Oct 6, 2017

Axios AM

By Mike Allen
Mike Allen
1 big thing: Rexit

Trump advisers and allies are floating the idea of replacing Secretary of State Rex Tillerson with CIA Director Mike Pompeo, age 53 — someone who's already around the table in the Situation Room, and could make the switch without chaos.

  • We're told that Trump is quite comfortable with Pompeo, asking his advice on topics from immigration to the inner workings of Congress.
  • Pompeo personally delivers the President's Daily Brief, making him one of the few people Trump spends a great deal of time with on a daily basis.
  • Pompeo is one of the few in the administration who knows how to convey tough news to the president, and how to push back without turning DJT off. (SecDef Mattis is good at that, too.)
  • Trump doesn't see Pompeo as a showboat.
  • Pompeo would take the job, as the cap to a career that included being a U.S. House member from Kansas.
  • Pompeo would have credibility with world leaders, who'd know he was a legit part of the president's inner circle — something no one thinks about Tillerson.

Sources tell us Trump recognizes that a Cabinet shuffle would bring bad press. White House Chief of Staff John Kelly wants stability, and so is discouraging high-level departures before next year.

And yet, insiders say Trump's relationship with Tillerson is broken beyond repair. We're told Trump was furious that Tillerson didn't try to blunt the story about him calling the president a "moron," by just going out and denying it (whether or not it actually occurred).

  • After what Trump considered a strong trip to Vegas, he seethed when he got back and saw Tillerson's gaffe dominating cable-news coverage. Everywhere he flipped, there was Tillerson's face instead of his.
  • The relationship is so toxic, sources tell Jonathan Swan and me, that few in the White House think it can be rebuilt. There's zero trust between the West Wing and the State Department.
  • NBC, which broke the "moron" story, said the chief of staff "abruptly scrapped plans to travel with ... Trump on Wednesday so he could try to contain his boss's fury."

Be smart: The breakdown in the relationship between a president and the Secretary of State has profound effects on American statecraft and the way foreign countries view this administration.

2. Trump's teaser: "You'll find out"

"Trump, during photo shoot, talks of 'calm before the storm,'" by AP's Jill Colvin:

  • "Trump delivered a foreboding message [last] night, telling reporters as he posed for photos with his senior military leaders that this might be 'the calm before the storm.'"
  • "White House reporters were summoned suddenly ... and told the president had decided he wanted the press to document a dinner he was holding with the military leaders and their wives."
  • "Reporters were led hastily to the grand State Dining Room, where they walked into a scene of the president, his highest-ranking military aides and their wives posing for a group photo. The cameras clicked and they smiled. ... Live classical music played."
  • "Then, Trump gestured to the reporters in the room. 'You guys know what this represents?' Trump asked. 'Maybe it's the calm before the storm.'"
  • "What storm, Mr. President?" one reporter shouted. "ISIS? North Korea? Iran?"
  • Trump replied: "You'll find out."

Between the lines: The commander-in-chief is pondering several high-stakes national-security decisions that we could hear about soon. But part of this may simply be the president's instinct for drama and photos that make him look strong, love of cliffhangers, and joy in flummoxing the press.

3. Iran issue about to ignite

"Trump is expected to overrule his top national security advisers and decline to certify the Iran nuclear agreement, ... a decision that would reopen a volatile political debate," the N.Y. Times' Mark Landler and David E. Sanger write in the paper's lead story:

  • What's next: "By declining to certify Iran's compliance, Mr. Trump would essentially kick it to Congress to decide whether to reimpose punitive economic sanctions. Even among Republicans, there appears to be little appetite to do that, at least for now."
  • Why it matters: "The strategy is an effort by the Trump administration to make the nuclear agreement only part of a multidimensional approach to pressure Iran on many fronts ... But the administration has yet to articulate that broader strategy. As a result, the nuclear deal remains ... a political football in Washington."
Bonus: Pic du jour

The lobby of a building on the Food and Drug Administration campus (Building 32) in Silver Spring, Md., shows a portrait of FDA Commissioner Scott Gottlieb, with missing spots for the President and Vice President (whose official photos haven't been issued), and the HHS Secretary, vacant since Friday.

  • Former Secretary Tom Price's pic was gone was Monday, when this was taken.
  • Our tipster named this photo: "Absence of Leadership."
  • If you have a newsy photo like this, shoot it to me: mike@axios.com.
4. Data du jour

"Football's decline has some high schools disbanding teams," by AP's Ben Nuckols:

  • "Participation in high school football is down 3.5 percent over the past five years, according to the annual survey by the National Association of State High School Federations."
  • "The decline would be much steeper if not for a handful of states in the South and the West. Throughout the Northeast, the Midwest and the West Coast, in communities urban and rural, wealthy and working-class, fewer kids are playing football."
  • "The risks of football have never been more apparent. This summer, researchers at Boston University said they'd found evidence of a brain disease linked to repeated head blows in nearly all of the 202 former football players they studied."
5. Beware the bull

The Economist cover story looks at signs of bubbles in both markets and real estate:

  • Historic context: 'No one would mistake the bloodless run-up in global stock markets, credit and property over the past eight years for a reprise of the "roaring 20s", or even an echo of the dotcom mania of the late 1990s. Yet only at the peak of those two bubbles has America's S&P 500 been higher as a multiple of earnings measured over a ten-year cycle."
  • 2 reasons to worry: "If today's asset prices have been propped up by central-bank largesse, its end could prompt a big correction. Second, signs are appearing that fund managers, desperate for higher yields, are becoming increasingly incautious."
  • 2 reasons not to worry: "[L]ook carefully at the broader picture, and there is some logic to the ongoing rise in asset prices. In part it is a response to an improving world economy. ... [E]merging-market economies have come out of testing times in far more resilient shape."
  • Be smart: Worry.
6. The talk of Hollywood

Movie mogul Harvey Weinstein told Emily Smith of the N.Y. Post's "Page Six" that he "bears responsibility" for sexual misconduct in the workplace, but threatened to sue the N.Y. Times for as much as $50 million for the bombshell piece alleging he subjected women to decades of sexual harassment.

The article by the Times' Jodi Kantor and Megan Twohey brims with on-record documentation, after years of whispers and failed efforts by news outlets to document one of the industry's biggest open secrets:

[A]fter being confronted with allegations including sexual harassment and unwanted physical contact, Mr. Weinstein has reached at least eight settlements with women, ... Among the recipients ... were a young assistant in New York in 1990, an actress in 1997, an assistant in London in 1998, an Italian model in 2015.

In a statement, ... Weinstein said: "I appreciate the way I've behaved with colleagues in the past has caused a lot of pain, and I sincerely apologize for it. Though I'm trying to do better, I know I have a long way to go." He added that he was working with therapists and planning to take a leave of absence to "deal with this issue head on."

Read on.

7. 1 trillion Snaps this year

"Snapchat has seen nearly 40% growth in Stories engagement since launching Snap Maps," Axios' Sara Fischer scoops:

  • The company believes Maps empower users to get creative and express themselves, which CEO Evan Spiegel hopes will help compete with Facebook and Instagram.
  • Why it matters: "Investors have been concerned about Snap ever since Instagram successfully launched a rival Stories feature last summer, which put a dent in Snap's user growth. But Snapchat thinks it can take on Instagram and its parent company Facebook with user engagement — spurred by camera creativity — which creates more opportunities for advertisers."
  • Huge stat: Snapchat expects over a trillion Snaps to be sent this year — roughly 3 billion per day, with daily active users opening the app 20 times per day. 60% of daily users create content on the platform daily, and more than one-third of daily users engage with Snapchat's augmented reality technology.
8. Living history: 1 year ago

Yahoo News posts an oral history of Oct. 7 to 9, 2016, from the release of "the Access Hollywood" tape to the second presidential debate:

The dizzying events of that weekend reflects some essential truths about the two candidates and their campaigns: Clinton cool, cautious and cocooned by staff; Trump instinctual, aggressive and unbound by propriety and convention. The same qualities that have so often gotten him in trouble were the also ones that rescued him from this crisis.

Go ahead — relive it.

9. First look: Atlantic's November cover

From the November issue of The Atlantic ... "Death at a Penn State Fraternity: Tim Piazza fought for his life for 12 hours before his Beta Theta Pi brothers called 911. By then, it was too late," by Caitlin Flanagan:

  • "Fraternity members live under the shadow of giant sanctions and lawsuits that can result even from what seem like minor incidents. The strict policies promote a culture of secrecy, and when something really does go terribly wrong, the young men usually start scrambling to protect themselves."
  • "Doug Fierberg, a Washington ... lawyer whose practice is built on representing plaintiffs in fraternity lawsuits, told me that 'in virtually every hazing death, there is a critical three or four hours after the injury when the brothers try to figure out what to do. It is during those hours that many victims pass the point of no return.'"
  • "The brothers did not use their many cellphones to call 911. Instead one searched the internet for terms such as cold extremities in drunk person."
  • Read on.
10. 1 fun thing: Top streaming shows

"The streamers [Hulu, Amazon, Netflix] don't share their ratings, but a new measurement looked at streams, viewers, engagement and more to determine which series have the biggest audiences," per Hollywood Reporter:

  • "Of the premium content offered by the Big Three streamers, the most popular shows in September from each were The Handmaid's Tale (Hulu), The Man in the High Castle (Amazon) and Narcos (Netflix), according to Parrot Analytics."
  • "YouTube is still the king of streamers."
  • Lingo ... "Cord-nevers": "There were 16.7 million cord-cutters by 2016, according to eMarketer, and there will be 40.1 million by 2021. There were 32.5 million cord-nevers (Americans who have never subscribed to pay television) in 2016, and that will rise to 41 million by 2021."
  • See the top 5 shows for Hulu, Amazon, Netflix.
Mike Allen