[Wolf Blitzer, Cnn:] Well, let's hope this ends and ends quickly and no more inquiries, no more people shot in the process. Erin Burnett OUTFRONT starts right now.
[Erin Burnett, Cnn:] OUTFRONT next breaking news, President Trump growing more frustrated tonight, the Dow drops 800 points in fears of a recession. Why the president should be concerned? Plus, the 2020 candidate seizing on remarks, the President's top immigration official said on this program that the poem of the Statue of Liberty refers to people from Europe. And Republican Congressman Steve King appearing to defend rape and incest. What was he talking about? Let's go out front. And good evening. I'm Erin Burnett. OUTFRONT this evening, the breaking news. Trump's market meltdown. The President frustrated and concerned tonight, worried about reelection. Sources say as he watched the Dow freefall today. You see the number, 800 points down. The reason, a fluorescent red recession warning light now flashing for the first time since 2007 which was just before the great market crash and recession. A recession which it is important to remember was the worst since the Great Depression in the 1930s. The stock drop today the biggest this year, the fourth largest point drop in American history.
[Unidentified Male:] ... joining us, we close at the session lows down 800 points on the Dow.
[Jake Tapper, Cnn:] ... fears of another recession causing panic.
[Unidentified Male:] Breaking this evening, the big sell off on Wall Street today. The Dow average plummeting 3 percent.
[Burnett:] Trump took to Twitter, sending nine tweets today about the economy, including trying to spin the plunge in interest rates into a positive. The president tweeting, "Tremendous amounts of money pouring into the United States. People want safety." Well, the President is right about this, money is pouring into U.S. Treasuries but that as he well knows is not a sign of strength tonight. That is a sign of deep recession fears. The lower the yield on benchmark treasuries, the lower the interest rates, the higher the fear of economic crisis. And today, the 30-year yield fell to its lowest level in history. Markets also afraid of Trump and China's trade war and Trump took that head on today too. The tweet, "We are winning, big time, against China." Well, only time will tell on this, but as for winning right now Trump's war with China is hurting the United States, big time. Trump first slap tariffs on Chinese goods in June of 2018 and compared to a year ago, U.S. exports to China fell 19% this July, bad for us. Meantime, Americans bought more from China than they did a year ago. Trump knows the economy can make or break him. He knows this all too well, just listen to Trump.
[Donald Trump, President Of The United States:] Last year for the first time in a decade, the United States was ranked the most competitive economy anywhere in the world. That made the economy so strong that nothing is going to stop us. We have the number one economy on earth. Our country now has the hottest economy anywhere in the world. Our economy is fantastic.
[Burnett:] That's not what the markets are saying tonight. And so Trump is blaming someone else, one of his favorite boogeyman, the Fed Chief Jerome Powell for the market freefall. Another tweet moments ago, "China is not our problem, though Hong Kong isn't helping. Our problem is with the Fed. Why blame China when you could blame someone in the United States? Pamela Brown is out front live tonight in Berkeley Heights. Pamela, so the President obviously watching the markets extremely closely.
[Pamela Brown, Cnn Senior White House Correspondent:] That's right. He's been watching the markets extremely closely all week during his working vacation here in New Jersey, Erin. We're told that just as the markets have been on this roller coaster ride this week so have the President's moods as he's watched the Dow go up and down. Sources familiar say that initially yesterday the President was pleased when his decision to back off those tariffs on China led to a bounce in the markets. But as we saw, that did not last long, Erin. The President today has been airing his grievances on Twitter directing his ire at the Federal Reserve. But were told by sources behind the scenes that the President has been expressing concern, frustration that his negotiating team has not been able to strike a deal yet with China. There is concern that China is waiting to see who is going to be elected next year. And also the President has been expressing concern that the trade standoff could hurt the economy and even his reelection chances. So certainly there are some generous going on behind the scenes. I've been speaking to White House sources today who do say that there is some anxiousness about what is going on. And while we may not be feeling the immediate repercussions that what is happening right now in the world economy and in the markets could be a warning sign of what's to come, Erin.
[Burnett:] So Pamela, let me just ask you. Obviously, the President knows this is crucial for his reelection, the economy. He looks at statistics, he knows full well a recession could doom his reelection chances and he brags about the economy every chance he can get. So what does do from here?
[Brown:] Well, that's the question and I've been asking White House sources that today because the President hasn't really provided concrete solutions of what to do and he hasn't taken responsibility or acknowledged how the trade war with China might be playing a role in what we're seeing with the markets in the economy. I'll tell you, Erin, that some officials I've been speaking with are sort of downplaying what's going on. They're saying, "Look, it's August. A lot of people are working right now." I don't know that this is a good way to look at what's to come. But in terms of what the President does next, that remains to be seen. A lot of it could hinge on how he deals with China and whether a deal can be reached, Erin.
[Burnett:] And Pamela on that deal, what happens next on that? Obviously, as you say he's frustrated with his negotiating team, but he's between a rock and a hard place. He threatened these tariffs and now he said, "Oh, I'm going to delay them." He can't be the President who cried wolf.
[Brown:] Yes, that's exactly right. And it's interesting initially when the President imposed the tariffs he said, "Look, the cost isn't going to be felt by the consumer here in the U.S." But then as we saw clearly, he acknowledges that it could impact the consumer and that is why he held off on some of these tariffs on China for the Christmas season. But certainly the clock is ticking for a deal to be reached with the negotiating team. The President tried to downplay even if a deal isn't reached that it's going to be OK that China really is the one suffering. You saw just in the last hour, I believe, he tweeted about China saying that they're really the ones suffering and all of this. And so we don't really know what is going to happen. It's sort of unpredictable. The President hasn't really laid out a plan for what he's going to do and how he's going to deal with the situation with China if a deal isn't struck. Again, sources I've been speaking within the administration say there is this real concern that China doesn't want to strike a deal right now because China wants to wait and see who wins the election, whether President Trump is reelected or if someone else wins, Erin.
[Burnett:] All right. Thank you very much, Pamela Brown, live from where the President, of courses, tonight. I want to go down to Larry Summers, former Treasury Secretary under President Clinton. And Secretary Summers, it's great to have you with us. I know we had a little trouble with the connection, but I think having your perspective tonight is crucial. How dangerous is this moment?
[Larry Summers, Former Treasury Secretary Under President Clinton:] Most dangerous moment in terms of recession since the 2008 financial crisis. That's not to say we're going to have another version of the 2008 financial crisis. But if you look at developments in markets, you look at business expectations, you look at indicators of the behavior of consumers, I think you have to be worried that there's a much greater chance of recession than what we want to have and that we're very much without tools if a recession were to come. Without tools, because interest rates are so low. Because, frankly, the federal government is so disorganized and because the spoke for fiscal stimulus given the resources [inaudible] less than it's been at most moments in the past.
[Burnett:] Right. It's important for people to understand, you usually give a tax cut when the economy gets weak. Well, the tax cut is already come. Interest rates are already at rock bottom to your point about where there is to go. Secretary, look, the President tweeted today about the selloff, "Tremendous amounts of money pouring into the United States. People want safety." I don't know if you heard his tweet, but obviously he knows the money is coming out of fear not out of something to celebrate. Does he think that people will believe him that enough people will believe him that this is good news?
[Summers:] I have no idea what the President is thinking. He complains about a scrolling dollar and then money flows in picking up the dollar and he celebrates that as a great achievement. He complains about a trade deficit and then we [inaudible] which is the other side [inaudible] a wonderful thing. There's no consistency to the thought from, frankly, hour to hour, let alone week to week, let alone month to month. And it has to be said that the uncertainty and doubt about the competence of the U.S. economic authorities is one of the things that makes this situation more dangerous.
[Burnett:] So I want to ask you one other important thing, Secretary, and that is, I don't know if you heard Trump bragging about the economy. We certainly have heard it in the past, but we had just put up some of that together and there are some things that are certainly when you look at them right now very good for the U.S. economy like this.
[Trump:] We have a very low unemployment rate. Unemployment has reached the lowest rate in over a half a century. I imagine you've all seen the incredible job growth.
[Burnett:] And unemployment secretary is at 3.7 percent. Even with today's plunge, stocks are up 40 percent since Trump won the White House. Is it possible, Secretary Summers, that the President will be proven right?
[Summers:] I don't think so. I think there are plenty of strengths that the American economy has an unbelievable capacity for entrepreneurship, essentially all of the world's leading technology companies, a set of natural resources, set of institutions of higher education, hard working people, we have a system that's second to none. So there's resilience and there's, A, good things that are happening, not because of what the President is proposing but frankly in spite of what the President is proposing. It's not that growth has been particularly more rapid than one might have expected three years ago or that there's been any substantial acceleration in the trend of growth in so far as we've been [inaudible] to what's happening before. It's a sugar high from the tax cuts.
[Burnett:] All right. Thank you very much, Secretary Summers. And next, the 2020 Democratic candidates tearing into Trump over remarks. His top immigration official told me about the poem on the Statue of Liberty.
[Ken Cuccinelli, Acting Director, U.s. Citizenship And Immigration Services Office:] That poem was referring back to people coming from Europe.
[Burnett:] Plus, Republican Congressman Steve King facing new calls to resign now from his own party after his remarks about rape and incest. And breaking news, a dangerous standoff underway in Philadelphia, six police officer shot. The President has now been briefed. We have new details on this ongoing situation ahead.