Apr 25, 2019

Axios AM

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1 big thing: How Trump can stall Pelosi

Illustration: Lazaro Gamio/Axios

President Trump is discovering a reality of congressional oversight: There's only so much Democrats can do if he just says no, Axios' David Nather, Alayna Treene and Jonathan Swan write.

  • Why it matters: The millions of voters who elected a Democratic House in November are about to find out how hard it is for one party — with just one chamber of Congress and without the cooperation of the other party — to investigate a president who is determined to run out the clock.
  • There's "no downside" to the White House stalling the Democrats as long as possible, according to a top Republican white collar defense attorney in close touch with the White House.
  • And the bad precedents? "THIS White House cares about that? Hahahahahahaha," the attorney wrote in an email.

House Democrats can subpoena whoever and whatever they want — but those subpoenas are hard to enforce.

  • Congress can hold administration officials in contempt, but in all of the most recent examples where Congress did that, it fizzled.

Be smart ... A senior Democratic aide said there are a variety of ways to go around the stalling White House "to start jamming these guys up":

  • "One trend we've been seeing more and more, and a way we can get new information, is from whistleblowers," the aide said.
  • The source also said House Democrats "haven't even begun focusing on issues that can be localized" — drawing attention to behavior that negatively impacts red states.
  • House Democrats are also prepared to use budget power to squeeze Republicans on specific local projects.

P.S. ... While the White House probably won't have legal standing to block a subpoena issued to former White House counsel Don McGahn, the administration could try to assert executive privilege over particular testimony, Washington defense lawyer Andrew Herman, who represents clients in congressional investigations, tells AP.

2. U.S. measles cases hit highest mark in 25 years

Illustration: Rebecca Zisser/Axios

Measles — declared eradicated in the U.S. in 2000 — has roared back at a record pace this year, Axios Science editor Andrew Freedman writes.

  • Why it matters: Most Americans have no firsthand experience with measles. That lack of familiarity, along with the online success of the anti-vaccine movement, is letting a deadly but easily preventable virus spread.

So far in 2019:

  • 695 cases of measles have been confirmed in 22 states.
  • More than 70 new confirmed cases were reported in just the past week.
  • Five states are reporting ongoing outbreaks (California, Michigan, New Jersey, New York, Washington state).

Different vaccine-hesitant communities added together are causing vaccination rates to fall below effective immunity levels, Anthony Fauci, who leads the National Institutes of Allergy and Infectious Diseases, tells Axios.

  • "I think unfortunately the best motivation… is that we’re having these outbreaks and people are really getting seriously ill," Fauci says. "Those are the things that are going to jolt people into reconsidering this."

Go deeper.

3. Everything's deadlier in the South
Expand chart
Data: Centers for Disease Control and Prevention, 2017. Interactive: Lazaro Gamio/Axios

The death rates from pretty much every major cause — heart disease, cancer, Alzheimer's, diabetes, suicide, sepsis, guns, infant mortality — remain highest in the South, according to updated federal data.

  • Between the lines, from Axios' Bob Herman: Rural Appalachia has higher death rates from drug overdoses. But a lot of the poorest health outcomes in the South reflect longstanding poverty, fewer health care resources and longstanding barriers to care.

Explore the graphic.

4. Pic du jour
Photo: Yuri Kadobnov/Pool Photo via AP

Kim Jong-un and Vladimir Putin met at a summit today in the Russian port city of Vladivostok, intending to show that Washington isn't the only power with enough clout to engage with Pyongyang on its nuclear program. (Reuters)

5. Trump's N.Y. nightmare

If New York officials succeed in getting Trump financial records, it will trouble Trumpworld far more than any congressional fight, per Jonathan Swan.

Deutsche Bank has begun providing records to New York Attorney General Letitia James in response to a subpoena for documents related to loans made to President Trump and his business, CNN's Cristina Alesci reports.

  • The CNN report, which Axios has not confirmed, said the bank "is in the process of turning over documents, including emails and loan documents, related to Trump International Hotel in Washington ... the Trump National Doral Miami; the Trump International Hotel and Tower in Chicago; and the unsuccessful effort to buy the NFL's Buffalo Bills."

Jay Sekulow, counsel to the president, tells Axios: "At this time, we cannot confirm the subpoena or any production. As with any demand for documents we will respond as appropriate."

  • "Our response will include litigation if necessary."
6. Hedge fund moment is over

Illustration: Rebecca Zisser/Axios

Hedge funds are losing clients and money as they continue to deliver returns far worse than the broader stock market, Axios Markets editor Dion Rabouin reports.

  • Aside from a select few managers who continue to generate inflows, hedge funds as a whole have been losing money — an average $5.4 billion of outflows per year since 2015, data from research firm eVestment shows.
  • Last year the industry saw the fewest funds launched since 2000, according to estimates from Hedge Fund Research (HFR).

What's happening: The S&P 500 has outperformed the average hedge fund by more than 100% since 2009, according to an Axios analysis.

  • Putting $100,000 in an S&P 500 index fund with a fee of 10 basis points would have yielded $301,489 at the end of 2019's first quarter.
  • That same $100,000 invested in the average hedge fund would have returned $174,787.

Go deeper.

7. Fining Facebook

Facebook said it's planning for a possible $3 billion to $5 billion privacy fine by the U.S., an amount that would set a record for the Federal Trade Commission, Axios' Ina Fried and Scott Rosenberg report.

  • The amount is a kind of Goldilocks median for the two parties — big enough for the FTC to claim a record victory, but small enough for Facebook to take a brief earnings hit and then keep on minting money.
  • It was an unusual disclosure: We can't remember a company accounting for a regulatory fine that hadn't even been proposed.

Be smart: That amount likely would be just a flesh wound for a company that brings in roughly that much revenue every month.

  • And a fine alone provides no guarantee that the company will change.

N.Y. Times Quote of the Day ... Matt Stoller, a fellow at the Open Markets Institute, a think tank that is a vocal critic of the power of tech companies:

  • "This would be a joke of a fine — a ... parking-ticket-level penalty for destroying democracy."
8. Downside for superstar tech hubs

Illustration: Rebecca Zisser/Axios

U.S. tech hubs continue to build in stature, pumping out top-tier, high-paid jobs. But there are also downsides to tech superstardom, Axios' Erica Pandey reports:

  • Huge swaths of lifers get priced out of housing, resulting in an increasingly homogeneous population bereft of children, immigrants and communities of color, says Jennifer Friedenbach, head of San Francisco's Coalition on Homelessness.

Between 2017 and 2018, 850 Bay Area restaurants — many of them long-time neighborhood staples — closed their doors.

  • The culprit, according to Gwyneth Borden, executive director of the Golden Gate Restaurant Association, is the rising cost of living. The old favorites simply could not compete with buzzy, new spots.
  • In Seattle, natives are finding once-beloved bars and coffee shops so crowded that they're almost unpleasant, Jen Swanson, a resident who recently returned to the city after 10 years, writes in the Seattle Times.

Be smart: Nearly all the tech hubs appear on the American Fitness Index list of the top 20 healthiest U.S. cities.

9. First look: Dems' rural gap

Former senators Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana, who lost last year, are launching the One Country Project to help Democrats win back rural voters ahead of the 2020 cycle, Axios' Alexi McCammond scoops.

  • Why it matters: If Democrats don't improve with rural voters, they're likely to once again win the popular vote but lose the electoral college in 2020.

Details: The group is focusing on Democratic Senate races and the presidential election, but eventually wants to work down the ballot.

  • Heitkamp and Donnelly will work with campaigns before the election, giving them messaging, data, polling and a strategy to break through with these voters who "didn’t feel that we shared their beliefs" in past elections, Donnelly told Axios.
  • "Culturally, they’re focused on faith and family and country, and Donald Trump tells them all the time that we’re not, even though we are."

Heitkamp said: "What we heard on the ground is that the Democratic Party no longer speaks for the entire country."

10. 🎬 1 film thing
Marvel Studios President Kevin Feige (left) with "Avengers: End Game" cast: Chris Hemsworth, Chris Evans, Robert Downey Jr., Scarlett Johansson, Jeremy Renner and Mark Ruffalo. Photo: Willy Sanjuan/Invision/AP

Marvel's "Avengers: Endgame” opens tonight on 4,600 U.S. and Canadian screens — the most for any movie ever, AP's Jake Coyle writes.

  • Many theaters will stay open for 24 hours. Seventeen AMC Theatres won’t close for 72 hours straight.
  • Presales set records on Fandango and Atom.

Disney said "Endgame" grossed $107 million on Wednesday in China, where it first opened — the most lucrative single day ever in Chinese theaters.

  • The current opening weekend record is held by the last "Avengers" movie — "Infinity War," last year's prelude to "Endgame."
  • Reviews — 97% fresh on Rotten Tomatoes — have been among the best for any Marvel movie.

The big picture: "Endgame" will give a much-needed jolt to the box office, which is 16% behind the pace of 2018.

  • L.A. Times review: Thrilling "Endgame" ... The latest movie in the Marvel Cinematic Universe brings satisfying closure to the blockbuster 22-film series.

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