Geopolitical Economy Hour with Michael Hudson — Trump, the Democrats, and the 2026 Midterms
Radhika Desai:
Hello and welcome to another Geopolitical Economy Hour, the socialist and anti-imperialist conversation that illuminates the fast-changing political economy and geopolitical economy of our times. I'm Radhika Desai, and you're watching Radhika Desai, Geopolitical Economist. But before we continue with this episode, let me take a minute to remind you to please like and share this video, subscribe to our YouTube channel, and if you can, please donate. You can do this through our Patreon, by becoming a paid subscriber on Substack, or by becoming a member here on YouTube. It helps us produce high-quality content and keep it free. And now, back to the main topic of the day. Today's Geopolitical Economy Hour is our regular fortnightly conversation with Professor Michael Hudson.
Welcome, Michael.
Michael Hudson:
Good to be here.
RadhikaDesai:
Michael, in our last conversation we talked about how Trump has reshaped the US economy by deepening the divide between the rich and the poor, further enriching the rich and further impoverishing the poor. Unfortunately for Trump, the latter are the majority of the people, and inevitably his economic policies are laying the groundwork for an electoral disaster for the Republicans in the midterm elections. Trump knows this, and he is trying his best to avoid what appears to be the inevitable Republican loss of the House and the Senate, and therefore of Congress as a whole. The consequences of such a loss for Trump are potentially incalculable, because if the Democrats were comfortably in control of Congress, they would launch numerous investigations into what Trump has been up to on a variety of fronts — the sheer amount of personal corruption he is involved in is astronomical — and of course they would impeach him if the possibility remained. So Trump has a lot riding on these elections. Let me set up a very basic framework to get us going. Here is the New York Times chart of Trump's approval ratings, and as you can see, his disapproval ratings have been going up while his approval ratings have been going steadily down since the 10th of March 2025 — not even two months after his inauguration.
The decline and the rise, respectively, were happening well before that, but the approval ratings dropped below the disapproval ratings around March 10th, 2025, and these figures are updated to today, July 28th. So this is a pretty dire set of circumstances facing Donald Trump. As we discussed last time, this is entirely of Trump's own making. To win the election he promised American voters heaven, only to rule it in the interest of his crony capitalist friends — the largest, most financialized, most speculative corporations. He has delivered them the hell of inflation, declining real wages, debt, and repression, among other things. So Trump knows he's in trouble. Michael, how do you look at this situation?
What's catching your eye among all the different things he's been doing to try to avert what he knows is coming?
Michael Hudson:
Well, Radhika, I wish you had the chart that needs to go with what you showed. The public's disapproval of the Democrats is just about as strong as it is of Trump. No matter how much I dislike Trump and his policies — and of course he's destroying the US economy and the politics too — so are the Democrats. That's why you and I were advisors to Jill Stein on the Green Party ticket. The reason Trump won was largely that Jill went to Michigan, Minnesota, and Wisconsin, places with large Muslim populations who voted against the war. They knew the Democrats were the pro-war party, and they were not going to let the pro-war candidate win — either they stayed home or they voted for Jill Stein if they could. I was in New York City, where Jill Stein wasn't even on the ballot. We'll get to the election problems.
Radhika Desai:
Michael, let me show you the chart you wanted. Give me a second. This goes back to 2017 — the part we're interested in starts around early 2025, about here. You can see that the favorable ratings, the green line, have been going down, and the unfavorable ratings, the red line, have been going up — perhaps not quite as much as in Trump's case, but in the same direction. Since the end of January 2025, the Democrats have essentially been moving the same way as Trump.
Michael Hudson:
And what is that approval level?
Radhika Desai:
At the moment, as of June 8th, it's 56.6 percent disapproval and 40.5 percent approval.
Michael Hudson:
Okay. Well, that's my point. What we're likely to see in this election is one of the smallest voter turnouts ever. I don't approve of Trump, and I'm certainly not going to vote for the Democrats. When we were talking with Jill Stein, her position was: as awful as the Republican Party is, there cannot be any political or economic progress for wage earners in America until you end the Democratic Party. It would be best to have just one party and let all the candidates run on it. I think there's a real revulsion against the Democratic Party — certainly on websites I follow, like Naked Capitalism.
Zelensky and Netanyahu are going to be meeting mainly with Democrats, who they'll expect to be their strongest supporters. The scuttlebutt online is that Trump will try to stay as independent from them as he can, telling Israel to withdraw from Lebanon and stop the ethnic cleansing — that calling people subhuman while grabbing their territory and torturing them is Nazism, and America still remembers World War Two from all the old movies. So the Democratic National Committee has spent the last two weeks making almost hysterical statements: socialism is bad, it's terrible that our candidates are winning. And what are the winning candidates actually saying?
That they don't take AIPAC money. That's going to be one of the big issues in this election — who's taking AIPAC money and who isn't. For the primaries beginning in January, the Democrats have arranged things so that, as usual, they'll get a Republican candidate running as a Democrat who's completely aligned with Trump without being Donald Trump. Their answer is to hold the first primaries in right-wing states, so the voters skew right-wing, giving the edge to candidates who want to privatize Social Security and cut Medicare — Trump's own program, essentially.
That's why they've picked South Carolina, which is what killed Bernie Sanders's campaign in 2016, when the leading Black congressman there — everyone waiting to hear what he'd say — endorsed Biden as the one who understood them best. One of the most corrupt politicians in Congress, using racial appeals to mobilize the Black vote against pro-labor candidates. That's how things are shaping up. Opinion polls show that most American voters actually prefer the word "socialism" to "capitalism." Yet if you read the Wall Street Journal, you'll find people like Obama's former chief of staff, Rahm Emanuel, writing a weekly column: "We've got to crush the socialists.
Fortunately, the whole Democratic National Committee gets its funding from Wall Street and Silicon Valley — we have the money to outspend them." The socialists don't have that; all they have are small individual contributions, while the establishment has billionaire money to kill them with. So will people really believe the socialist candidates who say, "Nobody's bought us, because they don't like what we say" ? If you depend on campaign contributors, they'll ask what you can give them, and the answer becomes: we can deliver our constituency to serve Wall Street and Silicon Valley billionaires — deliver our voters, whether workers, farmers, Black or Hispanic communities — through a false populism. So I don't think a strong Democratic victory is a sure thing. And even if the Democrats win the House, whenever there's a key vote, a handful of Democrats will always shift to vote with the Republicans and block anything genuinely popular from being enacted. Voters realize that, which is why I expect a low turnout
- and the most motivated people in a low-turnout election were supposed to be the Republicans. But even Trump's MAGA base is realizing he's a fraud who has delivered them to his financial backers — to Miriam Adelson, to the Silicon Valley crowd, to the cryptocurrency industry he's been pushing so hard.
Radhika Desai:
This is a very important point, Michael, and it's one we should come back to at the end, though it's worth anticipating now. What we're looking at is the destruction of whatever democracy ever existed in the United States
- the mechanism for translating the wishes of ordinary people into the actions of those in power. This destruction has been ongoing for decades, ever since the DNC under Bill Clinton decided to abandon any pretense of being a party of the working class and accept the Reagan settlement in favor of big money. So just as the Republicans under Trump put wool over the eyes of ordinary white working-class people, the Democrats have done the same to Black working-class people. Either way, they get the votes and then, in office, do what they both do equally well: serve a narrow corporate elite.
- The whole party system is fragmented, and between now and the November elections, as the primaries get underway, I think we're going to see something like a civil war within the Democratic Party between the democratic socialists — who have won some victories and are emboldened — and the establishment Democrats who cannot give up their reliance on corporate money and will fight the socialists tooth and nail. Rahm Emanuel has been making that speech, and watching CNN, it's clear the network is throwing its weight behind the Democratic establishment and against the democratic socialists, arguing that they're ruining the party's prospects — when in fact, if anyone is ruining the party's prospects, it's the likes of Rahm Emanuel. So we'll see this civil war unfold.
- Meanwhile, I've also been looking at the funding situation: Democratic candidates and incumbents are fine at raising individual money, but in terms of party funds — the money that belongs to the PACs and the parties themselves — the Republicans are way ahead, while the Democrats are actually in debt. And the bulk of billionaire money is going to the Republicans. According to this Fortune story, billionaires have already poured $433 million into the 2026 midterms, and 80 percent of it is going to the Republicans. So you can see who has the advantage there. Trump will leave no stone unturned to raise even more — handing out state contracts and government favors to any CEO willing to donate. Still, there's no doubt he's preparing the ground to challenge the results if they're unfavorable to him.
Michael Hudson:
Yes, he always rules by emergency. All the tariffs he began with were justified as a national emergency, and he'll find a reason to declare an emergency for anything — some nefarious foreign plot, or a "communist plot." Anyone who isn't for him becomes a communist, just like the McCarthy era I grew up in. So what will he do ? I think he'll claim the voting machines can easily be interfered with, and that mail-in ballots can't be trusted — that ballot boxes have been stuffed, and there's no way to verify a mailed-in ballot came from a real citizen. He's making it very hard: if you were born abroad and you go to vote in a state Trump is focused on, and they ask for your birth certificate, getting one from your country of birth can take a long time. And if you're an immigrant with even a minor infraction like a jaywalking ticket on your record, you may be afraid to show identification at all, worried they'll ask for proof of citizenship you don't have because you were born here.
Radhika Desai:
Exactly. As this Guardian story shows — and it's just one of many — it's clear he's laying the groundwork to tamper with the midterm results. If he doesn't like the outcome, he can claim China and Venezuela tampered with the voting machines, that registers were manipulated, that mail-in ballots can't be trusted. All of this lets him allege fraud and refuse to accept the results — and this time he's in a much better position to do that than in 2020, because this time he remains president throughout.
Michael Hudson:
He also trusted Bill Barr last time, and most of his appointees didn't want to go along with him — he had poor judgment about people and let the Republican establishment choose them. This time he has personally loyal enforcers.
Radhika Desai:
Exactly, and he has a Congress unable to restrain him in any way. So in all these ways, he's preparing the ground to annul the election if needed. He's also trying to restrict voting rights, especially by opposing mail-in ballots, which are used extensively in many states, and by demanding stricter ID requirements — a passport, a birth certificate.
Someone pointed out this will particularly affect women: if you changed your name after marriage, proving your birth certificate matches your passport becomes a headache, and a lot of people will simply decide not to vote. He's discouraging participation and gerrymandering districts — Louisiana has just been redistricted to create more safe Republican seats. These are all ways he's undermining the electoral process.
Michael Hudson:
We've been talking for the past year about how the US is a failed economy, and the way you're describing it, it's a failed political system as well. Unlike a European parliamentary system, where Bernie Sanders or anyone else could form a real third party and immediately leapfrog past a discredited establishment, in America you're stuck with this duopoly — a uniparty with two personalities. You can vote "yes, please" or "yes, thank you" for the same underlying program. There's no real alternative, and it's politically stifled — reinforced by a Supreme Court that supports the right wing, and by the fact that the worst right-wing judges have often been confirmed with Democratic help.
Michael Hudson:
Take Clarence Thomas. Biden, when he headed the relevant Senate committee, worked with Senator Grassley of Iowa to find a genuinely right-wing judge who happened to be Black, so it would look acceptable. It's no accident that Rahm Emanuel was Obama's chief of staff — they wanted another figure who could sell out his own constituency while serving Wall Street and the K Street economy. Republicans call the Democrats the party of Black, Hispanic, and LGBTQ minorities; the Democrats respond by calling themselves centrists, saying America wants them to stop fighting and stay in the middle. But what is a centrist ? Someone who doesn't want to disturb the market — because that would be socialism. A centrist is really an anti-socialist, a privatizer, a Thatcherite. That's what the Democrats have become. It would be interesting to see what share of Democratic Party contributions actually comes from billionaires, because what they want is essentially the same Obama-era policies.
Radhika Desai:
In the story I showed, the billionaires are still contributing to the Democratic Party, but only 20 percent of billionaire contributions go there — 80 percent go to the Republicans.
Michael Hudson:
And of the money that does go to Democrats, much of it supports candidates who are essentially right-wing Democrats.
Radhika Desai:
Absolutely, there's no doubt about that. I think this midterm is going to be quite a mess, and it'll be interesting to watch how different aspects unfold. You mentioned the Supreme Court decision that effectively found there's no longer meaningful racism in the United States, so states with histories of racial discrimination no longer need federal approval to change their electoral laws. Undoubtedly, Republican-run states will use this to make it harder for Black voters and other constituencies unlikely to support Trump to vote — a huge setback for the gains of the civil rights movement. And if the election results were to go against Trump, and people came out into the streets to defend the outcome, Trump has also built the infrastructure of political repression, particularly through ICE. He's spoken about policing the election, and if he deploys ICE or some other Praetorian Guard-style force at the polls, that alone would discourage voting.
Michael Hudson:
Yes — ICE agents at every polling place would mean even Hispanic citizens get harassed, and that takes time, creating very long lines, mainly in urban, Democratic-leaning areas. And on the crisis-maneuvering side: the election is in early November, but the new Congress doesn't take office until January. That leaves two months for what I think we've both forecast will be a real economic crisis. Trump has been flooding the market with oil from the strategic petroleum reserve to keep prices down and avoid a backlash over the inflationary effects of the oil war
- he'll keep doing that until the first week of November. Then, after the vote, expect an explosion in costs, and Trump declaring an emergency that lets him invoke special presidential powers to suspend the normal rules of civilian life.
Radhika Desai:
So it would be a political emergency built on the bedrock of the economic emergency he's already created. On top of that, there's the Insurrection Act, which authorizes Trump to deploy the military to suppress civil disorder — something he would use against any popular uprising defending a vote that goes against him and the Republicans.
There's also the fact that when he was elected, Trump was skeptical of AI and Bitcoin, but has since aligned himself closely with the companies driving both — figures like Elon Musk, part of a new cowboy-capitalist elite that wants to run roughshod over democracy. Peter Thiel, the PayPal founder and the man behind Palantir, put it this way: he remains committed to "authentic human freedom" as a precondition for the highest good — which really means the freedom of rich people to make as much money as they want. He goes on to say that over the last two decades he's changed radically, and no longer believes freedom and democracy are compatible. What he wants is a system where people like him can operate without social regulation of any kind — even regulation meant to prevent corruption, like insider trading laws — repealed, so that everything he wants to do becomes legal.
Michael Hudson:
He's laid the groundwork for that with DOGE — Musk's Department of Government Efficiency — by firing government staff.
Radhika Desai:
Sorry, Michael — you mean the Department of Government Efficiency?
Michael Hudson:
Yes. They've slashed staff at the IRS, so there's no longer capacity to audit the taxes of the wealthiest people — even ordinary taxpayers can't get through. The Weather Service has been cut back despite all the tornadoes, floods, and droughts we're having. Research and development funding through universities has been slashed too — the Financial Times had a big article on this recently. Research takes time, and by the time results come in, this administration's term will be over, or it won't count toward a corporate officer's quarterly earnings. So there's a huge inability of government to regulate, even where regulations remain on the books, because there's no one left to enforce them. It's the old Stalin line — when told the Vatican would oppose him, he asked, "How many divisions does the Pope have?" Trump's version is: how many officials and regulators does the government even employ anymore ? Now that we've slashed that workforce, there's nobody to regulate — only the president, acting within the executive branch, because there's no longer a functioning regulatory branch of government.
Radhika Desai:
That reminds me — Trump was once asked whether he accepts any check on his power, and he said only one: the check of his own conscience. Given what must be in Trump's conscience, that's essentially no check at all — he's said publicly there is no check on his power. There's another layer to this story: the Iran war, which has been on- again, off-again, will likely continue in that pattern at least until the midterms. Last week, many commentators were warning of a major escalation — something like World War Three — but by the end of the week Trump had called off the attacks and now claims talks with Iran are going well.
Two things matter here. First, Trump cannot win this war outright: the Gulf countries have clearly pressed him to stop, and the US's capacity to keep bombing Iran is limited by its ammunition stocks. Without the bombs, you can't keep bombing. So the only way to keep the war going is through periodic bouts of bombing that make it look ongoing, when what he actually needs to do — admit defeat — he can't do before the election, since that would be another nail in his electoral coffin. Second, there's the extent of Trump's personal corruption around the war: those close to him appear to be profiting from the swings in
oil prices. Anyone who knows in advance that he's about to announce the war is off can short oil; anyone who knows he's about to resume bombing can go long. Sorry, you wanted to add something.
Michael Hudson:
Yes — there was a chart in the New York Times over the weekend on how Trump has made his money. His traditional wealth, mostly real estate, has barely changed since his first term, but his overall fortune has gone from around half a billion to roughly $200 billion, almost entirely through cryptocurrency. He created his own coins and sold them to his followers, who believed his pitch that having his name on it would make the coin a collector's item that would keep going up in value, like a trophy. It was a pump-and-dump operation — the price spiked, and then roughly two and a half billion dollars was lost by the MAGA faithful and anyone else who bought in, at their expense.
"I'm a winner, you're a loser" is his business philosophy, and they were the losers — now realizing that any deal made with him leaves them worse off. That's cutting into what would normally be his Republican base, with other Republicans now trying to distance themselves from him. A lot of the money that flowed into his ventures wasn't just retail money either — the United Arab Emirates reportedly put in half a billion dollars. Why would the Emirates invest half a billion in Trump's cryptocurrency ? That was a payoff — a way to make a personal contribution to Trump in exchange for favors, paid directly into his personal account. They paid that half a billion for favors including his handling of the Iran war. He's also made enormous amounts through partnerships — Kushner has been given all sorts of deals, which Trump describes as "my family's money," not his own. Nearly all the Arab OPEC states have handed out huge contracts to Trump's family. That's basically how you buy favors — it doesn't show up cleanly on any chart, but we can see what's happening in the unrest over what Kushner and Ivanka are trying to do in Albania, part of this same corrupt arrangement with the Arab states.
Radhika Desai:
It's about time such unrest happened in the United States itself, not just in Albania. But you're right — I think the real purpose of Trump and Kushner acting as negotiators supposedly representing the United States is that they're really representing Trump's family and friends, doing deals with foreign leaders and coming back with lucrative contracts. There's also the scandal of the company that owns Truth Social, which is selling advance access to the platform's most important posts — including Trump's own — for $100,000 a month. That advance access amounts to a few microseconds, but for anyone running computer-aided trading, those microseconds are enough to make millions, even billions. This would normally be called insider trading, but because it's structured this way, it's technically legal, even if it has caused plenty of unease in the ordinary business community. And Trump never put his assets into a blind trust — the extent of his personal corruption is enormous.
Radhika Desai:
Going into this election, given how much is riding on it, and given that the democratic socialists could produce upsets — as we saw with Zohran Mamdani and a couple of governorships lost to progressive Democrats — I think Trump is doing at least two things. First, there will be a sale of favors like never before between now and November, with anyone donating to his campaign, the Republican Party, or the MAGA PACs receiving favors in return.
Second, he's reviving Cold War rhetoric, something he began on the Fourth of July with a speech at Mount Rushmore targeting "communists" — by which he means democratic socialists like Mamdani. In that speech, after calling communism a failure and equating it with fascism, he said: America will never be a communist country. It won't happen. Communism is a loser, and it always will be. Our warriors did not fight communism across the world only to have that ugly menace rear its head again right here in America — we're not going to let that happen. That kind of language creates the discursive space for an all-out attack on anyone who even mildly represents the real interests of ordinary Americans.
Michael Hudson:
They're doing something similar in England with critics of the genocide — being against genocide has effectively become treated as a crime there. The United States is already blocking journalists at the border and seizing their phones — a form of censorship of journalism. That's part of why you and I are on the internet; that's where people are actually getting their information now, since television news viewership keeps declining because there's so little real news on it — a fireman rescuing a cat, the weather, the traffic, the sports — not the kind of analysis you and I are discussing. There's been a real shift in how people get their news, and that's part of why AI is giving such a distorted picture: when the mainstream media and official statements all insist peace is coming, AI summaries
reflect what most online postings say — and most of those postings come from bots or from the media itself. I doubt you and I carry much weight in what AI factors into its account of world affairs.
Radhika Desai:
Completely agree. We should probably start winding down, but I want to return to where you started, Michael, because it's the key point we should end on, even though it's worth flagging early too: we're looking at the discrediting of the entire party system in the United States. It no longer works, and the clash of interests between the American elite and the American people is coming to a head. This midterm election will be an important chapter in that unfolding story — not the end of it, but a real milestone — because, especially since the 1980s, politicians in both major parties have been primarily beholden to the corporate elite. They take the elite's money, the money helps them win elections, and that lets them make promises to ordinary people that they then break.
But that can only go on for so long before people realize what's being done to them systematically — which is why we're seeing rising interest in democratic socialist candidates. So I think we're increasingly looking at a genuine clash. One more point: Trump won twice by telling ordinary working people he'd make things better for them, and in both terms — especially this one — that hasn't happened, and everyone can see it. I think the disillusionment of even the Republican Party and the MAGA base with Trump has to start somewhere, and we may be looking at the beginning of it now.
Michael Hudson:
More important than the general election, Radhika, will be the primaries — that's where the fight between the socialists and the right-wing Democrats will actually be fought out. Remember that in 2016 the Democratic establishment chose to lose with Hillary rather than win with Bernie, and they still feel that way. They'll do everything they can to fight anything pro-labor, pro-regulation, or opposed to tax favoritism for the wealthiest one percent and the financial sector. The class war is going to be fought out in the primaries — we're not yet at the point where it can be fought out in the general election, for the reasons you've described.
Radhika Desai:
That's a very good point — what I was calling the civil war within the Democratic Party is really the class war playing out. It'll be interesting to see whether anything similar happens within the Republican primaries, but I certainly agree we'll see it on the Democratic side. The only real hope I'd point to is a situation where grassroots politicians — funded by small contributions from ordinary people rather than by a handful of billionaires — emerge in critical mass, and I think they're beginning to. Perhaps what we're really saying is that it's time for figures like Mamdani and other progressive Democrats to fight for their own party in their own name, rather than walk away the way Bernie ultimately did after being passed over for Clinton. These candidates need to do something more determined than that.
Michael Hudson:
Is "progressive Democrat" even an oxymoron ? You mentioned why Trump won his two elections — I think it's because he could say "I'm not a Democrat," while the Democrats' whole pitch has been "I'm not Donald Trump." Neither side has anything positive to offer, just "I'm not as bad as the other guy." At a certain point, people realize both sides are terrible, for pretty much the same reasons and with the same donors. Grassroots contributors are mostly maxed out, and even when they're not, the party machinery works against outsider candidates. Bernie's 2016 campaign manager just published a memoir — reviewed in yesterday's Wall Street Journal — detailing all the ways the Democratic Party worked to undermine him: cheating, slander, every trick available, all to stop the left. And you can be sure that as long as Trump keeps up his neo-McCarthyite rhetoric about communists, the Democrats will be right there backing the crackdown, just as they were with the Smith Act in 1941, when labor leaders were jailed for their political views. There's a family story that fits here — my father was one of the "Minneapolis 17," from the Minneapolis general strikes, among the most significant labor actions in twentieth-century American history, and the only genuinely Trotskyist stronghold in the country, where the CIO was backed against the AFL's more conservative craft-union model. My father and his fellow organizers were prosecuted partly because they owned books by Marx and Lenin. The attorney general who pursued the case later wrote in his memoirs that it was the one thing he was ashamed of, and the Supreme Court refused to review the underlying law until it was later used against actual Stalinists. When my father retired to Florida, he was told felons couldn't vote — but there was no felon list with his name on it, so he voted anyway. Some felons get through; you can be sure Trump will be very careful about which ones don't.
Radhika Desai:
That reminds me of one more point before we wrap up — a chart you might find interesting too, on presidential campaign spending, from OpenSecrets.org. It only goes up to 2016, but it shows that in every election except that one, the candidate who spent the most money won. In 2016, Clinton outspent Trump and still lost — which was notable. Of course, Trump is also making a great deal of money now, and if it were purely a matter of the Democrats' own conduct, I think Trump would win regardless. But the additional factor is the misery he has inflicted on ordinary Americans — people vote on their own economic circumstances, and Americans are not doing well on that front. That's why Trump is pulling out every stop: casting doubt on the electoral process, reviving anti- communist rhetoric, all of it. The word "populist" is used completely wrongly to describe figures like Trump or Nigel Farage — genuine populists are, in some sense, committed to the popular interest, which these figures are not. There are far less flattering words one could use, fascism among them, but that's a discussion for another time.
Michael, I'll give you the last word if you have any final thoughts.
Michael Hudson:
No, I think you're absolutely right — who are people going to believe, the television ads or their own experience?
Radhika Desai:
Exactly. So, with that, thanks, Michael, and thanks to our listeners. I hope you enjoyed this discussion and learned something from it — if you did, please like, share, subscribe, and donate if you can. Michael and I will be back in two weeks, and of course I'll be back several times before that. Until next time, goodbye.
Photo by Dmitry Kropachev on Unsplash