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The Polling Edge with John Anzalone and Phil Cox

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During Sixth Street’s annual MaSH CxO Summit, David Stiepleman recorded our latest episode with two longtime political experts who have run dozens of statewide and national campaigns for Republicans and Democrats. The conversation was in front of a live audience of CEOs and other leaders from across our growth equity portfolio, and we dove into current political, geopolitical, and macro trends in this election year affecting their markets and companies.

Our guests are John Anzalone, one of the nation’s top Democratic pollsters and strategists, and founder of Impact Research, and Phil Cox, known as a “Republican kingmaker,” long-time political operative and founder of GP3 Partners, one of the largest corporate communications and public affairs firms in the nation.

Phil and John helped us separate signal from noise in the upcoming presidential and down-ballot elections here in the U.S., as well as what company leaders and individuals should be watching for as the year unfolds. The conversation sheds light on key challenges, opportunities, and nuances that shape our political discourse and is a key listen for business leaders looking for insight into how to navigate the next nine months.

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Episode Transcript:

David Stiepleman: Hi, everybody. Welcome back to It's Not Magic, our podcast from Sixth Street. We invite influential and thoughtful people, leaders, and founders to get to the core of how they're doing interesting and intentional things to stand out in their industries. Today is super important and was even a little fun. I spoke with two longtime political operatives who have run dozens and dozens of statewide and national campaigns for Republicans and Democrats. We had a spirited conversation in front of CEOs and other business leaders at our annual Sixth Street MaSH CxO Summit in Arizona in April. The audience were leaders from across our growth equity portfolio, and this session was one of many, giving these folks and our team insight into current political, geopolitical and macro trends affecting their markets and companies.

John Anzalone: Welcome to your political therapy session.

John Anzalone: When reporters call me and ask me questions about polling, I said, I'll give you my thoughts on where the polls are, what they mean. But you really should call a psychologist, and I don't mean that as joking. I mean, we're in a very strange time in America. We have this political divide that is real and it's intense.

Phil Cox: It's also the party infrastructure on the ground, the ground game, folks turning out, knocking on doors, turning folks out. That really matters. If you have a good governor's race or a good Senate race down ticket, that will help to drive a lot of that for the presidential.

David Stiepleman: That's John Anzalone and Phil Cox. John is President Biden's Pollster. He's the founder of Impact Research and one of the nation's top Democratic pollsters and messaging strategists. Phil is a longtime Republican political operative and a trusted advisor to governors Chris Christie, among others. And he's the founder of GP3 Partners, one of the nation's largest corporate communications and public affairs firms. You'll hear Phil and John help separate signal from noise in the upcoming presidential and down ballot elections here in the U.S., and help companies and us figure out what we should be watching for as the year unfolds. This conversation was incredibly valuable for our team and our portfolio company partners, and I'm sure it will be for you as well.

David Stiepleman: Morning. Hi. Nice to see everybody. This is exciting. First order of business, let's introduce properly our esteemed guests. So, John Anzalone, as Christy said, a big deal in Democratic politics nationally and in various other ways. You're the founder of Impact Research, that's a full service, public opinion, research and consulting firm, one of the nation's top pollsters and messaging strategists. You’ve spent decades winning some of the toughest political races in recent history, which I think means winning races no one expected you to win, which is probably a good definition of it. You've polled for the past four Presidential elections, elections for President Obama, Hillary Clinton and President Biden. You've helped to elect U.S. Senators, governors, dozens of members of Congress, more than 30 years of experience in message development and strategic execution. You've been called on by key decision makers, executives, CEOs, corporations, nonprofits, trade associations, everybody, to navigate complex challenges and achieve their goals in a changing world and marketplace. That's kind of what we're doing here today. So that's kind of good. You are from St. Joseph, Michigan. The pride of St. Joe. And you've lived for a long time in Montgomery, Alabama.

John Anzalone: Yes, that's a long story,

David Stiepleman: Which I wanna talk about.

John Anzalone: Yeah. Roll Tide. We got a big game coming up right here.

David Stiepleman: So, Democratic pollster, Crimson Tide. Kind of Interesting. Okay, we'll talk about that. Phil Cox, founder of GP3 partners, one of the nation’s, largest corporate communications and public affairs firms. Nearly three decades in politics, Phil's helped to elect more than 30 Republican governors, directed Presidential Super PACs, served as a senior advisor to numerous campaigns for the U.S. House and Senate. From 2011 to 2014, you led the Republican Governor's Association. In 2019, you served as the National Co-Chair for Trade Works America, that successfully advocated for the passage of the USMCA that was the replacement to NAFTA. You serve on the board of the Senate Leadership Fund, the principal Super PAC focused on electing a Republican Senate majority, which looks kind of likely in ’24. We'll talk about that. And Win Red, the GOP's principal small dollar fundraising operation. You were a senior strategist for Florida Governor Ron DeSantis in his 2022 reelection, and then in his presidential bid.

David Stiepleman: You're a trusted advisor to former New Jersey Governor Chris Christie, former Virginia Governor Bob McDonald, and lots of other governors and senior Republicans around the country. The Boston Globe called you a force for the GOP, The Washington Times called you a Republican kingmaker. I wanna know what that is, what that means. You grew up in New England in Massachusetts. You were a state champion hockey player. I'm gonna make a dad joke, you played left wing, which is kind of fun.

Phil Cox: I know. I feel bad for your interns having to unearth that research right there. But yeah, ’92 Mass state hockey champion. Go Harbormen.

David Stiepleman: That's pretty awesome. I love that. So give the people what they want. I think you were doing this a little bit at breakfast. I was sort of informally crowdsourcing in an analog way yesterday. What do people want? And I think basically the common denominator was kind of like an anguished sigh combined with a horrible groan. And if I can distill that down, it was kind of like, what's going on? We're business people and we're centrist, and doesn't everybody kind of agree with us? And why can't we get this right? Maybe Phil start. Can you try and unpack that a little bit and like, what are people reacting to and what are you seeing with your clients and the numbers?

Phil Cox: I think in general that's representative sort of where America is right now. And John can speak to this probably better than I, but there's great dissatisfaction with both choices this year. That's the bottom line. And we always talk about the third party candidates. Many of you may remember in ‘92, Ross Perot got, I think, 19% of the vote that year. You have a bucket of third party candidates probably led by RFK Jr., who I think, having sat through a lot of focus groups and seen a lot of polling, read a lot of cross tabs, I actually think the third party vote will be impactful this year, and for no other reason that I think there's gonna be a significant protest vote in the presidential. Presidential race is not about 50 states, as we all know.

Phil Cox: It's really about six or seven. And in those six or seven states, if you have an RFK end up getting five to seven percent, it's something to keep a close eye on for guys like us that are responsible for strategy and spending the money in these campaigns. So it's real. Biden’s numbers are not great. His job approval, low forties, in some states high thirties, Trump, is leading in probably six to seven of those battleground states, with the exception of Pennsylvania. But his numbers, his ballot share, is kind of capped right around 40, low forties. So anything can happen. And I think there's a sentiment, particularly in the Republican party, that Washington is broken, that the country is on the wrong track, and that folks really don't have a voice in the halls of power. And we've seen that play out numerous times over the last four, eight, 12 years and it's getting worse. And so I think it's a little bit of a depressing time for average voters. But there are real important things that are gonna be determined in this next election, in these next four years.

David Stiepleman: John, what are you seeing from the numbers? Maybe from the primaries, for example.

John Anzalone: Well, first, welcome to your political therapy section. I had breakfast with some people, everyone was peppering with great questions and anxiety. Because there's certain anxiety out there. And as a pollster, we believe in polling. Polling's important, polling and time, meaning right now is probably noise. We're in the strangest environment because we're in this post-Covid, kind of post-inflationary. There's still this low grade fever in America. When reporters call me and ask me questions about polling, I said, I'll give you my thoughts on where the polls are, what they mean. But you really should call a psychologist. And I don't mean that as joking. I mean, we're in a very strange time in America. We have this political divide that is real, and it's intense. We have this character Donald Trump, who has changed the dynamics of everything in our lives.

John Anzalone: Put Joe Biden on hold for a second - to the point where, for example, there's certain diagnostics - the job rating for the economy. You guys are all smart people. You see the numbers on the economy. We have a pretty good economy. And yet, if you take a look at the polls, 63% of the people say the economy is moving in the wrong direction. Well, again, all these diagnostics have become political. Everything in our lives have been political. So we're all uncomfortable. If you have a Democratic president, Republicans say the economy is shitty. If you have a Republican president, the Democrats say the economy is shitty. But when you take a look, for example, at the Wall Street Journal poll, if you take a look at individual states, how is the economy in North Carolina and Michigan, et cetera, everything's over 50% positive. So you have to start looking at different diagnostics as well. Just like when you go in to buy a company. You're not gonna just look at the first set of books, you're gonna start asking questions really deep. For example, when you ask, what is your personal satisfaction, America's personal satisfaction is in the seventies, like 78%, much different than what you see in the other diagnostics.

David Stiepleman: How does that compare historically?

John Anzalone: Historically, it is almost as high. What's different, and I think, worth noting is the very satisfied is down, is historically low in the last two decades, but still a little bit under 50%. Don't get me wrong, I'm not trying to put rose colored glasses on here. This is gonna be a tight race. I think we all have to remind ourselves, 2016 Trump won by 77,000 votes in three states. 2020 Biden won by 44,000 votes in three states. And, by the way, two of the states were different than 2016. So everyone knows it's gonna be a close race. And what I had suggested to you guys at the table, is for high information people who need this therapy session. Put this election right now, compartmentalize it, put it in a box, put it way up in a box, on your closet shelf, and take that box out on Labor Day, and you'll save yourself a lot of anxiety.

David Stiepleman: You said a lot of things I wanna follow up on. There's no way this room's gonna do that. So we gotta talk about that. I wanna double click on the economy for a second. Satisfaction, I get that point - states, people, blah, blah, blah - but sort of nationally they feel bad. And this is not a “let's defend a position on any particular thing.” I'm interested in what the numbers say and what you're seeing in the numbers. And Phil, what you're also seeing just with your clients and when you're out there. Is it people just don't get it? People are wearing a uniform so they know they have to say what their team is saying? I think Larry Summers did something like ten days ago where if you look at the way we used to measure inflation before we changed it, and you put in what people used to think about as what they're paying for things, they're paying more. What are you seeing in the numbers?

John Anzalone: Yes. No doubt about it. You can't put your head in the sand that the cost of living is still one of the top drivers of people's personal satisfaction and or financial. And things are just higher regardless of whether inflation is steady. So it's not about the inflation rate or whether it's steady, it's about the cost of living. And I think that if you're in a campaign, we get that. And the President gets that, and he talks about, “hey, costs are still way too high. But here's what I'm doing about it. And Trump doesn't have a plan,” et cetera, et cetera. And so there's no doubt that you have to meet people where they are, and that is where they are. But they're also on a bunch of different issues. And we can talk about that later.

David Stiepleman: We should. We absolute should.

Phil Cox: I had two governors in my house Saturday night and they’re Western - Utah, Montana. And the number one thing they talked about was the cost of housing. And it’s just very interesting. You can read the Wall Street Journal every day and hear about the statistics and all that, but the fact of the matter is if you compare where people are today. where they were four or five years ago, it's harder for an average family. It's gas, it's groceries, it's housing, it’s the cost of college. All of these things combine to contribute to that sentiment that two thirds of Americans believe the country is on the wrong track, and the economy is on the wrong track.

John Anzalone: And I think what you say is interesting because this race, there's gonna be almost $3 billion spent just on paid communication in the presidential campaigns. 76% of that is gonna be…

Phil Cox: I think that number's low.

John Anzalone: Well, 76% of that is gonna be spent in seven states that Phil was talking about. Nevada, for example, housing's a real problem. California investors have come in there, gobbled up housing and apartments. So that is a big issue. And my point being is that the issues in Nevada are gonna be, for example, different than the issues in North Carolina. And you will see very specific campaigns in each of those states.

David Stiepleman: John, maybe just to pull back to, generalities. What do you actually do with the numbers?

John Anzalone: That's a great question.

David Stiepleman: I think one of the things I've heard you say is, “gee, I'm glad I'm not in D.C., it’s helpful to me.” I was interested by that, because numbers are numbers and you're looking at numbers, but there's a feel thing too.

John Anzalone: I try not to be influenced by anything that comes out of D.C. because it’s usually wrong, number one. And there is an echo chamber. There's a real echo chamber.

Phil Cox: Group think.

John Anzalone: There's a herding. And I've lived in Montgomery, Alabama, raised my kids there. My ex-wife was from there, that kind of explains why. But I've also never watched cable TV. I've never watched Rachel Maddow. I've never watched Morning Joe. I just don't want to be influenced by what the talking heads are doing. What I do is I talk to real people. I talk to unfiltered. As a pollster, I'm talking to real people, whether it's for a campaign for electoral politics or a campaign for corporations, which I do a lot of. And I want you to think of polling and getting the attitudes of voters or customers as an efficiency tool. I mean, that's what I'm doing. You guys go in and buy a company, you look at the books, but you're doing a heck of a lot more than looking at the books.
John Anzalone: I don't care what you think about Elon Musk, but Walter Isaacson's book on him is fantastic. And one of the things you find out is that Elon Musk slept for weeks and weeks and months and months on the floor of his factory when they started it. Well, in some ways, that's what a pollster's doing. They're literally going into the homes and getting the attitudes of voters unfiltered from what anyone else can do. And we're seeing things differently than what opinion leaders see. And it's an efficiency tool to find not only what the right messages are, but also who are receptive to those messages. And when you're spending millions or billions of dollars, you're going to want that type of guidance when you do your advertising campaigns.
David Stiepleman: I think I've heard you say the best way to know a state is to caucus there. What does that mean?

John Anzalone: Well, for example, when you're in political business, you're at one point a bottom feeder. Like that is the best thing that can happen to you. When I started my firm, I was driving around Southwest Virginia getting legislative races, and the panhandle of Florida, getting legislative races. And we would do these caucuses, which mean the state legislatures, North Carolina, New Jersey, Florida, Illinois. And so you just learn a state, literally legislative district by legislative district. And that gives you really valuable information when you look at things at a state level or at a presidential level.

David Stiepleman: Is there an example, either from 2022 or now as you're receiving wisdom, you're hearing this is what's going on in a particular state, in a particular region of a state. And you're like, “that doesn't make any sense to me based on what I know about Macomb County, Michigan,” or whatever.

John Anzalone: I'll look at it a little differently. My experience in Hillary Clinton's campaign, which actually was a good experience, I had great relationship with her and I think incredibly highly of her. And the staff was really professional. But the difference between 2020, was that Biden was going to places like Beaver County, he was going to places like Erie, Pennsylvania. And in 2016, we tended to go to the Phillies and the Pittsburghs. And so, getting into the hinterlands, the Scrantons of the world. I do Gretchen Whitmer. She spends a lot of time in the upper peninsula in northern Michigan, those hard markets. Rick Scott, who I've run against three times and lost against three times all by one percent. This is a guy who goes after our base and goes to Democratic places. And so you have to talk to everyone.

David Stiepleman: Let's talk about eating into the base. And Phil, you mentioned the protest vote. The New York Times ran a big piece, I don't know, two weekends ago breaking down the primary caucus data, which I'd love to hear how reliable you guys think that is. It was kind of truncated, and it was kind of distorted for a lot of reasons. But their point was that there's a big protest vote in the Democratic primaries against Biden. One of those categories was Hispanic voters. And what's your take on that? Is that real? We're in Arizona, it's very relevant here, for example.

Phil Cox: I've done a lot of work in and around this community. It's a very diverse community. It's different from state to state, It's different within states. Florida Governor DeSantis won Hispanics in 22. Rick Scott, as you said, really targeted Hispanics, showed up. I think they're actually the key swing vote in the electorate right now. Because if you just look at their performance over the last three or four election cycles they're not embedded with one party. They're just not. If you look at Florida Republicans, Governor DeSantis won Miami-Dade County for the first time in history. They care about what every American cares about. They care about the economy first and foremost, public safety, education, does government serve them?

Phil Cox: And you really have to keep an eye on how the candidates are – and you have to show up, to John's point. The candidates I advise, I say you gotta go places where maybe you're not naturally comfortable, at the beginning, and you gotta show up and put in the work, because it's a respect thing, particularly in that community. One of the things we talk about at this level is you have to advertise in language. You see a lot of candidates that'll slap subtitles on English. It doesn't work. You have to go ahead and create media in language and target it to the right folks. And then understanding that, particularly in a place like Florida or Texas, the communities are very, very different. Miami is very different than Orlando. And you can say that about Arizona, New Mexico, Nevada, all these states.

Phil Cox: And you have to understand from our perspective how that looks. And Trump did quite well among Hispanics. We have Republican governors around the country, DeSantis, Abbott, others. We’ve really figured out, unlock the key and really show up and put in time. So it's going to be really interesting. John was talking about Rick Scott. I think our team has really learned the lessons. I think we still lag Democrats in a lot of areas, but we're showing up. We're putting in the time. We're devoting the resources to that community. And I think it's gonna pay dividends.

John Anzalone: And just to dissect the Latino community a little bit more because, it is the community. And I think every demographic when you have a race won by 44,000, 77,000, is important. You can't leave anyone off the table. But I do think that the evolution of the Latino vote is really an important kind of case study. One is the Latino as an umbrella doesn't work. You are Venezuelan-American, Colombian-American, Mexican-American, Puerto Rican. And you communicate that way, not only in language, but talking about that. If you're in Florida, you are buying Haitian radio, Haitian American radio. It is just so divergent, but I don't think that there's enough conversation about the evolution of the Hispanic vote. My parents were first generation Sicilian-American. My grandparents had broken English. All they wanted to be was American.

John Anzalone: They didn't want to learn the language, et cetera. And I think we forget that there's a lot of that in the Latino community. After the first generation, you're Colombia-American, you just wanna be American. And you start assimilating. And again, so all of a sudden party ideology is not really important. And so they're a persuadable universe. You have to go out and fight for them. The other thing that I think is really important that you start looking at with the Latino community is that they're mostly Catholic, but the biggest, fastest growing universe in the Evangelical and Pentecostal, is Latinos moving over from Catholicism to Evangelical Pentecostal. Once they're in those churches, welcomed by those - they're Republicans. And so there's a lot going on. This isn't just, oh, Trump, or this is whatever. There is an evolution of Latino Americans assimilating into kind of being American, more than just being Latino. And I think we forget that in a lot of ways.
Phil Cox: And the hit on the Hispanic Latino community has been, “yeah, there's a lot of 'em, but they don't show up.” And I think if you look particularly at the midterms in ‘22 and ‘20 and in ‘16, they're starting to show up. They're showing up now. At a level that's equivalent to African American voters.

John Anzalone: I think the thing to look for when you're looking at polling right now is, there’s just myth, quite frankly, there's just a wrong narrative by the media that Biden is bleeding the base. And what they do is, Biden got 91% of African Americans in 2020, based on exit polls. Or Biden got 63% or 68% of Latinos. And they compare it to where he is in polling. If you know anything about polling, the fact is that African Americans, young people, Latinos always poll lower than where they are. And then after Labor Day, that number starts solidifying. And you'll never hit the 91% that you're gonna get in the poll.

Phil Cox: The other thing, just to recognize, for those of you picking up The Wall Street Journal every day and reading, most of the public polling out there is garbage.

David Stiepleman: Explain that.

Phil Cox: You look in the mainstream media polls and the methodology is flawed. They are doing national polls, which are largely meaningless in my view, for what we do. But why do they do the polling? They do the poll so they have something to talk about in terms of content on the Sunday shows, in all their various media platforms.

John Anzalone: And great clicks. I mean, they get a lot clicks.

Phil Cox: They get a lot of clicks. That's it.

John Anzalone: As a pollster, I do one thing, and I would recommend this to you. Go to, which is Nate Cohn now, and Nate Silver used to have it, and RCP – Real Clear Politics. And they are an aggregator. They take and aggregate all the polls and try to take the noise out of them and give you averages. And I think that's the way to look at polling nowadays, because there's just so many bad polls. When I think about when I started out in politics, you had five or six polls, and now polling has become like political porn. I mean, that's what it is. And it’s really important for media firms, but guess what, do you think media firms spend a lot of money on polling? No, they don't.

John Anzalone: That's why when Tony Fabrizio, who's Trump's pollster, and I were approached to start the Wall Street Journal poll, they were committed to spending real money to do it the right way. Large sample sizes, multimodal, which meant you were getting people a bunch of different ways. And I think that they do a really good job, but there's just a lot of bad polling out there where, for example, they're online using panels, which we call Opt-in, where sometimes 40% of those panels are almost professional pulse takers. So that's where we get the bad reputation sometimes, is internally what we're doing for campaigns and corporations, we spend a lot of time and a lot of money doing it the right way, and the media polls don't, and often miss it.

David Stiepleman: So that's, that's one that reason why polls have gotten a bad rap – that I get. Your career also straddles going digital, Trump, realignment of things. What have you learned? What have you changed to get it better?

John Anzalone: So I think if we're being honest with ourselves, Trump really changed how polling's done, meaning like, he's different and his people are different, and they're hard to get. We’ve had to, for example, there's just certain people who will not take a live interview, but they will online. So for example, some people still have landline, so we do a little bit of landline. We do about 78%, or 80% of our interviews cut between live cell and what we call text to web. You may get a text and then you take it online, and we find that people who take things online look very different. We get the hard to reach voters by going online. Including our own party, who might not want to give answers to live interviewers.

John Anzalone: So it's like any company. I don't care whether you're a steel manufacturer or you're a software company, if you are not evolving, you’re gonna die. And so we're constantly evolving, as well as, not only in terms of how we're getting interviews, but how we're making sure we're getting the right interviews or the correct interviews. 2016, we were getting our non-college educated voter universe, but we weren't getting the right type of college educated voter. Stay with me for a second. Think about the transition over decades. My dad was a long haul trucker. He was a blue collar guy, and he was a Teamster. And that's kind of what you had. But now you have non-college educated work people who work with their hands, or drive, or agriculture or whatever, works in manufacturing. And then you have a whole universe of non-college educated voter who are in the service industry. And guess what? A lot of 'em live in the suburbs. And you're an administrator for a dental firm, and you don't have a college education, but you're acting much like a suburban voter. And so we have to get those type of mixes right, which is not something that we had to do in the past. You have to get the right interviews, super expensive and takes a long time.

David Stiepleman: And Phil, you're the tippy top of the most sophisticated consumers of these things. And maybe your clients are like, do we need to spend – like, what are you looking for? And what are, how are you sourcing the right kind of data when you're talking to your clients, political clients.

Phil Cox: Well, we use the right pollsters. The challenge with us is there's so many polls out there now. So that, whether it's a corporate client or political client, poll comes out, and political client, all the internals show that they're up, five to seven points, poll comes out, they're down two. And it's like, we have to take half our day to explain why that's not true. So what I would say is, from my perspective, we try to look at a lot of different sources of data, and I think there's too many people in our business, who are senior strategists, general consultants, who simply read the poll and write the TV ad based on the language in the poll.

Phil Cox: There's no thought or creativity that goes into it really beyond that. And there is something to be said for getting out in the community, talking to a lot of different people, using your instincts, knowing that, okay that may work, that may poll, that may on the paper show that 70% of the electorate’s gonna be moved by that. But that's not the issue we wanna be talking about. There's an issue matrix right now, and I think one of the reasons why Trump has a really good chance of winning this year is because the issues that Trump is most aggressive on, is most consistent on, are the issues that also the American people think are the most important. So right now, Trump’s been talking about the border before really a lot of people were talking about it. It's now become one of the top three issues in the campaign.

Phil Cox: China - huge issue. I think it's gonna define not only the next four years, but the next 50. The economy - obviously that's one where both parties are gonna have to battle really hard. I think they both have core messages that they're gonna advance. So it’s really trying to be thoughtful about everything that's going on in the universe and the political environment around you, and not just taking the number from one pollster. We use multiple pollsters. No offense, John. We're not gonna put all of our eggs in one basket. And when you have a divergence of numbers, you have to ask why, you have to look under the hood the same way you would do when you're assessing investment in a company. Why is it? What did you do? What were the assumptions that you made when you actually were looking to construct this poll?

Phil Cox: So we do a lot of qualitative data. We do quantitative data. We go in and we listen. I learn more from focus groups than actually from sitting in a room for two or three hours or watching 'em online. Watching the night manager from Walmart react to a message, and how he thinks about it, how he processes it, how he talks about it. It's just what we do every day. But having to put all those data points together to come up with the right way. A candidate hopefully knows what they stand for, knows what they want to talk about, in the context of a campaign. Your job is to really help them sharpen that message, and then think about the delivery mechanisms, to generate the most enthusiasm. And you're not gonna change who they are. But listening to those conversations, I've never walked out of a focus group and not learned something, not gotten a little bit smarter.

John Anzalone: I think that's right. I mean, we do a lot of focus groups, whether they're in person or online. And I would say that we're known for our political campaigns, but we do a lot of corporate work. And I would say that the qualitative is probably the most helpful in corporate work. Every major corporation should be doing research, but do it in a campaign style way, not a marketing way. They’re completely different. We go into major Fortune 100 companies, and they just do marketing. They do marketing research, very simplistic stuff. They're not good on message testing of where they should go in their advertising. I'll give you a great example. A company recently where they have a theory of the case. You go do focus groups, you do some polling, and they were way off.
John Anzalone: And again, we're an efficiency tool to help them spend their communication dollars the right way. Another recent one for a company in a battleground state, but a Republican state governor, where there's this myth that, new energy, green energy is a woke issue for Republicans. It isn't. No, matter of fact, Republicans at a very high level think that we should be producing more solar and wind. They just believe that it should be all of the above. And so they're missing out on a communications opportunity in their state talking about the investment in the electrical grid or the investment in new energy, because they're worried about Republican leaders. Well, there's a huge disconnect often between Democrat and Republican leaders or legislators and what real people think. Where you go wrong mostly, and my corporate clients go wrong, is they do the data and they put it up on a shelf because everyone's scared to make a decision. That's the biggest problem that corporate clients have.

David Stiepleman: We just passed the quarter end. Lots of stories about fundraising. Biden was way ahead. Trump raised 56 million bucks, but RNCs got new rules. He can use it for legal fees, whatever, how's that gonna flow through?

John Anzalone: It's not how much you raise, it's how much you spend and how you spend it. And if it's going to legal fees, it's not going to field, it's not going to TV, digital, mail, radio, scheduling, staff, et cetera. That is a huge problem.

David Stiepleman: And that impacts the presidential, the down ballot. What are you thinking?

Phil Cox: I think it's certainly everything, everything with Trump is unique and unprecedented. So we’re in an unprecedented phase here. But the bottom line is he wrapped the primary up historically early And the folks that fund campaigns, they tend to be a lot of billionaires, write the big checks, soft money checks 10 million up. They're coming around on our side. It's a progression. There were folks who supported DeSantis, supported Nikki, but at the end of the day they think they're gonna be better off under a Trump presidency than another four years of Biden. So, those folks are gonna write checks. I'm on the board of the Senate Leadership Fund.

Phil Cox: They're gonna spend $250, $300 million or more this cycle. The analog, the Senate Majority PAC on the other side's gonna spend that much as well. There's plenty of money in politics, period. It comes down to how you target it, how you spend it, and what the message is. And voters are smart. I mean, they, they take all these different data points. It's not just about the number of TV ads you see. It's not just about the quality of the TV ads. We were talking about this last night, I think for Biden, the number one thing for him is if they debate, can he show up and perform in that debate? More than anything else, that's what's going to impact those very small group of voters who are still persuadable in this country. There's not a lot of 'em left. People have got their team jerseys on, they've made up their minds.

John Anzalone: Voters also, they are smart, and they do take in a lot of data points. But one big one is a risk quotient. And I saw this firsthand in 2016. Donald Trump was the risk until Comey came in and opened up the FBI investigation, and they're like, “oh, she's in a risk, and she'll be under investigation and impeachment and all this stuff. We might as well look at the new guy.” And so the risk quotient is very high for him, on several different ways. One, he has a bunch of trials, and if he gets convicted we know there's probably about 25% of the electorate, including his voters, who say that they probably won't vote for him because of that. But his other risk quotient is just like, what is he gonna say tomorrow?

Phil Cox: You're missing the obvious risk quotient for Joe Biden which is –

John Anzalone: Hold on, hold on.

Phil Cox: Is he gonna survive a second term?

John Anzalone: I'm talking about the risk quotient of this election and getting here, which again is the fact that people now can say, “oh, yeah, he was, he's a businessman. He understands the economy.” But at the end of the day, the risk quotient is, “Can I live four more years with this guy as president, with what he put me through with his behavior previously?”
Phil Cox: And the risk quotient for Biden is can I live four more years.

John Anzalone: And let me tell you what, and people won't start focusing on that until post-Labor Day. So that's where the rubber hits the road and the PTSD will hit, it will really kick in on Trump. So again, you can say all you want on the Biden stuff, but the reality is the risk factors are much higher with Trump because he's his own worst enemy. Yeah.

David Stiepleman: Let's talk about Dobbs, and abortion, reproductive rights. And I don't mean to make this glib, but does it still have legs?

John Anzalone: Okay, so last week, I live in Alabama, one of the reddest states there is.

David Stiepleman: You just had a state legislative –

John Anzalone: We just had a state legislative special election, a Republican legislative seat right around Huntsville. I think it was an all-white seat basically, suburbs, where a woman won the seat with 64% of the vote running TV ads on abortion rights and IVR. Do you think it has legs?

David Stiepleman: Seems like it.
John Anzalone: Kansas beat back a referendum in the off year. My client, Gretchen Whitmer, is strong on her own, but there was an abortion referendum on the ballot because there was something in the constitution. And again, we didn't even see, quite frankly, the full effect of how strong it was until election day. So it is something that is real and has an impact.

David Stiepleman: Is that gonna make a difference in Florida, that they're trying to get it on the ballot in Florida to try and -

John Anzalone: It'll be on the ballot.

Phil Cox: It's not gonna make a difference in Florida. Florida is an interesting case -

John Anzalone: Well it could pass in Florida.

Phil Cox: Sure. But Florida has become so much more Republican, and it’s actually been kind of an ideological migration. You think about it, you have folks who moved from Michigan, New York, California, wherever, particularly during the pandemic, and they're Republicans for the most part. And so, when we started in spring of ‘21 with DeSantis, there were 300,000 more registered Democrats in the state than Republicans. Today there's half a million or more registered Republicans. So you look at Florida, 2000, the hanging chads, was obviously the swingiest of swing states. It's just not that anymore.

John Anzalone: It'll come. There's a lot of different stories in Florida, and I don't wanna spend too much time on it, but for example, minimum wage passed the referendum with over 60%, medical marijuana - I think both the pro-reproductive rights and the full marijuana will do it. These aren't super conservatives like Alabama. It is a fairly progressive state on the social issues, it is just an expensive state. You have to, as a U.S. Senate candidate, somehow think about how you're gonna get $200 million to compete. That's the problem with Florida.

David Stiepleman: Angry vote versus affirmative vote, that breaks different ways. John, I've heard you talk about it in other contexts, that Republicans are more likely to be sort of pro-Trump as opposed to anti-Biden. Democrats are definitely voting against Trump, and that plays in the Democrat's hands?

John Anzalone: Well, I would look at it a different way, which is people always wanna talk about enthusiasm. Gallup came out with a great poll today, which kind of broke the myth that there's this greater enthusiasm with Republicans. There is greater enthusiasm maybe for Trump. But the fact is that the enthusiasm level is within like four points, of the election. Which is much different than it was in the previous election. Enthusiasm was way low for Democrats in ‘16. It was higher in 2020. But the fact is, it’s kind of what Joe Biden always says. At the end of the day, this is gonna be about a choice. And that's why I say just wait until post-Labor Day to really angst on this election, because people are gonna come into a choice, and they're also gonna have to make a binary choice, most likely.

David Stiepleman: So you said Labor Day, put it on a shelf. I said, this room doesn't do that. And so let me color that up a little bit. I think the FT ran a story last week, maybe last Friday -the VIX, it's not really an index. It's more like a composite. It's a proxy, which measures volatility. It's up higher than historical levels in an election year this early. And the story was talking about how people were bringing, companies are bringing their capital raises up earlier. They don't want to be in the market in the fourth quarter. They want to have their cash ready to go. So are we overreacting? ‘Cause we're predicting we don't know what the hell is gonna happen.

Phil Cox: Volatility in the market, or volatility in the -

David Stiepleman: No, in our sentiment.

John Anzalone: But who are you really worried about?

David Stiepleman: Let me ask it this way. You’re going into companies and they're like, what do you think is gonna happen? What should we do? Who should we get close to? What should we be worried about? What regulation is coming? Big tech regulation, – everybody hates big tech, is that gonna still continue or is this gonna be a free for all once Trump gets elected, if that happens? How are you breaking that down for people?

Phil Cox: Look at what he's talking about. He's talked about the border, he's talking about the economy, he's talking about China. He talks about public safety. He talks about largely trying to avoid in foreign entanglements, a little bit more America first. That is sort of the arc of America first, MAGA, however you want to define it. It's still Washington, so we're most likely gonna have divided government. Republicans, very likely to win the Senate. House, what are we four seat margin in the House now?

John Anzalone: It could, it's gonna be one.

Phil Cox: House is probably more likely to go Democrat. And then the presidential is a toss-up at this point, but either way it's gonna be divided government. So there's really three parties in Washington. There's the Democrats, there's Republicans, and then there's appropriators. And I think last year we passed 27 bills. 27, that’s it. So what's gonna get done? Well, we're gonna fund government despite all the posturing that will happen and always does happen. Government's gonna get funded, defense appropriations, the big stuff will get done. There's gonna be something that happens on the border. I don't think it's gonna happen before November, for all the political reasons that we're all aware of. And then there's gonna be a lot of talk if Trump gets in about defense, about China, NATO, Ukraine.

Phil Cox: So I think from a business standpoint, you can predict actually more of the same, regardless of who's gonna be in there, because you have divided government in Washington, D.C. If you're trying to proactively get something done, you want to try to fold it into that rubric. So if you're producing something domestically, talk about it as it relates to China. We don't have to get this product from China now, now we can get it from the U.S. Talk about it in those terms. That's how you're gonna be successful in a Trump administration. It's always trying to meet, and candidly it applies to all politicians, wherever they are. You try to meet the politicians where they are. You try to present yourself as a partner trying to help them accomplish what they want to accomplish, both politically and in their priorities. There's this great machinery of government that exists underneath the cabinet secretaries. And the Democrats are a lot better. You can call it the deep state, call it the administrative state, call it whatever you want. But that's where a lot of the real work happens. And if you're outside of Washington, D.C. I would recommend hiring GP3 coming in.

John Anzalone: Right. Let’s do an architecture for you.

Phil Cox: And we'll help get it done. But I think in terms of the volatility matrix that you talked about at the top, I actually think it's gonna be fairly more of the same. The stuff that's clickbait, that sells newspapers, that gets eyeballs online, it tends to be the stuff that's more volatile, that's more sexy. But that's not what is happening most of the time in Washington and in states.

John Anzalone: I agree with Phil that we'll probably continue to be in divided government. For example, tech reform, it's gone nowhere under how many presidents? But when Biden had both the House and the Senate, as Democrats, I mean, things get done. Republicans, when they're in control, they stop stuff. Maybe you can say they’re stopping bad stuff, or they're stopping good stuff, whatever. But the fact is that when Biden had both House and the Senate, he did more to invest in the economic infrastructure of this country than just about anyone in modern presidency. Whether it's the bipartisan infrastructure bill, the Chips and Science Act that brought innovative manufacturing back here and the supply chain, and the money in IRA for things like new energy, et cetera.
John Anzalone: And so there's one guy who has a history of investing in America's future, and it's real. I don't think that that's spin. The fact is all that’s real stuff, and most of that was bipartisan. The fact is if you have divided government, the best that you can hope for is that you're gonna get a supplemental bill passed, and the speaker of the House is gonna get in trouble for doing it.
David Stiepleman: I have a million more questions, but we're gonna open it up to Q&A and see if other people have similar questions or different questions.

Audience Question: I've got a million questions too, but I'll ask some easy ones. Just electoral college versus popular vote from your standpoint of what you do.

John Anzalone: Listen, the Democrats and the campaigns have said this. You can have the blue wall, which is basically Wisconsin, Michigan and Pennsylvania. And then you have the Southeast and Southwest, which is Arizona, Nevada and Georgia. And then you have North Carolina, which is kind of another one. And then you have these two congressional districts, one in Maine and one in Nebraska, because they don't do take all winner-take-all. And so there's a bunch of different variations on it. The national vote matters, it's a great narrative. It's also an indicator a lot of times what the margin is of what's gonna happen on the electoral side in the states. But this is all state-by-state. I mean, that's what we're gonna look at.

David Stiepleman: And we didn't even get to state races and governor races.

Phil Cox: These Senate races. You have to look at these states in these congressional districts that are like pile on states. So Pennsylvania is a highly competitive swing state on the presidential, also a highly competitive Senate race. Wisconsin, highly competitive Senate race, right on down the line.

John Anzalone: The presidential is what you're saying, match up with the battleground Senate states almost perfectly.

Phil Cox: A hundred percent.

David Stiepleman: So, I think what you're talking about, the dynamic where there's a statewide race that can change or drive turnout in the presidential, because people are very interested in what's going on in that race, in that state.

John Anzalone: Literally the only places where there's not a competitive, and I mean toss up race for Senate, that's also a presidential is Georgia and North Carolina. They don't have it.
Phil Cox: It's also the party infrastructure on the ground. The ground game, folks turning out, knocking on doors, turning folks out. That really matters. If you have a good governor's race or a good Senate race down ticket, that will help to drive a lot of that for the presidential.

David Stiepleman: Yep. Got it.

Audience Question: So where does healthcare poll, it's gonna be crushing our economy, soon be 20% of GDP. Medicare Advantage is really becoming a problem for the government, paying too much money for the service it's getting. Do Americans care about healthcare in the dialogue and how does that relate to the presidential election and how does that poll out?

John Anzalone: I think a couple different ways. It's still one of the top issues, but it just gets blocked out a bit because of the other issues that are going on. Whether it's the wars or whether it's immigration or the cost of living, et cetera, et cetera. I think you're gonna see it manifest in this election a couple different ways. Trump has been very clear that he wants to repeal ACA, which now has almost a 60% favorable, 20-something million people use it. It's important to keep cost down. It's actually a successful program. The second is, that seniors are a key group in this election, like they always are, 'cause they vote disproportionately high. When you have things like $35 insulin, $2,000 cap on your prescription drugs, negotiation with Medicare, those healthcare issues are super important to voters over 55. And I think that we tend to forget, I don't wanna speak for women, but women view reproductive rights as a healthcare issue, and I think that that is really important as well.

Phil Cox: But it is not a top three issue in the election. It’s not.

John Anzalone: But you'll see plenty of ads on it.

David Stiepleman: Alright, last question. You guys mentioned 538, or you mentioned John, 538. What else are you looking at? What should we be reading, looking at? Who's reliable? What can we do to help separate signal from noise?

John Anzalone: Well, when I wake up in the morning, I mean, everyone's different. I don't watch cable news. I love Mike Allen's morning newsletter. I think it's very efficient. It’s quick, it's a quick read. And he is about trends. Him and his partner, Jim VandeHei, are about trends. They make you think about things that you don't normally think about. If you're a political animal, you gotta do the political playbook, which I think is long, but it gives you all the basic politics. And I just love the AP morning newsletter 'cause it's not politics, it's just news. It helps you realize that there's other things going on in the world.

Phil Cox: I'm looking at how people are feeling about their own personal economy. That's the thing that I'm sort of looking at right now. We talked about this an hour ago. Folks feel like they're struggling whether or not the economic indicators are good or bad. That's Wall Street, that's up here, that's in the sky. They feel like they're paying more for gas, groceries, housing, the whole thing. So if that somehow changes in the next six months where people are starting to feel better about the economy, then I think that certainly helps.

John Anzalone: And economic sentiment -

Phil Cox: But if it doesn't, then I think, famously said, it's the economy stupid.

John Anzalone: And if you look at the economic –

Phil Cox: It’s your own personal economy, It's not the macro economy.

John Anzalone: And the economic sentiment numbers are going up. Again, whether it gets to the point where people shift their feeling on it. But if you look at the University of Michigan Economics –
Phil Cox: There was only one way to go, John, which was up.

John Anzalone: No, there isn't, because it's actually fairly volatile.

Phil Cox: From where we were.

John Anzalone: It’s actually fairly volatile. It's hard to figure out why people change their sentiment within a given year.

David Stiepleman: Okay. Therapy session, eh… failed. Information, like super helpful. You guys are great. Thank you for taking the time and we really appreciate it. So thanks.

John Anzalone: Thank you.

Phil Cox: Happy to do it.

David Stiepleman: That was John Anzalone and Phil Cox. We spoke on April 4th, 2024, at Sixth Street Growth's annual CxO Summit in Scottsdale, Arizona. You heard about the value of knowing local dynamics and engaging directly with voters. You heard about the unpredictability of political races and how factors like third party candidates, and ideological migration and voter turnout will significantly impact outcomes in this election cycle. You heard about the volatility in the market and the importance of understanding and navigating political dynamics for businesses. And finally, you heard about the importance of understanding public sentiment behind the screen of media narratives and partisan agendas. Huge thank you to John and Phil. This was a very engaging discussion. Access to unbiased data is essential to the success of our democracy. And our team at Sixth Street appreciates you both taking the time to help us separate the signal from the noise. Thanks to everyone for listening. The views expressed in this podcast are not necessarily those of Sixth Street and Sixth Street is not providing any investing, financial, economic, legal, accounting, or tax advice or recommendations in this podcast. Please see additional disclosures on our website for more details.

AUM presented as of 12/31/2023 and excludes assets and commitments of certain vehicles established by Sixth Street for the purpose of facilitating third party co-invest opportunities. Calculation of assets under management differs from the calculation of regulatory assets under management and may differ from the calculations of other investment managers.