Axios AM

May 08, 2024
🐫 Happy Wednesday! Smart Brevity™ count: 1,297 words ... 5 mins. Thanks to Noah Bressner for orchestrating. Copy edited by Bryan McBournie.
🗳️ Breaking: President Biden's campaign is surging swing-state staffing and ads this month, with dozens of new hires and an eight-figure ad buy, Axios' Alex Thompson writes.
1 big thing: Trump's inflation bomb

Former President Trump is betting that high gas and grocery prices will fuel his return to the White House. But his second-term plans carry inflation risks, Axios' Zachary Basu writes.
- Why it matters: President Biden's approval rating has suffered under the crushing weight of inflation, which voters consistently rank as their top issue for the '24 election.
Trump is lobbing grenades from the sidelines as Biden struggles to bring inflation back to pre-pandemic levels.
- Simmering frustration with high prices has allowed Trump to build a decisive polling advantage on the economy — while some of his own plans have largely escaped scrutiny.
🔎 Zoom in: At least four of the main principles of Trump's economic philosophy carry significant inflationary risks, according to economists and Wall Street analysts.
1. Universal tariffs
In what likely would trigger a massive global trade war, Trump has called for 10% tariffs on all imports, 100% tariffs on cars made outside the U.S., and a minimum 60% tariffs on Chinese goods.
- An analysis by the Center for American Progress Action Fund, a Democrat-aligned group, found that the 10% tariffs "would amount to a roughly $1,500 annual tax increase for the typical household."
2. Lower interest rates
Trump broke precedent in office by frequently attacking the Fed for not dramatically lowering interest rates to compete with other countries.
- The Wall Street Journal reports Trump allies are drafting plans to gut the Fed's independence and allow the president to have more influence on the central bank's rate decisions.
3. Lower taxes
Republicans' top fiscal priority is extending Trump's 2017 tax cuts, which would cost $3.3 trillion over the next decade, according to the Committee for a Responsible Federal Budget.
- Tax cuts may make life more affordable for many Americans. But more money in the economy also juices consumer demand — potentially pushing up prices.
4. Immigration limits
Trump has vowed to carry out the "largest domestic deportation operation in American history," targeting millions of undocumented immigrants.
- Despite the backlash Biden has faced for his handling of the border, economists believe last year's immigration increase allowed the job market to continue booming without adding to inflationary pressures.
- Trump's deportation plans, while supported by the majority of Americans, could exacerbate labor shortages and reignite inflation.
2. 🧀 Biden's AI dig

President Biden will travel to Racine County, Wis., today to unveil a $3.3 billion investment by Microsoft to build an AI data center in the state, Axios' Hans Nichols writes.
The intrigue: Biden is taking a not-so-subtle shot at former President Trump. It's the same location where seven years ago, Trump touted a $10 billion Foxconn facility as the "eighth wonder of the world."
- That facility never fully materialized.
3. 🇮🇱 Why U.S. blocked bombs

A weapons shipment to Israel that the Biden administration decided to put on hold last week included 1,800 2,000-pound bombs and 1,700 500-pound bombs, a senior U.S. official told Axios' Barak Ravid.
- Why it matters: The unprecedented move by the Biden administration was a way for the U.S. to signal concern over a possible ground operation in Rafah, the senior U.S. official said.
The U.S. official said the Biden administration is especially focused on the end use of the 2,000-pound bombs in Rafah because of the devastating impact they could have in dense urban settings, as seen in other parts of Gaza.
- White House spokesperson John Kirby said Israel told the U.S. the operation in the Rafah crossing is limited in scope and time, and is aimed at preventing Hamas from smuggling weapons through the border with Egypt.
4. 🔭 Trump trial's racy day
Donald Trump squirmed and scowled, shook his head and muttered as porn actress Stormy Daniels described the unexpected sex she says they had nearly two decades ago. She said she remembered "trying to think of anything other than what was happening."
- Years in the making, the in-person showdown happened in a Manhattan courtroom that has become the shabby stage for the historic spectacle, AP reports.
Trump's son Eric was in the courtroom for the graphic testimony.
- Daniels spoke quickly: At least six times, Daniels was asked to slow down so a court stenographer could keep pace.
5. 💰 Scoop: Trump's day off from court
Illustration: Annelise Capossela/Axios
Former President Trump is scheduled to spend part of his day off from court today at a Mar-a-Lago dinner with supporters who spent thousands of dollars for Trump "Mugshot Edition" NFTs (non-fungible tokens), Axios' Sophia Cai has learned.
- Why it matters: Trump frequently complains that his criminal trial is keeping him from campaigning in swing states. But he also prioritizes using his name and likeness to make money.
Trump's trial is in recess on Wednesdays. Last Wednesday, he campaigned in Wisconsin and Michigan. The Wednesday before, he played golf.
- "I'd like to be campaigning," Trump told reporters yesterday outside the courtroom.
Trump, who flew home to Palm Beach yesterday, is expected to join supporters who bought at least 47 Trump NFTs (at $99 each) this evening, according to a copy of the dinner invitation.
- Supporters who bought enough NFTs to get invited to the dinner are supposed to receive a physical card with a piece of the suit Trump is said to have worn the day he was arrested in Georgia last August.
- Buyers who spent nearly $10,000 were invited to a VIP cocktail reception before the dinner. They'll receive physical cards with pieces of the suit and tie that Trump was wearing when he was arrested.
6. 💵 Exclusive: Small biz inflation fears

Small business owners are as preoccupied with stubborn inflation and economic uncertainty as most Americans. But most still embrace entrepreneurship — warts and all, Axios' Javier E. David writes from a American Express survey.
- Amex's small business survey found that Main Street is struggling to navigate multiplying economic headaches, with price hikes and cash flow topping the list of concerns.
🧮 By the numbers: 95% remain "overwhelmingly happy" as business owners and are in it for the long haul, according to the survey.
- Gina Taylor Cotter, American Express general manager, small business products and business blueprint, tells Axios that despite the pessimism that defines millennials and Gen Z, younger entrepreneurs are more inclined to strike out on their own. The omnipresence of technology has made them savvier business people.
A separate survey from Goldman Sachs (charted above), released last week, revealed that small business owners feel as if politicians aren't talking enough about Main Street entrepreneurs.
7. 🪖 Scoop: McCormick PAC's big ad buy

A super PAC supporting Republican David McCormick's Senate run in Pennsylvania is launching a $4 million TV ad buy today — its first in one of the most-watched contests of the 2024 campaign, Axios' Alex Thompson writes.
- Why it matters: Pennsylvania's race between McCormick and Democratic incumbent Bob Casey could determine which party controls the Senate next year.
Keystone Renewal PAC's first ad focuses on McCormick's time at West Point and his Bronze Star from the Gulf War.
8. 🎧 Charted: Music's biggest feud

The biggest rap beef of the streaming era — between Kendrick Lamar and Drake — is giving both artists a massive commercial and publicity boost.
- Lamar, who appears to have won, broke a single-day American streaming record on Spotify.
- Wikipedia page views for both artists shot up from about 10,000 per day to more than 250,000, Axios' Will Chase writes.
The feud between two of hip-hop's biggest stars has sparked at least eight diss tracks, AI impersonations of rap icons, accusations of physical and sexual abuse, possibly a shooting outside Drake's Toronto mansion that injured a guard (police haven't specified a motive).
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