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Interview With Richard Haass: Masters in Business (Audio) · Masters in Business

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  Speaker 1: Brought to you by B A. S F. We create Chemistry.
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  Speaker 1: This is Masters in Business with Barry Ridholds on Bloomberg Radio.
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  Speaker 1: This week on the podcast, I have a very special guest.
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  Speaker 1: His name is Dr Richard hass He is the President
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  Speaker 1: of the Council on Foreign Relations, where he has served
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  Speaker 1: for the past fourteen years. I thought it would be
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  Speaker 1: a great idea to get Dr hass in because, more
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  Speaker 1: than any time in the past, I don't know how
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  Speaker 1: many years UH, international events are driving UH not only
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  Speaker 1: the debate, but but the headlines and policies that we
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  Speaker 1: see everywhere, whether it's the Brexit vote in the UK,
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  Speaker 1: whether it's things like Middle East issues and isis UH
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  Speaker 1: and and the Iran nuclear deal, what's happening in China
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  Speaker 1: with the South China, see what's happening in Russia. Even
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  Speaker 1: even normalizing relations with Cuba are are significant events. And
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  Speaker 1: these are all outside of the US borders. I can't
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  Speaker 1: ever recall a time in recent history where overseas events
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  Speaker 1: have been more significant, more important to both the global
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  Speaker 1: economy and to international relations. I think you'll find Professor
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  Speaker 1: hass or Doctor hass Uh. He has taught at the
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  Speaker 1: Kennedy school. Uh, quite fascinating. He is about as knowledgeable
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  Speaker 1: a person as you'll ever hear. He began in Democratic
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  Speaker 1: Senator Claiborne Pell's office. He also served in both Bush
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  Speaker 1: White Houses. He's nonpartisan. Uh. He he very much has
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  Speaker 1: a fairly moderate and centrist view. He's he's an extremely
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  Speaker 1: rational and logical guy. And and a lot of what
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  Speaker 1: he says, uh, and a lot of the discussion that
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  Speaker 1: took place today, uh, really very much is just if
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  Speaker 1: you were to stop and and do a d historical
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  Speaker 1: dive into each of these subjects, they would inform your
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  Speaker 1: perspective and very much drive your decision making in a
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  Speaker 1: certain direction. Uh. That is consistent on both a cultural, diplomatic,
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  Speaker 1: and global basis. I found his conversation to be completely refreshing,
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  Speaker 1: uh and quite fascinating. For those of you who are
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  Speaker 1: aware of what goes on the world, you know what
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  Speaker 1: an expert hass is. And for those of you who
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  Speaker 1: are not very well informed about the state of the
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  Speaker 1: global affairs, this is going to be a crash course
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  Speaker 1: in international relations. I found it to be an absolutely
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  Speaker 1: brilliant and fascinating conversation. So, with no further ado, my
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  Speaker 1: conversation with Dr Richard Hass. This is Masters in Business
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  Speaker 1: with Barry Ridholes on Bloomberg Radio. My special guest today
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  Speaker 1: is Richard Hass. He is the President of the Council
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  Speaker 1: of Foreign Relations, a position he has held for the
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  Speaker 1: past fourteen years. UH fascinating career in government as a
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  Speaker 1: legislative aid in the Senate in the Department of Defense.
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  Speaker 1: In the State Department, he was awarded the Presidential Citizens
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  Speaker 1: Medal for his contributions during the US Operation Desert Shield.
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  Speaker 1: In one. He has been a special advisor to both
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  Speaker 1: President George H. W. Bush Uh in the National Security Council,
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  Speaker 1: as well as President George W. Bush in the Department
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  Speaker 1: of State, where he served as principal advisor to Secretary
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  Speaker 1: of State Colin Powell. Richard Hass, Welcome to Blomberg. I
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  Speaker 1: left out half of your CV. It's it's way too long.
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  Speaker 1: You are the author or editor of a dozen books.
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  Speaker 1: Perhaps the one I'm our our listeners might be most
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  Speaker 1: familiar with is the Reluctant Share of the United States
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  Speaker 1: after the Cold War, and you have a new book
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  Speaker 1: coming out in January. World in Disarray, American Foreign Policy
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  Speaker 1: and the Crisis of the Old Order. I am confident
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  Speaker 1: that a lot of the questions and topics we discussed
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  Speaker 1: today are covered in the book. But but let's jump
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  Speaker 1: right into your early career. So you leave was it Oxford?
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  Speaker 1: Did I get that right? Yes? You leave Oxford with
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  Speaker 1: a masters and a PhD and pretty much start as
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  Speaker 1: a Senatorial aid. Is that right? That was your first
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  Speaker 1: first job, and then you end up in the State
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  Speaker 1: Department and the Department of Defense. How did all that
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  Speaker 1: come about? Well after Oxford? Actually, during Oxford, I spent
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  Speaker 1: a year splitting between my masters and my doctorate, working
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  Speaker 1: in the Senate as an aid on the Senate Foreign
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  Speaker 1: Relations Committee to Senator Claiborne Pell, who was a Democrat
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  Speaker 1: from Rhode Island. I really just wanted some experience. I'd
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  Speaker 1: been an academic and wanted to see how the sausage
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  Speaker 1: was made, and I got the chance. After that, I
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  Speaker 1: then spent a couple of years working at a think
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  Speaker 1: tank in London, the place called the Institute for Strategic Studies,
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  Speaker 1: essentially doing a post doc. And then after some conference,
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  Speaker 1: I spoke at a few people who are working at
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  Speaker 1: the Pentagon said hey, would you come and work with
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  Speaker 1: us at the Department of Defense. So I said, great,
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  Speaker 1: and so I went and worked at the Pentagon. It
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  Speaker 1: was a fantastic opportunity because about less than six months
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  Speaker 1: after I got there, in seventy nine, you had two
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  Speaker 1: big historical events. You had the Soviet invasion of Afghanistan
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  Speaker 1: and you had the revolution in Iran. And I was
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  Speaker 1: assigned with a very small group of people to plan
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  Speaker 1: for what would the United States do in that part
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  Speaker 1: of the world, because we had very few capabilities, very
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  Speaker 1: few plans. And suddenly I was thrown at this in
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  Speaker 1: part because I had written my doctoral dissertation on this
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  Speaker 1: part of the world, on the Middle East, on the
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  Speaker 1: Middle East, on the Persian Gulf. What what was the
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  Speaker 1: name of your doctoral dissertation? Filling the Vacuum? And it
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  Speaker 1: was essentially the American reactions what was called the British
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  Speaker 1: East of Suez withdrawal, meaning the meaning for for listeners
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  Speaker 1: who may not be historians of that part of the world.
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  Speaker 1: When the Brits were were occupying most of the Middle East,
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  Speaker 1: at a certain point, they pretty much drew random some
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  Speaker 1: people have called them random borders on their way out
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  Speaker 1: and and really left the political and diplomatic borders uh
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  Speaker 1: we see today to some degree as a cause of
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  Speaker 1: some friction between some of these states. Well after World
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  Speaker 1: War One, which is what you're alluding to, there was
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  Speaker 1: the British and French ministers and their subordinates essentially did
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  Speaker 1: draw the map a lot of which is the contemporary
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  Speaker 1: Middle East. I was really focusing on the Persian Gulf
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  Speaker 1: and where the Brits stayed longer, and they left essentially
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  Speaker 1: in the early late sixties early early seventies. But soon
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  Speaker 1: afterwards again you had these major tests with the twin
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  Speaker 1: crises of Afghanistan and Iran, and I was lucky enough
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  Speaker 1: or unlucky enough to be one of those who was
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  Speaker 1: asked essentially to plan for it. So I had an
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  Speaker 1: amazing early experience in the depending on indeed what's now
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  Speaker 1: Central Command, the force which has fought several of the wars,
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  Speaker 1: including the Gulf War, the Rock arn All that I
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  Speaker 1: was involved in the creation of that force, So I
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  Speaker 1: know it was a little bit of being in the
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  Speaker 1: right or wrong place at the right time. And then
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  Speaker 1: after that, after the Carter administration ended, I was put
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  Speaker 1: on the transition team for the State Department for the
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  Speaker 1: Reagan administration and went over to the Reagan State work.
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  Speaker 1: You started as a Democrat under sand lerpel you you
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  Speaker 1: are now in the Department Defense under Carter, and then
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  Speaker 1: you're part of the transition team for the Reagan White House. Right,
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  Speaker 1: And it wasn't that I was a political chameleon. I
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  Speaker 1: was essentially a political at the time. I think I
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  Speaker 1: was probably a registered independent at the time. At some
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  Speaker 1: point I became a registered Republican. And even now I
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  Speaker 1: run a skip ahead of several decade. I run a
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  Speaker 1: nonpartisan institution. I don't feel particularly partisan in in my bones,
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  Speaker 1: and I'd like to think maybe it's naive that there's
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  Speaker 1: a place in American politics, say within the forty yard lines,
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  Speaker 1: where what you might create, where conservative or moderate Democrats
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  Speaker 1: and moderate Republicans can find common cause. And if we
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  Speaker 1: can't we if we can't have that center, then I
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  Speaker 1: think we as a society are in serious trouble. The
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  Speaker 1: fascinating thing is I totally agree with you. I think
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  Speaker 1: the fascinating schism is that most of the public, or
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  Speaker 1: a lot of the public, lives in between the forty
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  Speaker 1: yard line, so to speak. But everyone in DC seems
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  Speaker 1: to be in their respective end zones. But there's a
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  Speaker 1: reason for that. There's a principle that you see in
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  Speaker 1: the literature of political science called intensity, and the whole
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  Speaker 1: idea of intensity is what matters in American politics and
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  Speaker 1: early in democratic politics more broadly, is not absolute numbers,
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  Speaker 1: but it's the intensity with which political participan pence bring
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  Speaker 1: to the process, whether it's voting or money or time.
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  Speaker 1: So what this means of small numbers of people with
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  Speaker 1: great intensity could overwhelm large numbers of people who have
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  Speaker 1: virtually no intensity. It's the reason, for example, of Americans
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  Speaker 1: may favor background checks, but the n r A wins
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  Speaker 1: the gun control debate. That's an intensity issue. I'm Barry Ridhults.
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  Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My
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  Speaker 1: special guest today is Richard hass He is the President
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  Speaker 1: of the Council on Foreign Relations. Not too long ago
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  Speaker 1: we had the big UK vote to leave the EU.
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  Speaker 1: I think a lot of people were surprised by by
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  Speaker 1: the outcome of that. So let's start out, and I
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  Speaker 1: know you are intensely familiar with the region because of
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  Speaker 1: all the work you've done in Northern Ireland. Let's let's
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  Speaker 1: start out very simply. Why was the Leave campaign victorious
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  Speaker 1: in part peak US. It was a referendum on the
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  Speaker 1: status quo, and people who were, for one reason or
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  Speaker 1: another unhappy or disaffected or angry or worried about the
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  Speaker 1: future vented and supported the LEA vote. A lot of
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  Speaker 1: them were not particularly well informed exactly what would be
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  Speaker 1: the precise consequences. So I think it was something of
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  Speaker 1: a protest vote, and it was very hard for the
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  Speaker 1: remain camp to make a persuasive case. What were they
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  Speaker 1: were supposed to say? Well, things aren't perfect, but it's
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  Speaker 1: better to stay than it is to leave. That that's
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  Speaker 1: the case. That doesn't tend to get people out of
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  Speaker 1: their seats, much less to to to vote. So you
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  Speaker 1: had an anemic showing on the remain side, and you
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  Speaker 1: had an impassioned, if uninformed, uh turnout on the Leave side.
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  Speaker 1: And the rest, as they say, is history. You know.
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  Speaker 1: In investing in the markets, um enthusiastic ignorance is not
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  Speaker 1: a good way to make money, but apparently in politics
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  Speaker 1: it's a successful strategy. Well, except there's an awful lot
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  Speaker 1: of voters remorse and a lot of people afterwards. I think, indeed,
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  Speaker 1: if the referendum were to be repeated, it would go
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  Speaker 1: down in flames and if there is. There were some
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  Speaker 1: people who seemed genuinely surprised that this wasn't just a
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  Speaker 1: a pole, This was a policy vote with real consequences,
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  Speaker 1: and even though technically Parliament disposes, this was advisory. It's
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  Speaker 1: extremely difficult for British politicians to simply say never never mind.
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  Speaker 1: So so one way or another, bregsit in some form
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  Speaker 1: is likely to happened, I would say, and I'm prepared
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  Speaker 1: now to be called an elitist. To me, it's a
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  Speaker 1: real sign that you want not to be deciding major,
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  Speaker 1: major matters of public policy through referendum. That's why the
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  Speaker 1: founders of the American political system created something called the Congress,
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  Speaker 1: created something called an executive. The whole idea was to
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  Speaker 1: have representative government rather than direct democracy. And I think
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  Speaker 1: what we've seen in Britain is a very expensive lesson
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  Speaker 1: of what happens if you have direct rather than representative democracy.
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  Speaker 1: It's quite fascinating. Your background is such that you spend
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  Speaker 1: a lot of time negotiating and helping UH Northern Ireland
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  Speaker 1: UH broker a series of treaties with h the UK.
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  Speaker 1: Scotland recently voted to stay with the UK. UH part
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  Speaker 1: of the reason was the membership in EU. Is it
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  Speaker 1: possible that we're gonna see Scotland and Northern Ireland, both
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  Speaker 1: of whom were strong Remain supporters, say hey, you know,
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  Speaker 1: there's the benefits of being in the UK are less
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  Speaker 1: than being in the EU where we're gone from the
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  Speaker 1: Brits and we're going to join the continent. Or is
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  Speaker 1: that just wishful thinking. It's quite possible. What will depend
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  Speaker 1: What it will depend on more than anything, is if
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  Speaker 1: the British government goes ahead with Brexit, the new government
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  Speaker 1: under the new Prime Minister, Theresa May, and if depending
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  Speaker 1: on the terms there's there's Brexit and Brexit and this
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  Speaker 1: is this is totally uncharted waters, so we don't know
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  Speaker 1: what would be what will be the details potentially a
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  Speaker 1: new relationship between a post EU UK and in Europe.
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  Speaker 1: But depending upon the details, it's quite possible that you'll
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  Speaker 1: have a second Scottish referendum and in this time, if
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  Speaker 1: there is one, it would pass because people would vote
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  Speaker 1: to stay in Europe. And I believe there's a decent
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  Speaker 1: chance you will have a so called border pole in
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  Speaker 1: Northern Ireland in which people would vote to to join
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  Speaker 1: Ireland so I think that Brexit one of the many
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  Speaker 1: reasons I opposed. It has the potential to lead to
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  Speaker 1: the dissolution of the United Kingdom. And beyond that, it
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  Speaker 1: has the potential to tremendously increased centrifugal forces within Europe.
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  Speaker 1: And I just say, for those who aren't familiar with it,
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  Speaker 1: Europe is one of the great historic accomplishments of the
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  Speaker 1: last three quarters of a century. Twice in the twentieth century,
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  Speaker 1: Europe was the venue for great wars, for the two
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  Speaker 1: World Wars. The whole idea after World War Two is
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  Speaker 1: two so knit together, Europe and France and Germany in particular,
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  Speaker 1: that war would become unthinkable. We ought not to take
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  Speaker 1: that for granted. And I'm worried if bregsit goes ahead,
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  Speaker 1: depending again on the details, it could have knock on
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  Speaker 1: effects throughout Europe. That that makes a lot of sense.
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  Speaker 1: So so, given negotiations um that you undertook in in
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  Speaker 1: Ireland's um, if you were advising either the Northern Irish
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  Speaker 1: or the Scots, what sort of And I don't want
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  Speaker 1: to use the term elite in a negative way. Instead
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  Speaker 1: of saying elite is um, let's let's say educated and
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  Speaker 1: informed UH policy pronouncinations. What how would you advise them
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  Speaker 1: today given the most recent Well, I would I would
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  Speaker 1: wait and see what the details are whether bregsit goes forward.
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  Speaker 1: If so, what are the details? Assume it goes forward,
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  Speaker 1: So let me digress. Assume it goes forward. Are the
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  Speaker 1: Brits going to get a better deal with the EU
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  Speaker 1: or a worse deal when they're not part of it?
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  Speaker 1: I'm not ducking the question, the honest answers. Nobody knows,
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  Speaker 1: because there's a debate with in Brussels whether to give
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  Speaker 1: them a better deal or not too because a lot
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  Speaker 1: of people in Brussels feared that to give the British
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  Speaker 1: a better deal would create a precedent and suddenly twenty
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  Speaker 1: seven other governments may want their own, their own better deal.
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  Speaker 1: So it has to be from a game theory perspective,
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  Speaker 1: it has to be a worse deal than they previously had. Well,
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  Speaker 1: it could be a deal that would require less of
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  Speaker 1: them but would also give less less to them. And
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  Speaker 1: the real question is whether net net they would come
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  Speaker 1: off better. And I think if you're sitting in Northern
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  Speaker 1: Ireland or you're sitting in Scotland, you then have to
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  Speaker 1: make the calculation, are you better off in a post
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  Speaker 1: EU UK or you better off going out on on
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  Speaker 1: your own? And I think that will literally be the debate,
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  Speaker 1: certainly in Scotland and potentially in Belfast and beyond. So
• 15:45
  Speaker 1: let's talk a little bit about um the stakes here.
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  Speaker 1: You mentioned or I mentioned an uninformed electorate. How truly
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  Speaker 1: uninformed were the people who were casting votes there? Uh?
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  Speaker 1: Did they actually know they were voting for policy? Did
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  Speaker 1: they think this was a poll? There? There have been
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  Speaker 1: some suggestions that while the Remain camp was not as
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  Speaker 1: crystal squeaky clean and transparent as they should have been,
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  Speaker 1: the Leave campaign was industrial level fabrication. How did that
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  Speaker 1: impact the actual I may steal that phrase, I like
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  Speaker 1: that industrial level there's a there's a I'll send you
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  Speaker 1: the link to the Scottish or Irish professor who who
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  Speaker 1: I'm paraphrasing him, But but that was that was his
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  Speaker 1: Two things. I think there's two things to say. One
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  Speaker 1: is that, or maybe even more than that, one is
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  Speaker 1: that there there were poles that came out beforehand which
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  Speaker 1: suggested that the factual basis, shall we say, was incomplete.
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  Speaker 1: People just in many cases didn't quite understand what the
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  Speaker 1: relationship was between Britain and the EU and so far.
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  Speaker 1: Second of all, there was industrial misrepresentation of the facts
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  Speaker 1: about the flow of money, about consequences, about immigration issues.
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  Speaker 1: So now it's a little bit like the hangover what
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  Speaker 1: you have as a as a country that went out
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  Speaker 1: a bit on a political binge and now has to
• 17:08
  Speaker 1: deal with the with the consequences. And again it reinforces
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  Speaker 1: my instincts that you don't want to decide major issues
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  Speaker 1: in a democracy this way. So two other questions about
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  Speaker 1: Brexit that that I would be remiss if I didn't ask.
• 17:23
  Speaker 1: Brexit seemed to be quite the surprise to too, not
• 17:27
  Speaker 1: only the financial houses and and bookmakers, but lots of people.
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  Speaker 1: What other European surprises might be lurking out there. Well,
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  Speaker 1: it's not the first surprise we've had in Europe in
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  Speaker 1: the last two or three years. We had Russia and Ukraine,
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  Speaker 1: which how we say, was an unfortunate surprise. We had
• 17:45
  Speaker 1: the massive flow of immigrants from Syria and the Middle
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  Speaker 1: East to Europe. We then had terrorism. So this, in
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  Speaker 1: some ways, if you added up, is at least the
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  Speaker 1: fourth surprise in the last two to three years. And
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  Speaker 1: that and what's so surprising about this is that you're
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  Speaker 1: for decades was the part of the world with the
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  Speaker 1: fewest surprises. It seemed to be the most state and predictable.
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  Speaker 1: But I would think going forward you could uh. We
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  Speaker 1: still don't know what's going to happen with Brexit. We
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  Speaker 1: don't know whether the countries may decide to do their
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  Speaker 1: own versions of of of of an exit. We could
• 18:16
  Speaker 1: have problems once again in Greece on the financial side,
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  Speaker 1: or with some other country. In um, Italy and southern
• 18:22
  Speaker 1: and in southern Europe. You know that from what it
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  Speaker 1: is um you do. Unfortunately, you can imagine without a
• 18:28
  Speaker 1: hell of a lot of imagination, another terrorist problem in
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  Speaker 1: any number of countries. There's uncertainty about Russian intentions, not
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  Speaker 1: only in eastern Ukraine, but with some of the other
• 18:40
  Speaker 1: small states that that border it. So I had all
• 18:44
  Speaker 1: this up, and again I'm struck by if we had
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  Speaker 1: had this conversation three years ago, we never would have
• 18:50
  Speaker 1: talked about Europe Old Europe boring nothing going on there,
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  Speaker 1: And suddenly Europe is you sense it's in play. And
• 18:59
  Speaker 1: one of the less since I draw from that is
• 19:02
  Speaker 1: it's more difficult to have assumptions. Now it's more difficult
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  Speaker 1: to have a sense of the givens. There's a sense
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  Speaker 1: of greater not just speed of change, but breadth of change.
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  Speaker 1: And I just went three years ago. I didn't have
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  Speaker 1: the imagination, I'll be honest with you, to see a lot,
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  Speaker 1: to see this coming. You know, I was just in
• 19:21
  Speaker 1: Europe for a conference and I was astonished at how
• 19:25
  Speaker 1: really soft the Greek economy is when you're on the street.
• 19:30
  Speaker 1: And then in Italy, Southern Italy is is better than Greece.
• 19:34
  Speaker 1: But Rome is like New York City. Rome is booming.
• 19:37
  Speaker 1: It is I don't know if it's a tourist town
• 19:39
  Speaker 1: or what I mean. We know it's a tourist town.
• 19:41
  Speaker 1: But when you look at Rome, it is a hopping city,
• 19:45
  Speaker 1: a very very economically active city. Makes you makes me
• 19:50
  Speaker 1: think twice about how Italy is broken into different halfs
• 19:54
  Speaker 1: and and why part of it is doing so well
• 19:56
  Speaker 1: and part of it isn't right. What you have in
• 19:58
  Speaker 1: Europe then is increased inequality. You have high levels of
• 20:03
  Speaker 1: unemployment and underemployment. You have demographic distributions that aren't even
• 20:09
  Speaker 1: in terms of wealth and unemployment, and you sense there's
• 20:12
  Speaker 1: a lot of fault lines in Europe. Far right and
• 20:14
  Speaker 1: far left policy parties both could come to the four
• 20:18
  Speaker 1: year U asked before about surprises. That's another part of it.
• 20:20
  Speaker 1: So Europe at one and the same time, there's elements
• 20:23
  Speaker 1: of boom and there's real elements of fragility. And as
• 20:27
  Speaker 1: long as we're discussing Brexit, people have tried to draw
• 20:31
  Speaker 1: parallels between the Brexit vote any either the Sanders or
• 20:35
  Speaker 1: Trump candidacy. Um, do you see any parallels between the two,
• 20:40
  Speaker 1: and is it possible in the United States we end
• 20:43
  Speaker 1: up with a Brexit like surprise? The short answer is absolutely,
• 20:47
  Speaker 1: I see parallels. What you see on both sides of
• 20:49
  Speaker 1: the Atlantic is widespread pushback, even rejection of important aspects
• 20:54
  Speaker 1: of globalization, whether it's immigration or or free trade uh
• 21:00
  Speaker 1: or or other issues. And I take the Brexit vote
• 21:03
  Speaker 1: is something of a wake up calling shot across the bow.
• 21:07
  Speaker 1: So much absolutely that we don't have a direct equivalent
• 21:10
  Speaker 1: to Brexit. But again, what it shows me is that,
• 21:12
  Speaker 1: for example, historical support for free trade agreements is just
• 21:16
  Speaker 1: not there. What you have right now sitting in the Congress,
• 21:19
  Speaker 1: a major trade agreement, the t PP, the Trans Pacific Partnership,
• 21:23
  Speaker 1: involves the United States and countries and I think it's
• 21:25
  Speaker 1: eleven other countries make up around the world economy. Right
• 21:29
  Speaker 1: now that trade agreement is parked, I'm not sure under
• 21:33
  Speaker 1: what circumstances it could muster the necessary UH support. And
• 21:39
  Speaker 1: what this tells me is that here's one of the
• 21:42
  Speaker 1: basics free trade used to be bipartisan support Democrats, Republicans
• 21:47
  Speaker 1: and so forth. That at the moment you'd have to
• 21:50
  Speaker 1: say not just a the juries out, but the forces
• 21:53
  Speaker 1: are probably stronger against it than in favor of Well
• 21:57
  Speaker 1: that that that's one of the American parallel els to bruit.
• 22:00
  Speaker 1: I'm Barry Ridhults. You're listening to Masters in Business on
• 22:03
  Speaker 1: Bloomberg Radio. My special guest today is Richard hass He
• 22:07
  Speaker 1: is the President of the Council on Form Relations, where
• 22:11
  Speaker 1: he has served for the past fourteen years. Prior to that,
• 22:14
  Speaker 1: he has an extensive resume both in the Department of
• 22:17
  Speaker 1: State and the Department of Defense, as well as the
• 22:20
  Speaker 1: White House in US Senate, and is the author of
• 22:22
  Speaker 1: twelve books on foreign relations. Let's jump right into the
• 22:27
  Speaker 1: conversation about trade and globalization. How important is globalization to
• 22:34
  Speaker 1: the modern economy? And I include not just wealth creation,
• 22:38
  Speaker 1: but but job creation. Well, the answer is it's it's central.
• 22:43
  Speaker 1: Think about it this way. We have what three million
• 22:46
  Speaker 1: people in the United States. That's out of a world
• 22:49
  Speaker 1: of roughly seven billion, that's four we're what twenty odd
• 22:54
  Speaker 1: percent of the world's GDP. Another way of saying, a
• 22:59
  Speaker 1: world g D palies outside the United States. So if
• 23:02
  Speaker 1: we are going to sell a lot of what it
• 23:05
  Speaker 1: is we we do has to be outside the borders
• 23:09
  Speaker 1: of our our own country with just not a large
• 23:11
  Speaker 1: enough market to be self sufficient. So so given that perspective,
• 23:15
  Speaker 1: and I know it's obvious to folks like you and me,
• 23:18
  Speaker 1: why is there so much opposition to trade? One way
• 23:23
  Speaker 1: to answer it is that trade on occasion does cost jobs,
• 23:26
  Speaker 1: and whether it's cheaper labor elsewhere or people produce better products.
• 23:31
  Speaker 1: In the area of cars was a reality for a
• 23:33
  Speaker 1: long time, so trade displaces. What I think also happens, though,
• 23:38
  Speaker 1: is that trade is blamed for things it gets scapegoaded.
• 23:41
  Speaker 1: So the biggest source of displacement in jobs of job
• 23:44
  Speaker 1: elimination is not trade, it's technology. It's productivity increases, which,
• 23:48
  Speaker 1: by the way, is scary for the future for things
• 23:51
  Speaker 1: like robotics, three D printing, artificial intelligence. If anything, the
• 23:55
  Speaker 1: potential for job displacement might accelerate. And I don't think
• 23:59
  Speaker 1: we've begun to think that through as a society what
• 24:01
  Speaker 1: we're going to do. But in the meantime, trade is
• 24:04
  Speaker 1: the scapegoat. There's inventing and just like we're talking about
• 24:07
  Speaker 1: breaks it before that became a vote where people expressed
• 24:10
  Speaker 1: a lot of their frustrations with the status quo. You
• 24:13
  Speaker 1: don't get a chance to vote on globalization, but you
• 24:16
  Speaker 1: do get a chance to vote on grade on trade.
• 24:19
  Speaker 1: And I think what's happening is that trade is carrying
• 24:21
  Speaker 1: a lot of weight that it really doesn't deserve, but
• 24:24
  Speaker 1: people are turning towards it to to vent their frustrations.
• 24:27
  Speaker 1: If you really want to be scared about automation, there's
• 24:30
  Speaker 1: a book out um, I think you know his name
• 24:32
  Speaker 1: is Ford, called Rise of the Robots. The technology discussion
• 24:36
  Speaker 1: is fascinating, the future impact of that technology. Technology. It's
• 24:42
  Speaker 1: a little Malthusian for my taste. It's a little too
• 24:45
  Speaker 1: end of world, um, but it there is no doubt
• 24:48
  Speaker 1: that there are huge societal shifts coming due to technology.
• 24:52
  Speaker 1: It's uneven certain types of jobs, certain sectors of the
• 24:54
  Speaker 1: economy are more vulnerable. I just don't think we've really
• 24:58
  Speaker 1: begun the public conversation about how is it we better
• 25:03
  Speaker 1: prepare workers to deal with some of the challenges. And
• 25:05
  Speaker 1: that's everything from transition assistance financially, the education and retraining.
• 25:11
  Speaker 1: And we just can't put a mote out there. We
• 25:12
  Speaker 1: can't pull up the bridge. We've got to think about
• 25:14
  Speaker 1: how is it we compete in this world? And the
• 25:17
  Speaker 1: political conversation isn't close to the conversation we need to have.
• 25:21
  Speaker 1: So last year we saw a ton of news out
• 25:24
  Speaker 1: about hacking of various institutions in the United States. Specifically,
• 25:30
  Speaker 1: there's a building in China that's primarily filled with their
• 25:34
  Speaker 1: Department of Defense and their intelligence community, and these folks
• 25:38
  Speaker 1: are hacking US corporate sites, US military sites, and US
• 25:43
  Speaker 1: government uh information. How has this gotten as out of
• 25:48
  Speaker 1: control as it appears to be, Is there any chance
• 25:51
  Speaker 1: that this has gotten better? Is going to get better?
• 25:54
  Speaker 1: And what sort of things might they have stolen from us? Well?
• 25:57
  Speaker 1: In general, in the whole area of cyber the technology
• 26:00
  Speaker 1: g is outpaced the rules. It's a little bit like
• 26:02
  Speaker 1: the old Wild West, and there's no sheriff. A lot
• 26:05
  Speaker 1: of people out there with guns and we're seeing it
• 26:07
  Speaker 1: all over. So the U. S. China relationship is simply
• 26:10
  Speaker 1: one part of a of a larger UH situation. Look,
• 26:14
  Speaker 1: some forms of espionage and the rest we carry out,
• 26:18
  Speaker 1: and it's carried out against us, and if we're not
• 26:19
  Speaker 1: protecting our data, shame on us. So the idea that
• 26:22
  Speaker 1: the Office of Personnel Management got hacked, that was ther
• 26:25
  Speaker 1: responsibility on our side. Now, the Chinese are doing more
• 26:28
  Speaker 1: than espionage. They're also doing property theft and that is
• 26:31
  Speaker 1: something that we have got to sanction them on if
• 26:34
  Speaker 1: they won't stop. You're talking about patents and designs and
• 26:37
  Speaker 1: I mean they they're some of their military aircraft and
• 26:40
  Speaker 1: other things. It's clear that that's not in house stuff absolutely,
• 26:44
  Speaker 1: So again there's a difference between It seems to me
• 26:46
  Speaker 1: what is espionage and we carry that out and this
• 26:50
  Speaker 1: is just the newest domain of espionage and intellectual property
• 26:54
  Speaker 1: theft which needs to be stopped, and the Chinese have
• 26:56
  Speaker 1: agreed to stop it. The question is whether one they
• 26:59
  Speaker 1: meant the agreement to whether they will then implement it.
• 27:01
  Speaker 1: So there's big there's big questions UH there, And this
• 27:05
  Speaker 1: is you know, one of the six d things on
• 27:07
  Speaker 1: the US Chinese agenda, and I think also in future
• 27:10
  Speaker 1: trade agreements, this question of intellectual property protection is going
• 27:13
  Speaker 1: to play a larger role. It needs to. I'm Barry Ridhults.
• 27:16
  Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My
• 27:20
  Speaker 1: guest today is Richard hass He is President of the
• 27:23
  Speaker 1: Council on Foreign Relations. Let's jump right into some of
• 27:28
  Speaker 1: the rest of the world and and how what we
• 27:31
  Speaker 1: do here in the United States impacts our own ability
• 27:36
  Speaker 1: to to influence events. The two thousand oh eight oh
• 27:40
  Speaker 1: nine financial crisis, how did that impact the American ability
• 27:45
  Speaker 1: to project power around the world. Well, it hurt us
• 27:48
  Speaker 1: in lots of ways. It hurt us in terms of
• 27:50
  Speaker 1: lost resources. We simply didn't have as much wealth to
• 27:53
  Speaker 1: devote to what it is we do in the world.
• 27:56
  Speaker 1: It hurt us reputationally in many ways. Suddenly the does
• 28:00
  Speaker 1: are to emulate the American model was, to put it gently,
• 28:04
  Speaker 1: was not was not what it it was. And I
• 28:09
  Speaker 1: just think more broadly, it made people uncomfortable with the
• 28:12
  Speaker 1: world in which American leaders and officials were making decisions
• 28:17
  Speaker 1: that had tremendous consequence for them, over which they had
• 28:21
  Speaker 1: no influence, and No one likes to be in a
• 28:23
  Speaker 1: situation where they feel vulnerable but unable to influence, and
• 28:26
  Speaker 1: that's what the rest of the world felt. So here
• 28:28
  Speaker 1: we are. It's seven eight years later. The economy in
• 28:32
  Speaker 1: the US has recovered substantially. The rest of the world.
• 28:35
  Speaker 1: You know, someone had described us as the cleanest shirt
• 28:38
  Speaker 1: in the hamper um. I kind of like that description.
• 28:42
  Speaker 1: Given that recovery versus let's say, Japan and China and Europe,
• 28:46
  Speaker 1: have we regained some of that influence and or or
• 28:50
  Speaker 1: have we made a lasting um image problem that that's
• 28:55
  Speaker 1: going to affect our ability to influence events. It's a
• 28:58
  Speaker 1: good question. The polls would suggest we've gained somewhat, but
• 29:01
  Speaker 1: not that much because other areas have heard us. We
• 29:04
  Speaker 1: heard over issues. Our reputation gets hurt over things like
• 29:07
  Speaker 1: guns and violence uh in this country, or political dysfunction
• 29:12
  Speaker 1: has subtracted from our reputation. What we did in Iraq
• 29:16
  Speaker 1: and what we didn't do in Syria has has heard us.
• 29:19
  Speaker 1: So I think while we've recovered somewhat economically over the
• 29:22
  Speaker 1: last eight or so years, other aspects that affect the
• 29:26
  Speaker 1: way the rest of the world sees us. If it
• 29:28
  Speaker 1: were shaff stock, we've lost value, so I want to
• 29:31
  Speaker 1: come back to Iraq a little later. Let's let's let's
• 29:33
  Speaker 1: go through some of the recent diplomatic um breakthroughs or
• 29:38
  Speaker 1: or treaties that might impact us going forward. Uh. The
• 29:42
  Speaker 1: Iran nuclear deal. I think people generally were confused by
• 29:46
  Speaker 1: by that, or at least some people at first blush.
• 29:49
  Speaker 1: It certainly looked like a positive. It kicked uh, the
• 29:52
  Speaker 1: Iranian bomb ten years down the road. What's your take
• 29:56
  Speaker 1: on our new treaty with Iran? The joy Agreement, Uh,
• 30:01
  Speaker 1: to me was in principle better than either living within
• 30:04
  Speaker 1: Iran with nuclear weapons or going to war with Iran.
• 30:08
  Speaker 1: But there are aspects of the treaty that that give
• 30:10
  Speaker 1: me real pause. Uh. Not just a transfer of wealth,
• 30:14
  Speaker 1: but the fact that after ten years they can do
• 30:16
  Speaker 1: whatever they want when it comes to centrifugures. In fifteen years,
• 30:19
  Speaker 1: they can accumulate as much enriched geranium as it is
• 30:23
  Speaker 1: they want. So, as you said, as you rightly said,
• 30:25
  Speaker 1: it brought us time, but it didn't in any way
• 30:28
  Speaker 1: solve the problem. And there's a lot of people who said, well,
• 30:31
  Speaker 1: maybe in ten or fifteen years, or Ron will be
• 30:34
  Speaker 1: a much more reasonable, moderate place. That's possible. I wouldn't
• 30:37
  Speaker 1: bet I wouldn't bet a lot on it. And so
• 30:40
  Speaker 1: my concern is that in ten or fifteen years we're
• 30:44
  Speaker 1: going to face in Iran without constraints potentially, and in
• 30:46
  Speaker 1: the meantime, a lot of its neighbors, seeing this possibility,
• 30:50
  Speaker 1: may decide to develop nuclear options of their own, if
• 30:54
  Speaker 1: you will to hedge. So as bad as the Middle
• 30:56
  Speaker 1: East now is, and it's plenty bad by any and
• 30:59
  Speaker 1: every measure, it's conceivable to see how you could have
• 31:03
  Speaker 1: multiple moves towards what you might call a pre nuclear
• 31:08
  Speaker 1: weapons status on the part of several of Iran's neighbors,
• 31:11
  Speaker 1: and Iran could return to that. So this is not
• 31:14
  Speaker 1: a problem that's been solved. To say the least, how
• 31:17
  Speaker 1: important is the price of oil to not just Middle
• 31:22
  Speaker 1: East economy, but how how important is that to creating
• 31:28
  Speaker 1: a nuclear free Middle East and to at least have
• 31:33
  Speaker 1: people negotiating in good faith to try and resolve some
• 31:37
  Speaker 1: of their regional differences. You're not going to have a
• 31:38
  Speaker 1: nuclear free Middle East. You've got Israel that has nuclear weapons,
• 31:43
  Speaker 1: Pakistan Pakistan's Pakistan is not that far away, and they've
• 31:47
  Speaker 1: got the world's fastest growing nuclear arsenal. Iran has virtually
• 31:52
  Speaker 1: all the prerequisites of a of a nuclear weapon. Other
• 31:55
  Speaker 1: countries are beginning to put into place certain types of
• 31:58
  Speaker 1: nuclear power programs. So at the moment, UH, the idea
• 32:02
  Speaker 1: of a nuclear free Middle East looks to me like
• 32:04
  Speaker 1: a pipe dream. So was it a big mistake to
• 32:06
  Speaker 1: remove Saddam Hussein as the counterbalance to two I ran?
• 32:11
  Speaker 1: When Iraq and I ran, we're at each other's throats.
• 32:13
  Speaker 1: No one really had time to develop a nuclear program. Well, actually,
• 32:17
  Speaker 1: both both of them had elements of nuclear programs during
• 32:20
  Speaker 1: their eight year long war in the eighties. But I
• 32:22
  Speaker 1: take your larger point. I opposed the two thousand three
• 32:26
  Speaker 1: Iraq War even though I was in the government at
• 32:28
  Speaker 1: the time, I was at the State Department. UH. One
• 32:31
  Speaker 1: of the reasons was I did think that the balance
• 32:33
  Speaker 1: of power between Iraq and Iran suited our interests. And
• 32:37
  Speaker 1: I was also wildly skeptical of our ability to build
• 32:42
  Speaker 1: a post Saddam Iraqi society to our liking. And I
• 32:47
  Speaker 1: think it's fair to say that strategically, Iran was the
• 32:51
  Speaker 1: greatest strategic beneficiary of the Iraq War, no doubt in
• 32:54
  Speaker 1: my mind about that. The the enemy of my enemy
• 32:57
  Speaker 1: is my friend. And and that's a lesson that it
• 33:00
  Speaker 1: seems we occasionally, uh I forget about. I would state
• 33:03
  Speaker 1: the lesson differently in the Middle East. The enemy of
• 33:05
  Speaker 1: your enemy can still be your enemy, and we're paying
• 33:08
  Speaker 1: a price for that yet, no doubt about that. So
• 33:11
  Speaker 1: you opposed the invasion. But at the same time you
• 33:14
  Speaker 1: were one of the special advisers to General Colin Pale.
• 33:21
  Speaker 1: How did he wrestle with the issue of of going
• 33:24
  Speaker 1: to war in Iraq? If anybody understood the consequences, he
• 33:28
  Speaker 1: more so than the civilians who were agitating for war.
• 33:32
  Speaker 1: He he really understood what we were getting into absolutely,
• 33:35
  Speaker 1: And I would simply say that, like a lot of
• 33:38
  Speaker 1: military men, he is often very wary of large juices
• 33:42
  Speaker 1: of military force. He comes out of Vietnam and he
• 33:45
  Speaker 1: understands just how dangerous and risk he can be to
• 33:48
  Speaker 1: American military personnel. He doesn't see wars and abstraction. He
• 33:52
  Speaker 1: sees a war as as all too real. So you know,
• 33:56
  Speaker 1: he was the one who years ago, if you remember,
• 33:57
  Speaker 1: developed the quote unquote Powell doctrine, the idea, if you're
• 34:00
  Speaker 1: going to go to war, do it with a lot
• 34:01
  Speaker 1: of force. For very clear objectives. And the problem with
• 34:05
  Speaker 1: the two thousand three Iraq war. We did it with
• 34:07
  Speaker 1: the minimum a force, and we had objectives that military
• 34:10
  Speaker 1: force could not accomplish. Military force can destroy things, it's very,
• 34:14
  Speaker 1: very hard for military force to create things. So Powell
• 34:17
  Speaker 1: was properly skeptical. But then when it was clear the
• 34:19
  Speaker 1: President had made up his mind, this is President George W. Bush.
• 34:24
  Speaker 1: Powell then tried to influence how we would go to
• 34:27
  Speaker 1: war diplomatically through the U N with with and so forth.
• 34:31
  Speaker 1: But there I would simply say, and I'll let him
• 34:33
  Speaker 1: speak for himself. But the preponderance of the voices in
• 34:38
  Speaker 1: this administration this is uh. George W. Bush wanted to
• 34:42
  Speaker 1: go to war. Some for reasons. They thought that the
• 34:44
  Speaker 1: Iraqis might have weapons of mass destruction. Others thought that
• 34:48
  Speaker 1: Iraq was going to be an easy target topple Saddam.
• 34:51
  Speaker 1: And they actually thought, very quickly and very easily, you
• 34:54
  Speaker 1: could create a democracy that would set a precedent and
• 34:58
  Speaker 1: an example that the rest of the region would and
• 35:00
  Speaker 1: be able to resist. I was profoundly skeptical that that
• 35:04
  Speaker 1: would happen, but you couldn't prove it wrong. People believed it.
• 35:08
  Speaker 1: They thought this would be a transformational act, and they
• 35:13
  Speaker 1: and the rest again his history. In hindsight, that view
• 35:17
  Speaker 1: of taking our values and transferring it to a completely
• 35:22
  Speaker 1: different culture seems a little bit naive, doesn't it. I mean,
• 35:25
  Speaker 1: it's benefit of mindsight, but it didn't even need hindsight.
• 35:28
  Speaker 1: I thought it was wrong beforehand. It was naive. I
• 35:31
  Speaker 1: also thought it was arrogant and just simply and it wasn't.
• 35:35
  Speaker 1: It's funny. I got criticized once for suggesting it wasn't
• 35:37
  Speaker 1: gonna work, and being called, if you will, the foreign
• 35:40
  Speaker 1: policy of equivalent of a racist, and I said, no,
• 35:42
  Speaker 1: I'm simply saying that the prerequisites for democracy aren't to
• 35:47
  Speaker 1: be found in the contemporary Middle East, so we ought
• 35:50
  Speaker 1: not to embark on a foreign policy which posits that
• 35:53
  Speaker 1: as our objective. That that, that's quite fascinating. Let's talk
• 35:57
  Speaker 1: about Cuba, which is another change that seemed to be
• 36:00
  Speaker 1: so long incoming. What do you think about this, uh
• 36:05
  Speaker 1: re establishing relations with Cuba? What does it mean to us?
• 36:09
  Speaker 1: What does it mean to them? You're right, it was
• 36:11
  Speaker 1: a long time in coming, largely because the opponents have changed,
• 36:15
  Speaker 1: even though they weren't more numerous, had a great political
• 36:19
  Speaker 1: intensity to their South Florida and and the impact on
• 36:23
  Speaker 1: that allectual minority, if you will, held us back. I
• 36:27
  Speaker 1: think the feeling was, with the end of the Cold War,
• 36:28
  Speaker 1: there was no longer a strategic reason not to open
• 36:32
  Speaker 1: up that clearly embargo and isolation when not bringing about
• 36:36
  Speaker 1: the kind of political changes we wanted to see in Cuba.
• 36:39
  Speaker 1: So the feeling was, let's try engaging with them, Let's
• 36:42
  Speaker 1: try trading with them. Having tourism since ending their isolation,
• 36:47
  Speaker 1: you then take away the excuse of the regime that
• 36:50
  Speaker 1: it needs to keep control because of the American threat.
• 36:54
  Speaker 1: And so I think this is a worthy experiment. Uh,
• 36:57
  Speaker 1: the other wasn't working. After fifty years you still had
• 36:59
  Speaker 1: communists power. So let's let's try a different approach, and
• 37:03
  Speaker 1: maybe this can This can bring down or at least
• 37:07
  Speaker 1: bring up, bring about the mellowing the moderation of this system.
• 37:10
  Speaker 1: And I think there's a decent chance. We've been speaking
• 37:13
  Speaker 1: with Richard hass He is the President of the Council
• 37:16
  Speaker 1: on Foreign Relations and author of the upcoming book A
• 37:19
  Speaker 1: World in Disarray, American Foeign Policy and the Crisis of
• 37:23
  Speaker 1: the Old Order. If people want to find more of
• 37:26
  Speaker 1: your writings. UH, CFR dot org is that correct? C
• 37:31
  Speaker 1: far dot org is a good place to start. Amazon's another.
• 37:34
  Speaker 1: If you have enjoyed this conversation, be sure and stick
• 37:36
  Speaker 1: around for our podcast extras, where we continue talking about
• 37:40
  Speaker 1: all things UH, diplomatic and foreign policy relations. Be sure
• 37:46
  Speaker 1: to follow me on Twitter at Ridholts or check out
• 37:48
  Speaker 1: my daily column on Bloomberg dot com. I'm Barry Ridholts.
• 37:53
  Speaker 1: You've been listening to Masters in Business on Bloomberg Radio,
• 37:57
  Speaker 1: brought to you by B A. S F. We Create Chemistry.
• 38:01
  Speaker 1: Welcome to the podcast. Actually, as Richard, thank you so
• 38:03
  Speaker 1: much for doing this. This has really been um fascinating.
• 38:07
  Speaker 1: I last year interviewed your predecessor, Leslie gelb uh and
• 38:13
  Speaker 1: it was a fascinating discussion about a different aspect of
• 38:18
  Speaker 1: international relations. This couldn't be more timely between everything that's
• 38:23
  Speaker 1: going on in the world. You know, has business ever
• 38:25
  Speaker 1: been better for people studying foreign relationship? It seems that
• 38:30
  Speaker 1: more than I can remember over the past I don't
• 38:33
  Speaker 1: know how many years foreign policy issues are driving the
• 38:38
  Speaker 1: news cycle. UH the sad answers. I think you're onto something,
• 38:43
  Speaker 1: but if you look at the Middle East, it's as
• 38:45
  Speaker 1: close to chaos as the as any part of the world.
• 38:49
  Speaker 1: We talked about Europe for a while that is suddenly
• 38:52
  Speaker 1: much more unsettled than we ever imagined. Asia very uncertain future,
• 38:59
  Speaker 1: given who knows how China is going to play out
• 39:02
  Speaker 1: issues potentially with the South China Sea, the East China Sea,
• 39:06
  Speaker 1: North Korea. You've got India growing at seven eight percent,
• 39:09
  Speaker 1: but you still have the problems with Pakistan. And then
• 39:11
  Speaker 1: you've got all the global issues from cyber to health,
• 39:15
  Speaker 1: to trade, to proliferation to terrorism. So the the international
• 39:21
  Speaker 1: plate is as full. And then domestically, there's probably less
• 39:25
  Speaker 1: consensus in this country about America's relationship with the world
• 39:29
  Speaker 1: than at any time during my career. So the combination
• 39:33
  Speaker 1: of a world that to some extent is unraveling and
• 39:36
  Speaker 1: the United States, where there's no longer consensus about what
• 39:39
  Speaker 1: role we ought to play. The combination of the two,
• 39:42
  Speaker 1: I think, as much as anything else, explains what's going on.
• 39:45
  Speaker 1: Someone wrote an essay not too long ago about a
• 39:48
  Speaker 1: pencil that if you want to make a pencil, it
• 39:51
  Speaker 1: would cost you to just make it yourself. It would
• 39:53
  Speaker 1: cost you about three thousand dollars, as opposed to taking
• 39:57
  Speaker 1: some wood and some lead and some metal and some
• 40:00
  Speaker 1: rubber and buying it for eleven cents from someone else.
• 40:03
  Speaker 1: And it was really to me a brilliant way to
• 40:06
  Speaker 1: explain the advantages of trade. You couldn't make this yourself,
• 40:11
  Speaker 1: or the cost would just be so exorbitant without free trade.
• 40:17
  Speaker 1: It's amazing. I wonder how you you mentioned the scapegoating
• 40:22
  Speaker 1: factor of it. How significant is scapegoating of trade along
• 40:27
  Speaker 1: with the demographic trip changes we've had globalization, automization. How
• 40:32
  Speaker 1: effective a technique is that for politicians trying to uh
• 40:38
  Speaker 1: touch a chord amongst the populaces. Look, trade is important economically,
• 40:43
  Speaker 1: it might even be more important strategically as a way
• 40:46
  Speaker 1: of bolstering allies promoting development, uh tying others who are
• 40:52
  Speaker 1: potential adversaries into relationships with they'll they'll think twice before
• 40:56
  Speaker 1: they they overturned. The problem is that there is to
• 41:00
  Speaker 1: the energy and the domestic debate is anti anti trade.
• 41:03
  Speaker 1: It's blamed for a lot of things, including job loss
• 41:07
  Speaker 1: and who knows what else, So it's it's gonna be
• 41:10
  Speaker 1: hard to win that debate. I think you know this.
• 41:12
  Speaker 1: President Mr Obama has a few more months left in
• 41:14
  Speaker 1: his term to try to begin to shape the debate
• 41:18
  Speaker 1: about globalization in this country's relationship with the rest of
• 41:21
  Speaker 1: the world. His successor indeed his successors over the years,
• 41:26
  Speaker 1: we'll have the same opportunity or necessity. But I but
• 41:30
  Speaker 1: I worry that it's part of a larger turning away
• 41:33
  Speaker 1: from the world. I worry about certain elements of isolationism
• 41:36
  Speaker 1: we've seen in both parties. It's not a republican or
• 41:38
  Speaker 1: a democratic problem in some ways now the biggest debates
• 41:41
  Speaker 1: in this country or within political parties, and we're seeing it,
• 41:44
  Speaker 1: whether the opposition to immigration, opposition to UH trade more broadly,
• 41:50
  Speaker 1: this pushback rejection of globalization, and not just in this country,
• 41:54
  Speaker 1: we see it throughout Europe and elsewhere. So the lesson
• 41:58
  Speaker 1: I take is, if you want this country, in this
• 42:00
  Speaker 1: society and this economy to derive the benefits of globalization,
• 42:05
  Speaker 1: then you had better go out and make the case.
• 42:06
  Speaker 1: Forn't uh is it a matter of sharing the wealth
• 42:11
  Speaker 1: that is generated by that or how Because you referenced
• 42:15
  Speaker 1: inequality in Europe and some inequalities here, how significant is
• 42:20
  Speaker 1: globalization as a response to income inequality or anti globalization
• 42:27
  Speaker 1: as a response to to income inequality? Well, here I'll
• 42:30
  Speaker 1: probably alienate some of your listeners, but I don't think
• 42:33
  Speaker 1: inequality is the real issue. I think the real issue
• 42:36
  Speaker 1: is a loss or absence of upward mobility. And we've
• 42:40
  Speaker 1: had an equality in this country since day one. What
• 42:43
  Speaker 1: we what we've also traditionally had those tremendous opportunity and mobility,
• 42:47
  Speaker 1: And to me, the goal is to resurrect that. And
• 42:51
  Speaker 1: as long as people see real improvements in their standard
• 42:54
  Speaker 1: of living and the prospects of further than I think
• 42:57
  Speaker 1: we do just fine as an economy and as a society,
• 43:00
  Speaker 1: and people don't wake up every day angry about inequality
• 43:03
  Speaker 1: so long as their specific circumstances are improving, are improving,
• 43:08
  Speaker 1: and are likely to continue to improve. So so you
• 43:10
  Speaker 1: mentioned UH some presidents before you served in both Bush administrations.
• 43:17
  Speaker 1: How do you compare and contrast the different styles of
• 43:21
  Speaker 1: of George SR and and and uh George W. Bush.
• 43:26
  Speaker 1: I would say that forty one the Father's administration was
• 43:31
  Speaker 1: more formal, decision making was a bit more orderly, process oriented.
• 43:36
  Speaker 1: Is this ste more process oriented, a little bit more careful.
• 43:40
  Speaker 1: I think the W's administration UH a little bit less
• 43:47
  Speaker 1: form a little bit less careful, And some of the
• 43:50
  Speaker 1: decisions as well as some of the follow ups. So
• 43:52
  Speaker 1: I thought that the the administration of the father, all
• 43:57
  Speaker 1: things being equal, I think history will judge as a
• 43:59
  Speaker 1: more a more successful presidency. So let's talk about the
• 44:04
  Speaker 1: third bush Um Jeb I was kind of surprised that
• 44:08
  Speaker 1: he seemed somewhat surprised by the Iraq question. How can
• 44:14
  Speaker 1: we put that into context? He clearly has been prepping
• 44:17
  Speaker 1: for this for a long time, and by all accounts,
• 44:20
  Speaker 1: is a really intelligent guy. That Jeb Bush is very intelligent.
• 44:25
  Speaker 1: I think he would have made a good president. On
• 44:28
  Speaker 1: the other hand, he had in campaign for a while
• 44:30
  Speaker 1: and just rusty is that? Is that the answers? I
• 44:33
  Speaker 1: can't explain it. I wasn't involved. I can't be involved
• 44:36
  Speaker 1: in campaigns. I'm just an observer like you are. So
• 44:38
  Speaker 1: whether it was rust or just people thought they could
• 44:43
  Speaker 1: handle a question and then it turns out they couldn't.
• 44:45
  Speaker 1: I can't explain why it was, why it played out
• 44:52
  Speaker 1: the way it uh the way it did. But it
• 44:55
  Speaker 1: wasn't the only area, quite honestly, where he stumbles as
• 44:58
  Speaker 1: a as it kind then it's quite possible. So this
• 45:01
  Speaker 1: two thousand, fifteen sixteen wasn't his year, he's he represented
• 45:05
  Speaker 1: a degree of establishment continuity. And as you saw with
• 45:09
  Speaker 1: with both Donald Trump and Bernie Sanders, this was not
• 45:12
  Speaker 1: a year of great public outpouring for establishment continuity. So
• 45:17
  Speaker 1: you mentioned Trump when when Trump was jabbing at Jeb
• 45:23
  Speaker 1: and using his brother to as a cudgel on him. Um,
• 45:28
  Speaker 1: he took a page out of the Democrats side of
• 45:32
  Speaker 1: the island said Iraq was a colossal blunder, and there
• 45:37
  Speaker 1: were Republicans who flocked to that position. First, was Trump
• 45:42
  Speaker 1: right that Iraq was the two oh three invasion of
• 45:45
  Speaker 1: Iraq was a colossal blunder? And seconds, um, how did
• 45:51
  Speaker 1: he as a Republican say that when no Republican was
• 45:55
  Speaker 1: willing to address that publicly in the past. Well, I
• 45:58
  Speaker 1: wrote a book about the tour about the Gulf War,
• 46:01
  Speaker 1: in the Iraq War, cold war of necessity, war of choice,
• 46:04
  Speaker 1: and I was a great critic of the two thousand
• 46:06
  Speaker 1: three War of necessity, meaning the desert shields after Saddam
• 46:12
  Speaker 1: invaded Kuwait absolutely, which I thought was a war that
• 46:15
  Speaker 1: we were right to in fight, and we fought it
• 46:17
  Speaker 1: in the right way, very much a Colin Powell specific
• 46:21
  Speaker 1: objective overwhelming force and then get out when you're done right.
• 46:25
  Speaker 1: It was Colin Powell was President, Bush, Brent Scotcroft, James Baker,
• 46:29
  Speaker 1: and Dick Cheney by the way with Secretary of Defense,
• 46:32
  Speaker 1: and it was a very effective team. But considerable means
• 46:35
  Speaker 1: for limited goals very different than the two thousand three. Uh,
• 46:39
  Speaker 1: considerable means for limited goals as opposed to limited means
• 46:44
  Speaker 1: for considerable goals. And it you know it needless to say.
• 46:50
  Speaker 1: And I think history will be uh extremely critical of
• 46:54
  Speaker 1: the two thousand three, So I think it's legitimate to
• 46:56
  Speaker 1: criticize it. And I think what it also shows is
• 46:59
  Speaker 1: uh a lot of consensus within the Republican Party about
• 47:02
  Speaker 1: this country's role in the world. So you those who
• 47:04
  Speaker 1: thought the Iraq War was a great idea at the time,
• 47:07
  Speaker 1: some in retrospect, many people who opposed it at the
• 47:10
  Speaker 1: time or certainly in retrospect. And I just find this
• 47:15
  Speaker 1: part of a larger pattern that the most interesting conversations
• 47:18
  Speaker 1: about foreign policy happened within the parties. There's not a
• 47:21
  Speaker 1: democratic versus Republican foreign policy that is that is quite fascinating. UM.
• 47:27
  Speaker 1: So let's let's move beyond the bushes and and move
• 47:31
  Speaker 1: beyond um spend a little more time. We we mentioned
• 47:36
  Speaker 1: the parallels between Brexit and and Trump, but is it
• 47:41
  Speaker 1: really fair to say that, uh, we're we're striking the
• 47:46
  Speaker 1: same populace chord. Is it immigration and and lack of
• 47:50
  Speaker 1: opportunity and some wealth inequality? Are those the factors that
• 47:54
  Speaker 1: are driving to a lesser degree the Sanders Um candidacy answers. Yes.
• 48:00
  Speaker 1: And you've had, as you know, for many Americans, a
• 48:03
  Speaker 1: lack of real increase in living standards over the last
• 48:06
  Speaker 1: decade decade and a half. So and this concerns about
• 48:09
  Speaker 1: the inadequacy of safety nets, of retirement savings, a lot
• 48:14
  Speaker 1: of social change in our society, and record speed. So
• 48:18
  Speaker 1: I think you add all this up and there's a
• 48:20
  Speaker 1: lot of Americans who feel uneasy, uncomfortable, threatened, anxious, choose
• 48:24
  Speaker 1: your your adjective, but I think it's it's widespread. And
• 48:27
  Speaker 1: the fact that you've had outsiders like Donald Trump and
• 48:30
  Speaker 1: Bernie Sanders do as well as they've done in this
• 48:33
  Speaker 1: political season tells you something. So let's talk You mentioned Trump,
• 48:36
  Speaker 1: Let's talk a little bit about I mentioned Trump, so
• 48:38
  Speaker 1: I can't really pin that on you. Let's let's talk
• 48:41
  Speaker 1: about our relationship with Mexico. My understanding has been that
• 48:46
  Speaker 1: following the financial crisis, we saw not immigration but immigration.
• 48:51
  Speaker 1: When we look at the amount of money being wired
• 48:55
  Speaker 1: from the US to Mexico, ostensibly by illegal Mexican in
• 49:00
  Speaker 1: the United States sending money back to their family, that's
• 49:03
  Speaker 1: really taken a big drop, and and the amount of
• 49:06
  Speaker 1: illegal Mexicans coming over the border seems to have reversed.
• 49:10
  Speaker 1: It seems to be going the opposite direction. So, first question,
• 49:15
  Speaker 1: are we really threatened by Mexico? And second question, are
• 49:20
  Speaker 1: we really going to get them to pay for a wall?
• 49:22
  Speaker 1: How is that going to work? As you say, there's
• 49:25
  Speaker 1: net migration now in the direction of Mexico. It's a
• 49:28
  Speaker 1: combination of slowing economy here, the economy there is doing well,
• 49:32
  Speaker 1: smaller family size, uh there. So that's that's essentially what's
• 49:38
  Speaker 1: driving it. I also think that Mexico is something of
• 49:41
  Speaker 1: a success story, the fact that it's you've had several
• 49:44
  Speaker 1: rotations of power. It's it's increasingly a peaceful, legitimate democracy.
• 49:49
  Speaker 1: You've got problems in some cases domestically with drug gangs
• 49:52
  Speaker 1: with guns and so forth, but that's really a lack
• 49:55
  Speaker 1: of government capacity, and that's the kind of thing that
• 49:57
  Speaker 1: over the years or decades, I believe canon will UH
• 50:01
  Speaker 1: be solved. The fact that you don't have massive flows
• 50:04
  Speaker 1: of people out of Mexico and the United States. I
• 50:06
  Speaker 1: also see in some ways there's a reflection that the
• 50:08
  Speaker 1: NAFTA agreement worked. Next, Mexico's economy is doing better. It
• 50:12
  Speaker 1: can increasingly support its own UH population and a lot
• 50:17
  Speaker 1: of goods which are made in one country the other,
• 50:19
  Speaker 1: as you know, because the supply chains are really made
• 50:21
  Speaker 1: increasingly in both. But to answer your question, no, there
• 50:26
  Speaker 1: I do not believe there will be a wall between
• 50:29
  Speaker 1: the United States and and Mexico. If there water be one,
• 50:33
  Speaker 1: it wouldn't be paid for by Mexico. I would just
• 50:37
  Speaker 1: make a larger point about immigration. I think we need
• 50:40
  Speaker 1: to break it down at the three parts. We need
• 50:42
  Speaker 1: to continue to have a flow of talented individuals into
• 50:46
  Speaker 1: this country. It's a great driver of economic success in
• 50:49
  Speaker 1: this country. We've got to find a way to deal
• 50:51
  Speaker 1: with twelve million people who had this uncertain status. We're
• 50:55
  Speaker 1: not going to deport them. We've got to find some
• 50:57
  Speaker 1: kind of a legitimate path, a conditional path to a
• 51:00
  Speaker 1: legal status or citizen ship. And we've got to have
• 51:04
  Speaker 1: real security and I'm not worried about economic migrants. I'm
• 51:07
  Speaker 1: worried about terrorists. So I want to make sure that
• 51:08
  Speaker 1: the United States is secure and its borders on its
• 51:11
  Speaker 1: land borders, its air borders, and its sea boarders north, southeast,
• 51:15
  Speaker 1: and west. So we've got to be safe, and that
• 51:17
  Speaker 1: to me is a a real challenge that we've got
• 51:21
  Speaker 1: to face up to. So, but you mentioned NAFTA, I
• 51:27
  Speaker 1: have to come back to the Trans Pacific Um Partnership
• 51:32
  Speaker 1: that that is now stuck in Congress for years. What
• 51:37
  Speaker 1: happens if that doesn't pass? And and what does that
• 51:41
  Speaker 1: say to our trading partners And what are the odds
• 51:44
  Speaker 1: that that under new administration, perhaps with a new Congress,
• 51:49
  Speaker 1: UH might might actually be fast tracked. Well, you're right
• 51:52
  Speaker 1: that the agreement has been parked in the Congress. There's
• 51:57
  Speaker 1: zero chance that gets touched before the election. If Hillary
• 52:00
  Speaker 1: Clinton were to win, there's some chance it could get
• 52:02
  Speaker 1: touched in the lame Duck. More likely though it comes
• 52:05
  Speaker 1: If it comes up again, it would be sometime after
• 52:07
  Speaker 1: the new president takes UH takes office if it If
• 52:12
  Speaker 1: it doesn't pass, we'd pay a little bit of an
• 52:14
  Speaker 1: economic price. The estimates are point three or so percentage
• 52:19
  Speaker 1: GDP in not a lot, not like the Brexit costs,
• 52:22
  Speaker 1: which is a couple of percent, much smaller, exactly much smaller.
• 52:25
  Speaker 1: I think the bigger costs would be strategic and reputational.
• 52:29
  Speaker 1: What it would sell to these other countries is the
• 52:31
  Speaker 1: United States is no longer reliable, dependable, predictable country. And
• 52:36
  Speaker 1: it would also be the biggest winner would be China.
• 52:38
  Speaker 1: What the Chinese would say is, oh, great, well, we're
• 52:40
  Speaker 1: going to do a trade agreement with you. We're going
• 52:42
  Speaker 1: to replace the United States economically. So I don't see
• 52:46
  Speaker 1: people connecting the dots in this country. And if you
• 52:49
  Speaker 1: want to be against t p P, that's your prerogative,
• 52:52
  Speaker 1: but then you have to be honest about the strategic
• 52:55
  Speaker 1: consequences and as well as the economic consequences being against it.
• 52:59
  Speaker 1: It seems to me the case for it is so strong,
• 53:03
  Speaker 1: and there's ways of helping people who would conceivably or
• 53:06
  Speaker 1: potentially be hurt by it through economic displacement. Well, then
• 53:09
  Speaker 1: you help them with education, retraining and transitional financial assistance.
• 53:14
  Speaker 1: But to throw the baby out with the bath waters
• 53:16
  Speaker 1: to me, a uh strategic error of the first magnitude
• 53:19
  Speaker 1: is that the deal that has to get done. T
• 53:22
  Speaker 1: p P passes, but here's money set aside for retraining
• 53:26
  Speaker 1: of anybody who loses their job or or whose factory
• 53:29
  Speaker 1: closes as a result of this path. That's the way,
• 53:33
  Speaker 1: quite honestly, that is the way we've passed previous Trader
• 53:35
  Speaker 1: graft Naft and others, is that there's always a side deal,
• 53:39
  Speaker 1: if you will, where you help people who are like
• 53:43
  Speaker 1: not everybody gains, not everybody wins from globalization. So as
• 53:46
  Speaker 1: a society, we've got to take care of the people
• 53:48
  Speaker 1: who lose from globalization. That's part of putting together a
• 53:52
  Speaker 1: majority that supports these agreements. So I never asked for
• 53:55
  Speaker 1: forecast of predictions. That's that's part of our motto. No
• 53:58
  Speaker 1: stock picks, no no forecasts. But I'm gonna I'm gonna
• 54:03
  Speaker 1: cheat over to that that area a little bit and say,
• 54:09
  Speaker 1: is there any chance we see t p P passed
• 54:11
  Speaker 1: over the next five years. The answers yes. What you
• 54:14
  Speaker 1: can't do is renegotiate it. You can't reopen it with
• 54:17
  Speaker 1: eleven other countries. So if it were to pass, what
• 54:19
  Speaker 1: it would take a little bit. What we've been talking
• 54:21
  Speaker 1: about is a side agreement between whosever president and the Congress,
• 54:26
  Speaker 1: which would deal with everything from various forms of assistance
• 54:29
  Speaker 1: for affected workers, might also deal with with perceived problems
• 54:33
  Speaker 1: with the agreement, for example, to deal with the potential
• 54:36
  Speaker 1: the currencies are manipulated so other countries exports are cheaper here,
• 54:40
  Speaker 1: might deal with government subsidies. So what I would expect
• 54:43
  Speaker 1: is you'd have a side agreement between the President the
• 54:46
  Speaker 1: Congress that would, together with the agreement, would provide a
• 54:50
  Speaker 1: package that people, even skeptics, could support. So I think
• 54:54
  Speaker 1: the odds of that happening over the next five years
• 54:55
  Speaker 1: are better than even. Since you mentioned manipulating currency, let's
• 55:00
  Speaker 1: talk a little bit about China. Do you think China
• 55:02
  Speaker 1: is a persistent currency manipulator or is that just an
• 55:06
  Speaker 1: easy thing to paint them with. I think they were historically,
• 55:09
  Speaker 1: but they've stopped and in the last year or two
• 55:12
  Speaker 1: the evidence just isn't there These things that criticize China
• 55:16
  Speaker 1: four such as well. Obviously we talked about it before,
• 55:19
  Speaker 1: the question of property theft. Intellectual property theft is an
• 55:22
  Speaker 1: issue of government subsidies, government investments, and so forth. As
• 55:26
  Speaker 1: there's issues I just sort of column somewhere. I can't
• 55:29
  Speaker 1: recall that Amazon is having a problem that they're flooded
• 55:34
  Speaker 1: with Chinese knockoffs of of name brand goods. So if
• 55:38
  Speaker 1: we have a dumping problem from China, then we have
• 55:41
  Speaker 1: something called the World Trade Organization and we take we
• 55:43
  Speaker 1: should take China to task in the w t O.
• 55:46
  Speaker 1: Often we get rulings in our favor. Let's use the machinery.
• 55:49
  Speaker 1: Not too long before we sat down to do this interview,
• 55:52
  Speaker 1: there was a decision by an arbitration panel that basically
• 55:57
  Speaker 1: says China has no historical eights to parts of the
• 56:01
  Speaker 1: Chinese Sea that they're the South China South China see
• 56:04
  Speaker 1: that they're claiming as their own. What does this mean
• 56:08
  Speaker 1: going forward? Is this is this have binding force? Uh
• 56:11
  Speaker 1: and as China still gonna be flexing military muscle off
• 56:15
  Speaker 1: their own coast in in in the Pacific. Well before
• 56:18
  Speaker 1: the decision came down, the Chinese, knowing the decision was
• 56:21
  Speaker 1: going to go against them, essentially preempted and said we're
• 56:23
  Speaker 1: going to ignore the decision and before we feel too
• 56:26
  Speaker 1: much holier than now about it, we would do the
• 56:28
  Speaker 1: same thing. As a major power. We wouldn't allow our
• 56:32
  Speaker 1: foreign policy to be determined by some tribunal like this,
• 56:36
  Speaker 1: And so I don't in that sense. There's no surprise. Now.
• 56:40
  Speaker 1: The real question is not whether China goes along with
• 56:44
  Speaker 1: the ruling. There was zero chances that. The real question
• 56:46
  Speaker 1: is whether in any way they adjust their behavior and
• 56:49
  Speaker 1: stop some of the reclamation projects, the island rebuilding projects,
• 56:53
  Speaker 1: whether we see a little bit more reasonable nous on
• 56:55
  Speaker 1: their behavior on my hunches, there's a debate within China
• 56:57
  Speaker 1: on that that historically over last. If you think about
• 57:01
  Speaker 1: a forty years, China's foreign policy has been quite restrained
• 57:04
  Speaker 1: because they've understood they needed a stable environment external environment
• 57:08
  Speaker 1: in order to develop and grow economically. In the last
• 57:11
  Speaker 1: couple of years, you're seeing a more assertive streak coming
• 57:14
  Speaker 1: out of China. So my prediction is you're going to
• 57:16
  Speaker 1: see something of an internal struggle between these two different schools.
• 57:20
  Speaker 1: I thought, can we say it's been more than forty years,
• 57:22
  Speaker 1: it's been about five thousand years of China not looking
• 57:25
  Speaker 1: to project Look at the British Empire, the Spanish, but
• 57:29
  Speaker 1: look look at the Napoleonic You never really got that
• 57:32
  Speaker 1: from China. They were much more about taking care of
• 57:35
  Speaker 1: their own so big territorially and demographically that that's historically
• 57:40
  Speaker 1: been an up and now China is a major power,
• 57:42
  Speaker 1: and the question is whether they want to have a
• 57:44
  Speaker 1: certain influence or respect, if you will, accorded them in
• 57:50
  Speaker 1: the in the region. They want to assert certain things,
• 57:54
  Speaker 1: and I think they are the juries out. But again,
• 57:56
  Speaker 1: as growth has slowed significantly in China, again there's two
• 58:00
  Speaker 1: skills a thought. One says they're gonna continue to be
• 58:03
  Speaker 1: restrained because they can't afford to upset the economic out
• 58:06
  Speaker 1: applic cart. The other is saying they're going to turn
• 58:08
  Speaker 1: to a more nationalist foreign policy as a way of
• 58:11
  Speaker 1: compensating for their their slowing economic growth. And Western observers
• 58:15
  Speaker 1: are divided. My hunches the Chinese themselves are divided. Do
• 58:18
  Speaker 1: the Chinese feel disrespected because I don't know anybody who's
• 58:23
  Speaker 1: not a leader in technology, in in economics, in any
• 58:28
  Speaker 1: global perspective that doesn't look at China as a behemoth
• 58:33
  Speaker 1: deserving of respect. Or are they still feeling a little
• 58:36
  Speaker 1: bit of a of a third World chip on their shoulder.
• 58:41
  Speaker 1: I'm not sure to put it quite that way, because
• 58:43
  Speaker 1: they're at one and the same time both the developing
• 58:45
  Speaker 1: country and a power. But I do think they feel
• 58:49
  Speaker 1: based on my conversations with them, and what I read
• 58:51
  Speaker 1: that this is still an American dominated world. There's some
• 58:55
  Speaker 1: Chinese who think that the United States gets up in
• 58:58
  Speaker 1: the morning trying to block China's path. That really, uh sure,
• 59:02
  Speaker 1: When we, for example, opposed over the last couple of
• 59:04
  Speaker 1: years the Chinese sponsored Infrastructure Investment Bank in Asia, there's
• 59:09
  Speaker 1: a certain Chinese feeling that, again, the United States wants
• 59:15
  Speaker 1: to keep China in its place so it doesn't emerge
• 59:17
  Speaker 1: as a full fledged uh competitor. So there's a bit
• 59:21
  Speaker 1: of that in Chinese. Uh. I think in the Chinese
• 59:24
  Speaker 1: political debate, aren't the Chinese already a full fledged competitor.
• 59:28
  Speaker 1: I wouldn't call him full fledge, but I think they
• 59:29
  Speaker 1: are a significant competitor, and they're the closest thing to
• 59:32
  Speaker 1: an emerging rival great power that there that there is
• 59:36
  Speaker 1: in the world. I think the real question is whether
• 59:38
  Speaker 1: they can pull it off and whether they can maintain
• 59:40
  Speaker 1: the political stability at home amidst lower rates of economic growth.
• 59:45
  Speaker 1: So I actually think China is an underappreciated political question
• 59:49
  Speaker 1: mark over the next five to ten to ten years,
• 59:52
  Speaker 1: another potential surprise, like you absolutely speaking of surprises, Before
• 59:57
  Speaker 1: I get to my favorite questions, we really haven't talked
• 1:00:02
  Speaker 1: much about Russia other than their little Ukraine and crimea adventure.
• 1:00:07
  Speaker 1: What the hell is going on in Russia? It seems
• 1:00:09
  Speaker 1: that Putin is speaking of wild cards. He seems to
• 1:00:14
  Speaker 1: delight in surprising the West on a regular basis. Absolutely,
• 1:00:18
  Speaker 1: and there's nothing holding him back if he wants to
• 1:00:20
  Speaker 1: surprise us tomorrow. Mr Putin is shall we say, unconstrained.
• 1:00:25
  Speaker 1: He uh. There's not a lot of checks and balances
• 1:00:27
  Speaker 1: in the Russian political system, and economically and politically, he
• 1:00:31
  Speaker 1: has consolidated power to unprecedented degree. So he retains the
• 1:00:37
  Speaker 1: capacity and the ability to UH, to surprise if he
• 1:00:40
  Speaker 1: decides that it's in his interest to do so. So
• 1:00:43
  Speaker 1: you mentioned China is focusing on growth and political stability.
• 1:00:48
  Speaker 1: What what's driving Russia? What motivates Putin? Putin has political
• 1:00:52
  Speaker 1: stability at home. His economy is pretty much one dimensional
• 1:00:57
  Speaker 1: with energy. I think what he's trying for is respect
• 1:01:00
  Speaker 1: and attention, and I think he wants to uh. He
• 1:01:05
  Speaker 1: wants Russia to be a scene perceived, judged to be
• 1:01:08
  Speaker 1: a major power. It's why he is doing some of
• 1:01:11
  Speaker 1: what he's doing in the Middle East. I think you've
• 1:01:13
  Speaker 1: got to look at the last twenty five years of history.
• 1:01:15
  Speaker 1: For many Russians, particularly of Putin's mentality, someone from the
• 1:01:19
  Speaker 1: security services as a humiliating era, and what Putin wants
• 1:01:22
  Speaker 1: to do is in some ways compensate for what he
• 1:01:26
  Speaker 1: sees to be the humiliations of losing the Cold War,
• 1:01:30
  Speaker 1: NATO enlargement, you name it. That. Essentially, Russia has been
• 1:01:34
  Speaker 1: kicked off its pedestal. So during the Cold War, Russia
• 1:01:39
  Speaker 1: was constantly cranking out world class mathematicians, world class code writers,
• 1:01:46
  Speaker 1: world class physicists. If they wanted to compete with the
• 1:01:51
  Speaker 1: US and China on an economic capacity, uh we talked
• 1:01:57
  Speaker 1: about more stem uh education degrees, careers. They have that
• 1:02:04
  Speaker 1: in spades. Why haven't they taken that huge human capital
• 1:02:09
  Speaker 1: they have and create a serious competitor to Chinese manufacturing,
• 1:02:15
  Speaker 1: to Silicon Valley to New York finance. They have all
• 1:02:19
  Speaker 1: the components, but they just don't seem to have the
• 1:02:24
  Speaker 1: philosophy there. There's a simple answer to your question. If
• 1:02:27
  Speaker 1: they were going to free up their economy to do
• 1:02:29
  Speaker 1: exactly what you're talking about, it would have political consequences.
• 1:02:33
  Speaker 1: One of the advantages of having such a heavy state
• 1:02:35
  Speaker 1: run economy with so much of the wealth and oil
• 1:02:38
  Speaker 1: and gas is the government controls things. If you had
• 1:02:40
  Speaker 1: a real economy where people were starting up businesses where
• 1:02:43
  Speaker 1: they could be independent, they had sources of capital outside
• 1:02:47
  Speaker 1: the control of government, they would then demand political freedom.
• 1:02:50
  Speaker 1: Vladimir Putin does not want to oversee Russia where he
• 1:02:54
  Speaker 1: does not keep control. But that wouldn't be his headache.
• 1:02:56
  Speaker 1: That would be a twenty or thirty year transformation that
• 1:02:59
  Speaker 1: would make Russia an economic power. He's not going to
• 1:03:02
  Speaker 1: start that process. He is not going to start that
• 1:03:04
  Speaker 1: because you would begin to create momentum that would weaken
• 1:03:08
  Speaker 1: the share of power or the relative role of the state.
• 1:03:12
  Speaker 1: That is just not his vision of his country. Isn't
• 1:03:14
  Speaker 1: that the eventual disposition that's going to happen in Russia?
• 1:03:19
  Speaker 1: Maybe not next year or ten years from now, But well,
• 1:03:22
  Speaker 1: are they going to have a future beyond energy? It
• 1:03:25
  Speaker 1: has to be, but they're not. They haven't. The tentative
• 1:03:28
  Speaker 1: states they made a few years ago in that direction
• 1:03:30
  Speaker 1: they were going they were going to create or after
• 1:03:32
  Speaker 1: after a few years under that, jev and Putin there
• 1:03:36
  Speaker 1: was some experimentation about a high tech area around Roscow
• 1:03:39
  Speaker 1: and essentially they pulled the rug out from under it
• 1:03:41
  Speaker 1: because the same people who had the creative ideas to
• 1:03:44
  Speaker 1: start businesses had dangerous creative ideas about politics. That's fascinating.
• 1:03:50
  Speaker 1: Let's jump to some of our our favorite questions. Um,
• 1:03:54
  Speaker 1: I was gonna ask what you did before you started
• 1:03:57
  Speaker 1: at at D O D. But really you came right
• 1:03:59
  Speaker 1: out of school and pretty much straight into government, right.
• 1:04:02
  Speaker 1: I've been in it, Like my entire career is, it's
• 1:04:04
  Speaker 1: a very American career. This is one of the few
• 1:04:07
  Speaker 1: countries where you don't have to make but for the
• 1:04:10
  Speaker 1: Oxford part, but it's very American in the sense that
• 1:04:13
  Speaker 1: you don't have to make a single choice. Like if
• 1:04:16
  Speaker 1: you're in Europe, you would either have to be a
• 1:04:18
  Speaker 1: career diplomat or an academic, and you never academics. Don't
• 1:04:23
  Speaker 1: people go back and forth here all the time. Here
• 1:04:25
  Speaker 1: you go back and forth. We call him in and outer.
• 1:04:27
  Speaker 1: So I've been in and outer. I've worked in four administrations.
• 1:04:30
  Speaker 1: I've worked on the hill, I've taught a couple of
• 1:04:33
  Speaker 1: times at universities. I've been at various think tanks, including
• 1:04:36
  Speaker 1: the current one, the Council on Foreign Relations. So I've
• 1:04:38
  Speaker 1: been incredibly lucky. I've been able to follow this very
• 1:04:41
  Speaker 1: flexible set of you know jobs. So who are some
• 1:04:46
  Speaker 1: of your early mentors You mentioned you started in Senator
• 1:04:49
  Speaker 1: Pel's office. Who mentored you diplomatically and politically? I wouldn't say, uh,
• 1:04:56
  Speaker 1: he did that. I admire. We disagreed on a lot,
• 1:04:58
  Speaker 1: but I admired his principle and I admired it was
• 1:05:01
  Speaker 1: very old school Claiborne Pell was a patrician and for him,
• 1:05:06
  Speaker 1: politics weren't a blood sport. Politics were what gentleman did,
• 1:05:09
  Speaker 1: and it was a higher calling, a no bless no
• 1:05:13
  Speaker 1: bless ablusion there was. You treated your opponents with respect
• 1:05:17
  Speaker 1: and decency. It was all very mannered. It was all
• 1:05:20
  Speaker 1: very gentleman. It was a very different uh world. My
• 1:05:25
  Speaker 1: mentors were more teachers in terms of people I studied
• 1:05:28
  Speaker 1: with that say, Oberlin, where I was an undergraduate, had
• 1:05:31
  Speaker 1: a fantastic teacher of comparative religion. I had my teachers
• 1:05:35
  Speaker 1: give us a name, oh Man named Tom Frank, great
• 1:05:38
  Speaker 1: professor of a New Testament. And is what got me
• 1:05:40
  Speaker 1: interested in the Middle East, because I went off ultimately
• 1:05:42
  Speaker 1: to do an archaeological dig, which is how I got
• 1:05:44
  Speaker 1: interested in the Middle East. I had a series of
• 1:05:49
  Speaker 1: wonderful professors at Oxford historian named Albert Harani, another named
• 1:05:54
  Speaker 1: Michael Howard, alistair backin Headley Bull one of the great
• 1:05:58
  Speaker 1: political scientists of the twentieth century. Uh So all these
• 1:06:02
  Speaker 1: people had. In fact, I think the person who probably
• 1:06:05
  Speaker 1: had the greatest impact on me in terms of my
• 1:06:07
  Speaker 1: career was brentch Brncroft, who was the National Security Advisor
• 1:06:12
  Speaker 1: at the White House for and I was the senior
• 1:06:16
  Speaker 1: person for the Middle East and the Persian Gulf in
• 1:06:18
  Speaker 1: South Asia and working with Brandon watching how he balanced
• 1:06:23
  Speaker 1: the two sides of the job. He was both an
• 1:06:25
  Speaker 1: advisor or counselor to the president, but he was also
• 1:06:28
  Speaker 1: the person who dispensed due process and made the system work.
• 1:06:32
  Speaker 1: And how he balanced advocacy and fairness had a tremendous
• 1:06:35
  Speaker 1: impact on me. He's legendary. I mean, he used the
• 1:06:39
  Speaker 1: gold standard, he used the gold step right, and this
• 1:06:42
  Speaker 1: year's surprisingly cross party lines to endorse Hillary Clinton, which
• 1:06:47
  Speaker 1: I was I should say I was shocked, but uh,
• 1:06:51
  Speaker 1: not surprised. Is that a good way to describe that
• 1:06:55
  Speaker 1: he really is? You go back and read some of
• 1:06:57
  Speaker 1: his history. He's a rocks Are, There's no other way
• 1:07:00
  Speaker 1: to put it. He has the gold standard of people
• 1:07:03
  Speaker 1: who have held that critical job of national security advisor.
• 1:07:06
  Speaker 1: It's very hard to get the balance right. To be
• 1:07:09
  Speaker 1: an advisor, you have to be someone who all your
• 1:07:11
  Speaker 1: colleagues trust to make the process fair and accountable, and
• 1:07:17
  Speaker 1: Brent pulled off that balance better than any other individual
• 1:07:20
  Speaker 1: I've ever seen. So we talked about mentors and professors.
• 1:07:25
  Speaker 1: What thinkers have influenced your approach to foreign policy. I'd
• 1:07:29
  Speaker 1: single out two or three. One would be Henry Kissinger.
• 1:07:34
  Speaker 1: Kissinger's books are better than anyone else's and going from
• 1:07:40
  Speaker 1: particular moments of history to taking a step back and
• 1:07:43
  Speaker 1: making larger judgments or conclusions. So when I write, I
• 1:07:48
  Speaker 1: do my best to do the same. His most recent book,
• 1:07:51
  Speaker 1: Tom Keane cannot stop talking about it. He world. He's
• 1:07:55
  Speaker 1: been lavishing praise on it for most for good reason.
• 1:07:58
  Speaker 1: Uh so. Reason one second is a man named Headley
• 1:08:02
  Speaker 1: Bull I mentioned it before, Professor. Professor, Australian academic wrote
• 1:08:05
  Speaker 1: what I think is the single best book ever written
• 1:08:08
  Speaker 1: in the last fifty or hundred years about my field,
• 1:08:11
  Speaker 1: called the Anarchical Society. Anarchical society and it's a whole
• 1:08:16
  Speaker 1: idea of international relations at anyone moment is always a
• 1:08:19
  Speaker 1: balance between forces of anarchy and forces of society, things
• 1:08:23
  Speaker 1: coming together, things going apart. And so I found Headley
• 1:08:27
  Speaker 1: a great influence in his And then if some of
• 1:08:30
  Speaker 1: my former colleagues when I taught at the Kennedy School
• 1:08:32
  Speaker 1: at Harvard, name Dick new Stat and Ernie May, and
• 1:08:36
  Speaker 1: they did they did a book called Thinking in Time
• 1:08:38
  Speaker 1: and the subtitle is something like the uses of History
• 1:08:41
  Speaker 1: for decision Makers. And the whole idea was how you
• 1:08:44
  Speaker 1: could and should study and use history to shape challenges
• 1:08:50
  Speaker 1: that might come into your your in box, and how
• 1:08:53
  Speaker 1: to use it and not abuse it. And I think
• 1:08:55
  Speaker 1: it's a fantastic primer, Thinking in Time for anyone who's
• 1:09:00
  Speaker 1: to be in a position of decision making stat and
• 1:09:02
  Speaker 1: who is Alright, since we're talking about books, so so
• 1:09:08
  Speaker 1: these are the thinkers who have influenced you. What what
• 1:09:10
  Speaker 1: are some of your favorite books? What do you like,
• 1:09:12
  Speaker 1: whether it's related to your field or outside of it,
• 1:09:16
  Speaker 1: and um fiction or nonfiction. I've just given you the
• 1:09:21
  Speaker 1: my favorite books in my field. Uh yeah, I like
• 1:09:25
  Speaker 1: reading biography as much as anybody. I've been reading much
• 1:09:28
  Speaker 1: recently cause I've been so busy writing and when I
• 1:09:30
  Speaker 1: write books, it's very hard to read because you're you're
• 1:09:34
  Speaker 1: kind of more in a transmit than receive mode. Uh.
• 1:09:38
  Speaker 1: And then in terms of I don't read a whole
• 1:09:42
  Speaker 1: lot of fiction, though I have read the entire Jack Reacher.
• 1:09:46
  Speaker 1: My wife loves those. Yeah, I like those two. Uh.
• 1:09:49
  Speaker 1: My favorite line of his is I'm so cool you
• 1:09:52
  Speaker 1: can skate on me. But the first movie, she said,
• 1:09:57
  Speaker 1: Tom Cruise was miscast and not because should have been
• 1:10:00
  Speaker 1: a foot too short and it ought to be a
• 1:10:05
  Speaker 1: big bruising uh uh guy. But I don't read a
• 1:10:09
  Speaker 1: whole lot of fiction, but I you know, I'll pick
• 1:10:11
  Speaker 1: up the New Yorker every week, and I like, you know,
• 1:10:16
  Speaker 1: more nonfiction. I think I gravitate uh towards. But if
• 1:10:22
  Speaker 1: I could read anything, I usually like reading um biography.
• 1:10:25
  Speaker 1: I find that the to me, the most interesting place
• 1:10:29
  Speaker 1: to go. So what what do you see as having
• 1:10:31
  Speaker 1: changed in the world of diplomacy over the past twenty
• 1:10:35
  Speaker 1: five or thirty years? What what? What are the most
• 1:10:37
  Speaker 1: significant shifts that have occurred? A couple come to mind.
• 1:10:41
  Speaker 1: One is uh espetially at the end of the Cold
• 1:10:44
  Speaker 1: War years ago, and the whole structure of international relations change. Second,
• 1:10:48
  Speaker 1: of all, you've had a whole trend in terms of
• 1:10:54
  Speaker 1: away from concentration of power. We now have so many
• 1:10:57
  Speaker 1: actors and players in the world who can make a
• 1:10:59
  Speaker 1: different it's you know, whether it's the Gates Foundation or
• 1:11:03
  Speaker 1: groups like Doctors Without Borders, to CNN to Bloomberg two again,
• 1:11:11
  Speaker 1: dozens of countries around the world or groups like Isis.
• 1:11:14
  Speaker 1: So the chessboard, if you will, to use a terrible
• 1:11:17
  Speaker 1: cliche image is much more crowded with many different types
• 1:11:21
  Speaker 1: of things. I think also putting on my former policy
• 1:11:24
  Speaker 1: maker had it first struck me during the Gulf War
• 1:11:27
  Speaker 1: twenty five years ago, seven news cycle. I remember that
• 1:11:31
  Speaker 1: that was the first time the CNN effect was real.
• 1:11:33
  Speaker 1: I recall that explicitly. And suddenly you had one new
• 1:11:37
  Speaker 1: cycle you couldn't wait, and that anything said in one
• 1:11:41
  Speaker 1: place was heard everywhere, So there was no longer narrowcasting.
• 1:11:45
  Speaker 1: Everything was broadcast everywhere. So it created And that was
• 1:11:48
  Speaker 1: before social media. And now you've got social media, so
• 1:11:50
  Speaker 1: you're you're much more uh exposed and you you feel
• 1:11:55
  Speaker 1: much less in control as a as a politimate policy maker.
• 1:11:59
  Speaker 1: And so think it's gotten tougher because also elites have
• 1:12:01
  Speaker 1: broken down. I think the entire environment of making policy
• 1:12:06
  Speaker 1: and carrying it out has become more decentralized. Just look,
• 1:12:10
  Speaker 1: it's the reason you mentioned that you're nice enough to
• 1:12:12
  Speaker 1: mention before. I have this book coming out in January
• 1:12:14
  Speaker 1: called The World in Disarray. But I think objectively, if
• 1:12:17
  Speaker 1: you're going to measure the trends in the world, things
• 1:12:20
  Speaker 1: have gotten messier. Things have gotten much less orderly, whether
• 1:12:24
  Speaker 1: at the global level, or the regional level, or the
• 1:12:26
  Speaker 1: domestic level. So those are the changes of the recent past.
• 1:12:30
  Speaker 1: What do you see as the changes going forward? What's
• 1:12:33
  Speaker 1: the next shift that's going to take place in international relations?
• 1:12:39
  Speaker 1: I feel, like Yogibertt, predictions are always difficult about the
• 1:12:42
  Speaker 1: future here, but one as we've seen elements of it.
• 1:12:44
  Speaker 1: I think with the globalization debate, we talked to you
• 1:12:46
  Speaker 1: and I at some length about Brexit and as well
• 1:12:49
  Speaker 1: as about trade in this country, I don't think that's
• 1:12:51
  Speaker 1: a short term thing. I think that debate about how
• 1:12:54
  Speaker 1: to how societies and individuals are to navigate globalization that
• 1:13:00
  Speaker 1: could become a dominant debate for some time. I think
• 1:13:03
  Speaker 1: the possibility for a North Korea issue, we're gonna wake
• 1:13:06
  Speaker 1: up in a couple of years in North Korea is
• 1:13:08
  Speaker 1: going to be able to put nuclear warheads on missiles
• 1:13:10
  Speaker 1: that can reach the United States. What are we gonna
• 1:13:12
  Speaker 1: do about that? Terrorists can at some point get ahold
• 1:13:17
  Speaker 1: of some truly awful weapons systems. What about that we
• 1:13:20
  Speaker 1: talked a little bit about a potential domestic crisis in China?
• 1:13:25
  Speaker 1: You could have weakening within the you. I'm sorry, I
• 1:13:30
  Speaker 1: don't mean to be My kids call me Debbie Downer,
• 1:13:32
  Speaker 1: but hey, these are legitimate threats. These are things that
• 1:13:35
  Speaker 1: that civilized societies have to think about and figure out
• 1:13:37
  Speaker 1: ways to protection. And I'm more worried about the potential
• 1:13:40
  Speaker 1: downside than I am optimistic about the potential upside. Again,
• 1:13:44
  Speaker 1: it's it's an astramatic, asymmetrical risk, a small possibility, but
• 1:13:49
  Speaker 1: with a real absolutely and and there's more things that
• 1:13:53
  Speaker 1: could go wrong than that than that could go right.
• 1:13:55
  Speaker 1: And that's what worries me. So our last two questions,
• 1:13:57
  Speaker 1: because I know they're they're champing at the bit to
• 1:13:59
  Speaker 1: get you out of here. So a millennial or a
• 1:14:02
  Speaker 1: recent college grad comes to you and says, I'm interested
• 1:14:05
  Speaker 1: in diplomacy. What sort of advice would you give them?
• 1:14:09
  Speaker 1: Two things. I'm glad you asked me that one is
• 1:14:11
  Speaker 1: read some history because it's too easy to graduate from
• 1:14:15
  Speaker 1: too many of America's colleges and universities and not have
• 1:14:18
  Speaker 1: any grounding in history. Second of all, uh, this look
• 1:14:23
  Speaker 1: at me in trouble, but it's it's my general advice
• 1:14:25
  Speaker 1: to millennials, which they need a little bit more patients.
• 1:14:27
  Speaker 1: There's a a rush to arrive and an expectation of
• 1:14:32
  Speaker 1: I think it's probably because too many of them got
• 1:14:34
  Speaker 1: participation trophies when they're playing soccer. But I think people
• 1:14:39
  Speaker 1: have got not the first person who's brought that up. Okay,
• 1:14:41
  Speaker 1: but I but I think there's got to be a
• 1:14:45
  Speaker 1: willingness to pay your dues a little bit. I know
• 1:14:47
  Speaker 1: that makes me a dinosaur, and I apologize, but there's
• 1:14:52
  Speaker 1: something to be said for slogging and to work in
• 1:14:54
  Speaker 1: your way through and taking positions where you the print.
• 1:14:58
  Speaker 1: The principal measure of the value of the job is
• 1:15:02
  Speaker 1: how much you learn. And our final question, which will
• 1:15:05
  Speaker 1: make Sam very happy in there, um, what is it
• 1:15:09
  Speaker 1: that you know about foreign affairs and international relations today
• 1:15:13
  Speaker 1: that you wish you knew when you started thirty years ago?
• 1:15:19
  Speaker 1: That there's nothing inevitable, that everything is up for grabs,
• 1:15:23
  Speaker 1: and the two biggest forces out there are people and ideas.
• 1:15:27
  Speaker 1: And if you can people and ideas, and if you
• 1:15:30
  Speaker 1: can come up with some ideas and harness them to
• 1:15:33
  Speaker 1: the right people, you can make a real difference. And
• 1:15:35
  Speaker 1: I've seen this in white houses or anywhere else. Uh.
• 1:15:40
  Speaker 1: There's almost nothing that's inevitable. And the good side of
• 1:15:43
  Speaker 1: that is that you can make a real positive difference.
• 1:15:45
  Speaker 1: And the bad side of that is beats. Bad stuff
• 1:15:48
  Speaker 1: can happen, and people can drive things off the I
• 1:15:52
  Speaker 1: didn't realize how much of history, in a funny sort
• 1:15:56
  Speaker 1: of way, it gets decided day in day out there.
• 1:15:59
  Speaker 1: The historical forces are there. I get that there's large
• 1:16:03
  Speaker 1: historical forces, but within that there's a human agency. The
• 1:16:07
  Speaker 1: difference that people can make, uh, for better and for
• 1:16:10
  Speaker 1: worse is extroyed there. Richard, thank you so much for
• 1:16:13
  Speaker 1: being so generous with your time. If you have enjoyed
• 1:16:17
  Speaker 1: this conversation, be sure and look up and inch ure
• 1:16:20
  Speaker 1: down an inch and see the other or so conversations
• 1:16:24
  Speaker 1: that we've had over the past couple of years. I
• 1:16:27
  Speaker 1: have to thank my producer and recording engineer Charlie Volmer,
• 1:16:32
  Speaker 1: my Booker h Taylor Riggs and my head of research,
• 1:16:35
  Speaker 1: Michael bat Nick, for all their assistance. You've been listening
• 1:16:39
  Speaker 1: to Masters in Business on Bloomberg Radio, brought to you
• 1:16:46
  Speaker 1: by B A s F. We create chemistry.