135. Has the Military Turned on Trump?

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3:23And Doug. Massachusetts.

3:32Hello and welcome to The Rest is Politics U.S. I'm Anthony Scaramucci. And I'm Katty Kay. And today, Anthony, we are going to talk about Tennessee's seventh congressional district, which is not something, let's face it, that most people around the world will have thought about. But it is actually a pretty important indicator of where the Republican Party is right now, which I would say is feeling a little bit nervous. They had a midterm election, congressional election this week. The Republicans won it, but they won it by one heck of a lot less than they won it in 2024 for Donald Trump. So we're going to talk about that and see if we think that this is an indicator, a little bit of a canary in the coal mine for the Republicans.

4:13Then after the break, this is something that I wanted to ask you about because I can't help but have noticed that crypto is not doing as well as it was a couple of months ago. And I want to find out what's going on there, particularly the politics of it, given how much the Trump family seems to be invested in crypto. Fair enough. And I'm looking forward to that. Can I just say before we get to that conversation, because I need to get it off my chest quickly, quickly, because then we can move on and be friends again. I, of course, invested in crypto at about the top of the market, which is when I started talking to you about it.

4:45But okay, that's fine that's good okay now i've said it i mean this is your opportunity to average in like all of us have done you know i i have very high marks and low marks on my crypto investments but okay before we get into all of that caddy we've got pre-sales going on right now i'm talking about pre-sales for a live show on the 6th of september it's open now so members listen up check your inboxes for that ticket link and if you're not signed up you can still go to the rest of politics U.S. dot com to become a founding member and get exclusive pre-sale access. And for those of you who aren't members, general sales will happen on the 11th of December, Caddy.

5:27It feels like a very good Christmas present to me. What do you think? I think we need a Trip U.S. mug, by the way. I'm going to be talking to people about that as well. Everybody's got a mug, Caddy. You and I need a mug. We need a mug. That's one of the other things that we need for Christmas. But before we get into your menu, which you want to talk about, which is great, I got to give you some scuttlebutt and gossip if you don't mind because i have been talking to people who are retired military and not in love with the whole hegseth situation and donald trump and i know you've done your own reporting on this i'm just going to say what i know and ask you to chime in if you agree or if this confirms some of the things that you've heard but the general sentiment is that Hegseth, they want him out of there.

6:11The military is super upset with him. Some of it has to do with these strikes in the Caribbean and the second strike where he's now trying to totally disclaim himself and pass the buck. But the real issue has to do with Senator Mark Kelly. Democrat of Arizona. Yes, exactly. And so Mark Kelly, and by the way, Caddy, this is one of the more brilliant things that the Democrats have done. So let me set the scene for people. Six congressional leaders got together on the Democratic side. They ran a video saying that the military should not obey illegal orders. And that's their code of ethics. They should not do that.

6:51And those six members, just briefly, were all either retired military or retired intelligence services. Exactly. Exactly. And this is so important because usually Trump baits them, and then they go up like bottle rockets and they shoot up all over the place, but they baited him. All Trump had to say is, hey, I agree with those six senators. I have never, and Pete Hegseth has never given an illegal order, nor would we ever moving on, but they didn't do that, Katty. And a result of which they claim sedition, and now you've got a tribunal going after senator kelly and this is such a bro code violation of the military ethos that the complaints are being registered in the senate the house leadership and even donald trump himself has again gone on his back foot on this he doesn't like the pressure coming from these generals and these complaints now is that consistent with what you've heard yes a couple of things on that that I've heard recently.

7:55I also spoke to somebody who was a former senior person on the legal side in the Pentagon. They told me that the other thing that members of the military don't like is the way that Admiral Horsley, who was kind of pushed into early retirement by Pete Hegseth and was the head of Southern Command, which oversees this Caribbean operation, they don't like the way that he was treated. I was also told that Admiral Bradley, who is the person that ordered that second strike that we spoke about on that Venezuelan alleged narco boat was eager to testify to try and set the record straight. If you want to look at something about what Pete Hegseth himself believes about the need for members of the military to follow the rules of law, there is a video going around from April of 2016.

8:47We played it on the show yesterday morning on Morning Joe, which shows Pete Hegseth saying that it is the ethos of the military for the members of the military not to follow illegal commands and illegal orders. Just worth a little look. That was Pete Hegseth back in April of 2016 before Donald Trump became president. I do watch you on that show, Caddy, and I watched that whole video that you played, and I was like, my God, there's a video for everything. Isn't there a video for everything? So there he is claiming that Barack Obama is giving out these illegal orders and we have to disavow them, but not Donald Trump.

9:29Donald Trump can like blow people up that are floating around in the Caribbean Sea. Not a problem. All right. So before we go to Tennessee, Cady, just answer this question, Cady, if you don't mind. How did they successfully bait Donald Trump like that? I'm, again, surprised. He's off his game. I'm just going to submit that to everybody. Trump would have saw eight years ago that would have come across Trump's field of vision. He said, oh, these sons of bitches are baiting me. He probably would have put out a truth social or Twitter at that time and said, ah, they're trying to bait me. Let me flip it back on them.

10:03But he didn't. He fell right into the trap. Why is that, Kat? This is a story that's actually been unfolding in front of us that perhaps we haven't paid enough attention to over the last couple of months because you've got the incident itself in September. You've got Admiral Horsley stepping down mid-October. You've got then this video that comes out a couple of weeks ago. I think you and I were thinking, why have they suddenly put this video out now? They don't say what the illegal commands are that they're referring to, but is this because they had got wind of what had happened on September the 2nd and so that's when they put the video?

10:33That's the kind of speculation here in Washington at the moment that that's what they were referring to. So, has this rattled? Even though the president in that cabinet meeting this week had Pete Hegseth sitting next to him and seemed to double down in support of Pete Hegseth, are they all feeling a little rattled by Pete Hegseth and his position at the moment? And remember, it was Pete Hegseth that came out and said, we're going to bring back Senator Kelly and potentially have him court-martialed. And yet the president seems to be standing by Pete Hegseth for the moment. I think there is a lot of things that are not going very well for the White House right now, in terms of legislation that they have tried to propose, in terms of the tariffs, in terms of what's happening in the Supreme Court, in terms of what's happening around the country.

11:15And I think that's what brings us to this election in Tennessee, that they're feeling the heat. They had this first run of eight months where everything was going very well for them. It was full of, you know, storm and dram and, you know, nonstop action. And they seem to be getting away with an awful lot. And the legal process moves slower than the political process. and the fallout of what the president has done or not done, particularly in terms of prices, which I think gets us into Tennessee as well, all of that is starting to come back to affect the White House and the morale in the White House.

11:50And I've been told by people who are pretty close to the White House that things are pretty chaotic in the White House right now. Susie Wiles seems to have been a little bit sidelined. She was the chief of staff who kind of kept things running and the trains on the track. She's been a little bit sidelined. Stephen Miller has not been sidelined, and yet they're watching the opinion polls showing that these ICE raids are not particularly popular. So there's a lot of infighting, and it's pretty public between Marco Rubio and J.D. Vance over Ukraine. And the president then at the same time is waking up to headlines in the New York Times saying, Donald Trump is falling asleep again in meetings and is off his game and is showing signs of being 79 years old.

12:31And this man who seemed to have endless stamina is suddenly looking a little bit more frail. I think that some of that plays into what we're seeing. What do you think? Okay. Okay. Well, I do think all of that, and I do think that you're going to see a lot more activity January, February into March, or you're going to get the great pushback on Donald Trump and all things MAGA. So, we'll see if we're right about that. But Tennessee. Tennessee. Who knew that we'd be talking about? Tennessee's seventh congressional district. Christmas red was purpling before our eyes, Caddy. So what happened in Tennessee and why does it matter?

13:10So Tennessee's 7th Congressional District, which includes part of Nashville, Tennessee. Any of you who have been to Nashville, Tennessee have probably been to the music strip known as Bachelorette Party Central. Nashville, a little bit more blue. Like many cities around America, you get these blue islands of liberalism in red states in the country. Nashville is definitely one of those. But Tennessee's 7th district is not just Nashville. It's a whole load of rural Tennessee as well and suburban Tennessee as well. So actually an area that Donald Trump won by 22 points in 2024. So a true red bit of the country.

13:49A congressional election was held there this week, a special kind of off-year election like we've seen in Virginia, like we've seen in New Jersey. We've seen a couple in other places too. And Democrats started to realize that actually maybe they had a chance to win this election. So they pour$2 million into the election. But this is beaten by the Republicans who pour in a whopping$3 million to try and defend this seat because they don't want to lose it in Congress. And they also realize that it would be unbelievably embarrassing to President Trump if suddenly a Democrat won a seat that the president had won by 22 points.

14:26The election comes along, 180 ,000 people vote, in this election, which I think sounds like not very many people for$5 million worth of spending, but there you go. That's politics in America these days. And the Republicans actually managed to hold on to it, but their majority goes, their lead goes from 22 points in 2024 to just 13 points this week. And it's seen as, so although the Democrats lost, in a way they won, Anthony, because it shows that this is part of a trend, right? We've seen it in New Jersey. We've seen it in Virginia, this shift towards the Democrats. And the big issue, the big voting issue in Tennessee this week, of course, was around prices and affordability.

15:12That's what people were interested in. The Democrats ran a surprisingly, I think, progressive candidate for what is a kind of red-purple district, somebody who in the past had talked about defunding the police, who had called herself a radical. She still managed to do pretty well. But during this campaign, what was the issue that she ran on? She ran on the issue of affordability. I don't know how much of a bellwether you see this as, but I can tell you that there are a whole load of nervous Republicans, members of Congress, waking up after that election thinking, oh what was my margin in 2024 because if their margin was 13 points or less they're going to be feeling pretty nervous right now fortunately or unfortunately i've been doing this a very long time as a political fundraiser they're panicked let's just not pretend because money matters caddy but sentiment matters more than money right hillary clinton donald trump yeah right she outmanned him she had more staff than him didn't matter he won okay some could argue that the harris team had more money than trump it's hard to really when i look through the numbers i'm going to call it a tie but the point being is you could get the money because you're an incumbent or you're sitting there waving the money citizens united write me hundreds of tens of millions of checks for congressional race but if you don't have the sentiment caddy you're going to lose the election.

16:45And so the plot is going to thicken as we get into the midterms because, Caddy, if I tell you prices are lower and you're going to the supermarket and the prices are higher and you're buying stuff and you're like, what is this guy saying the prices are lower? The prices are not lower. If I tell you that the tariffs are not a tax and then you get something in the mail from FedEx and you open it up and it's a bill. It's a charge for the tariffs. They say, oh, by the way, you owe us this. And since your credit card's on file, if you don't send us a check, we're going to deduct it from your credit.

17:24It's a tax. The tariff is a tax. Scott Bissett said something yesterday. He was up here in New York yesterday. And I just marvel at the guy because literally when he opens his mouth now, the tongue is so severely twisted it's like an aunt annie's pretzel where it's like a bow tie coming out of its mouth it's okay i'm just joking you're you're choking on the prices caddy or you're you're choking on the wisdom of what you're saying the the wisdom yeah all right we're gonna have to get you cpr because i'm gonna keep being wise caddy that's gonna continue the the wisdom is gonna continue to the morale improves okay but anyway he's out there talking like Like the tariffs are not a tax.

18:06And he was making this big syllogism and this logical argument that was out of control. And I was looking at him like, is he really going to say and do this? He wrote a investment letter. His last investment letter at Keybridge was about the tariffs being inflationary. And guess what? The tariffs are inflationary. and he's trying to tell people that it's not a tax and it's not inflationary because he works for Donald Trump. So when you have Alice in Wonderland going on in the government and people want to pretend things are not happening that are actually are, it may work in authoritarian regime where they control all the media and they control the election and the tabulations of the election, but in a country like this doesn't work and they're going to feel the heat caddy.

18:53And this is a very important signal to what's about to come in the midterms. I think the other thing I took away from the Tennessee election that I think is why it's worth talking about is that there's a message here as well to Democrats on the kind of candidates they need to be running because they did run this candidate who, as I said, is progressive. progressive. Actually, the most dumb thing she said in an election campaign in Nashville was to say that she hates Nashville. And worse than that, she hates country music, which is what she told a podcast a while ago. So perhaps don't run a candidate who says they hate the city that they're running in and that they don't like the industry of the city that they're running in.

19:33But the message I think to Democrats is they need to choose their candidates carefully. They do have this opportunity. They had this big swing. People, as you say, are fed up about affordability. Donald Trump is not helping himself. He's sitting there in the cabinet meeting in the White House on television saying that affordability, this word that suddenly seems to have been invented, is a democratic hoax. I mean, he's literally calling it a hoax. I mean, they've got this chance, but they also need to think who are they running, in which districts they're running. They can run Mamdani in New York City.

20:08I think this is really confirmation of that. AOC did a virtual rally with the candidate down in Tennessee just on the eve of the election, but they can't run radicals everywhere. You've got to choose your candidates. And I think for the progressive wing, this has actually been a great week for centrist Democrats because it gives them the ammunition to turn to the progressive and said, fine, Go with Mamdani in New York City, but we need to find the candidates. If we're going to take this opportunity to defeat these vulnerable Republicans, and the idea that a Republican who won by 13 points is vulnerable suddenly is wild in and of itself, given where we were a couple of months ago and we thought that the Democratic Party had died an early death.

20:52But clearly, the 35 House Republicans who won by 13 points or fewer are going to be feeling pretty vulnerable about 2026, But the Democrats have the wind behind them. They've suddenly got energized. They found a message, which is affordability, affordability, affordability. As James Carville said, it is still the economy, stupid. But you have to run the right candidates for the right district. Okay. And I know we're going to take a break, but I'm just going to chime in for 30 seconds and say this is a special election, and I don't want to overly read into it either. Of course. Because sometimes special elections don't play out.

21:29But there have been several of them now, right? We're seeing a pattern. And just to remind people outside the United States, the structural realities of these districts, Caddy, are always in play. And so there's going to be a big fight over the next six months over the gerrymandering of these districts. And the Republicans may win that. And it may make it harder for the Democrats to win. So I don't want people to get complacent. Of course. People think, oh, this is great. There's going to be a great blue wave coming in the midterms. It's going to be still a challenge. Yeah. And also, you still have to raise the money.

22:08I mean, it's not great for the Republicans because if you're spending money in Tennessee, which is a red state, that's money you then have to raise in order to still spend money in Wisconsin and Michigan and Pennsylvania, which are actually swing states. So a lot of this is about money too. Where you're spending money in one place, that means you have less to spend in another place. But I agree. It's still a year away to the midterms, and the president has the opportunity to do things about prices. He's going to get a new Fed chair in the spring of next year, which would give him the opportunity to have somebody who lowers interest rates.

22:43That could help with prices. He can revise his tariff policy. That could also help with prices. They are proposing several measures to give money directly into the hands of voters. That can also help voters feel better about the economy. So there are several policy options the president still has to do something about the economy. It's not always easy for a president to bring down prices and address this issue of affordability. But I think the very first thing that the president could do is start sounding a little bit more empathetic about it rather than say that it's a hoax. OK, we're going to take a quick break and come back and talking of prices, talk about the price of Bitcoin.

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24:20with Capella University. Learn more at capella.edu.

24:28Welcome back to The Rest is Politics US. This is going to be a little bit different because it's basically going to be me asking for answers from Mr. Scaramucci. Actually, no, not Mr. Scaramucci, Professor Scaramucci for the purposes of this half, but only this half of this one episode. Professor. There's such mocking and a little bit of derision in the Professor Scaramucci stuff. Hey, look at the smile, see? Can't help yourself. All right, go ahead. Go ahead. Okay. Okay, Prof. So, Bitcoin, which I know that you are a great champion of, and this is what I want you to explain to me. It has come down about 30 % from its all-time high in early October.

25:12Remember, when Donald Trump came into office, there was a lot of speculation that his enthusiasm, particularly the enthusiasm of his sons and his family for Bitcoin, was going to push cryptocurrencies ever higher because they were juicing the market so much. They were putting so much money into it. They were coming up with the kind of regulation that the crypto industry wanted to see around cryptocurrencies and so many people were getting into it that this was going to be something that we're just going to have to carry on rising in this particular political atmosphere. And yet we've seen it come down a huge amount in a very short period of time.

25:54I know you've written a couple of books on, three books I think now, on cryptocurrencies. You are invested in them heavily yourself. You are a great believer in them. I know that you think there is always going to be volatility around cryptocurrency. But I'm particularly interested in this intersection of this new technology and the Trump family and Republican and Democratic politics and the kind of generational shift between older voters and younger voters when it comes to cryptocurrency. What's going on? All right. So there's a lot there and I don't want to overcomplicate it for our viewers and listeners, so I'm going to stipulate a few things.

26:35So to understand the blockchain caddy, simply, it means that I can transfer value to you without permission from a third party. And if you go back 5 ,000 years, when we transact with each other, we typically use a third party. If I'm going to buy your house, you give me your wiring instructions, I send my money from my corresponding bank to your corresponding bank. Those are two parties, but technically a third party. And then we transact for the house. We've created technology now where we can transfer value to each other without the intermediary. So let's say you go to a restaurant and you want to pay the bill.