WEBVTT 00:00:00.000 --> 00:00:02.580 Welcome to the Deep Dive. Today we're digging 00:00:02.580 --> 00:00:05.000 into some really significant recent events in 00:00:05.000 --> 00:00:07.740 American politics and policy. We've pulled together 00:00:07.740 --> 00:00:10.259 some news, some analysis, trying to understand 00:00:10.259 --> 00:00:12.640 what's happening now and maybe where things are 00:00:12.640 --> 00:00:15.500 headed. Exactly. So the main sources we're drawing 00:00:15.500 --> 00:00:18.800 on today are the May 7th edition of Electoral 00:00:18.800 --> 00:00:22.120 Vote News and also a report from Hedgeye called 00:00:22.120 --> 00:00:24.559 Trump's First Hundred Days, What's Changed and 00:00:24.559 --> 00:00:27.539 What Comes Next. Right. And our goal really is 00:00:27.539 --> 00:00:29.440 to get past the sort of day to day headlines. 00:00:29.260 --> 00:00:34.399 and find the key insights, maybe some aha moments, 00:00:34.719 --> 00:00:36.979 to give you a clearer picture of the landscape. 00:00:37.280 --> 00:00:40.679 OK, sounds good. Let's jump in. First up, a diplomatic 00:00:40.679 --> 00:00:42.960 visit that seems, well, maybe not so straightforward. 00:00:43.439 --> 00:00:45.159 Canadian Prime Minister Mark Carney was meeting 00:00:45.159 --> 00:00:47.140 with President Trump. Yeah, and you'd think US 00:00:47.140 --> 00:00:48.960 -Canada, pretty routine stuff, right? Right. 00:00:49.280 --> 00:00:51.380 But apparently Trump actually proposed Canada 00:00:51.380 --> 00:00:54.520 become the 51st state, tied it to tax cuts, reportedly. 00:00:54.799 --> 00:00:57.359 Wow, OK. And Carney. Rejected it pretty quickly 00:00:57.359 --> 00:01:00.079 as you probably expect but just the idea being 00:01:00.079 --> 00:01:02.600 floated It maybe tells you something about the 00:01:02.600 --> 00:01:06.099 administration's thinking Possibly wanting, you 00:01:06.099 --> 00:01:08.480 know integration but on very specific terms. 00:01:08.480 --> 00:01:12.099 Hmm And there was this detail about Carney wearing 00:01:12.099 --> 00:01:15.480 a suit getting a different vibe than maybe Zelensky 00:01:15.480 --> 00:01:17.560 did Yeah, the source mentioned that it could 00:01:17.560 --> 00:01:19.840 suggest well a kind of transactional view of 00:01:19.840 --> 00:01:22.959 these meetings and there was this expectation 00:01:22.959 --> 00:01:26.510 of praise for Trump like greatest leader since 00:01:26.510 --> 00:01:30.269 Ramses II. That's quite a line. It is. But even 00:01:30.269 --> 00:01:32.230 with that, the talk apparently moved quickly 00:01:32.230 --> 00:01:37.150 to tariffs. The familiar stuff. Aluminum, steel, 00:01:37.329 --> 00:01:40.870 cars. Ah, yes. And Trump's position was pretty 00:01:40.870 --> 00:01:43.170 clear. Very direct, according to the report. 00:01:43.329 --> 00:01:44.969 Something like, we want to make our own cars. 00:01:45.090 --> 00:01:47.170 We don't really want cars from Canada. And we 00:01:47.170 --> 00:01:48.849 don't want steel from Canada because we make 00:01:48.849 --> 00:01:51.329 our own steel. But that ignores the whole integrated 00:01:51.329 --> 00:01:53.329 supply chain thing, especially with cars, doesn't 00:01:53.329 --> 00:01:55.829 it? That was Connie's point exactly. The production 00:01:55.829 --> 00:01:58.310 lines are so intertwined across the border. It's 00:01:58.310 --> 00:02:01.829 complicated. Right. And Trump's still saying 00:02:01.829 --> 00:02:05.079 the trade relationship favors Canada. even after 00:02:05.079 --> 00:02:08.099 the USMCA, which his administration negotiated. 00:02:08.560 --> 00:02:11.319 Yeah, that claim was reportedly made. It suggests 00:02:11.319 --> 00:02:13.599 maybe a different way of looking at the numbers 00:02:13.599 --> 00:02:17.340 or the overall balance. And, well, the bottom 00:02:17.340 --> 00:02:19.080 line seems to be that the meeting didn't really 00:02:19.080 --> 00:02:22.000 achieve much concrete. Underlines the tension, 00:02:22.020 --> 00:02:24.800 I guess. And then you had that comment from Ontario 00:02:24.800 --> 00:02:27.139 Premier Doug Ford. Oh, right, the Fix His Little 00:02:27.139 --> 00:02:29.340 Red Wagon comment about the midterms. Yeah, that 00:02:29.340 --> 00:02:30.939 definitely doesn't sound like smooth sailing. 00:02:31.240 --> 00:02:34.750 No. And Hedgeye's analysis also flagged a potential 00:02:34.750 --> 00:02:37.430 confrontation coming with Canadian officials 00:02:37.430 --> 00:02:39.810 over these trade issues. So yeah, it could be 00:02:39.810 --> 00:02:41.990 getting a bit rougher. It feels like these tensions 00:02:41.990 --> 00:02:45.069 with Canada, they're not just isolated incidents, 00:02:45.129 --> 00:02:47.699 are they? Probably not. It seems to fit a broader 00:02:47.699 --> 00:02:50.159 pattern, maybe a philosophy focused on domestic 00:02:50.159 --> 00:02:53.340 production first, using tariffs as a tool, which, 00:02:53.360 --> 00:02:55.400 you know, could have ripple effects through the 00:02:55.400 --> 00:02:58.520 economy. OK, let's shift gears. The Supreme Court. 00:02:58.900 --> 00:03:00.520 There's been a development regarding transgender 00:03:00.520 --> 00:03:02.379 individuals serving in the military has been 00:03:02.379 --> 00:03:04.400 back and forth in the courts for a while. It 00:03:04.400 --> 00:03:07.659 really has. You had Biden's executive order allowing 00:03:07.659 --> 00:03:10.240 open service. Then Trump revoked that, which 00:03:10.240 --> 00:03:13.080 led to court challenges and lower courts actually 00:03:13.080 --> 00:03:15.879 ruled against the Trump ban. Right. So what's 00:03:15.879 --> 00:03:18.379 the latest? Well, the Supreme Court has now stepped 00:03:18.379 --> 00:03:22.199 in and said Trump's ban can be implemented for 00:03:22.199 --> 00:03:24.360 the time being, basically, while the legal fight 00:03:24.360 --> 00:03:26.500 continues. For the time being. And it was an 00:03:26.500 --> 00:03:29.300 unsigned decision. Unsigned. Yeah. With the three 00:03:29.300 --> 00:03:33.360 liberal women justices dissenting. Which. might 00:03:33.360 --> 00:03:35.259 give us a hint about where a final decision could 00:03:35.259 --> 00:03:37.719 land. It certainly suggests a potential 6 -3 00:03:37.719 --> 00:03:41.020 split along familiar lines, yeah. It's a reasonable 00:03:41.020 --> 00:03:43.419 guess that the final ruling might look similar. 00:03:43.960 --> 00:03:45.840 And what does this mean practically right now? 00:03:46.159 --> 00:03:48.659 It means the Pentagon can now move forward with 00:03:48.659 --> 00:03:52.460 its order to identify and potentially remove 00:03:52.460 --> 00:03:55.000 service members who have a diagnosis of gender 00:03:55.000 --> 00:03:57.020 dysphoria. So even though lower courts blocked 00:03:57.020 --> 00:04:00.000 it before, the Supreme Court's interim decision 00:04:00.000 --> 00:04:02.000 clears the way for the administration's policy. 00:04:02.110 --> 00:04:05.569 At least for now. For now, yes. The case itself 00:04:05.569 --> 00:04:07.590 goes to the Ninth Circuit Court of Appeals next 00:04:07.590 --> 00:04:09.750 and then, you know, very likely back to the Supreme 00:04:09.750 --> 00:04:12.349 Court for a final say. It really puts the spotlight 00:04:12.349 --> 00:04:15.610 on that intersection of executive power, the 00:04:15.610 --> 00:04:18.629 courts and individual rights, doesn't it? Especially 00:04:18.629 --> 00:04:21.509 for people in uniform. Absolutely. It's a really 00:04:21.509 --> 00:04:24.529 significant case to watch. OK, now another interesting 00:04:24.529 --> 00:04:26.990 point from the sources is this apparent shift 00:04:26.990 --> 00:04:31.500 in President Trump's messaging. Less. mourning 00:04:31.500 --> 00:04:35.639 in America, more gloom and doom. Yeah, that's 00:04:35.639 --> 00:04:37.519 how one source described it. It's a definite 00:04:37.519 --> 00:04:40.079 contrast to some of the past rhetoric, you know, 00:04:40.180 --> 00:04:43.019 the chicken in every pot golden age kind of promises. 00:04:43.139 --> 00:04:45.480 So now it's more about sacrifice and taking your 00:04:45.480 --> 00:04:47.459 medicine. That seems to be the new emphasis. 00:04:47.699 --> 00:04:51.040 Yes. Why the shift? Well, it's hard to say for 00:04:51.040 --> 00:04:52.980 sure. Maybe things aren't going quite as planned 00:04:52.980 --> 00:04:55.480 economically or otherwise, or maybe it's a deliberate 00:04:55.480 --> 00:04:58.139 messaging strategy change. It feels different. 00:04:58.139 --> 00:05:00.220 And then you have critics pointing things out. 00:05:00.300 --> 00:05:02.879 Like Mark Short mentioning reports of Trump making 00:05:02.879 --> 00:05:05.800 billions in crypto while telling others to cut 00:05:05.800 --> 00:05:08.360 back. Right. And Douglas Holtzikin called the 00:05:08.360 --> 00:05:11.000 message and the messenger tone deaf. That's a 00:05:11.000 --> 00:05:13.100 strong word. Holtzikin's point was basically 00:05:13.100 --> 00:05:16.500 that, you know, Trump isn't exactly the typical 00:05:16.500 --> 00:05:18.860 figure you'd expect delivering a message about 00:05:18.860 --> 00:05:20.860 belt tightening. Makes sense. And then there 00:05:20.860 --> 00:05:23.040 was that meet the press interview reference, 00:05:23.160 --> 00:05:26.079 the doll count. Something about the trade deficit. 00:05:26.079 --> 00:05:27.819 Yeah, apparently representing the China trade 00:05:27.819 --> 00:05:30.310 deficit saying it went from like 30 dolls down 00:05:30.310 --> 00:05:33.430 to three or four. It's hard to imagine how that 00:05:33.430 --> 00:05:35.769 lands with people who are genuinely struggling, 00:05:35.870 --> 00:05:38.009 you know, can't put food on the table, as the 00:05:38.009 --> 00:05:40.709 source noted. Right. And then comparing the U 00:05:40.709 --> 00:05:43.910 .S. to a department store where he as the owner 00:05:43.910 --> 00:05:46.790 sets the prices. That's an interesting analogy. 00:05:46.829 --> 00:05:49.430 It is. Because if he's setting the prices, how 00:05:49.430 --> 00:05:53.129 does he then blame, say, Biden for the economy? 00:05:53.410 --> 00:05:56.529 It feels a bit contradictory. It does raise questions 00:05:56.529 --> 00:05:59.120 about consistency in the messaging. Yeah. And 00:05:59.120 --> 00:06:01.399 then you have cabinet members like Lutnick and 00:06:01.399 --> 00:06:03.720 Besson reportedly suggesting a recession might 00:06:03.720 --> 00:06:06.160 be worth it or that the American dream isn't 00:06:06.160 --> 00:06:08.660 just about cheap goods. Which is quite a statement, 00:06:08.800 --> 00:06:10.579 especially if it's happening alongside, you know, 00:06:10.879 --> 00:06:13.420 potential tax cuts for wealthier people. It definitely 00:06:13.420 --> 00:06:15.860 creates a potential perception gap, a disconnect 00:06:15.860 --> 00:06:18.100 for a lot of folks. OK, let's move on to Medicaid. 00:06:18.860 --> 00:06:21.360 There's talk of significant cuts in the Republican 00:06:21.360 --> 00:06:24.720 budget proposal, but maybe not direct cuts using 00:06:24.720 --> 00:06:27.790 gimmicks. Well, the congressional budget resolution 00:06:27.790 --> 00:06:32.230 reportedly aims for about $880 billion in Medicaid 00:06:32.230 --> 00:06:35.089 cuts over 10 years. That's a big number. Huge. 00:06:35.449 --> 00:06:38.689 And direct cuts are often very unpopular politically. 00:06:39.230 --> 00:06:41.910 So the thinking, according to the analysis, might 00:06:41.910 --> 00:06:46.269 be to use these structural changes labeled gimmicks 00:06:46.269 --> 00:06:49.129 in the source to reduce federal spending without 00:06:49.129 --> 00:06:51.529 it looking like an immediate direct hit that 00:06:51.529 --> 00:06:53.970 voters would react badly to. So what's the main 00:06:53.970 --> 00:06:56.350 gimmick being considered? The leading idea seems 00:06:56.350 --> 00:06:59.569 to be a per capita cap, so limiting federal spending 00:06:59.569 --> 00:07:02.050 per enrollee in Medicaid. OK, how would that 00:07:02.050 --> 00:07:03.889 actually work? How is it different now? Right 00:07:03.889 --> 00:07:05.750 now, the federal government generally shares 00:07:05.750 --> 00:07:08.250 Medicaid costs with states based on a formula, 00:07:08.449 --> 00:07:11.009 kind of open -ended. A per capita cap would put 00:07:11.009 --> 00:07:13.629 a fixed limit on the federal dollars per person. 00:07:14.050 --> 00:07:17.430 Ah, so if costs go up more than the cap allows, 00:07:18.139 --> 00:07:20.319 The state has to pick up the difference. Exactly. 00:07:20.439 --> 00:07:22.579 It shifts more financial risk onto the states. 00:07:23.019 --> 00:07:25.259 And that gives states a really strong incentive 00:07:25.259 --> 00:07:27.519 to cut their own costs. How would they do that? 00:07:27.839 --> 00:07:31.120 They might tighten eligibility rules, reduce 00:07:31.120 --> 00:07:34.300 the services covered, maybe cut payments to doctors 00:07:34.300 --> 00:07:36.800 and hospitals, things like that. Which could 00:07:36.800 --> 00:07:38.779 mean very different Medicaid programs from state 00:07:38.779 --> 00:07:41.360 to state. Potentially, yeah, especially between 00:07:41.360 --> 00:07:43.199 red states and blue states. The article even 00:07:43.199 --> 00:07:47.000 raises this sort of grim possibility of people 00:07:47.000 --> 00:07:49.160 with chronic illnesses potentially having to 00:07:49.160 --> 00:07:51.199 move from states that cut benefits to states 00:07:51.199 --> 00:07:54.680 that maintain them. Wow. That raises some pretty 00:07:54.680 --> 00:07:57.399 big ethical questions, doesn't it, about how 00:07:57.399 --> 00:07:59.600 we care for the sick and the poor? It absolutely 00:07:59.600 --> 00:08:02.420 does. Fundamental questions. OK, now let's look 00:08:02.420 --> 00:08:04.339 at the Democrats. They seem to have their own 00:08:04.339 --> 00:08:07.079 challenge described as a Goldilocks problem, 00:08:07.300 --> 00:08:10.269 trying to get things Just right. Yeah, basically 00:08:10.269 --> 00:08:12.930 finding that sweet spot between firing up their 00:08:12.930 --> 00:08:15.649 progressive base and winning over those crucial 00:08:15.649 --> 00:08:18.370 moderate or swing voters. So you've got the energy 00:08:18.370 --> 00:08:21.250 on the left, the rallies for Sanders, for Ocasio 00:08:21.250 --> 00:08:25.339 -Cortez. pushing for a more aggressive left leaning 00:08:25.339 --> 00:08:27.879 stance. Right. But then you have the congressional 00:08:27.879 --> 00:08:30.600 Democratic strategy, which seems very focused 00:08:30.600 --> 00:08:32.980 on the practical goal of flipping those Republican 00:08:32.980 --> 00:08:35.399 districts, often the ones that are only slightly 00:08:35.399 --> 00:08:37.919 Republican, like R plus one to R plus five. It's 00:08:37.919 --> 00:08:40.620 a real balancing act. Lean too far left. You 00:08:40.620 --> 00:08:43.039 might scare off swing voters. Lean too far to 00:08:43.039 --> 00:08:46.200 the center or right. You risk demoralizing the 00:08:46.200 --> 00:08:48.539 progressives you need for turnout. Precisely. 00:08:48.759 --> 00:08:50.960 And it affects which issues get prioritized, 00:08:51.240 --> 00:08:53.759 too. The article mentions this internal debate, 00:08:54.220 --> 00:08:56.559 focused on something like immigration, citing 00:08:56.559 --> 00:08:59.879 the Kilmar -Abrego -Garcia case, or hammer away 00:08:59.879 --> 00:09:02.500 on economic issues like Trump's broken promises 00:09:02.500 --> 00:09:05.679 on lower prices. And Representative Fanadar introducing 00:09:05.679 --> 00:09:07.779 impeachment articles against Trump that seems 00:09:07.779 --> 00:09:10.500 to highlight the split too, with leadership apparently 00:09:10.500 --> 00:09:12.399 not keen on it. Yeah, leadership seems worried 00:09:12.399 --> 00:09:14.700 it might be a political tight end or even counterproductive 00:09:14.700 --> 00:09:16.679 for winning those swing districts. So what's 00:09:16.679 --> 00:09:19.470 the likely strategy? The article suggests maybe 00:09:19.470 --> 00:09:21.789 a very tailored approach, different messages 00:09:21.789 --> 00:09:24.649 for different districts, talk environmental issues 00:09:24.649 --> 00:09:28.129 in affluent suburbs maybe, and jobs and economic 00:09:28.129 --> 00:09:30.730 security in working class areas. Kind of micro 00:09:30.730 --> 00:09:32.610 -targeting the message? Something like that. 00:09:32.629 --> 00:09:34.970 It reflects that core challenge for any big party, 00:09:35.190 --> 00:09:36.970 right? Yeah. How do you build a broad enough 00:09:36.970 --> 00:09:39.509 coalition while still keeping your base motivated 00:09:39.509 --> 00:09:42.289 and staying true to your principles? Makes sense. 00:09:43.070 --> 00:09:45.730 Let's turn to the Pentagon now. There were reports 00:09:45.730 --> 00:09:48.509 about Secretary Hegseth carrying out what's being 00:09:48.509 --> 00:09:52.169 called a purge. Sounds pretty dramatic. It does 00:09:52.169 --> 00:09:55.610 sound quite significant. The reports detail what 00:09:55.610 --> 00:09:58.529 they say was Hegsett's promise during his confirmation 00:09:58.529 --> 00:10:01.590 hearings to remove people he described as woke 00:10:01.590 --> 00:10:04.730 generals, women, minorities, and DEI advocates. 00:10:04.850 --> 00:10:07.789 DEI being diversity, equity, and inclusion. Correct. 00:10:08.250 --> 00:10:10.210 And the reporting suggests he's targeting four 00:10:10.210 --> 00:10:12.769 -star generals with a particular focus on women 00:10:12.769 --> 00:10:15.429 and people of color. It specifically mentions 00:10:15.429 --> 00:10:17.509 the reported firings of General Charles Brown 00:10:17.509 --> 00:10:19.799 Jr., who is chairman of the Joint Chiefs. top 00:10:19.799 --> 00:10:22.340 military officer, yeah. And Admiral Lisa Franchetti, 00:10:22.500 --> 00:10:25.500 the first woman ever to run the Navy. And the 00:10:25.500 --> 00:10:28.919 goal is reportedly to fire, what, 20 % of four 00:10:28.919 --> 00:10:30.740 -star generals. That's the figure mentioned, 00:10:31.139 --> 00:10:33.600 yeah. With the stated justification being that 00:10:33.600 --> 00:10:35.659 this will somehow improve military readiness. 00:10:35.940 --> 00:10:38.120 But the analysis raises doubts about that, doesn't 00:10:38.120 --> 00:10:40.980 it? It does. The concern highlighted is that 00:10:40.980 --> 00:10:43.519 removing highly experienced leaders based on 00:10:43.519 --> 00:10:46.299 ideology rather than performance or strategic 00:10:46.299 --> 00:10:49.440 need could actually cripple the military's effectiveness, 00:10:49.940 --> 00:10:52.340 lose that experience, that knowledge. And Senator 00:10:52.340 --> 00:10:55.360 Reid wants EXIF to testify. Reportedly, yes, 00:10:55.779 --> 00:10:58.159 called for him to appear before a committee to 00:10:58.159 --> 00:11:00.679 explain these actions. It shows the level of 00:11:00.679 --> 00:11:02.879 concern in Congress or at least among some members. 00:11:03.019 --> 00:11:05.320 So potentially major upheaval at the very top 00:11:05.320 --> 00:11:07.940 of the military driven by these ideological goals. 00:11:08.549 --> 00:11:11.809 Another ongoing story. President Trump and Harvard. 00:11:12.350 --> 00:11:14.370 The pressure seems to be continuing. Yeah, it's 00:11:14.370 --> 00:11:17.210 like a running battle. The source outlines the 00:11:17.210 --> 00:11:19.269 previous attempts threatening to cut contract 00:11:19.269 --> 00:11:21.529 payments, threatening to revoke their tax exempt 00:11:21.529 --> 00:11:24.649 status. Both of which Harvard apparently resisted. 00:11:24.730 --> 00:11:26.870 Right. So the latest reported move is trying 00:11:26.870 --> 00:11:29.809 to ban Harvard researchers from getting new federal 00:11:29.809 --> 00:11:33.450 grants. Will that work? The prediction is Harvard 00:11:33.450 --> 00:11:36.190 won't cave, right? That seems to be the expectation, 00:11:36.389 --> 00:11:38.950 yeah. The article suggests the legal ground for 00:11:38.950 --> 00:11:41.909 these actions looks pretty weak. How so? Well, 00:11:42.070 --> 00:11:44.269 there are existing contracts. The whole precedent 00:11:44.269 --> 00:11:46.690 around tax exemption for universities is pretty 00:11:46.690 --> 00:11:49.750 strong. And there doesn't seem to be any clear 00:11:49.750 --> 00:11:53.029 legal way to just ban researchers, even Nobel 00:11:53.029 --> 00:11:55.590 winners, from applying for grants just because 00:11:55.590 --> 00:11:57.509 they work at Harvard. It sounds like Trump might 00:11:57.509 --> 00:11:59.809 be operating on a belief that if he just keeps 00:11:59.809 --> 00:12:02.549 pushing, they'll eventually fold. Like a zero 00:12:02.549 --> 00:12:04.710 -sum game. That's one interpretation offered, 00:12:04.830 --> 00:12:07.309 yeah. a sort of relentless pressure approach. 00:12:07.629 --> 00:12:09.429 But what if it goes to the Supreme Court and 00:12:09.429 --> 00:12:12.669 he loses? Maybe decisively, like nine in a row 00:12:12.669 --> 00:12:14.970 or seven, too. Well, the article floats a really 00:12:14.970 --> 00:12:18.389 interesting possibility. What if he were to defy 00:12:18.389 --> 00:12:20.649 a Supreme Court ruling? Just ignore it. Out of 00:12:20.649 --> 00:12:22.470 spite, potentially. That could become a huge 00:12:22.470 --> 00:12:25.149 political liability. Imagine Democrats running 00:12:25.149 --> 00:12:27.850 against Dictator Don and targeting Republicans 00:12:27.850 --> 00:12:30.169 who supported him defying the court. Especially 00:12:30.169 --> 00:12:32.450 if polls show people really don't like the idea 00:12:32.450 --> 00:12:35.480 of ignoring the Supreme Court. Exactly. The reported 00:12:35.480 --> 00:12:38.100 polling suggests strong disapproval for that 00:12:38.100 --> 00:12:40.580 kind of move. It could be very risky politically. 00:12:40.720 --> 00:12:42.399 Okay, let's talk tariffs again, but maybe on 00:12:42.399 --> 00:12:45.600 things you wouldn't immediately think of, like 00:12:45.600 --> 00:12:49.600 beer and window blinds. Yeah, the article uses 00:12:49.600 --> 00:12:51.620 a couple of letters from small business owners 00:12:51.620 --> 00:12:53.960 to illustrate how these tariffs ripple outwards 00:12:53.960 --> 00:12:56.960 in unexpected ways. It explains the basic tariff 00:12:56.960 --> 00:12:59.799 model, like on a Chinese t -shirt, but the reality 00:12:59.799 --> 00:13:03.379 is often way more complex. So a craft brewery, 00:13:03.480 --> 00:13:05.980 Baby Cat Brewery, wrote in. Yeah, saying the 00:13:05.980 --> 00:13:07.840 aluminum tariffs are hitting the cost of their 00:13:07.840 --> 00:13:11.240 cans, obviously. But also imported grains, hops, 00:13:11.620 --> 00:13:14.059 even the glassware they use, the paper for packaging. 00:13:14.240 --> 00:13:16.539 All getting more expensive, leading to higher 00:13:16.539 --> 00:13:19.320 beer prices for us. Potentially, yeah. And it's 00:13:19.320 --> 00:13:20.840 not like these tariffs are suddenly going to 00:13:20.840 --> 00:13:22.700 create a bunch of new American breweries making 00:13:22.700 --> 00:13:24.879 everything domestically overnight. Right. And 00:13:24.879 --> 00:13:27.379 the window coverings business? Similar story. 00:13:27.519 --> 00:13:29.840 Very similar. A custom window coverings business 00:13:29.840 --> 00:13:33.139 in Virginia relies on imported fabrics, trims, 00:13:33.200 --> 00:13:35.759 hardware, much of which involves aluminum and 00:13:35.759 --> 00:13:38.379 steel components now subject to tariffs. So their 00:13:38.379 --> 00:13:41.480 costs go up too. Right. And get this, the owner 00:13:41.480 --> 00:13:44.279 apparently pointed out that the only U .S. manufacturer 00:13:44.279 --> 00:13:47.419 of a certain type of curtain rod they use relies 00:13:47.419 --> 00:13:51.100 on German ball bearings. Huh. So even the Made 00:13:51.100 --> 00:13:53.899 in USA option isn't fully immune. It shows how 00:13:53.899 --> 00:13:56.429 tangled these supply chains are. It really does. 00:13:56.549 --> 00:13:58.350 And you hear the frustration in the letter, you 00:13:58.350 --> 00:14:01.429 know, questioning the business genius behind 00:14:01.429 --> 00:14:03.590 policies that are suddenly creating problems 00:14:03.590 --> 00:14:05.889 where none existed for their small business before 00:14:05.889 --> 00:14:08.970 worries about just staying viable. It definitely 00:14:08.970 --> 00:14:11.769 complicates that simple narrative about terrorists 00:14:11.769 --> 00:14:15.450 just boosting American jobs. OK, looking ahead 00:14:15.450 --> 00:14:19.009 to the midterms, what are the chances for Democrats 00:14:19.009 --> 00:14:21.190 flipping the Senate? The House seems more likely, 00:14:21.330 --> 00:14:23.549 maybe. Yeah, history suggests the president's 00:14:23.549 --> 00:14:26.129 party usually loses seats in the midterms. So 00:14:26.129 --> 00:14:28.470 a House flip is often considered plausible, maybe 00:14:28.470 --> 00:14:30.470 even likely, depending on the environment. But 00:14:30.470 --> 00:14:33.450 the Senate map is much tougher for Democrats 00:14:33.450 --> 00:14:35.870 this cycle. For how? Well, they have some seats 00:14:35.870 --> 00:14:37.909 they need to defend. The article mentions Georgia 00:14:37.909 --> 00:14:40.710 as maybe a godsend open seat, plus open seats 00:14:40.710 --> 00:14:43.289 in Michigan, Minnesota, New Hampshire. They really 00:14:43.289 --> 00:14:45.570 need to hold all of those. OK, so hold those 00:14:45.570 --> 00:14:48.090 four. But that's just defense. They need to gain 00:14:48.090 --> 00:14:50.070 seats, too, right? Exactly. They need to flip, 00:14:50.110 --> 00:14:53.059 I think. four Republican -held seats to get control. 00:14:53.720 --> 00:14:56.580 And the problem is, none of the seats seen as 00:14:56.580 --> 00:14:59.019 potentially flippable are open races this time, 00:14:59.419 --> 00:15:01.539 except for McConnell's in Kentucky, which is 00:15:01.539 --> 00:15:04.039 seen as a very long shot for Democrats. So which 00:15:04.039 --> 00:15:06.159 states are considered the most likely potential 00:15:06.159 --> 00:15:10.399 flips, even if tough? The article points to maybe 00:15:10.399 --> 00:15:16.299 North Carolina, Maine, Ohio. Montana, and it 00:15:16.299 --> 00:15:18.700 names some strong potential Democratic candidates 00:15:18.700 --> 00:15:20.980 for those races. But the cash is. None of them 00:15:20.980 --> 00:15:22.399 have actually announced they're running yet, 00:15:22.419 --> 00:15:24.580 at least according to the source. So it's all 00:15:24.580 --> 00:15:26.759 potential right now. And even those races would 00:15:26.759 --> 00:15:29.399 likely be very competitive, very close. Unless. 00:15:29.740 --> 00:15:31.759 Well, the article does add the caveat that if 00:15:31.759 --> 00:15:34.460 there's a really deep recession, that could change 00:15:34.460 --> 00:15:36.919 the landscape significantly, maybe put more states 00:15:36.919 --> 00:15:39.879 in play. But barring that, it looks like an uphill 00:15:39.879 --> 00:15:42.120 climb for Senate control. OK, finally, let's 00:15:42.120 --> 00:15:44.539 touch on something a bit different. The age of 00:15:44.539 --> 00:15:46.879 Congress. There's an argument being made that 00:15:46.879 --> 00:15:49.980 it's becoming, well, maybe too old. Yeah. This 00:15:49.980 --> 00:15:52.559 comes from an op -ed by Mitch Daniels, the former 00:15:52.559 --> 00:15:55.179 Indiana governor. He apparently quoted Lamar 00:15:55.179 --> 00:15:58.360 Alexander's description of the Senate as, America's 00:15:58.360 --> 00:16:01.820 finest assisted living facility. Ouch. That's 00:16:01.820 --> 00:16:04.460 blunt. It is. But Daniels uses it to make a point. 00:16:04.669 --> 00:16:07.269 He compliments Senator Durbin for retiring at 00:16:07.269 --> 00:16:09.990 80, which sounds old, but is actually relatively 00:16:09.990 --> 00:16:12.850 young for today's Senate. And he mentions others, 00:16:13.169 --> 00:16:15.509 like Feinstein, McConnell, or even a House member 00:16:15.509 --> 00:16:18.330 living in assisted living, who maybe stayed past 00:16:18.330 --> 00:16:20.830 their peak effectiveness. So the question is, 00:16:21.090 --> 00:16:23.629 how do these long -serving members want to be 00:16:23.629 --> 00:16:27.259 remembered? as wise elders or something less 00:16:27.259 --> 00:16:29.320 flattering. Right. And it's not just one or two 00:16:29.320 --> 00:16:31.860 people. There are apparently 35 current members 00:16:31.860 --> 00:16:34.559 over 70. The median age in the Senate is now 00:16:34.559 --> 00:16:38.500 65 compared to just 51 back in 1981. That's a 00:16:38.500 --> 00:16:40.659 big jump. How does that compare internationally? 00:16:41.000 --> 00:16:43.620 We're older. The article mentions Japan, Israel, 00:16:43.740 --> 00:16:46.379 the UK. Their national legislatures are all younger 00:16:46.379 --> 00:16:48.940 on average. So does this affect how Congress 00:16:48.940 --> 00:16:51.580 actually functions? Its energy levels, its ability 00:16:51.580 --> 00:16:54.789 to tackle new problems? That's the concern raised. 00:16:55.250 --> 00:16:57.629 Maybe it contributes to a certain inertia, a 00:16:57.629 --> 00:17:00.830 lack of dynamism. Daniels even floats the idea 00:17:00.830 --> 00:17:03.129 of a constitutional amendment, not term limits, 00:17:03.269 --> 00:17:05.910 but a maximum age to start a new term. Like, 00:17:06.069 --> 00:17:08.309 we have a minimum age now. Interesting idea. 00:17:08.390 --> 00:17:10.910 What's the argument for that? The argument isn't 00:17:10.910 --> 00:17:13.829 that all older people are incapable. Clearly, 00:17:14.049 --> 00:17:18.319 many are very sharp. It's more that maybe Systemically, 00:17:18.539 --> 00:17:21.519 having so many people serve for so long potentially 00:17:21.519 --> 00:17:25.059 blocks opportunities for younger, equally capable 00:17:25.059 --> 00:17:27.660 people with fresh perspectives. Like clogged 00:17:27.660 --> 00:17:29.720 arteries, as the analogy in the source goes, 00:17:30.279 --> 00:17:32.200 preventing new ideas from flowing in. That's 00:17:32.200 --> 00:17:34.180 the imagery used. Yeah, it's a thought provoking 00:17:34.180 --> 00:17:36.380 point about institutional renewal. OK, so we've 00:17:36.380 --> 00:17:38.119 covered a lot. Let's bring in that hedge eye 00:17:38.119 --> 00:17:40.420 analysis now. Looking back at Trump's first 100 00:17:40.420 --> 00:17:43.660 days, they described it as. Pretty unprecedented. 00:17:43.799 --> 00:17:46.599 Yeah, unprecedented activity levels. Really trying 00:17:46.599 --> 00:17:49.920 to implement the Project 2025 blueprint, pushing 00:17:49.920 --> 00:17:52.200 through significant changes very quickly. Lots 00:17:52.200 --> 00:17:54.859 of executive orders. A huge number, apparently 00:17:54.859 --> 00:17:58.099 more than one per day on average. Though, hedge 00:17:58.099 --> 00:18:00.279 -eye notes, maybe some missteps in there, like 00:18:00.279 --> 00:18:02.640 a Dogecoin initiative that didn't quite land. 00:18:02.880 --> 00:18:05.059 And historically, how does that compare, like, 00:18:05.160 --> 00:18:08.240 to FDR? While FDR had much stronger support in 00:18:08.240 --> 00:18:10.980 Congress, which made legislating easier, Trump's 00:18:10.980 --> 00:18:13.460 relying more on executive actions, and the courts 00:18:13.460 --> 00:18:17.359 have already stepped in to nullify or pause Quite 00:18:17.359 --> 00:18:19.779 a few of them. Why the rush, according to Hedgeye? 00:18:19.880 --> 00:18:22.460 Couple of reasons suggested. One, get your loyal 00:18:22.460 --> 00:18:25.380 people in place quickly. Two, maybe get the bad 00:18:25.380 --> 00:18:27.680 news or the disruptive stuff out early in the 00:18:27.680 --> 00:18:30.519 term. And a big focus was immigration. Huge focus 00:18:30.519 --> 00:18:32.819 on immigration control, yeah. Trying to really 00:18:32.819 --> 00:18:35.880 energize the Maggier base, maybe demoralize Democrats, 00:18:36.160 --> 00:18:38.420 and generally shake up the Washington establishment. 00:18:38.619 --> 00:18:41.579 The analysis suggests a strategy of restructuring 00:18:41.579 --> 00:18:44.099 the economy and budget in ways that will hurt 00:18:44.099 --> 00:18:47.119 many people, maybe as a distraction. That interpretation 00:18:47.119 --> 00:18:50.059 is in there, yeah. Along with criticism of how 00:18:50.059 --> 00:18:52.180 federal workers have been treated, it's definitely 00:18:52.180 --> 00:18:55.480 fueled intense partisanship. Democratic approval 00:18:55.480 --> 00:18:58.839 of Trump is reportedly extremely low. And looking 00:18:58.839 --> 00:19:01.660 ahead, hedge I see potential for more conflict, 00:19:02.140 --> 00:19:04.839 maybe trying to bypass the filibuster or even 00:19:04.839 --> 00:19:07.279 confronting the courts more directly. Those possibilities 00:19:07.279 --> 00:19:09.880 are raised, yeah, given the level of executive 00:19:09.880 --> 00:19:12.380 action and the pushback. How does the public 00:19:12.380 --> 00:19:15.000 see Trump, according to the polls cited? It's 00:19:15.000 --> 00:19:18.049 divided. As you'd expect, some see him as exciting, 00:19:18.269 --> 00:19:21.509 others as scary or chaotic. That comes from NYTC 00:19:21.509 --> 00:19:23.650 and Edison polling mentioned. And on specific 00:19:23.650 --> 00:19:25.910 issues. His ratings are reportedly relatively 00:19:25.910 --> 00:19:28.789 better on immigration and the economy, less so 00:19:28.789 --> 00:19:31.829 on foreign policy. Interestingly, maybe positive 00:19:31.829 --> 00:19:34.170 ratings on higher education, perhaps linked to 00:19:34.170 --> 00:19:36.329 the Harvard pressure we discussed. And a potential 00:19:36.329 --> 00:19:38.809 foreign policy shift. Away from Russia, more 00:19:38.809 --> 00:19:40.990 towards China. That's suggested as a possible 00:19:40.990 --> 00:19:43.130 pivot, yeah. What about voting intentions for 00:19:43.130 --> 00:19:46.170 2026, the midterms? The polling Hedgeye sites 00:19:46.170 --> 00:19:48.930 shows maybe a slight Republican lean, but it's 00:19:48.930 --> 00:19:51.849 early days, of course. On the budget front, Hedgeye 00:19:51.849 --> 00:19:54.490 seems skeptical about big spending cuts. Yeah, 00:19:54.849 --> 00:19:57.250 skeptical that significant cuts can happen without 00:19:57.250 --> 00:19:59.529 tackling the big entitlement programs, which 00:19:59.529 --> 00:20:02.829 is always politically difficult. They think renewing 00:20:02.829 --> 00:20:06.170 the 2017 tax cuts is more likely, sort of maintaining 00:20:06.170 --> 00:20:08.490 the status quo there. Which could mean bigger 00:20:08.490 --> 00:20:11.109 deficits. Potentially, yeah. There's some debate 00:20:11.109 --> 00:20:13.390 mentioned about the budget baseline and whether 00:20:13.390 --> 00:20:15.789 extending those cuts actually counts as increasing 00:20:15.789 --> 00:20:17.970 the deficit, but the practical effect could be 00:20:17.970 --> 00:20:20.769 more borrowing. It raises questions about whether 00:20:20.769 --> 00:20:23.230 those fiscal hardliners in the Republican Party 00:20:23.230 --> 00:20:25.730 still have much influence. And a need to move 00:20:25.730 --> 00:20:28.390 away from relying on foreign savings to fund 00:20:28.390 --> 00:20:31.269 U .S. debt. That point is made. Yeah. A need 00:20:31.269 --> 00:20:34.329 for a structural shift. Plus all the ongoing 00:20:34.329 --> 00:20:37.490 global conflicts. Gaza, Ukraine, Iran. Right. 00:20:37.509 --> 00:20:39.930 Those continue to be major factors. And an upcoming 00:20:39.930 --> 00:20:42.589 visit to Saudi Arabia is mentioned. Hegei also 00:20:42.589 --> 00:20:44.690 touched on cultural shifts. Yeah. Things like 00:20:44.690 --> 00:20:47.529 gender identity debates and maybe a rise in people 00:20:47.529 --> 00:20:50.029 identifying as Christian, all part of the complex 00:20:50.029 --> 00:20:52.549 backdrop. And the overall picture is one of intense 00:20:52.549 --> 00:20:55.109 polarization, making it hard to actually pass 00:20:55.109 --> 00:20:58.329 laws. Very much so. A lack of bipartisanship, 00:20:58.630 --> 00:21:01.930 gridlock, and some big deadlines looming like 00:21:01.930 --> 00:21:05.130 the Iran nuclear deal situation and eventually 00:21:05.130 --> 00:21:07.470 the debt ceiling again. So putting it all together 00:21:07.470 --> 00:21:10.680 from these sources, it's quite a picture. Assertive 00:21:10.680 --> 00:21:13.759 policies meeting resistance, deep partisan divides, 00:21:14.480 --> 00:21:16.980 economic uncertainty, demographic shifts. Absolutely. 00:21:17.079 --> 00:21:19.000 All these threads seem interconnected. You see 00:21:19.000 --> 00:21:21.240 the administration pushing hard on multiple fronts, 00:21:21.400 --> 00:21:24.619 trade, immigration, domestic policy, the military, 00:21:25.019 --> 00:21:27.720 but facing legal, political, and sometimes practical 00:21:27.720 --> 00:21:30.079 hurdles. And underlying it all is this intense 00:21:30.079 --> 00:21:33.440 polarization that shapes almost every debate. 00:21:33.720 --> 00:21:36.079 OK. So we've unpacked quite a bit from Electoral 00:21:36.079 --> 00:21:38.720 Vote News and the Hedge Eye Report. A lot of 00:21:38.720 --> 00:21:40.420 moving parts, a lot of... points. Definitely. 00:21:40.539 --> 00:21:42.680 From the complexities of US -Canada trade to 00:21:42.680 --> 00:21:44.740 Supreme Court decisions, shifts in political 00:21:44.740 --> 00:21:47.460 messaging, potential Medicaid changes, the internal 00:21:47.460 --> 00:21:49.819 dynamics of both parties, Pentagon shakeups, 00:21:50.000 --> 00:21:53.140 the ongoing Harvard saga, tariff impacts, and 00:21:53.140 --> 00:21:56.170 even the age of Congress. It's a lot. It really 00:21:56.170 --> 00:21:58.490 is. So as we wrap up this deep dive, thinking 00:21:58.490 --> 00:22:00.670 about all these different pressures and contradictions 00:22:00.670 --> 00:22:02.950 we discussed today, here's a final thought for 00:22:02.950 --> 00:22:05.250 you, the listener. Considering everything we've 00:22:05.250 --> 00:22:07.789 explored, what single factor do you think will 00:22:07.789 --> 00:22:10.650 be the most decisive in shaping America's political 00:22:10.650 --> 00:22:13.309 and economic reality over the next year or so? 00:22:13.750 --> 00:22:15.970 Something to mull over. Thanks for joining us 00:22:15.970 --> 00:22:16.609 on The Deep Dive.