Prof G Markets
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.
00:11:54 · Ed Elson
[00:11:54] S3: I mean, it brings up a very fundamental question about Trump and how he's going to respond to what happened on Tuesday, and that is, is he going to reverse his decisions? Is he going to reverse his decisions on Iran? Is he going to reverse his decisions on tariffs? Is he gonna reverse his decisions on immigration? I think that one's probably less likely. But, you know, at least on on Iran and tariffs, two of the most consequential economic decisions that have defined the experiences of every single American over the past two years that have defined the trajectory of markets over the past two years. And I wonder if this might be the moment that actually he says, okay. My bad. That was a mistake. I mean, do you think that's actually feasible or realistic?
00:12:47 · Catherine Rampell
[00:12:47] S4: I don't think he has... He's capable of that level of introspection or strategic thinking. Okay. But he may lose interest in a lot of these things in the same way that if you saw his press briefing today, it was like showing off the ballroom. That was his response to this, again, generational route for his party that he himself caused. He was like, let's go look at this beam over here. And he answered a couple of questions about the election, but then disavowed any sort of responsibility for it and and said, oh, it was maybe related to that Iran thing, now calling it a thing. A war in which 23 service members that we're aware of have passed away is pretty callous, but it also reveals the fact that he's... This is just not top of mind for him. He's never really been that interested in He's much more interested in these vanity projects. So will he actually, like, undo the damage, or will he just, get distracted and do something else? I think the latter is more likely. And the war aside on some of these other kinds of questions like tariffs, Congress does have a lot of power here. If you look at the constitution, which which one should in the current environment or always, the constitution says that it is Congress that controls power of the purse and that is supposed to control trade among the nations. So Congress has really abdicated some responsibility or delegated away some of these authorities over the years, and they can clearly take those back and may have more willingness to take those back. I think actually on on the tariffs, what's been interesting is that even in the kind of Rust Belt states, the Midwest, places where Democrats used to run on a very protectionist message. They are... They did not this cycle. Even people like Sherrod Brown were criticizing the Trump tariff agenda. So you may well see that on things like that, which besides raising costs, downstream costs for consumers, have also been really, really disruptive to companies and to markets. You may see some greater intervention or, like, reclaiming of those constitutional responsibilities in a way that both Hems and Trump... At least I hope maybe this is wish casting, but I I hope this is what happens. You know, Hems and Trump and also creates a lot less uncertainty and erratic policy making for markets.
00:15:21 · Catherine Rampell, Ed Elson
So I think that's part of the the market reaction here that we're seeing. [00:15:26] S3: Yeah. The markets have reacted positively. I guess that is... There's... We're sort of reducing the amount of risk now that we have a little bit of pushback. I mean, just in terms of what the Democrats should do at this point, it seems like one of the questions has been around prosecuting corruption and crime or alleged crime, apparent crime by the president, by his associates. What do you think they're going to do? Do you think they're going to go after this stuff? Do you think they are going to prosecute him? Are they gonna hand him subpoenas? What is the next step for the Democrats?