring. In fact, the unemployment rate now, look at this trend, it is the lowest again, 3.8 percent, since 2000. And that matches the lowest since 1969. You have to go back to 1969 to see 3.8 percent other than early 2000. So that just shows you how strong this labor market is.
Now, a couple of things here. There are about five or six million open jobs in America today that employers say they can't fill. There are about 5 or 6 million workers who haven't come back into the labor market during the worst of the financial crisis. So there is that mismatch. But, overall, economists are calling this full employment.
Where are the job gains? They are in retail. They are in health care. Again and again, we have seen health care jobs across the wage spectrum coming into this labor market. And in manufacturing, 18,000 net new jobs created in manufacturing, John. That makes it the best year so far for manufacturing job growth since 2011.
A caveat here, about an hour before this report came out, Wall Street expected a strong report because the president tweeted that he was looking forward to seeing these numbers. And the betting money on Wall Street was the president would not tease something that wouldn't be positive. So you saw a move in bond yield and in the dollar about an hour before the official numbers came out. That's raising some questions about just how pure the data lockup is and whether it's a level playing field for this really important economic information that Wall Street depends on.
John.
KING: Thanks, Christine.
And back to that question about the president's earlier tweet in a moment.
But the great news for the U.S. economy, clouded today, somewhat at least, by renewed threats of a trade war, not just with China, but with America's allies, too. President Trump taking swipes at Canada this morning on Twitter, saying Canada has treated our agriculture businesses and farmers very poorly for a very long period of time. Highly restrictive on trade. They must open their markets and take down their trade barriers. Canada, Mexico and the European Union now all moving to retaliate against the United States. That after the president announced yesterday he's slapping them with steep tariffs, 25 percent on steel imports, 10 percent on aluminum imports. China's also mad because of separate tariffs announced earlier in the week. Team Trump says, this isn't a trade war, just a family dispute, and they say it's gone on too long.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, WHITE HOUSE ECONOMIC ADVISER: The trade system is a fossil. It's a dinosaur. It needs to be reformed. Donald Trump is shaking the tree, like he always does. He means it.
(END VIDEO CLIP)
KING: With me today to share their reporting and their insights, Margaret Talev of "Bloomberg," Greg Ip of "The Wall Street Journal," Sahil Kapur with "Bloomberg," and Mary Katharine Ham with "The Federalist."
The president certainly is shaking the tree. Larry Kudlow is right about that.
We also know that Larry Kudlow is actually, in private, much more opposed to these tariffs. That publicly he has to go out and support the boss.
Greg, I view this like a tug-o-war. The president did sign the big Republican tax cut. He has done a lot, whether you like it or not, deregulation that business likes and economic growth. You see those jobs numbers? Wow. Yes, he inherited md pretty good economy from President Obama, but, wow, the economy is a boom. And then these tariffs, people think, well, wait a minute, just when you have this growth and this boom, are you going to smother it?
[12:05:16] GREG IP, CHIEF ECONOMICS COMMENTATOR, "THE WALL STREET JOURNAL": Yes, I think that if you look at the Trump economic agenda, the first year was full of stuff that business loved, you know, tax cuts, deregulation. This year it's full of stuff that business doesn't like. It's about these trade wars. It's about these tariffs.
Now, to date, the tariffs are not serious enough to undermine an economy that has this much momentum, but it definitely pushes it in the wrong direction for two reasons. Yes, it will protect some steel worker jobs, some aluminum jobs, but there are way more jobs dependent on companies that use steel and aluminum. Those are in danger. And the whole approach, which is to unpredictable and some would say incoherent sews uncertainty. If you were a company thinking of investing in a new factory, even one making steel, how -- you know, confident could you be that the policy landscape will be the same when you've finished building it a year from now?
KING: And yet he's made his name as a disrupter. And let me play contrarian for a minute. If you're going to do this, if you think the trade system has been screwed up for so long and all the elites telling you not to do this, or the people who made it the way it was and therefore I'm going to be different and I'm going to do this, is this the right time to do it when at least you have an economy that seems to have the strength to cover you, if you will?
SAHIL KAPUR, NATIONAL POLITICAL REPORTER, "BLOOMBERG": Economically, maybe, but politically we're six months before a midterm election and there are many members of his party who are very nervous about this. You have key Senate races in states like Missouri and Indiana and North Dakota where Republicans are trying to rest (ph) seats from Democrats incumbents where these are going to hit hard.
Farmers, for instance, are going to be hit by this. The soybean -- the prospect of a soybeans retaliation, when Trump was taking about other tariffs, is going to be bad. Pork bellies, Mexico is threatening to slap tariffs on those. That's going to hurt farmers.
There's a sense among Republican senators that I've spoken to that their constituents believe these tariffs are going to be bad for them, but they also think Trump has a plan. It's theoretical for them. Once it gets real, I think the politics could change rapidly.
KING: Do they have a plan? Do they have a plan? Is this -- if you listen to Larry Kudlow -- and this is real, I'm sorry, he wants us to -- he wants to say this is a conversation. It's a conversation when you say, European Union, we might slap tariffs on you.
MARGARET TALEV, SENIOR WHITE HOUSE CORRESPONDENT, "BLOOMBERG": No, it's been a fact since midnight.
KING: It's not a conversation any more when you -- when the tariffs take effect, it's no longer a conversation, it's a confrontation.
TALEV: Yes, so it is just a fact. But the fundamental question that hasn't been resolved yet is whether this is a permanent policy change or a negotiating tactic, a negotiating tool. The president anticipates that this will be a short term situation, really. I mean a very short term situation. And so while you have seen the markets react, you haven't seen them like fully react in the sense of, nobody really knows whether this is now the U.S. posture going forward or whether this is the U.S. posture for a month and then there's, you know, we're heading the G-7, there's going to be conversations about stuff. Maybe someone agrees to do x and then the U.S. agrees to do y. And so, fundamentally, that may have a bearing. And then the other question is, do the benefits of a tax overhaul so greatly outweighs this that it's really a blip felt in a few places and won't make difference (ph).
KING: And on this day, if you're the president watching, the market is up about 220 points right now. Normally the trade -- yesterday the trade conversation knocked the mark down a little bit. The jobs report lifting it up. Again, we have this tug-of-war as it plays out.
This is the president. For months some members of the president's team have tried to slow him down. Have tried to say, don't do this, don't disrupt this good. You have a good thing going on. Let's negotiate this. Let's not have the confrontation.
"The Washington Post" editorial board, given how Trump is treating U.S. allies, America could soon find itself short of friends. "The New York Times" editorial board, America declares war on its friends. "The Wall Street Journal" editorial board, Trump's steel destruction, he starts a needless trade war with America's best friends. So the editorial pages say, Mr. President, you're wrong, which I
suspect the way he views things makes him think even more that he's right.
MARY KATHARINE HAM, SENIOR WRITER, "THE FEDERALIST": Well, I should note also, a conservative Obama-era critique of Obama that he undermined allies and helped others.
KING: Right.
HAM: And that is what's going on here.
Look, it's this -- I think it's this toxic mix of unpredictability and uncertainty, plus top-down dictating an economy. So, look, if it ain't broke, don't fix it, especially six months before an election. And this economy is not broke at the moment. And he does run risks by doing this. And I do not think there is a grand unified plan. And, further, Canada and other allies have their own politics to worry about, where, for instance, the prime Minister in Canada, everyone is sort of allied behind him in levying tariffs the other way and fighting this fight. So he's on pretty solid ground as well. So it's not just Trump in isolation here, even though he likes to think perhaps he's just negotiating.
KING: Right. And so you -- so you hear talk, it's possible that China and the European Union and Mexico could come together to go to the World Trade Organization and file a complaint, saying this is illegal under the world trading system. Again, the president rolls hills eyes at the WTO. He says it's built against the United States.
But to bring it back home to that six month conversation. The U.S. Chamber of Commerce is directly across the street from the White House, just across Lafayette Park. I can tell you, under this Republican president, they feel a whole lot further away than just across the street. They said last night they think these tariffs put about 2.6 million American jobs at risk. They lay it out this way, 134,000 jobs at risk, they think, from the China part of it, 470,000 jobs more from the steel and aluminum part of it, 157,000 more from what the president says is coming with autos and auto parts and they think close to 2 million jobs if we end up, and this certainly complicates any hope of getting a NAFTA deal, has now been at least temporarily blown up by this showdown with Canada and Mexico.
[12:10:17] IP: So I think one thing that we've learned is that this White House -- and it's not just Trump, but his whole team, including Wilbur Ross, have made a serious political miscalculation. Part of their argument from the beginning was that our allies need us more than we need them so that they will not retaliate. We have learned this week that it's not just China. The European Union. Canada never retaliates. They're retaliating. Japan never retaliates. They are retaliating.
So whatever costs that these tariffs were originally going to impose just by raising the price of steel and aluminum are now compounded by the retaliation those countries will now take on the United States. I think that the idea that this was, you know, clever chess playing, negotiating tactic, that starts to weaken someone when you see that the negotiation is not working out the way they expected.
KAPUR: And to your point, John, this is a major defeat for some very important power centers within the Republican Party. You've got the Chamber of Commerce, Wall Street, big donors, supply side economists, including Larry Kudlow, who I think in his previous job would not be particularly pleased with this. This is a real defeat for them at the hands of a Republican president.
KING: And for -- let's continue the list. Speaker Paul Ryan, Majority Leader Mitch McConnell, the chairman of every economic committee, Republican chairman of every economic committee on Capitol Hill, this is the president being more like Bernie Sanders and, again, again, some people thinks he sticks to this too often, but this is how he thinks he became president, by being contrarian, by challenging establishment economic policy.
KAPUR: And he's not wrong about that. I mean anti-trade deals is probably the only consistent thing about President Trump's world view going all the way back to the 1980s when he said the United States makes horrible deals that are bad for its workers. That -- that --
KING: But he's been president for, what, 16 months now. Has he made any better deals?
KAPUR: No.
KING: He's broken -- he's broken some deals. He's walked away from deals. He's threatened deals. But has he made any ideas?
IP: The only thing -- the only thing you could point to is that there were some cosmetic changes to the free trade deal with Korea. But, in exchange for that, we now have China threatening tariffs on American egg (ph). We have like tariffs threated on beer, on bourbon, on sailboats, you know what I mean. So like if this is good deal making, I would really hesitate to see bad deal making.
HAM: The bourbon is really going to throw people (INAUDIBLE).
KING: But to that -- to that point, though, some of this is symbolic. But to that point, the people threatening to retaliate, and now actively retaliating, are looking at the American political map. If you look, Mexico says lamps, pork, fruit, cheese, steel.
TALEV: Yes.
KING: Lay that over the Trump map. Europe says motorcycles, denim, cigarettes, cranberry juice, peanut butter, lay that over with a Trump state map or a Republican map.
TALEV: (INAUDIBLE).
KING: Canada, sailboats, yogurt, beer kegs and steel. Beer kegs, no that one hits home. You know, the people retaliating are looking at the map, too, saying, if you want to send a message, we will send one back in, to your point, that close to an election.
KAPUR: Americans are about to realize that they actually support the anti-trade policies that they've been voting on for a while.
KING: All right. Up next for us, a word of advice, the next time you're really excited to share good news, make sure it's not supposed to be secret first.
(COMMERCIAL BREAK)
[12:16:55] KING: A new twist today on an old saying, rules are made to be broken by the president of the United States. Today's example, we talked a bit about this a moment ago, an upbeat hint at the new jobs report a little more than an hour before it officially came out. Looking forward to seeing the unemployment numbers at 8:30 this morning, Trump tweeted at 7:21 a.m.
The numbers were great. So the president's joy is understandable. But his tweet is not. Markets move on these numbers. Tens of millions of dollars can be made, or lost, and any inside information is gold, which is why this small group of officials who get to see these government economic reports in advance get detailed ethics briefings and are warned they not only must never discuss them in advance, they're supposed to keep mum for an hour after they are made public. There is no excuse for what the president did today. But here's the man who briefed him on the numbers yesterday making one anyway.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, NATIONAL ECONOMIC ADVISER: His tweet basically said, like everybody else, we await the job numbers. You can read into that ten different things if you want to read into it. I don't think he gave anything away, incidentally. And I think this is all according to routine.
(END VIDEO CLIP)
KING: It's all according to routine, except that it isn't.
CNN's Phil Mattingly joins the conversation.
It's not. I get Larry Kudlow worked for the president. Larry Kudlow worked for another president pre-Twitter, Ronald Reagan. Go back and look. He says it's routine. I dare you. Go back and look -- Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, Barack Obama -- find a president of the United States talking about tweeting about communicating about the unemployment report before it came out. I dare you.
IP: It is absolutely no routine, that's why there are, you know, memos in place that govern exactly how the information, which comes to the White House Counsel of Economic Advisers the afternoon before must be held under lock and key and not shared before 8:30.
Now, Kudlow's defense is that the president didn't actually say what was in the jobs numbers, he only said he was looking forward to them. Well, that would be the defensible statement if Trump tweeted that same tweet every single month, but he didn't. He only tweeted it ahead of a blockbuster report.
So the risk now is that going forward people are going to watch for the president's -- or absence or a presidential tweet for a hint on where that job number is.
KING: And here's his problem -- here's his problem. So he -- he got the briefing yesterday. Every president gets it the day before. A select group of people know about it. People at the Labor Department know about it, the Commerce Department, the Treasury Department. That was my first job when I came to Washington, I was the AP labor writer. They lock you up in a room. You get the report at 8:00 in the morning. You've got to sit there for 30 minutes. You can't go to the bathroom, so you can study it, so you can write it, because what you write is going to move markets. So they want you to get it right.
The question is, now Democrats are going to ask, did the president call anybody yesterday? Did he talk about this with any of his rich friends? Did he give inside information out to any people? Now, those questions might not be fair to the president, but I can understand why people would ask them because the president of the United States, who's been briefed on this from day one, tweeted out something about a jobs report he knows he's not supposed to.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Right, and we also -- we already know the market implications of what he actually did. You can look at the bond market yields, you can look at the dollar, you can look at futures. There were real impacts starting at 7:21 in 30 seconds based upon what he did.
And I think that you make a really key point. As we, in the media, get these reports, our mics are -- you can't transmit from the Labor Department until the clock hits 8:30. You're literally standing outside and there is a clock with a countdown that lets you know. That's how closely they guard this information. They guard the circuits and the connections inside the Labor Department.
[12:20:12] This is a very, very serious thing. And I think -- while I respect Larry Kudlow, the idea that the president would have tweeted about anything but a blockbuster jobs report is absurd. And I think everybody who knows anything about both the president and markets in general saw that tweet this morning and said, OK, this is going to be a good market. And that's not just us in our inner circle, that's people and market participants that are actually making money moves.
KING: Ari Fleischer, press secretary to George W. Bush, also worked on the House Ways and Means Committee up on Capitol Hill in the day, this certainly was a no-no. The advanced info is sacrosanct, not to be shared.
Democrats take it a bit further. He's Larry Summers, the former Treasury secretary, if during the Clinton or Obama administrations there had been a statement from at POTUS or any senior official in the morning before the employment report, it would have been a major scandal with all sorts of investigations following on. Now, I don't know if that's true, but their -- their point -- their
point -- their point is that, you know, imagine if President Obama had done this, and Darrell Issa was chairman of the Government Oversight Committee, in their view the subpoenas would already be issued for who did the president talk to, did you make any phone calls. We did live in that environment. And then, from Republicans now, no one's saying, Mr. President, please don't do this.
HAM: Yes, paging General Kelly. General Kelly to the Oval Office, please.
KING: Yes.
HAM: Look, follow the rules. There's a reason that the rules are in place. It's a pretty clear reason in this case.
And, look, I think the good news of these numbers outweighs the bad in this case, but I'm not sure exactly how you keep him from doing this in the future and signaling this again.
But also I want to highlight the unique ability of the Trump White House to take full employment and turn it into a story about something else because of a mistake that the Trump -- that Trump makes.
TALEV: There is a third concern about this. One of them is exactly, as Greg said, the idea that, in the absence of this next month, people may assume it's bad and, you know, bail.
KING: Right.
TALEV: Two is that the -- look, what happens is that now there is a -- sort of a top-down effect. And I talked to a guy named John Coffee, who's a law professor at Columbia, who studies securities law and kind of the implications of how the law is to be followed. He says, look, at the Federal Reserve, they have prodded for prosecutes of people affiliated with the Fed who have used early information or shared early information. If the president does it, what signal does that send to the other people who are supposed to abide by these rules?
And, yes, there's a difference between insider trading and a tweet that is the opposite of insider. It's literally anyone who's on Twitter can see it. But -- but the idea that all of the rules don't apply, that it's OK if you don't directly say what's in the report. If you just like say something that generally seems upbeat that it muddies the water in terms of the ethics guidelines that other people are supposed to follow.
And then the third is that it has moved markets.
KING: And then there's a broader question is, does this president, who has awesome powers and gets awesome access to information understand the awesome responsibility that comes with that. This is an economic piece of information that can and did move markets. When he tweeted this morning, he moved markets. And people will ask, did he share it with anybody else? There was the time he met with the Russian foreign minister and ambassador in the Oval Office. He was said to have shared classified information. There have been a number of questions where the president -- this president bends a lot of norms and sometime it's like he's just different but sometimes it's like, oh.
IP: So I think one of the big questions is, what comes next. If the -- if it's -- there's a realization in the White House that this was a mistake and they are genuinely contrite. I think the world can say everybody's allowed to screw up once, you know what I mean? And we actually, you know, to your point, we haven't seen, as far as we know, the president leaked classified information in a conversation with a foreign ambassador since that other incident.
If, however, what we see is like eight more hours of people making excuses why this was actually acceptable, I think that raises a different set of issues.
KING: Right, they work for him, so I understand what they're saying publically. You're right, you raise a key point, what are they doing, are they fixing this, cleaning it up, where they should be?
KING: Up next for us, the president's pardon strategy and the many messages he could be sending with his pics and his promises.
(COMMERCIAL BREAK)
[12:28:08] KING: Welcome back.
There's a big debate today about whether the president is trying to send a message with his pardons and his talk of pardons. Is he making light of political corruption and lying? Is he sending messages to those under Russia meddling scrutiny? Good questions, fair questions. And in the case of conservative pundit and activist Dinesh D'Souza, here's one answer.
(BEGIN VIDEO CLIP)
DINESH D'SOUZA, CONSERVATIVE FILMMAKER PARDONED BY TRUMP: The president said, Dinesh, you've been a great voice for freedom, and he said that, I've got to tell you man to man, you've been screwed. He said upon reviewing it he felt a great injustice had been done and that using his power, he was going to rectify it, and he said he just wanted me to be out there to be a bigger voice than ever defending the principles that I believe in.
(END VIDEO CLIP)
KING: Now, remember that last part. The president, who's the head of the Republican Party, wants Dinesh D'Souza to be a bigger voice. Bravo, tweets Senator Ted Cruz, who lobbied for this pardon and calls D'Souza a powerful voice for freedom. Check the court records here. D'Souza admitted he knowingly violated campaign finance laws and tried to hide it.
Sahil Kapur is back with us around the table.
Again, we were having this conversation during the break. If the president thought the punishment outweighed the crime, I get it, that's his right, that's the president's authority. But Dinesh D'Souza, whether you agree with his politics or disagree with his politics, admitted he cheated. He cheated. The president wants him to be out there as a spokesman? Law and order? Constitutional conservatism? Is that what the Republican brand needs?
HAM: I mean he's a fellow trollish provocateur. That's what Trump responds to and I would say --
KING: That's the new name of the Republican Party, trollish provocateurs?
I ask the question half tongue in cheek but half, if you're a Republican and you're trying to think, whether it's, you know, two, three years or seven years, there's going to be a post-Trump Republican Party. What do we want it to be?
HAM: Yes, got to love it.
KING: That would bother me a little bit.
HAM: Yes. It bothered me for a while.
[12:30:00] No, this is -- this is a problem, and I do think some of the pardons are just -- are used for trolling. Arpaio among them.
