Trumpdate (4.11.24):

EXECUTIVE SUMMARY:

1. Trump calls for the end of FISA, impacting surveillance laws in House bill. FISA regulates foreign intelligence surveillance.

2. RNC, led by Lara Trump, spreads claims of election fraud, potential legal scrutiny.

3. Economist Jason Furman discusses inflation, highlighting labor market impact.

4. Appellate judge denies Trump's bid to delay NY trial, marking repeated attempts.

5. Photographer resigns from Ford board over Liz Cheney snub, alleging fear of Trump.

6. Trump's varied stances on abortion surface, showing inconsistency.

7. Wisconsin Rep. Wichgers links contraception to social issues.

8. Fox News under scrutiny for minimal coverage of abortion ruling.

9. Auto insurance spikes by 22%, raising questions about the cause.

10. Trump's ex-CFO Weisselberg sentenced to jail for perjury in fraud case.

1.) Trump says to “KILL FISA” on Truth Social which causes the surveillance bill to collapse in the House

[CONTEXT] What is FISA? FISA stands for the Foreign Intelligence Surveillance Act. It is a United States federal law that establishes procedures for the physical and electronic surveillance and collection of "foreign intelligence information" between "foreign powers" and "agents of foreign powers" suspected of espionage or terrorism. FISA also establishes the Foreign Intelligence Surveillance Court (FISC) to oversee requests for surveillance warrants by federal law enforcement and intelligence agencies.

[TS] In other words, FISA is a U.S. law that outlines rules for monitoring activities related to foreign intelligence, especially concerning espionage or terrorism.

[ADDT’L CONTEXT] FISA history as it relates to trump:

• In October 2016, the FBI obtained a FISA warrant to secretly monitor Carter Page, a former foreign policy adviser to Trump's campaign, over suspicions of his connections to Russian officials.

• This FISA warrant and several renewals allowed the FBI to conduct surveillance on Page as part of its investigation into Russian interference in the 2016 election.

• Trump and his allies claimed the FISA warrants were improperly obtained and represented illegal spying on his campaign by the FBI and Department of Justice.

• They accused the FBI of omitting exculpatory evidence and abusing the FISA process by relying too heavily on the Steele dossier, which contained unverified claims about Trump's Russia ties.

• An Inspector General report found serious flaws in the FISA applications, though it did not find evidence of intentional misconduct or political bias against Trump.

• The FISA issue became a major talking point for Trump, who claimed it proved there was a "deep state" conspiracy against him within the FBI and DOJ.

But also Trump:

[TS] As an aside, FISA was passed to rein in privacy violations and foreign surveillance abuses that often included U.S. persons. Eliminate it, and it'll be much easier for government agencies to spy on American citizens. To put this another way: Absent FISA, it is long standing Executive Branch policy and legal view that no warrant is required when authorizing national security surveillance against an agent of a foreign power.

2.) CNN / KFILE: RNC under Lara Trump spreads ‘massive fraud’ claims about 2020 election.

The Republican National Committee last week sent out a scripted call to voters’ phones on behalf of new co-chair Lara Trump saying Democrats committed “massive fraud” in the 2020 election.

It’s the latest example of how the RNC under the former president’s daughter-in-law is perpetuating lies about the 2020 election, even as prominent Republicans say the party needs to look forward to win in 2024.

The claim of “massive fraud” in the 2020 election marks a significant shift in messaging for the RNC because lies about the 2020 election had not been a consistent theme in its messaging since Donald Trump left office.

[TS] Could this actually be illegal? It’s one thing to spread a falsehood, but in the pursuit of money? Seems like this might be treading into fraud territory.

[UPDATE] [TS] Let me preface this by saying: I am not a lawyer. But per Cornell on wire fraud:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

[TS] Even if it fits, I wouldn’t put any of my money down that anything is going to happen.

3.) Jason Furman (Harvard Econ Prof.) on “what has happened to inflation and what it means going forward.”

TL;DR: Underlying inflation fell from 4.0-4.5% to 2.5-3.0% as labor markets loosened (through openings down not unemployment up). Last mile will be much harder than to date.

Let me state at the outset, this is a story. Other stories that fit the data too. I'm not sure about this. And even if I had the model right, there are still unexpected shocks.

Plus no story fits the very high frequency data which has lots of noise & measurement error.

First, defining "underlying inflation"--the inflation rate that would prevail if the labor market stays the same and supply shocks go away. It might be a moving target as expectations adjust or wage-price dynamics unfold. Will (at great risk) pretend fixed.

CPI inflation peaked at 9% in mid-2022. But no remotely serious person thought that underlying inflation was anything close to that. At the time my rough estimate was that it was 4% or slightly higher, let's call that 4-4.5%.

Just about every type of inflation we can measure has come down from its 2022 pace. Partly that is bad supply shocks (transitory bad news) turning to good ones (transitory good news).

Partly that is Fed keeping its credibility, anchoring expectations, and them moving down.

But a big part is a loosening in the labor market. My favorite measure of labor market tightness is the number of job openings per unemployed worker. This has fallen as much as it did in the financial crisis. But this time immaculately due to openings down not unemployment up.

Depending on which wage series you look at they are consistent w/ what you would expect with inflation around 3-3.5% and slowing. Core PCE growth, absent anomalies, is about a 3% pace. So overall, with a smidge of optimism, would say underlying inflation 2.5-3%.

The most important question is where we are going. I would say there is a little bit of lagged labor loosening still to play through to wages/prices but I built that into my 2.5-3% underlying number.

But V/U has flattened lately & jobs prints not showing labor market loosening.

So I would say the 2.5-3% PCE inflation is a reasonable unconditional forecast.

Moreover, there is decent reason (but hardly certain or bulletproof) to think inflation is nonlinear in labor market tightness. So will require a lot more loosening to go from 2.5-3% to 2.0%.

Moreover, it is hard to make a best guess of a lot more loosening coming from V down rather than U up.

So that leaves us with inflation around 2.5-3% absent something much more painful than we've seen.

If everything I wrote above was known and true with certainty I would say relatively little to worry about. The Fed should tolerate stable inflation in the 2.5-3% range (whether it would is a different question).

Huge and asymmetric uncertainty is the problem. If I'm too optimistic and inflation is more like 3-3.5% we're in a world of hurt and the Fed will likely need to tighten more. But if it is more like 2.0-2.5% we're fine. And no reason to worry unless it fell below ~1.5%.

OK, this was longer than the thread I thought I was going to write. But you have the TL;DR.

Let me emphasize again, this is all a story. There is huge uncertainty. But the uncertainty itself has important implications, which are for the Fed to be very cautious about rate cuts.

4.) An appellate court judge REJECTS yet another attempt by Trump's legal team to delay the start of his New York criminal trial.

Between lower and appellate court attempts, that's more than 10 attempts, by the DA's count. This is the third judge from New York's Appellate Division, First Department, in three days to deny a separate eleventh-hour bid by Trump's attorneys to delay his criminal trial.

5.) POLITICO: Famed photographer quits Ford board over Liz Cheney snub

David Hume Kennerly wanted the Trump critic honored with the foundation’s top award.

A Pulitzer Prize-winning political photographer resigned Tuesday from the board of the Gerald R. Ford Presidential Foundation, blasting the group for cowardice in rejecting Trump critic Liz Cheney as the recipient of its top yearly award.

David Hume Kennerly claimed in a letter to fellow trustees that Cheney’s nomination for the Gerald R. Ford Medal for Distinguished Public Service was nixed largely out of fear that Trump would retaliate against the organization if he’s reelected. Cheney, herself a trustee, was rejected three separate times, Kennerly wrote, as other potential honorees declined the award.

6.) Trump was asked some questions surrounding his abortions stance:

• Trump tells reporters in ATL that he would not sign a federal abortion ban if reelected in November. “Would you sign a national abortion ban if Congress sent it to your desk?” Trump was asked by the reporter

  • “No,” Trump said, shaking his head.

  • “You wouldn’t sign it?”

  • “No."

[TS] That does indeed clarify it. Whether it’s true is obviously up for debate. In any event, R’s would struggle to pass such restrictions.

• Trump was just asked: “Do you think a doctor should be punished who perform abortions?”

  • “I’d let that be to the states, you know, everything we’re doing now is states and states’ rights," Trump said.

[TS] Not a new observation but on any given issue he has about two sentences worth of policy depth.

• Trump says: "Any Jewish person who votes for a Democrat or Biden should have their head examined!"

• Trump says Arizona’s Supreme Court went too far in ruling the state’s 160-year-old near-total abortion ban can be enforced. Trump predicted that Arizona’s governor will “bring it back into reason.”

[CONTEXT] Trump has said a lot of contradicting things about abortion. “But this is where the unique circumstances of being a former president running again matters: he has a record of what he did, and crucially on this issue, it’s appointed three of the five justices who overturned Roe.”

7.) Wisconsin State Rep. Chuck Wichgers (R-Muskego), speaking against access to contraception, says it leads to infidelity, men devaluing women, women thinking they're better than nature and the "proliferation of STDs."

8.) MEDIAMATTERS / Gertz: Fox News barely covered the Arizona court ruling banning abortions.

[TS] They did the same thing for the Alabama IVF ruling.

9.) Per BLS: Auto insurance is up 22% in the past year.

[TS] Is there any good/reasonable explanation for this? Home insurance up too.

10.) NBC: Ex-Trump CFO Allen Weisselberg sentenced to 5 months for perjury in Trump civil fraud trial.

Allen Weisselberg, the former chief financial officer of the Trump Organization, was sentenced Wednesday to five months in jail after pleading guilty to two counts of perjury last month in his testimony during former President Donald Trump’s civil fraud trial.

[TS] Why anyone would go to prison for trump, and twice(!) at that.