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Democrats Flips House & Senate, Clinching Huge Wins in Rebuke to Trump · Balance of Power

0:02
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Speaker 4: Thank you for being with us here on the Wednesday edition.
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Speaker 4: We're going to go around the horn. with our reporters
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Speaker 4: who are in the field beginning at the White House.
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Speaker 4: Courtney Subramanian is on the North Lawn right now. Julie Feiner,
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Speaker 4: Texas Bureau Chief, is live in Dallas. And Anna Edgerton
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Speaker 4: reporting for Bloomberg News, live from the great state of Alaska.
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Speaker 4: We're going to go through all of them right now.
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Speaker 4: And Courtney, I want to start with you at the
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Speaker 4: White House. President is speaking, as we speak, about not
0:49
Speaker 4: the midterm results, but the ballroom.
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Speaker 2: Isn't that how we got here? It is.
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Speaker 5: We were not expected to hear from the president today.
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Speaker 5: All of his policy meetings were closed to press. The
1:01
Speaker 5: pool was unexpectedly called, and they were taken to the
1:05
Speaker 5: construction site, where the president continues to talk about the
1:10
Speaker 5: construction of this ballroom, his pet projects around D.C. As
1:14
Speaker 5: you may remember, the president gave his closing remarks at
1:18
Speaker 5: the reflection pool just on Monday, again, not talking about
1:22
Speaker 5: the midterm elections at hand. focusing on these projects that
1:26
Speaker 5: he has spent a lot of time and effort. And
1:30
Speaker 5: what his critics have said was a distraction to the
1:34
Speaker 5: issues that voters said, you know, they were going to
1:37
Speaker 5: vote on, high cost of living, the war in Iran. So,
1:40
Speaker 5: we have yet to know if the president plans to
1:43
Speaker 5: take any questions here. We're still waiting to hear from him. But,
1:47
Speaker 5: as Kayleigh noted, we did hear from him quite a
1:49
Speaker 5: bit last night in a series of media interviews. And
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Speaker 5: he has promised to work with Democrats.
1:54
Speaker 3: Moving forward.
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Speaker 6: All right, Courtney Subramanian live on the North Lawn of
1:58
Speaker 6: the White House. Thank you so much. It does appear
1:59
Speaker 6: that President Trump is getting closer to wrapping up his
2:02
Speaker 6: remarks about the ballroom. He says he loves construction. He
2:05
Speaker 6: says when he gets criticized, why is he working on
2:07
Speaker 6: the White House? He's doing it because the White House
2:09
Speaker 6: is the ultimate symbol of America. But of course, the
2:12
Speaker 6: political composition of America It's looking a little bit different
2:15
Speaker 6: this morning, as states that have been red for decades
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Speaker 6: are not looking so red anymore, one of those being Texas,
2:20
Speaker 6: which not only flipped blue when it came to the
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Speaker 6: Senate race, but the gubernatorial race, a number of statewide
2:25
Speaker 6: races last night. For more, we turn to our Texas
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Speaker 6: Bureau Chief, Julie Fine, who is joining us once again
2:30
Speaker 6: from Dallas. Julie, James Tallarico did last night what Beto
2:34
Speaker 6: O'Rourke could not in 2018. Gina Hinojosa pulled off something
2:37
Speaker 6: that both Beto and Wendy Davis could not. What is
2:40
Speaker 6: different in Texas this cycle, and might it still be true?
2:43
Speaker 6: two years from now or in cycles to come?
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Speaker 7: Well, I think what's different in Texas this cycle is
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Speaker 7: the perfect storm that worked in the Democrats' favor. First
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Speaker 7: of all, they had candidates that connected with voters, and
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Speaker 7: they connected with voters on issues like the economy and
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Speaker 7: data centers. Also, you had an unpopular president, and quite frankly,
3:03
Speaker 7: you had an unpopular Republican candidate. It's very interesting because
3:08
Speaker 7: John Cornyn, who lost in the primary, just put out
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Speaker 7: an opinion in the Wall Street Journal, and he kind
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Speaker 7: of went through what he believes went wrong for Republicans.
3:18
Speaker 7: He basically said they stayed away from the kitchen table
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Speaker 7: issues that have worked well for them in the past.
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Speaker 7: He didn't spare anything when it came to Donald Trump,
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Speaker 7: when he really came right out and said, let's see this.
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Speaker 1: Oh, Mr.
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Speaker 7: Trump signaled disconnection by focusing on sideshows like swimming pool
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Speaker 7: liners in the reflecting pool. So that ought to tell
3:40
Speaker 7: you where this is really going. I mean, it was
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Speaker 7: a very politely written opinion, but you're going to see
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Speaker 7: more of this in in Texas coming up where John
3:49
Speaker 7: Cornyn was basically like, you know, you've got to get
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Speaker 7: back to traditional conservative values. These have been distractions, and
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Speaker 7: character matters when it comes to candidates. So this is
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Speaker 7: where I think we're heading in Texas in the next
4:01
Speaker 7: few days as they really try to dissect what happened.
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Speaker 7: But don't take it from the Democrats as well, who
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Speaker 7: fielded good candidates, and they had an effort that was
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Speaker 7: very coordinated with campaigns in the state as well.
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Speaker 8: Mm-hmm.
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Speaker 2: Julie, thank you so much.
4:14
Speaker 4: Bloomberg's Julie Fine, our Texas bureau chief, with us live
4:17
Speaker 4: from Dallas. The president may take some questions with reporters. Presumably,
4:21
Speaker 4: he would be asked about the midterm results, and we'll
4:24
Speaker 4: let you know if that's the case. He did talk
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Speaker 4: for about 20 minutes here about the ballroom, about missing moldings,
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Speaker 4: and the rare.
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Speaker 2: Marble that was used in the complex.
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Speaker 3: The ceiling as well.
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Speaker 2: The ceilings.
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Speaker 4: The clarity of the bulletproof glass you touched on. We've
4:40
Speaker 4: got a conversation coming up with Congressman Joe Morelli, the
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Speaker 4: Democrat from New York, ranking member on the House Admin Committee,
4:46
Speaker 4: presumably soon to be chairman. Before that, Anna Edgerton joins
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Speaker 4: us live from the great state of Alaska. The big
4:54
Speaker 4: question people keep asking me this morning, Anna, is what
4:57
Speaker 4: happened in Alaska? They saw so many of their other
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Speaker 4: races called last night, and it could be weeks before
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Speaker 4: we know this one.
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Speaker 8: You know, this is a different situation that we saw
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Speaker 8: in Texas, for example, because in Texas, you know, we've
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Speaker 8: seen how Ken Paxton was a very flawed candidate. Dan
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Speaker 8: Sullivan was actually a good candidate for Alaska. He told
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Speaker 8: a compelling story about how he worked with the Trump
5:19
Speaker 8: administration to notch policy wins for the people of Alaska.
5:23
Speaker 8: But what I heard over and over again talking to
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Speaker 8: people yesterday was discussion about survival. When you're talking about
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Speaker 8: the cost of heating oil, when you're talking about the
5:32
Speaker 8: expense of living in Bush, Alaska, for some communities, that
5:36
Speaker 8: means surviving the long winter or not. So hearing you
5:40
Speaker 8: talk about the ballroom just now and the way the
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Speaker 8: president was describing it, is so far removed from the
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Speaker 8: concerns of the people here in Alaska. And I think
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Speaker 8: those are headwinds. They're just really hard for even a
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Speaker 8: good candidate like Dan Sullivan to overcome.
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Speaker 6: All right, Anna Edgerton live for us in Anchorage in
5:57
Speaker 6: what looks to be a very cold Anchorage. Anna, thank
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Speaker 6: you for braving it for us, and we'll keep checking
6:01
Speaker 6: in with you as we await potentially for weeks the
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Speaker 6: result of that Alaska race. But we want to turn now,
6:07
Speaker 6: as Joe promised, to a Democrat fresh off a re-election
6:10
Speaker 6: victory and getting ready to helm the House Administration Committee
6:14
Speaker 6: as incoming chairman of a Democratic majority. Joe Morelli is
6:17
Speaker 6: with us. He represents New York's 25th Congressional District. Congressman,
6:20
Speaker 6: it's great to have you back on Bloomberg TV and radio. You,
6:24
Speaker 6: of course, were helping lead as the ranking member, current
6:27
Speaker 6: ranking member of the House Administration Committee. efforts around voter security.
6:32
Speaker 6: There was a lot of fear coming into this election
6:35
Speaker 6: that there may be disruptions at polling sites, that there
6:38
Speaker 6: may be questions around the results, that they could be contested,
6:41
Speaker 6: that litigation would follow. And while maybe we are seeing
6:44
Speaker 6: litigation in the case of Alaska, it feels like we've
6:46
Speaker 6: seen a whole lot less of the other stuff that
6:49
Speaker 6: was feared. Overall, how would you rate the safety and
6:52
Speaker 6: security of this election?
6:54
Speaker 2: Well, I think it was amazing.
6:56
Speaker 9: I think in the same way that you build a
6:59
Speaker 9: strong defense as a deterrence, I think the work that
7:02
Speaker 9: was done across this country by election administrators at the
7:06
Speaker 9: local level, Democrats and Republicans who did an amazing job,
7:09
Speaker 9: unsung heroes in my view, as well as the dozens
7:12
Speaker 9: and dozens of civil society groups and the literally tens
7:15
Speaker 9: of thousands of American citizens who stood as observers, who
7:19
Speaker 9: became poll watchers, who engaged in this process. I think
7:23
Speaker 9: seeing all of that, I think the White House knew
7:25
Speaker 9: that they didn't have the choice other than to stand
7:28
Speaker 9: down and let the elections happen as they often do.
7:32
Speaker 9: let the American people give a verdict, which they did
7:34
Speaker 9: loudly and clearly last night. So I'm really proud of
7:37
Speaker 9: all the partners. I think the preparation for months and
7:40
Speaker 9: months clearly paid off.
7:42
Speaker 4: It's great to get your read on things, Congressman, because
7:45
Speaker 4: we all thought we'd be covering days, if not weeks,
7:48
Speaker 4: or more of litigation coming out of this. I presume
7:52
Speaker 4: that you're going to be the next chair of the appropriations,
7:55
Speaker 4: or sorry, of the admin committee, forgive me. We saw
7:58
Speaker 4: the current chair, Brian Stile, concede his race pretty early
8:02
Speaker 4: in the race, in the course of things, in the
8:05
Speaker 4: last evening. How will this shake out once the new
8:08
Speaker 4: chairs are in place and this new Congress begins? The
8:12
Speaker 4: president says he wants to work with you. Do you
8:15
Speaker 4: want to work with him?
8:17
Speaker 9: Well, we'll welcome the opportunity to work with anybody, but
8:19
Speaker 9: advance the interest of the American people. Look, my responsibility
8:23
Speaker 9: and what I'm focused on is dealing with the corruption
8:26
Speaker 9: that's in Washington, making sure we restore faith that Americans
8:30
Speaker 9: have placed in us and in their government. We want
8:33
Speaker 9: to restore that faith. And doing all of that, whether
8:36
Speaker 9: it's ending stock trading for government officials, their participation in
8:40
Speaker 9: prediction markets, dealing with all the dark money that has
8:44
Speaker 9: come into our politics and the billions of dollars that
8:47
Speaker 9: are being spent, we need to do campaign finance reform.
8:50
Speaker 9: But all of this needs to be done along with
8:53
Speaker 9: a focus on reducing costs to average Americans. They're struggling
8:57
Speaker 9: with gas prices and grocery prices and housing prices and
9:01
Speaker 9: how to pay for child care and all the things
9:04
Speaker 9: that Americans are dealing with every day. That's really what
9:07
Speaker 9: they care about. And that's what I'm going to be
9:09
Speaker 9: focused on. And I know that speaker, soon to be
9:13
Speaker 9: Speaker Jeffries, I keep saying it because I'm so excited
9:15
Speaker 9: about it. But that's what we're going to be focused on,
9:17
Speaker 9: the new majority in the House, and I suspect our
9:21
Speaker 9: Senate colleagues as well.
9:23
Speaker 6: Well, as you talk about addressing costs, we've heard from
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Speaker 6: some of your colleagues in recent days and weeks that
9:28
Speaker 6: ways in which Democrats would like to do so, pull
9:30
Speaker 6: back the president's tariff authority that, of course, Congress technically
9:34
Speaker 6: has constitutionally in the first place, try to rein in
9:37
Speaker 6: the war with Iran, perhaps through appropriations, and maybe be
9:40
Speaker 6: able to restore Obamacare subsidies as well. Are those the
9:43
Speaker 6: three plans of action, Congressman, or do you see other
9:45
Speaker 6: items on the to-do list? I think my question is,
9:49
Speaker 6: what can you tangibly deliver in legislation to address costs?
9:52
Speaker 6: costs for the American people.
9:54
Speaker 9: Well, you certainly mentioned big drivers of costs, the tariffs.
9:57
Speaker 9: I live in upstate New York. We are on the
10:00
Speaker 9: border with our friends in Canada. The impact that that's
10:03
Speaker 9: had economically, this war with Canada of all of all
10:06
Speaker 9: countries has really hurt us economically, but it hurts people
10:09
Speaker 9: all over this country. When you look at that, when
10:12
Speaker 9: you look at the extraordinary costs of the war in Iran,
10:15
Speaker 9: which is ill-advised, in my view, illegal, which has spent
10:18
Speaker 9: probably $ 150 billion unauthorized by the Congress, cost us American
10:23
Speaker 9: lives and put us probably further behind from a national
10:26
Speaker 9: security perspective than we began this. All those things will
10:30
Speaker 9: certainly be things that we're focused on because they lead
10:32
Speaker 9: directly to Iran. the rise in the cost of living
10:35
Speaker 9: that Americans are now struggling to deal with. And yesterday
10:38
Speaker 9: could not have been a clearer repudiation of these policies.
10:42
Speaker 9: And as I often say, these were policies that were
10:46
Speaker 9: initiated by President Trump. They weren't because of outside influences.
10:50
Speaker 9: It wasn't some international conflict that we responded. These are
10:53
Speaker 9: initiatives that he began with in addition to the cruelty
10:58
Speaker 9: of ICE and what it's done in communities And that
11:00
Speaker 9: has certainly had an economic impact in communities all over
11:03
Speaker 9: the country. So I think those are going to be
11:06
Speaker 9: some of the things that we work on. And I'm
11:08
Speaker 9: going to get to work on, as I said immediately,
11:10
Speaker 9: the issues of stock trading and prediction markets and campaign
11:15
Speaker 9: finance reform in my committee, because those all lead to
11:18
Speaker 9: the cost of corruption, which has driven up the cost
11:21
Speaker 9: of all this. Look, and by the way, I can't
11:23
Speaker 9: help but reflect on what I just saw with the president.
11:26
Speaker 9: When I was five years old, my mother and father...
11:28
Speaker 9: taught me in really concrete ways that you have to
11:31
Speaker 9: take accountability for what you do. It's the hallmark of leadership.
11:35
Speaker 9: And boy, for a president to be talking about construction
11:39
Speaker 9: projects at the White House or the reflecting pool when
11:42
Speaker 9: Americans are struggling and there's just been a major repudiation
11:46
Speaker 9: of his policies, says volumes about his leadership, his emotional maturity.
11:51
Speaker 9: I don't even know where to begin with that, but
11:52
Speaker 9: I think Look, it's something we're all going to have
11:54
Speaker 9: to deal with over the next couple of years.
11:56
Speaker 2: Well, it's not all he said.
11:57
Speaker 4: Congressman Morelli, the president, said he's not concerned about impeachment.
12:01
Speaker 2: Why would I be? Does he have the right approach?
12:05
Speaker 9: Look, I don't know that that's certainly something that people
12:08
Speaker 9: are focused on today.
12:09
Speaker 4: So you draw the line between oversight and impeachment. I
12:11
Speaker 4: know a lot of Democrats are reluctant to say that
12:13
Speaker 4: word out loud.
12:15
Speaker 9: Yeah, no, I think accountability needs to be reigning the
12:17
Speaker 9: corruption that we've seen, make sure that we hold people accountable,
12:21
Speaker 9: but also look to the future. That's really what, as
12:24
Speaker 9: I went around my community, as I've gone around the country,
12:27
Speaker 9: that is what people are talking about. How do you,
12:29
Speaker 9: how does the American government help the average American be
12:32
Speaker 9: able to be successful for themselves and for the families
12:35
Speaker 9: and for the future? That's what they care about.
12:38
Speaker 6: Congressman, I just want to mention a new race call
12:39
Speaker 6: that's coming in because, yes, we don't know the outcome.
12:41
Speaker 3: Of all the races.
12:42
Speaker 6: Yet DDHQ is now projecting that in the 21st District
12:46
Speaker 6: of New York, the Republican Anthony Constantino will be victorious
12:50
Speaker 6: over Blake Gendebein. Of course, this is the seat of
12:53
Speaker 6: outgoing Republican Congresswoman Elise Stefanik. The fact that it was
12:56
Speaker 6: even in question this cycle tells you a lot about
12:58
Speaker 6: the dynamics coming into these midterms. But I would imagine
13:01
Speaker 6: the 21st District, a lot of districts in New York,
13:03
Speaker 6: might look different in the next cycle. You were charged
13:07
Speaker 6: by Hakeem Jeffries with liaising with Albany about a potential
13:10
Speaker 6: redistricting effort in the next cycle or before the next cycle.
13:16
Speaker 6: Given what we just saw happen to Republicans in states
13:18
Speaker 6: like Texas and Florida, where their gerrymanders backfired, are you
13:22
Speaker 6: now concerned that you might risk the same in New York?
13:26
Speaker 9: Well, first and foremost— We need a gerrymandering standard around
13:30
Speaker 9: this country, and I'm going to work in my committee
13:31
Speaker 9: and work with my colleagues to put that in place.
13:34
Speaker 9: We need to put an end to the hyper-partisan gerrymandering.
13:36
Speaker 9: What we're doing in New York is talking about mid-district redistricting,
13:41
Speaker 9: when and if we're in a position where New York's
13:44
Speaker 9: interest is are at risk. And so we'll continue to
13:47
Speaker 9: talk about this. I'll work with Speaker Jeffries. I'll work
13:50
Speaker 9: with my colleagues. But this will be a referendum. We
13:52
Speaker 9: can't make those changes until New Yorkers agree to allow
13:56
Speaker 9: us to make those changes. That's much different than what
13:58
Speaker 9: happened in Texas, what happened in Florida. So we'll look
14:01
Speaker 9: forward to that conversation in the coming months. I don't
14:03
Speaker 9: want to get ahead of my colleagues in the state legislature.
14:06
Speaker 9: But ultimately, the people of New York will make this decision.
14:10
Speaker 9: And that's as it should be.
14:11
Speaker 2: You get the bigger office, Congressman? You get the gavel?
14:15
Speaker 9: I'll tell you, I'm looking forward to the gavel. But honestly,
14:18
Speaker 9: I'm looking forward to having an opportunity to work with
14:20
Speaker 9: Speaker Jeffries and my colleagues on making America fulfill its promise.
14:25
Speaker 9: And that's what I think the message in yesterday's election
14:27
Speaker 9: was all about.
14:28
Speaker 4: I'm sure we'll meet again in Washington. Congressman Joe Morelli,
14:31
Speaker 4: we thank you as always.
14:33
Speaker 2: From New York. Ranking member, house admin, at least for now.
14:36
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14:55
Speaker 6: When we think about 2028, whether or not J.D. Vance
14:58
Speaker 6: or someone else runs, 2028 for Republicans will begin in
15:02
Speaker 6: Iowa with the caucus there. South Carolina, obviously, is where
15:06
Speaker 6: Democrats are going to be starting their cycle in 2028.
15:09
Speaker 6: But it is Iowa where Republicans begin. And it's an
15:11
Speaker 6: Iowa that right now looks a little different on this
15:14
Speaker 6: Wednesday than it did in recent years, as you obviously
15:19
Speaker 6: saw yesterday. calls not just for the Democrat to win
15:22
Speaker 6: the Senate contest, but the gubernatorial contest as well. So
15:25
Speaker 6: let's go now live to Des Moines, where we find
15:27
Speaker 6: Bloomberg's Tyler Woodhouse, who, of course, is a White House
15:29
Speaker 6: correspondent for us, but has been covering these Iowa races. Skyler,
15:32
Speaker 6: what was it like to wake up in Des Moines
15:34
Speaker 6: this morning? What's the feeling like on the ground on
15:36
Speaker 6: this day after?
15:39
Speaker 3: Hey, Kayleigh.
15:40
Speaker 10: I mean, it's actually pretty cold and there's no sun out,
15:42
Speaker 10: but I would say the energy in Des Moines, for
15:45
Speaker 10: the most part, is very positive. Democrats delivered a huge
15:49
Speaker 10: win here in the state, and this was a state
15:51
Speaker 10: that President Trump and Republicans were trying to keep red.
15:55
Speaker 10: Trump has carried the state since he really entered politics
15:58
Speaker 10: back in 2016. So this was a huge upset for
16:01
Speaker 10: the Republicans and a huge win for Democrats. And as
16:04
Speaker 10: we look forward to 2028, it'll be interesting to see
16:07
Speaker 10: how the Democrats and the state navigate these next two
16:10
Speaker 10: years as we head into a presidential election and if
16:14
Speaker 10: they can keep that momentum going to try and keep
16:16
Speaker 10: the state blue. I would say now the state is
16:19
Speaker 10: more purple, but we'll see what happens in 2028. But
16:22
Speaker 10: things are pretty positive right now. Here in Des Moines
16:24
Speaker 10: and here in Iowa, last night at the Democrats' election party,
16:29
Speaker 10: there was a lot of energy in the room, lots
16:31
Speaker 10: of excitement, lots of hugs going around. So this was
16:34
Speaker 10: definitely a win that the Democrats were happy to secure.
16:37
Speaker 4: All right, Skyler, it's good to see you in Iowa,
16:38
Speaker 4: and we appreciate all your help last evening. Skyler Woodhouse
16:41
Speaker 4: reporting live on Bloomberg TV and radio. Let's go back
16:44
Speaker 4: to last night, the Democrat Josh Turek following the news
16:47
Speaker 4: of his win.
16:50
Speaker 11: Our campaign finance system is broken. and nasty campaign commercials
16:55
Speaker 11: bought by billionaires trying to buy off our elections make
16:58
Speaker 11: it even worse. But tonight, Iowa, we outvoted the billionaires.
17:10
Speaker 11: We outworked the corporate PACs, and we told every single
17:14
Speaker 11: corrupt politician.
17:16
Speaker 2: Enough is enough.
17:19
Speaker 4: As we keep hearing, 2028 starts today, and we assemble
17:22
Speaker 4: our political panel for their take on the fallout from
17:25
Speaker 4: last evening and looking ahead to the next cycle. Well,
17:27
Speaker 4: I guess it's the now cycle. Rick Davis, Bloomberg Politics
17:30
Speaker 4: contributor and Republican strategist, partner at Stonecourt Capital, back with us.
17:35
Speaker 4: We're still awake, and so is Jeanne Shanzano, Democratic analyst
17:38
Speaker 4: and Democracy Visiting Fellow at Harvard Kennedy School's Ash Center. Rick,
17:42
Speaker 4: you know what it's like to launch campaigns in Iowa.
17:44
Speaker 4: To what extent does this color... I know Democrats won't
17:47
Speaker 4: be there firsthand, But Republicans will be there to rebuild
17:50
Speaker 4: a brand starting pretty soon.
17:52
Speaker 2: How does it work?
17:53
Speaker 12: Yeah, I think actually you point up a good issue
17:57
Speaker 12: for Republicans in Iowa, which is the Democrats don't think
17:59
Speaker 12: you're representative of the nation. So they pulled their nominating
18:05
Speaker 12: event there, the caucuses, and they moved to South Carolina.
18:09
Speaker 12: So the first thing we say is, you're much more
18:11
Speaker 12: important to the Republicans than the Democrats. And then from
18:14
Speaker 12: there you build. I mean, the reality is we have
18:16
Speaker 12: to build the base of the Republicans there. And the
18:19
Speaker 12: biggest fault of this election is was that we didn't
18:22
Speaker 12: mobilize Republican voters to show up. I mean, forget independents,
18:26
Speaker 12: forget Democrat switchers, this was all about the Republican Party,
18:30
Speaker 12: and we disappointed ourselves, and we disappointed our voters. So
18:34
Speaker 12: there's a common cause there, and especially in a caucus,
18:37
Speaker 12: it's man on man, right?
18:38
Speaker 2: So you have to literally.
18:39
Speaker 12: Knock on the doors and say, hey, Apologies for not
18:42
Speaker 12: delivering for you over the last two years, but this
18:44
Speaker 12: is the plan for the future. So the first thing
18:46
Speaker 12: we got to do is, as a party, come up
18:49
Speaker 12: with who we are.
18:49
Speaker 2: And what we stand for. It's been confusing.
18:52
Speaker 12: Tariffs, wars, all kinds of things going on in our
18:54
Speaker 12: party that is different than what our brand says historically.
18:58
Speaker 12: So we have to get back to some semblance of history.
19:01
Speaker 6: Well, it's interesting to hear Rick today talk about how
19:03
Speaker 6: Republicans struggled to turn out, despite the fact that they
19:06
Speaker 6: had the financial advantage. They had way more money to
19:10
Speaker 6: have advertisements, to fund a get-out-the-vote campaign than Democrats did.
19:14
Speaker 6: We just heard Josh Turek there talking about beating the billionaires, essentially.
19:18
Speaker 6: We saw that, too, in Texas, where Elon Musk literally
19:20
Speaker 6: lit hundreds of millions of dollars on fire only for
19:23
Speaker 6: his desired Senate candidate, Ken Paxton, to lose. He tweeted
19:27
Speaker 6: last night saying, Jeannie, guess my election interfering space lasers
19:31
Speaker 6: didn't work this time. What have we learned about big
19:35
Speaker 6: money in politics with these midterm results?
19:37
Speaker 13: And Josh Turek said it beautifully and you just reiterated it.
19:41
Speaker 13: This is the sleeper issue of this campaign. And as
19:45
Speaker 13: we go into 28, which is that Democrats outraised in
19:48
Speaker 13: small dollars Republicans. four or five to one, leaving the
19:53
Speaker 13: Republicans to be exactly what everybody has accused them of being,
19:57
Speaker 13: the party now of the billionaire donors. And that's what
20:00
Speaker 13: Josh Turek is talking about. That's what James Tallarico, his
20:04
Speaker 13: closing message in Texas was, Texas is not for sale
20:07
Speaker 13: to billionaires. And so Republicans going into 28, in addition
20:11
Speaker 13: to all the issues that Rick talks about, they are
20:14
Speaker 13: going to have to figure out how they get back
20:17
Speaker 13: to being a party of the small donor, a party
20:20
Speaker 13: of regular people, and not just a party of the
20:23
Speaker 13: billion and trillionaires, which is where they find themselves. You know,
20:27
Speaker 13: we talked an awful lot about the advantage Republicans had
20:30
Speaker 13: in terms of money, and you're absolutely right, they did overall.
20:33
Speaker 13: Democrats turned that back on them and said, where did
20:35
Speaker 13: this come from? You are being bought and sold, and
20:39
Speaker 13: we all know it, and we're not going to take
20:40
Speaker 13: it anymore. And that's what Republicans need to address.
20:43
Speaker 2: Well, we discussed Iowa.
20:45
Speaker 4: You won't be in the first-in-the-nation caucus state. You're going
20:47
Speaker 4: to be in South Carolina, correct?
20:49
Speaker 2: I'll still go to Iowa, Joe Matthews. That's fine. Well,
20:51
Speaker 2: we're going to have to go to— I think we're
20:52
Speaker 2: all going to Iowa. We're going to have to go
20:54
Speaker 2: to a lot of cool places. I get that.
20:57
Speaker 4: But how do you feel about that following the upset
20:59
Speaker 4: in the Senate race? Darlene Graham lost last night. And
21:02
Speaker 4: to see Jim Clyburn smiling his way through some of
21:05
Speaker 4: these victories was remarkable. What will that mean for the
21:07
Speaker 4: first in the nation, what are we called, first in
21:09
Speaker 4: the nation Democratic primary states?
21:12
Speaker 13: I think it should be South Carolina. I think it's
21:15
Speaker 13: important that the first state in the nation has a
21:19
Speaker 13: heavy black representation. And I'll tell you, particularly important going
21:24
Speaker 13: into 28, because this constituency of the Democratic Party is moderate.
21:29
Speaker 13: They are a moderating force in this party. And it's
21:32
Speaker 13: a party that's now going to be riled with a
21:35
Speaker 13: split between the DSA years and the more moderate folks.
21:38
Speaker 13: And as we've seen with Jim Clyburn, South Carolina in
21:41
Speaker 13: the past, they bring the party to a more moderate position.
21:45
Speaker 13: So it's wise. And it also gives our friend John
21:47
Speaker 13: Ossoff a little leg up. He's got the first black
21:51
Speaker 13: woman elected governor. He didn't get her elected. She got
21:54
Speaker 13: elected governor. He's sitting there. And now he can move
21:57
Speaker 13: to South Carolina if he chooses to do that. So
22:00
Speaker 13: this is an enormous win for the party. And South
22:03
Speaker 13: Carolina should be it. We don't need to go back to,
22:06
Speaker 13: we can include Iowa, but that is not a representative
22:09
Speaker 13: state for us.
22:10
Speaker 6: It was striking to me as the New York Times
22:12
Speaker 6: put out a voter trends analysis of the swings we
22:14
Speaker 6: saw from the 2024 cycle to this one among different
22:18
Speaker 6: demographic groups. As Jeannie talks about black voters in South Carolina,
22:21
Speaker 6: that was D plus nine compared to 2024. But the
22:23
Speaker 6: swing was much larger for Hispanics, 28 points. Rick, this
22:29
Speaker 6: is obviously why Republicans were dealt blows in Texas and
22:31
Speaker 6: Florida despite having redrawn congressional maps to favor themselves. What
22:36
Speaker 6: have we learned about the Hispanic electorate in this cycle?
22:39
Speaker 6: And if President Trump wants to continue his hard line
22:42
Speaker 6: on immigration and enforcement for the next decade? two years,
22:45
Speaker 6: are Republicans going to be able to win those Latino
22:47
Speaker 6: voters back?
22:47
Speaker 3: Yeah, look, they are swing voters, right?
22:50
Speaker 2: And they've proven that over time.
22:51
Speaker 12: I mean, you know, John McCain did really well against
22:54
Speaker 12: Barack Obama with Hispanic voters. You know, George Bush, W,
22:58
Speaker 12: used to win Hispanic voters nationally. You know, you win
23:01
Speaker 12: Hispanic majorities in Texas if you're a Republican time and
23:04
Speaker 12: time again. But that being said, you've got to do
23:06
Speaker 12: things that actually make sense to Hispanic voters. They're more conservative,
23:10
Speaker 12: very similar to black voters. They're more religious. They're business owners.
23:15
Speaker 12: So if you're a Democrat, you have to appeal to that.
23:17
Speaker 12: It can't just be on immigration. Republicans have to get
23:20
Speaker 12: right on immigration. We've been preaching comprehensive immigration reform. Now
23:24
Speaker 12: maybe there's a plan for that. I feel like I'm
23:27
Speaker 12: a throwback to the early 2000s because what I'm hearing
23:30
Speaker 12: from Jeannie is we're also going to have comprehensive campaign
23:32
Speaker 12: finance reform.
23:33
Speaker 3: Your time has come back around.
23:35
Speaker 9: Exactly.
23:36
Speaker 12: I mean, like, anybody who wants to do those things,
23:38
Speaker 12: call me. I've got a lot of history there. And
23:42
Speaker 12: so at the end of the day, I think you're
23:44
Speaker 12: going to have a scramble in these parties, like I
23:46
Speaker 12: was just saying before, to say, what's our platform? I mean,
23:49
Speaker 12: when was the last time we heard a party having
23:51
Speaker 12: a platform? Democrats ran against Donald Trump. We did not
23:56
Speaker 12: hear what Democrats are for. We heard about what they
23:58
Speaker 12: were against. And that was fine, and it did really well.
24:01
Speaker 9: Kudos.
24:02
Speaker 12: Now the onus is on you as a governing party.
24:04
Speaker 12: They're going to have to figure that stuff out. And
24:06
Speaker 12: there are a lot of reasons to want to keep
24:08
Speaker 12: those Hispanics, especially the young Hispanic males, that made a
24:12
Speaker 12: big difference in Texas inside the Democratic Party.
24:14
Speaker 2: Otherwise, it's a one and done.
24:16
Speaker 1: 2032.
24:17
Speaker 2: I don't want to look past 2028.
24:18
Speaker 12: We're skipping way ahead now.
24:21
Speaker 2: We're going to remake on this one.
24:22
Speaker 14: Post-new census.
24:23
Speaker 2: Doing this all today.
24:25
Speaker 4: Jeannie, I'm going to give you a chance to take
24:27
Speaker 4: a lap here because you talk about young voters. You
24:29
Speaker 4: spend every day on campus with young voters and you
24:33
Speaker 4: frequently defend young voters who we often say are on
24:36
Speaker 4: the couch instead of voting. 70 percent of voters, according
24:39
Speaker 4: to AP's nationwide voter survey, 70 percent under 30 backed
24:44
Speaker 4: Democratic House candidates. That's a very different story than we
24:47
Speaker 4: were telling in twenty four.
24:49
Speaker 2: That's right.
24:49
Speaker 13: And these are people who care about common sense issues.
24:53
Speaker 13: They are coming out of university carrying the largest debt
24:56
Speaker 13: of any single group in this country. The cost is
25:00
Speaker 13: absolutely outrageous. They need jobs. They're worried about AI stealing
25:04
Speaker 13: their jobs. They have health care thanks to their parents
25:07
Speaker 13: or whoever under the Affordable Care Act, but you get
25:10
Speaker 13: to be 27 pretty fast, as I can tell you.
25:13
Speaker 13: So these are common sense people. And there are many
25:15
Speaker 13: of the particularly young men who took A chance with
25:18
Speaker 13: Donald Trump when he promised to do right on the
25:20
Speaker 13: economy and no endless wars. They feel let down and
25:23
Speaker 13: they've gone the other way now.
25:25
Speaker 3: All right.
25:25
Speaker 6: Jeannie Shanzano and Rick Davis, both of them Bloomberg politics contributors.
25:30
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
25:34
Speaker 1: us live weekdays at noon and 5 p.m. Eastern on
25:37
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25:40
Speaker 1: Listen on demand wherever you get your podcasts or watch
25:43
Speaker 1: us live on YouTube.
25:46
Speaker 4: We're still picking up the pieces in some cases. We
25:48
Speaker 4: still have two Senate races not called. Alaska is going
25:51
Speaker 4: to take forever.
25:51
Speaker 2: Mississippi, who knows?
25:53
Speaker 4: The Democrat is in the lead by a couple dozen votes. And,
25:57
Speaker 4: of course, we're looking at a remarkable market reaction today.
25:59
Speaker 4: Charlie just laid it all out for us. To think
26:02
Speaker 4: that we're seeing gains like this after the stock dump
26:04
Speaker 4: that we witnessed last evening is quite remarkable, not to
26:07
Speaker 4: mention just the general sort of narrative on Wall.
26:09
Speaker 2: Street that traders were fearing.
26:12
Speaker 4: A sweep of Capitol Hill and what it might mean
26:14
Speaker 4: for regulations, the future of data center and the rest.
26:17
Speaker 4: And we are seeing some pockmarks here when it comes
26:19
Speaker 4: to the AI trade, but a rising tide across the board.
26:23
Speaker 4: We've got an expert with us here, Kayleigh, who we've
26:25
Speaker 4: spent a little bit of time with on this program,
26:27
Speaker 4: who knows about the Trump economic agenda and might have
26:30
Speaker 4: Some thoughts on the way this market's reacting.
26:32
Speaker 6: Yeah, I'm pleased to say Joe Livornia is here with
26:34
Speaker 6: us at world headquarters in New York. He's now chief
26:36
Speaker 6: economist at SMBC Americas, but he's also former counselor to
26:40
Speaker 6: Secretary Scott Besson in the Treasury Department. In this second
26:42
Speaker 6: Trump term, he served. in the first Trump term as
26:46
Speaker 6: well on the National Economic Council. Joe, it's great to
26:48
Speaker 6: have you back on Bloomberg TV and radio. Obviously, there's
26:52
Speaker 6: a lot of post-mortem happening of last night's results. It
26:55
Speaker 6: seems a lot of it, if you listen to J.D. Vance,
26:57
Speaker 6: comes down to the war with Iran and the impact
26:59
Speaker 6: it has had on the U.S.
27:01
Speaker 3: Economy.
27:02
Speaker 6: Democrats are now pledging with their newfound majorities to end
27:04
Speaker 6: the war with Iran. If we see an end to that,
27:07
Speaker 6: how quickly could some economic relief follow?
27:10
Speaker 3: It's happening today.
27:11
Speaker 15: I'm a little surprised that we had the reaction last
27:13
Speaker 15: night that kind of made sense because love Trump or
27:16
Speaker 15: hate Trump, he's been very friendly to financial markets, particularly
27:20
Speaker 15: certain sectors like AI, data centers, crypto, energy, and to
27:24
Speaker 15: some extent financial services. I thought the reaction might have
27:27
Speaker 15: been a little bit more violent. I still think that
27:29
Speaker 15: could happen because... Well, you know, the data center AI
27:33
Speaker 15: trade has not generally been friendly to the average American.
27:37
Speaker 15: And given the wipeout that the Republicans had, some of
27:43
Speaker 15: the moratorium talk and regulation could surface in January. And,
27:48
Speaker 15: of course, the momentum right now clearly favors the Democrats
27:51
Speaker 15: in 2018. But what's happening, I think, today is the
27:55
Speaker 15: move in oil is very important. And Chuck Schumer mentioned that,
28:00
Speaker 15: you know, he's going to basically stop the war in
28:03
Speaker 15: Iran and he's got Republicans to support him. I've been
28:06
Speaker 15: telling clients that we're basically going to be out by,
28:09
Speaker 15: I think, by the end of the first quarter. And
28:12
Speaker 15: I've been thinking all along this would drag on for
28:14
Speaker 15: a variety of reasons. So I've not been in like
28:16
Speaker 15: this is going to happen any day moment.
28:17
Speaker 2: Because of last night, you're saying it's going to happen.
28:19
Speaker 3: By the end of the first quarter.
28:20
Speaker 15: So I think Vice President Vance directionally is correct. There
28:26
Speaker 15: are a variety of reasons why the Republicans did so poorly.
28:29
Speaker 15: But certainly affordability is a huge issue. when you've got
28:33
Speaker 15: negative real wage growth, which is the opposite of what
28:35
Speaker 15: happened during Trump's first term. In fact, having been there twice,
28:39
Speaker 15: the Trump policies in the first term are very different
28:41
Speaker 15: than the Trump policies in the second term, more or less.
28:45
Speaker 15: And it was his inability to deliver, which created a
28:48
Speaker 15: tremendous backlash, of the American worker, or the working class,
28:52
Speaker 15: of which Trump did very well in the prior three elections.
28:55
Speaker 4: Is the market also happy because investors think this is
28:58
Speaker 4: the end of the tariff regime as we know it?
29:01
Speaker 15: Maybe, but I wouldn't push it that far because if
29:04
Speaker 15: you look back in the Biden administration.
29:05
Speaker 3: They kept all of Trump's tariffs. They had voluntary export restraints.
29:08
Speaker 2: And he could do EOs all day long.
29:09
Speaker 3: He could do EOs all day.
29:10
Speaker 15: But, you know, China is still a strategic competitor and
29:13
Speaker 15: peer adversary. And maybe some of the tariffs against our
29:17
Speaker 15: partners and friends, Mexico and Canada, come off. We go
29:21
Speaker 15: back to a more solid MCA, USMCA type of framework.
29:25
Speaker 15: But I don't think that if this is a tariff trade,
29:28
Speaker 15: I would fade it I don't think the tariffs with
29:31
Speaker 15: China which is a main competitor are going to change
29:33
Speaker 15: very much in a Democrat may May actually put them
29:37
Speaker 15: in place the issue I have with the tariffs is
29:39
Speaker 15: the way they were were executed. But in theory, you know,
29:42
Speaker 15: tariffs are neither good nor bad. If they're designed to
29:44
Speaker 15: protect industry and bring supply chains back, then that's great.
29:49
Speaker 6: I want to go back to the AI infrastructure build-out
29:52
Speaker 6: and data centers, which were literally on the ballot in
29:54
Speaker 6: many referendums in this cycle, but also were front and
29:57
Speaker 6: center in so many of these races. We now have
29:59
Speaker 6: gubernatorial victors in places like Texas and Georgia, where these
30:03
Speaker 6: build-outs are concentrated, who have campaigned in part on a
30:06
Speaker 6: moratorium on stopping them for the time being until there
30:09
Speaker 6: are clearer community protections established. in place. You have members
30:12
Speaker 6: of Congress who are pledging to rein this in as
30:15
Speaker 6: well and rein in artificial intelligence. Considering the CapEx boom
30:18
Speaker 6: around this that has been powering equity markets and the
30:22
Speaker 6: actual infrastructure, physical construction boom that has helped juice GDP,
30:26
Speaker 6: what happens if Democrats follow through on their campaign promises
30:30
Speaker 6: and act to slow it down?
30:31
Speaker 15: I don't even think it's actually a Democrat versus Republican story.
30:36
Speaker 3: It's bipartisan.
30:37
Speaker 15: I think the thing is that Under the Trump administration,
30:40
Speaker 15: they've had a very laissez-faire approach to regulation, and anything
30:45
Speaker 15: that rocks the apple cart, so to speak, you would
30:48
Speaker 15: think would be negative. There's just a lot to digest
30:52
Speaker 15: as we get into the new Congress. They're going to
30:54
Speaker 15: be sworn in, I think it's January 3rd or 4th.
30:56
Speaker 3: Yep, 3rd.
30:58
Speaker 8: 3rd.
30:58
Speaker 3: We're going to hear more about what these new.
31:03
Speaker 15: Politicians and policy people are going to say, and I
31:05
Speaker 15: do think there will be some headwinds to the exuberance
31:08
Speaker 15: of Whether it ends the boom remains to be seen.
31:11
Speaker 15: But I do think, I do share your, maybe if
31:13
Speaker 15: I'm reading this correctly, your sort of skepticism or concern. Hey, look,
31:16
Speaker 15: you know, this is like, things aren't going to be
31:18
Speaker 15: as good.
31:19
Speaker 3: And maybe that's the.
31:19
Speaker 15: Right approach, by the way, because I actually don't want
31:21
Speaker 15: a data center near me with all due respect to
31:23
Speaker 15: the data center people.
31:25
Speaker 6: I have no opinions, by the way, just questions.
31:28
Speaker 4: You were at the Treasury all that long ago. Do
31:31
Speaker 4: we have to worry about a fiscal cliff? Is the
31:34
Speaker 4: debt limit going to be addressed by Republicans in the
31:36
Speaker 4: lame duck or by everyone in the new Congress?
31:38
Speaker 15: No, so I don't think there's, I mean, there might
31:41
Speaker 15: be a couple of things that are done before the
31:44
Speaker 15: new session. I mean, maybe we extend the continuing resolution,
31:47
Speaker 15: which I believe ends December 11th.
31:50
Speaker 3: Extend that. We're not going to have a budget.
31:52
Speaker 15: Farm bill, defense authorization, kind of like the bare bones
31:56
Speaker 15: necessary things. But Joe, we're going to fight over the
31:58
Speaker 15: debt ceiling next year. Now, is the debt a problem? Well,
32:02
Speaker 15: in theory it is. We're on an unsustainable track. But,
32:04
Speaker 15: you know, the market isn't punishing us on that. Rates
32:08
Speaker 15: have backed up this year largely because, you know, we've
32:10
Speaker 15: had an economic boom. And that's sort of the self-inflicted
32:13
Speaker 15: aspect of Republicans, what.
32:15
Speaker 3: They did wrong.
32:15
Speaker 15: The economy is performing very well.
32:17
Speaker 3: Labor markets held in. But the U.S.
32:19
Speaker 15: Went into Iran. The Trump administration went into Iran. The
32:22
Speaker 15: public didn't support it. It certainly hurt them. Cost of
32:25
Speaker 15: living was a problem to begin with. Rates went up.
32:28
Speaker 15: I mean, it's sort of, you know, there's a lot
32:30
Speaker 15: of self-inflicted, unforced errors. And so we'll see what happens.
32:34
Speaker 15: But the economy is still pretty healthy. Labor markets look good.
32:38
Speaker 15: And the Fed will keep raising rates. It's not a
32:40
Speaker 15: bad thing.
32:42
Speaker 6: Just quickly on the Fed, if the president is presented
32:45
Speaker 6: with the opportunity to name any new nominees to the
32:47
Speaker 6: Fed board, he's now going to have to get them through.
32:49
Speaker 3: A Democratic Senate. There's not enough time.
32:53
Speaker 14: No.
32:53
Speaker 3: It's not going to happen.
32:54
Speaker 8: Okay.
32:54
Speaker 3: It's not going to happen, no.
32:56
Speaker 6: All right.
32:56
Speaker 3: We'll leave it on that note.
32:57
Speaker 6: Joe LaVornia, great to see you now at SMBC. America
33:00
Speaker 6: is where he's chief economist, but of course, a veteran
33:01
Speaker 6: of both the first and this second Trump administration in
33:04
Speaker 6: the economic arena. Thank you so much. We want to
33:07
Speaker 6: delve further into one of those topics we were talking
33:09
Speaker 6: about with Joe, which is AI infrastructure, data centers, which
33:13
Speaker 6: were not just an issue in places like Texas and
33:15
Speaker 6: Georgia that we talked about, but Ohio too. It was
33:18
Speaker 6: front and center in the campaign of the now Senate
33:19
Speaker 6: elect in Ohio, Sherrod Brown.
33:22
Speaker 14: Listen. I do not work for the utility companies. I
33:29
Speaker 14: do not work for data centers I do not work
33:36
Speaker 14: for Wall Street I work for you, I work for Ohio.
33:43
Speaker 6: Let's get more into this now after hearing Sherrod Brown
33:46
Speaker 6: at his victory party last night with Gautam Mukunda, lecturer
33:49
Speaker 6: at Yale School of Management and Bloomberg Opinion contributor. Gautam,
33:52
Speaker 6: we've been talking to you a lot about the data
33:54
Speaker 6: center pushback and how it is front and center in
33:56
Speaker 6: American politics right now with the victory of not just
33:58
Speaker 6: Sherrod Brown, but Amy Acton, who now has the governor's
34:00
Speaker 6: mansion or will in Ohio, Texas, Georgia, you name it.
34:05
Speaker 6: What in your mind is realistically going to happen with
34:08
Speaker 6: this story now? Will they act on the promises that
34:10
Speaker 6: they made?
34:12
Speaker 3: So they have to.
34:13
Speaker 16: There's just no question that data centers are incredibly unpopular.
34:16
Speaker 16: Of the actual referenda that were put out, so the
34:19
Speaker 16: ballot initiatives on data centers, there were 41 of them
34:23
Speaker 16: to restrict data centers. If I recall correctly, 41 of them.
34:26
Speaker 16: And 41, right? 40 of the 41 won. That's about
34:31
Speaker 16: as lopsided a result as you're ever going to get
34:33
Speaker 16: in American politics. I think the one that won had
34:35
Speaker 16: something like 600 votes total cast. So they are going
34:39
Speaker 16: to have to. But this isn't quite as bad as
34:42
Speaker 16: it seems. Data centers, when you actually do the exit
34:46
Speaker 16: polling and you ask people, were data centers the most
34:48
Speaker 16: important thing.
34:49
Speaker 2: That you voted on?
34:50
Speaker 16: Essentially, no people in the United States said that.
34:53
Speaker 8: Right?
34:53
Speaker 9: Like.
34:55
Speaker 16: Everyone in the United States agrees that data centers are bad.
34:58
Speaker 16: You may not like that, but that is an overwhelming
35:00
Speaker 16: political consensus. But it's not a major issue. It's not
35:04
Speaker 16: a top-tier issue. And so that creates a lot of
35:07
Speaker 16: room for an industry to sort of say, okay, so
35:09
Speaker 16: what can we do to make this more valuable to you?
35:11
Speaker 16: What do we do to make this less hostile? But
35:13
Speaker 16: it also requires a sort of complete attitude transformation on
35:16
Speaker 16: an industry level. whose approach up to this point has
35:18
Speaker 16: basically been, we're just going to bully you into it
35:20
Speaker 16: and force you to get to accept these things.
35:22
Speaker 4: But don't, I mean, it may not be in a
35:25
Speaker 4: vacuum a primary issue, but don't many voters see this
35:29
Speaker 4: as a sort of extension of the affordability issue?
35:32
Speaker 2: My water bill's up, my electric bill's up. Whether that's not.
35:34
Speaker 4: True or is true about your local data center, that's
35:38
Speaker 4: just the perception across the country. Was that not on
35:43
Speaker 4: the ballot for a lot of people first and foremost?
35:46
Speaker 16: No, I think that's exactly right. It's a tie to
35:48
Speaker 16: the affordability issue. It's also tied to the number one
35:51
Speaker 16: issue in this election, which was corruption, right? So the
35:54
Speaker 16: first time in the history of exit polling, the number
35:57
Speaker 16: one issue cited by voters was corruption for why they
36:00
Speaker 16: cast their vote. And because, again, the way in which
36:03
Speaker 16: the industry has sort of tied itself so closely to
36:05
Speaker 16: the Trump administration has been so open about, you know,
36:08
Speaker 16: working about pressuring legislators and pressuring political people at all
36:13
Speaker 16: levels to in ways that most Americans just don't like,
36:16
Speaker 16: it feels corrupt in a profound way. And that's the
36:19
Speaker 16: thing that they need to translate, as opposed to what
36:21
Speaker 16: I'm seeing on Twitter, people being like, oh, well, it's
36:23
Speaker 16: all over. Well, try to persuade people. Try to win
36:25
Speaker 16: them over to your side instead of what you have
36:27
Speaker 16: been doing.
36:29
Speaker 6: I want to ask you more broadly, Gautam, about the
36:33
Speaker 6: market reaction we are seeing today. Because with all this
36:36
Speaker 6: concern about data center and AI pushback, when the early
36:38
Speaker 6: results started coming in yesterday and calls were coming in
36:41
Speaker 6: for Democrats, we saw a massive sell-off led by the
36:44
Speaker 6: Nasdaq 100 in the futures market. The exact opposite is
36:47
Speaker 6: happening today. We've rallied back. And I wonder if you
36:50
Speaker 6: think the market is interpreting this correctly, also not just
36:52
Speaker 6: on the equity side, but the oil side as well.
36:54
Speaker 6: As oil prices are tanking today, I would assume because
36:56
Speaker 6: the assumption is that the war with Iran may come
36:59
Speaker 6: to a quicker end with Democrats in charge of Congress.
37:01
Speaker 16: Yeah, I think that is the assumption, or if not
37:03
Speaker 16: a quicker end, at least that you're less likely to
37:05
Speaker 16: see a major escalation, which is what the Trump administration
37:08
Speaker 16: clearly was planning before this outcome, which was so much
37:11
Speaker 16: more one-sided than they expected. The thing is that the
37:16
Speaker 16: Trump administration, right, these aren't planners, right? What we're going
37:20
Speaker 16: to do is go as whatever Donald Trump feels, and
37:22
Speaker 16: there's going to be a lot of swing. So I
37:24
Speaker 16: get the market reaction, a hugely one-sided outcome gives you
37:28
Speaker 16: a lot more stability than something where you could have
37:30
Speaker 16: imagined where there was a three- or four-seat margin in
37:32
Speaker 16: the House, and Donald Trump comes out and says, look,
37:34
Speaker 16: I'm not going to honor the election, and then you
37:35
Speaker 16: get real chaos in the United States. That's not going
37:38
Speaker 16: to happen because of just what a blowout this was.
37:42
Speaker 16: But on the larger side, the one thing I wonder
37:44
Speaker 16: about on the AI trade with that is, I think
37:47
Speaker 16: the biggest concern a lot of people have when we
37:49
Speaker 16: look at the finances of a lot of the AI
37:51
Speaker 16: companies is, is it actually possible for them to pay
37:54
Speaker 16: for the sort of gigantic commitments they've made for data
37:57
Speaker 16: centers and for computing? If those data centers can't be built,
38:02
Speaker 16: then that may actually help these companies a little bit
38:05
Speaker 16: and give them a little bit more space to try
38:06
Speaker 16: and build up revenue to match these requirements because the
38:09
Speaker 16: requirements are so enormous. I think there was a lot of, wait,
38:11
Speaker 16: does this actually make sense when you saw the numbers?
38:14
Speaker 2: Gautam, thank you. It's great to have you with us
38:16
Speaker 2: the day after.
38:17
Speaker 4: Gautam Mukunda, lecturer at Yale Law School of Management. Find
38:20
Speaker 4: him on the terminal as a contributor of Bloomberg Opinion.
38:26
Speaker 2: Thanks for listening to the Balance of Power podcast.
38:29
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38:32
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38:34
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38:37
Speaker 4: At noontime Eastern at Bloomberg.com.