Swamp Notes: US Democrats on the Offensive

This is an audio transcription of the FT press briefing podcast episode: Swamp Notes – US Democrats on the Offensive

Marc Filipino
Hello from the Financial Times. Today is Tuesday, September 20, and it’s your FT News Briefing.

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The catastrophic effects of climate change could be avoided, but it will cost billions of dollars. That’s according to a new report. US climate policy is causing headaches for global asset managers. And our Swamp Notes columnists Rana Foroohar and Ed Luce talk about the Democrat push ahead of the midterm elections. I’m Marc Filippino, and here’s the news you need to start your day.

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Two of Turkey’s biggest banks have stopped using the Russian payment system after warnings from Washington. They were among the five largest Turkish banks that used the Mir system – it’s the Russian version of Mastercard or Visa. Turkey has avoided taking sides in Russia’s war in Ukraine and has not signed any sanctions. But Washington has expressed concerns that these banks could provide a financial backdoor to circumvent Western sanctions. A spokesperson for one of the banks said it had temporarily suspended use of the Mir payment network while it assessed new guidelines from the United States.

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Two major global energy agencies have released a report that estimates the cost of avoiding the catastrophic effects of climate change. The International Energy Agency and the International Renewable Energy Agency released the report on behalf of dozens of world leaders. It indicates that by the end of this decade, the world is expected to invest approximately $1 trillion in renewable energy each year.

Camille Hodgson
This is a huge number, which is quite difficult to conceptualize. It’s so big.

Marc Filipino
It’s Camilla Hodgson from the FT.

Camille Hodgson
It’s not just about demanding a trillion dollar advance from governments. It will be a combination of public sector money and private sector money. You have recently seen governments and the private sector commit to pouring millions more into renewable energy. We really have the impression that there is more desire to do it in the context of the energy crisis. It’s obviously a challenge, but I think the groups that wrote this report think it’s doable. It’s just going to require some sort of sea change in the ambition of governments and the private sector to invest in and deploy renewables.

Marc Filipino
Camilla Hodgson is a climate reporter for the FT.

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Global asset managers find themselves caught in the middle of US political divisions over climate change. Recently, a global asset manager, Federated Hermes, withdrew its sponsorship of a group of Republican state finance officials who oppose action on climate change. Federated Hermes did so after pressure from European and Australian pension fund clients who value environmental, social and governance investments, or ESG investments. This is Chris Flood from the FT.

Chris Flood
This is further evidence of how the backlash against ESG is growing in the United States. I mean, just last month we saw the state of Texas blasting BlackRock, nine other European managers, describing them as hostile to fossil fuels. This is, I think, extremely troubling for these managers. They know that their investors and the rest of the world are genuinely committed to ESG. Managers like BlackRock also see such criticism as highly misplaced because they actually have significant investments in the oil and gas industries. They get it from Republicans on the one hand, complaining that they don’t support fossil fuels enough. They also find themselves under fire from environmental groups who don’t like their continued support for the oil, gas and coal industries. So it’s a bit of a no-win situation for some of the big investment managers right now.

Marc Filipino
It’s FT asset management reporter Chris Flood.

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The U.S. midterm elections are fast approaching, and for a while the prospects for the ruling Democratic Party looked pretty bleak. But legislative successes improved their odds against Republicans. The FT’s US national editor and columnist, Ed Luce, along with our global business columnist, Rana Foroohar, are here to discuss it. They write our Swamp Notes newsletter twice a week. Thanks for joining me, guys.

Rana Foroohar
Thank you for receiving us.

Edward Luce
Great to be here.

Marc Filipino
So, Rana, Ed, what’s behind this change? Why do Democrats have a better chance now?

Edward Luce
The broader shift we’ve seen politically for Democrats over the past few weeks is pretty unprecedented. And I think part of it has to do with the multitude of laws that have been passed and maybe the cancellation of student loans. But I think it has a lot to do with the focus on Trump. And Biden, you know, is doing as much of a referendum on Trump’s Maga party as the traditional referendum on Biden and the economy. And that’s smart politics.

Marc Filipino
OK. But do any of the laws passed under Biden influence how people vote?

Rana Foroohar
I think it’s all part of kind of a tailwind for a really mega shift. I mean, potentially the biggest political shift of our, of our lifetime, from less government control, more private sector power to more public sector power and less corporate control over things. And you can see that in all kinds of things like the FTC and the SEC and what they’re doing to really get the ball rolling on companies that have monopoly power or are unfair. We just saw the FTC take on Walmart in a new case. And I think the shift in voting power from baby boomers to millennials who don’t have assets to protect and who are just more in this kind of democratic socialist camp, to put it, you know, very broadly, does part of what re see.

Edward Luce
Yeah, I mean, I think there’s definitely a generational shift there. And levels of enthusiasm have increased recently among young people and among women. And let’s not forget the backlash from the Supreme Court rule, the Dobbs decision on the removal of Roe v Wade. I mean, you’ve seen enrollment rates go up and the overwhelming majority of new enrollees are women.

Rana Foroohar
Yeah.

Edward Luce
So I don’t think we should overlook, you know, the electrifying effect of that. He really motivated people.

Marc Filipino
So a lot of these things that we’re talking about, the repeal of Roe vs Wade, the abortion decision, inflation – Biden really has nothing to do with those things, does he? What have Biden and the Democrats done to put them more on the offensive than the defensive here?

Rana Foroohar
Well, I’m going to quickly touch on the inflation issue, because I think it’s interesting and complicated. So I think Biden, by creating this kind of “work, not wealth” slogan and paradigm, kind of shifted the dial to reclaim that Democrat mantle of: we’re the workers’ party. We believe in people to earn their money from a paycheck rather than asset price wealth. So I would say that’s one way he turned the needle. He’s also taken a lot of smart, low-hanging fruit, you know, releasing strategic oil reserves to try to bring gas prices down and using, again, antitrust policy to really look at price gouging companies. I’m starting to think he has a case there.

Edward Luce
Yeah. I mean, one thing I would point to Biden rebranding or Democrats rebranding in a more positive sense is that not just the legislation that they passed or the things that Rana mentioned. It’s just the meaning between . . . now, voters who don’t pay, you know, silly attention to all the things we’ve been talking about always feel like there’s a positive agenda.

Rana Foroohar
Mmm.

Edward Luce
There is an action, an active program to solve some of the problems in their lives. And the Republicans really boil down to a one-issue party, which is a stolen election. That’s what Trump, the Republican Party, says. . .

Rana Foroohar
A big point.

Edward Luce
You don’t have a Republican policy on any of these issues. And the only Republican policy on inflation is to drill on federal land. And it’s not particularly popular.

Marc Filipino
Ed Luce is the FT’s US national editor and columnist. And Rana Foroohar is the FT’s global business columnist. They write our Swamp Notes newsletter twice a week. We have a link to subscribe to this in the show notes. Thanks as always guys, it was great.

Rana Foroohar
Thanks a lot.

Edward Luce
Thanks.

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Marc Filipino
President Joe Biden has put Covid-19 back in the news by declaring the pandemic over.

Joe Biden
We still have a problem with Covid. We are still working on it a lot. Yes, but the pandemic is over.

Marc Filipino
His remarks on US television on Sunday night may be good news for Americans, but not for the pharmaceutical companies that make the Covid-19 vaccines. Investors wiped a combined $10 billion from the market value of vaccine makers Moderna, BioNTech and Novavax. Pfizer didn’t fall as much due to its broader product line. Analysts say the sale reflects concerns over demand for Covid vaccines as leaders, not just in the United States, say the crisis phase of the coronavirus pandemic is coming to an end. The World Health Organization said last week that the end of the pandemic was in sight.

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You can read more about all these stories on FT.com. This has been your daily FT News briefing. Be sure to check back tomorrow for the latest trade news.

This transcript was generated automatically. If by any chance there is an error, please send the details for a correction to: [email protected]. We will do our best to make the change as soon as possible.

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