National

A new book on Justice Brett Kavanaugh's confirmation process discloses that the White House held a secret mock hearing for Kavanaugh after allegations of sexual assault against him broke — which leaked to the press before it was even finished.

What they're saying: In the forthcoming book — "Justice on Trial," out Tuesday — the Judicial Crisis Network's Carrie Severino and The Federalist's Mollie Hemingway write that Kavanaugh's team was wary of leaks, but that those leading the confirmation effort argued that the advantages of broadening the group involved in his preparation were "worth the risk."

So former White House communications director Bill Shine and press secretary Sarah Sanders, along with a number of others, played the parts of various senators in a mock hearing.

But soon after Kavanaugh left the room and the team began discussing his performance, "someone interrupted the discussion to announce that the media were already reporting that Kavanaugh was mooting with the press team," the authors write.

"Later the Washington Post cited three sources who reported that 'Kavanaugh grew frustrated when it came to questions that dug into his private life, particularly his drinking habits and his sexual proclivities.' They added that he declined to answer some questions altogether, which made it sound like he had something to hide."

"Their suspicions about the discretion of the broader group confirmed, the core Kavanaugh team resolved to get rid of any nonessential aides."

Exclusive excerpt: Inside Kavanaugh's leaked mock hearing

In the forthcoming book — "Justice on Trial," out Tuesday.

Politics

Brett Kavanaugh

Joe Biden's reboot: A "wrap the bow" strategy

Joe Biden

2024 will be an election year like no other, as President Biden seeks re-election amid economic uncertainty, two wars and questions about his age. His likely foe, former President Trump, faces felony charges and vows revenge on his political enemies. Meanwhile, Americans generally are dissatisfied with those choices and are divided over immigration, race, education and more.

Politics & Policy

Generate

Axios Generate

The president is giving a speech on the environment on Monday. And some people think that's a little weird. 

What we're hearing: Two senior administration officials told Axios they were surprised when they first heard that President Trump would be giving a speech about his administration's "environmental leadership." Both said the president probably won't win a public debate on environmentalism, given he's spent much of his time in office proudly repealing President Obama's environmental regulations.

"I don't know why we'd spend any time talking about their issue," one of the senior officials told Axios. By "their," the source meant Democrats.

The other official described the speech as a "Javanka Special" (a phrase some conservative administration officials use to describe liberal moves they blame on Jared Kushner and Ivanka Trump).

White House response: Judd Deere, a WH spokesman, pushed back on this characterization, saying there was "broad consensus at the leadership level" of the White House and the EPA "to put the facts out on the president's record and what this administration is doing. There should be no surprise about this speech. We've been discussing internally for weeks."

Behind the scenes: Administration sources with direct knowledge confirmed that Ivanka Trump encouraged the president to make a public case for his environmental record. These officials also said Brooke Rollins, a presidential adviser who is close to Kushner, has helped with Monday's speech.

Between the lines: Aides say we shouldn't expect Trump to do a backflip and declare that, suddenly, he's become deeply concerned about climate change. When Axios interviewed the president in October, he pooh-poohed the findings of his own government's scientists, who reported that human activities are the dominant cause of global warming observed since the mid-20th century.

Perhaps foreshadowing themes we might hear on Monday, Deere added: "We are the party of conservation, environmental protection and expanding responsible clean energy technologies while the Democrats' radical Green New Deal would outlaw cows, cars and planes, crippling America's economy and crushing the poorest communities across the globe that rely solely on fossil fuels to survive." (Fact check: The Green New Deal resolution does not outlaw cows, cars and planes.)

A senior administration official said the White House crafted the speech to present the president as pragmatic and to appeal to suburban women, a demographic that has moved away from him and which his advisers believe he needs to win back to be re-elected in 2020.

The official said the same political calculus informed Kushner's recent rollout of a "merit-based" immigration plan. (The plan seems dead on arrival.)

What to expect: One of the most common environmental talking points of Trump administration officials is that natural gas has lowered America's carbon emissions and is cleaning up the air for countries around the world importing U.S. gas.

Reality check: The Trump administration is correct on this point, but the truth is complicated. Scientists say that simply replacing coal with natural gas won't cut emissions nearly enough to seriously address global warming.

And Trump is trying to repeal regulations on methane, a potent greenhouse gas that’s emitted during oil-and-gas development.

Inside Trump's "Javanka Special" speech

Some people think it's a little weird that Trump is giving an environmental speech.

Donald Trump

Capital

Axios Capital

Christine Lagarde is moving to Frankfurt to take on the most powerful and important job in Europe — just when the European Union needs her most.

What's happening: As the new head of the European Central Bank, she won't just be in charge of setting monetary policy for 19 wildly disparate European countries; she'll also be charged with protecting the euro itself, the single most visible and controversial element of the European project.

The biggest crisis facing the EU is Brexit, which is due to happen on October 31. Lagarde will need more than monetary tools to keep the rest of Europe unified during that seismic event.

Background: Lagarde does not fit any of the stereotypes of a central banker. For one thing, she'll be only the second woman ever to run a major central bank. (The first, of course, was Janet Yellen.)

Central bankers tend to be decidedly unglamorous, as well as being male. Think gray economists in gray suits spouting gray jargon in a windowless conference room in Basel. At the highest ranks, you might find a hint of mahogany.

Lagarde is not an economist, but she is a politician. She first came to international prominence when she served as the French finance minister from 2007 to 2011.

She's also impossibly glamorous, by central bank standards. See, for instance: the 20-page Forbes slideshow dedicated to "the most fashionable woman in finance;" her appearance between Carey Mulligan and Tilda Swinton on Vanity Fair's best dressed list; a U.K. newspaper headline calling her "the world's sexiest woman."

Why she matters: Lagarde is famous and powerful entering the ECB — something that could not be said for any of the men on the shortlist. Some central bankers become famous in the course of doing their jobs, but almost none of them are well-known beforehand. (The closest example would probably be the Bank of England's Mark Carney, who toyed with running to become the leader of Canada's Liberal party, and who might yetdo so.)

As head of the IMF from 2011 until last Tuesday, Lagarde effectively corralled a highly disparate set of shareholders as she navigated the Greek financial crisis and helped to orchestrate the nation's bailout.

Amazingly, given the IMF's reputation as the last bastion of despised neoliberalism, she exits that position even more respected than she entered it.

What they're saying: Lagarde's preexisting clout will be of great utility in her new position. As Bloomberg's John Authers writes: "The euro is a political project above all, born of the anxiety of the last generation of leaders to fight in the Second World War to ensure that the continent should be bound together. And it requires a politician to hold it together."

The bottom line: With inflation below target across the continent, the monetary-policy task facing any incoming ECB president is clear. The ECB's rate-setting committee knows what it has to do. The difficulties come in the political aspect of the ECB presidency. That's where Lagarde is uniquely qualified.

The ideal ECB president

Lagarde doesn't fit the stereotype of a central banker.

European Central Bank

Conflicts, policies and powers are intersecting and shaping the world. Breaking news and analysis of national security, foreign policy and global crises.

World

When an item is copied, the original tends to lose value — except when it doesn't.

Driving the news: The biggest fight in the music industry this week is undoubtedly Taylor Swift vs. Scooter Braun, the manager of longtime Swift foe Kanye West. Braun bought Big Machine, Swift's former record label, for what is said to be over $300 million, much to the megastar's displeasure.

In the midst of the resulting pop-culture chaos, Alex Boubia, a Bulgarian Taylor Swift fan, put up a change.org petition asking Swift to re-record her first 6 albums; he has almost 200,000 signatures.

It's not clear whether Swift is contractually allowed to re-record her early albums, or whether she would want to do so even if she could. But the economic intuition is clear: Given the choice, Swift's fans would prefer to stream new recordings where she owned the masters. By doing so, they would channel the Taylor Swift income stream away from Big Machine and toward Swift herself, enriching Swift at the expense of Braun.

Swift might be able to buy her master recordings from Braun, the outcome that would likely make her fans happiest. The negotiations would take place in the context of two implicit threats. First, she might be able to re-record the old albums; second, she could refuse permission to allow music on those albums to be used in movies, commercials and other lucrative contexts.

Be smart: If the masters have more value in Swift's hands than in Braun's, that's a more likely outcome than any attempt to devalue them.

Between the lines: Art has always had a strange relationship with copying. The most reproduced artworks tend to also be the most valuable — think Monet's water lilies or Warhol's Marilyns. If the artist makes many such works, that's often good for the per-piece value, even as mechanical reproductions are generally worthless. Broadly, the objects (which can be bought and sold) are worth much more than the copyright (which generally remains with the artist).

Copying art objects is generally taboo in the art world, but it tends not to have a negative effect on the value of the originals. Photographer William Eggleston reprinted some of his early photographs in 2012, without any deleterious effect on value of the earlier, smaller versions. And when Wade Guyton started making dozens of copies of one of his paintings going up for auction at Christie's, the original sold for $3.5 million, above its high estimate.

Even counterfeit goods don't always harm the owners of intellectual property. Italian fashion house Dolce & Gabbana is famous for refusing to prosecute counterfeiters, because they think counterfeits ultimately increase the desirability of the brand.

Generic drugs are meant to be indistinguishable from the originals, bringing prices down. A new book by Katherine Eban, however, argues that there are important differences between generics and originals; some hospitals actively avoid prescribing certain generics.

Generic drug manufacturers can become monopolies, with extraordinary price-setting power. That kind of market failure is distressingly common.

The bottom line: One glance at the price of an iPhone should be enough to prove that copies don't always mean that prices come down. In fact, they often serve to ratify the value of the original.

Go deeper: Almost everything in the digital economy is a copy. MIT professors Seth Benzell and Erik Brynjolfsson examine some of the implications in their paper "Digital Abundance and Scarce Genius: Implications for Wages, Interest Rates, and Growth."

Editor's note: This post was corrected to reflect that the estimated price Braun bought Big Machine for is over $300 million (not a definitive $300 million).

The economics of copying

Art has always had a strange relationship with copying.

Illustration of a copy machine printing money.

Business

Music

Finish Line

Axios Finish Line

A malfunctioning dog leash could end up creating billions of dollars of potential liabilities for online marketplaces, with Amazon front and center. 

Background: A dog leash sold and shipped by The Furry Gang, one of the millions of small sellers that operate on Amazon’s marketplace, snapped, permanently blinding the buyer in her left eye.

Amazon is responsible for the injury, according to a 2-1 decision from Philadelphia’s Third Circuit Court of Appeals.

“Amazon’s involvement in transactions extends beyond a mere editorial function; it plays a large role in the actual sales process,” the opinion states.

Our thought bubble: This ruling challenges the company’s longtime practice of effectively outsourcing quality control to its customers and their reviews. Amazon could now be held liable for all the random things that get sold on its site.

What to watch: This isn’t just bad news for Amazon. The whole e-commerce sector — including companies like Walmart, eBay and Shopify — could come under fire.

How a faulty dog leash became a new threat for Amazon and crew

The whole e-commerce sector could come under fire.

Illustration of  a shopping cart about to slip on a banana peel.

Amazon

Big Tech

Axios Pro: Deals

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Fuel shortages amid Venezuela's ongoing economic crisis are threatening what's left of the country's agriculture industry, the New York Times reports. 

The big picture: "Venezuela is an oil-rich nation. But years of mismanagement and corruption in the oil industry, worsened by American sanctions, have dried up gasoline pumps at a crucial moment. First, the shortage prevented farmers ... from getting their produce to markets. Now, it is making it hard for them to sow new crops," the Times writes.

Why it matters: Venezuelans are already suffering widely from hunger and malnutrition as the mismanagement of its oil industry created difficult financial conditions for citizens. A thinning agriculture industry further threatens the population. 

Fedeagro, the nation's main agricultural association, is estimating that total area planted with corn and rice this year will shrink by approximately 50%.

According to a sugar cane association, the sugar output in regional-stronghold Portuguesa has fallen from 12 million tons in 2018 to 5 million tons this year. 

Maduro promised $35 million in new farming credits in May, which Fedeagro has criticized as being too small. 

As of December, only 55% of Venezuelans were eating three meals a day, according to Delphos. 

Go deeper: Trump wants increased protections for Venezuelans fleeing to U.S.

In oil-rich Venezuela, fuel shortages spark man-made famines

The nation is already struggling with malnutrition.

Venezuela

Pro Rata

Axios Pro Rata

Deutsche Bank on Sunday announced a massive restructuring that is designed to revive Germany's largest lender. 

It will exit its global equities sales and trading unit, make big cuts in its fixed income operation (particularly its rates business), and create a "bad bank" with around €74 billion ($83 billion) of risk-weighted assets.

The bottom line: This comes after Deutsche Bank failed to merge with local rival Commerzbank, and it means Deutsche is giving up (for now) on becoming a top player on Wall Street.  

Deutsche Bank announces major restructuring

Germany's largest lender is making some very big changes.

Deutsche Bank flags fly outside the bank's annual meeting.

Flags with the Deutsche Bank logo. Photo: Arne Dedert/picture alliance via Getty Images

Deutsche Bank

Michigan Rep. Justin Amash told CNN’s Jake Tapper on Sunday that he left the Republican Party due to longstanding concerns of a “pretty rigid” system in Congress.

State Of The Union With Jake Tapper-9 02 30 Am - 9 04 02 Am-2019-07-07

"I think this term in Congress has really shown how bad it can get. ... But over the years, I've seen that people are just falling in line behind the leaders, including people in my own [Freedom] caucus. which I left."

Earlier this week, President Trump attacked Amash on Twitter.

Amash waved away the criticism and said he plans on running as an independent. 

"I think he's really identified what I talked about in my op-ed which is he thinks that people owe loyalty to him. But people are elected to Congress with an oath to support and defend the constitution. Not an oath to support and defend one person, the president who happens to be from your own party."

Justin Amash: "I don’t think there is anyone in there who could change the system"

"I think this term in Congress has really shown how bad it can get."

Justin Amash

The Democratic presidential candidates have stark differences on a number of issues, but on foreign policy there are big changes they'd all be almost certain to make.

The big picture: Trump’s unusually cozy ties with Saudi Arabia and Israeli Prime Minister Benjamin Netanyahu, his warm words for Russia’s Vladimir Putin and North Korea’s Kim Jong-un, and his adversarial relationships with allies are all ripe for course corrections from day one.

On Iran, the leading Democrats are all hitting virtually the same notes. The only division on display in the debates was over whether to rejoin the Obama-era nuclear deal or negotiate an extension first.

Expect an early trip to Europe, Canada or Mexico from any Trump successor to send a signal that the U.S. stands by its allies.

Of course, the debates that have raged in U.S. foreign policy for decades — when to use military force, whether to sign on to trade deals — will continue.

Some of the candidates, Joe Biden for example, talk about building on Barack Obama’s foreign policy. Others, like Bernie Sanders, emphasize protecting workers and cutting defense spending. 

But there are a number of issues on which it's “more about flipping a switch” than establishing new policies, says Ned Price of National Security Action, a group founded by former Obama administration officials that’s advising Democratic candidates on foreign policy. He says one of those is resetting relations between the White House and the intelligence community.

Between the lines: Many countries — allies and adversaries alike — are trying to wait Trump out.

The Iranians believe they can survive under “maximum pressure” through 2020. Experts tell Axios they don’t even have a clear plan for a second term of Trump.

European leaders seem to be hedging their bets, talking more about autonomy and collective security, while quietly hoping Trump is an aberration.

Others have placed big bets on Trump. “If Trump loses, the Saudis are screwed,” one Middle Eastern diplomat tells Axios.

But, but, but: By the time Inauguration Day rolls around in 2021, it will be “too late to turn back the clock” on the most daunting challenges the U.S. faces, says Richard Haass, president of the Council on Foreign Relations. 

He says “elements of Trumpism,” possibly on trade, could carry over into the next administration. In any case, he says, the next president will be “constrained by the fact that the world has moved on.”

“Even if the next American president sends reassuring signals, rejoins this or that, there’s still now an element of doubt about U.S. policy. There’s no longer the presumption of continuity that there was, and there’s a sense in the world that if it happened once it can happen again.”

Big foreign policy changes are coming if Trump loses

Relations with Europe, Israel and the Saudis would change overnight.

Illustration of the world as a puzzle with pieces partially put together.

Foreign policy

Iran's Deputy Foreign Minister Abbas Araghchi said on Sunday the country would break within hours the limit on uranium enrichment set in the 2015 nuclear deal, BBC reports.

Details: Araghchi said Iran would start enriching uranium above the 3.67% limit to provide fuel for its Bushehr power plant, according to BBC, which reported that officials said this would mean a concentration of about 5%. 

"This is to protect the nuclear deal, not to nullify it. This is an opportunity for talks. And if our partners fail to use this opportunity they should not doubt our determination to leave the deal."

Why it matters: Iran has already admitted breaching the deal. It said last week its stockpile of low-enriched uranium crossed 300 kilograms (661 pounds) — the maximum amount it's allowed to hold under the 2015 nuclear deal, which has been in jeopardy since the U.S. withdrew from it. 

Iranian President Hassan Rouhani said last week that Tehran would start enriching uranium to "any amount we want" on July 7. 

The big picture: Araghchi told a news conference Iran would scale back other commitments in 60 days if there's no progress in talks with European countries on the nuclear deal, according to Al Jazeera.

French President Emmanuel Macron said on Saturday that France and Iran had agreed to explore by July 15 conditions to resume talks on the nuclear deal, per Euronews. 

The situation between Iran and the United States remains tense. Last month, Iran shot down a U.S. drone. Trump called off retaliatory airstrikes at the last minute.

Go deeper: How Trump and Tehran came to the brink of war

This article has been updated with more details, including fresh comment from Araghchi.  

Iran nuclear deal: Tehran announces new breach

Iran has already deliberately violated the 2015 deal.

A view of the reactor building at the Russian-built Bushehr nuclear power plant as the first fuel is loaded, on August 21, 2010 in Bushehr, southern Iran. 

The reactor building at the Bushehr nuclear power plant. Photo: IIPA via Getty Images

Iran deal

Iran

A strong U.S. economy has helped propel President Trump to his highest ever approval rating. But former Vice President Joe Biden would beat him in an election, according to an ABC News/Washington Post poll published Sunday morning.

Details: The survey of 1,008 adults finds Trump is polling competitively for re-election against 4 of 5 possible Democratic presidential candidates. However, the poll of all adults shows Biden leading by 14 points (55%-41%). Among all registered voters, Biden is ahead by 10 points (53%-43%).

By the numbers: The poll found 44% approve of Trump's overall job performance — up 5 percentage points from April and 2 points better than his peak early in his presidency. However, 53% disapprove, keeping him at majority disapproval continuously for his first 2.5 years in office — a record for any president in modern polling, the poll notes.

Trump's approval rating hits highest point, but Biden leads poll

Trump also holds majority disapproval record, ABC News/Washington Post poll shows.

Sunday's top stories