On Thursday, roughly four hours after the Wall Street Journal reported that longtime money man and Trump Organization CFO Allen Weisselberg has been subpoenaed to testify before a federal grand jury as part of the Michael Cohen criminal probe and roughly six hours before CNN reported that the same Michael Cohen is prepared to tell Robert Mueller that the President knew ahead of time about the infamous Trump Tower meeting during which his son, his son-in-law and Paul Manafort met with Russians promising political dirt on Hillary Clinton, Donald Trump showed up in Granite City, Illinois and delivered an orange-faced rant that included this description of the Obama economy:
Got that? “Thanks to tariffs”, the steel industry is great again, which is a good thing, because under Barack Obama, the “economy was going to hell”.
If you don’t remember living in a Maduro-style economic hellscape during the Obama years, that’s understandable because there’s no truth to Trump’s assertion about how bad things were before he swept into the Oval Office on a wave of populist balderdash supercharged by a Russian misinformation campaign.
Trump had a sympathetic audience in Granite City. It’s apparently one of the only places on Earth that’s actually benefitted from his protectionist push. CNN writes that his steel tariffs “helped revive a steel plant [in Granite City] that had been forced to lay off roughly 2,000 workers in 2015.”
Whatever the case, Trump’s Granite City rally came a day ahead of the second quarter GDP print, and if you were wondering whether the President is still inclined to effectively leak top tier U.S. economic data ahead of the official release like he did with the May jobs report, the answer is “yes”.
Here he is telling steel workers that “if [the growth number] has a four in front of it, we’ll be happy”:
Is it legal to leak critical, market-moving economic data ahead of the official release? No. Or at least probably not, but because there’s not a lot of precedent for U.S. presidents front-running markets on social media and/or wink-wink-ing the numbers to a bunch of steel workers in southern Illinois at a campaign rally that no one even knows why he’s holding considering he’s not even 18 months into his presidency, no one has any idea how to deal with this.
“If it was anyone but the president, you would have just gotten yourself a nice appointment with the FBI or the SEC,” former chairman of the Council of Economic Advisers Austan Goolsbee told CNBC’s “Squawk Box” early last month, after Trump essentially told the world to look forward to a better-than-expected May payrolls report.
For what it’s worth, people who didn’t already have the numbers also thought there would be “a four in front of it.” Consensus showed the U.S. economy expanding at a 4.2% annualized rate for the second quarter, in part due to the tax cuts encouraging corporations to spend.
Trump suggested on Thursday that he hadn’t seen the report ahead of time, which is of course a lie. Critical numbers are handed off to the White House a day ahead of time and the officials to whom they’re given have the “option” of informing the president about them. I don’t know about anybody else, but it seems highly likely to me that Trump has instituted an unwritten rule that makes him privy to all of this data as soon as anyone at 1600 Penn. gets their hands on it.
As it turns out, the official number (released at 8:30, as usual) is 4.1%, which is just shy of estimates. But because it “has a four in front of it”, it’s safe to say Trump is “happy”.
Remember, he didn’t know the number ahead of time, ok?
In any event, these figures aren’t sustainable. That’s not to say robust economic growth isn’t a good thing, it’s just to point out the obvious which is that what “you’re seeing” (to use a favorite Trumpism) is a sugar high from late-cycle fiscal stimulus. Once that wears off, the activity data will decelerate.
In the meantime, I suppose we should all thank Trump for this economic miracle because remember, before Trump the economy wasn’t just “going to hell”, GDP was actually negative:
“Who ever heard of this?”
Nobody, sir. Nobody.