What Happens If Democrats Win the Midterms? — With Fareed Zakaria

Episode Overview

• Scott Galloway and Fareed Zakaria discuss whether the November 3, 2026 U.S. midterm elections will mark the peak of global right-wing populism, alongside the consequences of the Iran war, shifting global alliances, and Elon Musk's political influence.
• They examine how a record-high proportion of independent voters and collapsing demographic support for Donald Trump among Hispanic, Black, and young voters could turn Republican gerrymandering into an electoral liability.
• The conversation explores the economic and geopolitical fallout of the U.S. war with Iran, tariff policies, and the erosion of the post-World War II international order.
• Using a corporate governance framework, they illustrate how bullying allies pushes nations like Canada, India, and Australia to hedge against American unreliability, weakening U.S. global control.
• They conclude by analyzing the limits of technocratic hubris in governance and foreign affairs, focusing on Elon Musk's DOGE initiatives, Starlink's geopolitical entanglement in Ukraine and India, and the shifting definition of American identity.

Key Concepts

• Global Populism and the 2026 Midterm Inflection Point: In his book Age of Revolutions, Zakaria argues that right-wing populism is a reaction to 30 years of technological, economic, and cultural acceleration. While this wave remains entrenched globally, with figures like Pauline Hanson resurging as the "AfD or the Marine Le Pen of Australia," populist governance has struggled to deliver results. Zakaria notes that Britain is "without any question worse off than it was before" Brexit, and Donald Trump's policies have neither brought manufacturing back to the U.S. nor decoupled the American economy from China. Consequently, Trump's approval rating sits at 36% to 37%, which Zakaria notes makes him basically the most unpopular president in American history, rivaled only by Richard Nixon in the 6-month period around his resignation.
• Voter Malleability and the Demographic Shift: Contrary to the narrative that all Americans are locked into partisan tribes, 45% of the U.S. electorate now identifies as independent. Citing polling data, Zakaria points out that Trump's 2024 gains have reversed: he is down close to 20 points among Hispanics from 2024 levels (a shift that would be the single biggest issue if Texas goes to Talarico), his small surge among Black men has collapsed, and his surge of "maybe 10 points" among young voters has completely collapsed back to the 2008 Obama split. This mirrors rapid shifts seen abroad, such as in Brazil, where Lula lost the first presidential round but shifted 10 million votes in 3 weeks to win the second round.
• The Gerrymandering Wave Vulnerability: Because of gerrymandering, only 38 seats in the U.S. House of Representatives are competitive. However, Zakaria explains that gerrymandering can backfire in a wave election (while hedging that "we'll have to see how the results come out"). To maximize seats, Republicans split safe districts they would win by 20 points into two districts they would win comfortably by 8 to 9 points. If a D+12 Democratic wave translates locally, Republicans risk losing two seats where they previously would have won one, putting states like Kansas and South Carolina (which Galloway notes was solid Republican 3 months ago) into play.
• The Unpopular Iran War and Pocketbook Inflation: Zakaria states that the U.S. war in Iran is the first modern war to be unpopular from day one. Six months before starting the war, Trump conducted a massive bombing campaign that set back Iran's nuclear program "by months if not years, probably years... borne out by some evidence." He then initiated a war for regime change on a whim, an objective that failed within the first 3 days when it became clear the regime would survive. Now 6 months into the conflict, the war is directly tied to domestic inflation; even the Trump administration only argues that the inflation will subside once the war ends.
• The "Controlling Interest" Framework of Global Alliances: After 1945, the U.S. funded the reconstruction of defeated foes like Germany and Japan through the Marshall Plan (in the "$200 billion range" in today's terms) and established norms against brutal territorial annexations (which had seen territories like Alsace-Lorraine change hands 4 times in the prior century). Galloway and Zakaria compare this to corporate governance: by providing a security umbrella, the U.S. held a 20% stake in the global economy while exercising 60% to 70% of the voting control, much like a founder holding A-shares. By bullying allies, the U.S. is voluntarily downgrading itself to a 33% minority stakeholder as nations hedge their bets:
• Canada: After binding its economy to the U.S. under Brian Mulroney and George Bush Sr. (where auto parts cross borders 15 times) and passing NAFTA (which was Bush Sr.'s idea and passed with a majority of Republican votes alongside Bill Clinton), Canadian PM Mark Carney is now hedging against U.S. bullying by making deals with the EU, China, and India.
• India: Although 80% of Indian weaponry comes from Russia, India planned to shift to U.S. arms. After watching Trump's behavior toward India and Ukraine, Indian elites slowed that transition and placed a major order for French fighter planes this year instead. Simultaneously, Apple partnered with Tata in India to de-risk from China, scaling on India's 1.4 billion population to go from zero iPhones made in India 3 years ago to 100% of new iPhone models sold in America today.
• Australia: Under the AUKUS deal for 3 submarines, Australians are convinced Trump is delaying the process and they will never receive the vessels, leaving them having angered China for nothing.
• Technocratic Hubris in Governance and Geopolitics: Galloway and Zakaria examine the risks of billionaire technologists exercising state-like power without a deep understanding of history, politics, or statistics:
• Starlink's Geopolitical Entanglement: Galloway compares Elon Musk throttling back Starlink in Ukraine over the last few weeks to a hypothetical 1930s scenario where Charles Lindbergh buys McDonnell Douglas and turns off B-17 guidance systems mid-flight during the Blitzkrieg. In India, Musk's attempt to access its 1.4 billion people stalled while Reliance (owned by Mukesh Ambani) moved to launch low-orbit satellites via its telecom wing, Jio. When Musk tweeted "Dear Prime Minister Ambani..." to rally Indians against him, it backfired due to nationalism and Indian fears that Trump and Musk could cut off Starlink during a military skirmish with Pakistan, just as happened to Ukraine.
• Misunderstanding History and the Federal Budget: Zakaria points to Musk retweeting before-and-after photos of African places (like Johannesburg, Rhodesia, and Kenya) contrasting manicured colonial buildings before the end of apartheid with dirty modern cities, failing to grasp that those colonial cities served a privileged 5% white population supported by 95% Black servants and slaves. Similarly, Musk's DOGE claim that he would cut $2 trillion from the federal treasury via administrative cuts misunderstood that the federal government's money is in benefit checks, not the administrative staff writing them.
• Foreign Aid and the Shift in American Identity: The U.S. invented foreign aid after World War I with Herbert Hoover administering relief and institutionalized it after 1945, a legacy now undermined by the decimation of USAID. Zakaria, who immigrated to the U.S. in 1982 during Ronald Reagan's presidency, contrasts Reagan's final speech (affirming that anyone from anywhere can become an American) with Vice President JD Vance's claim that people who arrived a generation ago are not as American as families who arrived 8 generations ago.

Quotes

• At 4:05 - "So 45% of the American electorate is now independents, highest number ever. And the most interesting new data is around exactly what you said, the sort of malleability of voters." - Fareed Zakaria explaining why American voters are not as permanently dug into tribal positions as commonly believed.
• At 6:51 - "Because of gerrymandering, there are only 38 competitive seats in the House of Representatives. It is quite possible that the Supreme Soviet, the legislature of the Soviet communist system, had a higher turnover in its legislature than the House of Representatives currently has in among itself." - Fareed Zakaria illustrating the extreme rigidity of current U.S. congressional districts prior to a potential wave election.
• At 13:36 - "The Iran war is the most unpopular war in American history. It is the first war in the really in the modern era that has been unpopular from day one." - Fareed Zakaria contrasting the current conflict in Iran with the Korean, Vietnam, and Iraq wars, which were all popular when they began.
• At 18:30 - "What he's describing—strength, power, resourcefulness, might—Genghis Khan had all of that. The Russian Empire had all of that. The Germans had all of that. What was distinctive, as you say, about America was actually, and the West more generally, what sets the West apart from other civilizations is the Enlightenment, is the idea that all human beings have equal rights." - Fareed Zakaria critiquing the reduction of Western and American identity to raw power rather than Enlightenment values.
• At 23:47 - "For 50 years, the second and third richest countries in the world, Germany and Japan, said, 'We don't need to have, you know, major defenses. You take care of us. We are basically subcontracting our national security policy to you, the number one country.'" - Fareed Zakaria explaining the immense geopolitical return on investment the U.S. received from the post-1945 international order.
• At 28:35 - "Three years ago, zero iPhones were made in India. Today, every new iPhone in America is made in India. 25% of all smartphones are made in India." - Fareed Zakaria highlighting the speed of Apple and Tata's manufacturing pivot away from China.
• At 36:59 - "And I realize this is an incendiary statement, but I'll make it and I believe it: I think Elon Musk is a traitor to the West." - Scott Galloway reacting to Elon Musk throttling back Starlink access in Ukraine.
• At 40:10 - "The federal government is basically an insurance company with an army. If you're going to reduce costs in the federal government, it's not by taking out people at the Social Security Administration, it's by cutting people's Social Security checks." - Fareed Zakaria explaining why Elon Musk's DOGE pledge to cut $2 trillion through administrative staff reductions was mathematically flawed.

Takeaways

• Anchor political messaging in the center and connect corruption to kitchen-table costs: Because polling data shows a majority of Democrats want the party in the center rather than the far left, candidates should avoid over-interpreting an anti-incumbent wave as a mandate for far-left policies. Instead, emulate strategies like Jon Ossoff's by directly linking executive cronyism and family corruption (making billions) to the everyday grocery affordability crisis, and wait for visible evidence of executive abuse (such as ICE agents firing on and arresting people with dubious explanations) to make institutional critiques resonate with voters.
• Replace complex, exemption-ridden tariffs with a flat import consumption tax: Because the U.S. Treasury is now addicted to tariff revenue and the current system has ballooned to what Zakaria notes he read is around 7,000 different tariff rates riddled with exemptions and corruption, future policymakers should regularize trade policy into a flat 5% to 7% consumption tax on all imported goods to eliminate graft and lower prices for American consumers.
• Evaluate federal budget reform through transfer payments rather than administrative headcount: When analyzing or proposing government spending cuts, recognize that federal expenditure is concentrated in military defense and entitlement payouts like Social Security checks, meaning meaningful deficit reduction requires addressing benefit structures and defense spending rather than simply firing civil servants.
• De-risk critical national infrastructure from single-source foreign and private dependencies: Just as Apple rapidly diversified its supply chain into India and nations like India and Canada are hedging against U.S. and private tech unpredictability in defense and satellite communications, leaders in business and government must audit their supply chains and defense dependencies to ensure no single foreign administration or private billionaire can unilaterally throttle their operations.