Also: Working Class Voters & Global Shipping Emissions
Expert analysis made easy. Breaking down the news with data, charts, and maps.
Edited by Brady Africk and Carter Hutchinson
Happy Thursday!In today’s newsletter, we examine the sustained success of artificial intelligence stocks, new polling on the disconnect between Democrats and working-class voters, and new shipping emissions regulations.
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Topline: In light of a new Goldman Sachs report, AEI’s James Pethokoukis writes that the financial success of artificial intelligence companies can be attributed to productivity and profits over faith in the technology itself. The report concludes that the current AI-driven market surge cannot yet be called a bubble.
Magnificent 7 Mania: The “Magnificent 7”—tech companies with a market value over $200 billion—post an average return on equity near 46 percent and trade around 27 times forward earnings. These companies are more profitable and have stronger balance sheets than the companies that dominated the tech industry during the 90s.
Future of AI: While lower-than-expected earnings or weaker capital expenditure returns could change the current landscape, it seems that the current and sustained success of many AI companies is grounded in financial success, not irrational techno-exuberance. Economic theory proclaims that a truly transformative technology should push real interest rates higher, but the opposite happened in 2023 and 2024.
"If the current rally isn’t a bubble, it also isn’t being powered by dreamy anticipation of imminent artificial general intelligence. Valuations can look rich without assuming a coming leap to human-level AI or beyond.”—James Pethokoukis
Topline: There is a 50-point class gap among white voters ahead of the 2026 midterms. College-educated, white voters plan to vote for Democrats by 16 points, while white, noncollege voters plan to vote for Republicans by 34 points. AEI’s Ruy Teixeira writes that Democrats will continue to shed both white and non-white noncollege voters with their current electoral approach.
White Voters on Trump: According to the latest New York Times/Sienna Poll, 61 percent of white, noncollege-educated voters think President Donald Trump is cleaning up chaos and disorder, while only 36 percent of white, college-educated voters agree. These numbers are below 30 percent for nonwhite voters of all education levels. Dr. Teixeira explains that the Democrats' strategy of resisting and denouncing President Trump’s every action may appeal to white, college-educated voters but not their problem demographic: noncollege-educated voters.
Working Class Woes: Many working-class voters now strongly distrust the Democratic Party and appreciate Trump’s actions on key domestic issues. For example, 44 percent of noncollege-educated, white voters strongly support the deployment of National Guard Troops in Washington, DC, while 53 percent of college-educated, white voters strongly oppose the action. Since the 2024 election, Democrats have acknowledged the need to reach working-class voters, but only seem to be willing to change their rhetoric instead of adjusting their policy priorities.
"Democrats since the election have been talking nonstop about the need to reach working-class voters. They’re not unaware their party is increasingly a vehicle for educated professionals, whose priorities are quite different and frequently opposed to those of vast sectors of the working class. They’re just not willing to do much about it except proclaim their deep affection for the working class and assure them they are on their side and are really, really concerned about the cost of living.”—Ruy Teixeira
Topline: New International Maritime Organization (IMO) rules aiming to reduce greenhouse gas emissions from ships could decrease emissions from shipping by 40 percent, and global greenhouse gas emissions could be reduced by about 1 percent. AEI’s Brett Schaefer explains that the US opposition to these new measures must be taken seriously before other governments vote on the changes.
Consequences of Change: If approved, the new regulations would take effect in 2027, giving ships little time to come into compliance. Over 90 percent of the current global fleet cannot use green fuel alternatives, leading shipping companies to weigh costly retrofitting or fines. The fines could amount to about $20–30 billion a year by 2030, and green fuel alternatives cost at least three to four times more than traditional fuels. Fuel costs under the new IMO regulations are projected to rise by 350 percent. If the IMO regulations are implemented, the cost of shipping will increase, severely impacting consumers.
American Opposition: The US sees this proposal by the IMO as “effectively a global carbon tax” and deems the standards and emissions targets as “unattainable.” In the October vote of the 176 member states, US pressure could be sufficient to block or change the regulations. The US will be impacted by the new regulations even if it votes against them. If other governments approve the new rules, they could invite reciprocal fees or inspections on foreign ships at US ports.
"Other nations need to take the US opposition to the proposed IMO regulations seriously. The administration has demonstrated that it is willing to be disruptive and impose the trade measures it threatens. An off-ramp or alternative to address US concerns while preserving preexisting rules and relationships is the prudent course.”—Brett Schaefer
