5. ⁠What makes swing states swing?

0:06Hello and welcome to the rest is politics US I'm Katty Kay and it's me Anthony Scaramucci good Good morning, Caddy. Yeah, good morning from St. Louis. I've come out to the heartland. Merica, as you call it, Anthony. It's Merica. It's Merica. I can teach you to say it, okay? Where not very many tourists from around the world come to, but there we go. A little trip to St. Louis to interview them. You teach me to greet the king at some point, okay? And I'll curtsy or whatever I'm supposed to do. I'll teach you how to say Merica. How's that? Okay. Merica. I think it's going to be a good trip. I'm interviewing a whole load of Olympians.

0:39So I'm here to interview a wonderful athlete, Jackie Joyner-Kirsey. So I'm looking forward to that this morning. And it has brought me to the heartland of America. Today on the program, we are going to look past November's election at what a second Trump presidency would actually look like, particularly in terms of the economy and what he would do for businesses, because there's some very interesting numbers out which we can get into. And in the second half, we're going to explore swing states. I'm conscious, Anthony, that we've been talking a lot about swing states, but we haven't actually really explained what the swing states are, why they are swing states, and how swing states change in American politics.

1:20There have been these extraordinary shifts. For example, it wasn't that long ago that California was a swing state. So we're going to talk about why these swing states are what they are and how they could swing November's election. Before we get into any of that, I want to talk about the news that came out of the UK yesterday, which is the announcement that there is going to be a UK general election on July the 4th. For our American listeners, they will be amazed that you can run an election campaign in six weeks. American election seems to go on for six years. I mean, it's more about July the 4th, though.

1:51Americans are like, what are you talking about? I'll be eating hot dogs and flipping burgers at a barbecue and looking at my relatives that have tattoos in places that they shouldn't have tattoos. You guys will be having an election. I've already heard the quip that Rishi Sunak, the prime minister, wants his own Independence Day, and that'll be his freedom from Downing Street Day. So it's always interesting, you know, when America and American-British relationship is always interesting, this so-called special relationship, which the Brits get terribly hung up about. And do Americans pay enough attention to them?

2:20At one point, I remember Barack Obama tried to redefine it as the essential relationship, and that caused a huge flurry of anxiety in British circles. So they had to go back to calling it the special relationship. I can't help but think there is an interesting world in which Keir Starmer, who is way ahead, the Labour leader is way ahead in the polls in the UK, gets elected Prime Minister of Britain from the centre-left of British politics, and Joe Biden gets booted out of the White House and is replaced by Donald Trump. Now, we don't know which way either election is going to go, of course. We have to leave that to the voters in both countries.

2:52But in particular, a Starmer-Trump relationship would not be easy for the United Kingdom. These are two very different characters. Keir Starmer came out of the world of human rights law. I don't know if Donald Trump knows what human rights law is. He's a kind of anti-politician. He's low key. He doesn't make big promises. He's not a taller Boris Johnson type figure who actually Donald Trump got on pretty well with because he liked the kind of showman in Boris. And, you know, you've got the kind of center left, center right, although those political forces are being thrown up, as we might talk about later.

3:29But it would be interesting to see how that affects UK-US relations. Maybe you think from your time in the White House brief, though it was, that actually whoever is in power in Downing Street doesn't matter and Britain is there to do America's bidding. Listen, I mean, one of the things that I did in the transition team is I met with the Bank of England chair on behalf of the transition team. And second thing I did was I had lunch with Boris Johnson. It was on a Saturday in December. And I also met with your ambassador, the UN ambassador at his residence here in New York. And you had the Washington ambassador fly up for this.

4:11And in the briefing book that we were given, and this is the interesting thing that people should know about Republicans, it's probably possible Democrats as well. There's a standardized Republican briefing book. So we had Donald Trump winning, total accident that he won. None of us thought he was winning, including Trump. And we were scrambling on the transition. But in that briefing book were the words special relationship. In that briefing book were the words, this is what we need to do. Lined in red. Yeah. And this is the things that we need to do and say, and this is the reinforcement that we have to prevail upon our British friends about the relationship and the uniqueness.

4:48And it's interesting because you're parsing what Keir Starmer is like, and I'm telling you, Donald Trump is not parsing what Keir Starmer is like. He is an Anglophile. He talks about his mother liking the queen and liking the royal family and the monarchy. And he had a very good trip, right? To visit the queen. He liked that. I think he stepped in front of her by accident. And to be fair to him, he had a very good trip. He left the United Kingdom. And I think Woody Johnson, our ambassador, is a friend of mine. He owns the New York Jets. I think he did a very good job of setting the table and preparing Donald Trump.

5:24And I think the queen, by the way, whatever she thought of Donald Trump, liked him or disliked him, she did an amazing job on behalf of the country in terms of the way she represented the country. So Donald Trump has a love affair with the United Kingdom. So I would say to the UK listeners listening in, any anxiety about that relationship, no matter who the prime minister is, I personally wouldn't worry about it. So you don't think it makes any difference whether Keir Starmer is prime minister or Rishi Sunak? I don't. Unless you get into a situation where Keir Starmer gets to a microphone like this and starts blasting Donald Trump, or like the mayor of London did while Trump was president, I guess he got into a row with Donald Trump.

6:04And then that caused Trump firing back at him. So to me, I'm not worried about any of those things. There was a prime minister, Theresa May. I think you'll enjoy this story if you don't mind me telling it briefly. So I'm in the Oval Office. This happened on a Monday, Caddy, because I was only there for two Mondays. And so this happened on the first Monday. So I I could tell you TikTok what happened to me. And I was sitting at the Resolute desk to Donald Trump's right, my left. I was sitting at that first chair and we were talking about something and he said to me, look up. And I said, look up.

6:41So I looked up and there's beautiful seal of the president, the presidential seal, sort of the president's logo, if you will, on the ceiling of the Oval Office. It's in Placer Paris. It's in like a relief. and he says, you're in the blankety blank Oval Office. And I laughed. I said, yeah, I'm in the Oval Office with you, which is even more funny. Then he laughed. And then he said to me, are you nervous? Does this office make you nervous? And I said, yes, this office does make me nervous. And he said, you know something, I got to be honest, it made me nervous. When I sat down behind his desk and said, my God, I'm the president of the United States.

7:20He said, but let me tell you something, Anthony, it's a lot of work here. You won't be nervous in a couple of days. Things get going. He goes, the weirdest thing happened to me the first time I sat down at this desk. I said, well, what is that? He said, the phone rang. And I said, I answered the phone, Mr. President. Yes, this is White House protocol, the office of protocol. You are going to meet Prime Minister Theresa May at the North Portico. My first reaction was, where the F is the North Portico? Because he didn't know. He says, oh, okay, great. Oh, okay. And he hung up the phone And he says, so Mooch, I get up and I'm like, okay, I got to figure out where the North Portico is.

7:54And then he said, you know what, I'm the president of the United States. I got to go do this type of thing. And he met with Theresa May and I know he didn't get on with her. I know there was a way he held her hand. It was all this sort of body language stuff that didn't go well. But he loves the United Kingdom and he loves the concepts and he loves the principles that the United Kingdom represents. So I just think it's something I wouldn't personally worry about. So whatever happens on July the 4th, our dear British listeners will still be special. It's like Vegas. Whatever happens on July the 4th should stay on July the 4th, at least here in the United States.

8:26Bad stuff happens here on July the 4th, okay? You know that. It slightly makes me cringe how desperate it's are to have this relationship be described as special relationship. But there we go. It'll still be special, everybody. Don't worry. Let's move on to take a look at what's going to happen in a second-term presidency in terms of the economy. And I wanted to do this this week because a couple of things have happened. We had Donald Trump meeting with oil executives in Houston on Wednesday for a big fundraiser. And there's a new poll out, Antonia Harris poll, showing a huge misperception amongst Americans about how the economy is doing.

9:0356 % of Americans think the country is in recession. It's not. 49 % believe the S &P 500 stock index is down for the year, even though it went up about 24 % in 2023 and is up again this year. And 49 % believe that unemployment's at a 50-year high. It's actually at a 50-year low. So there is this kind of misperception in America about the state of the U.S. economy under Joe Biden. I don't know what people are seeing on TikTok. I don't know where they're getting their news. I don't know if other forces are meddling with the news they're getting to increase this misperception. And I realize inflation is high, but it leads to what I hear around the country.

9:45And I don't know if you hear this, too, of people saying to me, particularly from the business community, I don't really like Donald Trump. I don't like what he says. I don't like his style. I don't like his values. But I like his policies and his policies are good for business. So I think it's worth digging into a little bit about what, from your position as an investor and from my kind of reporting on this, what a Trump second term would look like for the American economy. And I'm not as convinced as the business leaders I hear from that actually he has a very pro-business policy, particularly pro-Wall Street policy.

10:21I mean, you're sitting up there in New York on Wall Street, what you think of what a Trump second term would look like, because he's got this very kind of interesting populistic economic agenda that may not be what these business leaders think it's cracked up to be for them. Yeah, so I thought about this a lot. So I'm going to make three remarks here. The first one is the superficiality of what you just said, meaning, if I'm sitting here with my Bloomberg terminal, and I look at the economic dashboard of the United States, it looks quite good. It's set up for an incumbent to win re-election. You mean I'm being superficial or superficiality?

10:54No, no, no, no. I'm sorry. No, no, no. You're not. Just clarifying for the top of the podcast. No, no, no. You're never superficial. How could you be superficial with that accent, right? I mean, our American listeners think you are like 20 times smarter than me. You get like 25 IQ points with that accent in this country. Yeah, I'm keeping them, I tell you. I'll take them. Anyway. I know you know you're teasing me because you know I don't think you're superficial. You're far too polite. Anyway, go on. But I'm talking about the superficiality of the voters. And I'm talking about the voters don't pay attention to this thing until the end.

11:25You and I pay attention to it. Thank God we have podcast listeners that pay attention to it. They don't pay attention to it. So there's a superficiality going on as it relates to Trump good for economy, Biden bad for economy, sort of a caveman-er, like at the end of each statement. That's number one. Number two, I have to remember, I'm from a blue collar family and I live two miles from where I grew up. I'm literally talking to you right now, two miles from my mom's house and all my cousins still live in the area. And for the Italians listening in, we get named after our grandfather and my grandfather's name was Anthony.

11:58So I've got like every one of my cousins is named Anthony. So we have Anthony Plummer, we have Anthony Deli Cutter in a deli, we have Anthony Autoglass Installer. And of course, when I show up at Christmas, I'm Anthony Hedge Fund. They could care less about how much money I made or whatever. They don't give a you-know-what. And when I sit with them, they tell me the inflation is hurting. And they don't understand what we talked about last week about situational versus personalized. And so they're personalizing the inflation on Joe Biden. And I'm here to tell you, if Donald Trump won re-election, it would be Trump's inflation.

12:35That was inducted by monetary decisions, lower interest rates. It was deducted by massive spending by the federal government here in this country. And that's why you've got the inflation. So here's a prediction I'm going to make. So my last point is that this is going to calm down as we get towards the conventions. And I think the Democrats are going to get a better narrative out there. Joe Biden, he's having a hard time selling his agenda because he has a great agenda to sell. He's done more for these people, my cousins, as an example, than Donald Trump did. He has reshored manufacturing. He put$250 billion into that legislation, the early part of his term to get manufacturers back.

13:19The CHIPS Act, which you and I have followed very closely, he's creating microprocessor foundries in the United States. There's one going in upstate New York here, which I'm actually going to visit in mid-July because there's clients up there and also there's jobs up there. And I just want to actually see it. And so I'm going to make a prediction that this is going to get tighter. Last thing, and that poll was interesting, but there's another poll, and it was on marketwatch.com yesterday, that it's a market sensitive poll. And they interviewed market participants, and then they balanced it against what's going on in the stock market.

13:57And that indicated that 58.8 % believe that Joe Biden is going to win the election, that this will be because of the economic data. Okay, whatever Trump's rhetoric is right now, however upset Anderson Cooper is, who's a very polite, nice anchor at CNN, but he was on oxygen last night when I went on a show because he thinks Trump is winning. You can see him like hyperventilating. I don't see Trump winning this election. Yeah, I mean, there is a sort of freak out on the left. I know I actually interviewed the co-chair of the Biden campaign a couple of days ago and spoke to him. And he said they expect the poll numbers for them to start turning around kind of August, September, that you'll start to see those poll numbers tighten.

14:39But what else Trump would do for the economy? And it's interesting, you talked about inflation. One of the things that I've heard from the Trump campaign that they're keen to do, they're going to deregulate the fossil fuel industry, lift off the kinds of things, the green energy policies that Joe Biden has put in place, that the drill baby drill mantra will be back again, even though America is producing oil at kind of record levels. And they believe that would help bring down inflation. They think they can talk to the Saudis to get the Saudis to boost production, which they also think would help bring down inflation.

15:12So they're very conscious of inflation. But on the flip side of that, Donald Trump has said that he wants to put a 10 % tariff on all imports, which would be inflationary for American consumers. They want to stop American firms investing in China at all. There are going to be very harsh penalties for employees who hire illegal migrants. And there's no suggestion really at the highest levels of a huge urge to cut taxes. I mean, one of the reasons, of course, that American businesses loved Trump and the stock market surged at the beginning of the Trump presidency in 2016 was they needed that massive tax cut.

15:50Well, there's not much room for a huge big, is there for another big tax cut? I mean, what would businesses actually get out of Donald Trump is what I'm trying to understand is what would they get? Because when I look at the Trump policy agenda, it looks like a pro-worker agenda. I mean, it's this kind of neo-populism that looks actually curiously kind of pro-worker more than it does, putting their tent up in the Democrats' backyard, perhaps. But I don't know if it's very certainly not pro-Wall Street. Well, I mean, listen, the Democrats are good at sloganeering, right? They once said that Osama bin Laden is dead and General Motors is alive.

16:25That was the rally cry in 2012. If I were the Democrats right now, I would say tariffs, taxes, deportation. I would say it over and over again in a chant. I say tariffs, taxes, deportation. And then they sound like Trump. No, but hear me out. Tariffs, he's going to push the tariffs too high. Taxes, Trump doesn't know what he's talking about. He's not going to find any tax cuts to further your point. And then the last part is deportation. The guy is running commercials that he wants to deport 15 million people. Okay. So let's just everybody take a chill for a second. That is horrific for the economy.

17:01Okay. How's that going to help McDonald's or Subway? Or how is that going to help. You pick the producer or the housing starts in the country if this man is going to set up deportation facilities. And do you know what the Bradley effect is? So just briefly for viewers and listeners that may not know what it is, Mayor Tom Bradley, the first African-American mayor, he won election in Los Angeles. He was running for re-election. The pollsters were calling people around LA, are you going to vote for Tom Bradley? They said yes. He was plus nine two days before the election. He lost by eight points.

17:35So it was a 17 % swing between what the pollsters heard before the election and what actually happened. And then they went back and did some exit polling and said, yeah, I didn't want to sound racist by telling I wasn't going to vote for the guy. And there's a Bradley effect going on in the Hispanic community right now. The Hispanic community, Trump is macho, macho man. And Hispanic men don't want to look feminine, if you will, by not saying they're going to vote for Trump. But then they look around and they say, this guy's going to deport my cousin or my brother. And when that curtain closes or that mail-in ballot is written, they're not going to vote for him.

18:12You can't deport 15 million people, Caddy, in this country. This is a browner and blacker country than 2016 and 2020. This beautiful, colorful mosaic of the United States has gotten more beautiful and more colorful. And so to me, I don't see the winning argument if the Democrats really press. And my last point is they've been spending their money on field offices right now. They're not spending their money on advertising and Facebook ads and TikTok ads, et cetera. They are a little, but they're putting people on the ground and resource on the ground because they know this is a get out the vote exercise, this election in those swing states.

18:53And I know we want to talk about what swing states are for UK listeners. And just before we get to that, one other question I would have is, what if the nature of the kind of Republican base, and I'm not just talking the MAGA base, has changed? I mean, Trump already changed the nature of the Republican Party by making it protectionist, by ditching the idea that they had to cut social security pension programs and that kind of thing. So he's already kind of changed it. And there's this understanding, I think, in Trump land that there is a big section of the American society, which is socially conservative, anti-woke, but actually wants the state to work to help it with economic issues.

19:36And that is, it is protectionist, that they like the tariffs and that they do like the deportations. I mean, this, you're right. I think that one of the big questions that's going to decide states like Arizona that we can get into in Nevada in the election is going to be what Hispanic voters do. Are they keen to avoid more deportations or are they protectionist social conservatives who find something in Donald Trump's kind of new mix of that? It's a new kind of blend of economic populism that he's offering people on steroids that, you know, do they like that? Well, this is why I applaud your vantage point.

20:13living here 25 years, you actually see the paradox that's going on in America right now. Because if you're on Wall Street, you're socially liberal and you're fiscally conservative, right? Or they say, I'm socially inclusive and fiscally responsible, right? I was told by a communications person on Wall Street, never use the word liberal and never use the word conservative. I said, why is that? They said, well, they spent billions of dollars, the Republicans spent billions of dollars torching the word liberal to 50 % of the country. And the Democrats spent billions of dollars torching the word conservative.

20:50So say you're socially inclusive and fiscally responsible. You see the parsing of the words? That's Wall Street. They over analysis. On Main Street, in the prairie, in the Midlands, we went to an event, a campaign stop in Youngstown, Ohio. And when Trump got back on the plane, I said to him, wow, I mean, are you socially conservative and fiscally irresponsible? And he looked me straight in the eye and he said, that's what the people are. You don't understand that? The base is not Wall Street, socially liberal, fiscally conservative. The base is the opposite. Is there exactly what you just said?

21:32And you know what? I didn't see that, Cady. That reflects poorly on me. Mitt Romney didn't see that. That reflects poorly on him. John McCain, the late, great John McCain, may us all rest in peace. He didn't see that. But you know who saw it? The SOB, Donald J. Trump saw it. And he's playing to that. But here's the problem with what he's doing. He's turning off the incremental voter. He needs that incremental voter. He's got those people that we just described, but he's also got to look at the demography and recognize that the Republican registrations have dropped since 2020 even. And so it's independents first, Democrats second, and then Republicans are third in terms of registration.

22:16So he's got to make up a lot of ground. I got these people, but I need another 20 plus percent of the electorate to make this happen for me. Yeah. Reminds me of, I interviewed a steel worker in 2016 up in, also in Ohio, in a town that was just decimated by the demise of the steel industry. I mean, it's grim. One in 10 shops is open on main street, a huge big steel plants that are now standing idle and quiet with 200 employees where they used to employ thousands. And this guy said to me, super thoughtful guy, knew far more about the World Trade Organization than is good for anybody, and knew a lot about China and offshoring.

22:58And he said, I have voted Democrat my whole life. I've been a union member my whole life, and I'm voting for Donald Trump. And what's interesting about, I think, the next iteration of Trump is he's taking that even further. You look at somebody like Oren Cass, who's the founder of this populist think tank, American Compass, which is the kind of brains behind the new Trump ideology. And it's actually pretty pro-union. It's pretty pro-worker and socially conservative and protectionist. And I think it's going to be interesting to see this kind of seismic demographic shift that's taking place in the Republican Party when it comes up against those kinds of incremental voters that you've just been talking about.

23:38In the second half, we're going to talk about the swing states because that's going to be where this is all decided. Before we go on though, Katty, does it surprise you that the Republican base is now socially conservative and they want to spend like Joe Crescent? I mean, the Tea Party movement, they had these placards up and said, get your government hands off my Medicare. And now it's, please give me more social. And you can't talk about cutting social security in the Republican Party now. I mean, they've done a full 180 on it. It's incredible. On social welfare policies. And that was all Trump.

24:10I remember being down at the Republican convention in Tampa, Florida. Yep, 2012. 2012, where cutting deficits wasn't economic policy. It was a test of your patriotism. It was a moral, emotional, religious affirmation. No question. It would have been a different country had Brownlee gotten elected. And that Republican Party doesn't raise its head anymore now. It's the party of J.D. Vance and Marco Rubio and Tom Cotton. Parts of that party thought they were with Nikki Haley, but it turns out Nikki Haley's not with them. So, Caddy, before the break, I just want to add two quick things. Caddy, I want to suggest to our viewers and listeners before the break that they read Robert Lighthizer's book.