# Political Risk, Inflation, and Midterm Market Implications

**Podcast:** Prof G Markets
**Published:** 2026-10-31

## Transcript

As soon as autumn rolls around and you swap your iced lattes for pumpkin spice, that's your signal to start thinking about the holidays.
The decor, the gifts, the shopping lists, but more importantly, the holiday treats.
Cheesecakes, cookies, is there anything better?
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made with fresh milk and real cream.
This holiday season, whether you're going all out or keeping it simple, make it really Philly good.
Find your favorite holiday recipe at creamcheese.com.
As soon as autumn rolls around and you swap your iced lattes for pumpkin spice, that's your signal to start thinking about the holidays, the decor, the gifts, the shopping lists, but more importantly, The holiday treats, cheesecakes, cookies, is there anything better?
And when the recipe calls for cream cheese, there's only one option.
Philadelphia, the original cream cheese made with fresh milk and real cream.
This holiday season, whether you're going all out or keeping it simple, make it really Philly good.
Find your favorite holiday recipe at creamcheese.com.
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Welcome to Simply Put, I'm Ed Elson.
This week, I predict a blowout.
In November 1890, President Benjamin Harrison was one of the most unpopular men in America.
Despite his party's resounding victory just two years earlier, he'd somehow managed to piss almost everybody off.
The worst of his decisions was raising tariffs.
After increasing import duties to 50%, prices immediately shot up and an affordability crisis followed.
Americans also considered Harrison's pro-business policies to be overly friendly to the Gilded Age industrialists with whom he'd become unusually close.
They had funded his campaigns.
By the time the midterms rolled around, the game was up.
Harrison's party lost 93 seats across the House and the Senate in what would go down as one of the largest congressional defeats in American history.
The president wasn't on the ballot, but he might as well have been.
He had lost the trust of the American people, and this was their moment to express it.
Why do I bring this up?
Because the midterms are next week, and I predict a similar outcome.
It won't technically be a referendum on President Trump, but practically, It will be.
Trump 2.0 has been arguably the worst presidency in the history of America.
Everything he could have gotten wrong, he has.
And while bad presidents sometimes get away with it, usually by blaming others, this one can no longer play that card.
I believe Americans have finally had enough.
And next week, they will tell us as much.
Prediction, the Republicans are about to get swept.
The Democrats don't need to make much of a case, as the president's already made it for them.
The man who promised to bring down inflation, put an end to foreign wars, and balance the budget has not only accomplished none of these goals, he's done the exact opposite.
It started with tariffs, which I and many others said would result in rampant inflation.
As with the 1890 tariffs, that is exactly what happened.
Within a year of Liberation Day, inflation had risen nearly a full percentage point.
After that, Trump launched a war against Iran without accounting for the fact that a third of global crude oil trade flowed through the Strait of Hormuz.
He also said this conflict would last only a few weeks.
Eight months later, we are still at war.
Inflation has risen another percentage point and gas prices are up 40%.
Hashtag winning.
I'd be less concerned about prices if wages were rising faster.
But they aren't.
For six straight months, inflation has outpaced wage growth, meaning American workers are getting poorer.
Meanwhile, corporate profits have exploded nearly 40% since Trump took office.
In other words, the trickle-down effect, once again, doesn't exist.
Most economic disasters are the result of exogenous events, and presidents are judged on how they react to them.
A recent example is COVID, which battered supply chains, resulting in a global inflation crisis.
Could President Biden have handled it better?
Possibly.
But the point is, the pandemic-driven inflation was triggered by an event that was largely out of Biden's control.
Today's economic problems, however, are unique in that they were invented by one individual.
There is no nuance or complexity to contend with.
There are no other factors to blame.
If it weren't for Trump, specifically his tariffs and his war, our inflation crisis would not exist.
It really is that simple.
That is why he is especially screwed.
The story is so cut and dried that there is no other story to tell.
Trump's overall approval rating has fallen to historic lows, but his approval rating on inflation specifically has fallen even further.
In fact, more Americans disapprove of Trump's handling of inflation today than they did of Biden's in 2022.
Americans understand exactly what's happened here.
Not only have we fabricated an economic crisis out of thin air, but for the first time in a long time, one person is solely to blame.
It would be one thing if he were just incompetent.
It's become abundantly clear, however, that he's also evil.
Set aside the Epstein files for a moment.
Ignore, if you can, the dozens of children who were sexually abused by his close confidant, as well as the countless women who were proven to be exploited, if not directly by Trump, then indirectly through his social circles.
Let's just talk exclusively about the horrendous shit he's done in just the past 18 months.
Last year, Trump personally profited $1.4 billion from his crypto projects.
Most of that was derived from the pockets of his supporters, who lost roughly $2 billion buying Trump coin.
Trump also traded as much as $1.5 billion in stocks.
Given the unusually good timing of some of these transactions, it's highly likely that he and his associates were making bets based on insider information.
When officials at the SEC and the CFTC tried to investigate these trades, though, they were immediately ordered to stop, and in some cases, pushed out of their agencies altogether.
Corruption does not get more obvious than this.
It's not just the brazenness of these scandals, but the sheer number of them.
From Kimberly Guilfoyle to Tom Homan to Trump's fucking teleprompter operator, a prerequisite for working with the president appears to be a willingness to lie, to cheat, and to scandalize.
It's genuinely disgusting.
And as I've said, on markets, the only viable remedy is to put these people behind bars.
FYI, that is not lawfare.
That is just the law.
Now, the good news is most Americans finally get it.
Two-thirds now say that Trump is using the office to enrich himself.
I won't pretend to know what the other third thinks.
My central claim is this.
Trump's been so terrible, he's ruined the chances for everyone else.
That might sound like a hot take.
However, the Democrats' odds of sweeping the Republicans have more than doubled since the beginning of the year.
So in reality, it's tepid.
Now, what would a sweep actually take?
Democrats will likely need two wins from Abdul El-Sayed in Michigan, Troy Jackson in Maine, or James Tallarico in Texas.
All of them have decent chances.
But if you'd said that eight months ago, you'd have gotten laughed out of the room.
Things have changed dramatically in a remarkably short period of time.
It's not that the Democrats have run great campaigns, it's that the president has run a horrible one.
From the Rio Grande to the Great Lakes, Trump has poisoned Republican wells across the nation.
Those who drink invariably get sick.
The Republicans know this.
That's why two-thirds of GOP candidates in competitive races are now distancing themselves from the president.
The irony...
is that he thinks he's helping.
The Trump-a-Palooza midterm convention was supposed to galvanize candidates ahead of November.
Instead, all it gave them was a headache.
Never underestimate the Democrats' ability to snatch defeat from the jaws of victory.
They've done it before, and they could do it again.
That's why I advise Democrats to commit to the following political strategy.
Do nothing.
The Democrats are in an enviable position in that the facts are on their side.
Their greatest political advertisement is also getting free coverage 24-7, and his name is Donald Trump.
The key will be to sit still and let the man continue to self-destruct.
They don't need a bold agenda.
They don't need a hero.
In the words of Don Draper, if you don't like what's being said, change the conversation.
But now is not that time.
Do this, and I'm confident the story of 1890 will repeat itself.
A blue wave, unlike anything we've seen.
Will that fix America's problems?
No.
At the very least, though, it will be a gratifying indictment of what caused them.
I'm not one for vengeance, but I do enjoy retribution.
And my bet is that America does too.
This edition of Simply Put was produced by Claire Miller and Alison Weiss, edited by Natalia Cabrera, and engineered by Benjamin Spencer.
Our research associate is Dan Chalon.
Our design editor is Olivia Rini-Hall.
Special thanks to Vivian Zhang, Audrey Hettleman, and Rohit Bola.
Thank you for listening to Simply Put by Ed Elson.
You can find this piece and more on Substack.
Just go to edwardelson.substack.com.
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