After the Midterms: The Politics of Affordability

Sanjeev Krishnan: All right, welcome to a special edition, off-cycle broadcast of the S2G podcast. It’s really great to have my colleague Grant Leslie join us, and then our guest, Carlos Odio. Thank you, Carlos, for joining on such short notice. I’m sure you’ve slept a lot this week.

Carlos Odio: There’s so much to talk about. It’s exciting.

Sanjeev Krishnan: Maybe just before getting into it, I was going to ask two questions to both of you: What happened, and what happens next? But before that, maybe, Carlos, a bit about who you are and a bit about yourself, and then we can hopefully get into what happened.

Carlos Odio: Sure. Well, first of all, thanks for having me. Yes, this all came together very last minute, but in some ways it makes it more exciting, because who knows what we’re going to say. There…

Sanjeev Krishnan: Yeah.

Carlos Odio: …was no time to prepare, so it’s a little more spontaneous. So, Carlos Odio. I’m a co-founder of Equis Research. We are focused on Latino voters, on understanding and engaging Latino voters, filling in gaps in that ecosystem. As I like to say, I do care about the rest of the electorate as well.

Frankly, I believe that understanding the more dynamic parts of the American populace helps us understand the overall picture a lot better. So we are research focused, but it is about research-driven insights to help everybody better operationalize how to integrate elements of the American electorate that maybe they normally don’t think about, right? We have to update for a very fast-changing American electorate.

I worked in the White House for a couple of years in the political shop. I’ve been in the donor advisor space, with a special focus on Florida, and I run the day-to-day on the research side. So we’ve been deep in analyzing what happened on Tuesday night.

Sanjeev Krishnan: So what happened?

Carlos Odio: Well, I think we’re all processing it for a few reasons. One is just the scale of it, right? Even the more optimistic predictions. I had said that I believed the Democrats would win 52 seats in the Senate and 235 seats in the House. And this was just a couple of weeks ago. And the number of texts and phone calls I got saying that seems awfully optimistic was staggering, right? ​“Do you actually feel like Democrats have it? These kinds of numbers seem optimistic for Democrats. That feels like the high end of the range. Will the polling really hold up in this moment?”

And the reality is the polling didn’t hold up. The polling was wrong, generally, on average, but in the other direction. Polling underestimated Democrats. So where we stand right now is, it looks like after Alaska and Mississippi get finalized, Democrats are going to have 56 seats in the Senate. Again, I thought 52 seemed ambitious. Even a few months ago, if you had said that there would be a 50 – 50 Senate, it would have seemed absolutely stunning. It is a bad Senate map. The number of seats that Democrats would have to flip that Trump had just won by double digits, it would be something that we had not seen since 1986, Reagan. But here we are at 56 seats for the Democrats.

In the House, again, the range of predictions was usually in the 230s. We are now looking at Democrats maybe even reaching 260 seats. So this is something we haven’t seen since Watergate, this kind of midterm election. And frankly, I think you have a lot of stunned members themselves. You had people who did not expect to get elected to Congress, who now realize they’re going to have to serve two-year terms and come back again and run in these very, very difficult districts. There are districts that Democrats had no business winning that they flipped on Tuesday night.

Sanjeev Krishnan: And the headline was that this was more a repudiation of high prices, the war in Iran, maybe self-dealing concerns, and it was not necessarily an endorsement of either party. Again, this is what I’m reading as a novice in this world. And then the coalition of men under thirty, Hispanics, particularly Hispanic males, and maybe some other constituencies that Trump gained in ​’24, the GOP lost in ​’26. Beyond those headlines, are there nuggets from the crosstabs, as they say in your world?

Carlos Odio: No, look, I think you’ve read it right. First of all, the Democratic brand was in the toilet. Democrats today are still not a popular party. The Biden years really took a toll on the Democrats. And the question coming out of 2024 was the extent to which they were going to be able to break from the past and project a future vision and a future image. And frankly, it’s not so much that they did that. To their credit, there was more of a focus than you might expect on the issues that voters themselves were talking about. A concern about Democrats is that they cared about a range of niche, luxury-item issues, right? Post-materialist, as the academics would say, instead of everyday concerns. But Trump had this incredible opportunity to remake the American electorate, and there’s no other way to interpret it than that he squandered it.

The very dynamics that helped elect him: the America First dynamic of ​“I am going to put you ahead of all other priorities. I am not going to let a conflict in Ukraine jump ahead of you. I’m not going to start new wars that distract us. I am going to put your cost-of-living concerns ahead of any fights about cultural issues, trans athletes in sports.” What you got instead, as the voters themselves were saying. I think if you had to sum up the critique of the second Trump term, it would be broken promises and wrong priorities, right? That’s the theme among those who were discontented with Donald Trump. And that’s starting a war in Iran that spikes gas prices. That is perceptions of self-enrichment, not just for himself, but for the people around him. Corruption in the abstract is not a very effective political tool, because the assumption of voters is that politicians are corrupt. But…

Sanjeev Krishnan: Everyone’s corrupt.

Carlos Odio: Everyone’s corrupt. But when you have specific proof points, especially when the sense is someone is getting rich off my back, that these higher gas prices are helping some oil executives make money, which, by the way, is not something that voters got from nowhere. Donald Trump said that. Donald Trump said we should be happy for the oil companies who made a lot of money. And of course, Donald Trump himself seemed more focused on building monuments, on the ballroom or on the reflecting pool. Even now, after this super shellacking, Donald Trump’s main focus is finishing the ballroom renovation. And so I’m trying to look at this in the most objective manner. You know, my critiques of…

Sanjeev Krishnan: Yeah.

Carlos Odio: …the Biden administration were equally harsh. The Biden White House was very much out of tune with where the American public was. Donald Trump got elected because he seemed more in touch. He seemed like he could rectify things. And instead, point by point, he invalidated all of the strong points that were the reasons people were electing him. So that’s the Trump of it all.

In terms of the actual mechanics, you asked about turnout and voter swings. It’s early. I think everyone is still assessing it. But when you look at it in the early going, it’s clear that to get the kind of swing you’re looking at here, you had a turnout differential, where people who voted for Kamala Harris turned out at higher rates than people who voted for Donald Trump. A lot of people who voted for Donald Trump didn’t necessarily switch sides, but stayed home. So that already is something unusual, to see a very big turnout differential. And it seems pretty clear in this early going that you had an electorate that was very Harris-heavy.

On top of that, you did have a lot of what we call vote switching, which is Trump voters coming out and being so pissed that they voted for a Democrat in key elections. And then you have a surge of new voters, even in a midterm, that could benefit. You need a combination of all three of those things. But the overall picture is an electorate that is the least white electorate we’ve ever seen in an American election. That is off of high Black turnout at the levels of a presidential election. The Latino share of the electorate was equivalent to a presidential. Usually, from a presidential to a midterm, the electorate becomes less Latino. The Latino share held steady relative to a presidential. Some of the biggest turnout spikes were among young Latinas. We can tell this from early voter file data in Georgia and in Texas. Huge spikes.

And then there were changes in support levels themselves. Donald Trump had made historic gains among Hispanic voters in 2020 and then in 2024. Some of that held in certain places, but overall you saw swing-backs that were a recovery for Democrats of a lot of what…

Sanjeev Krishnan: Yeah.

Carlos Odio: …they had lost. Multiple cycles of losses recovered in one night in terms of levels of support. And then the last thing is the youth piece. This was a very young electorate. Under-30s came out in force, were a larger part of the electorate than they’d been in recent midterms, and supported Democrats at levels that, if the New York Times estimates hold, would be the highest levels we have seen for young voters in a House election.

Sanjeev Krishnan: Thank you. Grant, so what happens next? Let’s not nerd out into our sectors yet, but in general, what do you think happens next in Washington, where you’re podcasting from today?

Grant Leslie: Yeah. Well, put me in the stunned bucket this week. I’m still trying to believe that all of this is true and think about exactly what you’re asking, Sanjeev: what happens next. And one of the things, and Carlos was just mentioning this, is that this election was a vote against the status quo. In terms of your question of what happens next, I think that’s something that’s really important to think about.

Because with this huge incoming class, at both the federal level and the state level, people are looking at them to do things differently, to do something, and certainly to do things that impact them directly. For all of the reasons that Carlos was saying, people were so mad that all of this stuff was happening and wasn’t helping them. So what people want to see is action on issues that are going to impact their families, their pocketbook, all of that. And so that sets us up for a situation where these newly elected members are going to have to do something. Figuring out what that agenda is, and then figuring out how to get that agenda done with a presidential veto, that’s the challenge.

But certainly, when you think about addressing the issues that Carlos said were impacting the electorate in terms of turnout, obviously we’re going to see a lot of conversations around affordability. And that can come in a lot of different ways. That can be in terms of data center conversations, tariffs, gas prices. But people are really going to want action. I think the next month or month and a half will be really interesting to see what happens in the lame duck. Getting some things out of the way, getting past the budget deadline and not having a shutdown, that will set Democrats up with a clean slate, hopefully, from their standpoint. Figuring out whether permitting gets done, those are big questions over the next month. But then organizing and figuring out, again, what those priorities are and actually how to do things, that is going to be what happens next.

Sanjeev Krishnan: One of the things that I found, and it’s a jump ball for either of you, is that it seemed like the issues were nationalized around war and prices and inflation and some of these other things, but the candidates were very local, meaning they spoke to their local constituency. And it seemed like a lot of pragmatists and centrists and dealmakers, and we’ve talked about the BS of bipartisanship for a couple of decades. Is that too much of a hot take, or do you guys think the crop of people that got elected on Tuesday were just a little bit different?

Carlos Odio: I think that’s right. I think there was a move in the Democratic Party toward heterodox candidates. You hear a lot about this fight between moderates and progressives, and I don’t think that’s the right way to think about these factions. I think generally the move was toward candidates who are far from a generic candidate, far from a generic Democrat, not somebody who seems like a party-line or ideological-line voter, but someone who thinks for themselves. And I think that’s been the move. You could see them across the spectrum on different issues, but generally speaking, that’s been the move: people who are appropriate to their state or to their district. And that’s a lot of what you saw: people who reflect their priorities without any of the excesses that did take over in, for lack of a better term, Woke 1.0. We are past Woke 1.0. We might now be past Anti-Woke 1.0 or 2.0. Ron DeSantis, the governor of Florida, has been out in the last few days saying that he thought Republicans went too far in their focus on trans issues. So you see these cycles.

Sanjeev Krishnan: Even on immigration, he said that, right?

Carlos Odio: On immigration, you saw some acknowledgment. I don’t know that I heard it from DeSantis, but certainly there are Republicans who believe that there was overreach on the immigration side. The reality is that there are issues like that on which there is a reasonable position that most politicians and most Americans agree on, right? Order at the border, and some rational way to take care of undocumented immigrants who’ve been in the country for a long time. Both of those things coexist. There are reasonable positions on a number of things. And I think what you’ve seen in reaction to the Trump years is a synthesis that is not, I would say, more centrist, but certainly is trying to avoid some of the excesses of the worst of the last decade in certain ways.

Sanjeev Krishnan: No…

Grant Leslie: Yeah, I mean…

Sanjeev Krishnan: Yeah, go ahead.

Grant Leslie: I was just going to say, I totally agree. And if you look at some of the states or districts where there were these major swings, a lot of them were rural, small-town, big ag states: Iowa, Texas, Kansas, North Carolina. Those are some of the top ten farm states in output. Those are states that care about different issues. And so I do think there are a lot of moderate Democrats that were elected, and I think the party is really trying to think about what that means in terms of the issues they’re prioritizing and are going to work on.

Sanjeev Krishnan: I want to get into our sectors a little bit. Carlos, as you learned on Wednesday night, we focus a lot on food and agriculture, energy, and ocean. The way I define it is calories, electrons, energy density, and water. A lot of those issues: obviously grocery prices, the cost of gas and diesel, et cetera. And maybe, Grant, the ​“so what”? Obviously, you still have the executive branch for another two years, firmly with Trump and the GOP. The legislative branch, this would spell gridlock. The market liked gridlock the day after, and then yesterday they didn’t like it so much. So we’ll have that vacillation, I’m sure, across markets. But in terms of our sectors, do you have any broad perspectives on it? And then we can go area by area, because, Carlos, I think a lot of the things you poll are relevant to our sectors.

Grant Leslie: For sure. Listen, broadly, I think that there is a huge amount of potential for engagement in our sectors. If you think about energy, obviously that is what is driving the conversations around affordability, around diesel prices, gas prices. And there is huge potential at the federal level to have conversations around what we need to do, if anything, to fix energy tax credits. What do we need to do on permitting? What do we need to do on data centers? These are big questions that impact the grid and impact markets across the country, and they’re hugely important for our sectors.

That’s at the federal level, but at the state level too, there’s a huge amount of opportunity and change, with switches in some of the governors and what their priorities are and what they ran on. These are issues that they ran on, and so they’re going to want to act on them. And obviously the states have a lot of jurisdiction to do things on these issues and get projects moving and in the ground.

And certainly in agriculture, and I just alluded to this, we had huge swings, like 15% toward Democrats in some of these small and rural towns. Ag states are on the table that just haven’t been on the table for a long time. And the thing that I think is most interesting about that is what I said at the beginning. These voters in rural areas, oftentimes what they actually want is stability. They don’t want to see change. But these voters were voting for change, and that means that the system isn’t working for them. So I think there is going to be a major conversation about what needs to happen in our food and agricultural system.

This was a huge issue in Iowa. The governor-elect and Senator-elect Turek were running on pesticides and water, issues that you have not seen candidates run on publicly in a state like Iowa. So there’s a lot to be done there. Obviously, tariffs. The issues that Carlos was talking about that were really top of mind are, I think, the issues that are driving the sectors that we work in, Sanjeev.

Sanjeev Krishnan: Carlos, I’ve critiqued our cohort of colleagues, including ourselves, for going from the IRA to AI data centers as the theme driving, frankly, some of the energy work. And we’ve tried to be pretty under-indexed to that, because we weren’t fully sure. So we’ve built a lot of our energy portfolio, whether structured finance or growth equity, to be largely indifferent to it. We have something in Europe, but we’re largely indifferent. And largely because of the concerns that the whole market was ​“noun, verb, adjective: data center.” It’s 40% of equities, 20% of fixed income, at least on the investment-grade side. So the economy is hugely levered to this data center buildout, which leads to this energy load growth hypothesis that everyone’s anchored on. But Tuesday, what does this mean? What happened on the data center side? And then maybe your hot takes on what happens next on data centers. And Grant, I’m going to come to you after that.

Carlos Odio: Sure. The thing about data centers is that it was not front and center, for example, in late-cycle campaign ads. And yet it certainly was a theme of the year, in part because the polling was so clear. Voters really did not like the data centers. All sides. Republicans did not like the data centers. And I was telling…

Sanjeev Krishnan: All sides, right? Yeah.

Carlos Odio: …you this the other day, Sanjeev. It’s because the way in which people started to learn about data centers, the way it was first received, fit so easily into a narrative…

Grant Leslie: Yeah.

Carlos Odio: …that discontented voters feel: that they don’t have control over their own lives, that there is some small, wealthy elite somewhere else that is making decisions for them, imposing things on them. And the data centers fit so neatly into this. The idea that this was going to be put in their neighborhood, whether they wanted it or not, and that they were going to have to pay high utility prices because of it, for this new technology that they don’t quite understand. That’s actually the broader sense. They don’t understand what AI is going to bring, but they know it’s a lot of disruption, and they don’t know if it’s going to be good disruption or bad disruption.

But what I’d say is there’s a path forward, because there is so much uncertainty. There are so many people who don’t have a clear sense of what this really is, other than that they didn’t like the way it was first rolled out. People favor regulation. They’re not saying shut down data centers. They’re not saying shut down AI. But they are saying there should be a process for this, right? There should be a way that the government is overseeing this so it doesn’t get out of hand. They oppose data centers mostly because of the impact on utility prices. So that’s a helpful thing to understand, and some of these companies are already contending with it, right? Striking agreements with local governments where they pay their own share of grid upgrades or what have you. There’s very high support for making the companies pay for their own grid upgrades. It’s actually one of the highest-supported policy issues I saw in the entire poll.

Overall, though, I would say I don’t think AI was a major priority. It didn’t necessarily decide the vote, but certainly the polling and the opinions on this will have to shape the decisions that these governors make. We talked a lot about Congress, but Grant, to your point, there are now 29 Democratic governors, which is the highest we’ve had in quite some time. There might still be two more to come, so that’s between five and seven flips. These are new Democratic governors who probably at some point, certainly in a place like Texas, campaigned against data centers.

Sanjeev Krishnan: I’ve been telling people, and very few people listen to me on this, to look at the governor’s race in Texas, because she ran on that issue as one of her top three.

Carlos Odio: She ran on that, and you saw it linked often to something like Flock cameras as well. Again, you start to understand what the theme is, right? A sense of technology trying to govern our lives. So yes, Gina Hinojosa, the new governor of Texas, ran on this. Greg Abbott, the incumbent governor, was kind of slow to come to this issue, as was the president, despite the polling that very clearly showed that even their own base was rebelling against it. Eventually you had people like Greg Abbott start to speak up against it.

But that’s the position. She ran on this, right? So she’s not going to turn around tomorrow and say it’s a building free-for-all. And yet, at the same time, I would say people like Governor-elect Hinojosa are very pragmatic. You were saying this earlier, Sanjeev. And so there are conversations to be had about what the path forward is, because there is going to need to be more AI compute in this country. We all know that. The question is in what way, and how can the politics of it be handled better to reflect the concerns that people have? They don’t want to have to pay for it, they don’t want the disruption, but there are ways to do it that people feel more comfortable with. And so there is a lane to navigate.

Sanjeev Krishnan: And Grant, you and I have worked together for a long time now, and I think when Donald Trump announced, we stopped investing in anything related to the IRA. This was late ​’23, early ​’24, if you remember those conversations. And then I think we’ve limited a lot of the data center thesis. We have a lot of service businesses in our energy work. But is this actually, weirdly, a counterintuitive time, on the politics and policy of this, to be more constructive and engage with stakeholders? Because, to Carlos’s point, we will need more compute.

Grant Leslie: Yeah. Actually, for all the reasons that Carlos was talking about, data centers and how they were impacting the elections and people’s thinking, I get super excited about it, because I start thinking of all of these policy ways to engage. Carlos, you mentioned that one thing people were for very strongly was the idea that these hyperscalers should pay for their own stuff: pay for their electricity, water, and other things. To me, the wheels in my brain start churning. And I know people on the Hill and in states are thinking about that, because that becomes: all right, what could we get these hyperscalers to pay for that we have needed for a long time in our communities? Infrastructure, other things related to clean energy, other things related to the environment. You can really start to be creative about how to have these hyperscalers make a change in these communities.

And that’s something, Carlos, to your point, that we already know voters are thinking about and that resonates with them. It could potentially get people more on their side, or at least more okay with the idea of more compute, by really making sure that these hyperscalers have skin in the game in a way that directly impacts the communities and the people who are in them. That could drive major policy change if people are creative about the way they think about it.

Sanjeev Krishnan: Another topic, getting out of energy: we do a lot in the protein landscape, particularly in animal protein, on the feed side, on the processor side, and then on the brand side. So, the opportunity. Maybe I’ll go with you first, Grant, and then Carlos, it’d be interesting to talk about the politics of this. This is a complex issue, because a lot of things were inflationary or had difficulty: the price of food and the price of groceries, and at the same time, farmer incomes are devastatingly low. Grant, you’ve forgotten more about food and ag policy than most people will ever remember. Tell us about what led to this issue, and perhaps something like Mississippi even flipping, maybe not just because of that, but partly because of it. And then the opportunity that you see in the food and ag system.

Grant Leslie: Yeah. Again, I’m so excited about the opportunities in the food and ag system. One reason is that I’ve always talked with people in the food and agriculture space about how, historically, in elections we actually haven’t seen farmers and agriculture vote on things that impact their pocketbook or their farm. They’re voting on other issues. I think we have seen in this election that farmers, agriculture, that rural bloc, were voting exactly on that. They were voting on pocketbook issues. They were voting on the fact that they were having to pay diesel prices that were 70% above last year. They were voting on the fact that the farm bill is not working. They were voting on the fact that tariffs were completely impacting them, to the point that they have no markets. It was destroying the protein market. They were voting on all of these things.

And so because of that, for those of us who have wanted to see conversations and momentum around some of these changes in the agricultural system, there’s never really been the political will to drive that. Well, I would argue that that’s changing, and the political will is here. If we go back to my original comment, people are voting against the status quo in agriculture. This is exactly what we’re seeing. They do not want the status quo.

And then you bring in MAHA, and you bring in those conversations about people who were voting on food and agriculture issues. I just mentioned farmers voting on things that impact their farm. Well, there are suburban moms, people in the city, voting on what is in their food, getting their families food that has no pesticides, that is cleaner, that is healthier. Again, I alluded to what was happening in Iowa on water quality. These are major issues. Even if they weren’t, as Carlos was saying, number one and two on their list, they were on their list. They were thinking about it. And that means that there is a moment here to do some serious work and to think about what we need to do with our food and agricultural system that will change it, that will support the issues people were caring about in terms of healthy food, that will support soil and water health. Those are things that people care about.

Sanjeev Krishnan: Carlos… oh, go ahead. Yeah, go for it.

Carlos Odio: Politically… sorry, go ahead. No, politically, Grant, you listed everything I would have listed in terms of the impact that higher diesel prices have had on agriculture, and the tariffs. You recall at one point the Trump administration also sent a lifeline to Argentina, and we were importing Argentine beef. That was actually a potent issue at one point in this cycle. The only thing I would add is the impact of immigration…

Sanjeev Krishnan: Yes. I was going to get to that.

Carlos Odio: …on the workforce. Frankly, I think that Trump has held back the dogs on certain industries, and agriculture is high on that list. They have not targeted farms in the way that would be very easy to do. And he had signaled at some point that there were certain industries they should be a little more careful with. That’s different from, let’s say, under George W. Bush, when there was a focus on workplace raids in meatpacking plants, which devastated several towns in Iowa. You haven’t seen that, in spite of this incredible immigration blitz under Trump 2.0.

And yet I would say: watch out for the next two years. They hadn’t yet beaten the Obama numbers on deportations, believe it or not. In order to hit some of those numbers, they might turn next to some of these more rural areas.

But what I would say is, as you try to divine the motives of the Trump White House for the next two years, you do have to understand the different factions within the White House. There are party loyalists, but most of those have actually been cleared out at this point. You have Donald Trump himself, who is the wild card. We don’t know where his focus is going to be.

By the way, you assumed gridlock. Bernie Sanders said in the last couple of days, ​“Donald Trump’s funny. This is a man who might want to make deals. This is a man who likes making deals with Mamdani.” In some ways, he likes Democrats more than he likes his own party. And so you could see him wanting to make deals: he gets to build his arch, and Democrats get Medicare for All. That’s within the realm.

But around him, you have ideologues, right? And then you have the aspirants, people who want to run for president themselves, who have other political plans and are trying to pursue those. So I would not assume that there’s going to be a single cohesive drive out of 1600 Pennsylvania Avenue, where you could predict at any one point what they are going to do, because it depends on which of the factions within the Trump orbit is making that decision at that point.

Sanjeev Krishnan: Grant, on calories, electrons, energy density, and water, there was this notion of ​“cheaper, faster, better,” which we certainly need. And then a common friend of Carlos and mine, and you know him, said it’s just ​“cheaper, cheaper, cheaper.” So is that your advice to our community of portfolio companies, entrepreneurs, or management teams that are developing products and services for calories, for electrons, the price of groceries, the price of power, maybe even deflating healthcare with food-is-health interventions? What is your advice to our portfolio companies and…

Grant Leslie: Yeah.

Sanjeev Krishnan: …co-investors about how they should think about product positioning and product development?

Grant Leslie: Sanjeev, I couldn’t agree more with that statement on cheaper. Listen, it’s about positioning your technology or your product as something that will help make affordability better for everyday people. So if you have a product where you can talk about how it’s going to contribute to lowering electricity prices, lowering food prices, lowering input costs for farmers, a very direct hit to a family’s bottom line every day, that is going to resonate. It’s absolutely going to resonate. It’s the thing that these new members are going to want to focus on. They’re going to want to talk about how they have lowered costs. That’s going to be the number one thing on their minds. So I hope that all of our portfolio companies and our friends in these sectors are really thinking about how they can help drive affordability in this country when they’re thinking about the technologies they’re working on and how they’re positioning them.

Sanjeev Krishnan: We didn’t do any prep for this call, so I’m going to go to 2028. I think we restrained ourselves from talking about this on Wednesday night. I don’t want to talk candidate by candidate, because that’s a horse race. But it’s my observation that we have this Hegelian dialectic, where in 2008 there’s a huge mandate; 2010, no mandate; 2012, a huge mandate, particularly on immigration. And then you have probably one of the most anti-immigration folks win in 2016. And there was a whole project in 2013 of ​“we have to reinvent ourselves and appeal to Hispanics,” and we got close to a bill. And so there are always these swings, right? But let’s not get into who’s running and who’s not. Just as we go into ​’28, is it all clay, or are there some learnings from ​’26 that will port over to ​’28, particularly with some of these demographics that came out, whether it’s young people, Hispanics, or other groups that drove some of the swings?

Carlos Odio: Well, first, what you’re describing is what academics call thermostatic public opinion: when the incumbents turn up the temperature on a certain issue, the American public wants to turn it in the opposite direction, whatever it might be. And so that’s the kind of swing you get. I think it also fits in with a structural incentive for disruption. This is global, across industrialized democracies: it is easier to disrupt than it is to govern. And that’s part of what explains the pattern you’re talking about, which is that all of the energy is on blowing shit up. And so that makes it very difficult.

Where I do think the Hegelian dialectic actually plays in is in some of these forces around nationalism and populism, and where the convergence is. I think in the Democratic Party there is now something of a synthesis where, in spite of the stylistic differences, the progressive wing and the moderate wing actually support very similar things. I think the agenda you’ll see coming forward, while there will be differences on the margins, will actually sound pretty cohesive, because there has been this synthesis of the directions.

What it means for 2028: the primary starts now on both sides, the Democratic primary and the Republican primary. You have a MAGA that has essentially imploded. You have a Democratic Party whose brand was in the toilet. Now they’ve risen, but without a cohesive new brand. There’s no brand to replace it. So how does that get shaped? It gets shaped through the primary. The primary is a battle to set up the vision, agenda, and ideas of both sides. And whoever emerges from it ends up being the carrier. That becomes the party. The parties don’t exist.

We talk about parties in a European context. Those are real parties, right? Where everyone depends on the infrastructure of that party. That doesn’t exist in the United States. There is no receptionist at the Democratic Party. The Democratic Party is whoever the most visible leader is at a given point. And whoever comes out of the Democratic primary is that new leader and will set the new direction, and then you have factions that fall in below that. So the ideas primary is what’s going to be really interesting, because you’re going to have a lot of people running, and everyone’s going to have to establish their own lane. And in doing so, you’re going to have to find a new idea. You’re going to have to say something that the others aren’t saying. And so how does that broaden the range of possibilities of what’s going to be discussed and what becomes a viable party platform?

Grant Leslie: Yeah. And I think…

Sanjeev Krishnan: Yeah, go ahead, Grant.

Grant Leslie: I was just going to say, I think on the Republican side, there’s such an interesting dynamic, similar to what Carlos was talking about but slightly different. For the past couple of years, everybody has just done the things they think are going to get them a pat on the back or an endorsement from Trump. And they’re waking up in a very different situation. So figuring out if it’s still worth embracing that, if he can save it a little bit, or if they just need to keep him at arm’s length, and then what that means for their position and how they’re going to try to build their coalition within the Republican Party, is going to be fascinating and incredibly complicated to watch as well.

Sanjeev Krishnan: Yeah. We talked about this on Wednesday night a little bit too. I was with a leader of a $400 billion pool of assets, and he said, ​“We never really underwrite politics and policy historically. And if we do, it’s to not do something.” And today, this was him telling me: you can’t ignore politics and policy. And that’s why we’ve invested heavily with Grant, in time and resources, to have a point of view and to understand it on the diligence side and then on the post-investment value creation side.

But maybe to end with this: the equity markets are finding out that they’re underwriting politics this week. They always kind of are, I guess. Carlos, maybe starting with you. Part of our audience is allocators and investors. How should we think about politics? We just had a live case study this week of why you have to have a point of view, I’d argue. Many of them, structurally or strategically, may want to just ignore it, even though I don’t think you can ignore it in this modern era. And then maybe the last word to you, Grant, on the investor side. We talked about the portfolio company side, but how should institutional asset owners and investors think about the next couple of years?

Carlos Odio: Well, look, I think what’s difficult is that the Trump era was so specific. Especially in the second Trump term, you had kind of a personalist president, so investment decisions almost had to be made with Donald Trump in mind.

Sanjeev Krishnan: Right.

Carlos Odio: …

Sanjeev Krishnan: He was chairman of every board, as someone told me.

Carlos Odio: That’s good. I’m going to borrow that. That’s really good. Right. But you just saw it, right? You would be naïve as a major investor not to keep Donald Trump in mind. Now, obviously he’s still in power for two years, but he’s a lame duck. So much is wide open. We talked about it earlier when it came to AI. We are in a moment of disruption, new technologies. The old ideological divides are changing, and there’s a lot of opportunity in that. There’s a lot of opportunity to shape what is possible.

I’ll give the example of housing, because all of a sudden you have this powerful YIMBY movement within the Democratic Party that wants to build, build, build as a way to lower the cost of housing. Mamdani in New York is a YIMBY, right? AOC is now a YIMBY. The politics on this have changed so drastically in such a short period of time because there were entrepreneurs, political entrepreneurs, I should say, and also actual private entrepreneurs, who were making a case, making an argument for how that helped solve a real problem that people were facing. And so there is that opportunity now, because everything is wide open, because things don’t fall into their traditional buckets. Solar is not just an issue of the left anymore, right? Elon Musk is the major figure of the right right now, the major funder of the right, and he’s the Tesla guy.

So all of those things have scrambled in a way where I don’t think people have to come from a place of fear, but they do have to come from a place of: how are we helping solve a problem that people are having? Because if you’re there to solve that problem, then there is a politician who’s reading the poll and seeing that that is a problem, and who is going to be very receptive to changes in regulations, or to supporting other changes that are going to advance that possibility.

Sanjeev Krishnan: Grant, the last word is with you. What should…

Grant Leslie: All right.

Sanjeev Krishnan: …investors be thinking?

Grant Leslie: Look, Sanjeev, you and I have talked about this a lot. Investors and entrepreneurs get really frustrated with government for a whole host of reasons: burdensome regulations, regulations that aren’t flexible enough. There are a million reasons to get frustrated. But one of the most important things is that these elected officials, at the federal level and the state level, understand what’s going on. I mention that because in the House alone, we’re looking at about ninety-five new members, both Republicans and Democrats. It is such a huge number of new policymakers in this country this week. And so education is key. We can get mad about what they’re doing or not doing, but if we’re not doing our job of explaining to them where we’re seeing markets going, where we’re investing, what the companies and technologies are that we’re investing in, how that will help address affordability, how that will help lower costs for Americans or for government, if we are not telling that story and educating them, then we have a major problem. And I think it’s harder for us to justify getting frustrated when they’re not putting forth things that are supportive of us. So one thing that I would say is: do not hide, do not ignore it. Engage and educate. We have a moment to do so with all of these new members who want to do something. Let’s give them some tools to do the smart things.

Sanjeev Krishnan: Well, thank you both. They say in Washington you’re either at the table or on the menu. And I think the table has changed. I think there are a lot more scalpel politicians, as opposed to ideological ones. I am hopeful. There is a moment where the table has changed a little bit, and I think it’s an opportunity. So thank you both for doing this on short notice and joining our special edition.

Grant Leslie: Thank you.

Carlos Odio: Thanks for having me.

Tonya Bakritzes: Thank you for tuning into the S2G podcast. If you enjoyed this episode, please subscribe, leave us a review, or share it with a friend. For more information or to connect with us, check out s2gin​vest​ments​.com.