Prof G Markets
00:03:40 · Catherine Rampell, Ed Elson
[00:03:40] S4: Yeah. I mean, was a generational route. And I think there was a high expectation for Democrats going into this election, but it just exceeded all expectations. As you point out, Kansas just got its first Democratic senator since 1932. Heck, there were Democrats who won races where they weren't even running. There was a guy in Iowa who was still on the ballot after having dropped out for a, I think it was a state legislature seat, and he won. That's crazy. The the the voters were clearly just infuriated by the economy that they're dealing with with the war, and they decided to deliver a message to Donald Trump. And this is the message that they gave. I think the real question is how much this is a Republican loss versus a Democratic victory. Arithmetically, obviously, they're the same thing, but what that means in terms of the mandate for Democrats going forward looks very different depending on how you interpret it. [00:04:44] S3: Trump has been saying that that this wasn't about him, essentially. He's saying that, you know, because he wasn't on the ballot, that's why there was such a historic loss. I assume you disagree with that. I mean, all of the polling seemed to suggest that this is specifically about Trump, specifically about him. He was on the ballot. I assume that is your view as well.
00:05:06 · Catherine Rampell
[00:05:06] S4: You can interpret this as nothing other than a wholehearted repudiation of the Trump agenda. Americans are mad that gas prices are high, that grocery prices are high, that mortgages are expensive. They're mad that Donald Trump promised that he was going to lower prices, which we can get into why that was never going to happen. But, of course, instead of even letting prices kind of plateau, instead of just kicking back and enjoying the relatively strong economy that he inherited, Trump decided to basically, push all of the buttons that made the economy worse. Generally, I... I'm of the view that presidents don't have a lot of levers to pull to affect the economy. They they get too much credit when the economy is good, too much blame when the economy is bad, blah blah blah. We have learned in the past year and a half that, actually, presidents can't do a whole lot to improve the economy, but they can do quite a bit to make it worse. And unlike other kinds of things that presidents might do where it's hard for voters to connect the dots between, like, an infrastructure project that takes twenty years or whatever to really pay off or some sort of subsidy. In this particular case, it was really easy for voters to look around them and say, I'm mad about x, y, and z gas prices, let's say, and connect the dots to a specific thing that Donald Trump did. So, yes, I definitely view this as a rebuke of the Trump agenda.
00:06:40 · Ed Elson
[00:06:40] S3: Yeah. There was almost no nuance. It seems like every election, there's always a blame game. There's always some confusion as to, like, what's actually going on. It feels like this is the only election we've ever had where it's like, oh, no. Everyone knows exactly what is happening here. Everyone understands what the problem was, which to your early... Earlier point to me says this was less of a Democratic victory than a Republican loss, which I guess the question then becomes, what are the Democrats supposed to do with that? Are they going to recognize that depending on if it's true? What do you think?
00:07:14 · Catherine Rampell
[00:07:14] S4: To be fair, I do think that Democrats were strategic in running pretty good candidates in a lot of these races. They were obviously helped by the fact that Americans hate the Trump agenda and hate the war and hate the tariffs, etcetera. But they did run good candidates in places like Kansas and in places like Texas. So, you know, they were maybe gonna get over the line no matter what in some places. But in those states that looked out of reach not that long ago, I do think that it was helpful that they had good candidates. So I don't wanna rob them of all their their laurels here. When it comes to what that means that they should do, I think that voters are pretty clear that they want lawmakers to focus on affordability. Now there's a bunch that Democrats can do to roll back some of the damaging Trump policies, things like restoring the funding for Medicaid that was cut, SNAP funding as well, or rolling back the tariffs. You know, there are a bunch of things where they can undo Trump policies. When it comes to actually doing new stuff on affordability, that's where it's a lot harder. I think Democrats have been overly simplistic in their messaging about all of this, you know, with some calling for things like a nationwide rent freeze or other kinds of price controls or things like that. Those are not gonna work. I don't know exactly how much political momentum there is behind those kinds of things. And besides, they certainly have more than their work cut out for them in just reversing some of the Trump policies. But I do think that there's gonna be a fight over the next couple of years and heading into the twenty twenty eight presidential election about what the actual affirmative message of the party should look like and what that policy agenda should look like beyond just, you know, scrubbing the evidence of Trump policy off of the government as it stands now.
00:09:16 · Ed Elson
[00:09:16] S3: Just on this idea that, they could roll back some of his policy decisions, it seems like one one of the most interesting moves in the market, following this election was what happened to the price of oil. Brent crude fell almost 10%. It seems like the market is basically telling us that we have a pretty good shot of ending the war and getting out of Iran. I mean, do you think... One, is is that what it's saying? And two, do you think that's right? Is that actually a feasible path here that the Democrats could really coerce?
00:09:50 · Catherine Rampell
[00:09:50] S4: I think it might come less from the Democrats actually than from Republicans themselves. Part of the reason why oil prices fell so much was that JD Vance, obviously, vice president, came out and explicitly blamed the war for this route that Republicans just experienced, saying that that's why voters were mad. That's why they threw the bums out, etcetera. Don Junior, the Trump's son, also, you know, whatever, retweeted that JD Vance post suggesting that that was the correct interpretation as well. So I do think there is reason to believe that this administration is is more inclined, I guess, to try to wind down the war. Now whether that can actually be executed in a way that markets seem to think is going to happen is a totally different question. Right? The the horse is out of the barn on this. The Iranians know... The Iranian government knows that it can control the Strait Of Hormuz, and so you can't, like, unsee that conclusion if you are the Iranian government or if you are in the oil markets themselves. Right? If if you... I don't know. If you are commissioning a tanker or whatever, or insuring a tanker. So I I do think there's a question about the feasibility of delivering that result. But in terms of the willpower or the willingness to deliver it, I think that there's more appetite, particularly for Republicans who are eyeing 2028 and who are worried about Donald Trump and his very unpopular war weighing them down, which obviously JD Vance is. Now I I also think that Democrats are going to put pressure on the administration to do all of these things, but ultimately, it's it's probably gonna come down to what the White House and what the Pentagon decide to do even if, you know, Democrats in the house and the senate can try to withhold funding, for example, from the Pentagon. It's really... Those strategic decisions are more likely to be left up to the administration.