This is an audio transcript of the FT News Briefing podcast episode: Swamp Notes — US Democrats on the offensive

Marc Filippino
Good morning from the Financial Times. Today is Tuesday, September 20th, and this is your FT News Briefing.

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The catastrophic effects of climate change could be avoided, but it will cost trillions of dollars. That’s according to a new report. US climate politics is causing headaches for global asset managers. And our Swamp Notes columnists Rana Foroohar and Ed Luce talk about the Democrats’ surge going into the midterm elections. I’m Marc Filippino, and here’s the news you need to start your day.

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Two of Turkey’s largest banks have stopped using Russia’s payment system after warnings from Washington. They were among five of Turkey’s biggest banks that were using the Mir system — it’s Russia’s version of Mastercard or Visa. Turkey has avoided taking sides in Russia’s war in Ukraine and hasn’t signed on to sanctions. But Washington has expressed concerns that these banks could provide a financial backdoor to sidestep western sanctions. A spokesperson for one of the banks said it had temporarily suspended use of the Mir payment network while it evaluated new guidance from the US.

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Two leading global energy agencies have issued a report that estimates the cost of avoiding the catastrophic effects of climate change. The International Energy Agency and the International Renewable Energy Agency published the report on behalf of dozens of global leaders. It says by the end of this decade, the world would need to invest about a trillion dollars in renewable power each year.

Camilla Hodgson
It’s a massive number, which is kind of hard to conceptualise. It’s so big.

Marc Filippino
That’s the FT’s Camilla Hodgson.

Camilla Hodgson
This isn’t just a case of demanding a trillion dollars upfront from governments. It’s gonna be a combination of public sector money, private sector money. You’ve seen recently commitments by governments and also the private sector to pump millions more into renewable energy. It definitely feels like there’s more of an appetite to do that in the context of the energy crisis. It’s obviously a challenge, but I think the groups that wrote this report think it’s feasible. It’s just gonna require a kind of step change in how ambitious both governments and also the private sector are in investing in renewables and rolling them out.

Marc Filippino
Camilla Hodgson is a climate reporter for the FT.

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Global asset managers are finding themselves caught in the middle of US political divisions over climate change. Recently, a global asset manager, Federated Hermes, withdrew its sponsorship of a group of Republican state finance officials who oppose action on climate change. Federated Hermes did this after pressure from European and Australian pension fund clients who value environmental, social and governance investing, or ESG investing. Here’s the FT’s Chris Flood.

Chris Flood
It’s further evidence of the way the backlash against ESG is growing in the US. I mean, just last month we saw the state of Texas criticising BlackRock, nine other European managers, describing them as being hostile to fossil fuels. That’s, I think, been extremely disturbing for these managers. They know that their investors and the rest of the world are genuinely committed to ESG. Managers like BlackRock also see these criticisms as being very misplaced because they actually have significant investments in oil and gas industries. They’re getting it from the Republicans on one hand, complaining that they’re not supporting fossil fuels enough. They’re also finding themselves criticised by environmental groups who dislike their continuing support for oil and gas and coal industries. So it’s a bit of a no-win situation for some of the big investment managers at the moment.

Marc Filippino
That’s the FT’s asset management reporter Chris Flood.

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The US midterm elections are rapidly approaching, and for a while, prospects for the ruling Democratic party looked pretty grim. But legislative successes have improved their odds against Republicans. Here to discuss this is the FT’s US national editor and columnist Ed Luce, as well as our global business columnist, Rana Foroohar. They write our twice weekly Swamp Notes newsletter. Thanks for joining me, guys.

Rana Foroohar
Thanks for having us.

Edward Luce
Great to be here.

Marc Filippino
So, Rana, Ed, what’s behind this shift? Why do Democrats have a better chance now?

Edward Luce
The broader change that we’ve seen politically for the Democrats in the last few weeks is pretty unprecedented. And I think some of it’s to do with the flurry of legislation that’s been passed and maybe the student loan forgiveness. But I think a lot of it has to do with the focus on Trump. And Biden, you know, is making this as much a referendum on Trump’s Maga party as he is the traditional referendum on Biden and the economy. And that’s smart politics.

Marc Filippino
All right. But is any of the legislation that’s been passed under Biden, is that influencing the way people vote?

Rana Foroohar
I think it’s all part of sort of a tailwind for a really mega change. I mean, potentially the biggest political change of our, of our lifetimes, which is moving from less government control, more private sector power to more public sector power and less corporate control of things. And you can see that in all kinds of things like the FTC and SEC and what they’re doing to really push forward cases on companies that are exerting monopoly power or being unfair. We just saw the FTC take on Walmart in a new case. And I think that the shift in voting power from boomers to millennials who don’t have assets to protect and who are just more in that kind of democratic socialist camp, to put it, you know, very broadly, is part of what we’re seeing.

Edward Luce
Yeah, I mean, I think there’s definitely a generational shift there. And the enthusiasm levels have gone up recently among the young and among women. And let’s not overlook the backlash to the Supreme Court rule, the Dobbs ruling on scrapping Roe v Wade. I mean, you’ve seen registration rates surge and overwhelming majorities of the new registrants are women.

Rana Foroohar
Yeah.

Edward Luce
So I don’t think we should overlook, you know, the electrifying effect of that. It really has motivated people.

Marc Filippino
So a lot of these things that we’re talking about, the repeal of Roe vs Wade, the abortion ruling, inflation — Biden didn’t really have anything to do with these things, right? What did Biden and the Democrats do to put them more on the offensive rather than the defensive here?

Rana Foroohar
Well, I’ll speak just quickly to the inflation issue, because I think it’s interesting and it’s complicated. So I think Biden, by creating this kind of “work not wealth” slogan and paradigm, has sort of moved the dial on reclaiming that Democratic mantle of: we are the party of the working people. We are thinking about people to earn their money from a pay cheque rather than asset price wealth. So I would say that that’s one way he’s turned the needle. He’s also taken a lot of the smart, low-hanging fruit, you know, releasing strategic petroleum reserves to try and lower gas prices and also using, again, antitrust policy to really look at corporate price gouging. I’m beginning to think that that he has a case there.

Edward Luce
Yeah. I mean, one thing I would emphasise about Biden’s rebranding or the Democrats’ rebranding in a more positive sense is that not just the legislation they’ve passed or the things Rana has mentioned. It’s just the sense among . . . now voters who don’t pay, you know, wonkish attention to all of the stuff that we’ve been talking about are still getting the impression there is a positive agenda.

Rana Foroohar
Mmm.

Edward Luce
There is action, active agenda to address some of the problems in their lives. And Republicans really are reducing itself to a one-issue party, which is it’s stolen election. It’s what Trump says, the Republican Party’s . . .

Rana Foroohar
A great point.

Edward Luce
You don’t have Republican policies on any of these questions. And the only Republican policy on inflation is drilling on federal land. And it’s not a particularly popular one.

Marc Filippino
Ed Luce is the FT’s US national editor and columnist. And Rana Foroohar is the FT’s global business columnist. They write our twice weekly Swamp Notes newsletter. We have a link to subscribe to that in the show notes. Thanks as always guys, this was great.

Rana Foroohar
Thanks so much.

Edward Luce
Thank you.

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Marc Filippino
President Joe Biden put Covid-19 back in the headlines by declaring that the pandemic is over.

Joe Biden
We still have a problem with Covid. We’re still doing a lot of work on it. It’s, but the pandemic is over.

Marc Filippino
His remarks on US television Sunday night may come as good news to Americans, but not the pharmaceutical companies that make Covid-19 vaccines. Investors wiped a combined $10bn off the market value of vaccine makers Moderna, BioNTech and Novavax. Pfizer didn’t fall as much because of its wider array of products. Analysts say the sell-off reflects concerns over demand for Covid vaccines as leaders, not just in the US, declare the crisis phase of the coronavirus pandemic coming to an end. The World Health Organisation last week said the end of the pandemic was in sight.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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