Rapid Response: What the Democrats' campaign changeup means for business, with Axios’ Alex Thompson

0:00Scaling a business in the US can feel like a maze. Each state has its own payroll, benefits, and compliance rules, pulling your focus away from growth, which is why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert, plus Fortune 500-level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So, if you're scaling, make it simple with Deal. Go to deel.com. slash MOS and get up to three months free. If you're in private capital, you understand that your next great deal starts with who you know.

0:41That's why over 3 ,000 firms trust Affinity, the CRM platform purpose-built for private capital. Affinity's relationship intelligence reveals your team's strongest paths to founders, investors, and decision makers using insights It's hidden in emails, calendars, and meetings. With powerful AI tools like Affinity NoteTaker and Deal Assist, you'll spend less time managing data and more time closing the right deals. Learn more at affinity.co slash marketplace. There's this frame that like, oh, Biden bowed out gracefully. That's not what happened here. Joe Biden was pushed out of this race by the Democratic Party and by leaders of the Democratic Party.

1:27It has surprised me how quickly every leader of the Democratic Party has endorsed Kamala Harris. Top Democrats had signaled publicly and privately that they prefer to have at least some sort of a competition rather than a coronation. And really the story that people should be paying attention to the next month is Kamala Harris is not just going to let the Biden campaign run as it was before. But she also doesn't want to change it enough that it falls to the ground.

2:25of some of the most insightful 2024 campaign coverage, and Alex has deep access to the Biden White House. Alex shares behind-the-scenes info on what's driven the dramatic changes of the past few days, plus the role of business leaders going forward, how the Harris 2024 enterprise is going into startup mode, and more. The road ahead is still unclear, but Alex gives us some signposts to help orient us. I'm Bob Safian, and this is Rapid Response.

3:00I'm Bob Safian. I'm here with Alex Thompson, National Political Correspondent for Axios. Alex, thanks for joining us. So good to be here. So wild last 24 hours or so. It's Monday evening, and we are really not sure exactly what's going to happen with the Democratic nominee. Although you knew all this was coming, right? How did you find out? I found out sitting right where I'm at right now, working the afternoon. I was tempted to go see a movie and go wild with my social life by doing so by myself. Wild, wild, yes. Yeah, I was going to go see Twisters. I was very excited for it. And I was like, yeah, I got some stuff to do.

3:46And so, you know, the way I thought about it is that my head said that he was going to drop out. but my heart just didn't think he was just because I didn't know how he was going to get there psychologically. You know, Joe Biden's, if you would call it a superpower, is sort of his resilience. And the fact that when he's knocked down, he, like, keeps going. I also think he really believed he was the most likable person against Donald Trump, even as the rest of the party and lots of his friends were saying otherwise. and I was a little bit surprised, you know, that he would sort of just say, you know, cry uncle after Nancy Pelosi really was saying it's time for you to go.

4:35I have to say that I, you know, from the moment I was watching that debate, I thought like, this guy's got to go. And yet this morning I woke up and I was a little bit like sad for him and for his family a little bit. Emotionally, as you say, it's a hard thing to turn away from. There's a lot of sadness and anger among people that have worked for Joe Biden in the past, people that weren't around those last six months, people that a lot of these people gave up a lot of the prime of their lives working for this man, whether or not it was in the Senate of the vice presidency. And I think the reason it's both sadness and anger is because, you know, they obviously are sad that it's over.

5:23They're sad that it's over in this way, where you have an incumbent president basically giving up power four months beforehand because a significant part of the population no longer believes he is capable. But I think that the anger really comes from a place of how did the people that spent time with him frequently let him get on the debate stage? This was not the first time he had acted that way. And why did the people that were spending time with him every single day, which was a small crew, let him get on that debate stage and get to this point? So this news comes yesterday afternoon. It's now Monday evening.

6:11In the time since then, I mean, it's been kind of crazy. What's unfolded as you expected and what surprised you? It has surprised me how quickly every leader of the Democratic Party has endorsed Kamala Harris. Yeah. Nancy Pelosi and several other top Democrats had signaled publicly and privately that they prefer to have at least some sort of a competition rather than a coronation. The fact that, at least as of this taping, Kamala Harris has appeared to mostly wrap this nomination up within 30 hours. Yeah. Did surprise me. I thought that, you know, given her performance in the 2020 campaign and given sort of some of the unevenness of her vice presidency, plus, you know, I can tell you, like Joe Biden has senior team, their concerns about her.

7:14Even despite what I just said, I'm not totally surprised that Joe Biden endorsed her. I take the politics out of it. Think about Joe Biden as a person. Loyalty is the highest virtue in Biden world, which is also part of the reason why he was offended by his perception that he was more loyal to Obama than Obama was to him. and was offended by what he saw as Obama preferring Hillary to him in 2016. So, you know, I don't think it's knowing Joe Biden. It's not so surprising that he endorsed Kamala Harris. But I guess I was surprised that the rest of the party went along so fast. Yeah, the the the parlor game that began almost immediately yesterday afternoon of like what might happen and who might it be in this.

8:06the whole idea of a more open convention, all that, it's like that's trying to be squashed down really quickly. Yeah, absolutely. The Democratic Party has made clear they want, after, you know, what truly was an agonizing three and a half weeks for the party, they just want to have a nominee and just have this news cycle from hell be over. The thing that's, again, surprising is, you know, we haven't really heard from Harris in a while. I mean, most of her events are very tightly controlled. They're friendly environments on friendly issues. We really haven't seen her do a tough interview for a while.

8:51And what happens if in like a week or two, she finally does a big sit down and she's a mess? You know, then I think there might be some buyer's remorse. But but also maybe like there's not that much time to Election Day and Democrats want to get on with the organizing and trying to beat Trump. And in which case, you know, having this very fast coronation makes a lot of sense. How much leeway was there with like the money that was there for Biden, the delegates that were posted by? I mean, did those automatically revert to her or was there actually more flexibility? Is there still flexibility? There definitely was flexibility.

9:36I think if Joe Biden had not explicitly endorsed her, this would be a very different thing. And you saw some prominent Democrats resist the momentum. Barack Obama, Nancy Pelosi, Chuck Schumer, Hakeem Jeffries, all did not endorse her yesterday. Right. That was intentional to see how this would play out. It was like a waterfall today. Yes, exactly. The money thing is complicated because the DNC has$100-plus million cash on hand, and that can be used for any Democratic nominee. The Biden-Harris team also has$100 million-ish in hard money. and some lawyers argue while biden's dropped out because harris is on the ticket she can use it as harris for president and there are some people less of it's a minority opinion that says like no you actually can't do that um and there are some people that say like it doesn't matter if it's harris or the nominee you can actually transfer that money to the dnc anyway this is the first election cycle between the trump trials and hunter's trials where my my mom was finally correct in suggesting I go to law school.

10:49As a show that focuses on business, one of the things that we've been reflecting on is the level of attention paid to business leaders' positions on candidates. One of the early New York Times stories yesterday highlighted that LinkedIn co-founder Reid Hoffman had endorsed Harris. Reid hosts a sister podcast to this one. Since when did the billionaire class, you know, count as an endorsement, you know, in the same way that a political leader would? It is sort of strange. I mean, some of this is, you know, the Post-Citizens, United World, where one billionaire can have such a huge effect. You have, I think, Elon Musk last week, the Wall Street Journal reported, would do 40 plus million dollars in a super PAC backing Trump.

11:35And you have these people of immense wealth being able to fuel tens of millions of dollars of campaign. And that means it's worthy of tracking them. I think it is this strange dynamic that we just increasingly just accept as normal, but maybe is a bit off. And so whether it's Silicon Valley folks, Elon Musk or Reid or even Jamie Dimon, like you really think it's all about the money. It's not necessarily that there's other influence because, you know, it matters what business leaders think. I think there's probably some of that in the same way that, you know, how many voters really could Sherrod Brown endorse Kamala Harris?

12:27I don't know. But Sherrod Brown is like an influential figure among a certain group of people. And it's a signal to them. And like, you know, a powerful group of people in Sherrod Brown's center of Ohio, if people don't know. And I think Reid Hoffman is sort of the same, where he is a signal to other people in his sort of influential group. And that is why it is important. That being said, some of it, I think, just has to do with the mind. So on this show, when we talk about startups, we sometimes use this analogy of, you know, how startups are like jumping off a cliff and building a plane on the way down.

13:14And it seems like that's kind of what this Democratic campaign is forced to do. You know, even though the Democratic Party is not historically an agile, fast moving operation. um do you have a sense about how yet that like the party is trying to build the plane in this moment yeah i'd say that i'd say the metaphor um is a bit a bit tweaked in this scenario because you did have a plane that was flying maybe it wasn't flying very well but like the biden for president re-election campaign it was airborne right like there was right right um and then and then basically the debate turned into you know multiple engine failure like steep dive and now they're in a situation where you know maybe they've leveled out but still like an engine or two is out so that i guess to to continue the metaphor way too long is that they are they are trying to fix the campaign while they are airborne and very close to the ground and that is what kamala harris and her team is going to try to do.

14:27And really the story that people should be paying attention to the next month is Kamala Harris is not just going to let the Biden campaign run as it was before, but she also doesn't want to change it enough that it falls to the ground. How are the ways that she changes the campaign was operating? Who does she install that she trusts, but also how does she do in a way that does not necessarily create sort of a freefall? Was one of the advantages or I guess disadvantages of someone other than Kamala Harris that you would have to like, you know, build a whole new plane if there were some other ticket?

15:11Yes. And you're exactly right that it comes with advantages and disadvantages, especially given And we are now four months before Election Day. And this is why, you know, Joe Biden's debate basically left the Democratic Party with no good options. You know, you could keep Joe Biden's ticket. That's like not a great option. You could replace him with Vice President Kamala Harris, who had had sort of an unsteady record, but would inherit the plane as rickety as it was. Or you could try to open up the process and let new people build their own plane. But the problem is they only have four months to do so.

15:46And, you know, Donald Trump declared for president, you know, 18, 20 months ago and has a 20 month head start in building his own plan. Yeah. Yeah. I guess I, you know, I was, I was a little surprised cause I, and maybe this is just the storyteller or the media person in me that like, as, as painful as the media story has been for the Democrats over the last three and a half weeks, like keeping the suspense of who would be on the ticket, you know, like that's a great story and you get a lot of attention and you sort of take up a lot of air that keeps, you know, that attention away from trump and republicans yeah there was definitely an argument i heard from democratic operatives including operatives close to potential uh you know presidential candidates that believed in open convention as chaotic as it would be would actually be the least bad option of the bad options available for this reason is that you would grab eyeballs, attention, and you'd bring energy right to a party that really needed it.

17:01As chaotic as the campaign might end up being, it would be just like this adrenaline, like multiple adrenaline shot as you'd have this big debate. I mean, listen, if there's anything Trump has taught us, right, it's that like Like, getting attention is an art form that works, you know? I think the thesis of Trump's life is that all attention is good attention. The battle for America's future may well hinge on who can best grab America's attention. Politics is a marketplace, after all, and Joe Biden was, in effect, failing as a salesman. After the break, Alex shares what Kamala Harris has to overcome in her sales efforts, why risk-taking is in short supply for both parties, and how he finds clarity amid the noise of the news cycle.

17:48Stay with us.

17:53Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups.

18:43And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

19:27So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. Before the break, national political correspondent for Axios, Alex Thompson, explored the impact of Sunday's jaw-dropping political news. Now, Alex talks about what Kamala Harris has to overcome, key advantages that Trump holds, and how the outcome of the presidential race may depend on risk-taking. Let's dive back in. You had a scoop early today about, you know, that Biden sort of initially didn't think Kamala Harris could win. Was that in part because he didn't feel like she could generate that attention?

20:16Like, do you have a sense about why he had that concern about her? Yeah, I think there's three parts to it. One is his own ego, right, where he had sort of convinced himself that he was the indispensable man. The second part is that they're just very different people and very different generations. And I don't think in some ways Biden didn't completely appreciate her skills because his skills are so about like being a politician from Delaware. It's all about how many hands can you shake because you can basically shake everyone's hand in the state. And then the most uncharitable explanation towards Kamala Harris is that, you know, Biden was just really not wowed by her performance the last three and a half years.

21:02And there was this feeling that she churned through staff to an incredible extent. I can give you like one stat. So, you know, about half of the vice president staff is paid through the Senate and that requires staff disclosure. So we don't have the full staff, but we have a significant portion of it. The 47 people that were on her Senate staff disclosure at the beginning of her term, of those 47, only five are still there. And I even compared, you know, D.C. is a churning place. So like I compared it to the to Vice President Biden's first term, same period of time of the Obama administration's first term of the 38 people that started with Joe Biden at the beginning of the Obama term, 17 were still there at the same period of time.

21:54So this is an abnormal level of churn and staff turnover the vice president has. She also, at times, with regards to migration and other issues, the White House felt that she walked away from responsibility rather than embraced it. and was not always a team player as she was looking out for her political future. Kamala Harris' team at times felt that the White House was almost intentionally not trying to give her clear wins. Again, this is from the Harris side. They never had evidence, but it was a feeling that the White House didn't want her to be seen as a clear alternative going into a re-election where there were some doubts about Biden.

22:42And yet he chose to endorse her, despite all of those things. And yet he chose to endorse her. I think the thing to remember is like there's this frame that like, oh, Biden bowed out gracefully. That's not what happened here. Joe Biden did not want to bow out of this race. I think just listen to every single appearance he's had the last four weeks since the debate. Joe Biden was pushed out of this race by the Democratic Party and by leaders of the Democratic Party. and then once he decided okay i'm getting out of this race then he basically just has a decision do i endorse kamala or not yeah and based on sort of what we talked about with this loyalty code i think he basically said i prefer to endorse harris rather than not we still have a long road to go before there's there's much clarity and there's so much noise right now so much feels like it's changing and it's unstable and it's unknown and you know as we see just over the last 30 hours.

23:42What do you hold onto as firm in this moment about where the party is and where the election is overall? Or can you not? Do you just need to be like reactive and attentive and see where it all goes? That's a great question. If you are any candidate in this race, you want to be Donald Trump right now. The back matter is that this is probably the strongest position Donald Trump has been in, in his entire short political career. The Republican Party is more united behind him than ever. He is also not in the midst of a once in a century pandemic. And, you know, there is a world in which we think back where, you know, even though Trump is dealing with COVID, he only lost by 45 ,000 votes across three states.

24:30You know, there's also a world in which, you know the the country just after the the sort of dual traumas of covid and what happened with the economy is is much more risk averse they're not happy with the status quo but they're actually much more risk averse that they're they're wary of change at least the sort of change trump is promising even though like most both candidates are not talking about covid at all i think covid it as sort of this quiet factor in how people are deciding. It's really interesting that the Democratic Party doesn't yet have a real cohesive story of the future that's different than the present, right?

25:14They're just riding on like, here's where we are right now. Let's just keep in this lane. Well, and that's the risk of picking Kamala Harris as your nominee, is that she is not distinct from the current administration. She is inextricably tied to this administration. And we've already seen that the first ad from the Trump super PAC was very focused on basically saying she is Joe Biden. And I think the Democratic Party, especially elites in the Democratic Party, after the debate, have convinced themselves that all the problems they have are only tied to Joe Biden's age and not to their record. And the Trump campaign is saying, no, like there's also problems with your record.

26:02And we will see how the Democratic Party responds to that and how voters respond to that. And we honestly don't know. Yeah. Well, Alex, very thoughtful of you to join us. And I hope we'll keep this conversation going. It's a crazy, crazy time to know what to do and what to think. Thanks for helping clear it up a little bit as much as we can for our listeners. So fun to be on. This presidential election season is unfolding like a season of succession. There's one twist after another and predicting where things will end up is anyone's guess. What's striking to me in Alex's observations is how risk averse both parties seem to be.

26:44Republicans harking back to the past, Democrats trying to hold on to the present. Neither seem particularly focused on the future, which, of course, is where we're all headed. We'll see if that shifts as the campaign evolves in the weeks ahead. Regardless, the future is where businesses and business leaders need to keep their focus. I'm Bob Safian. Thanks for listening.

27:14This is Emily Warden, Capital One Business customer and owner of Emily Warden Designs, a bespoke fine jewelry store that quickly gained buzz after opening its doors in Richmond, Virginia. My customer base grew exponentially once we had a storefront. We had one engagement ring case at the time, and we had lines out the door every weekend. As her storefront continued to have record sales, Emily knew it was time to up-level production. We normally just purchase diamonds in very small batches or per order. So we wanted to invest in not just one or two pieces, but a collection of natural diamonds. Emily knew creating a collection would be a big investment, but with the help of her Capital One business card, she was ready to bet on herself and bet big.

28:01It was about$40 ,000,$45 ,000 all in up front. Having the Capital One card was definitely reassuring to be able to make such a large investment purchase. And of course, to get the cash back that came with it. To learn more, go to CapitalOne.com slash business cards. Rapid Response is a Wait What original. I'm Bob Safian. Our executive producer is Eve Trow. Our producer is Alex Morris. Assistant producer is Masha Makutonina. Mixing and mastering by Aaron Bastinelli Theme music by Ryan Holiday Our head of podcasts is Leetal Malad For more, visit RapidResponseShow.com