US stocks experienced the largest destruction of value in the history of Wall Street last Thursday as the market priced the new Democratic majorities in Congress. At least $2.5 trillion in market capitalization disappeared over the course of one hour of morning trading morning, with AI companies taking the hardest hit.
The selloff followed threats by the newly-elected Democratic majority to investigate and prosecute companies, “including the biggest tech giants, artificial intelligence labs, natural gas firms, private prisons and nursing home operators, among dozens of others”, according to a planning document being circulated in Washington.
The 181-page dossier is written by former staffers for Democratic Sen. Elizabeth Warren of Massachusetts and America’s oldest DSA member in the Senate, Bernie Sanders of Vermont. Groundwork Collaborative wants to go “well beyond the president and focus on a wide range of corporate behavior that the group blames for the cost-of-living crisis” that Democrats created, and will now expand to newly-blue states.
Behold, Republicans were “hoarding” money in the emergency bank account for the state of Texas. Dumping this cash into the Texas economy will be an inflationary sugar hit. When costs go up, Democrats will just spend more.
While the phrases “economic populism” and “abundance” were Democratic Party promises on Tuesday, Democrats are set on a path to higher costs for everything from housing to gasoline to groceries. Just look at what Democrats did with their blue majority in Virginia. Democrats intend to raise the price of producing energy, doing business, and selling anything without leave of the Democratic Party.
Lindsay Owens, Groundwork’s executive director, wants “material restitution”, essentially consumer reparations. Bear in mind that the newly-elected Democrats will be making the fundraising phone calls (“call time”) for the party, so this is a kind of double billing.
Overall, DSA Democrat candidates underperformed on Tuesday, but this is not important to progressive change theory. Instead, the new members of the party’s Congressional delegations will do the whip-work of making corporate America pay for their politics.
Companies like Skydance/Paramount and SpaceX are already being named as targets for civil and criminal action, even nationalization, because the point is to make the billionaires afraid of “the people” so they will toe elite political lines. Except no amount of money can make voter sentiments change. This election proved it. The most that your campaign ad buy can accomplish is activating voter sentiment that already exists.
Democrats lost ground with Jewish voters, but most of them stayed Democrat. It’s not the first time in history that Jews supported their emerging enemies over a misunderstanding of their own situation. Entryism of Islamist Democrats forces a competent Jewish candidate, such as Josh Shapiro, to adopt even harder lines on other culture war positions to shore up their left flank.
As always, the issue is not the issue, the real issue is the revolution. Hakeem Jeffries thought he had already secured the speakership, but instead he finds himself the target of a youth vanguard imploring Democrats to pick someone even more progressive.
House Democrats “have sharply different ideas about what comes next”, reports The Wall Street Journal. “His caucus stretches from incoming freshmen pushing Medicare for All and abolishing ICE to dozens of lawmakers from deep-red districts. Jeffries wants to move quickly to lower costs, end the Iran war and pump the brakes on President Trump, but colleagues describe a cautious leader who prefers consensus over confrontation.”
DEI for everyone, sex changes for kids, the list goes on. So many priorities, so little time. Moreover, Democrats consistently choose the wrong priorities. Exit data shows that war was a distant second among voter concerns. Affordability was first. Democrats have already made it clear to everyone that their mind is not on making things affordable again, but on political correction, that is, political correctness.
Voter sentiment changes according to feelings, and one side simply felt this midterm more strongly than the other. That pendulum can swing with increasing force and speed these days. Democrats have to deliver the affordability first, and frequently, and resist calls for radical actions that will annoy the electorate — at least, until the electorate actually feels the affordability. Good times make soft men.
“According to a recent Washington Post-ABC News-Ipsos poll, this is the first time Democrats have held an advantage on the economy in 12 years. Otherwise, the Democrats would not be nearly as successful as they are likely to be”, Ruy Teixeira wrote in an op-ed for The Washington Post the week before the election.
The party’s “brand” is still hated, seen as “too extreme”, while “the data indicate that most of these voters will be ‘just visiting’ rather than locking in their support.” It is not enough to be anti-Trump when he still holds the veto pen. “If you promise to fix the economy, make life affordable and get things back to normal, you’d better do it.” Even if that requires shaking hands with the evil orange man.
Unless Democrats come through with relief, the voters can turn on a dime. Which is another way of saying they probably cannot do much to alleviate costs, while most of their preferred policies demonstrably destroy business or boost inflation. See the recent debacles in Seattle and Los Angeles for a preview of Texas under Democratic Party governance.
Rather than learn any lessons on, say, immigration, the new regime wants to repeat the policies that made Democrats unpopular in 2024. For example, the list of “non-violent offenses” that Houston will no longer turn over to ICE includes possession of child sex abuse material, drug trafficking, theft, and DWI.
This sounds wonderfully kind-hearted until you reckon with the increase in crime rates that will inevitably result from the illegal immigration surge that is bound to follow the midterm results. Or until you find out that progressive prosecutors regularly downgrade charges to shield the worst sorts of criminal illegal aliens from deportation. For, you know, diversity.
Democrats have a policy of putting criminal illegal immigrants first, and importing as many millions of illegal immigrants as they can get. This is not really about the American immigrant tradition. It is the Curley Effect, a well-studied phenomenon in political science.
“James Michael Curley, a four-time mayor of Boston, used wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston, thereby shaping the electorate in his favor”, reads the abstract of one paper. “As a consequence, Boston stagnated, but Curley kept winning elections.”
I was repeatedly told by Democrats that replacement migration was not real, but then the Great Replacement Theory turned out to be the Great Reset, which Biden put into action with a woke bravado by opening the border to streams of unvetted people. The ensuing Biden immigration surge played a demonstrable role in his defeat, mainly by way of raising costs.
Cost controls are a flagrant foul against free economy and Democrats are enthusiastic for them. Historically associated with decline, cost controls actually pass the costs to someone else, usually the taxpayer. Electric rates in Texas are below the national average because the state government has let energy suppliers build. Under a fixed rate regime, there is no incentive to build new energy supplies even as demand increases. The price signal becomes nontransparent and consumer costs go up. Energy will now become more expensive in Texas. Cost controls are far worse for America than inflation.
Newly-elected Gov. Gina Hinojosa wants to halt land sales to Elon Musk, putting a stop to new job creation in Texas by the world’s richest man. This is on top of the AI data center construction crunch, as the number of jobs building them will plummet. Musk however will be putting his data centers in orbit, out of meddling political reach.
Musk thinks that voters will come around on data centers. “Memphis is booming because of SpaceX”, he told a recent investors conference last week.
The restaurants are full, the hotels are full, we’re paying twice the prevailing wage people were earning before. We’ve also helped local schools. And the tax revenue the county and city are earnings is tremendous. I think this popularity thing is a temporary concern because there actually is tremendous prosperity that is brought by the data centers. Talk to the people in town and they feel it because their businesses are booming.
Democrats cannot create jobs with acts of Congress. They can certainly kill jobs with Congressional actions. Talk of billionaire surtaxes, prosecutorial inquisitions of grocery chain CEOs, and so on only serves to chill the American business climate. It is entirely possible for Democrats to inspire a recession if they try, and they seem to be preparing to try.
Impeachments do not create affordability. They distract Americans from the affordability crises that Democrats create with fiscal tomfoolery. Gov. Kathy Hochul said the words “free child care” to suggest the costs will be waved away by her magic spell rather than laid upon the taxpayers of New York state as another burden. It got her reelected, but the bill is coming due, now.
Democrats think of businesses as money machines rather than economic creation engines. A Democrat’s first impulse is to tax business, and then control and delay business through detailed regulatory process, to squeeze out every penny of lucre. They will now set out to do the same to AI, and again they will aim right for Elon Musk.
In politics, all opinions are fungible, and Democrats are already throwing off their pretensions of affordability to reveal the global giveaway they intend on charging to the American taxpayer. Far beyond restoring allegedly needful aid to countries that cannot sustain themselves, they want a full restoration of USAID funding for transgender operas in Columbia and LGTBQ+ comic books in Peru. They want the pork barrel nonprofit spending to come back and re-employ all the political actors with useless degrees.
Now, maybe this will all work for Democrats because they can blame Donald Trump for the consequences of their actions on the economy. Republicans are still trying to figure out why their losses were so deep when they have no easy answers to the problem of affordability, just true answers, which are the hardest answers for voters to hear. Conservatism today struggles to conserve economic liberalism, ironically. Democrats now offer economic illiberalism, which is expensive and annoying to voters.
Democrats seem to think they can expect 2028 to be the same electorate as 2026. This seems wildly off the mark, especially as they introduce new gun control measures in a society like Texas. Democrats in Colorado and Washington say they will try to overturn popular referendums to protect girls’ sports, doubling-down on one of their most unpopular culture war projects. The identitarian assaults on meritocracy of Woke 3 will rankle harder than Woke 1 because Democrats had moderated on the issue during the campaign season.
Nor are the culture wars to be decreased in number, under Democrats. Abdul El-Sayed wants to import his own culture war. “I would like us to figure out how to stop making deals with countries like Saudi Arabia or the UAE, who are doing genocide in Sudan”, he told ABC News this weekend. “I would like us to actually promote our values.” Our values? Really?
Reader, henceforth, check the stated policy position of Senator-elect El-Sayed against the following list of countries where the Muslim Brotherhood is outlawed. Use this handy list to keep track of El-Sayed’s attacks on foreign assistance targets, especially military aid. Note that he already says he wants to cut military assistance to Egypt and Jordan. Watch how he tries to shape Syria and Gulf policy as a Senator. I frankly do not want him to have a security clearance.
• Egypt ✓
• Saudi Arabia ✓
• United Arab Emirates (UAE) ✓
• Jordan ✓
• Syria
• Bahrain
• Libya
The 2026 midterm was received as a ‘Flight 93 moment’ by the bureaucratic administrative and educational classes, the people who listen to NPR. Presidential-year voters — what political science calls ‘low propensity’ voters — stayed home on the right and turned out on the left. These conditions can replicate the other way in 2028 if Democrats insist on being their worst selves.
Republicans are still in shock that culture was not destiny, but Democrats can elect a President Ron DeSantis if they try hard enough. He can talk about keeping Florida affordable, banishing unconstitutional and illegal DEI practices, and effective immigration policy on the campaign trail. He can contrast himself with everything that Democrats have done for two years.
Democrats will lose Donald Trump as a punching bag soon enough, and be forced to stand on their actual accomplishments. They had better accomplish things people want, and stop trying to pursue goals that median voters do not want. Markets have recovered about 60 percent of their lost value at the time of this writing. Democrats are taking big risks. If those risks do not pay off as positive voter sentiment in 2028, watch out.
Erin Lee Has Led An Uprising In Colorado
Erin Lee is the co-founder of Protect Kids Colorado. Her 2023 documentary, Art Club, tells the story of secret schoolhouse indoctrination leading to a crisis in her 12-year old daughter. Erin has lost her job, her town, and her trust in the system — but she still has her daughter. Now her organization has put three amendments on the November ballot that…