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The case of Stormy Daniels echoes past scandals

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Almost 30 years ago, in May 1994, a former Arkansas state clerk, Paula Jones, filed a sexual-harassment suit against President Bill Clinton. She said that in 1991, as governor of Arkansas, he lured her to a hotel room in Little Rock, pushed down his trousers and urged her to perform a sex act, but she rebuffed him.

Mr Clinton denied the story, and his lawyers said he was immune to civil litigation while in office. A federal judge eventually threw out Ms Jones’s claim, but not before the Supreme Court rejected Mr Clinton’s argument about immunity, finding—hilariously—that the suit would be a minimal distraction. In fact, information was secretly passing between the investigation by Ken Starr, the independent counsel in the ever-branching inquiry known as Whitewater, and Ms Jones’s lawyers.

Those lawyers asked during Mr Clinton’s deposition in the Jones case whether he had been involved with a White House intern, Monica Lewinsky, and his denial led to the charges of perjury and obstruction for which the Republican House of Representatives impeached him. The Senate acquitted him in 1999 in a bipartisan vote. For anyone, like Lexington, who slogged through the sexual, political and legal muck of those years, then looked up on the bright clear morning of September 11th 2001 to wonder if they had always had their priorities just right, it is hard not to watch a new documentary about Stephanie Clifford, “Stormy”, without some sense of déjà vu.

Ms Clifford, who performed under the name Stormy Daniels as a stripper and porn actress, has said Donald Trump had sex with her during a celebrity golf tournament in 2006. On the eve of the presidential election in 2016 Mr Trump’s lawyer, Michael Cohen, paid Ms Clifford $130,000 to sign a non-disclosure agreement. Mr Trump has denied Ms Clifford’s story but acknowledged he reimbursed Mr Cohen, to stifle her “false and extortionist accusations”. That reimbursement is the basis for what will be the first-ever criminal trial of an American president, if it starts as scheduled next month. The Manhattan district attorney, Alvin Bragg, has accused Mr Trump of falsifying business records in order to commit another crime he has not specified, but which appears to be violating federal election law.

Probably because this episode involves Mr Trump and has played out in the social-media era, the drama seems even tawdrier and the price paid by the woman at the centre seems even greater than in the saga of Ms Jones. Ms Clifford now owes Mr Trump more than $600,000 because she lost a defamation suit against him and is liable for his lawyer’s fees. She has said her lawyer filed the suit against her wishes.

Like Ms Jones, Ms Clifford, who grew up poor in Baton Rouge, Louisiana, was assailed as trailer trash, a gold-digger and a slut. Like Ms Jones, Ms Clifford, a registered Republican, said she had no political agenda. Both were exploited by some seeming allies. Also like Ms Jones, Ms Clifford was buoyed by (and attacked for) her new celebrity. After the Wall Street Journal revealed her claims about Mr Trump in January 2018, she embarked on a “Making America Horny Again” strip tour and discovered older women and gay men crowding her venues. “This is going to be the best day of my life,” she says in “Stormy”, with touching sincerity, as she prepares to appear on “Saturday Night Live”.

But the picture, never bright, steadily darkens during the documentary. Ms Clifford stays on the road not only to pay her bills but to protect her daughter from the uproar. Her marriage disintegrates. The lawyer who filed the defamation suit, Michael Avenatti, turns out to have embezzled from her (he is serving 19 years for crimes against her and other clients). Her book royalties dry up as fans realise their money might go to Mr Trump. Then Mr Bragg files his charges, and the insults on social media turn to death threats. Ms Clifford is shown, near tears, reading some aloud: “Kill yourself” and “You just signed your death warrant.”

Not just for the right but for the left it can seem as if history started anew with Mr Trump. In the documentary the precedent of the Clinton era goes unexplored. It ought to make just about everyone squirm. The establishment news media was less fascinated by Ms Jones at first than it was by Ms Clifford. Back then it was Republicans who were scandalised by the president, while Democrats, including many feminists, were scandalised by the women who accused him. Then it was a conservative prosecutor who seemed determined to whipsaw a civil complaint into criminal charges; now it is a progressive prosecutor electing to test a novel legal theory against a former president, after federal prosecutors chose not to pursue a similar case. Back then the accused claimed to be the victim and turned the prosecutor’s choice to his political advantage. So far that history is repeating itself.

Eye of the Stormy

Poignantly, the one person in “Stormy” heard questioning their choices is Ms Clifford. She has said she is not a victim, and that when Mr Trump surprised her by seeking sex during what she thought was an appointment for dinner, she complied. She says Mr Trump “wasn’t wrong” when he was overheard saying, on the infamous “Access Hollywood” tape, that women would let him do what he wanted. “The hardest part about all of this is I feel like I’m partially responsible for every woman that could have come after me,” she says, in an act of brutal self-examination one longs for others in this sad story to perform instead.

Even allowing for the documentary’s sympathetic viewpoint, Ms Clifford’s courage is unmistakable. She says she will not give up “because I’m telling the truth”. But she offers a devastating coda for the furore that has consumed her life. “This is just pointless,” she says. “I have no hope at all, any more.”

Read more from Lexington, our columnist on American politics:
Binyamin Netanyahu is alienating Israel’s best friends (Mar 18th)
“Dune” is a warning about political heroes and their tribes (Mar 14th)
Has Ron DeSantis gone too far in Florida? (Mar 7th)

Also: How the Lexington column got its name

Economics

The low-end consumer is about to feel the pinch as Trump restarts student loan collections

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Andersen Ross Photography Inc | Digitalvision | Getty Images

Wall Street is warning that the U.S. Department of Education’s crack down on student loan repayments may take billions of dollars out of consumers’ pockets and hit low income Americans particularly hard.

The department has restarted collections on defaulted student loans under President Donald Trump this month. For first time in around five years, borrowers who haven’t kept up with their bills could see their wages taken or face other punishments.

Using a range of interest rates and lengths of repayment plans, JPMorgan estimated that disposable personal income could be collectively cut by between $3.1 billion and $8.5 billion every month due to collections, according to Murat Tasci, senior U.S. economist at the bank and a Cleveland Federal Reserve alum.

If that all surfaced in one quarter, collections on defaulted and seriously delinquent loans alone would slash between 0.7% and 1.8% from disposable personal income year-over-year, he said.

This policy change may strain consumers who are already stressed out by Trump’s tariff plan and high prices from years of runaway inflation. These factors can help explain why closely followed consumer sentiment data compiled by the University of Michigan has been hitting some of its lowest levels in its seven-decade history in the past two months.

“You have a number of these pressure points rising,” said Jeffrey Roach, chief economist at LPL Financial. “Perhaps in aggregate, it’s enough to quash some of these spending numbers.”

Bank of America said this push to collect could particularly weigh on groups that are on more precarious financial footing. “We believe resumption of student loan payments will have knock-on effects on broader consumer finances, most especially for the subprime consumer segment,” Bank of America analyst Mihir Bhatia wrote to clients.

Economic impact

Student loans account for just 9% of all outstanding consumer debt, according to Bank of America. But when excluding mortgages, that share shoots up to 30%.

Total outstanding student loan debt sat at $1.6 trillion at the end of March, an increase of half a trillion dollars in the last decade.

The New York Fed estimates that nearly one of every four borrowers required to make payments are currently behind. When the federal government began reporting loans as delinquent in the first quarter of this year, the share of debt holders in this boat jumped up to 8% from around 0.5% in the prior three-month period.

To be sure, delinquency is not the same thing as default. Delinquency refers to any loan with a past-due payment, while defaulting is more specific and tied to not making a delayed payment with a period of time set by the provider. The latter is considered more serious and carries consequences such as wage garnishment. If seriously delinquent borrowers also defaulted, JPMorgan projected that almost 25% of all student loans would be in the latter category.

JPMorgan’s Tasci pointed out that not all borrowers have wages or Social Security earnings to take, which can mitigate the firm’s total estimates. Some borrowers may resume payments with collections beginning, though Tasci noted that would likely also eat into discretionary spending.

Trump’s promise to reduce taxes on overtime and tips, if successful, could also help erase some effects of wage garnishment on poorer Americans.

Still, the expected hit to discretionary income is worrisome as Wall Street wonders if the economy can skirt a recession. Much hope has been placed on the ability of consumers to keep spending even if higher tariffs push product prices higher or if the labor market weakens.

LPL’s Roach sees this as less of an issue. He said the postpandemic economy has largely been propped up by high-income earners, who have done the bulk of the spending. This means the tide-change for student loan holders may not hurt the macroeconomic picture too much, he said.

“It’s hard to say if there’s a consensus view on this yet,” Roach said. “But I would say the student loan story is not as important as perhaps some of the other stories, just because those who hold student loans are not necessarily the drivers of the overall economy.”

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Economics

Consumer sentiment falls in May as Americans’ inflation expectations jump after tariffs

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A woman walks in an aisle of a Walmart supermarket in Houston, Texas, on May 15, 2025.

Ronaldo Schemidt | Afp | Getty Images

U.S. consumers are becoming increasingly worried that tariffs will lead to higher inflation, according to a University of Michigan survey released Friday.

The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022.

The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%.

However, the majority of the survey was completed before the U.S. and China announced a 90-day pause on most tariffs between the two countries. The trade situation appears to be a key factor weighing on consumer sentiment.

“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy,” Surveys of Consumers director Joanne Hsu said in the release.

Inflation expectations are closely watched by investors and policymakers. Federal Reserve Chair Jerome Powell has said the central bank wants to make sure long-term inflation expectations do not rise because of tariffs before resuming rate cuts.

A final consumer sentiment index for the month is slated to be released on May 30, and will likely be closely watched to see if the tariff pause led to an improvement in sentiment.

This is breaking news. Please refresh for updates.

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Economics

JPMorgan Chase CEO Jamie Dimon says recession is still on the table for U.S.

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Jamie Dimon, chief executive officer of JPMorgan Chase & Co., speaks during the 2025 National Retirement Summit in Washington, DC, US, on Wednesday, March 12, 2025.

Al Drago | Bloomberg | Getty Images

Wall Street titan Jamie Dimon said Thursday that a recession is still a serious possibility for the United States, even after the recent rollback of tariffs on China.

“If there’s a recession, I don’t know how big it will be or how long it will last. Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point,” the JPMorgan Chase CEO said in an interview with Bloomberg Television.

Specifically, Dimon said he would defer to his bank’s economists, who put recession odds at close to a toss-up. Michael Feroli, the firm’s chief U.S. economist, said in a note to clients on Tuesday that the recession outlook is “still elevated, but now below 50%.”

Dimon’s comments come less than a week after the U.S. and China announced that they were sharply reducing tariffs on one another for 90 days. The U.S. has also implemented a 90-day pause for many tariffs on other nations.

Thursday’s comments mark a change for Dimon, who said last month before the China truce that a recession was likely.

He also said there is still “uncertainty” on the tariff front but the pauses are a positive for the economy and market.

“I think the right thing to do is to back off some of that stuff and engage in conversation,” Dimon said.

However, even with the tariff pauses, the import taxes on goods entering the United States are now sharply higher than they were last year and could cause economic damage, according to Dimon.

“Even at this level, you see people holding back on investment and thinking through what they want to do,” Dimon said.

— CNBC’s Michael Bloom contributed reporting.

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