We’re almost halfway through 2026, and the past six months feels like a decade. Here’s six things we’ve learned and what they might mean for the rest of the year.
1. Congress is struggling to legislate but still expected to pass another ~100 laws this year
The 119th Congress passed fewer laws in its first 18 months than any prior (other than the 118th). But 50% of bills pass in the final six months of the term, on average. So What? If recent history holds, this Congress will pass another ~100 laws in 2026, creating opportunities & risks for many stakeholders (action likeliest around defense, crypto, energy permitting, AI, health care, transportation & government spending).
2. Trump still dominates the GOP
Though his overall job approval may be down to 39% & 53% of Republicans disapprove of how he’s handling gas prices (Fox News poll), President Trump continues to dictate outcomes in Republican primary elections via endorsements and spending. The President has used this dominance to defeat Republicans who criticize him or fail to do as he demands, thinning the ranks of resisters & further cementing his control going forward. So What? Regardless of midterm outcomes, President Trump clearly intends to lead and shape the GOP in his remaining two years, a very un-lame duck likely to play an outsized role in the 2028 GOP Presidential primaries.
3. Drones have transformed warfare & power projection
Despite Russia’s huge advantage over Ukraine in men & materiel… and notwithstanding the U.S.’s extraordinary superiority over Iran in technology… drone-enabled defenders are surviving and exerting new power. Both Ukraine & Iran may end 2026 with greater strategic leverage than they began the year with. As blogger Noah Smith writes, this proves that “all non-drone militaries are obsolete.” So What? U.S. policymakers need to vastly increase America’s capacity to develop & manufacture drones and drone defenses, reducing dependency on China and reimagining operational plans. In particular, we need less expensive ways to intercept enemy drones — fighting $50,000 drones with $1,000,000 missiles is unsustainable.
4. Markets are resilient (or deluded)
Despite gas prices over $4 per gallon, inflation exceeding 4%, tariff-driven price increases, skyrocketing federal debt & stocks starting 2026 already at historically-high valuations, the S&P set 24 new all-time highs already this year. Most forecasters predict continued growth ahead. So What? Markets can stay irrational longer than you can stay solvent… and the market may not be irrational (e.g. S&P prices are tracking S&P earnings per share, as usual).
5. AI regulation is coming here
While the Trump Administration has been eager to support American AI leadership, concerns over systemic risk may be changing their plans, albeit uncertainly. Per Axios:
“Without clear national AI rules set by Congress, the administration has focused on overriding state AI laws, the national security and cybersecurity implications of advanced AI models, the procurement of AI systems into the federal government and the economic impact of the biggest AI companies. Export controls, voluntary testing frameworks, and procurement guidelines are becoming the building blocks of the administration’s shadow AI policy and a guide for how AI companies operate in the U.S.”
So What? States are not waiting for Washington, adding to AI builders’ uncertainty:
6. A trust recession is undermining citizens’ confidence in the future & national pride
Developed nations around the world are suffering from a trust recession, nowhere more than the U.S. Most Americans don’t trust the government to do what’s right, believing the system rigged by self-dealing elites and corrupt institutions. Per NBC News, “The lack of trust in institutions is also taking a toll on American pride.” Whereas 85% were “extremely or very” proud to be American in 2006, and 81% said the same in 2016, only 56% say so today. So What? As long as voters perceive a rigged system they’ll keep voting for “wrecking ball” candidates promising radical change.
VIDEO
One of my fondest memories as a kid was watching the the Bugs Bunny / Road Runner Hour with my Dad on Saturday mornings. Hilarious! So when I became a Dad, I bought the DVD and sat down to watch the same with my own kids. As this great comedian observes, Looney Tunes was quite different from today’s cartoons. Happy Fathers’ Day!
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.