Midterm Madness
Week of October 16-22, 2026
Published in conjunction with The Nation magazine, TRACKING THE CRISIS is a weekly round-up from The Democracy Collaborative tracking the administrative, legislative, and other actions of the Trump Administration as well as the many forms of legal and movement response from across a broad range of social, political, and economic actors. TDC is providing this service for collective informational purposes, as a tool for understanding the times during a period of disorientingly rapid flux and change in the U.S. political economy. This round-up is produced by humans, not by Artificial Intelligence. TDC should not be understood as endorsing or otherwise any of the specific content of the information round-up.
TRUMP TRACKER: Administration actions
On the brink: U.S. and Israel move military assets into ready mode as Iran warns of retaliation. Just days away from critical elections in Israel and the United States, the entire Persian Gulf region is once more on high alert as the belligerents, Gulf countries, and entities throughout the region prepare for a renewed round of kinetic strikes that could commence at any moment.
On Monday, October 19, dozens of Israeli fighter jets began large-scale ‘exercises’ near Iran’s western border, flying in formation and carrying out exercises with refueling aircraft over Syrian and Iraqi airspace, with jets flying sorties just short of the Iran border in what Axios called a massive ‘power projection’ operation against Iran. Analysts in Israeli media and elsewhere speculated that the sorties may have been intended to provoke an Iranian military response, which would not only justify Netanyahu’s return to full scale war but also possibly serve as a pretext for canceling or postponing the Israeli elections.
Netanyahu is currently trailing his main rival Gadi Eisenkot in the Israeli polls, with Netanyahu’s Likud party expected to take 48 seats and Eisenkot’s Yashar party bloc to take 54 seats. Recent polling shows that while neither bloc is primed to win an outright majority, it will be difficult for Netanyahu’s right-wing bloc to form a government, especially as Netanyahu comes under fire for his handling of the war with Iran.
Given that Netanyahu is also still wanted by the ICC for war crimes in Gaza, an election-disrupting event such as a return to all-out war could work in his favor; although with the approval rating for the war at just above 30 percent in the United States, a renewed wave of strikes on Iran would not serve Trump well before the U.S. midterm elections. Some outlets reported Trump had requested Netanyahu stand down before the elections, but it could not be independently confirmed. On Monday, Trump issued an endorsement of Netanyahu’s candidacy, with negligible effect on the Israeli electorate.
Nonetheless, preparations for war continued this week throughout the Gulf region. On Tuesday, the U.S. State Department formally recalled all U.S. personnel from their Gulf posts, evacuating them from U.S. facilities and other operating bases in anticipation of Iran’s threat to target any and all U.S. assets in the Gulf should military actions resume. Luxury aircraft were seen exiting the region in droves; and U.S. envoy Tom Barrack warned Gulf states that their 80-year security relationship with the U.S. was ‘no longer sustainable’ and that Gulf monarchies were to be responsible for their own safety as U.S. forces effectively abandoned Gulf states in the direct line of fire.
Multiple Russian aircraft were seen flying into Iran to evacuate personnel and deliver weaponry, as Russian Foreign Minister Lavrov made a visit to Iranian leadership for the first time since the conflict began on February 28. Speaking in Tehran Tuesday, Lavrov reiterated Moscow’s support for Iran, praised Tehran’s willingness to pursue diplomacy and called for a return to conditions that prevailed before the conflict in the Persian Gulf and the Strait of Hormuz. What weaponry was delivered to Iran is not known as of this writing.
Legal scholar Reza Nasri, also known as Iran’s “unofficial legal voice,” on Tuesday laid out the legal parameters by which Iranian escalation throughout the region in response to U.S./Israeli aggression would be justified under international law. Citing Trump and Netanyahu’s multiple threats to ‘annihilate’ Iran, Nasri wrote: “A state facing an existential threat knows no boundaries. Even the ICJ's 1996 Nuclear Weapons Advisory Opinion affirmed ‘the fundamental right of every State to survival.’ The Court also could not declare even the most extreme means unlawful where “the very survival of a State would be at stake.”
If the United States or Israel were to attack Iran for a third round, Nasri warned, “Iran will deploy all its means to make any attack prohibitively costly. A third wave of war would not stay contained. Power grids, desalination plants, refineries and ports across the region would burn. Tens of millions would be left without water or electricity, and a massive wave of refugees would move from Arab countries towards Europe. Hormuz would close completely, oil would spike, and the global economy would tip into recession. Israel’s economy, already bled by mobilisation and missile fire, would not survive a prolonged war of attrition. And Trump would be trapped in a crisis that consumes the rest of his presidency and leaves a wreck for his successors.”
In addition to threats to strike U.S. oil and AI facilities across the Gulf, Iran also revealed this week that it had successfully reverse engineered a 14-ton bomb that had been dropped on Iran during last year’s 12-Day War but had not successfully detonated. IRGC commander Sardar Naqdi said that the technology had been recovered and repaired by Iran, now ready to counter Trump’s threat of using the 10-ton “Mother of all Bombs” with “the Father of all Missiles.” Naqdi added: “If they are hit by such a bomb as well, they should know where its technology came from to us.”
The IRGC has also reportedly activated its “Mosaic Doctrine,” which gives the 31 regional IRGC commands full autonomy to hit dozens of designated U.S. and Israeli targets in the event that a ‘decapitation’ style strike aimed to take out the armed forces’ central command. The doctrine had been activated in the early days of the February 28th conflict, after U.S. strikes took out Supreme Leader Ali Khamenei and many of Iran’s top state and military leaders.
While it appears less likely that the U.S. or Israel will strike Iran until after the elections on October 27 and November 3, observers and players alike are walking a razor’s edge heading into the weekend. Netanyahu once again made a reference to regime change in Tehran as one of Israel’s aims, but given that the past eight months have not weakened the Iranian state’s ability to rally people around resistance, his ambitions remain highly unlikely. Analysts, however, are not ruling out the possibility of a strike before the elections, as both Trump and Netanyahu have proven to be unpredictable with their actions, especially with the political stakes being so high.
Housing market, producer price data reveals consumer weakness at the heart of the global economic slowdown. Affordability and inflation continue to be some of the biggest issues at stake for voters in the midterm elections. The latest monthly survey data from the University of Michigan shows that consumer sentiment has fallen to nearly its worst level in the 74 years since the survey began recording it, with most consumers expecting prices to continue rising well into next year.
New housing market data released this week shows that new home sales are in a ‘deep freeze’ as higher mortgage rates, tied to the benchmark 10-year U.S. Treasury yield, pushed prospective buyers to the sidelines. National Realtors Association data released Tuesday showed pending home sales in September were down 7.3% since August and 11.4% from a year prior, making 2026 on track to be the worst year for the housing market on record since the Great Financial Crisis of 2008.
Homebuilder sentiment is also the grimmest it has been since at least 2012, when the housing market was still digging itself out of the subprime mortgage crisis, according to the National Association of Home Builders/Wells Fargo Housing Market Index for October 2026. Buyers are also getting cold feet and backing out of purchases or homebuilder contracts due to affordability concerns, with homebuilder cancellations rising to their highest level since 2023.
Home prices in some parts of the United States have actually begun falling in recent months, pointing to a potential market correction in some areas. But with mortgage rates above 7% due to the surge in bond yields, even lower prices are not enticing new homebuyers to the market. New housing starts fell 4.6% in the last month, with building permits also down about 4%.
While some, including analysts at Goldman Sachs, believe that the market is going through a longer-term correction, other analysts such as Peter Schiff warn that the pressures on homebuyers and the market may trigger a broader crash. Fannie Mae and Freddie Mac’s stocks both fell over 23% over a three-day period this week, and Schiff warns that a more violent correction in prices, not the gradual scenario posed by Goldman Sachs, could wipe out many homeowners’ equity and leave them upside down on their loans.
Housing is but one of the many canaries in the coal mine that point to the affordability issues at the heart of the global economic crisis, as persistent inflation due to the oil shock continues to plague the macroeconomic picture. While the CPI (Consumer Price Index) remains elevated but relatively steady at 3.7%, the Producer Price Index (PPI) – the measure of wholesale inflation – jumped by 6.3% annually in September, the biggest spike in year-over-year producer prices since 2022.
Small to medium businesses were hurt even more than consumers by the spike in wholesale inflation; and unlike the inflation from earlier this year touched off by the Iran war, the rise in producer prices appear to be spilling over across the broader economy, not just in oil- and gas-dependent sectors, pointing to a broader slowdown in production and increasing costs all along the supply chain.
Tracking the Money: Midterm madness. The New York Times reports that ad spending on this year’s midterm elections has hit a record high of $10 billion and climbing, outspending the NFL in terms of ad buys and making it the most expensive election cycle in history. New campaign finance reports released on Thursday showed a blitz of spending from both parties in the first 14 days of October, with over $1 billion poured into digital ads, canvassers, and expensive fundraising events. All in all, around $11.6 billion is expected to be spent on ads in this cycle, with $1.7 billion in ads set to air in the final two weeks alone.
AI and crypto-connected industries have also spent record amounts this election cycle, with corporate spending related to the midterm elections from just these two industries set to hit over half a billion dollars. The New York Times has published an infographic showing how AI-connected donors funneled up to $52.6 million into 46 primary contests this year using its main super PACs, the Anthropic-aligned Public First and the Open AI-aligned Leading the Future.
Earlier this month, the Americans for Tax Fairness Action Fund found that 172 billionaire families in the United States have spent a record-breaking $1.7 billion on the midterms alone, almost all of it through super PACs.
Elon Musk, by himself, has funneled over $276 million into GOP groups and supporting GOP campaigns through his own super PAC in this midterm cycle alone. In total, The Hill has found, Musk has funneled over $442 million in private and PAC donations to Republicans in this cycle, which includes a single $158 million donation to the Senate Leadership Fund, a super PAC focused on keeping Republican control of the Senate; which one analyst called “one of the largest single political donations in American history.”
As the midterm season draws to a close, Republican spending on ads across at least nine competitive Senate races has doubled that of Democrat spending, but has netted only about 40% more rating points. New campaign finance filings released on Tuesday show that Trump’s main super PAC, MAGA Inc., has poured at least $300 million into the midterms, mainly going to support races that until a few months ago were not considered competitive, but have shifted since the unpopularity of Trump policies have threatened to flip those seats. MAGA Inc. still holds over $152 million in its war chest and Trump has vowed to spend over $400 million by Election Day.
MOVEMENT TRACKER
Albania’s ‘Flamingo Revolution’ deepens as calls grow for PM’s resignation. Albania’s “Flamingo Revolution” is seeing a renewed wave of energy as protesters have been met with harsh police crackdowns in recent weeks. The protest movement began earlier this year in response to the announcement of a planned Jared Kushner-backed private luxury resort on one of the country’s protected coastal islands, before evolving into a broader movement against political corruption and austerity measures in the country. Thousands of protesters flooded the country’s capital this week, and subsequent clashes with police have resulted in dozens of injuries and arrests. Calls for the resignation of Prime Minister Edi Rama have mounted through the movement, and Rama’s former deputy PM Belinda Balluku is currently facing corruption charges relating to rushing through construction contracts.
California fights back against ICE ahead of midterms. California is seeing protests this week in response to a new surge in ICE enforcement in advance of the midterm elections. Protests sprang up in Long Beach after Ricardo Gonzalez, a U.S. citizen and former Long Beach city employee, was filmed being struck by an ICE agent’s vehicle while riding his bike, before the agents then attacked and detained him without apparent cause, breaking his arm in the process. Senator Adam Schiff called the incident “another terrible abuse of power by ICE in our streets,” and Long Beach Mayor Rex Richardson has reportedly filed a formal complaint against DHS. At time of writing, Gonzalez is reportedly still hospitalized; his family have created a fundraiser for his medical expenses. Cities across California’s Central Valley have also seen protests and an increase in school absences in response to ICE enforcement.
Supreme Court hands transgender patients a rare win in healthcare ruling. Transgender Americans saw a rare win in the Supreme Court this week, as the Court ruled that federal prisons must continue providing gender-affirming care to incarcerated transgender individuals while a legal battle over the issue in the lower courts is ongoing. Upon assuming office for his second term, President Trump issued an executive order banning the use of federal funding to “promote gender ideology,” including providing gender affirming treatments to incarcerated transgender people; in response, a group of prisoners represented by the ACLU filed suit against the administration in Kingdom v. Trump seeking to reinstate decades-long healthcare policy. A federal judge barred the Bureau of Prisons from implementing the policy this summer, and the U.S. Court of Appeals for the District of Columbia Circuit upheld this ruling before U.S. Solicitor General D. John Sauer asked the Supreme Court to intervene.
