Pangaea Policy Founder Terry Haines joins Yahoo Finance Live to discuss Sen. Raphael Warnock's reelection victory, what the results of the midterms mean for policy and financial markets, and what the midterms say about politics in the U.S.
CHUCK SCHUMER: The people of Georgia are better off, the Democratic Senate caucus is better off and America is better off because he ran and won. And as I said, he's going to have a great, great future.
RACHELLE AKUFFO: Well, that was Senate Majority Leader Chuck Schumer there on Raphael Warnock's victory in the Georgia runoff. The win securing a slightly firmer buffer for Democrats in the upper chamber, but what does this all mean for future policy? Joining us now to discuss is Pangaea Policy founder Terry Haines. Now, Terry, you don't seem to be as sure that this is going to make a big difference when it comes to the Democrats in the Senate.
TERRY HAINES: The Senate Majority leader is very gifted in a lot of ways, and one is hyperbole. This makes-- for markets, first of all, and for the day-to-day running of the Senate-- this makes virtually no difference. Think about it this way. The Senate was already 50 plus one-- the Vice President. Now it's 51 without the Vice President. But still, the Senate operates much more as 100 CEOs that operate in coalition with one another, depending on the issue than any kind of fixed party line votes, generally speaking.
And so by and large, things aren't really going to change very much. You still have to cobble together the votes. And not only do you have to cobble together majority votes just to get things out of committee, for almost everything, you have to cobble together a 60-vote super majority in the Senate. And to do that, you need not only all your people, but you need a bunch of Republicans, too. So I wouldn't look for anything much different to change. For markets, it's going to be a little bit of a different look, though.
Markets can continue to expect centrists in the Congress-- Democrats and Republicans alike-- to shoot down nominees that are too progressive, too liberal, just as we saw at the Fed and at banking regulators over the last two years. But there's not going to be-- and that's the good news for financial services companies, for example. But on the other hand, there's not going to be the unanimity necessary to really try to stop things that the regulators are doing, either. So regulators having a freer hand is something that's going to cause financial services firms a little bit more headaches. So this is a mixed blessing.
AKIKO FUJITA: Terry, bottom line, just more gridlock? Is that what we're looking at?
TERRY HAINES: Akiko, good morning. Yes, I think so. I think what you have is three things here. You have domestic gridlock on pretty much everything. You have a grudging consensus on basic fiscal matters, by which I mean that the government continues to get funded on an annual basis, pretty much as it's done now. And finally, you get continued unanimity and bipartisan unanimity on foreign policy.
So things are not going to change with respect to Russia, with respect to Ukraine, with respect to China, just to name three. And I think that's where we are.
RACHELLE AKUFFO: And in terms of the narrative between now and 2024, how much does this change things?
TERRY HAINES: I don't think it really changes things a lot. What you've got is-- I don't think either party can really take much good away from the Georgia election. Reverend Warnock increased his total a little bit. Mr. Walker's total declined a little bit. But you had a situation where Warnock ran at the top of a Georgia ticket that was deflated down ballot by gubernatorial candidate Stacey Abrams, who was a great hope for the Democratic party over the past few years, and the like.
Similarly, Walker was at the bottom of the Republican vote-getting ticket, with Governor Kemp really doing very, very well in the gubernatorial election. So I think things get more muddled. One thing I always get asked about is, is this going to mean that Senator Manchin has less power or less control? No, no. He and Senator Sinema and the other centrists that are out there have the same ability that they've always had to try to pull the Senate in their direction.
That hasn't changed. And if anything, to your question about 2024, Rachelle, Senator Manchin is up for re-election. Senator Sinema is up for re-election. They don't have any incentive to do anything--
AKIKO FUJITA: Terry--
TERRY HAINES: --other than pull things in their direction. I'm sorry, Akiko.
AKIKO FUJITA: Specifically on Georgia, though-- these claims of Georgia now being a battleground state, now that Raphael Warnock has won two runoff elections-- you think that's overstated?
TERRY HAINES: No, I don't think it's overstated. I don't think it's really about Reverend Warnock, though. I think what you've seen in the past few elections is a huge turnout in Georgia. And you've seen, if anything, a move towards Georgians wanting candidates that will represent well, and represent to them well, engage with them well, and that are focused on the day-to-day business of government.
Kemp barely won four years ago. And in electoral terms did very, very well last month. Warnock really pretty much squeaked through. Nothing negative about that campaign, but pretty much squeaked through-- and you're always going to get-- against a weak candidate in Walker. And you're going to get-- if they get stronger candidates on the Republican side in Georgia, as Kemp shows you, Republicans are more than capable of winning there.