Aug 19, 2018

Axios AM

Mike Allen

☕️ Good Sunday morning.

Situational awareness: The N.Y. Times today begins a series, "Rebound: Can Democrats Win in Trump States?" that highlights "the challenges for Democratic candidates, activists and voters in states that President Trump carried in 2016." First stop: Pennsylvania.

1 big thing ... Trump's epic Mueller gamble

Illustration: Lazaro Gamio/Axios

Several top White House officials thought then and think now that President Trump made an epic error in rolling over to cooperate with Robert Mueller in the early stages of the special counsel investigation.

Trump himself thought then and thinks now that he personally has nothing to lose because he personally did nothing wrong. 

  • Who’s right might very well decide the fate of the Trump presidency.

One source close to the Trump team told us the full acquiescence to Mueller was "dumb" and "idiotic."

  • A top source said White House counsel Don McGahn and his lawyer, William Burck, never thought it was a good idea to cooperate the way Trump has, but realized they had no choice once the decision was made.

The White House made an epic gamble to try to placate Mueller rather than fight him:

  • The N.Y. Times' Mike Schmidt and Maggie Haberman report in the Sunday paper's lead story that McGahn gave "at least three voluntary interviews with investigators that totaled 30 hours over the past nine months."
  • The sessions included "detailed accounts about the episodes at the heart of the inquiry into whether President Trump obstructed justice, including some that investigators would not have learned of otherwise," The Times reports.
  • "McGahn described the president’s fury toward the Russia investigation" and recounted "the president’s most intimate moments with his lawyer."
  • Why it matters: "Lawyers are rarely so open with investigators, not only because they are advocating on behalf of their clients but also because their conversations with clients are potentially shielded by attorney-client privilege, and in the case of presidents, executive privilege."

Trump tweeted this morning: "The failing @nytimes wrote a Fake piece today implying that because White House Councel Don McGahn was giving hours of testimony to the Special Councel, he must be a John Dean type 'RAT.'"

  • "But I allowed him and all others to testify - I didn’t have to. I have nothing to hide."
  • "So many lives have been ruined over nothing - McCarthyism at its WORST!"

Asked about the Trump team's logic, sources told Axios that his lawyers believe the president isn't in personal legal jeopardy, and so eagerly cooperated and allowed testimony:

  • "We all think that the president can't be charged with obstruction," said a source familiar with the situation. "And McGahn had some good things to say."
  • "In the two meetings to [discuss firing] Comey, the president was instructed [by aides] that this is not going to end the investigation — it's only going to make it worse, the heat will be turned up."
  • "And [Trump] said, 'I understand that, but I have no confidence in him. So I'm going to fire him.'"
  • "That's a good fact," the source continued, "as compared to [him saying], 'I'll fire him so we'll end the investigation.' It was the opposite."

John Dowd, who left Trump's legal team in March, was an architect of the cooperation strategy, and defended it in emails:

  • McGahn, Dowd said, "was a very strong witness for the President."
  • "The strategy is working," Dowd added. "[A]ll of [Mueller's] questions have been answered by 37 cooperating witnesses, 1.4 million documents."
  • "We protected President by not asserting attorney-client privilege."
  • Dowd explained that if the White House counsel and other aides had not given interviews and instead had been called to testify before a grand jury, that would have cost POTUS the executive privilege as to all White House documents and witnesses.

Be smart: Trump’s relationship with McGahn was already very strained, and has been for a long time.

  • Trump gets frustrated by him, and sources who’ve watched them interact say McGahn simply doesn’t know how to speak to Trump.
  • The president has vented his frustration that McGahn’s instinct is always to tell him “no” rather than look for creative ways to get him what he wants.
  • McGahn has at times vented to colleagues about the crazy demands Trump makes of him, according to sources who’ve spoken with McGahn.
  • The Times notes: "Trump’s behavior has so exasperated Mr. McGahn that he has called the president 'King Kong' behind his back, to connote his volcanic anger."
2. New for school year: armed marshals
Students walk to Marjory Stoneman Douglas High School on Wednesday, the first day of the new school year. (Joe Raedle/Getty Images)

School districts around the country are substantially beefing up security, but critics argue that some of the measures taken can make schools feel like prisons and can't guarantee students' safety, Axios' Michael Sykes reports:

Armed marshals in Texas have been trained to prevent the next school shooting, per NPR's Austin affiliate, KUT.

  • The program allows school employees — including teachers — to carry concealed weapons on campus.
  • Teachers in Arkansas and South Dakota have been allowed to carry for years.
  • Legislators in Oklahoma, Wyoming and Kansas passed bills allowing staff to carry last year after the Marjory Stoneman Douglas High School shooting.

Other changes:

  • Schools in Lockport, N.Y., have installed security cameras with facial recognition systems.
  • Parkland students returned to new locks on doors, guards, and 52 new security cameras, USA Today reports.
3. Bill Gates: Pay attention to this trend
From Gates Notes: The Blog of Bill Gates

Bill Gates writes on Gates Notes: The Blog of Bill Gates that when he entered Harvard in 1973, the drawing above "was basically how the global economy worked":

  • "There are two assumptions you can make based on this chart. The first is still more or less true today: as demand for a product goes up, supply increases, and price goes down. If the price gets too high, demand falls. The sweet spot where the two lines intersect is called equilibrium. ... Everyone wins."
  • "The second assumption this chart makes is that the total cost of production increases as supply increases. ... Software doesn’t work like this. Microsoft might spend a lot of money to develop the first unit of a new program, but every unit after that is virtually free to produce."

Why it matters: "The portion of the world's economy that doesn't fit the old model just keeps getting larger."

  • "That has major implications for everything from tax law to economic policy to which cities thrive and which cities fall behind."
  • "[T]he rules that govern the economy haven’t kept up. This is one of the biggest trends in the global economy that isn’t getting enough attention."

"If you want to understand why this matters, the brilliant new book Capitalism Without Capital by Jonathan Haskel and Stian Westlake is about as good an explanation as I’ve seen."

  • "What the book reinforced for me is that lawmakers need to adjust their economic policymaking to reflect these new realities."

Be smart: "Measurement isn’t the only area where we’re falling behind — there are a number of big questions that lots of countries should be debating right now."

  • "Are trademark and patent laws too strict or too generous? Does competition policy need to be updated? How, if at all, should taxation policies change? What is the best way to stimulate an economy in a world where capitalism happens without the capital?"
  • "We need really smart thinkers and brilliant economists digging into all of these questions."
Bonus: Pic du jour
Roland Schlager/Pool via AP

Russian President Vladimir Putin danced arm-in-arm with Austria’s Foreign Minister Karin Kneissl at her wedding in Vienna yesterday, after receiving an invitation that opposition critics said undermined the West’s stance against Moscow, Reuters reports.

  • Kneissl was appointed "by the far-right Freedom Party (FPO) which has a cooperation agreement with Putin’s United Russia party."
4. 🛴 Why scooters provoke such backlash

Illustration: Caresse Haaser/Axios

In the months since electric scooters for rent started cropping up in cities across the country, local governments have scrambled to implement pilot programs with strict limits, Axios' Kia Kokalitcheva writes:

  • For some local officials, this is an opportunity to do what they weren’t able to do years ago when ride-hailing companies like Uber and Lyft showed up and flooded their cities with cars.
  • Some scooter companies haven’t helped themselves by aggressively deploying vehicles (including in San Francisco and Austin) before regulations are in place, and later protesting new rules.

Some of the backlash is undeniably part of a large anti-tech sentiment that’s been growing over the last several years, especially in cities where the industry is creating visible socio-economic divides.

  • And there are genuine safety concerns: Residents and city officials have been frustrated with the number of scooters left to block roads, sidewalks, and entrances.
  • Many scooter riders also zip along sidewalks instead of bike lanes or streets, despite scooter companies’ claims they try to educate customers how to safely ride.

Be smart: Scooter backlash is getting substantial media coverage, but it’s not as widespread as it appears. Slews of people are scooting. The backlash also exposes the refusal to acknowledge that private cars and public transit are falling short.

5. A third of marriages start online
Courtesy The Economist

"In America more than a third of marriages now start with an online match-up," per The Economist's lead editorial:

  • Shot: "Research has found that marriages in America between people who meet online are likely to last longer; such couples profess to be happier than those who met offline."
  • Chaser: "Negative emotions about body image existed before the internet, but they are amplified when strangers can issue snap judgments on attractiveness. Digital dating has been linked to depression. ... 10% of all newly created dating profiles do not belong to real people."
  • What's next: "The internet is the second-most-popular way for Americans to meet people of the opposite sex, and is fast catching up with real-world 'friend of a friend' introductions."

Why it matters: "Romance used to be a distributed activity which took place in a profusion of bars, clubs, churches and offices; now enormous numbers of people rely on a few companies to meet their mate."

  • "That hands a small number of coders, tweaking the algorithms that determine who sees whom across the virtual bar, tremendous power to engineer mating outcomes."
6. 🗞 1 fun thing
Courtesy Jesse Angelo

"The Next Great Fashion Trend Is … Newspapers? Thanks to an advertisement for the streetwear brand Supreme, Monday’s New York Post flew off the stands. How fashion collaborations are, perhaps, making newspapers cool again" — The Wall Street Journal's Jacob Gallagher (subscription):

  • "On Monday, the New York Post caused a fracas across New York City as those in the know raced to get a copy."
  • "Delivery drivers reported that young people chased down their trucks. Other Post-seekers rose, well before sunrise, to snatch up copies by the bundle."

"For the first time in the Post’s 216-year history, ... its infamous front page ... was upstaged by a stark wraparound advertisement":

  • "There wasn’t much to the ad ... from streetwear brand Supreme: just a single, square red 'Supreme' logo."

Be smart: For Axios readers still catching up on skate culture, there's a huge resale ecosystem around Supreme.

  • Tate and Gus, two of my Oregon nephews, make good $$$ buying Supreme merch online the second it "drops," then re-shipping the goods to strangers for a nice markup. (My sister won't let them fleece their friends.)

"On resale websites, [the $1 paper] was being flipped for over 15 times its face value," the Journal reports.

  • "Jesse Angelo, the New York Post’s CEO and publisher, was familiar with Supreme and was 'jazzed' by the idea of working with the [Soho-based] brand when they approached Post Studios."
Mike Allen

Thanks for reading, and see you all day on