WSJ What’s News - Why Red, Rural Voters Want to Split From Big Blue Cities

Episode Date: November 18, 2024

P.M. Edition for Nov. 18. WSJ Reporter Joe Barrett talks about the growing movements in California and Illinois for mostly republican rural areas to split from Democratic-run big cities. And the Journal’s Ryan Felton on what President-elect Donald Trump’s second term in office may mean for the auto industry. Plus, telecom reporter Drew FitzGerald on how Trump’s pick for the FCC wants to take on the big tech companies. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

What does possible sound like for your business? It's having to spend to power your scale with no preset spending limit. Redefine possible with Business Platinum. That's the powerful backing of American Express. Terms and conditions apply. Visit amex.ca slash business platinum. Trump's pick to head the U.S. Federal Communications Commission says he's ready to take on big tech. The U.S. 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. 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 percent.

Plus, Trump's plans for car makers could reshape the auto industry. It's Monday, November 18th. I'm Tracy Hunt for The Wall Street Journal. This is the PM edition of What's News, 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the Project 2025 policy paper, where he outlined plans to remove regulations that conservatives consider overbearing or outdated.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? 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. So what are some of the actions we expect Carr might take once he assumes his new role?

Well for a sense of the types of actions we might see out of the next Carr 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 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. 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? 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 to the consumer. But if you follow the line of thinking from the Trump team, it would incentivize automakers to build more product inside the U.S., which comes with jobs created, more money in the economy, that sort of thing. Trim 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? The varying things so far coming out of the automakers is that they're hopeful that some of the tax credits and 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, 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.

And speaking of Elon Musk, how does a Tesla CEO fit into all of 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 plant 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 is a reporter covering the automotive industry for the Wall Street Journal. Tesla shares ended the day up more than five and a half percent

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 fell. 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 earning 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 U.S. 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? 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, bringing the total to about a third of the counties in Illinois, but still that doesn't convince the legislature. And in California what have they proposing the new California state? 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. How widespread is this movement?

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, what effect would these proposed breakups have? It 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 a Pandora's box and nobody really knows where it would lead. So if these rural areas were to split off, how would that affect them economically?

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 counter argument 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.

That was our national affairs correspondent, Joe Barrett. Thank you so much, Joe. All right. Thanks so much, Joe. All right. Thanks so much. 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 Kosmitis. 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.