Welcome to the Deep Dive. Today we're digging
into some really significant recent events in
American politics and policy. We've pulled together
some news, some analysis, trying to understand
what's happening now and maybe where things are
headed. Exactly. So the main sources we're drawing
on today are the May 7th edition of Electoral
Vote News and also a report from Hedgeye called
Trump's First Hundred Days, What's Changed and
What Comes Next. Right. And our goal really is
to get past the sort of day to day headlines.
and find the key insights, maybe some aha moments,
to give you a clearer picture of the landscape.
OK, sounds good. Let's jump in. First up, a diplomatic
visit that seems, well, maybe not so straightforward.
Canadian Prime Minister Mark Carney was meeting
with President Trump. Yeah, and you'd think US
-Canada, pretty routine stuff, right? Right.
But apparently Trump actually proposed Canada
become the 51st state, tied it to tax cuts, reportedly.
Wow, OK. And Carney. Rejected it pretty quickly
as you probably expect but just the idea being
floated It maybe tells you something about the
administration's thinking Possibly wanting, you
know integration but on very specific terms.
Hmm And there was this detail about Carney wearing
a suit getting a different vibe than maybe Zelensky
did Yeah, the source mentioned that it could
suggest well a kind of transactional view of
these meetings and there was this expectation
of praise for Trump like greatest leader since
Ramses II. That's quite a line. It is. But even
with that, the talk apparently moved quickly
to tariffs. The familiar stuff. Aluminum, steel,
cars. Ah, yes. And Trump's position was pretty
clear. Very direct, according to the report.
Something like, we want to make our own cars.
We don't really want cars from Canada. And we
don't want steel from Canada because we make
our own steel. But that ignores the whole integrated
supply chain thing, especially with cars, doesn't
it? That was Connie's point exactly. The production
lines are so intertwined across the border. It's
complicated. Right. And Trump's still saying
the trade relationship favors Canada. even after
the USMCA, which his administration negotiated.
Yeah, that claim was reportedly made. It suggests
maybe a different way of looking at the numbers
or the overall balance. And, well, the bottom
line seems to be that the meeting didn't really
achieve much concrete. Underlines the tension,
I guess. And then you had that comment from Ontario
Premier Doug Ford. Oh, right, the Fix His Little
Red Wagon comment about the midterms. Yeah, that
definitely doesn't sound like smooth sailing.
No. And Hedgeye's analysis also flagged a potential
confrontation coming with Canadian officials
over these trade issues. So yeah, it could be
getting a bit rougher. It feels like these tensions
with Canada, they're not just isolated incidents,
are they? Probably not. It seems to fit a broader
pattern, maybe a philosophy focused on domestic
production first, using tariffs as a tool, which,
you know, could have ripple effects through the
economy. OK, let's shift gears. The Supreme Court.
There's been a development regarding transgender
individuals serving in the military has been
back and forth in the courts for a while. It
really has. You had Biden's executive order allowing
open service. Then Trump revoked that, which
led to court challenges and lower courts actually
ruled against the Trump ban. Right. So what's
the latest? Well, the Supreme Court has now stepped
in and said Trump's ban can be implemented for
the time being, basically, while the legal fight
continues. For the time being. And it was an
unsigned decision. Unsigned. Yeah. With the three
liberal women justices dissenting. Which. might
give us a hint about where a final decision could
land. It certainly suggests a potential 6 -3
split along familiar lines, yeah. It's a reasonable
guess that the final ruling might look similar.
And what does this mean practically right now?
It means the Pentagon can now move forward with
its order to identify and potentially remove
service members who have a diagnosis of gender
dysphoria. So even though lower courts blocked
it before, the Supreme Court's interim decision
clears the way for the administration's policy.
At least for now. For now, yes. The case itself
goes to the Ninth Circuit Court of Appeals next
and then, you know, very likely back to the Supreme
Court for a final say. It really puts the spotlight
on that intersection of executive power, the
courts and individual rights, doesn't it? Especially
for people in uniform. Absolutely. It's a really
significant case to watch. OK, now another interesting
point from the sources is this apparent shift
in President Trump's messaging. Less. mourning
in America, more gloom and doom. Yeah, that's
how one source described it. It's a definite
contrast to some of the past rhetoric, you know,
the chicken in every pot golden age kind of promises.
So now it's more about sacrifice and taking your
medicine. That seems to be the new emphasis.
Yes. Why the shift? Well, it's hard to say for
sure. Maybe things aren't going quite as planned
economically or otherwise, or maybe it's a deliberate
messaging strategy change. It feels different.
And then you have critics pointing things out.
Like Mark Short mentioning reports of Trump making
billions in crypto while telling others to cut
back. Right. And Douglas Holtzikin called the
message and the messenger tone deaf. That's a
strong word. Holtzikin's point was basically
that, you know, Trump isn't exactly the typical
figure you'd expect delivering a message about
belt tightening. Makes sense. And then there
was that meet the press interview reference,
the doll count. Something about the trade deficit.
Yeah, apparently representing the China trade
deficit saying it went from like 30 dolls down
to three or four. It's hard to imagine how that
lands with people who are genuinely struggling,
you know, can't put food on the table, as the
source noted. Right. And then comparing the U
.S. to a department store where he as the owner
sets the prices. That's an interesting analogy.
It is. Because if he's setting the prices, how
does he then blame, say, Biden for the economy?
It feels a bit contradictory. It does raise questions
about consistency in the messaging. Yeah. And
then you have cabinet members like Lutnick and
Besson reportedly suggesting a recession might
be worth it or that the American dream isn't
just about cheap goods. Which is quite a statement,
especially if it's happening alongside, you know,
potential tax cuts for wealthier people. It definitely
creates a potential perception gap, a disconnect
for a lot of folks. OK, let's move on to Medicaid.
There's talk of significant cuts in the Republican
budget proposal, but maybe not direct cuts using
gimmicks. Well, the congressional budget resolution
reportedly aims for about $880 billion in Medicaid
cuts over 10 years. That's a big number. Huge.
And direct cuts are often very unpopular politically.
So the thinking, according to the analysis, might
be to use these structural changes labeled gimmicks
in the source to reduce federal spending without
it looking like an immediate direct hit that
voters would react badly to. So what's the main
gimmick being considered? The leading idea seems
to be a per capita cap, so limiting federal spending
per enrollee in Medicaid. OK, how would that
actually work? How is it different now? Right
now, the federal government generally shares
Medicaid costs with states based on a formula,
kind of open -ended. A per capita cap would put
a fixed limit on the federal dollars per person.
Ah, so if costs go up more than the cap allows,
The state has to pick up the difference. Exactly.
It shifts more financial risk onto the states.
And that gives states a really strong incentive
to cut their own costs. How would they do that?
They might tighten eligibility rules, reduce
the services covered, maybe cut payments to doctors
and hospitals, things like that. Which could
mean very different Medicaid programs from state
to state. Potentially, yeah, especially between
red states and blue states. The article even
raises this sort of grim possibility of people
with chronic illnesses potentially having to
move from states that cut benefits to states
that maintain them. Wow. That raises some pretty
big ethical questions, doesn't it, about how
we care for the sick and the poor? It absolutely
does. Fundamental questions. OK, now let's look
at the Democrats. They seem to have their own
challenge described as a Goldilocks problem,
trying to get things Just right. Yeah, basically
finding that sweet spot between firing up their
progressive base and winning over those crucial
moderate or swing voters. So you've got the energy
on the left, the rallies for Sanders, for Ocasio
-Cortez. pushing for a more aggressive left leaning
stance. Right. But then you have the congressional
Democratic strategy, which seems very focused
on the practical goal of flipping those Republican
districts, often the ones that are only slightly
Republican, like R plus one to R plus five. It's
a real balancing act. Lean too far left. You
might scare off swing voters. Lean too far to
the center or right. You risk demoralizing the
progressives you need for turnout. Precisely.
And it affects which issues get prioritized,
too. The article mentions this internal debate,
focused on something like immigration, citing
the Kilmar -Abrego -Garcia case, or hammer away
on economic issues like Trump's broken promises
on lower prices. And Representative Fanadar introducing
impeachment articles against Trump that seems
to highlight the split too, with leadership apparently
not keen on it. Yeah, leadership seems worried
it might be a political tight end or even counterproductive
for winning those swing districts. So what's
the likely strategy? The article suggests maybe
a very tailored approach, different messages
for different districts, talk environmental issues
in affluent suburbs maybe, and jobs and economic
security in working class areas. Kind of micro
-targeting the message? Something like that.
It reflects that core challenge for any big party,
right? Yeah. How do you build a broad enough
coalition while still keeping your base motivated
and staying true to your principles? Makes sense.
Let's turn to the Pentagon now. There were reports
about Secretary Hegseth carrying out what's being
called a purge. Sounds pretty dramatic. It does
sound quite significant. The reports detail what
they say was Hegsett's promise during his confirmation
hearings to remove people he described as woke
generals, women, minorities, and DEI advocates.
DEI being diversity, equity, and inclusion. Correct.
And the reporting suggests he's targeting four
-star generals with a particular focus on women
and people of color. It specifically mentions
the reported firings of General Charles Brown
Jr., who is chairman of the Joint Chiefs. top
military officer, yeah. And Admiral Lisa Franchetti,
the first woman ever to run the Navy. And the
goal is reportedly to fire, what, 20 % of four
-star generals. That's the figure mentioned,
yeah. With the stated justification being that
this will somehow improve military readiness.
But the analysis raises doubts about that, doesn't
it? It does. The concern highlighted is that
removing highly experienced leaders based on
ideology rather than performance or strategic
need could actually cripple the military's effectiveness,
lose that experience, that knowledge. And Senator
Reid wants EXIF to testify. Reportedly, yes,
called for him to appear before a committee to
explain these actions. It shows the level of
concern in Congress or at least among some members.
So potentially major upheaval at the very top
of the military driven by these ideological goals.
Another ongoing story. President Trump and Harvard.
The pressure seems to be continuing. Yeah, it's
like a running battle. The source outlines the
previous attempts threatening to cut contract
payments, threatening to revoke their tax exempt
status. Both of which Harvard apparently resisted.
Right. So the latest reported move is trying
to ban Harvard researchers from getting new federal
grants. Will that work? The prediction is Harvard
won't cave, right? That seems to be the expectation,
yeah. The article suggests the legal ground for
these actions looks pretty weak. How so? Well,
there are existing contracts. The whole precedent
around tax exemption for universities is pretty
strong. And there doesn't seem to be any clear
legal way to just ban researchers, even Nobel
winners, from applying for grants just because
they work at Harvard. It sounds like Trump might
be operating on a belief that if he just keeps
pushing, they'll eventually fold. Like a zero
-sum game. That's one interpretation offered,
yeah. a sort of relentless pressure approach.
But what if it goes to the Supreme Court and
he loses? Maybe decisively, like nine in a row
or seven, too. Well, the article floats a really
interesting possibility. What if he were to defy
a Supreme Court ruling? Just ignore it. Out of
spite, potentially. That could become a huge
political liability. Imagine Democrats running
against Dictator Don and targeting Republicans
who supported him defying the court. Especially
if polls show people really don't like the idea
of ignoring the Supreme Court. Exactly. The reported
polling suggests strong disapproval for that
kind of move. It could be very risky politically.
Okay, let's talk tariffs again, but maybe on
things you wouldn't immediately think of, like
beer and window blinds. Yeah, the article uses
a couple of letters from small business owners
to illustrate how these tariffs ripple outwards
in unexpected ways. It explains the basic tariff
model, like on a Chinese t -shirt, but the reality
is often way more complex. So a craft brewery,
Baby Cat Brewery, wrote in. Yeah, saying the
aluminum tariffs are hitting the cost of their
cans, obviously. But also imported grains, hops,
even the glassware they use, the paper for packaging.
All getting more expensive, leading to higher
beer prices for us. Potentially, yeah. And it's
not like these tariffs are suddenly going to
create a bunch of new American breweries making
everything domestically overnight. Right. And
the window coverings business? Similar story.
Very similar. A custom window coverings business
in Virginia relies on imported fabrics, trims,
hardware, much of which involves aluminum and
steel components now subject to tariffs. So their
costs go up too. Right. And get this, the owner
apparently pointed out that the only U .S. manufacturer
of a certain type of curtain rod they use relies
on German ball bearings. Huh. So even the Made
in USA option isn't fully immune. It shows how
tangled these supply chains are. It really does.
And you hear the frustration in the letter, you
know, questioning the business genius behind
policies that are suddenly creating problems
where none existed for their small business before
worries about just staying viable. It definitely
complicates that simple narrative about terrorists
just boosting American jobs. OK, looking ahead
to the midterms, what are the chances for Democrats
flipping the Senate? The House seems more likely,
maybe. Yeah, history suggests the president's
party usually loses seats in the midterms. So
a House flip is often considered plausible, maybe
even likely, depending on the environment. But
the Senate map is much tougher for Democrats
this cycle. For how? Well, they have some seats
they need to defend. The article mentions Georgia
as maybe a godsend open seat, plus open seats
in Michigan, Minnesota, New Hampshire. They really
need to hold all of those. OK, so hold those
four. But that's just defense. They need to gain
seats, too, right? Exactly. They need to flip,
I think. four Republican -held seats to get control.
And the problem is, none of the seats seen as
potentially flippable are open races this time,
except for McConnell's in Kentucky, which is
seen as a very long shot for Democrats. So which
states are considered the most likely potential
flips, even if tough? The article points to maybe
North Carolina, Maine, Ohio. Montana, and it
names some strong potential Democratic candidates
for those races. But the cash is. None of them
have actually announced they're running yet,
at least according to the source. So it's all
potential right now. And even those races would
likely be very competitive, very close. Unless.
Well, the article does add the caveat that if
there's a really deep recession, that could change
the landscape significantly, maybe put more states
in play. But barring that, it looks like an uphill
climb for Senate control. OK, finally, let's
touch on something a bit different. The age of
Congress. There's an argument being made that
it's becoming, well, maybe too old. Yeah. This
comes from an op -ed by Mitch Daniels, the former
Indiana governor. He apparently quoted Lamar
Alexander's description of the Senate as, America's
finest assisted living facility. Ouch. That's
blunt. It is. But Daniels uses it to make a point.
He compliments Senator Durbin for retiring at
80, which sounds old, but is actually relatively
young for today's Senate. And he mentions others,
like Feinstein, McConnell, or even a House member
living in assisted living, who maybe stayed past
their peak effectiveness. So the question is,
how do these long -serving members want to be
remembered? as wise elders or something less
flattering. Right. And it's not just one or two
people. There are apparently 35 current members
over 70. The median age in the Senate is now
65 compared to just 51 back in 1981. That's a
big jump. How does that compare internationally?
We're older. The article mentions Japan, Israel,
the UK. Their national legislatures are all younger
on average. So does this affect how Congress
actually functions? Its energy levels, its ability
to tackle new problems? That's the concern raised.
Maybe it contributes to a certain inertia, a
lack of dynamism. Daniels even floats the idea
of a constitutional amendment, not term limits,
but a maximum age to start a new term. Like,
we have a minimum age now. Interesting idea.
What's the argument for that? The argument isn't
that all older people are incapable. Clearly,
many are very sharp. It's more that maybe Systemically,
having so many people serve for so long potentially
blocks opportunities for younger, equally capable
people with fresh perspectives. Like clogged
arteries, as the analogy in the source goes,
preventing new ideas from flowing in. That's
the imagery used. Yeah, it's a thought provoking
point about institutional renewal. OK, so we've
covered a lot. Let's bring in that hedge eye
analysis now. Looking back at Trump's first 100
days, they described it as. Pretty unprecedented.
Yeah, unprecedented activity levels. Really trying
to implement the Project 2025 blueprint, pushing
through significant changes very quickly. Lots
of executive orders. A huge number, apparently
more than one per day on average. Though, hedge
-eye notes, maybe some missteps in there, like
a Dogecoin initiative that didn't quite land.
And historically, how does that compare, like,
to FDR? While FDR had much stronger support in
Congress, which made legislating easier, Trump's
relying more on executive actions, and the courts
have already stepped in to nullify or pause Quite
a few of them. Why the rush, according to Hedgeye?
Couple of reasons suggested. One, get your loyal
people in place quickly. Two, maybe get the bad
news or the disruptive stuff out early in the
term. And a big focus was immigration. Huge focus
on immigration control, yeah. Trying to really
energize the Maggier base, maybe demoralize Democrats,
and generally shake up the Washington establishment.
The analysis suggests a strategy of restructuring
the economy and budget in ways that will hurt
many people, maybe as a distraction. That interpretation
is in there, yeah. Along with criticism of how
federal workers have been treated, it's definitely
fueled intense partisanship. Democratic approval
of Trump is reportedly extremely low. And looking
ahead, hedge I see potential for more conflict,
maybe trying to bypass the filibuster or even
confronting the courts more directly. Those possibilities
are raised, yeah, given the level of executive
action and the pushback. How does the public
see Trump, according to the polls cited? It's
divided. As you'd expect, some see him as exciting,
others as scary or chaotic. That comes from NYTC
and Edison polling mentioned. And on specific
issues. His ratings are reportedly relatively
better on immigration and the economy, less so
on foreign policy. Interestingly, maybe positive
ratings on higher education, perhaps linked to
the Harvard pressure we discussed. And a potential
foreign policy shift. Away from Russia, more
towards China. That's suggested as a possible
pivot, yeah. What about voting intentions for
2026, the midterms? The polling Hedgeye sites
shows maybe a slight Republican lean, but it's
early days, of course. On the budget front, Hedgeye
seems skeptical about big spending cuts. Yeah,
skeptical that significant cuts can happen without
tackling the big entitlement programs, which
is always politically difficult. They think renewing
the 2017 tax cuts is more likely, sort of maintaining
the status quo there. Which could mean bigger
deficits. Potentially, yeah. There's some debate
mentioned about the budget baseline and whether
extending those cuts actually counts as increasing
the deficit, but the practical effect could be
more borrowing. It raises questions about whether
those fiscal hardliners in the Republican Party
still have much influence. And a need to move
away from relying on foreign savings to fund
U .S. debt. That point is made. Yeah. A need
for a structural shift. Plus all the ongoing
global conflicts. Gaza, Ukraine, Iran. Right.
Those continue to be major factors. And an upcoming
visit to Saudi Arabia is mentioned. Hegei also
touched on cultural shifts. Yeah. Things like
gender identity debates and maybe a rise in people
identifying as Christian, all part of the complex
backdrop. And the overall picture is one of intense
polarization, making it hard to actually pass
laws. Very much so. A lack of bipartisanship,
gridlock, and some big deadlines looming like
the Iran nuclear deal situation and eventually
the debt ceiling again. So putting it all together
from these sources, it's quite a picture. Assertive
policies meeting resistance, deep partisan divides,
economic uncertainty, demographic shifts. Absolutely.
All these threads seem interconnected. You see
the administration pushing hard on multiple fronts,
trade, immigration, domestic policy, the military,
but facing legal, political, and sometimes practical
hurdles. And underlying it all is this intense
polarization that shapes almost every debate.
OK. So we've unpacked quite a bit from Electoral
Vote News and the Hedge Eye Report. A lot of
moving parts, a lot of... points. Definitely.
From the complexities of US -Canada trade to
Supreme Court decisions, shifts in political
messaging, potential Medicaid changes, the internal
dynamics of both parties, Pentagon shakeups,
the ongoing Harvard saga, tariff impacts, and
even the age of Congress. It's a lot. It really
is. So as we wrap up this deep dive, thinking
about all these different pressures and contradictions
we discussed today, here's a final thought for
you, the listener. Considering everything we've
explored, what single factor do you think will
be the most decisive in shaping America's political
and economic reality over the next year or so?
Something to mull over. Thanks for joining us
on The Deep Dive.