Latest / Gunther Fehlinger Podcast / Why the US Pulls Ahead: Europes Growth Problem Explained - libertarian economist Daniel J. Mitchell

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Why the US Pulls Ahead: Europes Growth Problem Explained - libertarian economist Daniel J. Mitchell · Gunther Fehlinger Podcast

0:02
This is going to failing us podcast.
0:04
Welcome to the new year. We are developing very well.
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We close to 16,000 subscribers on YouTube and 128,000 on X and
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the podcast is developing with our guests.
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And this morning I have a very prominent economic reformer of
0:20
the United States of America. I'm honoured to call you my
0:23
friend. We met I think in the year 2002
0:26
already, so more than 20 years ago.
0:28
And you are one of the leading American economies who cares for
0:32
Europe. You have been involved in
0:34
economic reform from the Baltics to Bulgaria and in many other
0:38
places then Mitchell, I'm happy you're here.
0:41
Please welcome and please introduce yourself to our guest.
0:45
Thank you very much. Gunther, glad to be on your
0:48
program. I am the president of the Center
0:51
for Freedom and Prosperity. I've been working for think
0:54
tanks in the US my entire adult life.
0:58
My focus is economic reform, not just in the US but around the
1:03
world. And the world is a laboratory,
1:06
and we see what countries are doing good things and what
1:08
countries are doing bad things, and it teaches us the right
1:12
thing to do. And which countries are your
1:15
favorite countries when it comes on good economics today 26?
1:21
Switzerland always stands out as a country with sensible, prudent
1:26
economic policy. Of course, in Eastern Europe
1:30
there's been a lot of good economic reform since the
1:33
collapse of communism. I guess if I had to pick a
1:36
country that has done it right, the best Estonia.
1:40
But you know, you can argue different countries have are
1:43
also very good in terms of reform and others are are
1:47
lagging and not not really doing much around the world.
1:52
You know, the most exciting thing happening around the
1:54
world, as I'm sure you know, Gunther is what's happening in
1:57
Argentina, where you had, you know, 80 years of terrible
2:01
policy under the proneness and took Argentina from being one of
2:05
the world's richest countries to being a a country mired economic
2:09
chaos, hyperinflation, high levels of poverty.
2:13
Malay gets elected and he's just, it's been, it's everything
2:17
we would have predicted is true. You do radical free market
2:21
reforms, you get wonderful good results.
2:23
And so in terms of Latin America, Argentina is the place
2:27
to look. But as we've, as we've talked
2:31
about over our 23 years of knowing each other, it really is
2:35
a formula. Free markets, limited
2:38
government, global engagement, you know, things, you know, I'm
2:42
old fashioned. I still believe in free trade
2:45
that's unfortunately fallen out of favor in some circles, but
2:49
the recipe for prosperity I think is still very much true.
2:54
One of your favorite countries, Bulgaria, with 10% flat tax, has
2:58
now joined the eurozone, so that's also good news.
3:01
But let's talk about Argentina. Argentina is very unpopular in
3:06
some circles in Europe and they think that is cutting welfare
3:10
and there's misery coming. But in reality the results are
3:14
really very good. What's your assessment of the
3:17
first years of Malay? Malay's been in office a little
3:21
bit over 2 years and in that time the poverty rate has
3:25
dramatically declined. They actually have two poverty
3:28
rates in in Argentina. You have the poverty rate, then
3:31
you have the destitution rate. In other words, the people who
3:34
are like desperately poor. And both of them have come down
3:38
dramatically since Malay took office.
3:40
What what some of our friends on the left don't understand,
3:43
Gunther, is that inflation is a huge tax on the poor because
3:47
there's no way that that their incomes are going to keep up
3:51
when you have governments financing their budget deficits
3:54
by printing money. And so poor people in Argentina
3:57
were in terrible shape until Malay came in office.
4:01
And under Malay, the inflation rate, which was, you know, up
4:04
around 202 hundred and 2200 and 30% has dramatically come down.
4:09
It's still too high. It's about 25%, but it's heading
4:12
in the right direction. And because inflation has come
4:15
down South dramatically and because Malay has balanced the
4:18
budget right away by controlling government spending, we're
4:22
seeing very, very good news on poverty.
4:24
But you know, this shouldn't be a surprise because if you go
4:28
back to 19th to the 1980s, Chile did dramatic economic reforms.
4:34
Now, unfortunately it didn't happen in the democratic system,
4:37
but none the less you still had free market reforms and the the
4:41
group that benefited more than anybody in Chile under the free
4:44
market reforms was low income citizens.
4:47
So if you want to help poor people, the best thing you can
4:50
do is not to say, oh, we're going to make you more dependent
4:53
on the government by giving you bigger handouts.
4:55
The best way to help poor people is, is by getting economic
4:59
fundamentals correct. Allow for a thriving private
5:03
sector because nothing is better for poor people than a real job
5:06
at the private sector, not not dependency and handouts on
5:09
government. And so I think what, what what
5:12
Malay has done has been great for everyone, but especially for
5:16
low income citizens in Argentina.
5:19
And, and, and of course, we saw him being rewarded last October.
5:23
There were midterm elections and everyone was worried that there
5:26
be a backlash against his reforms.
5:28
Instead, his Lavanza Libertad, if I'm even pronouncing it
5:33
correctly, his Libertarian Party in Argentina won a landslide
5:37
victory. Now, not quite enough to control
5:40
of the legislature, but enough so that there's now a very
5:43
serious chance of getting some of the additional reforms, labor
5:47
law reform, tax reform, getting rid of protectionist trade
5:50
barriers. There were some things Malay
5:52
could not do by executive power. He has to have a friendly
5:56
legislature. So I'm really hopeful that we're
5:58
going to see more good things from Argentina this year.
6:01
Is there a chance for tax reform, flat tax or pension
6:04
reform Chile style in Argentina? Those are some of the things
6:08
that are being looked at. I don't know that Malay has
6:11
explicitly said flat tax, but there's no question he
6:14
understands the the right direction to go lower tax rates,
6:19
less sort of industrial policy through the tax code with
6:22
special favors and special penalties.
6:25
He he, of course, philosophically, you know, his
6:29
rhetoric is, oh, the state is evil, the state steals your
6:32
money. So there's no question he wants
6:34
the taxpayers to keep more of their money.
6:36
The question is, you know, how quickly can he move in that
6:39
direction? Will the legislature go along
6:41
with his reforms? I think right now they're
6:44
debating labor law reform because, as you know, if you
6:48
make it expensive to hire workers by the government
6:51
policy, and if government intervention makes it expensive
6:54
to fire workers, guess what? The private sector isn't going
6:57
to hire a lot of workers. Or if they do hire them, they're
6:59
going to hire them in the shadow economy.
7:02
And that's a problem all through Latin America is that it's just
7:06
more profitable for both workers and employers to be hired in the
7:10
below under the table. And by lowering taxes, by
7:14
getting rid of all this unnecessary red tape, you know,
7:17
many of these laws were put in place by labor unions who simply
7:20
wanted to cement their advantage in the economy.
7:24
So if Malay can get his labor law reforms through, I think
7:27
that'll be a very positive sign for the Argentinian economy.
7:31
We have also good news from the European side for Latin America,
7:35
because it seems that today the final decision after Meloni and
7:38
Italy said yes. And so that you will approve the
7:41
free trade agreement with Mercosur, with Brazil and
7:44
Argentina. And that should also help to
7:46
stabilize the economic situation between Latin America and in the
7:50
free world in general. What's your take on this
7:52
agreement and do you agree on this agreement, was happy about
7:57
it and what you think will be the result and the impact of the
8:02
EU FDA with Mercosur? It's a positive move, but I view
8:07
it as being an incremental step, not dramatic reform, because
8:11
unfortunately Mercosur and the European Union, they have free
8:15
trade within those blocks, but then they have protectionist
8:18
barriers to the rest of the world.
8:20
Now, what the Mercosur EU agreement is doing is it's
8:23
reducing trade barriers between these two blocks.
8:26
But the best thing to do was just have unilateral free trade
8:30
that there's no reason free democratic countries.
8:33
I mean, I draw a distinction. China's in a different category
8:36
because it's not a free democratic country.
8:38
It has all sorts of subsidies and export promotions.
8:41
And, you know, it doesn't play by the rules.
8:43
But for the EU and Mercosur, or for that matter for the US and
8:47
Mercosur, the US and the European Union, I wish we would
8:50
get away from, you know, these thousands of pages of rules on
8:56
how trade should work. Free trade agreement should be
8:59
one page. You can sell what you want to me
9:01
and I can sell what I want to you.
9:03
Now, I admit I'm being, you know, very, you know, I'm
9:07
dreaming of the, of the ultimate good system.
9:11
And, and we don't want to make the perfect the enemy of the
9:13
good. So the EU Mercosur agreement is
9:16
a step in the right direction. But I don't want to exaggerate
9:19
how good of a step it is because, because I know that
9:22
Malay in, in Latin America, he thinks Mercosur is, is a, is a
9:28
trade barrier Organism rather than a trade promotion
9:32
organization. But he obviously took office.
9:36
Argentina's already part of it. You can't just blow it up, I
9:39
guess, by yourself. So it's a small good step, but
9:44
boy, we really have a lot farther to go, you know, for
9:47
those of us who still believe in free trade.
9:49
And unfortunately, you know, Donald Trump is not a good
9:52
example of that in the US. But I'm hoping that they'll
9:55
eventually be a a rebound with a lot of malaise all over the
10:00
world that push for free trade. And then now you started
10:03
yourself the topic of Mr. Trump and his Liberation Day.
10:06
I wanted to give you some introduction time to discuss
10:09
this. But in Europe, we were not so
10:11
happy about Liberation Day and not so happy about this Turnpike
10:15
agreement where imposed 15% tariffs on us, while we are
10:19
actually a very nice ally of the United States.
10:22
We have been very friendly, not in the Second World War maybe,
10:25
but since then we were ever always friendly to the United
10:29
States of America. And then Mr. Trump has called us
10:34
exploitative and devious and that we take advantage of the
10:39
United States of America. And we were actually quite happy
10:43
to have a deal with 15% because our allies got much worse, as we
10:47
said, now the reduction. But what's exactly going on with
10:51
this Liberation day and this tariff policy, which is against
10:55
all good economic stands, obviously?
10:58
Donald Trump, unfortunately, doesn't understand trade.
11:02
He thinks a trade deficit is a sign that somehow you're losing
11:05
as a country, when of course, mathematically, a trade deficit
11:09
is simply the flip side of a capital surplus.
11:12
And So what happens is that you have foreigners, foreign
11:17
companies, earning dollars by selling products to the US
11:20
market. And often times when foreigners
11:23
earn dollars, they think the best use of those dollars is to
11:26
invest in the US economy, which is a sign of strength.
11:30
And it is a sign of strength because the US has been growing
11:32
faster than Europe. And so if you could invest in
11:36
the US market, that's often a very good way of using your
11:39
dollars. But Donald Trump says, oh, look
11:42
at this, it's terrible. We have a trade deficit, and
11:45
that means somehow we're being cheated or exploited.
11:47
When, of course, trade is simply voluntary exchange between
11:51
people. Countries don't trade with each
11:53
other. People and businesses trade with
11:55
each other. And the analogy I use when
11:57
talking to American audiences is that I have a trade deficit
12:00
every week with my local grocery store.
12:03
I always buy things from them. They never buy anything from me.
12:06
Am I being hurt? Of course not.
12:08
I'm engaging in voluntary exchange.
12:10
I'm better off by giving them my dollars and they give me food
12:14
and, and drink and, and things that I want that that I that I
12:18
enjoy. And so I don't think a trade
12:20
deficit is, say, a statistic anybody should care about.
12:24
But unfortunately, Donald Trump doesn't because he has this
12:27
fundamental misunderstanding. He's he's launched this
12:31
protectionist war with almost the entire rest of the world.
12:35
It's hurting American consumers. It's hurting American businesses
12:39
because half of the goods we import roughly, are our inputs
12:43
for our own manufacturing and production process.
12:47
So we're, we're, we're losing jobs, we're raising costs on
12:50
American families, all because we have a president who has this
12:54
just this bad idea in his head about not understanding trade.
12:59
I mean, would it be good to have trade barriers between
13:02
California and Florida, between Texas and New York?
13:06
Of course not. So why does it make sense to
13:08
have trade barriers between countries?
13:10
Now, if there was some foreign policy reason, OK, maybe you
13:15
don't have trade with Russia after the invasion of Ukraine.
13:18
Maybe you have to have trade restrictions with China because
13:21
they don't follow the rules. But Europe, as you said, is an
13:25
American ally. So the idea that we're imposing
13:28
these very high taxes on European countries, it's just, I
13:33
almost feel like I should be apologizing to the rest of the
13:35
world for the mistakes of the US government.
13:38
Thanks a lot then, because it's also that I think the US foreign
13:43
direct investment in the European Union countries for
13:47
reason of reconstruction of the after the Second World War, the
13:50
Marshall Fund and all the others.
13:51
I think it's a cumulative for 4 trillion U.S. dollars which
13:55
Americans have invested into the European Union over the decades.
13:59
And it's a huge stock and you own most of our companies,
14:03
American share owners and most of our investment is also partly
14:08
at least American. And so we are so interconnected
14:11
that is especially astonishing to have such a rhetoric against
14:16
the European Union. I think cross, cross-border,
14:20
cross Atlantic economic ties are wonderful.
14:24
You know, Europe is the, is the, is the home of Western
14:27
civilization. Europe has great rule of law.
14:31
European countries are, are good allies for the United States.
14:36
It's just, it's just really sad that that we now have this,
14:40
this, you know, economic warfare almost going on.
14:45
Then and tell us from economic perspective, the American
14:48
policy. We're also worried because on
14:50
trade is very protectionist, on immigration is very nativist or
14:54
xenophobic, and he wants to have less people in America.
14:58
And so the whole thing and on the budgetary side actually is
15:02
expansionary. So isn't that a quite toxic mix,
15:07
which could lead to some economic shock later in 26 or
15:12
because a lot of speculation of overheating is going on in the
15:15
Stock Exchange as well. So are you worried?
15:20
The economic policy in the United States right now from a
15:24
free market perspective is a very incoherent mix on some
15:28
issues, such as regulation. Donald Trump is a deregulator
15:31
and I applaud what he's been doing.
15:34
He he likes to cut taxes, not often times, you know, always in
15:37
the best way. Sometimes we get new special
15:40
loopholes, no tax on tips, no tax on overtime, new tax
15:44
deduction for auto loans. I mean, so there are there are
15:47
things that are complicating the tax system, sort of the opposite
15:50
of what you want with a flat tax.
15:52
But he, he has lower tax rates. He has reduced the double
15:56
taxation on saving and investing.
15:58
So on tax policy, he is a net plus, even if it's not perfect.
16:02
But he has been a big spender, and not so much so far In his
16:06
second term. We did get a little bit of
16:08
reform of Medicaid, but in the first term, he was a big
16:10
spender. We'll see what happens in the
16:12
second term. But as we've already just talked
16:14
about, his trade policy is terrible.
16:17
He wants easy money from the central bank.
16:19
I worry about that. And then, of course, even before
16:23
he took office, we have this giant problem in the United
16:26
States with our welfare state, our entitlement programs.
16:30
We are in effect on a path to becoming a European style
16:34
welfare state like France or something like that.
16:37
And at some point, something's going to blow up.
16:40
I don't know whether it'll be in later this year or next year or
16:44
five years from now. But we will have a fiscal crisis
16:47
because we're keeping taxes at a reasonable level, but we're
16:50
allowing the burden of government spending to grow.
16:54
And then, of course, you have Trump pressuring the Fed, the
16:57
central bank, for easy money policy, which, as you intimated,
17:01
might create a bubble in your financial market.
17:04
So yes, in the long run, I'm very worried about the deal.
17:07
And this was even before Trump took office.
17:10
I'm very worried about the long run in the US.
17:12
We desperately need, need to reform entitlement programs, get
17:15
controls on government spending. We should copy the spending cap
17:19
they have in Switzerland, the Swiss debt break.
17:21
I think it's the best fiscal rule in the world right now.
17:25
But politicians, of course, you know, they don't want to put
17:27
handcuffs on themselves. They like the idea of being able
17:30
to buy votes by spending money, especially in election years.
17:35
Then let's talk about foreign policy because it was very
17:38
actually this year, of course, the fall of the tyrant Maduro in
17:41
Venezuela. That was very welcome.
17:43
But you know, many people here on my podcast and many of my
17:46
Twitter account and me as well, we were hoping that Venezuela
17:50
will be now turned into a market democracy and there will be some
17:53
reforms and openness and that will be a lot of additional
17:56
input. Freedom will thrive and it will
18:00
be wonderful. But Trump is doing these small
18:03
interventions and then intervention and everything
18:07
changes. Nothing changes.
18:09
So what's your reading on this kind of activity, right?
18:14
After the US sent the special forces to capture Maduro, I
18:20
wrote a column saying that, well, there's three possible
18:22
outcomes. But it turns out there was a
18:24
fourth possible outcome, which is that instead of dramatic free
18:29
market reform, instead of some of the other alternatives, if
18:31
Trump has decided, well, let's just cake Maduro, but but leave
18:35
the the socialist dictatorship in place.
18:38
Now, I hope that's not actually the case in the long run, the US
18:42
apparently is going to control Venezuela's ability to export
18:46
oil. And I'm hoping that there are
18:48
people like Secretary of State Marco Rubio who understand that
18:52
in the long run, we want to force, we want to force the
18:55
socialist out of power and allow a return to free markets.
18:58
Because Venezuela used to be the richest country in, in Latin
19:02
America, especially with oil. Well, so, you know, Argentina
19:06
before the pronist was the richest country.
19:09
And then Venezuela took over being the richest country helped
19:11
by oil. But under the under Chavez and
19:14
Maduro, it's just, it's, it's just become an economic basket
19:17
case. And if all we do is take out
19:19
Maduro but then leave the socialist in charge, that's just
19:23
not good news. But maybe we're going to use
19:26
control of their ability to earn money through oil.
19:29
Maybe we're going to use that to sort of slowly squeeze them out
19:32
of office. I do think that people like
19:34
Marco Rubio understand that a return to free markets would be
19:37
good. And maybe they're playing some
19:39
sort of long game where, you know, because Venezuelan oil was
19:43
helping to prop up Cuba's communist economy, maybe we can
19:46
sort of squeeze that. And then Cuba, the communists
19:49
will finally fall out of power and they can become a free
19:51
country and become prosperous course again.
19:54
So right now it seems a little strange, but I'm hoping, I'm
19:59
hoping that there's some sort of long run strategy that that will
20:03
create freedom not only in Venezuela.
20:06
But in Chile as well, I have had people tell me that, well, you
20:10
know, we took Maduro out, but of course you still have all
20:13
Maduro's cronies controlling the military.
20:15
And there's no way we could simply install a new government
20:18
by ourselves without unless we actually had dramatic military
20:22
intervention and people didn't want to do that.
20:24
So, you know, I guess the bottom line, Hunter, is that it's
20:28
really too soon to know for sure what's going to happen.
20:31
You and I both share a hope that there will be freedom and free
20:36
markets and democracy in countries like Venezuela, but
20:40
whether or not the US is capable of delivering that.
20:43
And, and I suppose we have to acknowledge there's also the
20:46
the, the foreign policy view that, well, maybe it's not the
20:49
job of the US government to impose democracy and other
20:52
countries, you know, if some country wants to be a
20:54
dictatorship with a terrible economic system, so long as
20:57
they're not somehow threatening the US government or U.S.
21:01
citizens, OK, Well, that that's your, your choice.
21:04
I mean, you can have a terrible government if you want to, but,
21:07
you know, we'll leave you alone. You leave us alone.
21:09
Yeah, that's what we can Europe call the Obama doctrine.
21:13
It has led to the rise of Russia, to the total disaster in
21:16
Syria and to a total disaster in the last 15 years in the world.
21:20
Yeah. And if you Americans don't lead
21:23
the world and then the Russians and the Chinese do it, and we
21:26
really don't want to live in that world.
21:27
Yeah, be sure about it. Yeah.
21:29
Let's talk about Poland and Venezuela because a lot of
21:33
people compare the free market reforms of Poland in the last 25
21:38
years and this enormous success of Poland really turning into a
21:42
medium economy, medium sized peak economy and Venezuela which
21:46
has basically stagnated when not completely declined.
21:51
What's your recommendation for a post mature economic policy for
21:54
Venezuela? Well, what Venezuela needs is
21:58
its own version of Javier Malay, ideally not imposed by the US,
22:03
ideally because they have their own domestic leaders.
22:07
This, this woman, I'm not even going to pronounce her name, but
22:11
correctly, but Maria Machado. OK, well, I'll, I'll trust your
22:16
pronunciation. You know, she she appears to
22:20
have the right ideas. She's written some things that
22:22
sound very free market. She believes in capitalism,
22:25
private property. So if she somehow wound up
22:30
becoming a leader or being involved in the economic reform,
22:34
I would be optimistic. It's simply whether or not you
22:39
do the right formula. If you cut back on government
22:43
intervention, have property rights, allow free enterprise
22:45
and competition, have open trade, your country can grow
22:49
rapidly. And, and there has been all over
22:52
your social media, there have been these memes and these
22:55
charts showing how sort of Poland is going like this.
22:58
And Venezuela has in the opposite direction.
23:01
You know, they, they, they switched places.
23:03
Venezuela used to be a good solid middle income country and
23:07
Poland was very war under communism.
23:09
Now Poland's a solid middle income country and Venezuela's
23:12
one on the toilet because of communism and just horrible
23:15
economic policy. But but you know what?
23:18
We have dozens and dozens, if not hundreds of those examples
23:21
all over the world. You know, I have this thing that
23:25
I call the anti convergence club.
23:28
And convergence is an economic theory that says that poor
23:31
countries should catch up to rich countries, but sometimes
23:35
it's the opposite. And in every single instance,
23:39
you see these countries going in opposite directions because one
23:42
has free markets, a limited government, and the other is on
23:45
the path for the welfare state and government intervention.
23:48
And so, yes, the Poland, Venezuela example is powerful,
23:51
but you know what? The old East Germany, West
23:53
Germany example was powerful. The North Korea, South Korea
23:57
example is powerful all over the world.
24:01
In this laboratory we see that free markets and limited
24:04
government deliver great results, and statism, welfare
24:08
state intervention, industrial policy, protectionism, I mean,
24:12
those policies deliver bad results.
24:15
And then let's talk Ukraine. I'm not sure you have been to
24:18
Ukraine, but I guess you have been probably in Ukraine, you
24:21
know the country very well. So situation is we in Europe, we
24:25
are in this existential war with Russia and we really want to do
24:29
everything to support Ukraine. We can, we are militarily not
24:32
very strong but financially very competent.
24:34
And we are also in 19 billion trillion GDP union.
24:39
And we have now recently decided to spend another 90 billion for
24:44
the victory of Ukraine. But unfortunately, America,
24:48
despite in the beginning being extremely helpful.
24:50
And I want to say thank you to all the generosity of many
24:53
Americans and also the American government to provide weapons.
24:57
Now under the Trump government, we are on our knees to get more
25:01
military supplies. We pay for it.
25:03
We really try to spend now 5% of GDP for defence.
25:07
And we regret all our past things, but we need your help.
25:11
And where's America when we needed to defeat our enemy,
25:15
Russia? I'm not a foreign policy expert,
25:19
so I can't really comment intelligently on the issue.
25:22
I do know one thing. Putin is the bad guy.
25:25
Russia invaded. That shouldn't be happening.
25:28
You can have all sorts of arguments.
25:30
Well, how far to the to the east should NATO have expanded?
25:35
You know, were there rational reasons to think that Russia
25:38
would have react negatively? I have no idea.
25:40
I don't have the confidence to comment on all those things, but
25:44
I know that I want, I want Ukraine to successfully resist
25:47
Russian imperialism. So, you know, I'm, I'm rooting
25:50
for Ukraine. I think Putin's the bad guy.
25:54
You know, to what extent, you know, how should Europe and how
25:57
should the United States deal with the issue?
25:59
That's sort of above my pay grade because, you know, you're
26:02
sort of like feeling asking me about, you know, what's the best
26:05
kind of classical music. I just don't have enough
26:07
knowledge to answer those kinds of questions.
26:11
I still have to ask you one more foreign policy question because
26:14
it's very important for us Europeans.
26:16
You guess already there's this Big Island with little people.
26:20
It's between US and it's called Greenland.
26:23
And you know why exactly Greenland of all places is such
26:28
a big issue? Because it's very small issue in
26:30
reality. And you know, you have already
26:32
troops there. And economically, does it really
26:35
play such a role with the resources, be a game changer,
26:38
the Greenland resources? Is it?
26:41
What is exactly going on? Because we in Europe, we cannot
26:43
really give up land towards Aggressa, even when it's our
26:47
friendly ally, the United States.
26:49
So can you give us some reassurance that this is just a
26:53
Internet hoax or something like this?
26:56
Well, I, I, I wish it was an Internet hoax.
26:59
It's really strange. Trump gets elected, then all of
27:02
a sudden he starts throwing out on social media that oh,
27:06
Greenland should belong to the US.
27:08
Now, as as we both acknowledge, I'm not a foreign policy expert,
27:13
but from what I understand, the US already has unlimited ability
27:19
to have bases. And in Greenland, if it was
27:22
economically profitable, if there were rare earth minerals,
27:24
there'd be nothing to stop U.S. companies from getting contracts
27:28
to explore for them. So.
27:29
So as far as I understand, which I admit maybe not that much
27:32
given it's a foreign policy issue, but as far as I
27:35
understand, there's absolutely no national security or economic
27:39
reasons for Trump to be doing this.
27:43
Just idiotic Saber rattling regarding Greenland.
27:47
I, I, I don't understand it. I, I, I sometimes think Trump
27:50
does this kind of stuff because he's bored and it entertains him
27:54
to, to get everyone all upset around the world.
27:57
But, but, but maybe he also, you know, because he's very
27:59
egotistical. Maybe he's thinking that if
28:02
somehow the US takes over Greenland, that he'll go down in
28:05
history as someone who expanded the territorial footprint of the
28:08
United States. But, you know, wouldn't it be
28:11
better to go down in history as someone who did something, you
28:14
know, good or something? I, I have no idea what's going
28:18
on. I have no idea what motivates
28:20
them. If he wants to go down in
28:23
history. On Capitol Hill, who have pushed
28:26
back against this, normally Republicans are very deferential
28:28
to Trump because they don't want him to, They don't want him to
28:31
attack them on social media. But this issue is so bizarre
28:36
that Republican senators, Republican congressmen, they're
28:40
they're sort of saying, what on earth are you doing?
28:42
You know, be a grown up. Focus on things that matter.
28:45
Yeah, the things that matter is Iran.
28:47
And Trump has then also tweeted that he will support the people
28:50
of Iran. Do you really think he will help
28:53
them? Because the Iranians need
28:54
American help immediately. Today is the moment the Shah has
28:58
called for revolution. So it's very dramatic day today.
29:01
And what you think is America ready to stand by the people of
29:05
Iran? And what will be the potential
29:07
economic uplifts for the world if Iran is no longer with Russia
29:11
and China, but it's with the West?
29:16
Just like in Venezuela, I desperately want the Iranian
29:20
people to have freedom, to have a democratic system of
29:23
government. And because I'm an economist, of
29:25
course, my number one goal is I want them to have free markets.
29:28
I want them to have economic liberty so that they can
29:30
prosper. Iran is one of the most
29:32
economically and for that matter, politically repressive
29:35
countries in the world. The people are suffering
29:38
tremendously from the horrible economic policy of the of the
29:42
government, which I guess technically isn't a socialist
29:45
government, but it's in effect doing the same things with a big
29:48
burden of fiscal burden of government, lots of regulation
29:51
of red tape and government control.
29:54
And, and you've seen inflation at at high levels and people's
29:57
living standards have been declining.
29:59
And so even though there's a real risk of being shot and
30:01
killed by protesting, and apparently several dozen people
30:04
have been killed at these recent protests, the Iranian, the
30:08
Iranian, the Iranian people are, are, are like a powder keg
30:12
waiting to explode because their lives have become so miserable
30:15
because of the bad government. But then the question becomes,
30:19
OK, they're protesting. What can the rest of the world
30:22
do about it? Is it appropriate for the US or
30:26
any other country to somehow send in their military?
30:29
Should the US send some Tomahawk missiles into the into the, you
30:34
know, central nervous system of the Iranian government, the the
30:37
Revolutionary Guards and, you know, the sort of the military
30:40
apparatus that is oppressing the people?
30:43
You know, part of me thinks, yeah, let's do that, Let's get
30:46
freedom. But then we've had protests in
30:50
Iran before and they fizzle out and the government winds up
30:52
being in control. Is it the job of the US to be
30:55
the world's policemen? I, you know, once again, we're
30:59
back to where we were discussing foreign policy issues before.
31:03
I just don't know enough. I know what I want to see at the
31:06
end of the day, freedom and free markets and free people all over
31:10
the world. How we get from here to there, I
31:15
don't know. You're more confident to answer
31:18
that question certainly, than I am.
31:20
Thanks a lot. And Dan, you are since 25 years
31:22
following European Union policies and you know the Lisbon
31:26
Council in 2000 when we decided we want to be the most
31:29
competitive, richest, wealthiest and educated economy of the
31:33
world. And unfortunately, it's not
31:35
going so good and we actually lose out since the financial
31:38
crisis significantly in terms of GDP per capita towards our
31:43
friends and allies, the Americans who raise away in a
31:46
big, big, enormous increase of wealth in the last decade.
31:50
And we are somehow in the stagnant position,
31:53
unfortunately, more at least Western Europe.
31:56
So let me ask you, what is exactly your advice, what the
31:59
European Union members, and especially the Western European
32:02
countries, shall do in the next five years in order to somehow
32:06
get back to growth and compete with the world and be as well
32:11
successfully able to produce prosperity and to defend
32:14
ourselves accordingly and also be this shining city of the
32:18
hill, which America is what we can do?
32:22
You're right Dunker, that that there has been a huge gap
32:26
opening up between the US and the European Union in terms of
32:29
economic performance. And and that's you know, we
32:33
talked earlier about the anti convergence club.
32:35
Well, this is an example. The US is richer than Europe,
32:38
which means that in theory the European Union countries should
32:41
be catching up. But instead the gap is growing
32:44
with the US getting richer at a faster pace.
32:46
Now let's acknowledge that maybe there's a bit of a bubble in the
32:50
USI always am cautious about the over interpreting certain
32:54
results. So maybe part of the US
32:57
advantage over Europe, this growing gap, you know, maybe
32:59
some of it will will get eroded away if there's some sort of
33:02
financial crisis. But in general, I think the
33:05
hypothesis is true. The US is growing faster than
33:08
Europe and part of the reason is that the Europe, European Union,
33:11
I mean, the welfare state is such an anchor on the European
33:14
economies. Now then the question becomes,
33:17
well, can the European Union do anything about it?
33:20
Well, maybe not if this is national government policies.
33:24
I mean, unless Italy wants to reform its welfare state, unless
33:27
Germany wants to deal with its bad net 0 policies, unless
33:31
France wants to reform its welfare state.
33:33
I mean, there are certain things that have to happen and, and
33:36
those things aren't going to come out of Brussels.
33:38
These are national government problems and national
33:41
governments have to fix them. Now my view on the European
33:44
Union, it has been that originally it was a very good
33:48
idea because it was a free trade agreement and it was designed to
33:51
sort of get rid of subsidies and protectionism in Europe and, and
33:54
in many ways it was successful. Now I worry that Brussels, you
33:58
know, the European Union bureaucracy and machinery in
34:01
Brussels. Now I worry they're interested
34:03
in centralization, harmonization and things like that.
34:07
So, so I, I for instance, supported Brexit because I
34:13
think, I think if the European Union with the sort of more
34:17
status mindset of the bureaucrats in Brussels now and
34:20
because the welfare state and demographics, especially the
34:22
demographics in Europe are terrible.
34:25
So you have a welfare state and you have demographics with more
34:27
old people, fewer young people, taxpayers.
34:30
I sort of view some of these countries as sinking ships.
34:33
And if there's a sinking ship, you want to get off the sinking
34:35
ship, you don't want to be on the Titanic when it goes
34:38
underwater. So, so, so I would love the
34:42
European Union to go back to sort of being the Treaty of
34:45
Rome, European Union. I don't think that sort of the
34:48
current mindset of centralization,
34:51
bureaucratization and harmonization.
34:54
I think the European Union now maybe isn't a net force for
34:57
good. But as I already said, don't
35:00
blame the European Union for the mistakes that national
35:03
governments are making. The, the, the, the demographic
35:06
problems, the welfare state combined with the welfare state,
35:10
it's just a horrible recipe for ultimate economic collapse.
35:13
And that's entirely the fault of national governments.
35:15
It's not the fault of Brussels. So I I have a lot of mixed
35:18
feelings about it. 10 years ago soon it was that the British
35:22
have decided to leave the European Union and you said you
35:26
endorsed that decision for this economic reasons back then.
35:29
But now actually many people in the UK seem to want to come back
35:32
to the European Union because economically, while we have
35:36
problems, they seem to have worse problems.
35:38
And what's your assessment of the 10 years of Brexit?
35:41
Was it really such a tremendous success?
35:43
Did they conclude so many free trade agreements have to reform
35:46
the economy? Or what is the status of
35:48
economic success of the United Kingdom compared to the EU?
35:54
If you look at economic growth rates of, of the UK versus, you
35:57
know, Germany, France, Italy, so on and so forth, there hasn't
36:01
really been any big difference. So I don't think it sort of
36:03
shows up in that headline data. When I wrote about Brexit back
36:08
in 2016, I said there were two arguments for doing it #1
36:13
because of demographics and the welfare state.
36:16
The European Union is going to have all sorts of fiscal crises
36:19
in the future. You know, think about Greece
36:21
back in 2009. That's going to going to happen
36:24
to Italy, it's going to happen to France.
36:26
And you look at Germany committing, it's almost like
36:28
they're committing economic suicide with their net 0
36:30
policies. And so, so my argument was,
36:33
well, if you, if you vote for Brexit, you'll avoid having to
36:38
help with bailouts when their European fiscal crises start,
36:42
but also you'll have the ability to control your own economic
36:46
policy and, and become Singapore on the 10s.
36:49
Well, unfortunately, at least from my perspective, you know,
36:53
Boris Johnson and then Sunak and now pure Starmer, they're all a
36:57
bunch of big government guys. So the, so the United Kingdom
37:01
got the ability, the freedom to do radical free market reforms.
37:06
But instead of doing radical free market reforms, they made
37:09
government bigger and bigger and bigger.
37:11
Now they, of course, they had some ability to do these
37:13
economic reforms even while inside the EU.
37:16
So I don't want to overstate that argument, but but with the
37:20
United Kingdom, Brexit gave them the liberty, the freedom to
37:24
choose whether to become a free market, super free market
37:27
economy or a super bad economy. And unfortunately, they chose to
37:30
become a super bad economy. They're doing a lot of the same
37:33
net zero stuff as Germany. They're in effect just, you
37:37
know, Germany and the UK are just horrible examples of
37:39
countries that are making manufacturing extremely
37:42
unprofitable because energy costs are are, are very
37:45
important when you're looking at manufacturing.
37:48
And so to me, it's just like, why are they doing this?
37:51
I mean, China and India are building hundreds of coal-fired
37:54
plants all the time. There's literally nothing that
37:57
the UK and Germany are achieving with net zero.
37:59
And yet they are sabotaging their own industry, their own
38:03
economy with these policies. And, and frankly, that has
38:06
nothing to do with Brussels. I mean, Brussels isn't the bad
38:08
guy. They're, you know, well, maybe
38:09
they are the bad guy. They're sort of into the whole
38:11
climate alarmism stuff. But but it's, it's national
38:15
government decisions that are really driving these, these high
38:19
energy prices in the United Kingdom and Germany.
38:21
So whether you're inside the EU or outside the EU, you know
38:26
those those national governments should be doing the right thing,
38:28
not the wrong thing. I always saw Brexit as a kind of
38:32
Russian sponsored kind of division of the West and
38:35
ultimately that it will make no sense because they will never be
38:38
able to really reform inside or outside because of the only
38:42
limitations that it has been proven factual.
38:44
And I'm much more for returning them to the European Union.
38:49
I hope they will now join the customs union and we will build
38:52
the biggest free trade area of the world with Mayor Kosua and
38:55
now hopefully with ASEAN countries and so on.
38:58
And today you is waking up to the crisis.
39:01
I hope so at least. Let's see for that.
39:05
Here's my view, Gunther, if you were in charge of the EU, yes,
39:09
very, very pro EU. I worry however, that some of
39:13
the people in charge of the EU have a more status mindset.
39:16
So we'll, we'll see what happens.
39:19
Look, Dan, thanks a lot for the compliment.
39:20
The truth of the matter is that here in Europe, a lot of things
39:23
are changing because of the Russian war against Ukraine and
39:26
was a lot of underline. She's also very much on the
39:29
green agenda and all these mistakes.
39:31
But she is now changing because she sees that we are in a
39:35
essential and existential crisis.
39:38
And if we're not now more united and also more open to the world,
39:41
and that's why I see pushed it through in the last moment, the
39:45
Microsoft agreement and all these 20 agreements with trade,
39:48
which we have not been able with ASEAN, with Australia, with
39:51
Africa and many of the countries.
39:53
We will now really open up to the world.
39:56
And it will be, I think, I hope at least a very successful
40:01
period for us in the next years because we're gonna win this war
40:05
against Russia at least more. Look, with your help us, it
40:09
would be easier. Let me ask you also about German
40:12
foreign economic policy, because you're also very active in
40:15
Germany and you have many friends in Germany and you have
40:18
been very active on that. What's your advice now?
40:20
We have Mr. Mertz. He is a tax reformer of the
40:23
first class. He is now the Prime Minister,
40:26
the Chancellor of Germany. He in many ways is the hope of
40:30
reforming Europe and the strong economic recovery for Germany.
40:34
And what's your assessment of his first year?
40:37
And what at the beginning of 2026 is your advice for him and
40:41
for the CDU LED government in Germany to do?
40:44
And what they shall do according to you?
40:47
Well, unfortunately, even though Mertz is a CDU politician, I
40:53
sometimes wonder whether this the, the SDU was actually
40:56
calling the shots. Because the first thing Mertz
41:00
did just about was getting rid of their version of a debt
41:03
break, which was never as good as the Swiss debt break, but at
41:06
least did impose some control on fiscal policy.
41:09
And, and, and they, they came up with an agreement.
41:12
Well, let's just spend a lot more money and violate the debt
41:15
break. And now I agree that Germany
41:19
needed to spend more on defense, but couldn't they have cut back
41:22
on the welfare state? You look at what's happened
41:25
since 2015, and there's been a big increase in the burden of
41:28
government spending in Germany. Why not go back to 2015 spending
41:33
levels that would free up not only money for tax cuts, but
41:36
money to replenish the defense budget.
41:39
So I worry that Merck isn't tackling the most important long
41:43
run economic challenge, which is the growth of government.
41:46
Germany used to be more like 40% of GDP for government spending,
41:50
whereas France was more like 50% of GDP government spending.
41:55
It seems that under merge, the government spending burden is
41:58
becoming more French like when they should be trying to become
42:01
more Swiss like, where government spending is a little
42:03
bit over 30% of GDP. So you sort of think about it
42:06
very simple terms. Switzerland 30% of GDP, Germany
42:10
40%, France 50%. Obviously Switzerland is the
42:14
good role model there. Switzerland has the richer
42:16
economy, the faster growing economy they have the balanced
42:20
budget, they have the, you know, surplus is usually not deficits.
42:25
So Switzerland is the role model in terms of the national
42:28
economic fiscal policy that country should have.
42:32
And you know, I wanted Merch to be the leader of Germany.
42:37
What he because he was in the leadership race way back before
42:40
the, you know, 2 elections ago. And he didn't make it because I
42:43
thought he was going to be sort of the Javier Malay type for
42:46
Germany. But I've been disappointed so
42:48
far. Now, you know, you made it seem
42:50
like I'm an expert. I follow it, but I'm sure you
42:52
know, much more. So, you know, maybe I just have
42:55
a pessimistic view and there's some good news that I'm not
42:58
saying. But right now I'm like, that's,
43:00
that's disappointing. You know, why?
43:02
Why he should have reduced domestic spending to finance
43:06
more defense spending. He didn't do that.
43:10
To me, that was a a sad sign. But if he's in a, if he relies
43:14
on the Social Democratic Party for the votes, I guess there's
43:18
no choice. But then you know, you know, so,
43:22
so maybe he had no choice. But to me it's a frustrating
43:25
situation. Then about Maloney, about Italy,
43:29
there was a lot of hope she will do the flat tax and she has done
43:32
some tax reform actually, and she is now really a dynamic
43:35
reformer of Italy. Are you optimistic she will be
43:38
really getting Italy back to growth?
43:41
Because as far as I see the last 30 years, we're not really such
43:45
a successful economic period for Italy.
43:48
I was just at a dinner in Rome last month where Maloney spoke
43:54
and I, I guess my view is that is that she wants to do the
43:58
right thing, but Italy is so difficult to reform and, and of
44:04
course their demographic problems are very severe.
44:08
I have. I just had a conversation.
44:10
You probably know John Fund, a mutual friend of ours.
44:14
You know, John and I actually had discussion about, you know,
44:17
where he's more optimistic that Maloney will get reforms than
44:20
me. I don't know enough about the
44:22
domestic political situation in Italy.
44:25
I know that they have a problem with government at 50% of GDP or
44:28
more. I know that they have a problem
44:30
with demographics. That data is very easily
44:32
accessible by everyone. But are they going to do Chilean
44:37
style pension reform? Are they going to liberalize
44:39
their labor markets? Are they going to cut back on
44:41
the welfare state? Does Maloney even have the
44:43
ability? Because of course the fragmented
44:46
parliamentary system in Italy, you know, her party is just part
44:49
of a coalition. Do the other coalition members,
44:52
are they willing to go along with sort of these serious, you
44:56
know, free market reforms that you and I would like to see?
45:00
I don't know. But it's, it's, it's very
45:02
difficult to be optimistic about Italy because that the
45:06
entrenched interest, the welfare state, the demographics, those
45:09
things combined in a way where where even though I think
45:12
Maloney is probably the best Italy can have right now, does
45:16
she have the political support to do what you and I would like
45:20
to see? I'm I'm skeptical but I hope I'm
45:23
wrong. You were for decades now in
45:26
Eastern Europe, active in the free market roadshow promoting
45:29
the flat tax, and it has been really very successful.
45:31
Many countries have a flat tax or a similar system, maybe with
45:35
two brackets or at least some low tax system.
45:40
I think every country from Estonia to Bulgaria has, of
45:43
course Bulgaria with 10%. But we have not been able to
45:46
convince the Western European country to really go for that
45:49
great system. Can you explain a little bit
45:51
what is the big advantage now after 20 years of having a flat
45:55
tax system? You can also see the fiscal
45:57
situation. Did it really lead to the
46:00
collapse of government revenues, which many of our our enemies
46:04
have been thinking? And was it really good for
46:06
economic growth in Romania, Bulgaria and all these
46:09
countries? What's your assessment of the
46:11
flat tax movement in the last 20 years?
46:16
Eastern Europe, of course, having suffered decades of
46:20
communist enslavement, had very low living standards.
46:23
If you go back to, you know, the early 1990s when they finally
46:26
became free, many of those countries decided we have to
46:31
catch up to Western Europe. So let's try to have a very
46:34
entrepreneur friendly, business friendly tax system, like a flat
46:38
tax to encourage more economic growth.
46:40
And there's no question we've seen convergence.
46:42
We have seen these Eastern European countries, especially
46:46
the Baltics are now, you know, they're, they're actually, you
46:49
know, at the level of Southern Europe.
46:51
And in some cases they're beyond now the Southern European
46:53
economies. So we have seen some good
46:55
convergence. We have seen some good results
46:57
that I think are evidence that the flat tax has been
47:00
successful. But I think it's also very
47:02
important that we we recognize what a flat tax can do, but also
47:07
what it can't do. If you have very high payroll
47:10
taxes, social insurance taxes, which some of these Eastern
47:13
European economies can do, OK, you have a flat tax that's great
47:17
for your income tax. But if there's still like a 20%
47:20
or a 30% tax on labor because of your social insurance taxes,
47:24
well, a flat tax is not going to solve that problem if you still
47:27
have government spending of nearer, you know, 40% of GDP or
47:31
even 50% of GDP. And I'm thinking country like
47:34
Slovenia, you know, how are you going to get economic growth if
47:37
you're not also controlling the burden of government spending?
47:40
So when I look at Eastern Europe, there are some star
47:44
performers. The Baltic countries I think
47:46
have been the best performers. I think Poland, Bulgaria,
47:49
Romania have done reasonably well.
47:51
I'm not so optimistic about the Balkans because you know that,
47:55
you know, they're not, they're not solving in some cases some
48:00
of the problems with rule of law and corruption and industrial
48:03
policy. So I guess it's a mix and, and I
48:09
like to think in the long run some of these problems will be
48:11
solved. But you know what, the
48:13
demographic problems in Eastern Europe, or even worse than the
48:16
demographic problems in Western Europe, when you have fertility
48:19
rates down close to 1, how are you going to have a small
48:24
government when you have a very old population you don't have in
48:28
many cases, you know, the Chilean style funded pension
48:32
systems. So I worry a lot.
48:36
I'll just leave it at that. I worry a lot about Eastern
48:39
Europe because the demographics to me are sort of the hidden
48:42
story. Or we talked about Bulgaria.
48:45
There's a lot of, there has been some good news in Bulgaria.
48:47
But I wrote a column recently about how government spending in
48:50
the last few years has really gone out of control.
48:53
Yeah, they're in the euro now. And that that I assume is
48:56
probably good news for Bulgaria. But if they don't fix their
48:59
fiscal problems. But you've had over 1,000,000
49:01
people, young people mostly, emigrate out of Bulgaria.
49:05
That's your tax base. If your tax base is leaving and
49:08
all you have left is a bunch of pensioners, you know, the taxes
49:12
on the remaining people will have to be very, very high.
49:15
So yeah, there are, there are, there are, there are, well, any
49:19
country in the world. Of course, you can always find
49:21
bad things to worry about and good things to applaud in
49:24
Eastern Europe. There's a lot of policies that I
49:28
applaud, but boy, those demographic issues are always in
49:31
the back of my mind as a as a threat to the economic vitality
49:35
of Eastern Europe. Then you are American, quite
49:41
unique because I think you traveled in the last 25 years,
49:45
many months through Europe. You know, most of the countries,
49:49
if not older European countries, and I think you like Europe very
49:52
much. Can you make some assessment?
49:55
You know that our statement maybe you know what the American
50:00
says some American policy maker today who seem really not to
50:03
like us, like JD Vance, he seems to really despise us, even.
50:08
Yeah, when we can believe he's the chats of the Houthi
50:12
discussion when he said he doesn't want to bail out the
50:15
Europeans anymore and others, they seem really not to like us.
50:19
Is it really reasonable not to like us?
50:22
Are we so bad people? What is it good policy for
50:25
American leaders not to like the Europeans we want?
50:29
We are a little bit flabbergasted by this JD Vance
50:31
and his attitudes towards Europe because to my best knowledge, we
50:36
have never done you any harm and OK in the Second World War.
50:39
But you came to fix that. And now we are here since the
50:43
year 49. We are your allies.
50:45
We are grateful for liberation from the Nazis.
50:47
We are grateful that you kept us out of the Soviet grip.
50:51
We are very grateful that you helped us to fight Milosevic and
50:55
now you basically save us deal from Putin and we are actually
50:59
OK. Some people are anti American
51:01
and they are a little bit jealous for your success.
51:04
But in general we are quite similar to the Euro Americans
51:07
and we like America and we have nothing against even JD Vance,
51:12
but he has something against us. And can you explain a little bit
51:16
what's your assessment of that and what should American policy
51:20
make us do with Europe in the future?
51:24
I view Americans and Europeans as cousins.
51:28
We both share the same heritage. We both are, I think both works
51:33
of Western civilization and I think Western civilization is
51:37
something that should be applauded the Enlightenment
51:40
values of individual liberty. If that's something that's a
51:43
gift to the entire world. The the Western civilization
51:47
gave us the rule of law. So so I think Americans and
51:50
Europeans naturally should be very close friends.
51:53
Now that doesn't mean we can't have, you know, friendly fights
51:57
within the family. I think that, you know that
52:00
American politicians like Trump are are right to say that
52:03
Europeans need to spend more on National Defense.
52:06
And and to me, part of that means that you need to control
52:09
your welfare state because it's not that I want to have big
52:11
giant governments that add more defense spending on top of that.
52:14
I want more economic freedom, smaller domestic spending to
52:18
enable governments to focus on one of the few things they
52:20
should be doing, which is National Defense.
52:23
I think it's perfectly reasonable for friends, the US
52:26
and Europe to have, you know, arguments about things like,
52:29
well, you know, should we have, you know, a very extreme global
52:33
warming agenda? I think the Europeans are more
52:35
like that and the US is more no, you know, energy use and cheap
52:39
energy is good for economies, good for living standards, good
52:42
to help lift people out of poverty.
52:44
So yeah, we can have friendly economic fights, but but then
52:48
the question you raised is very legitimate.
52:50
It seems like Vance and Trump, they're beyond just having
52:54
friendly economic fights that they almost view Europe as as I
52:58
don't think it's fair to say they view Europe is the enemy,
53:01
but I think they sort of view Europe as irrelevant.
53:03
And and they and they they make insulting comments.
53:07
And it is disturbing to me that there are people who seem to
53:10
actually be pro Russian. You know, there's a very
53:14
legitimate argument in foreign policy world, how much should
53:17
the US intervene? But to me, it is completely
53:22
unreasonable for anybody to be on Russia's side.
53:26
You can say I'm, I'm, I'm perfectly happy the US should
53:30
not give money to Ukraine. That's you can make that
53:32
position. But if you also say we should
53:35
not give money to Ukraine because I want Russia to win, to
53:37
me that's completely illegitimate.
53:39
That's wrong. So I think every American should
53:42
be on Ukraine's side and then have a legitimate, honest debate
53:45
about, well, how much should we be intervening?
53:47
How much should we be involved? I mean, in theory it is more in
53:50
Europe's backyard. So maybe Europe should have more
53:52
responsibility for it. Again, these are foreign policy
53:55
issues that are, are beyond my area of expertise.
53:58
But Europe, Western Europe, especially in the US, we should
54:03
be united. Russia is the bad guy in this
54:06
situation, not the good guy. Now, that doesn't mean we can't
54:09
hope that Russia liberalizes eventually and becomes a, a, a
54:13
full member of the of the Western world and and becomes a
54:16
prosperous country. I think we all hope that that
54:19
happens everywhere in China, Russia, Venezuela.
54:24
I want freedom and liberty for everybody in every country in
54:27
the world. I think some countries are more
54:30
susceptible to bad policy because they don't have the
54:33
traditions of Western civilization.
54:35
And that gets back to what I said before.
54:37
Europe and the US are are should be great friends because we both
54:41
have this this heritage of the Enlightenment.
54:44
And I think that is something to be applauded and celebrated.
54:48
Then I think you're absolutely right.
54:50
I want to thank you very much for your friendship to Europe,
54:53
for your care for Europe, and also I hope that a lot of
54:56
American policy listen, make us listen to this podcast and
55:01
follow your advice because really we want to be your
55:04
friends and we are your allies and we need you so much.
55:07
And we also need your political economic advice to reform our
55:11
welfare States and our tax system.
55:13
And thanks that you do this since 25 years caring for
55:16
European prosperity and European security.
55:20
This is my interview with Dan Mitchell, a leading American
55:23
economist who really loves and cares Europe.
55:26
Thanks a lot for that and very much appreciated.
55:29
All the best in 2026 and I wish that your input will be listened
55:34
to from Venezuela to Germany, from Italy to Washington, DC for
55:40
freedom. Thank you, doctor.
55:42
Thanks a lot. I will stop now.