It’s amazing to see people on Fox News claiming this was a good election for the Republican Party, merely because it gained a couple seats in the Senate. This is quite wrong: it was a bad election for the GOP. There was a blue wave that wiped out many Republican lawmakers in suburban districts that previously were favorable for Republicans, such as in the Sun Belt. The GOP lost nearly 400 state legislative seats in just this one election. By way of comparison, it took four elections — the entire eight years of the Obama presidency — for the Democrats to lose about a thousand state legislative seats.
The only reason the Republicans gained any seats in the U.S. Senate is because those seats were in GOP-leaning states that Republicans carry in any close presidential election (except for Florida, which is a swing state that voted for Trump). The Democrats were defending 26 seats, compared to the Republicans’ 9 seats. The Democrats will keep at least 24 of those seats after this election, compared to the Republicans’ 11. The Democrats even managed to win in Montana and Ohio, which Trump carried easily in 2016. It would have been very hard for the Democrats to gain seats, since the last time these seats were up for election, 2012, was a great year for Democrats.
Republicans have lost at least 37 seats in the House of Representatives, a remarkably high percentage of their seats given that the economy is growing better than before, unemployment is at a 49-year low, and wages are finally growing faster than inflation in most of the country.
In 2020, the Republicans will probably lose control of the Senate, because they will be defending most of the seats up for reelection in 2020, including in states that the Democrats have now carried for four or more elections, such as Maine and Colorado. They are especially likely to lose control of the Senate if the economy goes into a recession, which is likely to happen by 2020 given the fact that recessions happen sooner or later due to the business cycle, even if the President has done nothing wrong. The risk of a recession grows when the economy has been growing for a long time, as is now the case, even if the growth rate was slow until recently.
The Republicans have lost ground in Pennsylvania and Michigan, states that Trump carried in 2016. Without those states, it will be difficult for him to win reelection. The likelihood of a Democratic victory raises economic risks for the country, because the Democrats are not likely to nominate a market-friendly moderate like Jimmy Carter or Bill Clinton for president. Instead, they will likely someone far more radical, such as Kamala Harris or Elizabeth Warren. Hillary Clinton is further to the left than her husband Bill, but nowhere near as far to the left as Harris or Warren. But Mrs. Clinton likely will not be nominated again in 2020.
Even a left-leaning website that likes Elizabeth Warren admits that her “Accountable Capitalism Act” could wipe out trillions in stockholder value. That would harm retirees, because pension funds that retirees rely upon, and the mutual funds that people own in their 401(k)’s, rely on the value of corporate stocks — stocks whose value would shrink due to Warren’s proposed legislation. But as the progressive web site Vox admits, “it seems likely that literally trillions of dollars” in “stock market wealth could be eliminated” by adopting Warren’s proposals.
The Democrats could nominate someone even worse. As was noted earlier, socialism is gaining ground in the Democratic Party. According to a Gallup survey, 57% of Democrats have a positive view of socialism, while most don’t have a positive view of capitalism. Former President Obama supported self-proclaimed “Democratic Socialist” Alexandra Ocasio-Cortez, who was just elected to Congress. Even a left-leaning website admits that her economic proposals would cost the country $42 trillion, far more than the entire current federal budget. Paying for her proposals would require both deficit spending, and massive tax increases on the middle class, not merely the wealthy.
Even if the Republicans manage to retain the White House in 2020, losing the Senate would pose major problems. If the Democrats retake the Senate, they are expected to block any future appointments to the Supreme Court while Trump is in office. They are also expected to block virtually all appointments of judges to the federal appeals courts (and perhaps even to federal district courts), leaving many federal judgeships vacant — even though this would result in what are known as “judicial emergencies.”
The ideological composition of the judiciary matters for the economy. Yesterday, a judge blocked the Trump administration’s approval of the Keystone Pipeline, which would help both the economy and the environment. It will transport petroleum more safely and with fewer environmentally-damaging spills than other methods of transportation like rail. But now the Trump administration will have to jump through yet more hoops before it can once again approve this economically important project.
More sympathetic judges would allow such economically-helpful policies to go into effect. They would also make it easier for the Trump administration to repeal or delay burdensome Obama-era regulations. Liberal judges have blocked some of the administration’s delays of Obama-era rules, based on strained reasoning, or procedural technicalities. A Democratic Senate will prevent Trump from appointing conservative appellate judges who might overturn these rulings.
The Trump administration helped the economy by bringing an end to the vast wave of government red tape that occurred under Obama. It has also sought to eliminate existing regulations that are harmful or unnecessary. As the Competitive Enterprise Institute noted, Trump has pruned regulations more vigorously than any president since Reagan, and withdrew or delayed over “1,500 Obama rules” that were in the pipeline. Regulations cost the economy “$2 trillion annually. This amounts to a hidden tax of nearly $15,000 per household.” CEI says eliminating more regulations will result in “more jobs and higher wages,” more “investment,” and higher productivity.