Midterm Updates and Silver Linings

For 2024, Democrats now own the economy.

The problem with calling what was to come a Red Wave was always that many races were tight. Polling was close in Pennsylvania, Georgia, Wisconsin, Arizona, and Nevada. If GOP victory was to be a near-certainty, then the media would frame anything less as a defeat. Well, here we are.

As I’m writing this, Democrats are predicted to control the Senate with a final composition of 50 Democrats and 50 Republicans (with Kamala being the tie-breaker). Here’s the breakdown from The New York Times.

Arizona remains in play, although the media’s consensus is that Democrat Mark Kelly is likely to prevail over Republican Blake Masters. We’re not so sure about that. Arizona has somehow only counted 68% of its ballots as of noon Eastern – an achievement worthy of the third-world – and Masters performed well on election day. It’ll be close. But complicating matters is the fact that Maricopa County has 275,000 early ballots they have yet to count. (That is only part of Maricopa County’s problems, which included non-functioning voting machines that likely disenfranchised thousands.)

Troy Hayden @troyhaydenfox10

Election officials just now: More people dropped off early ballots in drop boxes yesterday in Maricopa County than voted in person. Those ballots have not been counted yet. 275,000 votes. The counting will likely continue through the end of the week.

The Georgia Senate race doesn’t look good for Republicans. It will be a runoff with both candidates, Democrat Raphael Warnock and Republican Herschel Walker, failing to reach the required 50%. In an election where Brian Kemp trounced Stacey Abrams in the Georgia Governor’s race, that momentum couldn’t help Walker defeat Warnock. The Kemp assist won’t be there in the runoff. Why should we be confident that Walker can defeat Warnock in the head-to-head matchup? FiveThirtyEight has thoughts: “Georgia runoffs have typically favored Republicans.”

In Nevada, Republican Adam Laxalt holds a slight lead over incumbent Catherine Cortez Masto. We’ll see if he can hold on. Nevada has been “flooded by thousands of mail-in ballots” and it may take days to count the votes. We’re sufficiently jaded to know who those votes will benefit.

The good news? Republicans will take the House. We’re looking at an estimated 211 Democrat House seats and 224 Republican House seats.

Silver Linings - be careful what you ask for.

Let us assume for the sake of argument that Senate control remains with the Democrats and the Republicans control the House. Is there a silver lining if the Republicans don’t take the Senate?

Yeah, but it assumes a storm will hit first. I hate false hope and you won’t find that here about the House or Senate results. Rather, any silver lining or potential benefit is about the near-term future.

Democrat control means Democrat ownership of what is to come: a predicted recession and continued inflation. New home construction is lagging, borrowing is too expensive, and corporate earnings are starting to fall. The drop in earnings will correspond to even more declines in the stock market, absent FED intervention. (Watch your investments carefully. Be especially wary of high market cap stocks with negative earnings.)

The question is whether economic pain will be sufficient for change in governance. In 2022 the answer was no. Economic arguments help but they can’t overcome lackluster candidates. Dr. Oz lost to a vegetable. Walker couldn’t be lifted by Kemp.

Maybe 2024 will be different for Republicans. It should be different if we see a recession and the resulting stock market losses and higher unemployment. For those in the middle who can be persuaded, the right candidate might do it.

But keep in mind that in many jurisdictions, the pain is never enough. Millions of voters will gladly accept rising murder rates and homeless camps and open-air drug markets, just as long as they’re not ruled by a Republican. Nothing will change that. These are spiritual matters.

Biden 2024? And what is yet to come.

According to Politico, the midterms have left the White House aides “giddy.” They’re confident. A senior White House official is adamant we’ll see Biden up for re-election in 2024. The quote: “He’s running.”

We’re not so convinced. They have to say that, otherwise Biden is effectively a two-year lame duck. In reality, the Democrats don’t want Biden to run. He’ll drain the ticket. He can’t defend his record. Neither can they - the Biden record was not part of their 2022 campaigns.

Then there is the fact that Biden doesn’t have the capacity or the stamina or the savvy to run for re-election. He can barely get through the easiest parts of the presidency. He appears increasingly frail and confused, propped up by frequent “vacations” to Delaware and a media that has downplayed his mental and physical deficiencies. His public appearances will grow increasingly rare during the day and non-existent at night, his staff locking him in his room to avoid politically-fatal sundowning episodes. The President of the United States is a hostage to the night.

As the White House looks toward 2024 the House Republicans do the same. And they’ll use all the tools at their disposal to prepare for that war. This means hearings and subpoenas.

The good thing is there’s plenty to investigate: the politization of the FBI/DOJ, Joe Biden’s business deals as VP, the botched Afghanistan withdrawal, COVID-19 origins, etc. And that’s just the short list; Republicans have tipped their hand, recently disclosing topics of inquiry that put a heavy focus on the FBI. For us, Congressional subpoenas to Francis Collins and Anthony Fauci couldn’t come sooner. Get every single e-mail and every single text from their personal phones. Make them answer for their crimes under oath.

Finally, you can’t discuss 2024 without thinking of the brightest spot for Republicans in the 2022 midterms: the decisive DeSantis win in Florida. Miami-Dade County, which had been solid blue and voted +7 for Biden in 2020, turned DeSantis +11 in 2022. The red shift in Florida was complete.

What does the DeSantis win say about 2024?  

It increases the likelihood of a Trump-DeSantis showdown. Brace yourself - the presidential election is now underway.