The Democratic Party’s victory in the midterms was not especially surprising. (I have been saying for two months that the Democrats would take the House and the Senate; the only real question was the margin.)

Still, even I am surprised at some of the places the Democrats won. Darline Graham and Ken Paxton were weak candidates, to be sure, but I did not think South Carolina and Texas would be sending Democrats to the Senate. I certainly didn’t think Hinojosa would beat Greg Abbott for Texas governor.

The truly shocking result is Mississippi—even though President Trump’s recent rallies there suggested Republicans were worried about losing it, the race is still too close to call as I type.

THE SITUATION

It is not hard to see why Republicans were beaten so badly. President Trump won his second term by promising to stop illegal immigration, fight inflation, and continue his policy of non-interference in foreign wars. President Trump successfully closed the border, but the heavy-handedness of ICE and the callous cruelty of Stephen Miller and his ilk made Hispanics think twice about the president they swung to in droves in 2024. President Trump’s decision to wage war on Iran to overthrow the so-called Islamic republic violated his other two promises by driving up energy and fertilizer prices and getting the US caught up in what looks with each passing day like another forever-war in the Middle East. Tariffs unevenly applied drove up prices still more, while imports of Argentine beef and South Korean eggs turned farmers against him.

On top of it all is the obvious corruption. No president has monetized the office quite like the Trump family, from President Trump’s memecoin to a Russian oligarch paying for Donald Jr.’s wedding festivities to Jared’s business dealings in the Middle East. Add to it the bizarre and incompetent focus on redecoration projects (the reflecting pool and the White House ballroom) and the illogical attacks on US allies like Canada, and you get an energized opposition vote and a (very) subdued Republican vote (and in places like Texas, major Republican figures voting for Democrats). All of this might have been forgiven had the economy kept humming. But beneath the AI-driven flirtation with all-time market highs is an electorate feeling the corrosive impact of inflation, an electorate 70% of which opposes data centers (rightly or wrongly is a question for another time), and a base directly hurt by the administration’s policies.

The Democrats’ Opening

That is the past. The more important question is the future. Some Democrats, like Jon Ossoff (who increasingly looks like the frontrunner to be the next Democratic nominee) and Hinojosa, offer moderate, pragmatic policies. (Hinojosa’s identification as an economic populist and her categorical rejection of progressive culture wars is particularly notable in this regard.) These are political figures who are not just anti-Trump—they are for policies that meet Americans where they are. But the Democratic Party is also beset with internal factions that are not on the same page (case in point, the epic El-Sayed–Stevens drama in the stretch-run of the Michigan race).

Approval ratings for Democrats are higher than for Republicans, but not by much.

The board looks good for Democrats today and in 2028, to be sure, but only if they understand that this vote was about Trump’s failings. That was and is a one-trick pony. If Democrats want to keep and extend their gains, they must show they are beyond unpopular woke culture wars and for some of the very things that had Trump riding high: bringing down prices, opposing foreign wars, bringing accountability to corruption, regulating big tech, and controlling the border without being cruel. If the Democrats spend their time focusing on empty calories, like yet another impeachment or pronouns, the pendulum could swing back against them in a hurry.

Trump’s Next Move?

President Trump has thus far struck a conciliatory tone. The size of the victory renders his usual habit of questioning results ineffective. But one of President Trump’s particular forms of genius is understanding how the median voter feels. He has not been afraid to cozy up to theoretical enemies, like New York City Mayor Zohran Mamdani, or even AOC. That’s because Trump is, at his core, not an ideological but an instinctual political figure. And as he thinks about his legacy, he might choose to work with Democrats and blame Republicans for the loss. This is part wishful thinking but not unrealistic enough to dismiss when considering where markets and geopolitics go over the next two years.

It is far more likely that Trump will do what most lame-duck presidents with a hostile Congress do: focus on foreign policy. This is likely one of the reasons President Trump has not settled the Iran war—it gives him national security cover for things he might otherwise be stymied from attempting. Markets generally like divided US governments, because markets like certainty, and in most divided governments gridlock is certainty. It is disconcerting, but the first two years of Trump’s second term may prove the more stable part on foreign policy. Trump will likely be even more unpredictable on the global stage as his options at home dwindle and as the Democrats bog his administration down in investigations and other battles.

A Multipolar World

As for geopolitics: I am in Europe as I type and was putting jetlag to good use in my hotel gym this morning, where everyone, American and European alike, could not stop talking about the midterms. One woman asked if she could stream Fox News on her phone, and everyone told her to turn up the volume. The world is watching the US closely and is fascinated by its political melodrama. And yet, the world has also gotten the message that Trump is not a fever dream; that whatever his idiosyncrasies, he represents a real shift in US politics toward isolationism, protectionism, and self-absorption.

In Iran, no doubt the IRGC and the surviving remnants of the regime are toasting to their endurance and convincing themselves they have outlasted the worst of Trump. In China, Xi Jinping is likely reassured that his pivot away from Wolf Warrior diplomacy and toward pragmatic competition and engagement with the US is the best path forward. EU countries, Japan, and Canada might have allowed themselves to believe Trump 1.0 was a fever dream, but Trump 2.0 confirmed that they must reduce their dependency on the US, diversify, and build self-reliance. 

All of the countries above, enemies and allies and everything in between, will still work with, and even make deals with, the United States, but they are also actively adapting to a multipolar world in which the US is either unwilling or unable to maintain the global order from which they were enriched or held back. These are broader structural forces that transcend a single US election cycle, or even a single French election cycle or Chinese plenum meeting.

The unsatisfying conclusion, at least from a geopolitical lens, is that the midterm election, while remarkable, is in the end not all that important. That such a colossal change in the US government matters so little to the rest of the world speaks volumes in itself.

MAP/CHART OF THE WEEK

BLIND SPOT

I am in Geneva for work, and I always get pensive when I am in this city. My father’s parents lived in Vienna when the Nazis took over. They escaped to France, only to go into hiding when France fell. Eventually, they snuck their way into Switzerland (a story in and of itself). They spent the remainder of the war in a displaced persons camp there. I still have my grandfather’s letters from that time, including many sent to embassies and consulates in Geneva, begging for help producing copies of the identification documents needed to apply for visas, among other things.

As I was walking around Lake Geneva on a cold and blustery night, I was thinking about my grandparents, about what they might think of their grandson walking Geneva in a nice suit, secure in his person and livelihood, about what it must have been like for them to walk around this lake with such incredible burdens of uncertainty and loss.

Geneva is an international city, and so when you walk around you hear different languages and accents and see different colors and clothes, and I wondered if there were people walking around the lake that night in the same position as my grandparents, safe but stuck in geopolitical limbo.

READER QUESTION

FINALLY...

What I’m watching: Star Trek: The Next Generation (RIP Patrick Stewart)

What I’m reading: Dopamine Nation, Anna Lembke

What I’m listening to: What You See Ain’t Always What You Get, Luke Combs