Morning Joe - Morning Joe 7/29/22

Episode Date: July 29, 2022

Jan. 6 texts missing for Trump Homeland Security’s Wolf and Cuccinelli: WaPo

Look, I've been coming down here a long time, and I'm used to the lies, and I'm used to the deception, and I'm used to the cowardice, and I'm used to the hypocrisy. But what I am not used to is the casual cruelty. So all these folks here that have been working for a decade or more to help veterans who are sick and dying finally had an exhale moment, finally got to breathe easy for a moment. And that's what they pulled out from them. Jon Stewart sounding off on Senate Republicans after they blocked a bipartisan bill aimed at expanding health benefits to veterans exposed to toxins in war zones.

The question this morning is, why did 25 Republicans who supported a previous version of the bill change their votes to no? Stewart, who is an outspoken advocate for military veterans, will join us a little bit later this morning. We're also following new developments from the January 6th committee, top aides and cabinet members to former President Donald Trump

testifying behind closed doors, including one official who resigned the day after the attack. We'll tell you who that is. And more text messages from the time of the attack disappear. First from the Secret Service, now the Washington Post reporting texts between members of Trump's Homeland Security team, the leadership there, are missing as well. Good morning. Welcome to Morning Joe. It is Friday, July 29th. I'm Willie Geist. With us, we've got the host of Way Too Early, White House Bureau Chief at Politico, and the author of The Big Lie, Jonathan Lemire. MSNBC contributor Mike Barnicle is with us, and the President of the Council on Foreign Relations, Richard Haass. Gentlemen, good morning to you all. Let us begin with those text

messages from the leaders of former President Trump's Homeland Security Department from around the time of the Capitol attack that have been deleted. According to the Washington Post, the lost messages are from both Acting Homeland Security Secretary Chad Wolf and Acting Deputy Secretary Ken Cuccinelli. The Post reporting this, quote, The Department of Homeland Security notified the agency's inspector general in late February that Wolf said Cuccinelli's texts were lost in a reset of their government phones when they left their jobs in January of 2021. The Office of Inspector General Joseph Khafari did not press the department leadership at that time to explain why they did not preserve these records, nor seek ways to recover the lost

data. That's according to the four people briefed on the watchdog's actions. The IG also failed to alert Congress to the potential destruction of government records. This comes, of course, after we learn the Secret Service deleted texts from the day before and the day of the insurrection. So, Jonathan Lemire, the more we hear, the worse this gets. It's not just the Secret Service. It's not just a few guys at Homeland Security. It's the leadership of Homeland Security who conveniently, much like the Secret Service, went through some kind of a upgrade that apparently deleted the text that may be now lost to time. Nothing suspicious about this at all, Willie. No, it is. It just adds to

the growing belief that there is a cover up in government, whether it's the Secret Service, Homeland Security, about what happened around January 6th. These text messages, of course, would provide useful, really useful information to investigators, not just the January 6th committee, but of course, the Department of Justice as they piece together exactly what happened that day, exactly what the former president's response was that day. Was there coordination to try to get any sort of law enforcement or military presence there? We heard from the then defense secretary in testimony released just this week that Trump, of course, despite his lies, did not send the National Guard there. In fact, it was the vice

president having to do so. And it just it just looks bad for this government to seemingly trying to cover its tracks for what happened that day. Richard Haass, you worked in the government. You're supposed to preserve records even on normal days, even on boring days, even on January 4th. You're certainly supposed to on January 6th. Obviously, you know, government is nothing if not, what's the word, protective of its communications. When you work at the White House, so you have any interaction with the president in particular, you know, when you, I remember when I, when you leave government, everything you have, you know, gets filed, sent. One, you owe it to history, short of lawyer. And most people in government, by the way, are not involved in legal investigations but this is this is the historical record and you owe it to history you owe it to your successors

but this is obviously different people were all put on notice they knew that something shall win this was not an ordinary january 6th so the idea that things were casually lost by recess is preposterous it simply doesn't pass at the credulity test. You know, Willie, it's also kind of a metaphor for the entire administration that is out of office now, the Trump administration, in the terms of the destruction of elements of government that they cared not a whit for. So all the text messages are gone. They've been destroyed. Homeland Security, the head of Homeland Security, his assistant, their text messages are gone. But Richard used to work in the State Department, and the State Department was gutted substantially during the four years. Other departments were

gutted. The functions of government were destroyed. So it's an apt metaphor and a disturbing metaphor for what happened during the course of four years, but especially the week of January 6th. It is interesting to note that Chad Wolf actually left. He resigned about five days after the attack on the Capitol, the acting head of DHS, and was critical of Donald Trump around that time in January, right when Donald Trump was leaving office, leaving Washington. So it'd be interesting to know what was going on on his phone in those days around January 6th. We're going to talk to Carol Lennig of The Washington Post, who broke this story coming up in just a little bit here on Morning Joe. Meanwhile, the Saudi-funded Live Golf Tour is teeing off its second U.S.-based tournament this morning at Trump National Golf Club in Bedminster, New Jersey, playing

at a pro-am event on the course yesterday. Former President Donald Trump responded to criticism from families of September 11th victims who are urging Americans to protest the tournament. Former president defended his decision to host the event by casting doubt on any connection between Saudi Arabia and the 9-11 attacks. I've known these people for a long time in Saudi Arabia, and they've been friends of mine for a long time. Nobody's gotten to the bottom of 9-11, unfortunately, and they should have, as to the maniacs that

did that horrible thing to our city, to our country, to the world. So nobody's really been there. But I can tell you that there are a lot of really great people that are out here today and we're going to have a lot of fun and we're going to celebrate. Nobody's gotten to the bottom of 9-11, says the former president of the United States. We do know, of course, that 15 of the 19 hijackers on September 11th were Saudi nationals. Richard Haass, just listening to that, it's what Donald Trump does. Let me cast some doubt where it benefits me in some way. Let me plant the seeds or at least allude to conspiracy theories of some kind, even about 9-11. What were your thoughts as you heard

that yesterday? Oh, I had a lot of thoughts when I heard that yesterday. Well, for the 9-11 families, I would think they would be outraged. They were already unhappy about the LIV golf tour playing at Bedminster for their reasons, because they blame Saudi Arabia, even though there's not evidence of Saudi government. Official, if this was, you know, we had a commission last time. Remember the 9-11 commission looked into this. Osama bin Laden. We know what happened out of Afghanistan. Last I checked, we had a war that we removed the government of Afghanistan because they

were providing territory and support to these people who carried out this attack. Yes, the preponderance of whom were Saudi nationalists. But we know what happened. What the president's trying to do is justify the fact that he's gotten into bed with this golf tour that is funded by the sovereign wealth fund of Saudi Arabia. So this was a self-serving thing about his relationship with Saudi Arabia. But if I were the 9-11 families, I would not have taken well to this. Now, we know the former president, never critical of anyone who supports him. And at this point, as you point out, he and the Saudis there are very tight. We know that after September 11th, his initial reaction was when he called

for a radio interview was to note that his building now was the tallest in lower Manhattan after the Twin Towers fell. We also know that he lied that day about seeing what he claimed were a group of Muslims celebrating in New Jersey for the towers falling. And Mike Barnicle, I mean, we do know what happened on September 11th. But even if there had been any doubt, he was president for four years. He could have looked into it. He chose not to. This is clearly just another example of him not caring about who he hurts, including the families that were there protesting that tournament, as long as he could try to deflect any sort of blame. You know, Jonathan, to Willie's question posed to Richard, what were you thinking when you just heard that, that clip that we just played?

I thought immediately, not for the first time, we were lucky to survive four years of him in the White House. We are lucky to be where we are today. And we're not in great shape today. Thank God for Joe Biden for beating him. But this man on the verge of perhaps again running for the presidency of the United States, people really should stop and think about this. Think about him. Think about exactly what you just said. Everything is about him. Everything he says even today is

about him. About how he's been attacked, he's been vilified. The most vilified person in the history of the United States of America. Everything revolves around him. He is the first occupant of that oval-shaped office who thought that he was bigger than the office. Everybody else had this knowledge and the self-awareness that they were temporary custodians of a sacred, historical, national democratic trust. He is the one outlier. And yet always a victim, even to this day, as he watches the January 6th committee do its work. We'll come back to the story in just a bit. Again, that golf tournament, the live golf tournament gets underway in just a

few hours at Trump's Bedminster course in New Jersey. Back on Capitol Hill, Senate Democrats are racing against the clock now to pass that wide-ranging spending bill through the process of reconciliation. Just about a week to go before Congress leaves for a month-long recess. A source says Senate Majority Leader Chuck Schumer called on his caucus to stick together during a closed door meeting yesterday. The majority leader says he plans to bring Inflation Reduction Act of 2022 package to the Senate floor for a vote next week. And despite the timeline, Democrats are expressing some cautious optimism about its chances of moving forward. That includes President Biden, who had this to say at the White House yesterday. I know it can be sometimes seem like nothing gets done in Washington. I know it never crossed any of your minds, but the work of the government can be slow and frustrating and sometimes even infuriating.

Then the hard work of hours and days and months from people who refuse to give up pays off. History is made. Lives are changed. With this legislation, we're facing up to some of our biggest problems and we're taking a giant step forward as a nation. My message to Congress is this. This is the strongest bill you can pass to lower inflation, cut the deficit,

reduce health care costs, tackle the climate crisis, and promote energy security. The bill, as we told you yesterday, facing criticism already from Republicans. Senator John Barrasso of Wyoming called the bill, quote, nothing short of an attack on the American family. And a member of the Senate Finance Committee, Chuck Grassley of Iowa, had this to say. That's not the time to increase taxes or spending. It's going to feed the fires of inflation. And this administration has a terrible economic policy. Senator Susan Collins of Maine, meanwhile, reportedly believes the bill may compromise efforts in the push to gather support in the Republican Party to codify same-sex marriage.

Let's bring in Heather McGee. She's a political strategist and board chair at the nonprofit civil rights advocacy group Color of Change. She also is the author of the bestselling book titled The Sum of Us, What Racism Costs Everyone and How We Can Prosper Together. And she's out with a new podcast series now by the same name. We will get to that in just a moment. Heather, good morning. It's great to see you. Congratulations on the podcast. Let's talk about this reconciliation bill that surprised a lot of people a couple of days ago when the news broke that Chuck Schumer and Joe Manchin had been sort of huddling together for a couple of weeks to get this done. What's inside it that you like?

And do you have any concerns that it will get through even with reconciliation? Thank you. It's great to be with you. This is really something to celebrate for members of all of the American community to celebrate because we are dealing with some of the greatest threats of our time. We're dealing with inflation. We're dealing with rising health care costs and the fact that we can't right now use the government's power and our collective power to negotiate to drive a bargain on prescription drug prices. This is going to be great for seniors and people with chronic disease. And most importantly, this is what the next few generations need to buy some time

on global climate change. We are already seeing the worst impacts at our front doorstep. And if we didn't act in this administration with a trifecta of Democratic support in Congress, it would be a stain on the party and on this generation of leaders. And so I'm glad to see Joe Manchin come to his senses, recognize that, you know, we've got flooding and wildfires and record temperatures. Our infrastructure is not ready for climate change. And this is the biggest congressional act on climate that we have ever seen. And it's not as big as the original Build Back Better, the American Jobs, the American Families Plan. There's a lot that's not in there. But if we were going to try to go into the midterms as Democrats without anything

done on these big threats, on the economy, on health care and on climate, it would not have been pretty. Manchin on board, eyes now turning to Senator Kyrsten Sinema, the White House officials I spoke to yesterday, cautiously optimistic that she will come on board, although she seems to pride herself on being an enigma and has yet to comment to this point. But Heather, to your point, this is certainly gives Democrats a real boost heading into the midterms. But it also may change how we all view to this point the presidency of Joe Biden. I mean, I have always thought that this president who inherited the mess, as often Democrats do when they inherit the White House from Republicans, did an extraordinary amount. Like we often don't talk about the fact that the U.S. poverty rate hit the lowest level on record

in the first year of the Biden administration, in large part due to the reforms in the American Rescue Plan, which did not have any Republican support, which lowered child poverty to the lowest level it's been on record, provided millions of American families with relief on housing, on student debt, on health care. The biggest costs in Americans' life were tackled by the administration's efforts. And then the problem of inflation, which is a problem that I think is driven by a mix of corporate greed, the supply chain issues, and what is going on in the macro economy globally, you know, caught up. This here now is going to be a way for us to finally make the wealthiest Americans and the biggest corporations that have been profiting on all of Americans' investments,

all of our workers and our people and our customers, without giving anything back to the nation that makes their success possible. Say, you know what, you're in this country too, with a minimum tax on corporations, making some of the wealthiest traders pay more in taxes than they do now, which is often less than their secretaries and nannies and janitors and gardeners. So this is a really important articulation of what the Democratic Party stands for, who their side they're on and who they're willing to make pay to be a part of the American community. John, let me turn your question, excuse me, to Heather, back to you. Your new piece in Politico, share a byline that you say, Joe Biden is back in the game. He's on the brink of turning this around. Obviously, his approval numbers are still low. His party faces big headwinds going into the midterms this

fall. But just this week, these two pieces of legislation, if the reconciliation bill does go through and then make its way to his desk for signature, these would be landmark for him in his administration in these first two years. Yeah, and it was just about a year ago, Willie, that things started to go south for the Biden administration. The withdrawal from Afghanistan and then this Delta variant surge sort of threw them off their game. And they've struggled to regain their footing since beyond the bipartisan infrastructure deal, which we should note is certainly a significant achievement. And there are still decisions on the horizon. The president has to figure out what he's going to do about student loans. The president and his

team has come under immense pressure to try to expand abortion rights in the aftermath of the Roe v. Wade overturn. Of course, we know inflation remains high and he's got forced policy challenges as well. But White House officials I spoke to yesterday for this piece, cautiously optimistic that things are about to turn around. They feel like this could give his presidency and also the party some real momentum in in before November and also revealing some strategy to this point. The White House pretty, pretty hands off. They let Manchin and Schumer broker this deal, though, of course, they were in frequent contact with Chuck Schumer, Mike Barnicle. But they also know the president looms if needed. If it's Kyrsten Sinema or some other potential hiccup arrives at the 11th hour, President Biden, certainly no stranger to the Senate, can step in and act as the closer.

You know, Jonathan, this is something you know and you've written about it and you wrote about it in some Politico today. There's one job in this country, one job that's 24 hours, seven days a week, and it's the presidency of the United States of America. And Joe Biden does the job sometimes to no acclaim, sometimes to very little notice. This is one of those situations. He knew, I assume, I'm told that the Manchin-Schumer negotiations were going on. He knew, I assume, I'm told, that the Manchin-Schumer negotiations were going on. He knew about them all the way along. He knows that every day when he gets up that there's going to be something on the desk having to do either with China or something that happens in Evansville, Indiana. There's

something every single day. He doesn't get a lot of publicity for it, nor does he seek a lot of publicity for it. Maybe that's part of the problem, the communications in this administration. But Richard, the nature of the job, you've been close to the presidency. The nature of the job is so all consuming that eventually I think you must accept the hits that you take every day with regard to the economy. And you sort of say, how come I didn't get credit for helping with the Manchin-Schumer stuff, which he did? It's one of the ironies of the presidency. You often get credit for things that you don't deserve. You often get blamed for things you don't deserve. Stuff happens on your watch. People assume,

rightly or wrongly, that it's your doing. But I do think all things being equal, this is probably the best stretch for the Biden administration. You're beginning to see some domestic political victories. It's also a pretty good stretch for American politics. In addition to what I think is the positive message of the January 6th committee, we're actually seeing a degree, shockingly enough, of bipartisanship. We're seeing some legislation passed, amazingly enough. Foreign policy, we got bipartisan support for the policy towards Russia and Ukraine, which is really impressive. A significant, I believe so far, foreign policy accomplishment for this administration. So again, it's a couple of weeks stretch or whatever, a couple of months. But all things meek, I think this has been the best phase for this president and this administration.

Heather, before we let you go, I want to ask you about the podcast, The Sum of Us. It debuted this week on Spotify, a nine-part series with the same title as your book. And you went out on the road. You went on a road trip. I did notice you got the endorsement of a former president of the United States, Barack Obama, who likes your podcast. Congrats on that. But what did you find when you went out on the road uh you know i think most people's experience is the conversation out in america when you go out and actually sit and talk with people and listen to them and hear about their lives is unlike what you see on twitter for example or or other places which is that people are living their

lives with each other and and trying in good faith to figure it all out no i made the some of us podcast with Higher Ground, with Futuro Studios, an incredible team, because I needed a shot of hope, right? You know, I, after writing the book The Some of Us about the cost of racism to everyone, ended it on a hopeful note that if we come together across lines of race, we can actually gain the power we need to take on powerful interests and win on the fights that unite us. And that was an idea. I had a few examples, but as I promoted the book, that was the number one question people asked me was, how can we attain that solidarity dividend, which is what I call it? And how can you still have

hope? And so I said, you know what, let me get back on the road again. And this series is a documentary series. It's all new stories. There's only one that actually overlaps with the book. And it's stories of people in unlikely places crossing cultural, political, racial, and ethnic divides in order to win in their communities on big issues, clean air and water, abortion rights, housing, health care, the things that really, really matter to American families. And it's not always leading the news. And these are heroes that you don't usually hear about in politics. But they are rolling up their sleeves, linking up arms and getting stuff done for their neighbors.

It's a truly hopeful series. And I hope everybody hopeful series. And, and I hope everybody likes it. Well, people are really going to enjoy it. The first two episodes of the podcast, the sum of us are available now streaming on Spotify, Heather McGee, always great to have you on the show.

Thanks for being here this morning. We appreciate it. Still ahead on morning, Joe. I'm used to all of it, but I am not used to the cruelty. They lived up to their oath. And yesterday they spit on it in abject cruelty.

These people thought they could finally breathe. You think their struggles end because the PACT Act passes? All it means is they don't have to side between their cancer drugs and their house. Their struggle continues. John Stewart will be our guest this morning following his blistering takedown of the United States Senate after Republicans blocked passage of a bill providing aid to veterans who were exposed to toxins. We'll talk to Jon in just a bit. Plus, the warning Chinese President Xi reportedly made to President Biden over Speaker Nancy Pelosi's potential trip to Taiwan. We'll talk to Richard Haass about that and more when Morning

Joe comes right back. President Biden spoke with Chinese President Xi yesterday in a call that lasted for more than two hours. Among other issues, the two discussed Taiwan, a contentious topic, of course, that lately has strained the relationship between the two countries. According to the White House, President Biden emphasized the United States, quote, strongly opposes any efforts to change the status quo or undermine peace and stability across Taiwan. China, however, took a tougher stand in a statement released after the call. The Chinese ministry said Xi made it clear that Beijing firmly opposes, quote, interference by external forces. The statement also read this way. Those who play with fire

will perish by it. It is hoped the U.S. will be clear eyed about this. Meanwhile, the AP reports Biden and Xi also are exploring an in-person meeting at a date in the near future. So, Richard Haass, we don't know a lot of the details about what happened on this call. You've been in the room for these kind of high-level meetings and phone calls before. But the question of Taiwan at the center of this and the potential for a visit by Speaker Nancy Pelosi obviously inflaming things a bit. Yeah, but actually, if there's any inflaming going on, it's coming from China's side. There's nothing new in our policy. We have said time and time again, the president said it yesterday, we stand by the one China policy.

We do not favor Taiwan's independence. The speaker of the House has made clear she's not going to Taiwan to fan independence. Polls on Taiwan show there's no big push for independence. So let's get real here. Xi Jinping has all sorts of economic problems. He wants an unprecedented third term to be greenlighted this fall when the party meets. He wants to attract, you know, distract attention away from China's economy. Maybe he thinks, you know, we're distracted by Ukraine or our internal things. This, you know,

I don't know how to say wag the dog in Mandarin, Willie, but that's what this is about. This is a self-generated for domestic political consumption crisis. And I don't think, you know, again, we can debate the wisdom of the speaker going. She's not the first speaker to go to China. Newt Gingrich went. Cabinet officials go all the time. Again, this is taking place within the context of existing policy. So I really think this is much more about Chinese domestic politics than it is about American foreign policy. So spell that out a little internally in China. What are his specific issues? What is the specific problems that he's dealing with on an everyday basis? Well, first of all, he wants an unprecedented third term. That itself is a change with Chinese constitutional and political tradition.

He's got problems with COVID. He still hasn't come up with a formula because China doesn't have a vaccine that works. Why not? Well, because they won't use anyone else's vaccine except their own because of Chinese nationalist pride. How could they depend on Western vaccines given the superiority, quote unquote, of the Chinese system? The problem is the Sinovac vaccine is not effective. So you have these lockdowns which are causing tremendous hardship. Chinese economy. It isn't great. For years and years and years, the Chinese Communist Party derived its legitimacy from one thing, double double digit economic growth. The official

numbers this year are five. The real numbers are probably three or something like that. China no longer has growth. They have massive youth unemployment. They have all sorts of demographic problems. The residue of the one China policy, real environmental problems. You've got that on a long list. China faces all sorts of difficulties. They've got, you know, Steve Ratner can talk about it, their various financial bubbles, terrible real estate investments. So what do they have left? So I think they're playing the nationalist card. That's what this is about.

So U.S. officials suggest that a Xi-Biden meeting, if it were to happen, likely on the summits of the sidelines of the G20 summit this November in Indonesia. Richard, there's a two-hour call. Obviously, about an hour of that is actually for translations. But still, that's plenty of time to get to a lot of topics. And we know one thing that put Biden wanted to push Xi Jinping on a little bit anyway, would be China's ongoing refusal to condemn what Russia is doing in Ukraine. There's a storyline we haven't really been talking about as much lately. Give us an update there as

to what sort of soft support Beijing is still providing Moscow. Well, they're buying Russian oil, as are the Indians, by the way, and others. They're happy to take coal. For what we can tell, though, that even though they're giving diplomatic support and economic support, what we don't see is direct military support. That seems to be the American red line. And the Chinese understand that. They understand that if they get caught providing direct military support, that would open them up to sanctions. And the last thing China needs right now, given their economic difficulties, is to make themselves vulnerable to secondary American sanctions. But they're not going to back off support for Russia. Again, it comes back to

Mike's question. Xi Jinping, remember, they issued the no limits communique with Russia days before Russia invaded Ukraine. Xi Jinping cast his vote, so to speak, with Vladimir Putin. He now can't say I made a mistake. Now, Xi Jinping clearly bet wrong, asked Vladimir Putin about how this war would play out. But China's a little bit stuck in that relationship. All that said, I'm glad they had the conversation yesterday. And I actually do hope they have a face-to-face meeting. These are the two most important countries in the world. As this relationship will go, so will go in some ways important parts of this century. We need a private strategic conversation with China about Ukraine, about climate change, about global health issues. We still never, you know, China's never opened up

totally about COVID-19. Nuclear weapons. And we've got a long, long list. This is North Korea. I could go on and on. So it's important the United States and China stop these fiery public exchanges and actually have a serious private conversation. And it remains to be seen if Speaker Pelosi will, in fact, go to Taiwan. We'll find out very soon which president she said would be playing with fire. Still ahead this morning, at least eight people are dead after what the governor of Kentucky is calling one of the worst flooding disasters in the state's history. We'll have a live report from the storm-ravaged state that got more rain overnight, plus a major bipartisan victory on Capitol Hill after the

House passes a bill to bolster domestic manufacturing and to boost U.S. competitiveness with China. And is the United States economy in a recession or not? Steve Ratner joins us with charts to explain next on Morning Joe. Chairman Powell and many of the significant banking personnel and economists say we're not in a recession. But let me just give you what the facts are in terms of the state of the economy. Number one, we have a record job market of record unemployment of three point six percent today. We've created nine million new jobs so far just since we became president. Businesses are investing in America at record rates. That doesn't sound like a recession to me. President Biden reacting to yesterday's economic news that the United States economy shrank for the second quarter in a row.

Let's bring in former Treasury official and Morning Joe economic analyst Steve Ratner. Steve, good morning. Good to see you. Before we dive into your charts, just your assessment as someone who's lived and worked in this stuff for his entire life about what two consecutive quarters of economic contraction means. There are a lot of people using this as a technical definition of recession. Obviously, politicians want to use it as a blunt instrument. But is this economy in a recession or not? Almost certainly not, Willie, and we'll get into this with some data in the charts.

But this two quarters of negative GDP thing is a common layman's definition. In the real world, what happens is a nonpartisan independent institution called the National Bureau of Economic Research comes in and decides when a recession begins and when it ends. It probably won't do so for a good while because it considers all the data, not just this two quarters thing. But as the president pointed out, what's going on in the jobs market, what's going on with consumers, what's going on with investment, all sorts of data. And then after all that is said and done, usually months, maybe even a year later, they came in and tell us whether we were in a recession or not. So it's a very technical issue. And this two quarters thing is just shorthand. All right. So let's take a look at the charts. And you begin with the U.S. economy contracting

again. But you take a little closer look at what that means. Sure. So first, let's just a little bit of history. The solid red line is how the GDP overall has been performing for the last 18 months. And as you can see, for the last year, in 2021, we had very significant growth. We actually had 5.7% growth. And as the president has also pointed out on many occasions, that is an exceptionally high rate of growth, obviously had to do with our coming out of the pandemic a bit. And then you can see the red line dip below zero, and those are our two quarters of negative growth. And all those colored bars are basically the

different pieces of GDP. The things above the horizontal black line are things that added to GDP. The things below it are things that detracted. And you can see that the overall decline was small. And so this is almost as much stuff above the bar line as below it. And what's going on here are some technical factors that I'm going to spare you about inventories and foreign trade and so on. But the things to note is the turquoise line, which is how much services consumers are buying. This is the famous airline situation, hotels, doctors, lawyers, all that stuff has stayed substantially positive throughout this period. They are buying fewer goods at the moment. That's the dark blue line, a dark blue square just

below the line. But that's fairly normal after what's gone on in the pandemic. I think the other important things to note are that housing has begun to decline. You had a 14 percent decline in housing last quarter. And that's to be expected when you raise interest rates and mortgage rates as you know have doubled over the past several months. It has an effect on housing. The last thing I would note on this chart is the dotted red line to the right. That is the consensus projection of economists for what could happen

in the next two quarters which is slightly positive GDP, i.e. not a contraction. I do think there is still a very substantial chance, probably more than 50 percent, that we have some kind of recession at some point to get inflation under control. But it is not where we are today. So as we move to your second chart, Steve, one of the points that people like Jerome Powell and Janet Yellen have been making is when talking about whether we're in a recession is if you look at the employment picture, that's just not an economy in a recession. We have 11 million open jobs, twice as many jobs as people looking for them. It just doesn't square with the argument that this is a recession.

Do you do you agree with them on that? And this chart shows exactly what you just said. This goes back through every recession from the mid-1950s on, with the exception of the pandemic, because unemployment went so much it was literally off this chart. And you can see that in every recession since 1957, you've had a material increase in unemployment. All those blue bars, black bars going up is essentially the amount by which unemployment went up in percentage points, as you can see far over on the left. And then you look over on the right and you see our little turquoise bar, which actually shows unemployment going down over the last two quarters, completely contrary to recession. And as you said, 3.6% unemployment rate, huge number of unfilled jobs.

Just last month, we created 372,000 new jobs, 2.8 million new jobs this year. This is not a recession that I've ever seen. And therefore, I don't really think, nobody really thinks this is actually a real recession. Now, on your last chart, the other side of this, what makes it feel whether or not it's technically a recession or not, like one to a lot of people, is the cost of things. It's just too expensive to go out, and you're seeing that in consumer confidence. Yes. Look, the economy is no doubt weakening, and that is part of the plan. We have to bring down this inflation. The only way known to man and economists is to reduce demand, which could eventually lead to some unemployment,

but just get people to spend less. And inflation, unfortunately, has been taking that toll. So the chart on the left, this is interesting numbers that just came out in the last day or two. We've seen a lot of consumer confidence numbers over the months. They're all pretty terrible, quite frankly. This particular index isn't even as bad as some of the other ones that are out there, but you can see that we've had a fairly steady decline in consumer confidence for several months. What makes this chart a bit new and interesting, perhaps, to the viewers is on the right, this chart actually, or this index, is based on five different sub-indices that are all then aggregated. And one of the things they do is break a question to consumers of how do you feel now, and this is particularly about the job market, and how do you think in the future.

And what you can see on the red line is that at the moment consumers, for obvious reasons, feel pretty darn good about the job market. They feel that there are plenty of jobs out there. But when you look at the blue line, they are very pessimistic about the future. And as we all know, elections are about the future. We are facing an election. This kind of a spread is not great for Democrats going to the election. And we really obviously need to hope that jobs continue to come in strong and we get some kind of a reversal of that blue line, people's expectations about the future being quite negative at the moment.

Steve, a couple of questions about the lived economy. What's going to happen to interest rates on car loans, credit cards, and where do you suppose all the workers are? Well, on the first question, Mike, they're going to go up. We have to be realistic about what's going to be required to bring down 9.1% inflation. We had 75 basis points, three quarters of a percentage point in layman's terms increased this week. The market is expecting more increases before it finally tops out.

Mortgage rates have gone roughly from two.75% to 5.5% for a 30-year mortgage. As I said, that has already had an effect on the housing market. You will see other interest rates follow suit. This is sort of economics 101. Higher interest rates mean people borrow less, which means they spend less. It's painful. It's not fun for anybody. But unfortunately, it's the price we pay for having been a little bit too exuberant with our stimulus, both from the Fed and from Washington, from the central government over the course of the pandemic and during the recovery. And the question is, can we land this plane safely without a recession? That would be that

is not supported by history. History would tell you that we're not sophisticated enough to land the plane. It would be a bit like a civilian aircraft airplane pilot like me trying to land on an aircraft carrier. You might get lucky, but more likely you're going to probably have a bit of an unpleasant experience. And I think we have to prepare ourselves for that possibility. Steve, I have a faith in your piloting abilities. But let's there's going to be more legislation coming. Democrats believe they can get this reconciliation package. Anti-inflation is right in the name. But from what you know of it and what it aims to do, what sort of impact will it actually have? Well, first, this in the

Manchin Schumer package or whatever you'd like to call it, I think is an extraordinary achievement. I think to have, first of all, pulled it back from the jaws of defeat, but to produce a package that actually reduces the deficit in a meaningful way for the first time in 11 years, and therefore would presumably have some positive impact on inflation, as well as getting corporate taxes partly sorted out, as well as the prescription drug, all that stuff is quite amazing. But we have to be realistic that these are all small things relative to the size of the

inflation problem. There are other small things the president could do that so far he hasn't done relative to the size of the inflation problem, but they're small relative to the size of the inflation problem. We have a very significant inflation hole, if you will, but every little bit of digging out is helpful and we should continue to try to dig ourselves out. Every little bit we can dig ourselves out by policies like these takes some pressure off the Fed, means interest rates don't have to go up quite as much, but I don't want to

hold out false hope that you're going to suddenly see a meaningful drop in inflation simply because they pass this reconciliation bill. Excellent explanation of everything going on right now, all the cross currents. And Steve's being humble. He actually was the technical coordinator on Top Gun Maverick and wisely cut himself in on the back end of that one point two billion dollar film. Steve Ratner can drop a dime on an aircraft carrier any day of the week. Great to see you, Steve. Thanks so much. Still ahead, the unexpected reversal by Republican senators on a bill to help veterans exposed to toxic fumes that had Jon Stewart outside the Capitol and not happy. We'll break down what happened and speak with Jon Stewart ahead on Morning Joe.

Break for some baseball. The New York Yankees needed just one swing from the man himself, Aaron Judge, to beat the Kansas City Royals. Judge's solo home run, a walk-off in the bottom of the ninth inning, his league-leading 39th of the season, his third walk-off of the year. The Yankees beat the Royals 1-0, only had two hits against them. One of them, Judge's walk-off. Over in Baltimore, what might have been a memorable final plate appearance at Camden Yards for longtime member of the Orioles, Trey Mancini. and a year to write low will drip back low doesn't see it low lost the ball here comes hayes trey's gonna go to third trey's gonna be where tome here comes man city he is Save! Save! Save! Mancini sneaks in with an inside the park home run. A right field play from the Boston Red Sox school of outfield.

Oh, that hurts actually. Oh my gosh. So Mike Barnicle, we talk about Trey Mancini perhaps leaving Baltimore after a long career there. Orioles playing really well this year. But who else are you looking at? Trade deadline is coming up in a couple of days here. Who do you think makes some big moves? Who are the contenders who need things?

Well, the Yankees need something. They'll probably make a move, not a major move. I think maybe the Dodgers will end up with Juan Soto if Soto is indeed moved. They have all the material, all the personnel to make a deal like that, or the Cardinals, they're in it as well. The catcher for the Chicago Cubs, he'll be moved, almost guaranteed the Cubs' final send-off to the World Series team. There'll be a bunch of moves made. I mean, trading deadline is always fun

uh to watch and to hang on to but uh you know last night's yankees game really i gotta hand it to you two hits and one of them was was pretty big we just showed an erin judge but uh the yankees the the yankees are you know they're 33 games above 500 i think jonathan 33 games above 500, I think, Jonathan. 33 games above 500. Yeah, 34 now, yeah. They are well positioned to lose to the Astros and the ALCS. The Aaron Judge, though, Richard Haas, we were just talking about this off set. First of all, we'll note that the Red Sox, though, they did win last night. We both think are probably more likely to be sellers than buyers come the deadline in a week. So let's forget about them.

They're only 500. But Aaron Judge, who is having, no doubt about it, an MVP season. He leads the league in a week. So let's forget about them. They're only 500. But Aaron Judge, who is having no doubt about it, MVP season. He leads the league in home runs. He's had clutch hit after clutch hit. He has carried them. He bet on himself. He and Judge and the Yankees could not come to an agreement about a contract extension before the season. This is the last year of his deal before being a free agent. Certainly his price tag going up. He also, in an interview with over All-Star Break, raised eyebrows where he very much was asked, like, oh, reassure your Yankee fans that you'll stay. And he was like, you can root for me on whatever team I play with. So is Aaron Judge

out the door? How much would you be willing, in terms of years and money, to pay him to stay? This actually connects this story and the Ratner conversation. It's inflation. Aaron, this is at least $100 million worth of extra stimulus to the U.S. economy that Aaron Judge is going to cost the Yankees or somebody. And the market's open. But after this season, very, very hard for the Yankees to lose them. Very hard. Particularly, they can't. If they win the series, he's the hero. And if they lose, how can you get rid of your best player after disappointing yet again? So I think the Yankees made a $100 million decision. Unfortunately for them, it went the wrong way.

But good for Aaron Judge. We know the direction of that Ratner chart. Aaron Judge's contract simply going up. He bet on himself and won. No way, no way the Yankees let him walk. He's going to get whatever he asks for. And luckily, the Yankees have the money to give him whatever he wants. Plus, he's like Cheater.

Great guy. Fans love him. Red Sox won last night, Willie. Huge. I noticed that. I noticed that. Did they crawl? Crawling out of the cellar.

Good for everybody up there. That's fantastic. Coming up, new poll numbers out of the Pennsylvania and Georgia Senate races. Plus, the latest on the war in Ukraine. Russia again launches missiles at Kiev as Ukraine begins a counteroffensive to break the country's hold on a major southern city. The chairman of the House Armed Services Committee, who just returned from a trip to the region, will be our guest.