Independents foiled Trump's hostile takeover of the GOP
Summary in the beginning:
Donald Trump thinks in terms of business tactics which is why he tried a “hostile takeover” move to win control over the GOP (Republican Party) so he could force loyalty and run unopposed for his bid to re-election in 2024. However, the unfolding midterm results are showing that Independents used a “poison pill” to foil his hostile takeover plan. (whew… those are a lot of analogies to unwind)
Hostile Takeover
A “hostile takeover” is business talk for “I want your company, and I will get it without your permission”. Therefore, the company that does *not* want the takeover is called “the target”. Just recently, Elon Musk pulled a hostile takeover of sorts, when he bought Twitter (“the target”). Musk offered a price that the Twitter board of directors could not reject by law. We witnessed the hostility that Twitter employees had for Musk when he became the CEO. Elon Musk can fire those hostile employees and try to replace them with people who actually want to work at Twitter for him.
There are certain strategies that businesses can take to try and prevent a hostile takeover. One of those strategies is known as the “poison pill”1. Let’s use Twitter as an example to explain this better.
Action - Twitter (the target) would activate a poison pill by allowing their current shareholders the right to buy more Twitter shares at a discount price.
Result - This would dilute Elon Musk’s interest as the new owner and prevents Musk from gaining too much control through stock ownership.
The poison pill prevents the hostile party from dominating the company and the agenda.
Trump’s Hostile Takeover Bid
I don’t think it will be hard for me to convince anyone reading this that Trump is the “hostile party” trying to do a hostile takeover with the target being the GOP. Trump’s takeover is the quest to be the heir apparent to run for re-election. One way to try and knock out the other possible contenders was to demonstrate that those who follow his agenda will win. Another way to look at it is that winning on Trump’s agenda demonstrates that is really what the people want.
It should not be surprising that someone who spent his entire life in business would see any institution as a business. That was Trump’s appeal to many Americans. I talked to many people who were small business owners and loved Donald Trump. They could identify with him because their own lives revolve around running a business, AND they believed politicians were running the government inefficiently or at least being reckless with spending.
US Constitution makes the citizen the real boss
However, our Constitution sets up an institution (federal government) that cannot be run like a business and this is where Trump’s theory of life (everything is a business) leads him astray. Businesses do not represent consumers (the recent fall of FTX is the best example of this). Therefore, business decisions are best made when based on supply and demand, generally.
In contrast, the Constitution creates a Congress (House of Representatives + Senators) that does represent their constituents. Therefore, political decisions are best made when based on what their voters want, generally. Those members of Congress that vote according to their own will might not survive a re-election. As a result, members of Congress are more like independent contractors who all have different bosses from each other. There are 435 different bosses in the House of Representatives and 35 different bosses2 in the Senate. If they want to keep their job, they have to get the approval of their voters.
US Constitution makes the US President the boss of the Executive Branch
This setup does not allow for a US President to run the ruling political party, like employees in a business. The Constitution does allow the US President to run the Executive branch like a CEO of a business. When Trump did try to do that by firing insubordinate people, this is where the mainstream media led the country astray in believing Trump could not do this. The President could fire anyone for any reason, but we have become very weird if this actually happens believing there is something corrupt going on. One example of this is when Trump justly fired James Comey as the director of the FBI, which became a pretext for his first impeachment trial. But, that is a topic for a different newsletter.
Needless to say, you can see from the organizational chart below how much the Executive branch has in its’ purview and how frustrated Trump was that he could do little about it.
In sum, you cannot takeover an organization that is not really one unified group. The US President will have influence over Congress, but the voters in the hundreds of different districts across the country ultimately are the boss. And… these bosses do not think in tandem or in a hive. Therefore, what is conservative to upstate New York is liberal to south Alabama. There is not one formula or one message to rule them all.
Independents activate poison pill to Trumps’ hostile takeover
Trump tried to activate his hostile takeover through at least 2 methods -
Targeting 10 Republicans in the House of Representative who voted to impeach him for the January 6th Capitol riot.
Backing candidates who were trailblazers (untested) and supported his agenda.
In both situations, Trump’s candidates did not do very well overall. As I examined each of those flipped districts and senate seats, I found 2 common themes.
Voters in those districts really did want their House Representatives to vote to impeach Donald Trump the second time.
and/or…
Voters (specifically Independents) did not want an untested candidate, especially one that sounded like Donald Trump.
There are 2 exceptions where a Trump pick did win, but it actually still follows my theory about the voters being the main boss that matters.
Exception #1 - Ohio - J.D. Vance (R) Senate win
His pick for the Senator of Ohio with J.D. Vance is an exception which I wrote about in my previous newsletter. The fact that it was an “open seat” really helped Vance have the advantage in what is now a “red state”.
Exception #2 - Wyoming - Liz Cheney (R) primary loss
Liz Cheney in Wyoming might seem like an outlier because she lost her primary, but her Republican challenger easily won the general election. Some might argue that Wyoming is deep red and anyone who would have run as a Republican would have won. That is true, but the huge loss Cheney sustained in her primary was truly unprecedented for an incumbent. Cheney lost to attorney Harriet Hageman by almost 40 points.
The mainstream media wanted to make this loss about Trump’s impeachment and January 6th hearings. It is true that the people of Wyoming support Donald Trump, AND… it is also true that the people of Wyoming really really care about local issues.
In reality, Hageman ran a race centered around Wyoming issues. I looked at her tv ads she ran during the race while going around Wyoming talking about the issues while Cheney lived in Virginia. Hageman easily portrayed Liz Cheney as an outsider who was out of touch with Wyoming life and issues. Therefore, Cheney was not representing her district with her pursuit of impeaching Donald Trump. Regardless if Liz Cheney thought her voters were wrong in their priorities, the voters are the boss, and the boss fired Cheney.
Independents turned Trump’s picks into Democrat flips
The unfolding midterm outcome has been the swing in the Independent vote. What makes this so perplexing is the fact that the GOP did very well in getting their voters out to vote. So well, that in the House of Representatives Republicans are beating Democrats in the popular vote by almost 5% points.
However, Republicans will probably have one of the slimmest majorities in the House in history. How is this possible?
The above tweet with a Wall Street Journal (WSJ) article provides some answers -
In a typical midterm, those voters [independents] should be inclined to swing against the party in power, especially given inflation and President Biden’s low job approval. This year they didn’t.
To political junkies surprise, “independents favored Democrats by four points.” This only matters depending on where those independent voters live throughout the United States. Independent voters tended to be where Trump tried to do a hostile takeover, like Arizona and Pennsylvania. Using Arizona as an example from the WSJ article -
40% of Senate voters = identified as Independent
55% of Independents voted = Democrat Mark Kelly
39% of Independents voted = Republican Blake Masters
Mark Kelly (D) won 51% to Blake Masters (R) 46%
You really cannot overcome that huge gap with independents unless you are a very popular and trusted politician like Doug Ducey. Ducey is outgoing Arizona governor who is very popular and could have easily won that senate seat. However, he did not want to run and many speculate it is because he did not want to deal with Trump’s hostile takeover. Ducey signed the certified results of the 2020 Arizona election despite receiving a lot of downward pressure from Trump. Unfortunately, for the GOP, Trump prevented a seasoned candidate who had the backing of the voters (especially independents) in his state.
To add fuel to this fire, Trump’s pick for Arizona governor just lost the race as it was called for Democrat, Katie Hobbs.
Why did Independents break for Democrats?
Again, I think the WSJ article says it best with these 3 takeaways -
#1 - “The message couldn’t be clearer. Independent voters in swing states may be unhappy with the direction of the country, but they didn’t trust the GOP enough to give them power.”
#2 - “Abortion seems to have been one factor that cut against the GOP this year, and the pro-life party will have to adjust its policy and message for 2024.”
#3 - “Mr. Trump’s hand-picked candidates who supported the stolen 2020 election line to win his endorsement also appear to have driven away swing voters.”
Trump’s Hostile Takeover part deux??
Tonight, Trump is supposed to be making a big announcement. Ever since the January 6th Capitol Riot, social media and mainstream media has virtually cut off any type of Trump coverage, with the exception of scandals. It is interesting to see that C-SPAN will covering this event.
I have no idea if he will announce a 2024 presidential run tonight. It does seem clear that he wants to make a comeback. I am not sure there is anything he could possibly do to win the Presidency if he does win the Republican nomination because of how much Independents really really dislike him. In my opinion, Trump has become to the Republican Party what Hillary Clinton is to the Democratic Party = toxic.
If Republicans want to be in a position that they are “so sick of winning all the time”, they should heed this advice from the WSJ editorial board -
In today’s closely divided politics, some partisans think all you need to do is drive your own base supporters to the polls. That’s important but not sufficient. If Republicans want to keep losing elections, they’ll keep nominating candidates who turn off swing voters.
Sincerely,
Me
Twitter did activate a poison pill once Musk announced his offer to buy Twitter. At the time of Musk’s bid, Musk owned more than 9% stock ownership of Twitter. Twitter wanted to prevent Musk from gaining too much ownership so Twitter’s poison pill said that “if any single entity or person acquires a company stake of 15% of more, all other shareholders will be able to acquire additional shares for half their market price, or alternatively the company could simply distribute an extra share for each one already owned”.
There are 50 states and each state gets 2 Senators for a total of 100 Senators. However, these Senators are up for re-election every 6 years and the Senate staggers their elections so that the Senators are not all up for re-election at the same time. Therefore, there were 35 Senate seats up for re-election this year.