WEBVTT - Former House Financial Services Patrick McHenry Talks US Midterms

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio, news.

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<v Speaker 2>This is a joy.

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<v Speaker 3>I'm going to get right to it because every second

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<v Speaker 3>counts here on a Friday. Features up 26. The VIX

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<v Speaker 3>advances a bull market 15.28. In the yield space, yields

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<v Speaker 3>are up two basis points, 525. I'm going to call

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<v Speaker 3>it stasis on the 10-year. Patrick McHenry is wonderful as

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<v Speaker 3>a politician and somebody who has served the nation, former

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<v Speaker 3>Republican Speaker pro tem. because he's a student of history.

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<v Speaker 3>And Patrick Henry knows that what everybody's trying to avoid

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<v Speaker 3>and whether the polling's right and people say it's going

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<v Speaker 3>to be closer than expected, but to have Patrick Henry

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<v Speaker 3>now into the midterms 25 days away is truly a joy.

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<v Speaker 2>He is, of course, always from the Carolinas.

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<v Speaker 3>Patrick, 1890, William McKinley. It was a vote on tariffs.

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<v Speaker 3>The Republicans got crushed. I've been thunderstruck how tariffs haven't

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<v Speaker 3>been part of the debate here. Are they part of

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<v Speaker 3>the debate, inflation from tariffs, when people go in the

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<v Speaker 3>voting booth?

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<v Speaker 2>They are.

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<v Speaker 1>But they're not the primary source of attention. They're the secondary.

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<v Speaker 1>They're the result.

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<v Speaker 4>And so what people are not speaking to is the

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<v Speaker 4>heart of the matter. And in that circumstance, McKinley had

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<v Speaker 4>to answer for tariff policy immediately. and monetary policy together.

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<v Speaker 4>And we're in a similar circumstance. Here we are over

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<v Speaker 4>130 years later. And McKinley, in the 1892 election, Karl

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<v Speaker 4>Rove has written a book about.

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<v Speaker 1>The 1892 election. It's fantastic.

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<v Speaker 4>And what it says then is that McKinley answered for

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<v Speaker 4>monetary policy, the cross of gold, and talked about this

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<v Speaker 4>in terms of the effect on tariffs and tax policy.

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<v Speaker 4>So I think we're seeing this same basket of issues

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<v Speaker 4>that we've been all wrestling with since the post-financial crisis.

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<v Speaker 1>We're trying to speak to the economic pain of the

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<v Speaker 1>American people.

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<v Speaker 3>Right.

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<v Speaker 4>And tariffs are part of this. The AI build is

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<v Speaker 4>part of this. Oil and gas are part of this.

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<v Speaker 4>So inflation is on the ballot. Cost of living is

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<v Speaker 4>how they think of it, though.

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<v Speaker 2>And, folks, this is what's great. I'm sorry. You're always

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<v Speaker 2>going to be Congressman McHenry. I'm too formal.

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<v Speaker 3>What's great about Patrick is he's going to give you

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<v Speaker 3>the Republican and the Democratic angle as well. Best article

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<v Speaker 3>I've seen, Patrick, in the last three days, four days,

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<v Speaker 3>is David Wasserman over to Cook Political Report talking about

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<v Speaker 3>the doubly disenchanted. Where in God's name is Scoop Jackson?

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<v Speaker 3>Conor Lamb in Pennsylvania. Where are the Democrats that can

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<v Speaker 3>come to the middle and take away Republican disenchanted votes?

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<v Speaker 1>They don't have to. They don't have to.

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<v Speaker 4>So you don't see a move by the Democrats to

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<v Speaker 4>do that. What you see, this is a doubling down

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<v Speaker 4>on socialism. The Democrat socialists are the animating function of

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<v Speaker 4>the Democratic Party, much in the way that the Tea

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<v Speaker 4>Party was in 2010. Now, by saying this, both sides

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<v Speaker 4>will hate me for saying this. But the point is,

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<v Speaker 4>in a midterm election like this, what you're harvesting is

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<v Speaker 4>voter anger or angst about the current situation. And what

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<v Speaker 4>they want is somebody who is animated to respond to this.

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<v Speaker 4>Not humdrum, but animated. And that's what you see out

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<v Speaker 4>of the socialists right now. They're not running to the middle.

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<v Speaker 4>But what Wasserman talks about here is what we called

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<v Speaker 4>in the 2016 election double haters.

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<v Speaker 1>The people who went to the ballot box.

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<v Speaker 2>You're describing my children.

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<v Speaker 5>Double haters.

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<v Speaker 2>I like that.

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<v Speaker 1>Well, it's true. We used this in 2016.

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<v Speaker 4>The public opinion survey said a majority of the American

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<v Speaker 4>people disliked both Hillary Clinton and Donald Trump as choices

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<v Speaker 4>in the ballot box in 2016.

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<v Speaker 1>Who do they hate more? Hillary Clinton.

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<v Speaker 4>So the election is decided by the negative, not the positive,

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<v Speaker 4>especially in the midterms.

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<v Speaker 5>I'm in the camp with Tom and once a congressman,

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<v Speaker 5>always a congressman. So Congressman McHenry, what do you make

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<v Speaker 5>of President Trump coming out on social media and saying

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<v Speaker 5>he's not going to attack Iran before November's midterm elections?

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<v Speaker 5>I mean, it's doing a little bit for the oil

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<v Speaker 5>market today. But other than that, what does it mean

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<v Speaker 5>to the average voter as they head to the polls

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<v Speaker 5>in these midterms?

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<v Speaker 4>Well, the response is right because he's trying to have

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<v Speaker 4>whatever relief in the oil market is possible. any relief

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<v Speaker 4>in the commodities market possible between now and Election Day.

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<v Speaker 4>Even little fractions make a difference. We're in a battle

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<v Speaker 4>in this election cycle on a game of inches. We're

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<v Speaker 4>going to have multiple congressional and Senate seats decided by.

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<v Speaker 1>A point or two or less. So everything matters.

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<v Speaker 4>And what the president's trying to signal is to the

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<v Speaker 4>Iranians and to the oil market that they need to

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<v Speaker 4>be responsive to what he is saying. We'll see if

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<v Speaker 4>it bears out in physical reality. This has been the

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<v Speaker 4>battle for the whole calendar year on whether or not

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<v Speaker 4>the words equal the actions, and time will tell.

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<v Speaker 5>What else is going to be... you think, top of

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<v Speaker 5>mind for voters as they head to the polls? Because,

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<v Speaker 5>I mean, I have to think it's all about cost

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<v Speaker 5>of living, and they're going to be heading to the

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<v Speaker 5>polls with gas prices near their highest level in quite

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<v Speaker 5>some time.

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<v Speaker 4>So the primary issue is affordability, how life is less

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<v Speaker 4>affordable today than it was two years ago. The pitch

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<v Speaker 4>for President Trump 2.0 was to make things better like

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<v Speaker 4>he did pre-COVID, that the economy was roaring, wages were rising,

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<v Speaker 4>a real feeling of prosperity.

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<v Speaker 1>That's what they wanted to bring back. We've not yet

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<v Speaker 1>seen that for a number of reasons.

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<v Speaker 4>The war tariffs, certainly we've touched on that. But the

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<v Speaker 4>secondary thing we see emerging is corruption. And what the

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<v Speaker 4>Democratic Party wants to focus on is anything that touches

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<v Speaker 4>the president or his family, that could potentially make American

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<v Speaker 4>people's lives more expensive. That is a second piece of message,

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<v Speaker 4>and we're seeing that emerge across the country as a

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<v Speaker 4>second powerful message.

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<v Speaker 3>What I've been asking here, Congressman, in the last number

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<v Speaker 3>of days, even into weeks now, is where is the

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<v Speaker 3>Republican experiment after Trump? Let me rephrase it now for

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<v Speaker 3>the midterms in 25 days.

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<v Speaker 2>At 10 p.m. the first Tuesday of.

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<v Speaker 3>November, what level of lame duck or changing lame duck

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<v Speaker 3>is the president of the United States?

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<v Speaker 1>Not very.

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<v Speaker 4>And because he still has mastery over the Republican Party.

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<v Speaker 4>We've talked about the top line results of what the

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<v Speaker 4>American people think in double haters. But what we've not

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<v Speaker 4>talked about is Republican activists. Republican activists still love President

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<v Speaker 4>Donald Trump. And that will have a powerful impact on

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<v Speaker 4>who is the next Republican nominee for president. It will

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<v Speaker 4>still have a powerful impact on congressional leaders and what

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<v Speaker 4>their willingness is to break from him and therefore Republican activists.

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<v Speaker 4>So he's still going to have a very strong hand

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<v Speaker 4>and will be determinative on who is the Republican nominee

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<v Speaker 4>for president for 2028.

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<v Speaker 2>Patrick, thank you so much.

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<v Speaker 3>Patrick McHenry with us with his perspective, Bloomberg contributor, and

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<v Speaker 3>of course, Republican Speaker Pro Tem of a few Congresses ago.