The Penta Podcast Channel
The Penta Podcast Channel is home to all of Penta's podcasts, including the Macrocast and What's At Stake: A Penta Podcast. The Macrocast, produced by Penta and Markets Policy Partners, features weekly insight and analysis on the latest macroeconomic trends. What's at Stake: a Penta Podcast features in-house experts and often special guests for analysis on the biggest issues shaping business and public policy.
The Penta Podcast Channel
Navigating policy shifts and business strategy in a new political landscape
Former President Trump is back, and Republicans are on the cusp of a sweep after winning control of the Senate and possibly the House. Join co-hosts Bryan DeAngelis and Ylan Mui, along with Penta senior partners Stacy Kerr and Kevin Madden, as they explore the reshaping of U.S. politics. They discuss the economic concerns driving voters, Trump’s stance on trade, tariffs, and immigration, and the challenges experienced by Vice President Kamala Harris' campaign. This election could be just the beginning of a fundamental realignment of America’s social contract.
Welcome to what's at Stake. I'm Brian DeAndrus, partner and head of the Washington office here at Penta.
Speaker 2:And I'm Ilan Moui, managing director at Penta.
Speaker 1:We are three days out from the election. The balance of power has shifted once again in Washington. Everyone knows this, but former President Donald Trump has pretty decisively won his comeback campaign for the Oval Office. Republicans will take control of the Senate and as of today, friday November 8th, they appear poised to hold on to the House of Representatives as well. These election results have ushered in realignment, not only here in Washington, but certainly it'll have impact on Wall Street and across corporate America, as well as across the globe. So today we're bringing in two of our senior partners, stacey Kerr and Kevin Madden. Friends of the pod, they've been on many times before and they'll help us unpack what happened in this election, why it was so decisive Tuesday night, and then what we can look forward to in terms of some of the policy proposals and agenda coming out of a Trump administration, including tax, trade and a whole bunch of other issues. So, stacey, kevin, great to have you with us, great to be here.
Speaker 4:What a week.
Speaker 1:What a week indeed. So let's just dive right into it. Kevin, I'll start with you. You've done, you know, several interviews with us over the last few months. I think a lot of us were looking at a pretty, you know, closely contested, almost virtually a tie race heading into election day. But what's sort of your big takeaway coming out of Tuesday night?
Speaker 3:You know, I think on moments like this, you actually, I think the instinct is to overanalyze this, and I think it's actually pretty straightforward and pretty simple. I mean, this was an election that was purely driven by the fundamentals, and the fundamentals were the people, the direction of the country, people's views about the direction of the country and the economy, and people's views about the state of the economy and their place in it. And, quite simply too, I think also that this was a change election at a time where you had an incumbent in President Biden who had an approval rating that was at 40% and that created nearly impossible headwinds for Kamala Harris to overcome. I mean, if we break that down, if we look at the American public's views of the economy, 70% of the electorate believed that the economy was either not good or in poor condition. The vast majority of those voters voted for Donald Trump. If we look at the right track, wrong track, it was crystal clear that people felt that the country was going in the wrong direction and that just created the perfect conditions for Donald Trump as a challenger on the outside, even though he has the sheen of an incumbent, having served previously. It gave him the perfect opportunity to exploit that. Also, trump there was an incredible level of nostalgia for the Trump, for the Trump economy, by many voters. They, you know I think most swing voters were walking out of their polling station and if you ask them who'd you vote for and why, people would say I voted for Trump because, at the end of the day, I think the economy was better under him than it was under Biden.
Speaker 3:And then I think you take the weak candidacy of Kamala Harris. I think first she was burdened with the low Biden approval rating, burdened with people's views about the state of the economy, never really truly answered the anxieties that people had about the economy. And then also, you're talking about a candidate who, in the space of 100 days, was trying to moderate her political profile, when there is a very, very long track record of her being a, you know, a almost template San Francisco liberal who is very out of step with the voters in places like Wisconsin, michigan, pennsylvania and even the Sunbelt states of Arizona, nevada and Georgia. And that was the whole ballgame. And so you have a very decisive win by Donald Trump, and decisive enough that he brought along a Republican Senate and likely a Republican keeping a Republican House.
Speaker 1:Yeah, stacey, let me, let me bring you in here. I mean, this was a a strong repudiation of the of the Biden presidency and, to Kevin's point, it was just headwinds that Harris couldn't overcome, and I think it was 107 days that she had to run this election, which is a pretty short period of time, even with the record-breaking fundraising that she was able to pull off in that time. So what were you thinking Tuesday night? And kind of what are you thinking in the days afterwards of what you saw in this election?
Speaker 4:Well, I agree with Kevin on the sort of fundamentals. It was certainly an election about personal economics and we can get into some of what that will mean for governing, and personal economics versus corporate economics and a lot of the sort of corporate rhetoric that we heard from both sides during the campaign. No question, voters across the board, across parties. I think it's clear that this is about personal economics. One of the most surprising or one of the most sort of definitive stats that I, you know, saw, was that 80% of people in exit polls said they decided before September. 80% decided before September.
Speaker 4:That's more than half of your 107 days. Right, that's, that's so you know. You could argue that it wasn't ever, and then you get into into. I think that this was, um, there was some very fundamental reminders. Whether you're in politics or you're running advocacy or you're a business operating in these sort of dynamic landscapes, and that is like you either define what you are for or you will be defined by your opponents or your critics, and I think you know there were decisions made by.
Speaker 4:I guess you'd say Kamala Harris, I think it was. Kamala Harris was the candidate and this was Biden's campaign, so you inherited a lot of the you know the campaign staff based on the timing, and there was a decision that was made that this was an election. This was going to be an election about character and it was clearly an election about issues.
Speaker 4:I think there was, you know, brian, I think you've made the point in our conversations and I don't want to, I don't want to steal your talking point, but I think it's nice to see what you heard, what you saw from from the campaign, from the Harris campaign, was, you know, starting to dip into policy differences with Donald Trump and then in the last weeks, maybe month, of the campaign, all about democracy and back to character. And you know, in hindsight that was clearly a mistake. I think another interesting thing to see and maybe this is where this wasn't quite as typical as it looks in hindsight is just some of the erosion of very strong. If you look at the map, a lot of blue on the edges and red in the middle, but you look at states like New Jersey and New York, where there were serious declines or serious inroads made by Republicans or serious inroads made by Republicans, I think it would be a mistake for businesses to not be looking at what that sentiment is. It's not just a political issue. There are some things that can be learned from that.
Speaker 4:And then you know I think there was, you know there's a real question I think that will be had in the weeks and the months to come that there was a definite repudiation of social issues being mandated by the government. I think we've seen several rebukes now over the last few years. People don't want it mandated by ESG and corporations. They don't want it mandated by the government, and there's going to be some conversation about where all of that sits and what that means. That's not going to go away and I think corporations and politicians are going to be needing to think wisely about those sentiments within their own workforces or whatever that is.
Speaker 2:So, really, some lessons to be taken from the political election that will carry into, I think, the business and PENTA's own economic sentiment index that we pulled together with civic science and it showed that over the summer, you know, sentiment bottomed out around the economy, so to its lowest level of the entire year. So this is when folks were kind of starting to make up their minds, and those images and their perceptions of the candidates are really starting to solidify that carryover from inflation. It has a very, very long tail, even though we're starting to see, you know, those price increases decline. People remember what prices used to be Right and they don't. They don't see them going back and so and so that that that economic anxiety that Kevin mentioned, that you were referring to, I think, really played a played a big role here.
Speaker 2:That Kevin mentioned, that you were referring to, I think really played a big role here. And I think that goes to this idea that this is a change election, not just for the public but also for companies and for businesses as well. I mean, trump's economic agenda could not be more different from what Kamala Harris had put forward, and you're already seeing the response on Wall Street to the prospect of potentially lower taxes at least not higher taxes and to a lighter touch on regulation, some of those mandates that you were referring to, stacey, perhaps going away and so there really is just a 180 happening, I think, within the business community, as they try to wrap their minds around. What does this mean for sectors across the board? There's some things that could be really strong and positive for business growth and some things that could potentially be a little bit more troubling.
Speaker 4:Yeah, and I think one of the things that's going to be driving that on is and maybe this was if it's not a surprise that Trump won, I think maybe it is a surprise complete Republican control, which is the way it appears to the direction it appears to be heading with the House, and that has that.
Speaker 4:That will that will have an impact on how quickly we will see his agenda start to unfold. A Republican Senate obviously allows this administration to move faster on their cabinet appointments than we might have seen if we were sitting here predicting that. You know, if Trump wins and a divided government, who will you be able to get? I think there's going to be an expediting of that. And then, just from for those of us working in campaigns and politics and very inside, seemingly insider Washington jockeying for position, but I do think setting in place your chief of staff, having some of those personnel decisions, is what's going to allow them to move faster on putting these cabinet secretaries into place and starting and that's what's going to define what that you know the specifics of that agenda, and I think that's going to come into focus much faster than we might have been anticipating several weeks ago, even if we were predicting a Trump victory.
Speaker 1:Yeah, I mean it carried him to victory, right, it was another it's the economy stupid kind of election, like it just all came down to that and you both mentioned it.
Speaker 1:But you know, right around that September point where confidence bottomed out on the economy, it's where Harris, you know, to Kevin's point kind of refused to define where she was on this.
Speaker 1:She came out of the convention, I feel like pretty strong, talking about an opportunity economy, kind of looking to the future, presenting Trump and even Biden as the past and as a moment we had to move beyond.
Speaker 1:And then there was this switch to messaging around Trump being a democratic threat, talking too much about Trump where, you know, really I don't think people out in the states outside of DC feel that the same way. I think they think democracy is broken in the sense of the elites running, you know, dc and New York and businesses, and this was a real like kind of throw them out sort of election that led to, you know, I think, a pretty aggressive Trump agenda. And, kevin, I'd love to bring you back into this of kind of how you see maybe the next couple of months and the first hundred days or so of what are we going to see out of Trump. He made a lot of promises on the trail about, you know, immigration and other issues, but there's also a big Republican Party agenda around tax reform that expires at the end of next year. What can we expect in those first 100 days?
Speaker 3:Well, first, I think you know there's an old saying you always you campaign in poetry and you govern in prose.
Speaker 3:So I think that theory will be tested now. And you know, trump is, first and foremost he is a salesman, and a celebrity salesman at that, and so he makes very big promises on the campaign trail, knowing that he's got to get the customers onto the lot before he can sell them anything. And but I think if you're looking at the core sort of tenets of a Trump policy agenda, you have to start with two big policies. I think First is immigration and border security, and then second would be trade and tariffs. I'll take the second part first. I think he is very clear that he wants to pursue a tariff agenda that puts America's economic competitors around the globe on notice, and those economic competitors are not only in China, but and you've heard Trump say this phrase over and over and over, and when we were consulting with a lot of our Penta colleagues in our European offices, we heard this term over and over again too where it's really caused a lot of agita amongst folks in Europe. But Trump would say our so-called allies, and that related to the EU, that related to NATO, but I also think it relates to our trade and economic partnership with, with some of those, some of those countries. So I think everybody's on notice now. Everybody's on notice now. One of the theory is that it is a negotiating tactic, that Trump wants to talk very big and very boldly about tariffs in order to sort of get the best deal for America. So we'll see, but on that front, the business community has a very important decision for them. Do they deploy hope as a strategy and say, well, let's see if it's all just bluster from Trump and let's watch and wait? Or do they recognize that there is a very big looming threat to the way they do business, to their supply chains, to their customers, to their manufacturing base, you name it and do they take action to shape the trade and tariff policy that is going to be, you know, a priority for this administration? That's number one.
Speaker 3:On the second part of it, border security and immigration. You know, I think border security is different from how we sort of handle the immigration part on our economy. But on the border security, the Trump administration is going to be very aggressive in putting more resources into border enforcement. Now, what does that mean for the promise about deporting illegal immigrants that are already here? That becomes the huge economic question for the country. And if you look at the level of support that Trump got from Latino voters and Latino voters who are actually very animated about the idea that we're happy we have too much illegal immigration but we need to have to do something to support and have better legal immigration here, and how that contributes to the economy and the Latino votes now even expanded power in the American electorate, and I think Democrats and Republicans both have to take notice of that. There's a fantastic story on the front page of the Wall Street Journal print edition today that goes into this Like that is going to be, of course, a very important part of the political and policy conversation going forward.
Speaker 4:And I think you know just as it relates to immigration, one thing that I'm very interested in watching is the connection between the sentiment of personal economics and how does immigration policies affect people's personal economics? For example, what is the effect of immigration on food prices? I mean, we have a labor force that is dependent on a lot of immigrant workforce, both legal and illegal and what does that mean?
Speaker 4:And where are some of these big, broad ideas that Kevin is talking about that we know the administration, the Trump administration, is going to give attention on and how does that trickle down and impact people's personal finances and personal economics, which is clearly what they went to vote on. That is not a place where I would bet a lot of voters gave a lot of attention and you know kind of thought through the multi steps of how these big policies, how do trade and tariffs, impact the bottom line for families. And that's the work of both business and, I think, both parties to be monitoring that sentiment and to be mindful of that sentiment, not only for their own political gain and their constituents that sentiment, but as that relates to the overall economy and right, but I think a lot of people would say, statistically the economy was strong under Biden and people did not feel that Right.
Speaker 1:And this is this will be, you know, muddy waters for the business community, as it has been in the past. I mean, stacey, we spent a lot of time yesterday together at a conference talking about immigration in the sense of students coming over here and entrepreneurs coming here and H-1B visas, and you know Trump's focused on illegal immigration. But these will be big, you know, concerns of the business community if they can't get the workers they're trying to get across the globe to come over here and to help spur a lot of what we see in terms of the innovation that happens in this country, the education, et cetera.
Speaker 4:Yeah, I'm curious. I'm always curious, alon, who you know, a reporter for CNBC, a reporter at the Washington Post in your past. If you were waking up this week as a reporter, what would you be thinking about as it relates to these specific issues that we're talking about?
Speaker 2:Well, I have to say honestly, I'm glad I was not a reporter this week, because the amount of work that the all-nighters that my friends who are still in media are pulling hats off to them I'm getting too old for that. But one thing that does stick out to me is you mentioned some of the connection between immigration and economics is that, you know, immigration is what drove the strong job numbers that we saw throughout the year. You know the reason why the Fed can now start to lower rates and we see such a strong job market. I feel like there is a, there's a connection between the two that the Washington establishment at least likes to sort of, you know, highlight and maybe even wring their hands about.
Speaker 2:But what is important for the business community to understand about Trump is that he he connects things in ways. He sort of breaks things apart and then puts them back together in ways that the rest of the world hadn't really thought about before. And we're seeing that happen right now with the connection between tariffs and with taxes, and so you're already starting to see Republicans on Capitol Hill try to put together a way to pay for the tax cuts and tax reform package that they want to pass through Congress next year and pay for that through the use of tariffs, which is sort of unprecedented. And they would even have to potentially rewrite the rules of the House and rewrite the rules of the Senate's arcane reconciliation process in order to do that.
Speaker 4:But you know, trump thinks outside the box, and so businesses have to be that's not going to the old rules are certainly not going to stop this administration. Right, the old rules are certainly not going to stop this administration.
Speaker 2:Right, the burr bath is not going to stop him from trying to pay for tax cuts through tariffs, and so there's a lot of debate and controversy over the extent to which tariffs could even put a dent in the $4.6 trillion tax package that Republicans have been talking about, but it's just a sign of how different the approach is going to be. We saw it during the first Trump administration, and I think that businesses are really going to need to be prepared for anything when it comes to the second administration.
Speaker 4:Yeah, and along to that point, I would say, you know, one of the most consistent questions I got from business, from our clients in conversation, as Brian said, we were with a bunch of CEOs and senior folks this week is what speed can we expect for the tax package, right? Is that going to be a year-long process? Is that going to be an immediate process? And what they're looking?
Speaker 4:The question that I think they want to answer, which is the right question to be asking, is how quickly do I need to jockey for position, right? How quickly do I need to understand where my priorities fit, aligned to others? And you know the advice that we've been giving, and I think there are these. We do not know the answer to that question yet, but what people can do in the conversations we've been having is be prepared. Be prepared to articulate in your own way acting proactively versus acting reactively will be a strength in this environment. Being prepared to act proactively, that's very different than overreacting, right, and that's that caution that we need to calibrate. But I think we can expect a very, very crowded attention for priorities in this and I think you can't wait for all of the answers to be known to be prepared.
Speaker 1:Right. It's funny, I was almost going to disagree with you and by the end, I completely agree. And, Kevin, you and I have talked about this a lot, Like when do companies need to start on this? Yesterday, right, Like you can companies need to start on this Yesterday, right Like you can't be prepared enough for this, right? I mean, we were having lunches six months ago trying to get folks to think about this and what was coming in the first six months of 2025. So we've spent a lot of time talking about this, all of us.
Speaker 1:But you know, thinking about this would be a different Trump administration. He came in in 2017, really surprised the world then, mostly staffed with, yes, some loyalists, but it wasn't his party yet there was a lot of, I would say, somewhat traditional Republicans moving into that administration. This time, he knows what he's doing and he's got a team around him that knows what he's doing and we could see roles for RFK Jr and Elon Musk. But I also think he's got a pretty good grasp of what he wants to do. I mean, somebody jump in. How do companies start to prepare for that and do the research and get ahead of it?
Speaker 4:Well, some of the conversations I've been having, brian, are just very but very simply is make choices, get prepared and be ready to be flexible. So how would you do that? To make sure that you have the constant research, the constant right part of that preparation is what are you using to make those decisions? I think the mistake is going to be, as we saw in the first Trump administration, that everything is just personally motivated and, you know, based on only on personnel. I think it's getting the right inputs to be measuring. What are you measuring and how are you measuring that over short and long periods of time? To inform your strategy is really is going to be really, really important.
Speaker 2:I love how, when there's a new administration that comes into town or that power shift in Washington, everyone has to rebuild a Rolodex right.
Speaker 2:Everyone has to say who are the new levers of power, who are the people that need to get to know. I mean, that was just wildly apparent. My entire source list had to be rebuilt when President Trump came into office the first time, and that's happening again. So the extent that you can understand the positions of people like an RFK Jr who maybe had flown under the radar, folks like Scott Besant right, I think that that becomes really, really important. I think there's a lot of that background research, a lot of that trying to understand folks who might have been, you know, not as prominent voices or figures in the past administration, trying to trying to rebuild those networks.
Speaker 1:Yeah, Kevin, you want to come back in here Some of the work we do around those people, as well as their influencers and the policymakers on the Hill. That'll be his go to allies. He's got a lot more of those this time than he did in 17.
Speaker 3:Well, I think. I think the thing is also people have to remember about Trump and this was very apparent in 20 and 20 in his first administration was that Trump outsources a lot of policy details to the quote unquote experts. You can't, because this is a podcast, you can't see me doing the air quotes but, and you know, there are people up on Capitol Hill with 10, 15 years of knowledge, steeped in trade, steeped in health care, steeped in tax, and those influential senators and and chairmen are going to have, you know, a big say in how a lot of this, how a lot of these plans are put together. But the other folks that are going to have a big say are the people who are heading up the campaign committees for their respective parties.
Speaker 3:The 2026 election for midterm, the midterm cycle started the Wednesday morning after election day and you know there is going to be a the 2025 tax fight. For example, the 2025 legislative agenda is going to be the first phase of a very intense fight to either keep or win back working class voters. That's going to be central. So I think there is going to be a lot of people and I think the corporate community has to do this as well there are going to be central. So I think there is going to be a lot of people and I think the corporate community has to do this as well there are going to be a lot of folks out there trying to understand what was what was driving the shift. How permanent is the current state of public opinion around economic populism? What could go wrong? What could go right? Where's the next trend and how do?
Speaker 3:I get ahead of it and I think you know calibrating a lot of your messaging and your advocacy efforts accordingly. There is certainly a very different type of Republican approach to the economy now that's taken place with Trump as the titular head of the party. It's no longer about free markets or economic dynamism of Milton Friedman right. Instead, it is a lot more about how does government work to shift the power structure back to employees, back to workers. How are we preparing for a dramatically changing economy over the next 10 years as the economy becomes more digitized and globalization continues? What is the American economic blueprint for that? So you know, shifting your message towards an opportunity economy, the real impact that policymaking has in communities around the country, grounded in a Main Street viewpoint about employees and growth.
Speaker 3:That's going to be the next battleground over the next two years. And there are some. There are some Democrats out there. You know a lot of people saying like well, all the all the Democrats are going to be in stark opposition to Trump. I think that's largely true, but there's a bunch of people who woke up on Wednesday, who are facing reelection in 2026. And they are in states that Trump won and they're in, they're looking at that economic populism in a very different way now.
Speaker 3:And I think engaging those policymakers and and also tailoring your advocacy with that in mind is going to be a big part of the next two years.
Speaker 2:And just to build on that for the, for the final thought here, for for our podcast today, looking at an even longer time horizon, you know, past 2026, even past 2028. The sort of economic and political principles that Trump embodies Is his administration the swan song for those? Is this really the culmination of that, or do we believe that this is ushering in a new era of the American social contract?
Speaker 3:I think it's a new era and the way I've always tried to explain this Lelan is and it's kept me from getting invited to Christmas parties by sort of establishment Republicans is Trump will have a bigger impact on the overall profile of the Republican Party, when you look at the footprint of history, than Ronald Reagan did, in the sense that he has remade, or I'd say as big or possibly bigger, because he has remade the party in his image when it comes to how he talks about the economy, how he appeals to working class voters and also tactically. You see that Republican candidates now are so much more confrontational with mainstream media. They are using new platforms to communicate to audiences in a very different way.
Speaker 3:And the results have borne out. He has a successful template of results to point to. So you're looking at probably the next 10 to 15 years, the Trump approach being embedded not only at the national level, but in state and county parties all across the country, and then you also will see that there will be Trump like heirs. The cabinet is going to be staffed with people who are going to lead the party into the next decade, and it's going to be people like Tom Cotton, elise Stefanik, even Marco Rubio, who is very different from the Marco Rubio of 2016. They have an economic populist message. There is an infrastructure on the right that is largely parroting a lot of the economic populism, and so it's not only the message and the messenger in Trump, but there's an entire infrastructure and a new ecosystem of support that is sort of risen up around it.
Speaker 2:Stacey, do you agree? This is the beginning, not the end.
Speaker 4:Yeah, look, I think there's going to be a reengineering of American society through this, and government is certainly not the lever, the only lever, to do it. I think there's going to be a very big conversation about what government does and what government does not do. I think you know how business and corporations channel. This sentiment of personal economics is still going to be very much a question for everyone to navigate, and I think America's place in the world is going to be shaped by certainly the next four years, but the next eight years, the next decade and what this means. We'll see how that starts to take shape here in the next couple of months, but I think we will be able to answer that question a lot better a year from now. Well, we'll leave it there, but I think we will be able to answer that question a lot better a year from now.
Speaker 1:Well, we'll leave it there, but I'll take a point of privilege and say I was glad to hear Kevin mention the media too, because I actually think this impact will go beyond politics. I mean, you're seeing a different way of campaigning, a different way of getting your message to audience. I mean the stuff he was doing on the podcast and some of these influencers on YouTube and elsewhere. I mean this is probably the future of campaigns and how folks really build followings. I'll give him credit. He was a master at that and I don't think we're going back. I think the mainstream media probably has a lot of catching up to do on that front. But, Stacey, Kevin, thank you guys so much for joining on what was a pretty crazy week, but I appreciate your perspectives on where all this is headed.
Speaker 4:We better rest over the weekend, because it might be the last weekend we have for a while.
Speaker 1:Great and Alon. Thank you as always for co-hosting and to all our listeners, remember to like and subscribe. Wherever you listen to your podcasts, follow us on Twitter or X at PentaGRP and on LinkedIn at PentaGroup. I'm your host, brian DeAngelis, here with Elan. Look forward to talking to you again next week.