Why Red, Rural Voters Want to Split From Big Blue Cities

Summary

WSJ What’s News – November 18, 2024 Episode Summary

The Wall Street Journal’s What’s News podcast episode released on November 18, 2024, delves into several pressing topics shaping the current socio-political and economic landscape. Hosted by Tracy Hunt, the episode covers President Elect Donald Trump’s strategic appointments and policies, the burgeoning movement among rural Republican voters to segregate from Democratic-dominated urban areas, and significant developments in the automotive and tech industries. This detailed summary encapsulates the key discussions, insights, and conclusions drawn during the episode.

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1. President Elect Trump’s FCC Appointment and Brendan Carr’s Agenda

Overview: The episode opens with an in-depth discussion about President Elect Donald Trump's nomination of Brendan Carr as the new chairman of the Federal Communications Commission (FCC). Carr, a seasoned telecommunications lawyer and regulator, is recognized for his alignment with Trump’s policies, particularly those aiming to deregulate industries conservatives find restrictive.

Key Points:

• Brendan Carr’s Vision: Carr’s appointment signals a potential shift in FCC policies, emphasizing deregulation and a tough stance against big tech companies.

• Free Speech and Censorship: Carr has publicly advocated for dismantling what he refers to as the “censorship cartel,” aiming to restore free speech rights. This rhetoric mirrors Trump’s criticisms of media and social media platforms.

• Project 2025: As a senior Republican on the FCC, Carr co-authored the Project 2025 policy paper, which outlines strategies to eliminate what conservatives view as outdated regulations.

Notable Quotes:

• Brendan Carr on Social Media: "We need to dismantle the censorship cartel and restore free speech rights for everyday Americans." [01:47]

• Joe Barrett on Carr’s Statements: "Carr is targeting big tech companies that many conservatives believe are unfavorable or biased against them." [02:49]

Implications: Carr’s leadership is expected to open avenues for increased consolidation within the broadcast and telecom sectors. His aggressive stance on big tech could lead to significant regulatory changes, although the exact impact remains uncertain due to the FCC's limited authority over online content.

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2. Trump’s Impact on the Automotive Industry

Overview: The podcast transitions to the automotive sector, examining how Trump’s anticipated policies could reshape the industry, particularly concerning tariffs, electric vehicle (EV) mandates, and autonomous vehicle technology.

Key Points:

• Tariffs on Automobiles: Trump’s proposed tariffs aim to incentivize automakers to manufacture vehicles domestically, potentially increasing job creation and economic growth despite higher consumer costs.

• EV Subsidies: There is concern within the auto industry about potential rollbacks of EV tax credits, notably the $7,500 consumer tax credit for EV purchases, which is a significant incentive for buyers.

• Autonomous Vehicles and Robo-Taxis: Elon Musk of Tesla advocates for a federal framework to deploy self-driving vehicles. Interestingly, Trump’s transition team aligns with Musk’s vision, indicating possible collaborative advancements in this technology.

Notable Quotes:

• Tracy Hunt on Tariffs: "The Trump team believes tariffs will incentivize automakers to build more products inside the US, creating jobs and boosting the economy." [04:36]

• Elon Musk on EV Tax Credits: "The $7,500 tax credit for customers purchasing an electric vehicle is ripe for elimination." [05:04]

Market Reaction: Following the discussion, Tesla shares surged by over 5.5%, reflecting investor optimism about potential federal support for autonomous vehicles. Conversely, companies like Uber and Lyft saw mixed performances in the market indexes.

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3. Rural Republican Movement to Separate from Urban Areas

Overview: A significant portion of the episode is dedicated to the growing movement among rural Republican voters to secede from Democratic-controlled urban centers, aiming to form their own states. This trend is particularly evident in states like California, Illinois, and Oregon.

Key Points:

• Mechanics of Separation: The process involves gaining approval from state legislatures and Congress. However, given the dominance of blue governments in many states, achieving this is highly challenging.

• Case Studies:

  • Illinois: Recently, seven counties have agreed to pursue separation, representing about a third of the state, though legislative support remains elusive.

  • California: In a bold move, rural areas have declared independence and are petitioning Congress directly, drawing parallels to historical precedents like West Virginia’s formation during the Civil War.

• Political and Economic Implications: Successful separations could redraw the political map, potentially resulting in additional Republican senators. Economically, proponents argue that new states could thrive with lower taxes and regulations, although critics highlight potential losses in tax revenue and economic instability.

Notable Quotes:

• Joe Barrett on Secession Efforts: "In California, they've declared independence and plan to petition Congress directly, citing the dominance of what they consider a communist government." [08:51]

• Tracy Hunt on Economic Prospects: "Proponents believe a new state could match Indiana in population and economic output, benefiting from lower taxes and less regulation." [10:43]

Broader Impact: The movement, while still fringe, has gained traction, especially with the perceived support in Washington. If successful, it could set a precedent for further state splits under different administrations, potentially leading to significant political fragmentation.

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4. Roblox Enhances Platform Protections amid Safety Concerns

Overview: The episode concludes with a focus on Roblox’s recent initiative to bolster platform safety for its youngest users. This comes in response to allegations by Hindenburg Research, which accused Roblox of prioritizing growth over child safety.

Key Points:

• New Safeguards: Roblox has introduced enhanced parental controls, including the ability for parents to create linked accounts, set daily usage limits, and restrict access to specific game genres.

• Company’s Response: Roblox asserts that these security measures were in development prior to the Hindenburg report and denies the allegations of inflating user metrics.

• Market Reaction: Despite the negative press, Roblox’s proactive measures may help restore investor and user trust.

Notable Quotes:

• Tracy Hunt on Roblox’s Action: "Roblox said the new parental controls and gatekeeping features were planned and in development long before Hindenburg released its report." [11:17]

Future Developments: Roblox’s commitment to improving child safety on its platform highlights the increasing pressure on tech companies to address user safety proactively, especially in the face of scrutiny from research firms and regulatory bodies.

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Conclusion

The November 18, 2024 episode of What’s News by The Wall Street Journal provides a comprehensive analysis of the intersecting dynamics in telecommunications regulation, the automotive industry, political realignments, and tech safety measures. From Brendan Carr’s impending leadership at the FCC and Trump’s transformative economic policies to the radical push for rural secession and Roblox’s safety enhancements, the episode offers listeners a nuanced understanding of the forces shaping current affairs. By incorporating expert insights and timely quotes, the podcast ensures its audience remains well-informed about the developments that could significantly influence markets and societal structures.

Transcript

[Tracy Hunt]

How do airplanes fly?

[Ryan Felton]

What's in this box?

[Tracy Hunt]

What does this thing do? Kids are curious about everything, including guns. Learn how to store your guns securely and make your home [e-mail] brought to you by N Family Fire Brady and.

[Drew Fitzgerald]

The Ad Council.

[Ryan Felton]

Trump's pick to head the US Federal Communications Commission says he's ready to take on big tech and the growing movement among rural Republican voters to separate from Democratic run cities.

[Drew Fitzgerald]

They're pretty popular in surveys and stuff and if you just look at the voting that happened these seven counties in Illinois that recently agreed to the plan, they're winning by 75%.

[Ryan Felton]

Plus, Trump's plans for carmakers could reshape the auto industry It's Monday, November 18th. I'm Tracy Hunt for the Wall Street Journal. This is a PM edition of what's the top headlines and business stories that move the world today. President Elect Trump has picked Brendan Carr, a career telecommunications lawyer and regulator, to lead the Federal Communications Commission as its next chairman. Carr is the senior Republican on the five member commission and has championed many of Trump's causes. He's also one of the authors of the Project 2025 policy paper where he outlined plans to remove regulations that conservatives consider overbearing or outdated. Joining us now is WSJ reporter Drew Fitzgerald. So, Drew, shortly after his appointment was announced, Brendan Carr posted on X a call to, quote, dismantle the censorship cartel and restore free speech rights for everyday Americans. What does he mean by that?

[Joe Barrett]

Carr has sent a lot of these posts out on X over the past few months that really echo the tone and targets of some of the issues that President Elect Trump himself has tweeted about and talked about in public. Carr is doing two things with some of these statements about free speech. He's one, targeting some of the same media outlets that the president has criticized in the past for allegedly unfair coverage of his campaign and of his presidency. And the second is to target big tech, especially social media companies that many conservatives consider unfavorable or tilting the balance of their rules against them in the past. But what that really means for telecom and media regulation remains to be seen because the FCC that he'll lead only has so much say over the content of online media and of broadcast media.

[Ryan Felton]

So what are some of the actions we expect Carr might take once he assumes his new role?

[Joe Barrett]

Well, for a sense of the types of actions we might see out of the next car fcc, you can really look to some of the points he made in the Project 2025 policy paper, but also his statements in the past as an FCC commissioner, one thing for sure is that the floodgates will be open to more consolidation, especially in certain parts of the broadcast TV infrastructure and telecom infrastructure that have been criticized by conservatives for years as outdated and a relic from the days when everybody got their TV through rabbit ears. You can also expect Carr to take a very tough stance against big tech companies. He's talked about this in posts on X, but also in his policy statements as a commissioner that he believes that big tech companies are shutting out opposing viewpoints and that some of the legal protections that big social media companies enjoy should be stripped away. Now, Carr has also come out strong against TikTok, calling its Chinese ownership a national security threat. That's something that has differed from some of President Elect Trump's past statements, which have been a little bit more ambiguous about whether he thinks it should be banned or not.

[Ryan Felton]

Drew Fitzgerald is a telecom reporter for the Wall street journal. Tariffs, EVs and Elon Musk are all likely to be on the minds of car executives as President Elect Trump prepares his return to the White House. Our reporter Ryan Felton wrote about all the ways Trump's campaign promises might reshape the auto industry, and he joins us now. Ryan, how will Trump's proposed tariffs affect the auto industry?

[Tracy Hunt]

The main things, if you add a tariff onto the cost of bringing a good into the country, the general thinking and understanding is that that cost would be passed on down the consumer. But if you follow the line of thinking from the Trump team, it would incentivize automakers to build more product inside the US which comes with jobs, created more money in the economy, that sort of thing.

[Ryan Felton]

Trump has been quite hostile to what he calls Biden's EV mandates. How worried are carmakers that he'll eliminate some of these EV subsidies?

[Tracy Hunt]

The varying things so far coming out of the automakers is that they're hopeful that some of the tax credits in the IRA as it relates to manufacturing, building EVs, building EV batteries in the US will remain intact. The credit that's seen most at risk is more well known than others. A $7,500 tax credit for customers who are purchasing an electric vehicle, which can be done now at the point of sale, when you are literally at the dealer. This is kind of seen as a ripe target. Even Tesla's Elon Musk has said that it's not needed. And Elon now has essentially emerged as a key ally of Trump.

[Ryan Felton]

And speaking of Elon Musk, how does a Tesla CEO fit into all of.

[Tracy Hunt]

This as it relates to those tariffs. That's just interesting to notice. The company for a long time has been suggesting it was going to build a plan in Mexico, but Elon kind of intimated that they would have to wait until the election is done because if high tariffs are put on, then it might not make as much sense to build in Mexico. So that's one key interesting thing and dynamic that's here. But another that's playing out right now is Elon has cast Tesla and its future as being pinned on the success of its autonomous vehicle technology. And Elon has said that he would like to see the federal government create this sort of streamlined federally approved process to deploy robo taxis on the road.

[Ryan Felton]

Ryan Felton is a reporter covering the automotive industry for the Wall Street Journal. Tesla shares ended the day up more than 5.5% after a report that Donald Trump's transition team wants a federal framework for self driving vehicles. As mentioned earlier, Tesla CEO Elon Musk has been advocating for this same policy. Meanwhile, Uber Technologies and lyft fellas in US markets indexes were mixed. The NASDAQ composite gained 0.6% while the S&P 500 rose 0.4% and the Dow slipped 0.1%. And if you're wondering what to make of this earnings season as it draws to a close, heads up. We're going to be releasing a special bonus episode this Wednesday where we take a look at some of the big themes that are standing out in corporate earnings reports. That'll be this Wednesday afternoon in between our usual AM And PM editions. Check it out and let us know what you think. Coming up, the growing movement to break off rural Republican areas from the blue cities in their states. That's after the break. Across US States like California, Illinois and Oregon, residents of red rural counties that are dominated by a few big blue cities are demanding the right to break off and in some cases form their own states. Joe Barrett is a national affairs correspondent at the Wall Street Journal and he joins us now. So Joe, how do these groups envision these breakups? What form would they take?

[Drew Fitzgerald]

Well, it's a complicated situation where you need to get approval of your state legislature and then take it to Congress. So many of these states are dominated by blue governments and the chances for these red counties to make that happen are pretty slim. They're just doing their best to make a case. In Illinois, they recently voted, seven more counties agreed to pursue this route. Bring the total to about a third of the counties in Illinois. But still, that doesn't convince the legislature.

[Ryan Felton]

And in California, what have they proposing? The new California state.

[Drew Fitzgerald]

In California, they've formed their own government, they've declared independence, and they have a plan to petition Congress directly. This happened once before in the Civil War, where the Virginia legislature had seceded from the Union and West Virginia wanted to form its own state. They went directly to Congress and the president, and they agreed to hear their appeal, even though they couldn't get the approval of their old legislature. So in California, the plan is to go straight to Congress and say that the blue cities are so blue and dominated by what they consider a communist government that they've already seceded from the Union and therefore they should be recognized as the true government of California.

[Ryan Felton]

How widespread is this movement?

[Drew Fitzgerald]

It seemed a lot more fringe if Kamala Harris was back in the White House. But these people feel like they've got a lot of backing in Washington these days, so they're pretty popular in surveys. And if you just look at the voting that happened, these seven counties in Illinois that recently agreed to the plan, they're winning by 75%. So they're still drawing in some support for this politically.

[Ryan Felton]

What effect would these proposed breakups have?

[Drew Fitzgerald]

Would be a redrawing of the political map in the U.S. i mean, if you turned Illinois, which is now a blue state, into a half of a red state and half a blue state, you'd have two new red senators. Presumably, Congress would maybe not change that much because they're already elected locally. But there's just a big question over whether maybe Trump would think this is a great idea. But then further down the line, when a Democrat gets in the White House, there could be more splitting off of states. And so, you know, it'd be kind of opening up Pandora's box, and nobody really knows where it would lead.

[Ryan Felton]

So if these rural areas were to split off, how would that affect them economically?

[Drew Fitzgerald]

The state of New Illinois, if it ever existed, at least the proponents say, could be as large as Indiana by population and have as much economic output as Indiana. They also think that with lower taxes and less regulation, they could be more competitive, so they think they'd do well on their own. The counterargument is that there's just a lot of people and a lot of economic activity in the northern part of the state. And if you include Cook county and some of the other collar counties, that's where all the tax revenue gets generated and a lot of it gets sent south. And so could be a lot of economic difficulties for the southern part of the state.

[Ryan Felton]

That was our national affairs correspondent Joe Barrett. Thank you so much, Joe.

[Joe Barrett]

All right.

[Drew Fitzgerald]

Thanks so much.

[Ryan Felton]

And Roblox today launched more protections to its platform for its youngest users. The move comes about a month after short selling firm Hindenburg Research accused the video game company of favoring growth over child safety. Roblox said the new parental controls and gatekeeping features were planned and in development long before Hindenburg released its report. The company has denied the firm's allegations, which include that it inflates the user metrics it shares with investors. The new safeguards include the ability for parents to create their own accounts and link to their children's accounts, allowing them to set daily usage limits, block access to specific game genres and more. And that's what's news for this Monday afternoon. Today's show was produced by Anthony Bansi with supervising producer Michael Kosmidis. Additional support today by Chris Zinsley. I'm Tracy Hunt for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.