The Strongman Loser

Jacob Shapiro: 00:04 All right, listeners, we're- we've got all your questions. We're gonna do the mailbag episode, but we had to get Cousin Matt on the show to talk about midterms and just election madness in the world in general, because we've had Serbian elections we've had Israeli elections, we've had Brazilian elections the midterms are coming. There's all sorts of other stuff going on. So Cousin Matt, thanks for coming on the show and lending your expertise as usual.

Matt Gertken: 00:27 Oh, man, it's always great to hang out with you guys.

Jacob Shapiro: 00:30 Yeah. It's pretty fun. Marko, I think we should start … I mean we have the f- one of the foremost experts on geopolitics who happens to be Serbian. I feel like we should start with Serbian elections, not just because we've gotten a lot of emails about it, but I think we need to set you up and let you riff about this, and also because I think it's the clearest one that maybe, you know, has broader implications across the board. Not that Serbia's that important, sorry, but that- Yeah, so- you know, the Gen Z student protest movement, how this fits into other Gen Z protests, how it is or isn't different from Brazil and Israel. Why don't we let you start cooking there, and we'll go from there

Marko Papic: 01:03 I mean, it doesn't matter at all, you know? To be honest, I mean, you're… You don't have to apologize to me. You… I'm bathed in aloof indifference. Serbia's a country of six million people. So I think that what's interesting about it is the way it came up. Two years ago, there was a tragedy. A canopy that was recently installed at a railway station fell on some people, and killed f- 16 people in Serbia. This was two years ago, and there was a suspicion that the work was shoddy, not c- to code, that corners were cut, and it launched, sort of a protest movement. President Vucic, who's a you know, right-wing populist, but who has managed to kind of from a Western perspective, he's managed to, dampen some of, you know, maybe Serbia's aggressive foreign policy. He didn't always tow the line on Russia, but he was actually quite conciliatory on things like Kosovo and things like regional tensions. You know, he didn't really stoke them otheri- rhetorically, and he openly, you know, said he was pro-EU accession even though he didn't really do anything about it. But the thing is that he cracked down on those protests. A couple of first vigils, they happened. They cracked down on them violently. Just random thugs showed up and beat up some students protesting against this tragedy, and that launched this two-year two-year protest movement against, Vucic. And what was interesting about it is that the students didn't create a party. They used almost 19th century direct democracy stuff, you know, like Soviets, effectively. They… These groupings, different departments at the University of Belgrade, different departments at University of Novi Sad would just meet up and create demands.

Marko Papic: 03:06 And they eventually put together a list of 250, you know- candidates who were not party members. They're just experts. Everything from an engineer who just knows how that canopy was put together shoddily, to former central bank governor, to a singer and a poet. And you know it was just a very, like… And a basketball player, obviously. Dejan Bodiroga, also known as just The God because he pulled a Shamgod on Carmelo Anthony. Matt Gertken's just lighting himself on fire. I'm like, what? He's just… Yeah. Yeah. He pulled a Sham… Anyways go on YouTube and watch Dejan Bodiroga just make Carmelo Anthony look like a child. The point is, it was just a very weird political movement that I can't really put into any parallel, Jacob, honestly.

Matt Gertken: 03:58 Hmm.

Marko Papic: 03:58 Because now there is no party in charge. There's just a collection of candidates that were submitted by student groupings, meetings, and those candidates are now in charge. You know, they're… And, you know, literally the newspapers are asking "Well, are the students going to now be consulted again?" 'Cause that takes up time. You know, they gotta get together, they gotta get into a drum circle. No, I mean, I'm not even kidding. It's not clear. And the titular leader of the candidates said, "No, no, no, we are now, like us, the parliamentarians, you know, the hundred odd of us that got into the parliament, we're now gonna have to sit down and figure stuff out," you know? Kind of with some mild consultation. Now, the student where this is then being perverted by the West- is that everyone's obsessing, well, are they pro-West, are they not? And it's like, look, this was about domestic corruption. This is about media freedom. This is about freedom of speech, human rights. They have 11 demands, the students. None of them really have anything to do with Russian sanctions or EU accession. And so all of the Western media attention to this issue is being refracted through Western biases against Serbia or towards Serbia. Oh, are they gonna be pro-Russian? You know. And it's like, well, no, these are people who are just trying to fix the country. So, you know, pump all the breaks and give them some time. Stop counting how many EU flags there are at protests. That was literally the common thread in every Western media article about this, was how many EU flags there were or were not at the protests. Who gives a shit? EU abandoned Serbia as far as the Serbs are concerned 46 years ago. They have moved on, and it's really about just fixing what was a very sclerotic regime. You know, that's it.

Jacob Shapiro: 05:51 Yeah. Can I as- I wanna pose a question to both of you guys. Because, yes, there was the coverage about the EU, but there was also… Vučić is one of these leaders, you know, these illiberal democratic leaders who ran afoul of… And he absolutely limited freedom of expression and did things that ran afoul of the rule of law. I would accept all of that. And you can say the same thing about Viktor Orbán. You can say the same thing about President Erdoğan in Turkey. And yet when Viktor Orbán lost an election, he left office. Vučić lost an election, and he left office. So what does that… how do we think about these guys? Because there is a narrative that these are illiberal guys who are fundamentally challenging the foundations of democracy, and therefore should not be allowed in the EU or are causing problems with the EU or causing problems. And yet when push comes to shove, you have a peaceful democratic transition of power. And Marko, I agree with your point exactly. People cover it ideologically, and they're, they don't even know what to say about what happens next because they're still fighting the old ideological battle. So if we're giving people some terminology to think about how to deal with this, 'cause we'll need this terminology also to talk about Israel and talk about Brazil. How do you guys think about these leaders and what their legacy is gonna be? I mean, and I,

Matt Gertken: 06:59 I would say one thing real quick, is that I've spent the past 10 years trying to just make simple distinctions on these stories about strongman leaders. We use terms like strongman or authoritarian, and it just makes no distinction between Narendra Modi, who is always lumped in, for example, even though there's no really no evidence that he's going to stay around if he loses an election. And similarly Orban, he was a classic example of this. There wasn't a firm basis for believing that he was going to be able to defy an election. I know it was a concern, but anyway. So what you're, what you're talking about, what we should focus on is the regime autocratic? And we can extend that to, for example, the early 1930s, everyone indexing off of Hitler's election and then usurpation of power. But the, notice that the military was indoctrinated for hundreds of years in an imperial mindset, so they craved an autocrat. So you either have to control the military or you have to have a military that wants an autocrat. But what's very hard to do is not control the military and not have a military that wants an autocrat, and then somehow seize an election and overturn the Constitution.

Marko Papic: 08:14 I w- I would say, you know, particularities of Serbia are maybe a little different. Small country, couple of hundred thugs, maybe enough, you know. Just, you know, that's what I would say. I would say it's interesting, Jacob, Vucic did concede right away, you know? There are rumors though that he conceded only once European leaders called him and were like, "Hey, man, our diplomats are telling us that there's masked dudes getting ready to beat the crap out of protesters." You know. And there were some masked dudes outside of this important square that became important. So apparently one of the people who called, Vucic was Orban called him- Wow … like, "Brother, it's not worth it," you know? Like- So I just wanna note that. Like- you can imagine…

Matt Gertken: 09:08 I mean, obviously you c- there are cases where it's not just direct military overthrow, and you can distort the political machinery enough to stay in power. But it's just, like for example, Xi Jinping has spent 14 years attempting to reconsolidate power over a central military commission that he already is the chairman of, and that's in an autocratic system. Or look at… Or Putin. So I'm just saying it was always false to lump every strongman leader, and I think it should just m- force us to make a distinction between autocratic- Agreed. No … and illiberal democratic leader, you know.

Marko Papic: 09:48 No, you're absolutely correct, by the way, Matt. I mean, first of all, Viktor Orban and Vučić, I mean, maybe not through rhetoric. I c- I can tell you Vučić's rhetoric is at times abhorrent, but he w- does through practice at least. I mean, he ran for elections. He was part of the opposition for a very long time. You know he used to talk about freedom of media because media blocked him out. He was politically incorrect for a long time, too right wing. So anyways, doesn't matter. Once he came to power, he definitely adopted all of these, very non-democratic practices. But was Yu- was Serbia an authoritarian regime for the last 14 years? Hell no. You can't say that. I mean, that's just not true. Otherwise this would not have happened what just happened. I would say that the opposition was absolutely terribly inept, easy to divide and conquer and buy off by the regime, and… But that's, you know that's not Vučić's fault. I mean he just preyed upon their weakness, and what the students did is they offered this alternative. So again, we shouldn't talk about Serbia 'cause, you know, I'm obviously from there, so I can talk about it forever. I would just wanna put it, put a little bug in your guys' ear. We don't have to talk about it today But there's been a lot of Gen Z stuff. There was Nepal, right? Jacob and I, you and I talked about Nepal. Yeah.

Jacob Shapiro: 11:17 Mm-hmm.

Marko Papic: 11:17 There was-

Jacob Shapiro: 11:19 Morocco

Marko Papic: 11:19 Morocco. Matt, are we missing Nepal, Morocco? There's Peru a little bit. Egypt.

Matt Gertken: 11:26 I haven't, I don't know what you guys have been doing, but I have not been tracking Nepal and Morocco lately.

Marko Papic: 11:31 Well, let's… My point is there's been a l- Okay, France. All right, let's-

Jacob Shapiro: 11:35 France.

Marko Papic: 11:36 Yeah, that, that, that counts.

Jacob Shapiro: 11:37 What, what, France.

Marko Papic: 11:38 What's interesting is that this is clearly by far the most effective. They did not burn anything down. They did not protest. They did not smash windows. They didn't burn cars. And they created an effective political method by which to seize power, and then handed it to experts and technocrats and, you know, people who are respected in society, and with a mandate to clean corruption, judicial system, law enforcement, like very specific things. And I think that's, you know, they're calling it a bottom-up reset of the entire civilization of the society. And you're on the call.

Jacob Shapiro: 12:18 That's pretty cool. Yeah, I mean, that's, that, that, I think that's it. I, it is pretty cool. I think that's overstating, but I will say I think also Vučić comes out looking very good. I think when the historians are writing this period, like what they will write about the Serbian election of 2026 was, yes, this was part of the Gen Z protest and the general malaise, and here was an example where active democracy, was able to articulate an alternative, and the leader who was there, who everybody thought was a dickhead- Allowed the peaceful transition of power. And sure, maybe it was because Orbán called him or because the European diplomats called him, but history will look at him as having given up the keys, which is pretty cool. Do we- And I, no, and I want to segue to what, Matt said, because if we-

Marko Papic: 12:53 No, wait. Before we do, though.

Jacob Shapiro: 12:54 Okay, fine. Go,

Marko Papic: 12:55 I'll let- Wait, can't we just wait a week, though, or a month? Because, ah, you know eh.

Jacob Shapiro: 13:00 No, we gotta put out content, cousin. We gotta make the … We don't have a week. People are already, people are g- You know, if we waited two weeks to weigh in on these things, how many emails we would get about people being upset with us? But what were you gonna say? What were you gonna say, Jacob?

Matt Gertken: 13:12 Like-

Jacob Shapiro: 13:14 Well, no, I just wanted to segue a little bit because you were talking about strongmen, Matt, and I … the most consequential of these elections that we're gonna talk about is Brazil, and we have to create a new category, which is the strongman loser. The person who would've been a strongman and is not going to be a strongman. For the listeners who are not following this, I mean, this was incredible. So the first round was a complete surprise to everyone. Looked like the polls were neck and neck. It was not neck and neck. Bolsonaro's party won the Chamber of Deputies, won the Congress. You got multiple Bolsonaro family members who were elected, and Bolsonaro was ahead. He didn't have enough to avoid a round two but was significantly ahead of where polls had him. Then, over the past three weeks, Bolsonaro just about as awful a campaign as you can possibly run. Articulated no plans for how to help the economy, which everybody was looking to him for. Insulted Lula's, Lula only has nine fingers 'cause he lost a finger when he was a metal worker back in the day. He was really part of the proletariat, which was basically, you know, people are calling it his basket of deplorables moment, except it's the right doing it to the left. And Lula, you know really sees that. And so then Lula pulls it out in the second round even though it seemed like he was left for dead. And then the real shocker is that Flávio you know, he's under, also, investigation for corruption allegation. They call him in to say, "You're gonna have to cancel your passports. You're gonna have to answer for all these things." I'm sure there is a political element to this as well. Flávio disappears into Argentina, then is on a private plane to Miami. At one point claimed he was the legitimate president-elect of Brazil. He is … He, by the way, changed that social media statement. Now he's just the legitimate leader of Brazil, whatever the heck that is supposed to mean. The US government has granted him visas, so he's gonna be in opposition government questioning the legitimacy of Brazilian elections from Miami. Meanwhile, Bolsonaro … Excuse me. meanwhile, Lula is the president, and he's dealing with a Bolsonaro tinged Congress and everything else that's with it. So the joke is that Flávio is the strongman loser, and he might still be able to do things as the strongman loser, but talk to me about Brazil, you guys. 'Cause this is the big one. This is the country that is not 6 million or 10 million people as in the case of Israel.

Jacob Shapiro: 15:16 This is the one that really matters, I think, in terms of size and scale.

Matt Gertken: 15:19 Yeah. And it, it's really extraordinary, and it's also … It's been interesting over the past decade to watch how closely US and Brazilian politics have paralleled, and then this was the moment- Where, Brazil went full emerging market. And I mean, I guess, you know, we'll see what happens in the US. Like it could be that this was the preview for what's gonna happen in 2028 or some- in some way. But no, this was the moment where you could almost say that, … You know, I assume that when President Trump steps down like the… I assume he's gone on January 20th, 2029. I'm… Of course, I shouldn't say I assume it because I'm willing to entertain all kinds of other scenarios, and I've thought about them a lot, etc. But when he goes, it's probably we're gonna look back in retrospect and see that the US political system just continued to operate, whereas the Brazilian one, like you said, we now have this you know, this sort of like claim, rival claimant to the throne who's going to be throwing rhetorical hand grenades. It's just that he's got two years because assuming that Democrats do take over just because of the cycles in the US, they probably will send him back to Brazil. So he's gonna have to find somewhere else to chill out, you know? And he might end up spending his whole life in exile at least until some future date when Brazil is calling him back because Lula and other you know, politicians have taken Brazil further down an unsustainable fiscal trajectory. But I will say that there's one explanation, and I'll stop, but one explanation of this election that I haven't heard a lot of people talking about which is because the Liberal Party did so well in the first round and it was quite clear that right-wing parties were going to sort of control the Congress, it actually created an environment where four million people or so could swing back to Lula and say, "Okay. Well, wait a second. If I have a right-wing Congress anyway and they're going to be… Then maybe I want old man, old familiar man Lula to just sort of preside as a president over this more conservative policy that we're gonna have anyway."

Matt Gertken: 17:26 So it could be a check on the Congress, and that could be why the second round differed from the first, aside from just Lula's general, you know, name recognition and popular sway.

Marko Papic: 17:36 Yeah. Yeah, I think that's what I was gonna go with, Matt. That's… I think that's exactly what happened. Polls were very close in Serbia, by the way, as well, and then in Brazil. But the thing that people have to understand, you know, everybody says polls suck. Well, you know, calm down Polls have to basically assume a turnout. Just literally pick a turnout number out of thin air. And you had, you know, over 70%, I think, turnout in Brazil, in Serbia, and in Israel. This is like, what we're seeing is democracy in action. People are mobilized across different continents in different situations in idiosyncratic storylines. You know, in Israel there's a war storyline, in Serbia there's a corruption storyline, in Brazil there's an economy storyline. And in each case clearly highly motivated, and that's exactly what I think happened, Matt. And by the way, this is also very much something to keep in mind when you look at the US elections I think this is why those enthusiasm gaps really matter, like who is motivated to show up. You should expect to on the side of enthusiasm. So if the Democrats have more enthusiasm going into an election, it's quite likely that polls will be wrong, and they will outperform on the Democrat side. And that's I think what the sec- the first round did in Brazil. It created this enthusiasm for the like, the more centrist, the more liberal, and the more left-wing part of the Brazilian society to come out and say "Okay." You know. Also, I think one narrative out there that's been floating around the Twitter sphere, manosphere, if you will- … rightosphere, if you will, is this whole you know there's a right-wing nationalist revival in the world. All right. You know, Espriella- Well, no,

Jacob Shapiro: 19:38 I wanted to dwell on that for a second because I don't think you can actually generalize from any of these results because, you know, Lula is far, was far left. He's really not far left anymore, and the left has sort of died in Brazil. There is no real coherent ideology. He's also the incumbent. This is the fourth time he'll have won, I mean, sixth time if you count him backing Dilma. So this was not a Gen Z look for a different voice or a next generation to hand the baton off. This was, "No, let's go back to the old guy who's been doing this for a long time because Bolsonaro…" I mean, I think both parties have led Brazil down a bad fiscal path, and I think part of Bolsonaro's problem was, you know, people were looking to him, "Okay tell us what you're gonna do." And he was like, "Yeah, well, I'm not gonna cut entitlements, and I'm not gonna do anything, but don't worry. Trust me. I'm gonna fix things." And I think that wasn't the right answer. And I wonder if Lula now has a chance. It, it'll be difficult for a, you know, an old cat to change its stripes this way, but he's gonna have a Congress that is against him, and he's a pragmatist. And could he actually make the compromises necessary to fix Brazil's fiscal path? I mean, hope, hopes springs eternal here. But I just wanted to emphasize what you said, Marko- You did … because I don't think you can generalize from these results. It's, every single one of these results is different. There is obviously some kind of angst and democratic moment here happening, but it's expressing itself in very different ways when you look at these results, I think.

Marko Papic: 20:59 Well, yes, and what I meant was that people were generalizing from Milei in Argentina, from, Espriella in Colombia, and I butchered that name who by the way squeaked by.7%. You know, so you've got people on Twitter saying like, "Oh my God, you know, Argentina, Colombia, here comes Brazil into the fold of the right-wing nationalism." And it's like, all right, let's pump the brakes on that. Milei's struggling. He's got an election coming up, not looking great. Maybe not. We'll see. And people didn't vote for Milei because of his right-wing nationalism. That's not why they voted. They voted because of decades of suboptimal economic outcomes that have been painful for Argentinian citizens. In Colombia, it was whatever, you know. Again, the guy won by a hair And now here in Brazil, Bolsonaro gets absolutely clobbered in the second round, like absolutely stomped. And so I think that a lot of American commentators were just drawing from the Latin American results what they wanted to read into America. And the reality is that there is no real movement globally one way or another. People are still voting based on idiosyncratic situations in these countries. If anything, what I would say is that if there is kind of… If you wanna draw a narrative, and I wonder what you guys think, and it's, you guys are probably gonna disagree, but what I would say is that, you know, there was this moment after Trump's first election and after Brexit where everyone said, "All right. All right. Maybe not. We don't need that much populism." I remember when Biden won, you guys remember when he introduced his cabinet and it was like the cabinet of PhDs, the most highly qualified … It was this odd, idiosyncratic-

Matt Gertken: 22:50 Yeah, and just technocrats and just bureaucrats. It was really just bureaucrats, you know?

Marko Papic: 22:55 Just- But do you remember how he presented them? Normality.

Matt Gertken: 22:58 Yeah.

Marko Papic: 22:58 They were on stage, and it was like, "Here's Blinken, and here's Janet Yellen." And it's like s- you know, it's like, all right. And then what they ended up doing is they ended up bungling all of these technocrats everywhere across the world. They all messed up the COVID response massively. It was like, "Don't use masks. No, no, use masks. Well, actually, use masks a lot, but no. No, it's six feet. No, it's eight feet. No, it's 12 feet. You know what? It doesn't matter. Do whatever you want." So everybody then rejected the technocrats again, so we went back to the 2016, 2017 populism. And now if I were to say one thing, it's the pendulum is kind of swinging, you know, Orbán, Vučić, Bolsonaro. It's like, eh, you know, maybe one guy with common sense, quote-unquote, is kind of not enough. If there was one thing I would draw from all of these elections, I would maybe say that, but that's it.

Matt Gertken: 23:52 You know, okay, there's so much to say here. So first of all, people were attracted to crazy because they desperately wanted change, and when a candidate presents themself, when you've had you know, degradation of the existing parties, you need a crazy outsider to come in because they might be crazy enough to do the things that are politically suicidal in order to change the economic or social outcomes. And so people were attracted to it. Then when they find out the crazy is actually crazy and it leads to negative worse outcome, then they vote back, "Okay, let's get the technocrats back in here." So obviously the brilliant ones are the ones that act crazy and then are technocrats like Meloni, who I know you guys love. I mean, we all love Meloni but act crazy but don't be crazy. Then the other thing I was gonna say is, and I think this is a really deep one- It speaks to the fact that, that change is initiated domestically. I mean, changes in the world are happening because of groups of people and core groups of people that are evolving, and it's emanating outward from that domestic scene. And it starts maybe in the capital or maybe in the countryside, but it's emanating from the domestic economy, and then it, and it moves outward. And that's why when someone has a narrative like, "Okay, all of Latin America is shifting to the right wing," well, not really. What happened was in a series of economic malaise-type scenarios, it turned out that there was a moment of synchronicity where the opposition happened to be right wing, and so people voted right wing. But they just wanted change. And what you saw in Brazil was they are gonna get the change. The Congress did shift, so policies will shift. It's just that they were also given the choice whether they wanted to maybe put a lid on some of the unorthodoxy at the highest level. And it, and so it speaks to your point, Jacob, which is it could be… I mean, again, yeah, I don't wanna get carried away, but it could be an okay moment for Brazil because Lula does know how to moderate and position himself, and if he, if the economy is forcing him to do some sort of right-wing reform in some way, he can probably work with the Congress in order to do a little bit of it.

Matt Gertken: 26:06 It's just that it won't be, you know, obviously it's not gonna be deep and structural. It'll be more like, it'll be more like twisting the knobs a little bit here, a little bit there. But anyway, it's not the worst outcome. And so last thing, democracy is constantly used As if it's separate from populism. Democracy inherently is majoritarian, and what we're seeing is that the voters are actually more strategic, and they understand the difference between a mixed regime or a republican regime because they can say, "Check Donald Trump by voting for a Congress that will work against him," or they can check the Brazilian Congress by voting for a president that will vote, that'll work against him. So the voters actually understand that it's not a purely majoritarian democratic system. It's actually a republican system that has different branches, and you can work the branches against each other. And in that way, voters are a lot smarter than some of the commentators we hear.

Marko Papic: 27:01 No you're absolutely right, and in their infinite wisdom, the voters of Brazil have just created the conditions that underpinned the famous 2004 pension reform. Which or 2003, I think. 2003. And Lula, by the way, he's been in power since, for like so long, but in 2003, he did not have a majority. You know, to your point, Matt, that's exactly the context that we had in 2003, where you have this left-wing militant leader and a pretty centrist right-leaning Congress that then ends up… Like it was almost only Lula could have done that because the voters believed him that he would like, you know, have checks and balances on sort of the more right-leaning pro-business intentions of Congress. And so if you're looking… That's why when the market kind of fell, Brazilian market sold off so much on Lula becoming the president. It's like, but why? He's done this before. He's got the right-wing Congress, and the voters ultimately wanted these checks and balances because they maybe want reform, but in like a measured way. You know? Let's… And that's what the French voters wanted, too, when they didn't give Macron the majority in the National Assembly and so on and so on. And now as you say, as you suggest, maybe in the US as well.

Jacob Shapiro: 28:21 I think that's an important point, too, just to say, which is unless you're trading on a very short-term time horizon, especially like in the example of a Brazil or a France, there's nothing that's happening in this election that either confirms or falsifies a thesis about the long-term macro investment possibility of Brazil. Like before the first round, if you were bullish Brazil, that election result did nothing. Like it was not, it did not correlate to, oh, 30% higher return or whatever it was. And Lula's victory in the second round should not correlate to, "Oh my God, the sky is falling. Everything has to be down 30%." Like if you're bullish Brazil, you're bullish Brazil not because of whoever's president but because of bigger macro things in general. Before we start leaning into US elections, I know we have to talk about-

Matt Gertken: 28:58 If you're, if you're bullish- Oh, no. No, go ahead … wait. If you're, if you're bullish Brazil, it better just be because of commodities because even though we're giving Lula and the Congress here a little bit of a moment, it's not gonna be, it's not gonna be a policy-driven success story. It might be a policy-driven avoidance of catastrophe, but what you really need is commodities

Jacob Shapiro: 29:18 You can come-- I mean, I think you also… You're seeing a rise m-maybe. If-- I think if you're bullish Brazil, you're looking at a country that has been inherently small C conservative, especially for the wealthier landed classes, and saying actually there is a rising entrepreneurial class, and that they are going to support policies that are not just about protecting the conservative classes, but which are trying to increase you know, innovation and entrepreneurship at the bottom level, which Brazil has not really done. And I know Brazil has a mixed record, and yes, they're overspending, but, like some of that is structural. It's not like Lula has been profligate. That was a result of a macro environment that saw higher inflation and higher interest rates, and the Brazilian Central Bank reacting that way. Unemployment is relatively low. Wages are up. Like he has done-- Marko alluded to pension reform. The far left guy was the one who got pension reform across the finish line. So like there's a complicated story there in general. But yes, I think your point is exactly right. I think it's a little bit more than commodities, but I, I'm splitting hairs here. I think if you're bullish Brazil, you're not bullish or bearish Brazil because of the election result. You're bullish or bearish because you see, okay, Brazil over this five-year time horizon has relative advantages to other countries in the region or around the world that it could take advantage of

Marko Papic: 30:33 Hey one thing I wanna say, I alluded to this earlier, but just one thing just before we go to the US. And obviously we should probably talk Israel. But so the turnout in Israel was 77.7%.

Jacob Shapiro: 30:45 Yep.

Marko Papic: 30:46 So that is the highest since, 1999, I think. Um-

Jacob Shapiro: 30:54 It's been a minute, yeah.

Matt Gertken: 30:56 7%. It's a, it's a, it's a little bit worrisome that they had that big of a turnout, but they still end up with a hung Knesset. You know what I, you know what I mean? If you're an Arab voter and you finally are commit … "You know what? I'm gonna participate this time. I'm in this. We're gonna change the system," and then it ends up being screwed anyway or, you know, traffic jammed anyway, that, that can be a little bit, Anyway, concerning.

Marko Papic: 31:18 But Serbia, and then Serbia and the second round of Brazil was very high turnout too. So I just wanna say before we go into Israel, pretty good thing for democracy that turnout was high. Now, going to

Jacob Shapiro: 31:28 Israel- Yeah, although, but Brazil's also interesting 'cause the first round was not high. Yes. That was actually very low turnout. No, that's true. So it's also anytime you try to generalize, it's like, boom, like there's something that, that trips us up. But, but I think that's, but that's the point that Matt was making, right?

Marko Papic: 31:37 So clearly the first round was the lowest on record. No since 1998. 1998 was less. And then in the second round it just jumped to the highest ever. But that's, to Matt's point, people just didn't want Bolsonaro to be the president. Yeah. I think that the outcome of the first round made many Lula voters, or many people who don't like Lula but hate Bolsonaro, come out and vote. So that's why this notion that there was a, some sort of a stolen election is absolutely idiotic. All right. So Israel.

Jacob Shapiro: 32:13 Israel. Yeah. Yeah. I wanna get to what Matt said about, you know, it's f- you have a high turnout in Israel and you get to a hung Knesset type situation. I mean, this is all purely demographics. And it doesn't have to be a hung Knesset type situation or hung parliament type situation. I mean, if you're looking at the results right now, the pro Netanyahu faction does not have enough seats for a majority. The anti Netanyahu faction minus the Arab parties did not have enough seat for, does not have enough seats for a majority, and the Arab parties themselves don't have enough seats. It looks like the Arab parties are gonna get … What is the, what is the updated estimate? Is it 18 or 19? But they're gonna have the highest number of seats that they've ever had, and the turnout there was very high. But this is the thing: it's been a taboo in Israeli politics for Jewish parties to partner with Arab parties. It's only happened once before. It was that brief Naftali Bennett premiership because, you know, Netanyahu has been prime minister I forget for how many consecutive years except for that little brief window. But if what is left of the center left in Israel was able to join hands with the Arab parties, they have a majority. They could govern any time that they wanted. If Benjamin Netanyahu made common cause with one of the Arab parties or the Arab parties, or jettisoned some of his far-right wacko religious folks for some secularists and some Arabs, he could also put things together. But it, it's a demographic story. So, you know, Israel is obsessed with this notion of being the Jewish state, but it's also a democracy, and roughly 20% of the population is Arab, and we have gotten to the point now where you are not gonna be able to put together a majority government unless you work with the Arab parties. Or the center right could actually put it together if they will jettison Netanyahu. So there are some paths here, I think, for Israel to make a government that is more inclusive and that is better for governance and things like that, but either Netanyahu has to fall or the taboo on working with Arab parties has to fall. And I don't know that in October 2026, year of our Lord, that this is the election where that's gonna happen. Maybe it will, but we're probably gonna have to go through a few more rounds, I would guess, I would guess before we get to that moment. But in that sense it's really just a demographic situation, and Israel's gonna have to accommodate itself to how its demographics have changed one way or another.

Matt Gertken: 34:20 Okay, real quick, Jacob, I have a question for you. Cut to the chase on the Iran issue, because obviously there's a lot to be said about Israel and its, in the region as a whole and the relations. But is there a difference… So if you accept the logic that Israel has to be kept on a somewhat of a short leash by the United States because the US doesn't want the war to escalate excessively and spiral into a global recession, then in that case, it shouldn't really matter who the prime minister is because whether it's Netanyahu or whether it's Eisenkot, they're gonna have to sort of play ball. And I would think that Eisenkot would have to be, in fact, more conciliatory toward the rest of the world, maybe trying to patch up relations with Europe or other countries. But either way, I mean, he, he's a former military leader. I assume he's gonna be very unhappy with the outcome in Iran because President Trump's gonna have to accept all these really dissatisfying compromises. But he can't really sabotage a ceasefire because then he's just isolating Israel more. And so I guess what I'm asking is, will Netanyahu actually be more of a risk to a ceasefire in Iran, or are they both equally constrained by the fact that Israel can't afford to be completely isolated?

Jacob Shapiro: 35:41 As long as there's election uncertainty and there's a chance of another set of elections and we have to separate two, like Iran is two issues here. Number one, it is Bibi's only camp- real campaign issue, is Iran. Yeah. I mean, I'm sure, I'm sure you saw the AI video of, you know mushroom clouds over Tel Aviv and how it's time to, you know, Iran could destroy Israel. He's literally been doing this for what? Three decades? I g- I've lost count of how many years he's done- And it's been very effective. It's how he's maintained his political career, because he is the only person who can prevent the second Holocaust. So it has to be a campaign issue for him, and he has to have it up front and center because that's the thing that he uses to scare the electorate. In terms of actual practice, I don't know, maybe you guys will push back against me. I mean, I don't … Israel might have been able to drive the beginning of this process. I don't think it's in the driver's seat right now. I think it's shot its shot and it failed. And so now- Well- … it can try and cajole and pressure the United States- Yeah … into doing things, but I don't see that Israel has a whole lot more that it can do. And I would also note, I've been saying this for years now, and it is finally starting to percolate into the Israeli secur- security and political community, where they're starting to talk less about Iran and more about Turkey as the real long-term problem. And some of that language has been incendiary. Like the way that Naftali Bennett talked about it I thought was pretty irresponsible. But you're starting to hear in Israeli security circles, "Hey, Iran is not the real issue here. The real issue here is demographics, is what is gonna happen to Jordan? What is gonna happen to the peace deal with Egypt? What's going on with this alliance of Muslim powers that is all around us? And what are we gonna do when Turkey, which is much closer to us and can really affect, Israel in physical ways that the Iranians never could, what happens if that relationship breaks down and Turkey is off of NATO's leash?" So I think there's a whole host of security problems that Israel has not been dealing with because Netanyahu is obsessed completely with getting reelected and making it about Iran, and has sold both his soul and the soul of the state down the river just so he can maintain his position in office. So, I don't know if that answers your question.

Matt Gertken: 37:36 The way where I … The way, well, no, it's really good points. But the way I would take that is that Netanyahu very much could still be a provocateur or spoiler in the Iran dynamic. I mean, I think especially, like you're saying, if it goes to a second election, that means he might continue to ramp up tensions in order to capitalize on them, and in that case, there's some s- 'cause the US is gonna have its election over, right? So beginning on November 4th, President Trump can intensify strikes, at least for a period of time, and Netanyahu may also have an incentive in intensifying strikes, and so that means the war escalates. But if it's Eisenkot, you're saying, you know, he may not, he may be a little bit more reluctant to do that. He might wanna create, follow the American lead and create more space for him to operate diplomatically and take a step back and focus on the larger issues that Israel faces.

Jacob Shapiro: 38:32 Yeah. I'll just say one more thing, which is it, it's, I don't understand how Netanyahu gets a pass for October 7th. I mean, Golda Meir basically, her political career was basically over after the military intelligence failures on '73 in the 1973 war. You can lay at the feet of Netanyahu and the Netanyahu government October 7th and a lot of the security failures that led to that sort of thing, and I think you can add, you know, some of the inefficiencies in Iran, too. He has Hezbollah. He has some other things that he can sort of lay credence to. But October 7th was a huge moment in Israeli history. I think the population is still dealing with the PTSD of it, and it doesn't seem to touch Netanyahu. He's still there. He's still the head of the Likud party. He's still pushing for power, and, you know, I wouldn't bet against him at this point. He'll probably figure out a way to it. But the Teflon nature of people like Netanyahu and Trump to just kind of avoid the things that are clearly their responsibility, I, I've never been able to explain that, so.

Matt Gertken: 39:28 Well, okay, now wait, though. I, you might, there might be some details about what happened with Golda Meir, and I'm not remembering exactly, so you might wanna mention those. But I think the issue is nationalism. Nationalism is what's the driving force beneath Netanyahu and Trump and figures like them. And if a country's attacked, nationalism goes up, and so, and it's not exactly fair to blame him for the attack. I mean you know, if he knew this was going to happen and didn't lift a finger, then that's just insane, and that sounds like a conspiracy theory to me

Jacob Shapiro: 40:00 I mean, there were warnings and- There were and they didn't. They, but the system that he created was not able to respond to it, in part because he was so obsessed with Iran and with other things. I mean, Golda Meir, it was cl- you know, they had clear signals that the Egyptians were mobilizing, and they dismissed it. They said, "Ah, we don't, we think this is a feint," or, "We think this is not actually gonna be a thing." And of course, it came through. So it's a military intelligence failure. It's a fail- a failure of leadership and to respond to information that is in front of you. And it's pretty clear that, you know, Israeli security and intelligence was warning for months some- Hamas is gonna do something. They are building up to something, and that that fell on relatively deaf ears at top levels.

Matt Gertken: 40:38 I th- I think that the ability of, you know, non-state groups to conduct deceptive and surprise attacks is always going to exist. And, you know, and it might be a little retrospective to say that they could have stopped it. I'm sure there were warnings. I'm sure there were l- but there was a mountain of warnings and alerts having to do with all kinds of things and risks and, you know, hindsight's 20/20.

Jacob Shapiro: 41:05 Yeah.

Matt Gertken: 41:05 Yeah. anyway, I, anyway, I don't know, but what I would take from this conversation is you clearly delineated that Israel has a whole range of strategic issues other than Iran. They've been myopic by, in some way, or, you know, they've had blinders in some way focused on the… And maybe it was appropriate if they were focused on the nuclear program, but now that that's been dismantled largely, they're going to have to pivot and reconstruct their international standing in some way and also address those regional issues. And it means that you need this change, you need Eisenkot to come in if you're going to start addressing those. Otherwise, you might be stuck in this gear that you're referring to, where Netanyahu just continues to prosecute a one-track foreign policy.

Jacob Shapiro: 41:50 Well, and just the last thing I would say about it, I mean, people have been warning about this for years, and there are permutations where you don't have to get to this point quite yet. But the very simple question is, like Israel's been having its cake and eating it, too. It's been a Jewish democratic state. We are at the point demographically where I am not sure that it can be both at the same time. It cannot be completely Jewish and completely democratic, and so the electorate has a decision to make, and the politicians have a decision to make. Do they work with the Arab parties? Do they normalize their participation in political life and in political discourse? Or is the Jewish component more important? And if the Jewish component is more important, then it's gonna be center-right frothing-at-the-mouth governments from here on in. And if it's not, then maybe you have a rebirth of, you know, multiethnic, multireligious democracy in the heart of the Middle East. Wouldn't that be a nice dream?

Matt Gertken: 42:39 It, you know, it, the way that you get that transition happening is a minority government under Eisenkot with Arab support for, you know, n- like they're not part of the government, but they're supporting on key votes for supply, et cetera, and then you can basically have this minority lead. That would be part of the transition you're talking about. But is there a way for Netanyahu to form a government prior to that? 'Cause I assume he gets first choice.

Jacob Shapiro: 43:06 I mean-

Matt Gertken: 43:07 Doesn't look like it he, he's a political magician, but it's hard to find the math for him to do that.

Jacob Shapiro: 43:12 Prob-

Matt Gertken: 43:12 See, that's … Yeah, it's hard to find the math, and I just have to say, he is a political magician, but it's also the end of the road strategically. Like you, you've just pointed out that he's focused on Iran all this time, but the nuclear program has been hit. The Americans demonstrated they're willing to hit the nuclear program. So now there may not be a need for Netanyahu. The Israeli state may not need him anymore because a key objective has been achieved. The Americans are telling him he can't escalate any further, like if he wants regime change, and so that may be the end of the road for him.

Jacob Shapiro: 43:42 Yeah. Marko, anything you want to say about Israel before we move into the US?

Matt Gertken: 43:48 You're suspiciously quiet

Jacob Shapiro: 43:49 Yeah, you are suspiciously quiet.

Marko Papic: 43:51 Well, I just think that it's fascinating what's happening in Israel, you know. The whole country is just very, very militantly right wing. And I think part of that is that it's high on its own supply. I think this is a great example of how American power, when it envelops a country, it creates almost geopolitical QE. It distorts signals and constraints. It makes a country start believing that it's a regional hegemon or, you know, global hegemon even, as Benjamin Netanyahu has liked to talk about. So you've got 6% of the public that voted for Yair Golan's Democrats, which is the old Labor Party, basically. 6%. Six.

Jacob Shapiro: 44:36 Pour one out. Pour one out.

Marko Papic: 44:38 Yeah. I'm so sorry. Pour one out for… But then you've got… So 10% of the electorate just voted for Haredi parties. God bless them, you know. Shout out to them, yo. That's fine. That's fine. It's always there, but, you know, 10% basically is just focused on medieval issues, I'm gonna say. Then you've got, what, 14% that voted for Arab parties or something like that. Maybe more. 15%, let's say. No, 14. And then pretty much everyone else is like… Oh, no, sorry, and then you have 10% that voted for you know I don't know how you would ex- describe Ben-Gvir and Smotrich without getting into some paradoxes of history, if you know what I mean. But so 10% voted for whatever you want to call that, you know? Then you got 10% is Haredi, 15% is Arab, 5% is centrist, center left, and then everyone else is a nationalist, like Matt said. But they hate each other, you know? There's a… And they're just split into two camps based on personality, you know? Netanyahu versus the rest. I think that Israel is in for a tough five to 10 years because over the next five to 10 years, that geopolitical QE is gonna be withdrawn. And so this like sort of Israeli nationalism is gonna have to be put in some form of a box or like a room with four corners and like a door. It can't… it's been flowing on American benevolence. And I know like our Israeli listeners are gonna be super mad, and they're gonna be like, "But we've got technology and cybersecurity companies," and I'm gonna make fun of them. And it's like, look, like this is just not the world. The world that Israel has been living in is one of American benevolence. And that benevolence, I gotta tell you, and I know we're gonna now…

Marko Papic: 46:39 We've advertised this as a midterm foreca- you know, conversation with Matt. Yeah. We're about to talk about midterms.

Matt Gertken: 46:45 Working our way.

Marko Papic: 46:47 And well, I'll tell you what, there's a bunch of American states, like Michigan, whose Democratic primaries purely came down to who's taking money from AIPAC So that is like, you know, like a record scratching on an LP? That is like the thousand records and thousand LPs, like scratching in the background. And I mean, and it's not Vermont or New Hampshire or like Delaware, you know? Like no, no, it was Michigan's primary that came down to this, and there's other primaries where this became an issue. So I think that, I think that the current makeup of Israeli domestic politics is based on an aperture of potential outcomes that's not based on Israel's material constraints. Like effectively, Israel is walking right into the world where he doesn't get to do whatever he wants. And its domestic politics is not like adjusted to that, you know? And so that's why they have options to ignore the Arab vote. Well, fuck it. Who cares? We don't have to think about 20% of the population. Ignore what the rest of the world thinks of us. Yeah, screw those guys. They're all anti-Semites. Ignore potentially changes in American society. Now we've got… You know, like no, no, no. Like I think in five years, like if I had to put my money on something, I would put money on the center left, absolutely. These pendulums swing, as Matt knows, as you know, Jacob. Like 5%, s- wait, 6.4% of Israelis voted for like the kind of centrist center left. No, no, no, that's the bottom. Guys, believe me. Oh,

Jacob Shapiro: 48:29 I hope you're right, but I think this is not a pendulum and it's a demographic issue. I think there's, the humans that you're talking about are not there anymore, and they've been replaced by people who will go for these other shades of parties. But maybe this is the way oh, and the last thing on this is one of the ways in which Netanyahu is similar to Trump, because at the core of what they say, like 70% of it is asinine and insane and unhinged, but 30% is deeply true and profound. And Netanyahu on the campaign trail was saying what you were saying, Marko, which is, "Hey, American support's not gonna be here forever." And some of his critics were like, "Well, yes, and you created that situation because of all the crazy things you did." It doesn't matter if he created it or not. He is saying what you're saying out loud, which is, "America's not gonna be here for us forever. We got to make some facts on the ground right now and figure out how to prepare for a non-US backed world." And in some sense he's the… I mean, others have talked about that, but I thought he was fairly perceptive in being out in front of that. But let's now dive into midterms and m- Well, well- Unless anybody else wants to close here- No, no … because I know we got to get to it. I,

Matt Gertken: 49:22 I have to say just one last thing though, because I think it's important, is what you just said is key, but that, what that means is that, that if he drives any further… Like imagine a situation where the American president has to try to backpedal out of the war in Iran, and he's trying to manage the situation so it doesn't lead to a larger global economic shock, and Netanyahu essentially remains aggressive and escalates the situation. Your point is by, if Netanyahu himself has recognized that the Americans are not gonna be there to support him, then he really can't do that, and that's, that supports the view that this war can actually be sort of managed over the next year or two, even if he stays in power. I mean, it, j- I'm just saying, like to me it's really important whether you take the view that he's going to go out in a blaze of glory by escalating. You know, 'cause you could take his ideology and you could say, "Well look, the Americans have a blockade right here, right now. We should just go for the jugular, escalate the whole conflict, and basically force the Americans into a regime change environment." And it would be suicidal like, from their own interest as a nation, but it's what Bibi's been driving towards. And Trump is now lo- he would be locked into it if it happened. So I guess that's what we have to keep us up at night.

Marko Papic: 50:41 What's interesting is that the far right parties got one less seat. That was interesting to me. Just by the way, there was a lot of talk about Ben-Gvir and Smotrich getting a lot more votes. They got one less, so just I'll add that. But yeah, let's go to the US. So basically three elections with extraordinary turnout. For all, for those of you who don't know, most polling is done by public universities, by newspapers, by some polling companies. But take the state of Maine. It's actually critical to the control of Congress and of Senate. Maine is a, you know, I would argue liberal-leaning state, but a longtime senator… My brain just stopped. Matt, help me.

Matt Gertken: 51:33 Susan Collins.

Marko Papic: 51:35 Susan Collins. She's kinda like she's very difficult to defeat. She always pulls out at the end. And- But she won't this time, though.

Matt Gertken: 51:44 But anyway, go on. Yeah.

Marko Papic: 51:46 No, I just wanna say, I just wanna set up the conversation about- Yeah … midterms by just stating that where do you think polls come from, you know? "Where do polls come from, Daddy? Tell me where polls come from." Well, I'll tell you the birds and bees of polls. Basically, m- a vast majority of them come from, you know, non-profit seeking, like universities. They try their best, and they genuinely do a very good job by picking people and asking them who they wanna vote for. The problem is once you get that, you need to assign a coefficient for the turnout, and that's where you don't, you don't have any data on that. You have to rely on historical modeling, and that's where, you know, Matt, you… You know I'll let you, I'll give you the floor, but look, the enthusiasm gap here is huge, and I think if the polls end up being wrong, it will be because we have underestimated the turnout in this midterm in favor of the Democrats. So, I think the polls will be wrong, and I think there will be a big wave for the Democrats in all sorts of states. So what do you, what do you think, Matt, on that one?

Matt Gertken: 52:54 Yeah. I think they're gonna, I think they're gonna win, and it's gonna be pretty big. I d- And of course I don't really know whether Susan Collins can hang on or not. if any senator can hang on, it's a four-term moderate who won't touch Trump with a 10-foot pole. You know I get that. But I, the only reason I say it, though, is because if you look at this last week, the momentum has broken for several Republican races. So Paxton dipping down in Texas Collins dipping down in Maine, and then Rogers dipping down in Michigan, and then meanwhile the polling is holding up for the Re- for the Democrats. And when you're in the final stretch, that c- it, it's not always the perfect reading, but that can be a real death knell to see them lose momentum in that way. So anyway, look, the disapproval level, the disapproval of the president- Is it levels seen during the g- the global financial crisis, you know, 2008 or 2006, you know, when Iraq was going bad? You- these are levels that we saw with Nixon in Vietnam. This is a 65% disapproval rating. Trump is now polling worse than Biden on the question of inflation, even though inflation was 8%, you know? Approval for Congress always terrible, right? It's always around 20% or something, but it fell 10, 15 percentage points since the one big beautiful bill was passed. Congress had actually been… Interesting fact, the approval of the US Congress had gradually been recovering over the 2010s, and it got up to about a 35% approval of Congress, which was a great number in modern times. And once the one big beautiful bill passed, it's now been going down, and it's back to 25% or lower, implying that it didn't really thrill people that they, that these tax cuts happened, and then they meanwhile were dealing with sticky inflation. So and it's all very clear that it was the Iran war that, that tipped all this and the rise in the gasoline prices.

Matt Gertken: 54:58 So it just seems to me extremely hard for you to be wrong in what you said, Marko, about enthusiasm. It's a, it, it's a disapproval that is going to blow like a wind, you know? But the unemployment is low, and so it may not be as gigantic as some cases we've seen in history. Let me- So, so in other words one big exception to what I'm saying is now Alaska, this scandal, which I'm sure we can talk about, but also Ohio. Interestingly, even though Sherrod Brown is up, he is leading the race, the momentum for him actually stalled, and the momentum for the Republican, Husted, is holding up. So there are some tricky issues here, but I still think Democrats are gonna pull it off.

Marko Papic: 55:43 So let me… I wanna do some, a quick fire game with you. Okay. Both. I mean, Jacob, you can participate in this as well.

Jacob Shapiro: 55:51 I j- I just wanna say one thing. You can tell the Republicans are worried because Donald Trump was on the campaign trail in Mississippi.

Matt Gertken: 55:58 Oh, yeah.

Jacob Shapiro: 55:58 If the Republicans are worried about Mississippi- Yeah. Let's talk about- … like, they are internally seeing data that looks really bad Well, and South Carolina's on the list now.

Matt Gertken: 56:04 Kansas is on the- Yeah … I mean, the, the- It's crazy … the battlegrounds alone, the shift of the battlegrounds tell you what ha- So- has happened, and that's what Marko's… Yeah.

Marko Papic: 56:14 This is where I wanna go. I wanna go to this Real Clear Politics, realclearpolitics.com has this list of battleground Senate states. It does not include South Carolina, by the way, gentlemen, but that's the joke. So I want both of you to just give me quick fire predictions. All right? So I'm gonna tell you what is the list of states on realclearpolitics.com and who is currently leading in the polls. So I'm gonna start with Texas. Ted Cruz up 2.1%. Go. Yeah, he'll win. Who will call… He'll win. Jacob?

Matt Gertken: 56:46 I think he can do it.

Jacob Shapiro: 56:48 I don't know. I, f- I feel like Texas has flirted, but I, I'm gonna s- I'll take the other side of Matt on this, but I don't feel confident about it

Marko Papic: 56:55 Oh, Texas. All right, I'll be the tiebreaker. I'm gonna say Texas. Okay, Iowa. All right, this is fascinating.

Matt Gertken: 57:00 Wait, you're gonna say Tall Rico, or are you gonna

Jacob Shapiro: 57:02 Yeah.

Marko Papic: 57:02 No, I'm going with Matt.

Jacob Shapiro: 57:03 You said I'm gonna say Texas Yeah. Which is the greatest, way to-

Matt Gertken: 57:06 Texas is gonna win the Texas Senate race. Texas forever. I like guarantee- Texas memories for the night, guys … I guarantee you the next senator of Texas will be Texan, or at least representing Texas.

Marko Papic: 57:16 Hell yeah. Hell yeah. No, all right. Iowa. Iowa, fascinating story. Cancer rates are rising, lots of angst towards corporate. Iowa right now, Polymarket has them going Republican. Hinson is up, but by a hair, 0.5%, which is irrelevant. So, Matt, Iowa.

Matt Gertken: 57:37 That's a tough one. I would say Republican.

Marko Papic: 57:41 Jacob?

Jacob Shapiro: 57:42 You know, I'm out there in the ag world quite a lot, and people are not happy, so I don't know if it's enough, but that's the sort of one where I think there might be enough disillusionment to push it to the Dems. I'll take a- Yeah, it w- … I'll take a flyer on the Dems there.

Matt Gertken: 57:57 And I can be persuaded on that. I'll… It, it's a tough call on this, in this round.

Marko Papic: 58:01 I'm gonna go with Democrats, 'cause my whole thing is we cannot forecast turnout, and I think Democrats are absolutely rabid. All right, Maine. Jackson's up 1.4%, so it's interesting, Matt, you had high conviction for Jackson winning.

Matt Gertken: 58:16 Yeah.

Marko Papic: 58:16 Yeah. Polymarket agrees with you, 62% Dems. Jacob, do you think Susan Collins survives or Jackson takes?

Jacob Shapiro: 58:25 No, I think Susan Collins is done. And I would also just say you're right about the rabid Democrats, but, you know, the point about Iowa and in some of these other places is just how disillusioned are Trump voters with Trump. And that's not … They're not gonna go out and vote for the Democrat, but if they stay home, you know, then that … You … If you get- Especially farmers now … rabid Democrats with Republicans who are just depressed, like that, that's the combination you need for the wave.

Marko Papic: 58:48 And you have a great pulse of that community. I know you work a lot. You go out, you speak to farmers and, yeah, I mean, it's … This is even Republican-leaning, Republican card-carrying farmers voting for Republicans. All right. Alaska. All right. So this is interesting. So Peltola is up still 1.2%, but there is this New York Times story that came out saying that her campaign did recruit the Republican with the same name as the Republican incumbent. So Matt?

Matt Gertken: 59:20 Yeah, so in … I actually think that this will be a deal breaker for her. I think it is a real scandal, and a lot of people who were … Let's say you're in a Republican state, deep Republican state, and you have all these moderate Republicans who were really dissatisfied with the direction of the country and they were willing to give her a try. But now they just found out that she, that her campaign was literally deliberately recruiting a doppelganger to sabotage her opponent. I mean, it's, it, it's a real scandal. It's not a fake scandal. So I think Republicans might end up taking it.

Marko Papic: 59:54 So you go with Sullivan. Jacob?

Jacob Shapiro: 59:56 I go with the Republicans on this one.

Marko Papic: 59:59 All right. All right. Well, fine I'll take the other side just because why not? It's Alaska. Come on, everything is fine in Alaska. All right. Michigan, El-Sayed up 3.2%. Polymarket's giving him 72% against Mike Rogers. Matt?

Matt Gertken: 01:00:15 Yeah. Yeah, I think he'll get it.

Marko Papic: 01:00:17 Jacob?

Jacob Shapiro: 01:00:18 Yeah, I, I'm with Matt on this one.

Marko Papic: 01:00:21 All right. Same, Ohio-

Matt Gertken: 01:00:22 The thing is, the thing… He, he's got a lot- Okay, go ahead … he has a very credible background as a policy maker and a leader in his ability to speak and everything. So he has the air of a successful politician and successful leader, and that, that, and that is actually really helping him here. But they would, he, they would be a lot… Democrats would be a lot better off if they had nominated a center-left conventional candidate. But given that they went with a farther left and practicing Muslim, they could be in hot water. But, and yet he's the type that can pull it off because he's a medical doctor and he's just very, very able to articulate-

Jacob Shapiro: 01:00:56 Well, and also is there a state in the Union that has suffered more from the top-down policies of this administration than Michigan when you take into account the Canada trade war, and the tariffs, and everything else, like the rising fuel costs? Michigan is in competition for the state that has it the worst from all of the Trump administration policy. Yeah. So bad that somebody like Sayed is realistically capable of taking this election.

Marko Papic: 01:01:18 So- Yeah … a lot of Sayed praise here. Let's put a pin on that and come back to it at the end. So,

Jacob Shapiro: 01:01:24 Oh, d- just because… That was not praise from me. I was just saying the macro context is such that someone like Sayed-

Marko Papic: 01:01:28 No, no, I'm not …

Jacob Shapiro: 01:01:29 Is realistic. No, no, no, it's fine.

Marko Papic: 01:01:29 Every- that's crazy. No, it's okay. It's okay, it's okay. I'm not judging. I'm not judging. I wanna come back to it, though. Ohio, Matt?

Matt Gertken: 01:01:37 Yeah, I think Democrats will get Ohio, but I do think it's the one to really watch here. It could be that- Sure … this could be the rock that the ship breaks on. It, I, again, I think Democrats are gonna win the Senate, but it, they really need Ohio. And I'm surprised that the polls are showing Brown flagging here at the end. And I'm… And what I'm gonna take that as is just a false signal, that he's sort of flagging at the end, but he is up overall in the national tide. It's gonna propel him over.

Marko Papic: 01:02:07 Jacob?

Jacob Shapiro: 01:02:09 I'm sure you guys have heard about this. I mean, this is not in the Senate race, but in the governor race, this ad against, Amy Acton that was put out by the Ramaswamy campaign and how controversial and kind of gross it's been, which seems to be, you know, surging support for Democrats. So I think that might actually be part of the story here, and that, that that'll help the Democrats get across the finish line in Ohio.

Marko Papic: 01:02:31 You mean the ad where, Ramaswamy recruited her mom, who-

Jacob Shapiro: 01:02:37 Yeah, her mom …

Marko Papic: 01:02:37 Basically deported-

Jacob Shapiro: 01:02:39 Yeah the man who raped the Democratic governor-al cabinet at 12 years old?

Marko Papic: 01:02:39 That r- Yes … you're talking about that ad. That, that's the ad. Okay, good. Okay, let's move on to Minnesota. Minnesota, Flanagan, 5.1% up. Matt?

Matt Gertken: 01:02:55 No, you just, you thought that all needed to be articulated.

Marko Papic: 01:02:58 I did. I thought that needed to be articulated. I just want to- And then, and then, and then quickly run away from, like you could not have been wrong, but-

Jacob Shapiro: 01:03:01 Pardon me, I'm just stating facts, Jacob.

Marko Papic: 01:03:04 These are just facts.

Jacob Shapiro: 01:03:07 I understand, but not all of us are bathing in that aloof hand cream that you're talking about right there. My goodness.

Marko Papic: 01:03:14 All right. So Minnesota, a fla- I mean, I think you guys both probably go with Minnesota. I mean, there was a little bit of a wobble there.

Matt Gertken: 01:03:19 Yeah, there was a wobble, but it's a lockdown now. I, the Republican- Is it? The, in the polls, the Republicans are just crashing.

Marko Papic: 01:03:26 Interesting. Well that's that point that you're making, Matt, which is like the, like last couple of weeks are not the… I mean, okay, so let's go. Home co- home state of Kansas, that's the next on the RealClearPolitics.com list. Matt Hamilton, I think this is the Baptist preacher, right?

Matt Gertken: 01:03:46 Well, he's a Methodist preacher. Method- sorry. He was President Obama's chaplain in some form. So, so in both Texas and Kansas, an Evangelical Democrat is creating a competitive environment, so the Bible Belt is in play, and that's an interesting development. And Democrats did lay seeds for this many years ago. Many years ago they started the narrative sort of lurking in, at least Evangelical Christian corners that, that the policies, whether it was Bush invading Iraq or not being, or, you know, kicking people out of their homes during the financial crisis, or whether it was Trump and his scandals and the way he treats women or invading countries, like basically that it's not Christian, you know, that Jesus wouldn't behave in these ways. So, I don't think Hamilton'll do it, though, because I think s- like I said with Iowa, I think structurally it's still gonna be conservative enough. But whereas with Iowa, I'm perfectly willing to have that debate and won't be surprised at all if the Democrat wins. In Kansas, I would be pretty amazed if Hamilton actually pulled it off. It c- it, it's, you know, it's possible, but- It's tough.

Marko Papic: 01:04:52 Jacob?

Jacob Shapiro: 01:04:52 I'm really t- I'm really torn here because Matt's gonna know this better than all of us, and yet sometimes the thing that you're closest to is the thing that you have the l- the, not the deepest read on sometimes, 'cause you have your preconditions. So, uh-

Matt Gertken: 01:05:04 Yeah, yeah, true …

Jacob Shapiro: 01:05:04 I don't know. That, that toss-up over here, I'm not sure.

Marko Papic: 01:05:10 That's a tough one for me.

Matt Gertken: 01:05:11 Look, Hamilton's a great speaker. He's a, he's a classic preacher who can get large numbers of people to follow him, so perfect for the Senate. You can talk all day. I mean, the thing is, it might work, but, you know, there's just a lot of the state that, that is that's… They're basically going to take his old co- One time he said something about how you shouldn't eat beef because it was… I don't remember the quotation, and I don't wanna get involved in the he said, she said. But just imagine running for office in Kansas saying that it's somehow, sacrilegious to eat beef. I don't know.

Marko Papic: 01:05:52 All right. So the next three are pretty easy. First of all, New Hampshire, not close at all. Papas versus former, I think, Governor Sununu. That should be concerning for Republicans that they're not even close there. I'm not even gonna ask you guys who's gonna win this. Florida, for some reason, made it to this RealClearPolitics election list. It shouldn't be 'cause Republicans are gonna win. And Georgia, I'm not gonna ask you guys at all, 'cause Ossoff is absolutely- Yeah … crushing Georgia. Yeah.

Jacob Shapiro: 01:06:20 Well, he's, he, he's my dark horse for the next US president. I think he's laying the groundwork.

Marko Papic: 01:06:25 Yeah. That's a, that's a really good pick. But- Yeah what's interesting about, He's great. So, sorry to just like what's nestled between North Carolina and Georgia, which are not swing states at all anymore, they're just fully now Democrat apparently, is South Carolina. And so I am gonna ask you guys about this because the latest polls… And by the way, South Carolina did not make the RealClearPolitics list of swing states, but we have to talk about it because apparently this is now a neck and neck between, Lindsey Graham's sister and Andrews, Annie Andrews, who is the Democratic candidate. So I'm gonna go, and I'm just gonna say F it, you know, swing election Democrats take South Carolina, which would be a shocker. Um-

Matt Gertken: 01:07:13 I think Republicans will hold it. But we also need to start talking about the odds of Trump toppling the Iranian regime. You know it could get real wild here if you know-

Marko Papic: 01:07:23 Nero mode. Yeah, he might unlock Nero mode.

Matt Gertken: 01:07:27 Yeah.

Marko Papic: 01:07:28 All right. So I know we gotta go. Unfortunately Jacob's got a hard stop, and, … What are your guys' final thoughts on the election?

Matt Gertken: 01:07:37 So, well, I'll give it a go. We started with strongmen and authoritarians, and I think in the Western media narrative there's an ulterior motive or an underlying preoccupation which is, will Trump go, you know, in 2028? And so every election is then interpreted through the lens of strongmen come, they g- they're gonna stay forever. What we see around the world is that in many of these cases, these democracies that are less storied than the American democracy, populist leaders lose an election and they're out. And I think what it points to is, well, first of all, strength of institutions, that does matter, and I don't think Trump ha- does have the capability of staying. But also, democracy is not just like a piece of paper. It's the power of all these people, right? So if you decide that you're gonna reject what all these people say you should do, then it's you versus them. You know, they're gonna go on strikes, they're gonna go on protests, they're gonna shut down the country, they're gonna demand that they get the result that they voted for. So they, they're, you have all these entitled human beings who believe that they have a choice in who their government is, and they actually have an enormous amount of power. And then last point, the Republican system of government is so amazing. It's not the same as democracy. We vote and we change the House, we change the Senate, we change the presidency, and it constrains these leaders. And so we should stop always talking about democracies like they're these majoritarian systems that elect one leader who then becomes a dictator and can rule forever.

Jacob Shapiro: 01:09:09 Yeah, I'm gonna make the classic Jacob move and say I'm bored by this, and I've been bored by this because the outcome's been known for months. We know the Dems are gonna take the House. Whether they take the Senate or not, it's interesting, we can argue about it, but the Dems are gonna take the House. We're gonna have a divided government. Trump is gonna be stymied at the domestic level. He's gonna do weird stuff internationally probably to push things forward. It's disturbing to think that the first two years of this administration were the quiet time in foreign policy, and now things are gonna get really interesting. That bothers me. But I think we have to look through this, because the midterms are usually important because they constrain and shape the behavior of the person that is in office. The midterms have not constrained or changed or modulated the behavior of Donald Trump in office. He has done whatever he wanted to do in spite of all the pain and suffering it was going to ring down during the midterms, and we're about to get all that for the Republicans. This is really now about the next election cycle. This is about is it a center-left movement? Is there a far-left movement? Is there a Jon Ossoff who emerges and becomes the consensus candidate on the Democratic side? JD Vance and Rubio sort of positioning themselves. And honestly, until the US economy cracks, and whether that's the popping of the AI bubble or a rise in inf- unemployment or higher inflation than people expect the US economy has to crack before I think the political populist math actually begins to change, and that's not gonna happen in this midterm election. It's a wave election against an unpopular candidate who criticizes predecessors for starting wars that they couldn't wrap up in the Middle East, and now has done the exact same thing, is gonna face the exact same result. So I just think there's gonna be… it's kind of more of the same in American politics, and I'm looking through to the next election cycle and wondering, you know, what kind of factions and battle lines are gonna be drawn now, so that when the economy does get bad and we stop squabbling about who's going to what bathroom we'll actually see some of the remaking of these policies and parties in real time. So that's my take.

Marko Papic: 01:10:57 Well, we're not, we're not squabbling about that, right? I mean, that's not what this election is about. So I think we have moved on from that. And I think that the fact that the Republicans, or at least MAGA Republicans, are flailing as much as they are with the economy where it is a really bad sign for them. And I will just end on this, and don't assume me reading these comments to be me not being a nihilist. However, the US health secretary said, "There's 500 million Arabs in the world, and yet they don't produce science. They don't win Nobel Prize, and they don't win the Fields Prize. They don't win the Wolf, they don't win the Wolf Prize. They don't produce literature." President Trump has called Abdul El-Sayed a jihadist. He's actually said that he is a member of the jihadist Muslim Brotherhood. And then JD Vance has basically, you know, like toned down a little bit on that. But effectively, Mike Rogers too, basically in the debate suggested El-Sayed is a member of the Muslim Brotherhood. We've had a full out turn towards Islamophobia by the Republicans in this election, and that, I suspect, is a sign of them tilting. You know, there's this term in poker where you're so rattled by losing a bunch of hands that you start basically making illogical, irrational bets. Yeah. You're going for broke. You're hoping the river card comes in. That's what they're doing, you know? And that to me tells me, Jacob, that the '28 election is already over. Not that Democrats will win. I just know who will lose, and I don't think that JD Vance has any chance in 2028. I think he's gonna be tainted with this for a very long time, and I think Marco Rubio's last intervention, I think he was on a stage and he made a comment for 11 seconds. He was just "I don't wanna be here." I think this is gonna be, …

Marko Papic: 01:12:58 And fundamentally, the reason for this is that Americans are not Islamophobic and they're not racist. They're just not. And so this is not gonna sit well with the majority of the electorate. So I think that was a bad move by, Trump and by Mike Rogers and by everybody else who made these comments, and they're gonna get punished for it

Matt Gertken: 01:13:19 And by the way, the Iranians are gonna be back there monkeying around to make sure that it still looks like an unstable world and that the policies have failed. You know, regardless of whether there's a ceasefire or not, it's gonna look bad, and they're gonna keep doing that, and that's because they need to cultivate the same change that you're talking about on the US side. And so Trump's gonna be faced with this high level of disapproval at home, which is because of inflation, and it's not because of what you're saying, although, you know, it doesn't, it doesn't speak well of them. But also, it's gonna be a world that seems chaotic and unstable, and that's not going to make the Republicans look good.

Marko Papic: 01:13:58 I think, look, Trump made incredible moves in '24 by bringing in other parts of the American society into the MAGA coalition, and he has basically effectively now told 60% of Americans they don't belong, or 65, 70% Americans who don't have a certain background they don't belong in that coalition, and so that is the end of that coalition.

Jacob Shapiro: 01:14:22 Can I just close by telling our health secretary to stop taking B vitamins and doing pull-ups and read a book? My God. Just go read a book, man. Like… Or maybe go do some algebra. Yeah. But both of- Do something that makes you realize, like- But guys, we're trying to- … where we got Western enlightenment from. I can't, I can't.

Matt Gertken: 01:14:38 Yeah, but and I have to say, though, we're trying to wrap this thing up, but both of you have, in a way, gone down a rabbit hole because if you make it about identity, that's actually not how Democrats have been winning. And then also the health secretary, who cares? The point is that the Republicans were elected to fight inflation- Yeah and stabilize the economy, and they didn't, you know? And that's why- Yeah … they're getting involved.

Jacob Shapiro: 01:15:01 I think that's exactly right. All right, I gotta run to the airport, guys. We'll talk to you soon.

Matt Gertken: 01:15:05 Yep, good luck.