The Week: The Death of the Old GOP, Housing’s Incumbent Problem, and the Numbers Anthropic is Hiding

Historian Heather Cox Richardson told Scott that the Republican Party “as it was” no longer exists, creating room for a new Republican Party that might resemble an older tradition. She pointed to Republicans who supported Donald Trump until recently and are now breaking away, including a former Republican governor in South Carolina who endorsed Lindsey Graham’s opponent because, in his words, “we just can’t go this way.” Richardson compared the moment to the 1850s: people with different views on immigration, finance, and internal improvements could still unite against an elite group taking over the country and making everyone else serve it. Richardson said the people remaining in the Republican coalition may be a huge constituency that does not yet know what it stands for. New issues—including data centers, climate change, and artificial intelligence—give people opportunities to form alliances without settled positions. She also argued that earlier political realignments in the 1890s and the 1920s and 1930s followed a similar pattern, with parties reforming around new versions of old problems. The implication was not that a new party already exists, but that the current Republican fracture could create one.

The episode reported that midterm political advertising had reached $11.2 billion, more than the entire 2024 presidential election and the most expensive political advertising cycle on record. During a live Raging Moderates event, Scott said spending had risen to roughly $11 billion and focused on Texas, where about $850 million—or nearly $1 billion—was being spent on a Senate race in a state where many voters already know the candidates and basic political alignments. Scott argued that the return on investment for political money could be “about to hit an absolute record low.” If $850 million cannot buy a Senate seat in deeply Republican Texas, he said, that would be evidence that money has less power than expected. He connected this to the broader question of wealth and democracy, using Elon Musk’s reported $300 million political spending as an illustration: for someone worth $1 trillion, that is proportionally like a person with $1 million spending $300. Scott said this scale of spending helped move him toward progressive tax rates, not only to raise revenue but to limit the danger of concentrated power. He expected the next political debate to focus less on how to build wealth and more on the responsibilities and political effects of wealth.

Scott proposed that the defining conflict of the present might be “entrants versus incumbents”—young people facing older people who already benefit from institutions. He cited France as a possible warning sign, saying a large share of education spending goes to teachers who no longer teach and that retirees have higher average incomes than working French people. He connected this to distrust in institutions, protests, and the feeling among young people that they are being handed a bill for a party they never attended. Richardson pushed back on Scott’s account of the 1850s. She said the Civil War era’s central question was not simply human enslavement, but whether government should protect property controlled by a small privileged group or protect the good of the wider community. She invoked Lincoln’s Gettysburg Address and its “new birth of freedom,” describing it as an effort to establish government “of the people, by the people, and for the people.” In her view, the modern parallel is the same basic struggle: a few people want government to serve their interests while everyone else wants it to meet broader needs. She cited opposition to data centers as a symbol of resistance to government responding only to powerful interests, and warned against treating retirees as the main problem when billionaires and concentrated wealth are more central sources of power.

Aziz Sunderji and Kyla Scanlon explained why younger Americans are being pushed out of homeownership. Sunderji said housing has to function simultaneously as a place to live and a speculative asset, because much of many homeowners’ wealth is tied up in their houses. That gives existing owners a reason to oppose construction that could threaten prices. Scanlon, who said she is 29 and does not know when she will be able to buy a home, argued that young people were taught that buying a house is necessary for the American dream, yet increasingly need parental or other outside financing. If housing is the foundation of the economic ladder and people cannot climb it, she said, they may question the value of working hard, marrying, or building an economic future. Sunderji read a New York Times passage complaining about high rents and scarce housing, then revealed that it was from 1856. Apart from the word “tenements,” he said it could be copied into today’s newspaper, showing that the crisis has persisted for centuries in productive cities where jobs are concentrated. He identified income inequality as an under-discussed driver: high earners, including investment bankers, compete with teachers and other workers for the same limited land. Because housing is a positional good, inequality intensifies the competition.

Answering a listener’s question about making housing affordable, Scott argued that the worst housing policy change was not simply bureaucratic control, but transferring permitting power from local civic officials to homeowners. Homeowners benefit from less traffic and construction, and they also benefit financially when limited housing supply makes their existing homes more valuable. That means the people deciding whether new homes can be built have incentives directly opposed to the needs of new entrants. Scott described this as a broader metaphor for the last 40 years: incumbents use regulation to deny admission to the club and increase the value of their existing membership. He called housing a supply problem rather than a demand problem. Policies such as low-income housing tax credits, mortgage-interest deductions, and first-time homebuyer credits may be well-intentioned, but, in his view, they add demand while leaving restrictive supply rules in place and therefore push prices higher. He recommended federal and local measures that make access to federal funds conditional on allowing more construction, along with tax credits for developers. His central recommendation was to overcome national NIMBYism by changing the incentives and rules governing permits.

Anthropic filed its S-1, the major SEC filing before a public listing, and could be valued at as much as $2 trillion—potentially the largest IPO ever and one of the world’s dozen most valuable companies on its first trading day. The filing reported $16.3 billion in revenue during the first half of the year, up from $1.2 billion a year earlier, while its operating loss narrowed to about $700 million. Ed argued that the most important figures appeared at the back of the filing: Anthropic had signed more than $800 billion in future compute commitments, none of which appeared in the current income statement but would eventually affect the company. Those commitments included $110 billion with Amazon, $115 billion with Google, and $161 billion with Broadcom. The total excluded billions in capital expenditures Anthropic said it expects to incur building its own computing capacity, so Ed believed the eventual figure could be higher. He cautioned that this did not prove Anthropic was a bad company or lacked an impressive product; it showed that the business model remained unresolved and that losses could expand sharply. Steve Eisman, known for “The Big Short,” gave a direct answer when asked whether he would invest: “No.” His concern was that the company appeared to have no durable moat. If Anthropic had cut prices by 50%, Eisman said that would reinforce the idea that competition was based mainly on price. A business committed to $800 billion of spending while relying on price to gain share was, in his view, dangerous—not a proven, safe corporate investment.