Good morning. David Meyer here, filling in for Alan from Berlin.
The 2018 midterms provided something for everyone. The Democrats resoundingly took the House, putting an end to four years of Republican-controlled Congress. The Republicans grew their Senate majority. President Trump was not engulfed in a massive blue wave—notably, progressive hopefuls Beto O’Rourke and Andrew Gillum lost out—but Trump didn’t win anything like a clear endorsement from the voting populace either.
Here’s what we can say with confidence now:
- Trump’s existing victories (such as tax cuts) are likely safe for the next couple years, given the Republican domination of the Senate.
- Trump’s promised victories (such as more tax cuts) are likely doomed, given the Democratic domination of the House.
- Trump and his administration are about to face a ton of scrutiny, now that Democrats control the House committees.
What of bipartisanship? Trump’s presidency thus far has been an intensely tribal one, and his campaigning ahead of yesterday’s election all but demonized the Democrats with claims that they wanted to enact a socialist, border-destroying agenda. Meanwhile, the Democratic surge was largely fuelled by anti-Trumpism.
Potential House speaker Nancy Pelosi drew fire from the left when she last night promised her party would “strive for bipartisanship.” That will be difficult while also launching investigations against and checking the impulses of a president who is, in political terms, an outright street fighter. But anything that might even slightly ameliorate the toxic divisiveness of the last few years would be welcome. Perhaps much-needed infrastructure investment might provide an opportunity for a spot of cooperation.
Sides aside, this is an historic moment. There are now (based on the races that were called at the time of writing) at least 117 women in Congress, up from the previous high of 107. The House will now include Muslim women and Native American women for the first time. America’s lawmakers are becoming more diverse and representative—and however divided these times may be, this is a shift that bodes well for the future.
More news below.
France is to defy the U.S.’s sanctions on Iran, with Economy Minister Bruno Le Maire explaining that “Europe refuses to allow the U.S. to be the trade policeman of the world.” After the Belgium-based Swift financial messaging system decided to go along with the sanctions, Le Maire said the EU needed to press ahead with its plans for a separate channel for allowing trade with Iran. Financial Times
Some of HSBC’s U.S. customers fell victim to a hack last month, the bank has admitted, saying the hackers got potential access to detailed information about account balances, transactions and payee details. The BBC reported that the hack affected fewer than 1% of HSBC’s American clientele. The bank has apologized and offered the victims free credit monitoring and “identity theft protection” services. BBC
A planned summit between Secretary of State Mike Pompeo and senior North Korean officials has been called off. There is no explicit reason for the decision, but it may lie in the fact that neither side has shown signs of giving way on the issues of U.S. sanctions and the North Korean denuclearization schedule. Wall Street Journal
Zillow stock lost a fifth of its value in after-hours trading after the company lowered its revenue outlook. The U.S. housing market is slowing and real-estate startups are naturally affected—not just Zillow, but Redfin too. Fortune
Around the Water Cooler
New Iron Curtain
Former U.S. Treasury secretary Hank Paulson has warned of an “economic Iron Curtain” as a result of the breakdown in Sino-American trade relations. The immediate tariff war may be over soon, he said hopefully, but unless deeper tensions are resolved, “we are in for a long winter in U.S.-China relations.” South China Morning Post
New York’s new attorney general, Letitia James, has vowed to “shine a light into every dark corner of [President Trump’s] real estate dealings, and every dealing.” James, a Democrat, replaced Barbara Underwood, who filled the position after the downfall of Eric Schneiderman over allegations of abuse against women. Bloomberg
Draper on Musk
Investor Tim Draper reckons Elon Musk should have taken Tesla private—a move he says would have saved the CEO from having to comply with all those pesky rules that come with running a publicly traded company. Draper: “We have to sort of say, hey look, he’s a human being, he’s doing the best he can.” CNBC
Marijuana measures were also subject to votes yesterday. Michiganders decided to legalize recreational cultivation and use, and Utah and Missouri OK’d medicinal use. North Dakota, however, rejected weed legalization. Forbes