Anthony Scaramucci On Trump, The Press, And The Economy

Well, I think it's specific to the Attorney General slot. I think that's a temporary position, and so I think what will happen is that'll burn off and blow over in the next two weeks. I predict when he gets back from Paris, he'll have a permanent Attorney General that will have to go through the process and be Senate confirmed. My guess is whoever he picks will get that confirmation because remember, he picked up seats in the Senate. I think that's good news for the President's agenda. The fact that he lost seats in the House and it flipped, that's bad news for him if they start pressing on him with investigatory and subpoena powers. It may be bizarrely good news for him if they can cut a deal light on immigration and they can reach across the aisle and create some bipartisan activity. The Attorney General controversy now would be very difficult to confirm from the outside. Certainly looks like this is a person who has been supportive of really limiting the Russian investigation.

Well, I think what the president is trying to do is he had a personality difference obviously with Attorney General Sessions. He probably wasn't happy with the way he recused himself. I mean, that's been pretty obvious. So I think he's really trying to find who should be the interim person until he picks a more permanent person. And I think he's now discovering that there's nuances to that because Attorney General designee Whitaker has not been confirmed by the Senate, like somebody like Rod Rosenstein has been confirmed by the Senate. So I think there'll be a tussle, a two-week tussle probably, but I think he'll get somebody in place permanently. So what we're talking about right now will probably burn off and go away. But if it doesn't, then I think the president does have a problem. And somebody that's honest with them will say, listen, from a bipartisan perspective, if you look at the Constitution, a person that you're going to have run this department needs to be Senate confirmed. So my guess is that Whitaker will not be there for a long period of time. But can I just address the Russian thing quickly?

I think the president's gonna be exonerated on the Russian thing. And I think the president's made a decision that he's going to be treated fairly on the Russia thing. Otherwise, Rod Rosenstein would have been fired as well.

Oh, I hope not. I certainly don't think that's the case. I mean, I know him personally and obviously I was his comms director for 11 short days, but they were a lot of fun for me. And I've had a lot of conversations with him about the press. As you know, he has been a product, a byproduct of the press for 45 years. So I'll share this with your viewers: my first day in the Oval Office, he turned to me and said, 'Man, I had such a great relationship with the press for 45 years. What do you think's happened?' And I said, 'Well, sir, you declared war on the press. You allowed Steve Bannon at CPAC to declare war on the press. You're saying that the press is the enemy of the people, and this sort of stuff. And that's not helping you because what ends up happening is you're setting each other up now for anytime a match gets struck, it burns into this gigantic bonfire.' So the example you're using from last week, I think is an unfortunate example, but I do think there's fault on both sides. I'm not equivocating. I believe in the First Amendment. I believe in the free press. I believe that the press should be adversarial. Both Democratic and Republican presidents have faced the adversary of the press. I just don't think it should be war-like. That's one of my big issues. But I know the president well. He's 72 years old and he feels that you're in the White House, you're in the East Room, he's the president of the United States. You may not like Donald J. Trump, but you should respect the office of the presidency and probably be a little bit more polite in those situations, even if you're being adversarial. That's just my personal view. Having said that, they have the right to be there. I turned the lights and cameras back on my first day when I got to the White House. I went to the press box and tried to answer every single question I could as objectively as possible. And I think the president's tried to do that. I think, Henry, you'd have to stipulate this with me that he has been way more open in terms of press sprays, talking in front of the Rose Garden or leaving for Marine One, and doing this sort of thing. So he's been more accessible. I think that's probably a direct result of Bill Shine's influence. Let's see what happens. But I hope they dial this back. I don't think it's good for America.

I don't think he believes that. He thinks that through the enemy of the people... You may have caught that Axios interview that went on HBO. I think what he gets upset about is that if he thinks he's being treated unfairly, he'll lash out, he'll say those sorts of things. But I don't really think down deep he thinks he's the enemy of the people. And by the way, you're not asking me this but I want to answer it anyway: he's definitely not a nationalist if you define nationalism the way George Orwell or Barbara Tuchman did in The Guns of August. He is nothing, not even close to a nationalist. But he likes saying that as well because he knows that works. These intellectual elitists who have actually read those books and they get very upset, they strike a match to their hair and they run around on these cable shows upset that the president's calling himself a nationalist.

I think that is a big issue. And let's be fair, when you look at things like ethnocentrism and white nationalism, it's a very small fringe. It gets a lot of attention. And I think that's an unfortunate byproduct of trying to stoke up the liberal elites in the media. But you know, I'm not a fan of any of those things. I mean, that's one of the main reasons why I was at such odds with somebody like Steve Bannon, because at the end of the day, this stuff is, in my opinion, totally anti-American.

Okay, so I've actually talked to him about this. I was on a Bill Maher show two weeks ago. President called me after that media appearance and we, you know, he's the media coach in chief, so he was giving me pointers and telling me what I was doing right and wrong. But what he did point out, which I think is worth sharing with people, is that some of the stuff that he's doing is almost like a diversionary tactic. Scott Adams, who is the author of the Dilbert series, wrote an unbelievable book about the president called Win Bigly. And it's got a great little cartoon of the orange hair and the whole thing. And what Scott says in the book is that the president steps on some of these pufferies, mistruths, lies, whatever you want to call them. Look, I'm not here equivocating. You can call him any one of those things. He does that as a diversionary tactic to take people off of the main thing that he's driving. And this is one of the points in my book, The Blue Collar President. He is going after the blue collar base that's been traditional to the Democratic Party. So what he's found is by doing these mistruths or these misdirections, his opponents are focused on those and they come across like a hall monitor on television or they come across like Charlie Brown's teacher, you know, 'wah wah wah wah wah.' And he likes that, you know, because it keeps them off focus of what he's really doing. And my recommendation, the Democrats... Bill Maher didn't let me say it, but I think you're gonna let me, so I'll give my recommendation. Guys, focus on the people that you left behind. There's been a 35-year vacuum of advocacy for middle class and lower middle class people. So what the president did, you have to just think about this, is historic. He stole the Republican nomination from the Republican establishment. They clearly did not want him to have it. He took it and then he reached over and grabbed the base of the Democratic Party and he moved it over to him. And I described how he did that in the book, why he was capable of doing that. And despite the fact that he's had an unbelievably gilded life, Henry, he still saw something in those people and he was able to galvanize them towards him. And I try to describe why in the book. So on the untruth, puffery, whatever you want to call it, it's basically marketing. It's a game plan. I know Donald Trump doesn't like to think of it this way, but the presidency, he is an employee of the people. You have lots of employees in your business. Honesty, forthrightness, they are the core of any organization. I agree with that. So I think he tried to make the point to John Karl, the ABC correspondent, that he's doing the best he can to tell the truth. But you don't have to understand, he's been a showman his whole life, he's been a rock on tour his whole life. So it's a little bit like my grandfather: why would you let the truth sometimes get in the way of a really good story? And that's sort of what he's doing. I can speak from a market perspective. The stock market and the people that are market participants have sort of priced this into the equation. They give the president, based on his personality, more or less a free pass verbally. He can jawbone at the Fed, doesn't impact the market. He can talk about the dollar, doesn't really impact the market. He can say things that typical presidents or the first 44 presidents wouldn't say, and the market says it's okay. So I think the population and the marketplace have sort of adapted to the president's personality as opposed to him at age 72 changing. I don't see the guy changing.

A huge percentage of the things I try to point out that he is way more temperate, he's way more deliberate in his thought process. If you really got an inside portal to what he's like in those meetings, I think you would gain a lot of comfort. I mean, there was one meeting, I can't get into the details because some were classified, but he turned to me after the meeting and he looked at me and he was like, 'And they call me the warmonger.' And it was an insinuation that there were a number of different things that needed to be decided and he was really choosing the most moderate, most peaceful way of going about something. So I think the American public, if they knew that about him, they would calm down a little bit. They would find that that's a good thing, not a bad thing.

Yeah, so I wrote an op-ed last July which was published in the FT that described what he's doing. And I also strongly suggested to the president to be careful with the rhetoric because what you don't want to do is make the rhetoric so heated that the market starts losing confidence in the pro-business agenda. If you really understand the president, he's using the tariffs more as a cudgel, Henry, in the negotiating process. It's too long to describe here, but there's been a 75-year decision by the United States to even the playing field to allow for internal economic interdependence among nations and rising living standards around the world. The US made that decision because we thought that would allow the world to have less conflict. So the president's looking at that now and saying, 'Well, the side effect of that is it's hollowed out lower middle class and middle class living standards. Wages are down on real economic terms over 30 years.' So his suggestion is we have to start to even up that playing field today. So if you look at the tariffs that he's proposing, it's really he's always looking for parity. So if the Chinese tariffs are up here on our goods and services and ours are down here on theirs, he's just saying, 'Okay, we're coming up here unless you're willing to come down here.' So my prediction is, just like he did with the Canadian situation, he met the deadline, signed that deal, now calling it the USMCA or whatever he's calling it, I think he'll do the same thing with China. My prediction is in the next three months you'll have a deal done with China. I think the Chinese are ready to see their IP is soaring over there, their AI, artificial intelligence, their intellectual property is soaring over there. And I think they're at a state of economic maturity where they're willing to relax aspects of their market. I think that'll be very, very good for the world. These two leaders, I believe, like each other, at least that's been my impression when talking to the president. And I think there's a deal there. I'm not saying it's gonna get done at the G20 in Argentina, but I do think it gets done by the time you and I are freezing in Davos, Switzerland in January.

Well, I think the stock market's stumbling for a combination of different things. One of them is seasonal. October is typically a rough month for the stock market as people rebalance. Secondarily, rates are going up. So you can look as an economist, you can look at interest rate sensitive areas of the economy like housing and financial services and see some pressure there. Also, weirdly, the yield curve is flatter than it should be at this point in the cycle. That has more to do with the way the Treasury is borrowing. We took out a lot of debt to finance the tax cut and the treasurer made a decision to borrow at the forward end of the curve, and so that's artificially flattening the curve. But some economists are looking at that and saying a flat yield curve augurs for a recession. So we at SkyBridge, we don't see that. We don't see a recession. But we do see if the Fed doesn't start moving more aggressively towards data dependency, we do see a sell-off into 2019 if we stay on current trend. And so that'll be unfortunate because the economic growth is there over the next two years. You can clearly see a three percent number for economic growth. But my prediction on that as well is that the Fed will start to curb their interest rate hikes. You'll likely get two to three more hikes instead of three to five more. And I think the economic story for the US is still very much intact. So I think the bull market, I think this is a temporary dip in a still long-term trend of a bull market.

One of the reasons why I couldn't last in Washington, I actually don't like politicians, right? Because they're very hypocritical and they tell a lot of mistruths. So at certain times they're saying we hate the deficit and other times they're ignoring the deficit, it depends on who's in charge. But I've studied the deficit for 30 years as a cop, as an economist. And what I would say about the deficit is that we can handle the debt that we're taking on provided that we don't touch off inflation. So that's the real dilemma for the Fed. If you look at the US balance sheet, it's about $72 trillion. That's the governmental balance sheet. You've got $21 trillion of debt. You could add on more debt, particularly if you're gonna get economic growth through 3%. But the issue is if you have inflation, you'll stall the capital market, you'll stall the debt market. So that's a dilemma for Jerome Powell. He's got to get the rates moving in a mama bear sort of position where it slows down inflation, gets everybody comfortable with the US dollar and the rate of inflation, but also allows for economic expansion and opportunity. But the dirty secret that all of us who study the deficit know is that as long as you don't have systemic inflation, the United States can handle this level of debt.

We're launching our product on December 1st. We've created a private REIT to take advantage of the new tax code's regulations on Opportunity Zones. So briefly, clients will be able to sell low basis, high valued securities, wine collections, businesses. This should have been available to you, Henry, when you sold Business Insider. And we're gonna put you in our Opportunity Zone. But what basically happens is you can sell your low basis, high value stock, that liquid cash you can dump into an Opportunity Zone. You have 180 days to do it. There are 8,700 of them according to the 2010 census. And you can make real estate investments, other types of investments, and you have a 10-year tax deferral on that basis creation. And then any money that you make in the Opportunity Zone over the ten years comes to you tax-free. So this is a fabulous piece of the tax code. It should unleash one trillion dollars of capital into the nation's poorer areas. It'll almost be like an off-balance sheet infrastructure infusion and real estate infusion into areas that need it, and some areas frankly that don't need it. As an example, all of Brooklyn is in the Opportunity Zone and parts of Manhattan. But I think it's a fabulous idea. One of the first things I did when we got back to SkyBridge started to organize a fund around this. So we're creating a private REIT which will throw off some yield and we'll give people diversity as opposed to doing one-off real estate projects like some of our competitors.