How infrastructure week became a punchline

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

President Donald Trump came into office pledging to update America’s rotting infrastructure with huge spending on big new projects. It hasn’t happened.

In this week’s POLITICO Money podcast, POLITICO Magazine’s Michael Grunwald talks about his piece on Trump turning cold on the Gateway project, an ambitious $30 billion effort to build a new rail tunnel from New Jersey to Manhattan and to update other pieces of a critical leg in the heavily trafficked Northeast Corridor that are in desperate need of repair.

Federal funding for Gateway is now in doubt. And the entire American approach to infrastructure — once a source of bipartisan deal-making — is now completely polarized. The result could be that nothing happens on infrastructure until catastrophe hits.

Kudlow: Economy will help GOP keep its grip on House

NEW YORK — Larry Kudlow, President Donald Trump’s top economic adviser, says Republicans will hold the House this fall and the economy will be a big reason why.

“These are very good times and the midterms will be a report card on that,” Kudlow, the director of the National Economic Council, said in an interview, dismissing concerns that relatively flat wages and a soaring deficit will cut into enthusiasm for the economy.

“The confidence indices are telling a very important story, and POTUS is polling in the low to mid fifties on the economy,” Kudlow said just before returning to the White House after some time off. “The great blue wall has crashed. I think GOP will lose seats but keep the House.”

Republicans are counting on faster growth and a low jobless rate to help them hold off expected Democratic gains in swing districts where Trump polls poorly. Continue reading “Kudlow: Economy will help GOP keep its grip on House”

How a T-shirt explains Donald Trump’s trade war

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

Scott Lincicome, a veteran trade lawyer and adjunct scholar at the free-market Cato Institute, was scrolling through Twitter one Saturday morning when he saw a photo of a woman at a Donald Trump rally wearing a T-shirt that said something like “Tariffs are great!”

Then he had an inspiration. He would create his own shirt highlighting how difficult it is for opponents of protectionist trade policy to combat these kinds of easy slogans.

The shirt, which quickly went viral and has appeared on NBC, Bloomberg and other TV networks reads: “Tariffs not only impose immense economic costs but also fail to achieve their primary policy aims and foster political dysfunction along the way.” All proceeds from sales of the shirts go toward financial education programs.

On the latest episode of the POLITICO Money podcast, Continue reading “How a T-shirt explains Donald Trump’s trade war”

Why Trump’s economy could be downhill from here

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

President Donald Trump has already hit his high-water mark on the economy and probably faces a significant slowdown heading into his reelection campaign, according to a leading economist.

“It’s probably as good as it gets,” Megan Greene, chief economist at Manulife said on the latest edition of the POLITICO Money podcast, regarding the robust second-quarter growth rate of 4.1 percent.

“I think Q2 is the peak,” she said. “We will probably decelerate and return to our potential GDP growth, or around our potential GDP growth, from here on out, which is going to be around 2 percent. We won’t go straight to 2 percent, it will take a while. But unless we fundamentally boost productivity growth or our labor force, I don’t see any other way of really boosting our potential GDP.”

Greene said Continue reading “Why Trump’s economy could be downhill from here”

Trump’s trade war boosts the economy — before it bites

NEW YORK — President Donald Trump is likely to get one of the best headlines of his presidency on Friday with a highly tweetable report expected to show the U.S. economy grew at its fastest rate in years in the second quarter.

But the big number risks becoming fool’s gold.

Economists warn that Trump’s trade war sped up U.S. exports in the second quarter as China and other countries rushed to snap up American soybeans and other products ahead of impending tariffs, lifting growth in ways likely to be reversed in the coming months.

And as Trump continues to argue that the strong economy and stock market offer him leeway to press his aggressive approach, his trade battles could wind up slowing an economy that is among the GOP’s strongest selling points to voters.

“We are going to see a spike in growth in the second quarter that’s Continue reading “Trump’s trade war boosts the economy — before it bites”

What Hollywood can teach us about the gig economy

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

Back in the early days of Hollywood, A-list stars like Maureen O’Sullivan and Groucho Marx moved from job to job, enjoying little in the way of health care coverage or retirement savings options. They were the gig economy workers of their day.

But years of organizing efforts, including by Ronald Reagan, created the Screen Actors Guild and shifted power away from big studios and toward actors and production workers.

In the latest POLITICO Money podcast, POLITICO’s Andrew Hanna discusses his story on how early Hollywood could serve as a model for today’s gig economy workers — from Uber drivers to dog walkers — as they grapple with the same issues faced by movie stars in the 1930s.

Trump isolated in his push for tariffs on foreign cars

President Donald Trump’s threat to slap massive tariffs on imported cars and auto parts will rocket back into the spotlight this week with a high-stakes visit to the White House from European Commission President Jean-Claude Juncker, who is expected to bring with him some kind of concessions from the European Union designed make it easier on Trump to declare victory and back off.

White House officials opposed to the auto tariffs have high hopes that Juncker’s visit could head off a bruising automotive trade war, which even some of Trump’s top advisers think could be potentially disastrous, raising car prices and destabilizing a thriving industry on the eve of the midterm elections.

“There is not a lot of support for the auto tariffs internally,” one senior administration official said. “There are many people who don’t want to see it go through.” This person said U.S. Trade Representative Robert Continue reading “Trump isolated in his push for tariffs on foreign cars”

Are we really safe from the next financial crisis?

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

The U.S. financial system is safer a decade after the worst financial crisis since the Great Depression. But that may be more a matter of luck and timing than anything done in response to the meltdown of 2008.

“We are safer,” Harvard economics professor Ken Rogoff said in the latest edition of the POLITICO Money podcast, recorded from a panel at the POLITICO Pro Summit. “A lot of it comes from when the whole system has been traumatized — consumers, investors, policy makers, regulators — you are less likely to have something right away afterwards. People are very nervous.”

But Rogoff said the rapid rollback of many protections in the Dodd-Frank financial reform law are unlike anything seen following previous major crises. “Usually it takes many decades before everybody says, ‘Hey, things are going Continue reading “Are we really safe from the next financial crisis?”

How Trump’s immigration crackdown could slam the U.S. economy

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

The Trump administration’s immigration crackdown could severely limit American companies’ ability to hire workers in a tight labor market, economist Mark Zandi says.

“The labor market is very tight and we have a record number of open positions already, and it’s just going to get worse,” Zandi, chief economist at Moody’s Analytics, said in the latest edition of the POLITICO Money podcast.

“If the president wants to build his wall between Mexico and the United States, he’s going to have to hire Mexicans to do it because there are literally no American construction workers there to do anything other than build the homes that are going up,” Zandi said. “Immigrants are key to the workforce in every industry. Every industry is going to feel it. It’s pretty much across the board.”

The nation’s jobless rate sits Continue reading “How Trump’s immigration crackdown could slam the U.S. economy”

Trump’s trade war triggers recession fears

President Donald Trump could be running a “Morning in America” midterm campaign strategy, bragging about an economy growing as consistently as it has in over a decade with an unemployment rate tied for the lowest level in nearly half a century.

Instead, he’s banking on hard-line trade and immigration policies that could excite his base while undoing economic gains from other Trump policies and nudging the U.S. toward a recession.

On Monday alone, iconic motorcycle manufacturer Harley-Davidson said it would move some production out of the U.S. in response to Trump’s tariff fight with the European Union while the Dow Jones Industrial Average tumbled over renewed fears from the president’s expected new trade restrictions on China.

It’s all part of a high-risk trade and immigration strategy that has many Republicans, business leaders and even Trump’s former advisers deeply worried about both the politics and the economics of the Continue reading “Trump’s trade war triggers recession fears”

Trump’s death march over trade

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

The escalating size of potential U.S. tariffs on Chinese goods could leave consumers paying higher prices while damaging the ability of American farmers to export to the world’s second-largest economy.

A potential collapse of NAFTA could destabilize supply chains for American companies.

And as corporate America tries to figure out exactly what President Donald Trump is going to do and what it could mean, one group is cleaning up on the all confusion: lobbyists.

In the latest POLITICO Money podcast, POLITICO’s Doug Palmer and Marianne LeVine examine all the latest developments in Trump’s trade battles with China, Canada, Mexico and the European Union.

Trump picks budget official to lead consumer bureau, setting up fight in Congress

President Donald Trump selected Kathy Kraninger, a little-known White House budget official, as the next director of the Consumer Financial Protection Bureau, setting up what is likely to be a bruising battle in Congress over the controversial young agency.

Kraninger works under Mick Mulvaney at the Office of Management and Budget. Her surprise selection to head the CFPB would ensure that Mulvaney, whose tumultuous six-month tenure as acting director of the bureau has drawn the ire of consumer advocates and Democrats, continues to have influence over the agency created in the wake of the financial crisis.

Any Trump nominee would have to survive a stormy confirmation process to lead the divisive consumer bureau, which was conceived and set up by Sen. Elizabeth Warren (D-Mass). Republicans have repeatedly tried to defang the watchdog, which they see as a symbol of executive overreach. Democrats see the agency – which is funded by Continue reading “Trump picks budget official to lead consumer bureau, setting up fight in Congress”

Kudlow says he will return to White House

Larry Kudlow, the top White House aide who suffered a mild heart attack on Monday, said he will return to work in the administration.

In a text message on Wednesday evening, Kudlow, director of the National Economic Council, told POLITICO that he would “of course” be back on the job in the coming days.

Kudlow left Walter Reed Medical Center on Wednesday. The White House indicated they expected Kudlow back on the job soon. “Doctors say Larry’s recovery is going very well. The president and the administration are happy Larry is back home and look forward to seeing him back to work soon,” press secretary Sarah Huckabee Sanders said in a statement.

Kudlow, 70, has been working feverishly in recent weeks on trade talks with China and efforts to save the North American Free Trade Agreement. He traveled to Beijing for trade talks and to Canada for the G-7 meeting Continue reading “Kudlow says he will return to White House”

‘This is not the way America leads’

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

Sen. Mark Warner said he is “embarrassed” for the United States after President Donald Trump’s performance at the G-7 meeting and suggested the president set America’s standing in the world back decades.

“I was frankly embarrassed — embarrassed for our country,” Warner (D-Va.) said on the latest edition of the POLITICO Money podcast. “This is not the way America leads and the way America has led the world through Democratic and Republican administrations since the second World War.”

Warner, mentioned as a potential Democratic presidential candidate in 2020, also ripped into Trump’s summit with North Korean dictator Kim Jong Un, saying the president gave Kim much of what he wanted and got little to nothing in return.

“One thing we do know is that North Korea came out a real winner. North Korea, which has Continue reading “‘This is not the way America leads’”

Trump places a big midterm bet on trade talk and North Korea deal

To President Donald Trump’s camp, his scorched-earth challenge to key U.S. allies over trade and his valedictory denuclearization pact with Korean dictator Kim Jong Un amounts to a compelling midterm pitch from the man who promised to shake up the global order.

But the president’s big moves of the past few days also represent a giant bet that he can keep his negotiating partners at the table between now and November.

Just as Trump got Kim to stick to plans for the Singapore summit by sending a letter threatening to withdraw, the president expects spurned U.S. trading partners – Canada, China, the European Union – to come to the table rather than calling Trump’s bluff and going for a trade war heading into the fall, said Jason Miller, who served as the senior communications adviser to Trump’s 2016 campaign.

“The U.S. is a fantastic market for these Continue reading “Trump places a big midterm bet on trade talk and North Korea deal”

Kudlow could be back ‘within a week’ after heart attack, friend says

Larry Kudlow, the top White House economic adviser who suffered a mild heart attack on Monday, could be back on the job within a week, according to one of his close friends.

Stephen Moore, the conservative Heritage Foundation economist who worked with Kudlow on Trump’s campaign tax plan, said he expected the National Economic Council director to return to the chaotic administration in a matter of days.

“I think it’s highly likely that he’ll be back on the job in a week or so, though he’ll certainly have to change his lifestyle a little bit,” Moore said in an interview.

But Moore suggested that Kudlow, who recently visited China for trade talks and Canada for the G-7 meeting, would have to cut back his travel schedule and make other adjustments to ease the physical strain of life in the administration.

Trump tweeted about the heart attack on Monday evening from Continue reading “Kudlow could be back ‘within a week’ after heart attack, friend says”

The $10 trillion inventor

Ted Benna is not happy with what became of his creation.

Benna was working for an insurance firm outside Philadelphia about 40 years ago when he figured out how to use an obscure provision of a 1978 tax law—section “401(k)”—and turn it into an employee retirement account for contributions from both employees and employers. He designed it as a fringe benefit for banks that wanted to save taxes when they transferred bonuses to employees. In the years since, however, it’s grown into much more—it’s now the dominant way that Americans save for retirement, helping them collectively amass trillions.

Today, he’s proud that his invention has helped millions of people prepare for retirement. But the plain-spoken Pennsylvanian now says that the accounts have an “ugly” side—primarily that they have made mutual fund companies and investment managers rich off fees that grew way too high. He’s now on a crusade to design Continue reading “The $10 trillion inventor”

Lobbyists cash in on bitcoin

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

The latest POLITICO Money podcast explains what’s happening with bitcoin and other cryptocurrencies, including the potential for new federal oversight and congressional scrutiny. POLITICO’s Colin Wilhelm explains how lobbyists are cashing in on the crypto craze and describes what it was like inside a recent industry conference in New York that featured Lamborghinis on the streets and Wall Street bankers and tech nerds in the meeting rooms.

Trump readies to hit U.S. allies with steel, aluminum tariffs

President Donald Trump is preparing to impose steep tariffs on steel and aluminum imports from Canada, Mexico and the European Union as soon as Friday, but conversations with his top advisers are still ongoing, a senior administration official said late Wednesday.

The decision could be made final Thursday, and the official put the odds of the U.S. imposing tariffs on all three close trading partners at 75 percent. But the official added that a meeting Thursday morning could change that decision or slow it down.

Any official document released by the White House is expected to include language saying that all decisions are subject to further negotiation, the official said, which leaves open the possibility that the countries could have some wiggle room to avoid the duties.

The news comes just hours before a temporary exemption that Trump had previously granted to Canada, Mexico and the EU — which Continue reading “Trump readies to hit U.S. allies with steel, aluminum tariffs”

Trump investigating imported cars is ‘farcical,’ Obama trade chief says

Subscribe to POLITICO Money on Apple Podcasts here. | Subscribe via Stitcher here.

Former U.S. Trade Representative Ron Kirk, who served during President Barack Obama’s first term, thinks the Trump administration’s investigation of imported automobiles as a potential national security threat is "farcical."

“If there is a national security threat, then you’d have to think on the other end of it there was some nefarious purpose to invade America to carry out some undefined purpose,” Kirk said on the latest edition of the POLITICO Money podcast. “If it is, then I would say BMW and Mercedes have done it brilliantly because they’ve been here for 50 years so they’ve already invaded. It is part of the random, arbitrary mess that comes out of this president’s Twitter rage."

Kirk also described what it’s like to be in high-stakes trade negotiations including ones he led that resulted in a Continue reading “Trump investigating imported cars is ‘farcical,’ Obama trade chief says”