The US Mid-Term Elections: Instant Analysis

Political insiders share their insights on the Nov. 6 mid-term election results and interpret what it all means for the US, Europe and the world.

Featured Experts from the Natixis Investment Managers Summit:

  • Nicole Bacharan, Historian and Political Analyst
  • Andrew Card, Former White House Chief of Staff; Chairman, National Endowment for Democracy
  • Francesco Guerrera, Head of International, Dow Jones Media Group
  • Moderator: Dave Lafferty, Chief Market Strategist, Natixis Investment Managers
“America is unbelievably tribal today, and the tribalism was not mitigated, it was exacerbated,” said Andrew Card, a former White House Chief of Staff and the Chairman of the National Endowment for Democracy, speaking the morning after the US mid-term elections at the Natixis Investment Managers Summit.

That was the most important takeaway from the election results, which saw Democratic “tribes” in suburban and urban areas giving their party a majority in the House of Representatives, while Republicans, many in rural areas, helped their party hold the Senate. This tribalism is set to continue to affect politics on both the national and international stage.

No Big Surprises
The biggest surprise this November was that there were no big surprises, analysts said. “For all the talk of how bad the polls have been, the pollsters basically hit it out of the park,” said Dave Lafferty, Chief Market Strategist at Natixis Investment Managers.

The only ones who got it wrong, according to Card, were the “pundits and the partisans.” “The blue wave was not a wave that anyone could ride on a surfboard,” he said, adding that the House majority would give the Democrats new momentum, but wouldn’t significantly alter the dynamics there. “They don't control it by enough votes to be able to mandate anything on Congress,” he said.

They can, however, be expected to exert another kind of power, for example by launching investigations. And Democrats may actually be an asset to the White House if they are able to meet President Trump at the negotiating table.

Market Watch
As for the immediate market reaction in the wake of the mid-terms, there were no “major earthquakes” there either, according to Francesco Guerrera, the Head of International at Dow Jones Media Group.

In the longer term, Guerrera saw three areas that might be impacted by the results. He’s already seen some bets placed on infrastructure, although he noted that people “will see the fiscal deficit rise, and that’s negative for democracy.” On the healthcare front, Trump has mentioned (and Democrats support) drug pricing controls, which could be bad for pharmaceuticals. Finally, “trade will remain Trump's arena, and therefore the markets remain jittery about what could happen with China, Europe and other countries on potential trade wars,” Guerrera said.

A Shot Heard ’Round the World
For all its bad reputation, tribalism can be seen to have a positive outcome. “The turnout was up substantially so it seemed like love or hate this president, he is driving engagement on both sides of the aisle,” said Lafferty of Natixis.

And engagement is good for democracy, said Nicole Bacharan, a historian and political analyst, adding that Europe and other countries have been worried about the example set by the United States. “We didn’t know where we stood anymore,” she said. “As a European, are the United States still our friends?” After the vote, “there is a sense that checks and balances are still there, so that democracy might not be perfect but it is still happening and it will survive for – we don’t know how long, but right now it seems that it will survive for quite a while.”

Guerrera, however, is more wary, stemming from his general alarm about the polarization of the media and the rise of social media as a news source. “I’m heartened that more people have voted, but if the vote has been driven by tribalism, then I am worried about democracy,” he said. “Why did they vote, what were they thinking and how did they get informed ahead of that vote?”

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The Natixis Investment Managers Summit was hosted by Natixis Investment Managers. Natixis Investment Managers includes all of the investment management and distribution entities affiliated with Natixis Distribution, L.P. and Natixis Investment Managers S.A.