Dan Kanninen, CEO of Arc Initiatives, joined Cheddar News to breakdown the economic impact of the midterm elections as voter frustration with inflation drives them to the polls. 

Dan Kanninen, the CEO of Arc Initiatives a and former Hillary Clinton senior advisor, joined Cheddar News to weigh in on the economic state of the U.S. following the midterm elections. "The Fed, I think, is having this terrible dance of trying to thread this needle and be a tightrope of tackling inflation without massively driving us into that recession territory," he noted.

Wake Up With Cheddar

The Economic State of America After Midterms

joining us now to discuss is dan Cannon ceo of ark initiatives and former Hillary Clinton, senior adviser dan, thanks so much for joining us this morning. Welcome to the show. You know, voters have become, yeah, voters have become discouraged about the state of America. What do democrats and republicans, you know, where do they stand in terms of the economy? Well, I think the republicans, you know, try to use the record inflation that you mentioned and and the economic uncertainty and complex economy really with job growth still strong. But the inflation stubbornly high as a way to use joe biden as a cudgel to win elections just yesterday, but they also failed to have an economic measures that resonated with voters in the middle of the country. I think they tried to make the issue of the election on those terms. But rick scott, the head of the Republican National Senate Committee had a plan that would cut Social Security and cut Medicare and put a tax on the lowest wage earners in the country. I think they had a hard time articulating a vision that was a good alternative. Meanwhile, democrats did really well on the issue of choice in the wake of the dogs decision and found a way to motivate folks in a way that really overcame the concerns on inflation and the anxiety around the economy generally. Yeah, great point. I'm glad to hear you kind of reiterate how these major issues were used by each party's, you know, obviously based on what the makeup of we're seeing so far and the races that have been determined. How do you think these issues are playing for each party? Well, going into last night, you would be a fool to expected anything more than, you know, republican control handling in the House and perhaps winning the Senate. Uh, but it turns out that the script was flipped entirely. Um, Traditionally the party out of power in this case, republicans would win something like 40 50 or 60 seats based on prior midterm elections under Obama, under bill clinton under under donald trump. Um, but this time around they're hanging on to maybe getting a majority in the House. I think they probably will, but it's still really, really close. And the fact that we don't know yet tells you how underperforming the republican party was last night and the Senate. Meanwhile, the democrats came in having to sweep a bunch of races to hold onto the Senate. Now they're they're pretty handily favorites to hold the Senate, maybe a 2 to 1 advantage there. They've got to win basically one of the last couple of toss up races to get there even without winning a runoff with with Raphael Warnock in Georgia. So at the end of the day, republicans last night thought they're gonna be celebrating a big, massive red wave and instead democrats are gonna hold on at least one house and be very competitive in the, in the, in the lower chamber and we of course, will keep all our viewers updated on the results as they roll in. Now. I want to switch gears here now and talk about the slowdown in housing activity and higher mortgage rates. How is that impacting the pace of home price growth here? Well, I I think that the mortgage rate, uh you know, um situation is difficult for for people trying to start a family build and grow the economy. And and the Fed has this very difficult challenge of trying to bring interest rates down and to try to use interest rising to bring down inflation. We're stuck in this place where to really, really, really ratchet down inflation away. That would be dramatically reducing prices. You're probably gonna have an impact on rates and jobs, uh and and maybe even bring us into recession. So, the Fed, I think is having this terrible dance of trying to thread this needle and be a tightrope of tackling inflation without massively driving us into that recession territory. So, so far, honestly, it's working. And look at the UK, their markets have crashed, they've had higher inflation. We've had, we've managed to keep steady job growth and hold the lid on inflation even though it's stubbornly high? We'll see what happens in the next year or so. But that's the challenge. Can you keep the rates from going up, Can you bring them back down without using, you know, high interest rates and mortgage situation in a way that adversely affects job growth and and and savings dan, rising energy prices are another big issue for voters and we know when it comes to gas at least the movement of price varies dramatically across key midterm states. Did that frustration reflect in the election results that we're seeing so far? Well, it's interesting. It certainly did in the polls, I think all summer long, all all spring really as gasses rising to 4.5, even $5 a gallon. That was a real weight around Democrats neck and it looked like that was going to be the issue may be the one issue that really cost them. Um see it's in a major way in the election, prices have come down and it's basically about a buck 20 a buck 25 lower today than it was six months ago. And that price, that price drop has been pretty consistent over the last uh six months or so. Perhaps that mitigated some of the, the, the outrage on gas prices that helped democrats avoid some of those big losses. It's clear that it was an issue in the election and it was a decisive issue in some races. But it's also clear that the turnout from young voters and from women, particularly the dobbs election just overcame those concerns and it's why democrats are going to come up with a better night than republicans dan. Thank you so much for time for your time and insight today. That's dan cannon in a ceo of ark initiatives and former Hillary Clinton senior adviser.