- Business Insider's Henry Blodget interviewed former White House Communications Director Anthony Scaramucci about the latest in politics, the economy, and President Trump.
- Scaramucci claimed Trump is "doing the best he can to tell the truth" and that Trump intentionally attacks the media as a diversion tactic.
- "He's definitely not a nationalist," said Scaramucci, "He likes saying that because it irks these intellectual elitists."
- Watch the video above for the full interview and to find out what Scaramucci says about this month's midterm elections, Trump's "mistruths," and striking a trade deal with China.
Following is a transcript of the video.
Henry Blodget: Anthony Scaramucci is the former White House communications director and the managing director of his own firm, SkyBridge. Anthony, Democrats win the House. President Trump fires his AG and appoints someone that has immediately caused controversy across the political spectrum. What is next?
Anthony Scaramucci: Well, I mean, I think, specific to the Attorney General slot, I think that that's a temporary position. And so, I think what'll happen is that'll burn off and blow over in the next two weeks, I predict. When he gets back from Paris, they'll have a permanent Attorney General that will have to go through the process and be Senate confirmed. And 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 on immigration, and they can reach across the aisle and create some bipartisan activity.
Blodget: And the Attorney general, now, controversy is, would be very difficult to confirm. From the outside, it certainly looks like this is a person who has been supportive of really limiting the Russia investigation. You don't think that that's what the President is really trying to do?
Scaramucci: 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. And 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. And so, I think there'll be a tussle, 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 him will say, listen, from a bipartisan perspective, if you look at the Constitution, a person that you're gonna have run this department needs to be Senate confirmed. And so, my guess is that Whitaker will not be there for that long of a 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 gonna be treated fairly on the Russia thing. Otherwise, Rod Rosenstein would have been fired as well.
Blodget: The President has said, under pressure, often, that he supports a free press. But, he certainly doesn't act like it. And we had a situation this week where a Washington Post reporter was stripped of his credential. We have what appears to have been a doctored video circulated by Washington or CNN reporter? CNN, I apologize. CNN reporter, I'm sorry. But, situation, that following so many other acts Yeah seems like, actually, If given his druthers, the President would shut down any press that appeared critical of him.
Scaramucci: Well, 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. And as you know, he has been a product, a by-product of the press for 45 years. So, I mean, and 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 has happened? And I said to him, well sir, you declared war on the press. You allowed Stephen 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. And 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 warlike. That's one of my big issues. And so, 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- Recently, he certainly has been. the Rose Garden or leaving from Marine One and doing this sort of thing. And so, yeah, he's been more accessible. I think that's probably a direct result of Bill Shine's influence. And, let's see what happens. But I hope they dial this back. I don't think it's good for America.
Blodget: And the President is fond of saying that the press is the enemy of the people. Does he actually believe that, or is that just shtick?
Scaramucci: I don't think he believes that he thinks that they're 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'm gonna 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 it irks 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.
Blodget: Well, he also seems to Say nationalist knowing it will stoke the passions of white nationalists. The word is very much entwined in that.
Scaramucci: I think that is a big issue. I think that, 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 think that that's an unfortunate by-product of trying to stoke up the liberal elites and 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.
Blodget: There was a great quote, in one of Donald Trump's books. Basically to the extent of, just say it, people will believe it. And this is certainly been in evidence in his presidency. Does he feel it is negative of the press to call him out when he just says something that doesn't happen to be true?
Scaramucci: Okay so, I've actually talked to him about this. So, I was on Bill Maher's show two weeks ago. The President called me after that media appearance and he's the media coach in chief. And 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, okay, 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 wanna call them. Look, I'm not here equivocating. You can call them 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. And so, what he's found is by doing this 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 with the And he like that because it keeps them off focus of what he's really doing. And my recommendation to the Democrats, and Bill Maher didn't let me say it, but I think you're gonna let me. And so, I'll give my recommendation to Democrats. 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. And so, what the president did, and 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 describe 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.
Blodget: So, on the untruths, puffery, whatever you wanna call it, it's basically marketing. It's tactics to get something. It's part of his game. That's his game plan. Heres the thing, though. 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.
Scaramucci: I agree with that. And 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 have to understand, he's been a showman his whole life. He's been a raconteur his whole life. And so, you know, it's a little bit like my grandfather. Why would you let the truth sometimes get in the way of a really good story, okay? 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. You know, 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. And so, I think the population and the marketplace has sort of adapted to the president's personality, as opposed to him at age 72 changing. I don't see the guy changing.
Blodget: So, behind closed doors, is he the same way? In staff meetings, are huge percentage of the things that he says not true?
Scaramucci: I try to point that 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 it's somewhat 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 was 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. And 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.
Blodget: And you talk about how Wall Street is priced in the president and things he says. When he was elected, I remember lots and lots of smart people said, oh yes, ignore the bombast. This is a very smart business person. This is gonna be great for everybody and then we get into what looks increasingly like a real trade war. Like he is intending to press this on. I think you've said recently that actually, there'll be a deal soon. Not a big deal, don't worry about it.
Scaramucci: 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 wanna do is you don't wanna 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 cajole, Henry, in the negotiating process. It's too long-winded to describe here, but there's been a 75-year decision by the United States to uneven the playing field to allow for economic interdependence among nations, and a rising living standard around the world. The US made that decision because we thought that would allow the world to have less conflict. And 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. And so, his suggestion is, we have to start to even up that playing field today. And 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. And so, my prediction is, just like he did with the Canadian situation. He met the deadline, signed that deal. Now calling it the USMCAI, or whatever he's calling it. MCA. I think he'll do the same thing with China. My prediction is in the next three months, he'll have a deal done with China. I think the Chinese are ready to seed on IP, because 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, and 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, I do think we get a deal.
Blodget: Midterms out of the way, stock market has stumbled recently, where do we go from here?
Scaramucci: Well, I think the stock market's stumbling from a combination of different things. One of them is seasonal. October's typically a rough month for the stock market as people rebalance. Secondarily, rates are going up. And 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. So, we took out a lot of debt to finance the tax cut. And the treasury's 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. And 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 could clearly see a 3% 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 the three to five more. And I think the economic story for the US is still very much intact. And so, I think this is a temporary dip in a still long-term trend of a bull market.
Blodget: And what about the deficit, which you mentioned? We had the tax cut. Deficit has ballooned. In the late stage of the cycle, usually it's small now. If we do go into recession, it's going to explode.
Scaramucci: Well, I mean, you know, one of the reasons why I couldn't last in Washington, right? Because I actually don't like politicians, right? Because they're very hypocritical and they tell a lot of mistruths. And 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 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 the economic growth through 3%. But, the issue is if you have inflation, you'll stall the capital market. You'll stall the debt market. And so, that's the dilemma for Jerome Powell. He's gotta get the rates moving in a mama bear sort of position. Where it slows down inflation, it 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 know that study the deficit, as long as you don't have systemic inflation, the United States can handle this level of debt.
Blodget: Talk about opportunity zones, which is a part of the tax bill. SkyBridge is now launching a new product to take advantage of that.
Scaramucci: Yeah, so we're Launching our product on December 1. 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. We gotta put you in our opportunity zone. But, what basically happens is, you can sell your low basis, high-valued stock. That liquid cash, you can dump into an opportunity zone. You have 180 days to do it. There's 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, the creation. And then, any money that you make in the opportunity zone over the 10 years comes to you tax free. So, this is a fabulous piece of the tax code. It should unleash one to three 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, is started to organize a fund around this. And so, we're creating a private REIT, which will throw off some yield and will give people diversity, as opposed to doing one-off real estate projects, like some of our competitors.
Blodget: Anthony, thank you so much. It's great to have you.