Former House Financial Services Patrick McHenry Talks US Midterms

SPEAKER_1 (0:02)

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Tom Keene (0:07)

This is a joy. I'm going to get right to it, because every second counts here on a Friday. Features up 26 The VIX advances a bull market 15.28 in the yield space.

The yields are up two basis points, 525 I'm going to call it stasis on the 10 year. Patrick McHenry is wonderful, is a politician, and somebody who has served the nation, former Republican Speaker Pro Tem, because he's a student of history. And Patrick Henry knows that what everybody's trying to avoid, and whether the polling's right, and people say it's going to be closer than expected. But to have Patrick Henry now into the midterms, 25 days away, is truly a joy. He is, of course, always from the Carolinas. Patrick, 1890, William McKinley.

It was a vote on tariffs. The Republicans got crushed. I've been thunderstruck how tariffs haven't been part of the debate here. Are they part of the debate, inflation from tariffs, when people go in the voting booth?

Patrick McHenry (1:10)

They are. But they're not the primary source of attention. They're the secondary. They're the result. And so what people are not speaking to is the heart of the matter. And in that circumstance, McKinley had to answer for tariff policy and monetary policy together. And we're in a similar circumstance. Here we are over 130 years later. And McKinley in the 1892 election, Karl Rove has written a book about the 1892 election. It's fantastic. And what it says then is that McKinley answered for monetary policy, the cross of gold, and talked about this in terms of the effect on tariffs and tax policy. So I think we're seeing this same basket of issues that we've been all wrestling with since the post-financial crisis. We're trying to speak to the economic pain of the American people.

And tariffs are a part of this. The AI build is part of this.

Oil and gas are part of this. So inflation is on the ballot. Cost of living is how they think of it though.

Tom Keene (2:19)

And folks, this is what's so great. I'm sorry, you're always going to be Congressman McHenry. I'm too formal. What's great about Patrick is he's going to give you the Republican and the Democratic angle as well. Best article I've seen Patrick in the last three days, four days, is David Wasserman over to Cook Political Report talking about the doubly disenchanted. Where in God's name is Scoop Jackson?

Conor Lamb in Pennsylvania. Where are the Democrats that can come to the middle and take away Republican disenchanted votes?

Patrick McHenry (2:51)

They don't have to. They don't have to. So you don't see a move by the Democrats to do that. What you see this is a doubling down on socialism. The Democrats socialists are the animating function of the Democratic Party much in the way that the Tea Party was in 2010 Now, by saying this, both sides will hate me for saying this.

But the point is, in a midterm election like this, what you're harvesting is voter anger or angst about the current situation. And what they want is somebody who is animated to respond to this. Not humdrum, but animated. And that's what you see out of the socialists right now. They're not running to the middle. But what Wasserman talks about here is what we called in the 2016 election double haters.

SPEAKER_1 (3:37)

The people who went to the ballot box.

Tom Keene (3:39)

You're describing my children.

Alexis Christophorous (3:41)

Double haters. I like that.

Patrick McHenry (3:44)

Well, it's true. We used this in 2016 The Public Opinion Survey said a majority of the American people disliked both Hillary Clinton and Donald Trump as choices in the ballot box in 2016

Who do they hate more? Hillary Clinton. So the election is decided by the negative, not the positive, especially in a midterm.

Alexis Christophorous (4:06)

I'm in the camp with Tom, and once a congressman, always a congressman. So, Congressman McHenry, what do you make of President Trump coming out on social media and saying he's not going to attack Iran before November's midterm elections? I mean, it's doing a little bit for the oil market today. But other than that, what does it mean to the average voter as they head to the polls in these midterms?

Patrick McHenry (4:27)

Well, the response is right because he's trying to have whatever relief in the oil market is possible. Any relief in the commodities market is possible between now and election day. Even little fractions make a difference. We're at a battle in this election cycle on a game of inches. We're going to have multiple congressional and senate seats decided by a point or two or less.