The Outsider Perspective, Issue 20

Welcome to the 20th issue of The Outsider Perspective, brought to you by The Beltway Outsiders.

For those new this week, previous issues are up on the website. If you received this as a forward or a friend sent you a link, please sign up here and welcome aboard!

Good Friday Morning! We’re 24 days out from the General Election and the October surprises have arrived. With a vengeance. There’s a lot to cover today as both campaigns are getting hammered by bad press. But without question, Trump is bearing the brunt of the negative coverage. I’ll start out with a broad overview of the race first, before hitting the main events for Trump and Clinton. There’s a lot to cover today so let’s jump right in…

Election 2016

The State of the Race 

The overarching theme of the past week is the implosion of Trump’s campaign. I’ll dig into the stories in Trump’s section below. But the big picture is this: since last Friday, Trump’s campaign has been hit with massive negative news cycles every 48-72 hours. First it was the NYT tax return release, then the tapes, and now the accusations of sexual assault. Clinton’s campaign is leaking opposition hits on Trump with lethal accuracy. Sean Trende of RealClearPolitics had the best description:

Stu White, a good friend of mine from college who has gone on to become a military historian, brought to my attention an analogy that might be apt – the theory of how to “disintegrate” an army, by 19^th century Prussian general Carl von Clausewitz. You don’t pound the opposing force incessantly. Rather, you operate in short bursts, allowing the army time to regroup, before pounding it again. The fighting forces won’t disperse, but they can’t get their footing either; you continue this strategy until nothing is left.

That’s what I think is happening to Trump, and what I anticipate will happen for the remaining four weeks. The Clintons are masterful manipulators of the media, and I suspect that every three or four days, a new bombshell will drop, each one a bit more powerful than the last. Maybe Trump’s supporters will regroup anyway, but I suspect this strategy will be successful. If I’m wrong, we could yet see a closer race. But I don’t think that is where the smart money is right now.

The other problem for Trump is this: it keeps him off message, off-topic, and incapable of preparing a defense before the onslaught hits. For Clinton, the game is easy: she’s out of the spotlight. Which is a good thing since Wikileaks is trying to hammer her with their own October surprise. Leaking new emails from her or her campaign staff daily. The problem: Trump’s sexual adventures are far more salacious and ready-made for clickbait. Don’t snooze on the negative Clinton stories, though, they do appear to be hampering her ability to obtain terminal velocity against Trump in the polls.

Speaking of the polls, Trump has lost serious ground since the tapes have been released. From Nate Silver:

Trump now trails Clinton by 6.5 percentage points in our popular vote forecast — by comparison, he was 4.6 points back of Clinton a week ago, on Oct. 5, before the videotape or the second debate. So he’s moving in the wrong direction as time is running out. While a Trump comeback is still mathematically feasible — Trump’s 17 percent chance in the polls-plus model, as we’ve pointed out before, is the same as your chances of losing a “game” of Russian roulette — it wouldn’t really have any good precedent in recent American presidential elections.

Silver’s model is matched by the RealClearPolitics average of polls, where Trump is currently down by 6.2 points. Right now, that would place Clinton at a 2008 Obama performance. Complicating matters for Trump is that he’s completely pulled out of Virginia, ceding the state to Clinton. Trump’s team is claiming it’s just a “reallocation of resources” to North Carolina (2 point average Clinton lead right now). But reallocation this late in the election is code for: we’re losing this state. Which comes close to eliminating his path to any victory. His campaign is losing more in Pennsylvania than it is in Virginia. Clinton leads by 7.5 points in Virginia and 8.7 in Pennsylvania. Without flipping another state, Clinton holds 256 out of 270 electoral votes needed to win. Trump only holds 156. In order to win, Trump MUST win the following states outright: Florida, North Carolina, Ohio, New Hampshire, Wisconsin, Iowa, Nevada, and Arizona. He can’t afford to lose one of those states. And he’s either down or tied in most of them. His electoral path is slim to none right now. Like Silver said, it’s the odds of losing a game of Russian roulette. And Trump is down so bad, that Clinton is pushing into normal red states:

Mrs. Clinton’s campaign has concluded that at least two traditionally Republican states, Georgia and Arizona, are realistic targets for her campaign to win over. And Republican polling has found that Mr. Trump is at dire risk of losing Georgia, according to people briefed on the polls, who spoke on the condition of anonymity.

Trump is losing. Badly. Or bigly, to use a Trumpism. And Clinton is now moving to offer help to down ballot Democrats. Which is why Republicans are jumping off the Trump-train at this station. Trump may very well cost them the House AND Senate. Democrats only need 4 seats in the Senate and 30 seats in the House to flip both. The problem for Republican is that they’re losing by 7 points to Democrats on the generic ballot (asking people if they would just vote for a generic Republican or Democrat, no specific candidates). If you add a Trump’s endorsement to the generic ballot, Republicans start losing by 12 points. For those who oppose Trump, the number increases to 10 points. In other words, the mere presence of Trump at the top of the ticket is harming the GOP in polls. Poll numbers like that on a generic ballot typically indicate a large loss of seats. So what should the GOP be doing? Should they renounce? It’s hard to tell, as Sean Trende points out:

As for down-ballot Republicans, it puts them in a bind. On the one hand, it seems sensible for them to try and get out of the blast radius as best they can. This, of course, risks losing Trump voters’ support. On the other hand, as one of my friends was fond of saying in law school, “There’s no such thing as a lukewarm hell,” suggesting that since they have already attached themselves to Trump to some degree, they may as well hold on to his supporters and hope for the best. There’s no easy strategic choice for them; we’ll find out whether they make the correct one in 26 days.

Which is why House Speaker Paul Ryan is telling Republicans to do what they have to do to win. He sees a very real threat of losing the House. In 2008, when Obama won by similar numbers that Clinton has now, the GOP lost 21 seats. Democrats need 30 seats to retake the House. The one solace Republicans can take from the polls is this: Democrats are lagging behind Clinton and not getting much of a boost from her. There isn’t a sign of being able to ride coattails.

The long and short of the race is this: Republicans need Trump to become disciplined Trump, get out of the spotlight, and avoid any more nukes. This would allow them to regroup and push themselves over the finish line. But it doesn’t look like that will happen. Which means, the only way for Trump to win the race is a miracle: 1) A miracle where the polls are massively wrong for a historic miss, 2) Voter turnout is so low that Clinton voters simply don’t show up and Trump’s small base is able to have an impact, or 3) Clinton’s campaign gets an October surprise so harmful it implodes her campaign, causing a negative news cycle she can’t climb out of and allows Trump to climb up. It may take some combination of those 3 things or all of the combined. It’s a long shot. This is the equivalent of the Cleveland Cavaliers coming back from down 1-3 in the NBA Finals to win in 7 games. It’s possible, but highly unlikely. And Donald Trump is not LeBron James.

The race isn’t over. But the outlook is grim for Trump. If he can’t stem the damage, we’ll be talking about whether Clinton can carry Arizona, Georgia, and Texas before long.

Donald J. Trump’s no-good, very bad week of implosion and infamy 

What a difference a week makes. When I wrote this newsletter this time last week, Trump was getting ready for the debate and the only major news story bothering him was the New York Times story on his taxes from the 1990’s. Since then, he’s been hit by the some of the hardest October surprises in electoral history. Video tapes surfaced from 2005 where Trump, talking with then Access Hollywood host Billy Bush, talked “lewdly” about women. Those tapes ignited a firestorm of controversy. Trump’s campaign pitched as “locker room talk” and “machoism.” Republicans everywhere began jumping off the ship, condemning Trump and demanding he step aside from the ticket. That firestorm culminated in the debate where the moderators set the trap for Trump. The key section was this exchange between Trump and CNN anchor Anderson Cooper at the start of the second debate:

Cooper: For the record, are you saying that what you said on the bus 11 years ago, that you did not actually kiss women without consent or grope women without consent?
Trump: I have great respect for women. Nobody has more respect for women than I do.
Cooper: So for the record, you’re saying you never did that?
Trump: Frankly, you hear these things. They are said. And I was am embarrassed by it. But I have respect for women–
Cooper: — Have you ever done those things?
Trump: — And they have respect for me. And I will tell you, no I have not…

After Trump finished his remarks here, they moved on to Clinton. The hook was set. Trump claimed it was only words, nothing ever happened. It was a purposeful job to hit this exact point. Trump evaded the first few times, but Cooper specifically waited until he had a yes or no before moving on. Two days later, the New York Times, People Magazine, and other news sites chronicled the stories of multiple women who all claimed the same thing: Donald Trump physically or sexually assaulted them. Trump denied all the allegations and claims he has “evidence of his innocence” which he will release “at the appropriate time.” Trump also responded with a strongly worded, but empty, letter telling the NYT to pull their story or he’d sue them.

As to whether or not the new allegations will sink his campaign, only time will tell. Nate Silver offered his analysis of it here. I’m not going to add much to what he said because we’re still waiting on sufficient polls to inform us of how the first tapes and last debate will affect the race (polls start coming out Friday – Sunday). I’ve argued on social media this will hurt him, and he’ll likely be down in the averages 7-9 points. Clinton and Democrats have a blueprint for attacking Trump, and they’re running it to perfection.

First, they goad him into a fight. Prior to the tape revelations, there was a consistent back and forth fight over whether or not Trump was going to attack the Clinton’s on Bill’s extramarital affairs. Part of the goading came from the Clinton camp where they half-heartedly said it was bad style. Trump took the bait and went full throttle at that exact point. Instead of staying on message, he charged ahead like a bull charging a matador.

Second, they hit Trump with the real punch. When he charged after Bill’s infidelities, that’s when he was hammered by the tapes. They finished him off by goading him into saying it was only words at the debate, as I pointed out above. Then hammered him with real accusations. Trump is left reeling, off-message, and in complete disarray. The GOP is aghast and jumping ship as a result. The Clinton’s never look like they started a fight, the only finished it.

Third, the Clinton’s let Trump take the full media spotlight. The person in the media spotlight of this election has consistently lost in the polls. Trump’s stupidity in this regard has allowed the Clintons to get by while the Wikileaks revelations hit.

So where are we headed now? We’ve already seen a few signals for the next attacks. I’m not convinced Trump or his campaign is ready. He expressly forbade his campaign from investigating his past to know what sins they would face. So his staff is flying blind. But there are hints. First, there are multiple, unsubstantiated rumors on social media that videos exist of Trump uttering the “N” word. No one has come forward. Which suggests this was the Clinton campaign putting out feelers to suggest areas of investigation for journalists (think Clinton operatives sending out feelers in 2007 on Obama’s birth certificate). And there is smoke to investigate. We know Trump was sued for denying housing to blacks. And Kamie Crawford, a black pageant contestant, tweeted that Trump assaulted women and made derogatory remarks towards black contestants. The long and short of it: no one will be surprised or question if a tape appears showing Trump saying something bad towards blacks or other minorities.

Second, Reuters posted a story about how Trump’s employees are not donating to his campaign. Expect Trump to get questioned about it soon. And if he says anything about treating employees well, the next hit will be about how he mistreats his employees and bullies them into staying quiet.

Third, the White House made an odd announcement. After First Lady Michelle Obama gave a speech condemning and attacking Trump for his remarks on women, the White House said: “I can’t think of a bolder way for Donald Trump to lose even more standing than he already has than by engaging the first lady of the United States.” Code for: “Please attack FLOTUS, Donald! Please!” The First Lady is one of the most popular people in the country. Defending herself from Trump’s misogyny would only elevate her further and harm Trump.

There are likely other examples. But these jump out to me as obvious areas Clinton is trying to goad Trump into a losing fight. Trump takes all the damage in these fights and gains nothing. The question will be: which one of these hits will they run just prior to the debate, so he’s forced to answer questions again? I’d be surprised if they stuck with the sexual assault attack line. I’d expect another line of attack. The debate is next Wednesday. We’ll likely know the next scandal on Sunday or Monday. To allow an appropriate amount of time for outrage. And if you don’t believe the media would hold a story for the Clinton’s, look at the flack NBC is getting for holding back on the story before being scooped by the Washington Post. NBC knew about the story during the Olympics.

Trump needs to be disciplined and avoid the fights. But after declaring that he was “free of shackles,” it doesn’t seem likely Trump plans to miss any fight ahead. Especially since his stated goal now is to turn Bill Clinton into Bill Cosby. And a mountain of evidence says that is a bad idea.

Clinton’s low key, no-good, kinda bad week where she’d implode if she faced anyone but Trump

Wikileaks is doing what many predicted back in the spring: releasing Clinton emails in October, trying to harm her campaign. Right off the bat, you have to understand one thing about these leaks: They’re coming from Wikileaks. An organization which is acting almost assuredly as a front for Russian intelligence.

As much as I’d love to believe all of the negative attacks in these leaks regarding the Clintons, I have to keep in mind: the Russians are world renowned for sowing disinformation, forging faking documents to go with the real, and bringing down countries with propaganda campaigns. So when you’re reading about these leaks, never trust anything from a Russian source like RT (Russia Today). In fact, RT was posting full stories for Wikileaks before Wikileaks even posted the “source material.” Which suggests very heavily that Russian intelligence is behind these “leaks.” We won’t know the truth or veracity of the emails for some time. Unlike the emails released by the FBI/State Department, which had been vetted.

That said, Clinton has been taking hits from these leaks. Not helping matters is the revelation that career employees of the FBI and DOJ railed against the FBI’s decision not to indict Clinton:

The decision to let Hillary Clinton off the hook for mishandling classified information has roiled the FBI and Department of Justice, with one person closely involved in the year-long probe telling FoxNews.com that career agents and attorneys on the case unanimously believed the Democratic presidential nominee should have been charged.

The source, who spoke to FoxNews.com on the condition of anonymity, said FBI Director James Comey’s dramatic July 5 announcement that he would not recommend to the Attorney General’s office that the former secretary of state be charged left members of the investigative team dismayed and disgusted. More than 100 FBI agents and analysts worked around the clock with six attorneys from the DOJ’s National Security Division, Counter Espionage Section, to investigate the case.

“No trial level attorney agreed, no agent working the case agreed, with the decision not to prosecute — it was a top-down decision,” said the source, whose identity and role in the case has been verified by FoxNews.com.

A high-ranking FBI official told Fox News that while it might not have been a unanimous decision, “It was unanimous that we all wanted her [Clinton’s] security clearance yanked.”

“It is safe to say the vast majority felt she should be prosecuted,” the senior FBI official told Fox News. “We were floored while listening to the FBI briefing because Comey laid it all out, and then said ‘but we are doing nothing,’ which made no sense to us.”

I wrote at the time it was a travesty of justice. And nothing released since then has changed my mind. If anyone else had done what Clinton did with classified information, they would be sitting in a jail cell. The trial would have been quick. Which is one reasons why polls continue to show people have trust issues with Clinton. But until Trump can manage to focus the spotlight on her, none of this will matter.

Evan McMullin receives a big boost in the polls 

Evan McMullin has made a mark in Utah, pulling within a statistical tie with Trump and Clinton in the state:

And along with the billionaire businessman’s sudden fall, independent candidate and BYU graduate Evan McMullin surged into a statistical tie with the two major party presidential nominees, according to survey conducted Monday and Tuesday by Salt Lake City-based Y2 Analytics.

“A third-party candidate could win Utah as Utahns settle on one,” said Quin Monson, Y2 Analytics founding partner.

McMullin may well have caught lightning in a bottle.

The poll shows Clinton and Trump tied at 26 percent, McMullin with 22 percent and Libertarian Gary Johnson getting 14 percent if the election were held today.

A Monmouth University poll confirmed roughly the same numbers. It is not impossible for McMullin to win the electoral votes of Utah. He’s already in touch with the state leaders of Utah, almost all of which have called for Trump to step aside:

But this is McMullin’s moment, and his team is hoping to consolidate state GOP support.

“We’re talking to pretty much all of the key leaders in Utah,” McMullin campaign chief strategist Joel Searby said. “We have had direct communication with every leader in Utah who has either not supported Trump previously or has since unendorsed Trump. Every single one.”

McMullin hasn’t yet been endorsed by any of those elected Utah Republicans, but multiple strategists and operatives in the state said that they could come out in support of the conservative long shot in the coming days.

McMullin’s campaign is also pushing Mitt Romney for an endorsement, in order to move more voters towards McMullin. It’s more evidence a third party can do damage in a year like this one. If McMullin can win electors, it would be the first time since 1968 (Richard Nixon (R) v. Hubert Humphrey (D) v. George Wallace (I)), a third party won delegates (Wallace won 46 delegates). Ross Perot won a large chunk of the vote in the 1990’s, but never won an electoral vote. And Utah might just be enough to swing the election for McMullin…

Links for your radar 

• Chris Christie is under criminal investigation for his role in “BridgeGate” – The Daily Beast
• Leaked emails show that Trump was a tool of the Clinton campaign two months before Trump ever jumped into the race. – RedState
• Here’s what will happen in the GOP IF Trump loses – Nothing. – The Federalist
• Viral piece: A Conservative Woman on the Moral Collapse of a Trump-Excusing GOP. – The Weekly Standard
• Where do Trump and Clinton have the biggest upsides in winning voters? Not where you think. Trump’s gains are almost all in the northern states with major gains among non-college educated whites. Clinton wins all other groups. – FiveThirtyEight Interactive County Map
• If Clinton’s campaign wasn’t facing Trump right now… it’d be imploding – The Daily Wire
• Florida’s GOP has only registered 117 new voters in the past month. Democrats have registered nearly 7,000. Trump’s ground game is not looking good in the home stretch. – Election Smith
• Clinton aides / media believe she is totally dependent on GOP running Trump. Would lose to any other candidate. – HeatStreet
• RNC has spent $0 in TV ads for Trump. – Politico
• If Donald Trump has done one thing, it is to snuff out the Religious Right. – Russell Moore
• The Evangelical Civil War: Division in the age of Trump. – Bloomberg

Foreign Policy 

The mountain of information to weed through the election this week has made writing about foreign policy more difficult than normal. However, I recommend the following pieces. They should help keep you abreast of current events and what to keep on your radar internationally:

• The New Cold War is upon us: From propaganda to missile deployments, Russian leader Vladimir Putin is testing Obama’s resolve—while claiming to be America’s victim. – The Daily Beast
• America’s Hot proxy war with Iran: How the Iranians are attacking American forces and allies. – Commentary
• Rethinking Iraq: We’re having the wrong conversation on Iraq. We need to stop calling the Iraq War a mistake. That statement obfuscates our purposes there now and our long term interests. We’re in Iraq. We need to fix the problem. Not pretend it doesn’t exist and allow it to fester. – Task & Purpose
• A window of opportunity is closing in the Ukraine: What the US needs to do in the near future to bring change to Ukrainians. – RealClearDefense
• The Taliban surge in Afghanistan: Obama is about to lose the Afghani city he staked his legacy on in 2009. – The Daily Caller
• The Taliban ambushed an Afghani military group, killing nearly 100 soldiers and police. – Reuters
• The Military is investigating an Air Force drone base hit that’s being hit with “mysterious” outages to its highly classified systems. – BuzzFeed News
• Obama and Clinton have the same plans and strategy for attacking ISIS. – The Daily Caller
• The White House says Russia is responsible for recent hacks on US. The US will retaliate in kind, but the public likely will never know the results of those hacks. – CNN

Economy

The Pre-Election Jobs Report – 156,000 new jobs added

156,000 new jobs were added to the economy in September. This is down from the expected 172,000 jobs expected by economists. 156,000 is average and tells us little of the current economic situation. Like most economic indicators right now, we’re all waiting for the results of the election and whether or not the Federal Reserve will hike interest rates in December. Which means this is a quiet jobs report.

If you look at a secondary measure of the jobs market, the JOLTS report, you’d find that nearly 3 million people quit their job in August. The JOLTS report measures the number of people quitting their job voluntarily for a better position elsewhere. Voluntarily quitting a job is seen as a positive economic indicator. People who do that typically have a second job lined up. And the 3 million figure was the second largest jump in that number we’ve seen since the recession.

The combination of these two jobs reports, a mild in boost in wages, and President Obama’s approval ratings above 50% would favor Clinton winning the election. Most economic models use gauges like these to estimate which party will win.

The Federal Reserve is having an intense fight over interest rates

The FED released the minutes of its most recent meeting where they discussed the decision to not raise interest rates. The hawks, those wanting to raise rates, are becoming increasingly loud and concerned about leaving rates low while unemployment is low. El-Erian went so far as to call the FED: “Divided against itself.” The hawks point to history:

At an unusually divisive Federal Open Market Committee meeting in September, hawkish members said history holds a worrisome lesson for a central bank that has kept a historically accommodative monetary policy in place for the past eight years. 

“A few participants referred to historical episodes when the unemployment rate appeared to have fallen well below its estimated longer-run normal level. They observed that monetary tightening in those episodes typically had been followed by recession and a large increase in the unemployment rate,” said a summary of the meeting released Wednesday. 

The worry is that if the Fed waits too long, it could be forced into having to raise rates aggressively to slow the economy.

I hold a similar position to these hawks. I would modify the concern slightly though. My concern is that in the event of a recession, the FED would lack the tools necessary to fight a recession in the event of a deadlocked Congress. Having low interest rates while hitting a recession is part of the formula of the previous recession. The housing bubble was, in part, caused by cheap credit created by the FED. It was a bubble fueled by cheap credit. Any cheap credit bubbles created by the FED in this instance would pop in a recession.

December appears to be when a rate hike will happen. But even this hike would be minuscule, no more than a quarter of a percent hike. Most economists expect a recession in the next 12-18 months. Particularly once we get past this election. Which means the hawks fear of the US being caught in a recession with low interest rates seems highly likely.

Links for your radar

• Haim Saban, the head of Univision and billionaire donor to Clinton, has $10 million on Clinton becoming President. – Bloomberg
• America’s next great metropolis is taking place in Texas. – Forbes
• A Fed Divided Against Itself: Reading the new FED minutes for guidance. – Bloomberg View
• Dissent at the FED: Hawks warn Yellen is risking recession. – Fortune
• When will the fundamentals matter again? The FED’s easy money policies are revealing a dark future. – TCW
• The Connectivity of Hip-Hop’s Entrepreneurial System. – Kauffmann Research

What I’m reading

“Believe it or not: The New York Times has quietly returned to its ‘Jesus is dead’ theme” –  GetReligion

The New York Times recently started referring, in small editorial ways, to Jesus and Christianity in ways that imply Christ is dead. This may seem small when you see the examples, but when it emerges as a trend of reporting, it stands out. GetReligion provides the context and explanation on how the specific phrasing and descriptions the NYT uses is a purposeful slight against Christianity. They do not use the same tact with other religions. Only Christianity.

Quote of the week

They are slaves whose fear to speak
For the fallen and the weak;
They are slaves who will not choose
Hatred, scoffing, and abuse,
Rather than in silence shrink
From the truth they needs must think;
They are slaves who dare not be
In the right with two or three.