WSJ What’s News - Did Wisconsin Democrats Just Halt a Left-Wing Surge?

Episode Date: August 12, 2026

A.M. Edition for Aug. 12. Centrist David Crowley scores an electoral upset in Wisconsin, narrowly defeating Democratic socialist Francesca Hong in a race to secure the Democratic nomination for governor. WSJ’s Damian Paletta says Crowley’s victory could mark a turning point for progressives. Plus, New York City launches a sweeping investigation into four prediction markets – probing Polymarket, Kalshi, Coinbase and Gemini Titan for alleged deceptive marketing practices and the targeting of minors. And could one of Hollywood's oldest studios be relocating from Tinseltown to Music City? Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

New York City dials up the pressure on prediction markets. Plus, we'll look at whether last night's Democratic primary suggests a left-wing surge is stalling, and Paramount floats leaving California as its antitrust battle with the state drags on. Could one of Hollywood's oldest studios be relocating from Tinsletown to Music City? It's a distinct possibility. It's Wednesday, August 12th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. New York City is launching a sweeping investigation into four prediction markets,

with the city's council probing polymarket, calcite, coinbase, and Gemini Titan for alleged deceptive marketing practices and the targeting of minors. Reporter Caitlin McCabe has the latest. So City Council Speaker Julie Menon has sent letters. to these prediction markets. And in a letter addressed to Polly Market, she asked for details about promotional videos that appeared to depict fake trades and promoted insider trading on social media,

some of which may have targeted minors. This comes after our colleagues published a story earlier this summer, analyzing more than 1,000 videos from polymarket creators, which found that about 70% of them featured these dummy sites that the company used to film fake traits. And while Caitlin said that the council has no power to bring criminal charges, its actions could still force company practices into the light. So what city council can do is issue subpoenas, forcing companies to turn over documents, which, you know, it's worth noting has rarely, if ever, been used on a private firm.

But what city council can also do is hold public hearings. on the issue, which it says it intends to do. And Menon says she's also considering legislation around this that would authorize increased enforcement, public education campaigns, things like that. Kalshi and Gemini Titan didn't respond to request for comment. A Coinbase spokeswoman said that the company fully complies with applicable laws. And a spokeswoman for Polymarket said the company looks forward to engaging with the city council. We should note that Polymarket has a data partnership with Dow Jones, the publisher of the

Journal. Turning to yesterday's primaries, Milwaukee County Executive David Crowley has narrowly defeated Democratic Socialist Francesca Hong to win Wisconsin's Democratic nomination for governor. Hong had been leading in the polls and her loss to Crowley, who scored a late endorsement from Governor Tony Evers, suggests that an intra-party fight over how Democrats position themselves ahead of November's general election is far from over. With more, I'm joined by the journal's Washington coverage chief, Damian Palletta. Damian, good morning. Would it be premature after these results to say that the left-wing surge that we had been seeing

in Democratic primaries of late, maybe ebbing now? Not at all. The centrist strike back in Wisconsin. I mean, if you just remember last week in Michigan, the real progressive candidate, Abdul El-Sayed, was predicted to win the U.S. Senate primary for Democrats by double digits. Instead, he won by just one point. And here we have a similar result in Wisconsin where Francesca Hong, a member of the Democratic Socialists of America, was predicted to win by polls by more than 10 points. And there, an election day, the only poll that really matters, she ends up losing.

David Crowley closes the gap and makes up all that distance and ends up edging her out. David, we'd reported just a few days ago that the GOP may be losing its edge with voters on the economy, polling, revealing some skepticism over whether they can address cost of. of living concerns. And into that void, Hong, who's a part-time bartender, had presented herself as knowing what people are going through, saying she had the bold solutions to lower costs. I guess New York City voters, maybe who got behind Zoron Mamdani might validate that premise, but has Wisconsin shown us there's a split here about the electoral wisdom of going so bold? Exactly. And I think, you know, she has a lot of, quite frankly, really bold ideas that I think made people very nervous in Wisconsin. So, yeah, Mom Dani might work in New York.

his politics might work in New York, AOC's politics might work in New York, Bernie Sanders' politics might work in Vermont. But we're not really seeing that work in states like Wisconsin. It did narrowly work in Michigan. Now, El Sayed's really got a big uphill battle to win the November general election against Mike Rogers. But we saw in Wisconsin and the governor's race, voters said, no thank you because that kind of progressive Democratic socialist candidate was just not what they were looking for. That was the journal's Damien Palletta. Damien, Appreciate you getting up early for us. All right, my pleasure. Thank you.

While progressives did not show in in neighboring Minnesota last night with lieutenant governor Peggy Flanagan, besting centrist representative Angie Craig to become the Democratic nominee for an open Senate seat. In other races, President Trump's endorsement failed to propel Darlene Graham, the sister of the late Lindsay Graham, to an outright victory in the Republican primary to fill his South Carolina Senate seat. Despite finishing first, Graham fell short of a majority. forcing her to go up against Representative Ralph Norman in a runoff later this month. Speaking to supporters, Norman expressed hope that he could win without the president's backing. He chose who he did, and that's fine.

South Carolina's going to decide the next Senate. And in Minnesota, Trump's backing proved little help to My Pillow founder, Michael Indell, who lost a Republican primary for governor. Instead, State House Speaker Lisa Damoth will face Democratic Senator Amy Klobuchar in November. Well, as we saw there in Wisconsin, the cost of living is on a lot of people's minds this year. But even just on housing, the journal's Sinai Rashid reports that states are approaching the issue in starkly different ways. Sinai, case in point, four states that you're highlighting, North Carolina, Wyoming, Florida, and Oklahoma, remind us what voters will be deciding there come November. Yeah, come November, all of these states have ballot proposals on the ballot for voters to decide.

about lowering property tax costs in their respective states. So in recent years, especially since the pandemic, property taxes have risen enormously across the U.S., especially in Wyoming, where, you know, a lot of retirees have been moving into the state and house prices have increased. And when house prices increase, property taxes also increase in those kind of respective states. So we've kind of seen a push mostly by Republican-led states to lower property taxes that homeowners have become more frustrated. with the amount that they're paying each year when they get their reassessments. I'm sure many homeowners are intimately familiar with their own property tax bills, but just remind us what kind of run-up we've seen in recent years.

In the U.S., between 2016 and 2025, average annual property taxes for single-family homes rose about 34% reaching more than $4,400, according to Atom, a property data company. And property taxes are super important in the U.S. property taxes comprise almost 30% of total U.S. collections in 2023 the Tax Foundation saw. So they're really critical revenue sources for state and local tax revenue. But again, because they've risen so quickly, homeowners are kind of caught in a front where they feel like they're paying so much more on their property taxes, but they're still critical for the state and for our local governments. I'm glad you brought that up because I can imagine the prospect of rolling back property taxes will go over pretty well with voters. But what are tax experts and local officials who you've spoken to saying about this prospect?

Yeah. So most tax economists actually really like property taxes. They're a very transparent tax because you as a homeowner are directly paying these taxes which go back into your local communities to fund schools, to fund firefighters, emergency services. So most tax economists are actually in favor of keeping property taxes where they are as opposed to cutting them. Local officials, where do they land on this? Yeah, so in Wyoming, Brent Bean, who's running for governor this fall, who's a Republican, is saying that in order to cover for lost property tax revenue, he's been one of the biggest proponents about cutting property taxes in the state. He wants to scale back on government spending in general and kind of ensure that local counties are reprioritizing the programs that they fund. He still plans to protect funding for essential programs, but in general, he does want to scale back on government spending so that local counties don't have to rely on property taxes as much. And we already see in other states like Florida that cities are already starting to prepare that if property taxes are cut, how to reutilize the tax revenue that they currently have in their local counties. We see some people freezing hiring, cutting travel, and just railing back expenses in order to reprioritize the revenue that they do have. So I'm sure if property taxes do end up getting

cut in some of these states come this fall, we'll definitely hear more from local officials about how it's affecting their counties and the citizens. I've been speaking for the journals, Sanai, Rashid, Sanai, thanks so much for bringing us this story. Thank you. Coming up, we've got the day's top markets news as Paramount considers uprooting from California. That story and more after the break. Bank of America is joining the likes of Morgan Stanley in boosting U.S. investments into data centers, energy, and critical minerals. We exclusively report that the bank is planning to deploy a quarter trillion dollars.

as part of that infrastructure push, and while a company executive said it doesn't intend to focus on equity investments, it hasn't taken that option off the table. That says J.P. Morgan has announced it'll use its own capital to invest directly into companies that sees as critical to national security and economic self-sufficiency. Well, speaking of the data center buildout, shares of cloud computing company Corweave have jumped off hours after it posted a fifth consecutive quarter of record revenue. Corweave's business model involves buying advanced AI chips, installing them in data centers and leasing them to hyperscalers.

Its shares fell late last year, as concern mounted over an AI bubble and have yet to recover that lost ground. But speaking to investors, CEO Mike and Trader said its sales backlog now exceeds $100 billion, and he projected confidence that demand won't erode, even as some cities and states hit pause on new data center construction. We feel like moratoriums are, they're not going to impact the demand for this infrastructure. They are going to impact where this infrastructure gets built.

To win community trust in Traders said that companies should pay for grid upgrades and emphasize the jobs and tax-based benefits of new data centers, infrastructure, he said, was necessary to retain America's AI leadership. Well, it's poised to be a relatively quiet earnings day on Wall Street. with results from Cisco leading the slate this afternoon. The tech conglomerate's results come after it said in May that it would shed thousands of jobs as it goes all in on AI. But front and center for investors today

will be the release of U.S. inflation figures for July at 8.30 a.m. Eastern. Economists are projecting the report to show consumer prices up 3.4% from a year earlier, well above the Fed's 2% target. And finally, could one of Hollywood's oldest and most storied studios pack up and leave California. Paramount is saying that a move out of the state is definitely on the table as it tries to settle an antitrust lawsuit filed by California and 11 other states aimed at blocking its $81 billion acquisition of Warner Brothers Discovery. California Attorney General Robonta yesterday described talk of leaving the state as an attempt

to blackmail regulators. In considering other new homes, Journal Media and Entertainment reporter Joe Flint says that Paramount chief executive David Ellison has often mentioned Tennessee, which is also home to Oracle, the company co-founded by his father, Larry Ellison. Paramount is talking about relocating to Tennessee, perhaps as early as this October, or maybe Georgia, or Texas. Moving to Tennessee won't exactly make the case go away, but it will be cheaper for Paramount to operate while this legal battle goes on. And the longer the legal battle goes on, the more Paramount could potentially owe Warner shareholders who are waiting for the deal to close. Starting in October, a so-called ticking fee will begin,

in which Paramount will be responsible to pay Warner shareholders approximately $7 million a day until the deal closes. We reported last month that California Governor Gavin Newsom's office is pushing for a settlement, a move echoed by Democratic gubernatorial candidate Javier Becerra, who said it would be devastating for California if Paramount left. And that's it for what's news for this Wednesday morning. Today's show was produced by Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with the news show.

Until then, thanks for listening.