The coverups and excuses aren’t working

**David Pakman** (0:00)
Donald Trump's top economic adviser got confronted on Fox News after predicting 4 percent, 5 percent or 6 percent GDP growth. We got one point five. And he gave an excuse so absurd that I'm going to dive into it with you. We also have new details raising real questions about the timeline of Mitch McConnell's mysterious proof of life pictures and the smoking gun maybe is weaker than advertised, but it's still not so good. I'll explain it. And Republicans are laying groundwork to reject the midterm results. While behind the scenes, Donald Trump officials seem to be realizing if they lose the House, it will be two years of hell for them. Let's hope so.
Fox News commits the unthinkable by admitting that Donald Trump's signature legislation is a toxic bomb for Republicans. And they keep talking about a manufacturing renaissance, but we're losing manufacturing jobs, not gaining them. Reality is sort of catching up with them all at once. And if you'll allow me, I plan to talk about all of it today.
This is a good one. This is a Fox News meltdown. Top economic adviser to Donald Trump, Kevin Hassett, went on Fox Business this morning. And listen, he was confronted by Maria Bartiromo about one of his predictions, which aged like milk in a hot sun or something like that, Hassett and actually Howard Nutlick and a Besson. They've all been predicting we're going to have four percent GDP growth, five percent GDP growth, six percent GDP growth. Oh, the first half of the year wasn't so good. Well, it's going to get really good during the second half of the year. We now got the latest GDP number one point five percent, well below expectations, slower than the previous quarter going in the wrong direction. So to her credit, Maria Bartiromo says, what happened? You made this prediction. It didn't come true. Please explain it. And Hassett tries. He tries to take the number like putty and shape it into something completely different and make us believe that everything is just going spectacularly. Well, let's see if he does a good job or a bad job of convincing anybody.

**Maria Bartiromo** (2:21)
Worries over inflation. Yesterday, the GDP was slower than expected. Last time we spoke, you told me you were expecting 4% growth in the second half of the year.
We got a growth number yesterday, but it was way lower than people expected. How would you assess the macro story today?

**Kevin Hassett** (2:37)
Right. Well, I think that what we were looking at when you and I talked last was the really surging domestic demand. And so final sales within the US were about 4%, actually almost exactly the number we talked about 3.9%. And the reason why the top line number was 1.5 was that we imported so many capital goods because we're building factories so fast that the number was different than we expected by a little bit.

**David Pakman** (3:04)
By a little bit.

**Kevin Hassett** (3:05)
The bottom line, though, is that if you look at that. So the huge surge in capital spending, which means there's downward pressure on inflation because there's upward pressure on supply.

**David Pakman** (3:14)
Notice this guy smirk when he delivers these lies.

**Kevin Hassett** (3:17)
Plus CPI and PC, those two reports were about as good as you could ever hope to see if you're a federal reserve governor, then it means that the economy is really running on all cylinders.

**David Pakman** (3:28)
It's just it's it's all working so well. It's a remarkable answer because, first of all, has it has been using the same excuse for months when growth was two percent? He said it would have been four or five. That would be like the real rate of GDP growth.
But companies are importing so much equipment to build these factories thanks to the dear lord Emperor Trump. But we're going to get to north of four percent north of five percent. We could even be above six percent GDP growth. And I told you that's not going to happen. And I explained why. And now growth falls even further to one point five percent. But somehow the fact that GDP is down is proof of this Trumpian economic explosion that's just right around the corner. Now, listen, I don't know what other shows do. I'm always totally transparent with you about these economic numbers. There is a small kernel of truth buried inside of Hassett's propaganda. What is the kernel of truth? Well, imports are subtracted when GDP is calculated. You add exports and you subtract imports. And it is true that in the second quarter, imports weighed a little bit on that GDP number. The trade deficit knocked off about one percentage point from growth and business investment in equipment was a part of the total number. But it's not because of manufacturing, as they have claimed many times. It's computers and equipment for AI infrastructure. That is where a lot of that business investment was. But even still, then you would be talking about two point five percent GDP growth, which is still well below what they promised. And it's still well below what they said is OK when it's a Democrat who is president. So the one point five percent headline, it understates some domestic demand. That's true.