Latest / Uncomfortable Conversations with Josh Szeps / Inauguration Episode Two: Josh & the Anti-Trumper, David Frum

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Inauguration Episode Two: Josh & the Anti-Trumper, David Frum · Uncomfortable Conversations with Josh Szeps

• 0:00
  G'day humans, well I'm about as far away as you can get from the hull of a
• 0:10
  lure of the inauguration both metaphorically and literally. For those of you
• 0:15
  watching the YouTube you will see that I am standing in front of a South
• 0:20
  Pacific volcano and the lapping shores of the South Pacific on an
• 0:26
  overwater bungalow on an island that you can only get to by taking a boat
• 0:32
  from another island that you can only get to by taking a dash eight from another
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  island that you can only get to by taking a dash eight from one of the small
• 0:39
  eastern most dysfunctional but beautiful developing world capital cities in
• 0:47
  the South Pacific. I'm in the Solomon Islands which is a flyspec archipelago of
• 0:53
  tropical paradise wedged somewhere between Australia and Hawaii is probably
• 0:58
  as best one needs to place it around Palau, Papua New Guinea, Fiji, Venomatu and I cannot
• 1:07
  explain talk about like first world insights here I cannot explain how good it is
• 1:12
  to not be consuming 24 hour news at the moment. That being said this is a
• 1:20
  terrific cracker of an episode. The last episode I basically wanted to tee up
• 1:25
  inauguration with a conversation with two Republicans. One a pro-Trump Republican
• 1:31
  that was the last episode that you heard with Bachier Angasagham and one with a
• 1:35
  never-trop Republican. Today's guest David from. David's one of my favorite
• 1:40
  conservative thinkers in America. He probably needs no introduction but I'll just
• 1:46
  give you a potted reminder. He was a speech writer in the White House for George
• 1:51
  W. Bush. He was considered instrumental in this sort of lead up to the Iraq war.
• 1:56
  He coined the most famous phrase of George W. Bush's presidency the Axis of
• 2:01
  evil which was given at his State of the Union after the September 11
• 2:05
  terrorist attacks and before the invasion of Iraq. And over the course of the
• 2:10
  subsequent couple of decades has become a more and more principled voice
• 2:14
  against the derangement of the Republican Party and was one of the earliest and
• 2:18
  most prominent anti-Trump Republicans. He has since most recently left the
• 2:24
  Republican Party altogether in disgust. He doesn't know quite what he is now I
• 2:29
  suppose. He professionally is a journalist more than anything. He's a senior
• 2:37
  editor at the Atlantic and you can see him frequently on MSNBC but he's a
• 2:41
  deep thinker about strategy, about politics, about the deepest kind of
• 2:45
  politics really. The sort of old school vision of politics as a polity, a
• 2:50
  strategy, not a knee-jerk reaction to populist whims. So I love this
• 2:57
  conversation that I recorded just before I hopped on a plane and went to the
• 3:00
  middle of nowhere. There will be more great programming coming up but please
• 3:04
  just enjoy this inauguration day amid all of the insanity this breath of
• 3:09
  pressure from the one the only David Trump. How are you feeling David ahead of a
• 3:15
  second Trump term? Well of course I have foreboding. I feel an intense sense of shame.
• 3:25
  It's different from 2016-17 because back then one could look at the first
• 3:32
  Trump presidency as basically a kind of technical glitch in American democracy.
• 3:37
  Trump had lost the popular vote to Hillary Clinton and not by if the election
• 3:41
  had been the other way if Hillary Clinton had come out on top of the
• 3:43
  electoral college it wasn't especially close. I mean he got a smaller share of
• 3:46
  the vote than Mitt Romney did than John Kerry did than Al Gore did. But the
• 3:54
  electoral college worked in his favor. There had been this Russian interference and
• 3:57
  you could say something went wrong and we face a tremendous challenge but you
• 4:01
  don't have to have any question marks about the basic character of the
• 4:06
  country. This time it's a tougher thing. Trump did win outright. He brought
• 4:12
  with him very tiny but real majorities in the House of Representatives and the
• 4:16
  US Senate. All of the elected power of the United States government is in the
• 4:20
  hands of Trump and his party. They will be able to use that power and so I feel
• 4:25
  foreboding. I think it's like no one promises the democracies never make
• 4:30
  mistakes. It's a serious mistake. But I also feel a sense of commitment. We
• 4:35
  have to pull ourselves together and and meet this challenge. There have been
• 4:39
  other dark times in American history. Here's one more. One thing you just said
• 4:43
  that you feel is shame David. Why shame? I was born in Canada. I grew up in
• 4:52
  Canada. I'm still spent a lot of time there and you may feel this may resonate
• 4:57
  with you as an Australian. There is a sense of belief in America that those of
• 5:02
  us who grew up under American protection often have even more intensely than
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  any American does because we understand very vividly what our worlds would
• 5:11
  look like if America weren't there. What it would mean for Australia to be alone
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  in that big Pacific without America. What it would mean for Canada to be this
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  mid-size country alone in the world without America. And so we have this extra
• 5:22
  dimension of belief and faith and confidence and if we are on the right or
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  center right we spent a lot of time arguing with our left-wing
• 5:30
  co-nationals who are very anti-American about the decency and goodness of the
• 5:35
  American nation. It's trustworthy. And so there's a sense shame as a sense of
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  being let down that all those arguments I've had for now many decades with
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  people who said a different view of America. You know they've got a big
• 5:51
  talking point in their favor. Becoming an inauguration day. Shame for having
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  argued for something that you now regard as having been what? No I don't
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  shame I don't regard that but shame because it's like some of your friends are
• 6:09
  amaligning another friend and you stand up for the friend and you champion
• 6:13
  them and you maybe are outnumbered and then the friend knocks open the door
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  says something I'm seeing and falls down face drunk. Face forward drunk and you
• 6:24
  think okay you just I look stupid. Right yeah yeah and you also just said an
• 6:31
  interesting thing that that pricked my ears which is about the character of
• 6:35
  America. There are many reasons to be to feel a sense of foreboding this
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  inauguration day to do with international relations to do with the democratic
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  institutions and kind of autocracy in America or cronyism in America to do
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  with the possible punishing of Trump's enemies you know they're all kind of
• 6:54
  practical things but I don't normally frame my dread as a question about America's
• 7:01
  character why choose that frame. Look Trump speaks to a series of ideas some of
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  them plausible some of them not some of them even a little bit true but the
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  secret of his power the secret of his appeal is it appeals to something bad in
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  people he's an obviously appalling human being and you expect normal people to
• 7:26
  react to that with revulsion but some people react to it with excitement it's
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  liberating for them and I know you know people who are not unintelligent and not
• 7:40
  on a patriotic who resonate to Trump and you think how could they do it and
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  and because I think in some sense that he has liberated some dark energy in
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  them and they find it exciting and that's that's what I mean what this
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  appealing to the character that the secret of Trump is that he is he is people
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  often sometimes ask me is there anything good to say about Donald Trump? Well
• 8:04
  there are some good things and one of them is he's not a hypocrite he doesn't
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  pretend to be a good person he is a nakedly bullying cruel dominating deceitful
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  vicious person makes no bones about it there during the wildfire fires in
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  California that he was gloating about it and mocking the people who were
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  dispossessed of their homes and attacking the political leadership and just
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  saying one hurt hurtful thing after another in the in the middle of this
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  extremity and we have to face look the Roman Colosseum stood for something like
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  500 years putting bums and seats twice a week to watch people hack each
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  other into little pieces and as as I understand it it was a going business
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  concern the whole time that there's something in human beings we will pay to
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  watch people hack each other into little pieces and that that thing that was
• 8:53
  there in the Colosseum that's the thing that Trump speaks to and this time
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  around last time you could say well more people voted against it than voted
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  for it this time you have to admit more Americans voted for it than voted
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  against it on his lack of hypocrisy I remember David in 2016 trying to
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  explain to Australian friends and colleagues that his election victory and
• 9:15
  one of the things in my toolkit would be to say his part of his is a
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  stick and his appeal is to say Hillary Clinton and the rest of those lobbyists
• 9:24
  on K street and the elites in Washington they will betray you behind closed
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  doors they will go to Davos on their fancy private jets and they will sell
• 9:33
  you up the river they will lie to you and pretend that they're not I will lie
• 9:38
  to you straight from the podium yeah and I will take advantage of you and I will
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  cheat you and I will you know I mean he I will sell you these stupid coins that
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  are worthless my wife will market a $90 Christmas ornament made in China that
• 9:51
  is worth nine cents and I will go on TV and say of Kamala Harris she got the
• 9:57
  questions for her town hall when I know the whole time I got the questions
• 10:01
  that was amazing just explain that David because I didn't know that until I saw
• 10:05
  your Twitter feed yeah re re-tweet that so this has been one of Donald Trump who
• 10:11
  was not a very good student and who probably got through some good schools with
• 10:15
  a lot of parental gifts to the school but probably a healthy amount of cheating
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  one would guess believes that whenever people confront any kind of test the way
• 10:22
  they get through it the way they surmounted is by cheating so he would say that
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  when they're a Democratic town halls in 2016 that somebody given Hillary Clinton
• 10:31
  the answers with somebody given Kamala Harris the answers now it's it's absurd
• 10:35
  because if you're a working politician who prepares you go to a town hall you
• 10:40
  don't need anyone to tell you what the questions are going to be one of the
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  economy as we went on immigration also you've presumably just done 543 town
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  halls in similar you know but you've prepared you've worked and you've had
• 10:57
  people come up with oddball questions like you know tell me something
• 11:01
  important that happened to you well you were growing up you you have you are
• 11:04
  ready for it it's not but Trump insisted again and again that Hillary Clinton
• 11:10
  and Kamala Harris had been given the questions for their town halls and then it
• 11:15
  turns out we learned that and we learned it from a book written by a well-regarded
• 11:20
  journalist who had been close to Trump campaign that when Trump did one of his
• 11:23
  big Fox News Town Halls that a mole inside the network it wasn't like some
• 11:28
  disaffected person had given him the questions and he wargamed the
• 11:31
  questions and in advance including that they got him because he had used this
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  language but I will be a retribution that they had trained him to say I do not
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  intend to exact retribution I think slight political opponents which is again
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  who had no more than him the journalist or his panel his panel of his
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  now normally again a normal politician certainly one running for president does
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  not need to by the way if asked do you intend to exact extra legal vengeance against
• 11:59
  your political opponents the answer is no you shouldn't really need to but I mean
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  David this is the thing I mean if you you know if asked whether or not the the
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  men and women of the armed services who went to Iraq you know did a good job
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  you should say yes you shouldn't say what Trump also said which is are they
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  threw away their lives on a pointless venture when asked if John McCain is a
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  hero you should not say no he's not because I like my hero is not getting
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  shot down like with it again and again and again and again he just we know
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  this now he blows the norms that doesn't matter that goes to the non hypocrisy so
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  he hates John McCain this John McCain was hostile to him he resents John
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  McCain because John McCain was acknowledged hero and no one can be admired in
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  Donald Trump's company especially for something that Donald Trump was incapable of
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  doing so he had to be attacked and destroyed so he that is a riff reflexes you see
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  again and again you say something positive especially something positive that
• 13:00
  Trump could never possibly do about someone and Trump will lose lose control
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  of himself but here we are and we are Trump will be president he will have a
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  slight majority in the house a substantial majority in the Senate he will have
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  a friendly federal court system he will have a lot of power for at least two
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  years and unlike 2017 when he really didn't know what he wanted to do and
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  didn't know how to do it this time he enters with a list of things he does want
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  to do and he does know how to do and he doesn't have the people around him who
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  can tell him not to and who can constrain him which is one of the other great
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  fears when you just think about the guardrails that existed you know when he
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  wanted to use military force against domestic protesters yes one of the
• 13:47
  federal defense secretary now who would stop him from doing that the way that
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  Marcus but did yeah one of the things that Trump has learned Trump is a bully
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  who admires violence Trump assumed the US military the upper
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  reaches were staffed by people who are also bullies who admired violence and then
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  to his dismay he discovered that actually these are men who had seen violence
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  and want to minimize it to the maximum extent possible these are men who had
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  seen conflict and understood that allies are huge force multipliers for the
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  United States and that allies need to have their interest taken into consideration
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  and that warriors are human beings who hurt and bleed and who need care after the
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  battle and how high families and by the way aren't all southern white men many of
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  the warriors are of different groups and they have to find out ways to work
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  together and so to Donald Trump's dismay that the people he thought he could
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  most rely on the uniform military that the three stars and the four stars turned
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  out to be the people who are they would of course carry out any leap lawful
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  order he gave them but they would provide restraint at this time he's keeping
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  them at bay and he has schemes of violence he will have he's he and he's
• 14:55
  picked for the crucial power positions in his administration now we don't know
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  if they'll all get through the Senate but people of weak character people
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  have to form character people he will have control over I mean Pete Hague Seth
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  I was going to say an alcoholic co-host of Fox News Mornings
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  right right so and someone who who if he is not going to be going on boards
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  doesn't have friends in the uniform military doesn't care what the three stars
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  and four stars think about him doesn't care about his place in history
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  he will just do what Donald Trump says and will be helpful to Donald Trump in
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  making sure that the next crew of three stars and four stars are people of
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  less integrity than the present crew of three stars and four stars
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  he's chosen and we'll see if she gets through the Senate
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  Tulsi Gabbard is Director of National Intelligence
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  just pause David just pardon my ignorance about how the military works but
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  our is the appointment of generals is that a unilateral decision from the
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  defense secretary no it's not it's a very complicated question so first
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  generals have to be confirmed by the Senate good but it but it's but there's
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  also an internal screening process that the military sends forth names
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  that recommendations now that defense secretary
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  doesn't have to follow them but especially for the four stars
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  it would be a huge fight if the general did not follow the recommendations
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  and you'd have to have a very capable person the way you reshape the military
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  is you start with the kernels and the one stars
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  okay you don't begin I mean you can pick like by the time you're getting to
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  people who are sent com commanders you've got a list of people who have
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  been selected for their loyalty to the constitution for their military
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  competence for their independence and people have spent 20, 30, 40 years of
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  their lives in the military and have seen presidents come and go
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  and three stars and four stars have worked with at least two or three
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  presidents quite closely over their career they're not in
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  all of them necessarily and the military studies
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  American history very intensely and so they all know that you're
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  joining in this life and in the next your name is going to be remembered with
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  Dwight Eisenhower and MacArthur or it's going to be remembered with
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  Benedict Arnold and the Confederate generals you know you don't want to be
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  you want to be with the on the right side of American history not the wrong
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  but you but an abject enough defense secretary who's willing to
• 17:19
  be guided can reshape the military this is sort of a pointer to the broader
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  question about you know people's fears about the politicization of the public
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  service I mean the you know the the vision of this the sort of
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  trumpest vision of an expansive executive like well you know the military is
• 17:38
  part of the government and so is the postal service and so is the national
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  weather service and so is the CDC therefore
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  you know I can do what I want with them and there's this this sort of you know
• 17:49
  people might have heard about project 2025 we didn't ever so to about it
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  so idea that really there's no reason why you couldn't
• 17:57
  have political loyalty tests for you know a postal worker or you know
• 18:03
  we make someone make a scientist's funding contingent on their political
• 18:07
  loyalty we used to if you were an American politics
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  in the 19th century every job and including like the runners in government
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  office building every job changed with the elections that and the first
• 18:18
  question if you said I want to be a messenger inside the Department of Agriculture
• 18:22
  the questions well what did you do to elect president you know right it would
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  be Hayes so it was it was a complete spoil system
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  beginning in the 1880s that has progressively changed and we've had a more
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  highly skilled civil service chosen not for political loyalty
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  and while the president is supposed to set broad policy
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  we don't want the president to say you know what
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  there's going to be an election next week in this town my side looks likely to
• 18:52
  looks likely to have some difficulty so if you could generate a weather forecast
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  predicting rain that would be really helpful to me you know we don't want the
• 19:02
  president to have that power and since the 1880s but you know the weather
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  service and many other agencies are they're not
• 19:09
  completely independent but they have substantial autonomy and the people have
• 19:12
  careers they have career protections
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  but that's just a custom right David no this is the law
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  constitutionally aren't they just under the executive
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  branch they are in the executive branch but the exact rules they've
• 19:25
  there have been statues going back to the 1880s
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  where congress created life tenure for certain categories of civil
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  service
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  and that those those categories have spread and spread and spread and spread
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  now there are many the United States has many many more
• 19:40
  elected and appointed politically appointed officials than any other peer
• 19:44
  democracy yeah that there's a lot more time when an election happens and
• 19:48
  the new team comes in then they would be in Canada or Australia or the
• 19:52
  Australian equivalent of an assistant secretary of commerce does not
• 19:55
  change with the election the american does
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  you know we elect state prosecutors we elect state judges that that's part of
• 20:02
  the old-fashionedness of the american system and and those are real and the
• 20:05
  election of state prosecutors and state judges has been
• 20:08
  often the grounds for scandal in american life but most most the federal
• 20:11
  civil service serves our professionals who serve on good behavior that is
• 20:16
  you have to show they've done something wrong before firing them something else
• 20:19
  it needs to be said and i think that Elon musk and
• 20:23
  his group were trying to reform the government don't know this
• 20:27
  the federal government employs about as many people today
• 20:30
  as it did during the john f kennedy administration it is not a big employer of
• 20:34
  labor and and the civilian service in particular
• 20:39
  is has not grown and the reason for that in 1962 the federal government
• 20:44
  delivered a lot of mail and processed a lot of social security checks now think
• 20:49
  about how many human beings it took to process a social security check in the
• 20:53
  days of typewriters and paper files and how many it takes to do it today
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  so because the u.s federal government is such an enormous consumer of
• 21:01
  information technology that the places that the things where the money is
• 21:05
  really spent especially the civilian like post office social security
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  administration they just need a lot fewer bodies than they did before the
• 21:11
  advent of computer technology so the government has been actually under
• 21:16
  tremendous deflationary pressure and now it's added some it's added some
• 21:21
  it's added a lot of functions since john f kennedy but the idea that it's this
• 21:24
  big bloat some state governments are but the federal government is really not
• 21:28
  and if you start trying to fire people what you're going to discover as many
• 21:31
  of those people have good options you start firing the staff of the national
• 21:35
  ocean oceanographic and atmospheric authority
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  those people have options uh most people in the department of justice
• 21:42
  could walk out the door and work at better pay jobs tomorrow they wouldn't have
• 21:46
  maybe as much satisfaction they would have
• 21:48
  probably less maternity and paternity leave than they do is the government the
• 21:51
  government has some attractions but they have options
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  you start messing with this um you could have chaos and i think this is a point
• 21:59
  i really want to drive home i think a lot of people have an implicit model that
• 22:03
  trump two will look like trump one in that trump one inherited about as
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  favorable a set of conditions as any precedent has ever inherited um an
• 22:13
  economic expansion had begun in 2010 trump inherited the back half of that
• 22:18
  economic expansion um he inherited a world that um where major wars were winding
• 22:24
  down he inherited um uh more or less peaceful planet um he inherited a
• 22:31
  period where um interest rates were low and stable none of those things are
• 22:36
  going to be true in trump two i mean it's already clear we can already see
• 22:39
  trouble in the bond market that interest rates are going to be higher
• 22:42
  there are major battles going on all over the planet and trump intends to
• 22:46
  take the russian side in ukraine he intends to empower israel in the middle east
• 22:50
  and he's got a lot of very strange ideas about intervening directly in
• 22:54
  mexico militarily against the cartels um i'd uh which is probably the single biggest
• 22:58
  military threat in the immediate future that gets
• 23:02
  dangerously little discussion in the united states um
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  and we are at the end of a long economic expansion and he could find himself in
• 23:09
  much more turbulent waters than the easy ride he got in this first term
• 23:14
  fascinating i want to get to that international stuff in just a moment but just to tease out
• 23:18
  the government efficiency and sort of cronyism and politicization of the civil service to put a
• 23:23
  button in that it strikes me that sometimes what what i think americans are talking about when
• 23:29
  they talk about government bloat is not actually bloat but is underfunding and maybe unions
• 23:36
  that are too strong like the the experience of going to the department of motor vehicles in the
• 23:41
  united states to get your license or the experience of mailing a letter at a post office or
• 23:45
  the experience of dealing with the transportation safety administration when you're
• 23:49
  boarding a plane is a lot more frustrating than it is in comparable countries
• 23:55
  al franken used to have a line that uh you know no offense against republicans david but he used
• 24:00
  to have a line that uh your republicans run on the platform that government doesn't work and then
• 24:05
  they get elected and prove it yeah and to some extent i think you know there is a kernel of truth in
• 24:09
  well first most americans don't carry out and why should they the difference in the functions
• 24:14
  of the federal state and local governments um and so the among the department of motor vehicles
• 24:20
  of course is a state and and often a local responsibility um and many of the things that are
• 24:25
  most federally frustrating are indeed driven by well one of the complaints americans will have
• 24:31
  is how difficult it is to get anybody on the phone if you have a question for the internal
• 24:34
  review service well that's an easy problem to fix hire more people use more and and buy a lot
• 24:40
  more information technology actually because a lot of the questions can be answered by you know a chat
• 24:44
  bot um but because the republicans are above all answerable to people who own small family businesses
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  who are uh often have the best ways of hiding income of anybody in the society uh their group of
• 25:01
  people regard in power they they they will make it seem like having an effective IRS is the
• 25:05
  Gestapo now if you're a W2 earner with a little bit of freelancing come you want an effective
• 25:11
  buyer you're you are declaring everything you make you're not cheating um uh but you have a
• 25:15
  question uh and or you're wondering where your tax refund is you want to talk to somebody and
• 25:20
  because uh the government is answering to the car dealers who are are cheating uh that you don't
• 25:27
  have the people to help you and so you get this impression um and you don't have the investment in
• 25:31
  IT for it to work i mean what i you know i i were dealing with the IRS is extraordinary i tried to
• 25:37
  log on when i was doing my US taxes last year and having been in Australia for a while now i don't
• 25:42
  have to but because i'm married to an american there's all the kind of filing requirements and i'd
• 25:46
  forgotten my passwords so it said reset passwords so i clicked that and i go through and i have to
• 25:50
  enter a number that was at the top of my last tax return so i have to locate my last tax return
• 25:55
  and enter that and then it says congratulations you've successfully uh requested a new password it
• 26:00
  will arrive by mail yeah in like six to eight weeks i was like in Australia i go onto an app and i
• 26:06
  go and i get it sends a two factor authentication and when bam we're done we're in one one of the
• 26:11
  things that the United States could do with it many many most developed countries don't have tax returns
• 26:16
  if you live in any European country uh what you do is when when it's tax time you go you go to the
• 26:22
  website you the government has prepared a draft tax return for you uh you can amend it if you
• 26:27
  want to um oh you know you forgot i have three children not two i get a more of a deduction than
• 26:32
  you think um but you click a couple buttons it takes seconds and you process your turn and your
• 26:37
  refund is in the mail now americans have been pressing for this idea in the united states for
• 26:41
  decades and it has been opposed by our paid tax preparing services the it's h and r block and
• 26:47
  companies like that and the republicans have been for both for ideological reasons and interest
• 26:52
  group reasons have been have fought this and in fact during the last government shutdown one of
• 26:56
  the demands was they were going to shut down the government and even default on the debt
• 27:00
  unless Biden stripped out the funding for the experiment for the self-populating income tax return
• 27:05
  there was one of the more positive agenda items of the Biden administration so as you say there
• 27:10
  that it's just clarified for me David articulate for me why do they think ideologically it's a good
• 27:16
  thing for it to be really annoying to deal with the tax office um ideologically because if you
• 27:23
  have a terrible time dealing with the tax office and you you are an ordinary worker you will then
• 27:29
  feel more sympathetic to that i mean the heart and soul of the republican party are people in
• 27:33
  small family businesses that are not always as forthright with their taxes as they should be
• 27:39
  and who regard the IRS as their enemy because it's always discovering you know those tickets for
• 27:44
  the enough for the super bowl that you deducted as a business expense weren't a real business
• 27:48
  expense there's income in the that there was income in the company that should have been declared
• 27:52
  that you did not declare um you have you have a lot that the people have a lot of ability to hide
• 27:57
  and create false deductions that's the spy of the republican party and they hate the IRS and
• 28:01
  dread it and they are trying to recruit allies among other people have no reason to feel the same way
• 28:06
  and making the iris a miserable experiences way that the spying of the republican party can recruit
• 28:12
  allies plus hnr block and other tax repairs spend a lot of money almost all of it on republicans
• 28:17
  to defeat self-populating tax returns okay got it got it all right let's talk about internet
• 28:22
  the international order uh the last episode that uh that was released on this podcast was with
• 28:28
  barchia who um you know was a the sort of a i guess the republican pro trump voice and uh uh she
• 28:35
  framed the things that she would like to see Donald trump honor as the core of his platform
• 28:41
  in three ways one was to restore social sentrism meaning you know anti-workness
• 28:47
  the second was to be a hawk on terrorism but not on foreign adventures meaning sort of you know
• 28:52
  an anti-militarism and maybe pro-russia position and the third was to defend american workers
• 28:57
  through tariffs and immigration reform um you mentioned international stuff uh let's just so
• 29:04
  let's start on i guess number two uh you know you're still associated in the republican mind and in
• 29:10
  the american mind with a connection to a big foreign policy blunder which the iraq war and sort of
• 29:15
  is the i suppose the uh the bet and wire of big military adventures of the past generation
• 29:22
  how do you look at the is it a phony binary between that kind of adventureism and isolationism
• 29:28
  or where do you line out Donald trump and his vice president to be have talked often about firing
• 29:35
  rockets into mexico to attack uh drug labs um republicans and congress have introduced resolutions
• 29:40
  calling for the united states to deploy military force inside mexico against cartels um that
• 29:45
  the trump the first trump administration thought very seriously and the second trump administration
• 29:49
  is taking a look at designating the cartels as international terrorist organizations against
• 29:55
  which the president would be authorized to use force um i i don't know that we're going to get a war
• 30:00
  inside mexico from trump not uh but uh the the dangerous system signals are flashing so
• 30:08
  if you tell me that your top issue is anti militarism and you support trump i think
• 30:14
  look maybe you don't read news from mexico a lot of americans don't uh but um we are heading
• 30:18
  toward a real risk of a very big military adventure with this administration and one that will
• 30:24
  end disastrously because uh projects in mexico can only work in cooperation with the mexican
• 30:29
  government and it will never cooperate with the united states firing rockets into met labs in
• 30:32
  mexico um not that they don't deserve to be rocketed but they if they have to you have to do it
• 30:37
  in conjunction with the the government of the territory um Donald trump's position on
• 30:43
  ukrain is not anti militarist he and the people around him the they're tremendously sympathetic
• 30:48
  to russian militarism uh just in the days before um the inauguration they were speaking of
• 30:54
  annexing greenland and the pan amalkan al both of which would be military adventures um and well
• 31:00
  there wouldn't be violent military adventures greenland belongs to denmark which is an EU
• 31:04
  country and a nato member and seizing territory from denmark i mean obviously denmark can't fight a
• 31:10
  war against the united states and um and wouldn't try but it would rupture nato and rupture the european
• 31:16
  union and rupture us EU relationship so they are talk the this administration that you have to
• 31:21
  deal with trump as he is and not the fantasy version that some highly ideological people
• 31:27
  constructing their head the idea that donald trump would have a care for workers
• 31:31
  it i mean i know some people say that and not all of them are idiots but it's not true and
• 31:39
  there's no reason to believe it is true he has never cared for a working person in his life he
• 31:44
  well i mean they there might be two sort of parallel metrics by which you could judge whether he
• 31:49
  cares about working people you know you might you might sort of do the the the dodge that some
• 31:54
  Christian conservatives did when they held their nose and voted for a guy who obviously behaved in
• 31:59
  ways that they thought were completely immoral which is to say he may not give a shit about workers
• 32:03
  and he may be a little bit uh you know uh misogynistic and handsy and uncouth but his policies
• 32:10
  would be more pro-worker policies because his policies are tariffs and like the manufacturing
• 32:14
  tariffs would be a comeback and well then i say you know what again a lot of people admire tariffs
• 32:19
  and they're not all idiots but it really helps because because how much do you have to not understand
• 32:27
  about tariffs and trade to imagine that the typical person would be better off i mean nothing you
• 32:32
  can't you can't understand nothing about it um so what a tariff is is attacks on on an imported
• 32:40
  good some of those goods are consumer goods you know fruits and vegetables uh clothing but most
• 32:46
  them will be inputs into other industrial processes so when you start applying tariffs what you're
• 32:50
  doing is raising the cost of every of every good and service produced in the United States so you
• 32:55
  put a tariff on Mexican glass um that gets fabricated into an American window the windows more
• 33:02
  expensive because the tariff on Mexican glass because the windows more expensive the condo building
• 33:06
  is more expensive because the condo building is more expensive the condo is more expensive um every
• 33:10
  tariff is also simultaneously and of necessity and anyone who's ever looked at the subject
• 33:15
  understand this attacks on exports so not so as your imports become more expensive your exports become
• 33:21
  less valuable and that means that the people inside the US currency area are all poorer people
• 33:26
  just explain why your exports become less valuable well um it's sort of an accounting identity but
• 33:31
  what you're doing is uh as you are making it more difficult for foreigners to sell goods into the
• 33:38
  United States you're reducing the ability of foreigners to buy goods from the United States and in
• 33:42
  fact in exactly and literally a one-to-one ratio is that because of retaliatory tariffs that the
• 33:47
  other country imposes or it's an account of that it's an accounting thing so uh the Mexicans sell
• 33:52
  the glass to the United States they get a dollar oh I see what you're saying then your stuff is
• 33:57
  more expensive to yeah they use the dollar they have the fact that you were going to start a trade
• 34:02
  war and so every I mean it was very hard to deescalate tariffs in the 80s because everyone had to hold
• 34:08
  their noses and jump and sort of do it at the same time because no one wants to be the idiot who
• 34:11
  doesn't have tariffs when everybody else does but we managed to do it and so it seems full-hardy now to
• 34:17
  of course other people are gonna put on tariffs if you've got in the 1980s there are people still
• 34:22
  alive who remembered the last time somebody had tried to do Trump style economics and and how it
• 34:27
  turned the economic crisis of 1929 3031 into the Great Depression of 1932 33 and toppled democracy
• 34:35
  in Germany and started World War II and you know you're talking to me I'm sitting here in a
• 34:40
  house in Washington DC this house was owned by uh in a previous life by a man who was a very
• 34:46
  distinguished officer of the OSS the precursor to the CIA and who after that went on to be the chief
• 34:53
  writer for Cordell Hall who was the secretary of state in uh for Franklin Roosevelt and was the
• 34:58
  leading free trader in the Roosevelt administration helped to begin the process toward a post-war
• 35:03
  world of creating a freedom and the man who lived in this house ghost wrote Cordell Hall's memoirs
• 35:09
  those Americans understood what tariffs had done and not just to the prosperity of the world but
• 35:15
  to the peace of the world and they knew from dead friends from disrupted lives that if you want peace
• 35:26
  you must have trade and if you want trade and if you want and and growing trade and if you want
• 35:29
  accelerating peace and stability and security you must have growing trade so and the losers from trade
• 35:34
  protectionism are always the ordinary people and the Americans who experienced tariffs from the
• 35:40
  Civil War to the the Great Depression knew that firsthand and so uh so the idea that Trump
• 35:47
  is doing any I mean Trump it again and maybe as I say being an idiot here helps and it maybe
• 35:53
  that Trump just really doesn't understand and he's driven by xenophobia but there is no less
• 35:59
  pro-worker policy than tariffs well I mean let me let me give voice to I think the the
• 36:07
  Trumpest view which is there has been a hollowing out of the middle class there's been an
• 36:14
  upward funneling of cash from a hard done by people to the top end of town for decades and there's
• 36:21
  this there's this unholy alliance between a Davos class and K Street and Washington DC and lobbyists
• 36:29
  and everything and like their system is stitched up and Appalachia is hurting and look at the
• 36:35
  opioid crisis right look at manufacturing look at mining look at decent job you used to be able
• 36:40
  to have a home with like a single worker and they would be able to be middle class that dream has
• 36:45
  faded so excuse me if we all have to pay a little bit more for our flat screen TVs but the benefit
• 36:53
  that we get from having the condo be more expensive having the glass be more expensive is that
• 36:57
  that then gets is that we have a robust manufacturing base and people have jobs and yes everything
• 37:02
  they buy might be slightly more expensive although they also think that that could be partly
• 37:06
  offset by you know the foreign companies and countries being more efficient and swallowing some
• 37:11
  their profits in order to eat the tariff but even if we pay more it's sort of a collectivist
• 37:16
  communitarian way of you know holding our manufacturing base so the story goes and I hope it's true
• 37:23
  that during the filming of the first Star Wars George Lucas handed a page of script to Harrison
• 37:28
  Ford who read it over and said George you can type this shit but an actor can't say it
• 37:35
  so what you just said is a string of words all of the minglish that form a grammatically correct
• 37:41
  sense but at no point does that do any of those words have any connection to any actual thought
• 37:49
  like how how does any of this work so what we do is we say okay so we take the Mexican glass
• 37:54
  that is going to go into the window and we put a tariff on it and that does two things it allows
• 37:59
  the American glass manufacturer to raise his price and it means that the and if there it means
• 38:05
  that the consumers of the Mexican glass can't must buy less of it must pay more for it so when we
• 38:10
  now have more expensive glass now we have more expensive windows and everything else that glass goes
• 38:15
  into millions right but hang on let me just pause there we have more expensive glass which means that
• 38:19
  the glass company in Minnesota which was about to go out of business now may not go out of business
• 38:26
  because they can charge more for their glass the core mistake the fundamental core mistake that
• 38:32
  when advocates of tariff try to get fancy is they forget that every product is an input
• 38:39
  into somebody else's product so yeah so the sheet okay you can say okay well you just paint
• 38:44
  here's your sheet of glass it pays a little bit more you have this beautiful American made
• 38:47
  sheet of glass and it's a little bit more expensive but when they don't it's not what we have is a
• 38:52
  whole economy every piece of which is less dynamic less competitive more expensive than a Chinese
• 38:58
  contour because everything your everything your tariffing is an input into another product so when
• 39:03
  you raise the tariff on glass and on steel and on aluminum and on everything else you don't just
• 39:08
  make those things more expensive you make everything more expensive so what if so what if you would
• 39:15
  you have to you have your hand on having to do and we did this in the 19s it's not like this is like
• 39:20
  doing that on the back what we did this in the 19th century you make you put a tariff on wool
• 39:24
  now you need to put a tariff on the coats because the coats are more expensive now you discover
• 39:28
  that you have to have all kinds of anti other kinds of discriminator practice because the workers
• 39:33
  need to earn more to pay for the coats made out of the more expensive wool and so it goes so each
• 39:38
  tariff demands ever greater pressure from more tariffs because every input every product is an
• 39:44
  input into another product until eventually the whole economy is no longer competitive with the
• 39:49
  rest of the world and that is the story of Argentina so all the there's so many people say I love
• 39:53
  Trump and I love melee well melee is at the end of a once industrial country Argentina that spent
• 40:00
  50 years doing exactly what you recommend to Trump which is putting up saying you know Argentina will
• 40:04
  make its own glass and therefore its own windows and therefore its own cars made up cars because
• 40:08
  the everything will be out of competitive and pretty soon you are completely priced out of world
• 40:12
  markets and can't compete with anybody with anything and it's this is not theory it's been
• 40:17
  tried and tested this is the story of the world this is the story of America now one of the things
• 40:21
  that the Trump people say is I've heard Trump say this and and his brains trust or Robert
• 40:28
  Lighthizer who wrote a big book will say well we had very high tariffs in the 1890s and we got
• 40:32
  in dust more industrial then so if we had very high tariffs in the 2020s obviously despite
• 40:38
  the lapse of 130 years of history everything would be exactly the same but you know people have
• 40:43
  looked at this question and it is true that the United States had high tariffs in the 1890s and
• 40:47
  also it is true that it became more industrial but those are not cause and effect and the reason
• 40:54
  the United the two things that they forget is in the 1890s unlike today the United States was
• 40:59
  despite its tariffs on the rest of the world the largest free trade zone on the planet that is
• 41:03
  you had the most consumers subject to the same tariff in the United States so it was it was a bigger
• 41:07
  economic zone than anybody else had point one point two is tariffs mattered less because transportation
• 41:12
  costs are so high so even if you have free trade in class the United States would be still making
• 41:17
  much of its own class this class was heavy and bulky and it was difficult to and after you paid
• 41:21
  the transportation cost even in a free trade world you would report that much then the United States
• 41:26
  was for many other reasons tremendously expanding both its population by immigration and its
• 41:33
  discovery of natural resources through exploration and so it was enjoying what economists call
• 41:39
  extensive growth that is adding more not getting squeezing more value out of each factor of production
• 41:44
  but adding more and more factors of production to produce more wealth so you know if you have 100
• 41:49
  workers and they all do more that's one way to get rich in others to take the 100 workers add 10
• 41:54
  more and have nobody produce more but the 110 produce more than 100 and that's very much what
• 41:59
  was happening in the United States in the 1890s as you would add 10 more workers every year to your
• 42:03
  110 110 120 and even though productivity was growing less rapidly than it would grow in a free
• 42:08
  trade world because of the extensive growth you offset it especially because you're discovering
• 42:11
  new sources of iron ore and you're discovering new sources of petroleum you're adding all of these
• 42:16
  more resources more workers it doesn't matter that it's not as efficient as it might theoretically be
• 42:20
  but none of the sisters say that you should try all of this again and rerun the 1890s in the 2020s
• 42:27
  and see if it works this time what if you were to target the tariffs and I'm not even sure
• 42:32
  that this is something that Trump has floated but instead of putting tariffs on input materials
• 42:38
  like steel and wool and so on you say here are a handful here are three specific industries that
• 42:44
  have been decimated by globalization that we want to give a lifeline to let's say it's the
• 42:50
  car industry there are instances of countries South Korea for example which is now one of the best
• 42:55
  car producers in the world didn't start its car industry in an environment of free trade they
• 43:01
  protected that industry they were like we're going to do what Japan did and we're going to become
• 43:05
  better at making cars than even the Americans and Europeans are and they did that by closing off
• 43:09
  their car industry and allowing and forcing South Koreans to buy only South Korean cars for a
• 43:14
  while why is that wrong um let's it's wrong for a couple for a number of different reasons first
• 43:21
  three industries and only three Henry George who's a great writer and on trade of the 19th century
• 43:28
  had this very cynical but true observation that to introduce a tariff bill into a congress
• 43:32
  or parliament it's like throwing a banana into a cage of monkeys soon every one of them is
• 43:37
  screeching and yelling and demanding his own you can't introduce a tariff bill into Congress and say
• 43:41
  three and only three everybody else you have to compete with the world but our three favorite
• 43:45
  pets by the way all of whom gave lavishly we do that what about the chips act or any other
• 43:50
  form of you know subsidy or a subsidizing green energy thing like that the government does
• 43:55
  the exact time picks yes and then and you get metastasizing to the chips act and the great these
• 43:59
  are not success stories then what happens is you you at the same time so first everybody wants
• 44:07
  second um you brand of the problem that even a car is still an input into another product
• 44:14
  of American cars are made more expensive what happens to ride share services and the innovation
• 44:19
  that produced the ride share economy that cars are inputs to everything everything is an input
• 44:26
  into another product or another service and then the the last point is the cost to consumer welfare
• 44:33
  remains real yes South Korea did all the things you said and it did industrialize but the reason
• 44:38
  there's so much south migration of South Korean talent from South Korea into the United States
• 44:43
  and so little migration from the United States into South Korea is that people with some education
• 44:49
  who and who didn't own the companies that got the benefit of the tariffs discovered I'm a pretty
• 44:54
  good scientist and I can live better higher salary more uh spatial department in the United States
• 45:00
  and not because South Korea is so very crowded because it's not that crowded but because the presence
• 45:05
  of this protection system artificially depresses consumer welfare for every consumer I mean maybe
• 45:11
  but you know South Korea is one-seventh the size of the United States by population so there are
• 45:16
  lots of reasons why people come to the United States I moved to the United States and it's not
• 45:19
  because Australia had tariffs but these these effects consumer welfare is lower tariffs always
• 45:24
  lower they make you're purchasing power less they make the goods more expensive and they make
• 45:28
  your wages by less and look there are people who are so ideological committed to it okay but don't
• 45:36
  tell me okay don't tell me that I have a policy of um throwing open all the windows to my house
• 45:43
  and running the furnace maximally hot and and I'm doing this because of my commitment to environmental
• 45:48
  protection that if you're putting on tariffs you are not making workers better off they're all
• 45:52
  going to be poor their wages will count for less they'll be able to buy less they yes they may work
• 45:58
  harder um but uh yes they may do kinds of jobs that would otherwise be eliminated by
• 46:05
  content competition or automation but generally we regard it as progress when people earn higher living
• 46:11
  standards by working less not by earning higher lower living standards by earning more right but
• 46:16
  they're just not always the same person right I mean the person who's put out of the um a coal mining
• 46:21
  job or the factory job isn't necessarily the same person who ends up getting the higher paid job
• 46:27
  in some industry that America is excelling in thanks to free trade but then we need to say and this
• 46:33
  is um again the problem with this kind of semi intellectual movement that is that is Trump intellectual
• 46:39
  Trumpism um Trumpism starts with the answers and works backward uh works backward from there but
• 46:47
  they've decided the answer is tariffs and then they look for explanations and excuses so it is true
• 46:51
  it is true that one of the social problems we have in the United States is that at a given age
• 46:57
  regard the Americans are older than they used to be but at a given age an American is less likely
• 47:01
  to move from one state to another in pursuit of a job than even in the 1980s about half slightly
• 47:07
  why I could speculate I don't know and the people who study it more closely than I they don't know either
• 47:13
  so that's a reason why when when there's an import shock that comes to a town and closes an
• 47:17
  industry whereas once upon a time those people would have gotten in their um dodges and driven to
• 47:23
  another town of a pursuit of job they don't seem to do that anymore it's a good question why not
• 47:27
  again I don't have a ready answer but that's your problem if you are serious that's your problem
• 47:33
  but if you start with the answer which is Trump has but has thus spaked Trump he said tariffs
• 47:38
  therefore I say tariffs therefore I am looking to back form a whole case for tariffs and I will use
• 47:43
  any argument that comes to hand and I don't worry too much like doesn't make sense who doesn't come
• 47:47
  true and that's how one of the things that has happened on the center right is Trump is such an
• 47:51
  enormous corruptor of intellectual life on the center right because it used to be when I was a
• 47:58
  lad the kind of person was attracted to conservative intellectual life what someone said
• 48:05
  you know I'm kind of a less polite person than some others I'm very interested in what is true
• 48:11
  I'm a little less interested in hurting other people's feelings and maybe maybe I'd be a better
• 48:15
  person if it were the other way around maybe it's more admirable to do the person soft pedals what
• 48:19
  but I'm really interested in what is true and I don't care where the chips fall and I'm describing
• 48:25
  myself a little bit and again I don't look back on this entirely with pride it's is not
• 48:28
  and it's always an amiable or a crack I'm still in the prideful phase of that mindset David so
• 48:33
  I wait my most for it okay but maybe you know but what has happened now and you see this at all
• 48:43
  the Washington thing thanks is actually the rewards if the people are connected to the center of the
• 48:48
  people want glib formulas and who are worried about what their peers think and are scared to say
• 48:53
  the wrong thing and and I know that there are certain positions supposed to take around them are
• 49:00
  the hereby dragons territory where you can't you know if you you can't read too smart a book you
• 49:07
  can't think too hard you can't learn to visit because you'll realize that much of what we're saying
• 49:10
  is not true and especially the terrorists and the terrorist question this is not a close question
• 49:16
  this is not some of us we're not here at the outer edge of advanced physics theory we are dealing
• 49:22
  with like the most basic proposition and economic I mean everybody study this as you're full of shit
• 49:27
  you're giving me like a constriction in my chest just because it feels like it's such a an
• 49:34
  example of a whole way of thinking about almost everything that infuses so much in the way that
• 49:39
  we're talking to each other not just in Trump stand but in culture more broadly that we've got
• 49:45
  our sides we've picked our lane we don't want to hear what we don't want to hear you know whether
• 49:51
  it's terrorists or whether it's vaccines or whatever it's you know what you don't have to when
• 49:56
  you say we do that some what are they going to do arrest you it's still a free country I mean I
• 50:02
  remember the one of Elon Musk you know I'm not saying that I can't say it I'm just saying that
• 50:06
  there is yeah that many many people find themselves unwittingly inside a an echo chain but where
• 50:12
  that's a choice back before Elon Musk saved America by destroying Twitter people would get upset
• 50:20
  because they would say something and they would then make a mistake of taking something that needed
• 50:24
  to be said in longer form and compressing it into a few words and putting on Twitter and then all
• 50:28
  kinds of people would yell at them and they would morally collapse I went through many I've been
• 50:35
  through a few of those Twitter storms before Elon Musk destroyed Twitter and I held people's
• 50:41
  hand starts what is happening here it's just you're sitting in your comfortable
• 50:47
  library with a hot fire on a winter day and there's howling winds outside and you feel them because
• 50:53
  the windows open you know what you should do close the window and it all goes away all they're doing
• 50:58
  is yelling on the social media platform and no one will remember it even 11 seconds later just
• 51:04
  don't be so scared I mean that's true today but it wasn't true then because people got fired
• 51:09
  for after social media pylons you know what people lost friends I've been fired I've lost
• 51:16
  friends it's not fun but you know you know it's worse being a worm yeah yeah it's true I want to
• 51:26
  get to international politics into NATO and global stability and everything but before we leave
• 51:30
  workers the subject of workers immigration is something we need to touch so there's been this
• 51:34
  whole brujaha for the past few months which vatua and I went into some detail on on the last
• 51:39
  episode about you know skilled migration visas the whole h1b snafu between Elon and tech on one
• 51:45
  side and Trump stand and marga on the other I my understanding of Trump's appeal on immigration
• 51:53
  was that his core pledge was to stop illegal immigration to build a wall to deport people who are
• 52:00
  living in the United States illegally especially violent ones that's what I understood the core of
• 52:05
  his message to be but I hear when I listen to the anti h1b make America great again like isolationist
• 52:15
  I suppose don't call them xenophobic necessarily but you know anti-immigrationist wing of Trump
• 52:20
  stand they seem much more focused actually on reducing legal immigration which I didn't understand
• 52:27
  to be a core part of the Trump pitch but I feel like maybe his supporters view it as such
• 52:33
  yeah where you know where do you stand on this and what would the impact they well I agree with
• 52:39
  you I think the reason this issue has become so important in so many developed countries
• 52:43
  is because the basically because it's so much cheaper to travel than it used to be
• 52:48
  and because we have seen the growth of transnational criminal networks that for an investment of
• 52:53
  five thousand ten thousand twenty thousand maybe thirty thousand dollars we'll get
• 53:00
  a person with a little bit of property in afrogerasia transport them to a country where they can
• 53:05
  earn more and get back the investment and use the asylum system so we're having this huge
• 53:10
  influx of tens of millions of people from the less developed world to the more developed world
• 53:15
  and each and every one of those people is enterprising and ambitious and striving and any one
• 53:19
  of them would probably be a benefit to the country that receives them but as with any kind of
• 53:24
  human movement something that is you know you put one car on the freeway it's a delight you put
• 53:29
  five it's it works you put a million and the highway stops moving so you can't have a million
• 53:34
  cars on the highway in the same way you need some restraint on the number of people moving from
• 53:37
  country to country and when you and because so many of these people are brought here by transnational
• 53:43
  criminal enterprises many of them are just paying the enterprises but a disproportionate number
• 53:47
  of them turn out to be criminals themselves including the people the people operating the
• 53:52
  transnational can criminal enterprises are certainly criminals themselves and they end up
• 53:56
  their people you know the gang or the cartel has people on every stage of the journey including
• 54:01
  the receiving stage in the United States or Australia or wherever it is and those people are real
• 54:05
  criminals and often violent criminals and they commit all kinds of crimes so there's a real problem
• 54:09
  and uh and indianized states Biden because of an excessive desire to reverse every single
• 54:17
  thing that Trump did and because uh well for complex ideological reasons with the democratic
• 54:23
  party reverse some of the progress that had been made during the Trump year of storage restraining
• 54:27
  these looks we got a huge influx of millions of people um and it's been very disturbing and
• 54:33
  Americans want it stopped recently and they want the most dangerous people said home recently
• 54:37
  and they certainly want people who have literally a judicial order saying you have exhausted every
• 54:43
  appeal you must leave the country last Tuesday last Tuesday being in 2019 and that piece of paper
• 54:49
  let's say that guy who was ordered to leave the country last Tuesday in 2019 and is still here in
• 54:54
  2025 we want him gone to um so that's a that's a real thing um and Trump could do um
• 55:03
  himself a lot of good if he said you know what we've got some hundreds of thousands of people who
• 55:06
  have valid deportation orders against them who should have been left the country in 2019 or 2018
• 55:13
  they've exhausted every appeal out i'm rounding them up what's your argument against not deporting
• 55:17
  somebody whom a court of law has said should be deported and also all the people with criminal
• 55:21
  records who come up who have been sentenced to commit serve their time for their crime if sentence
• 55:27
  is over we don't release them on the street we send them back so that's that seems to me all
• 55:32
  reasonable invalid um but there are we are going through this kind of emotional crisis in America
• 55:40
  and again people haven't thought this through what does um if you are doing both the tariffs
• 55:47
  which make every good and service more expensive and you're also shrinking your labor force at the same
• 55:51
  time you take you take those two your boys take those two cars smash them head to head against each
• 55:58
  other what happens big bang but not successful traffic so that Trump i mean in some ways i'm
• 56:07
  slightly heartened by your pessimism about his economic competence because it means that within
• 56:12
  the next 12 months the shit's going to hit the fan and he's going to be scrambling to figure out
• 56:16
  what to do about it and he's not going to like i mean the shit's going to hit the fan in a way
• 56:20
  that he doesn't like not in the way that he'd like the bond market afforded bond futures are
• 56:26
  already telling us that interest rates will be higher in the second half of 2025 and they are going
• 56:30
  to be in the art today um and uh uh the mortgage market which peaked in 2023 at about eight percent
• 56:38
  softened a little bit to about seven percent in 2024 it looks like it's rising again
• 56:42
  wait what is that percentage that you're talking about uh the mortgage rate if you want to borrow
• 56:46
  money the interest rate i say to my home the home line right yeah gotta um so i said at the beginning
• 56:53
  i think that people trump inherited until he was hit with the first crisis of his presidency the
• 57:00
  pandemic which he completely bungled trump had a very smooth sailing for his first three years and
• 57:04
  the basic story of the trump administration is this uh the first trump we have this terrible
• 57:10
  recession in 2008 2009 we have a slow recovery from that recession and as late as 2014
• 57:18
  americans are still not back where they need to be but the federal reserve begins to get scared
• 57:24
  in 2014 that the economy is growing too fast and they overcorrect and they tighten interest rates
• 57:30
  in 2014 and we get a slowdown of economic activity in 2015 and 2016 uh that's what defeat
• 57:35
  Hillary Clinton at election Donald Trump then the federal reserve realizes you know what we over
• 57:39
  corrected uh the economy we we have more and we and they open the taps and we got strong growth
• 57:46
  in 2017 2018 in 2019 and a popular presidency and easy times for trump and no real tough decisions
• 57:51
  to make and a lot of the people see him well if that's what if he inherited that good luck the first
• 57:56
  time he won't inherit not only good luck but the same good luck the second time but it's not
• 58:01
  going to be the same in 2019 he is going to be hit internally in 2025 he's heading into a more
• 58:06
  restrictive environment and his policies trade tariffs which i completely reject an immigration
• 58:12
  control which i support to when it's rational and not racist and punitive um those are both
• 58:18
  going to be deflationary he's got higher interest rates on his hands he it's going to be bumpy
• 58:23
  to give him credit the first time i mean he also injected stimulus into the economy through massive
• 58:27
  tax cuts what if he just tries to offset the the delusurious effects of tariffs and immigration reform
• 58:33
  by giving a massive tax cut to everybody well growing a ton of money from China great question
• 58:38
  great question it's that's tougher to do this time because this time remember his tax cuts in
• 58:43
  2017 are going to be expiring at the 2020 at the end of 2025 so he's going to they want to start
• 58:48
  right they'll be renewed well okay but suppose they are renewed that's not an additional tax cut
• 58:54
  that's just keeping like in 2017 it's a new tax cut i see i see yeah so you'd have to get it
• 58:59
  through but republican i mean republican would oppose the gigantic tax cut would they well there's
• 59:05
  a problem which is um this the the normal rule it's a stupid rule what is the rule is that to take
• 59:11
  anything through the US Senate takes 60 votes not 50 because of the filibuster the filibuster
• 59:17
  there's an exception which is if it's a fiscal measure and if it does not increase the deficit
• 59:22
  over a 10-year period this is a relative saliation right and if it doesn't touch social security
• 59:26
  then you can pass with 50 he also has a one-boat margin that the House of Representatives so he has to
• 59:32
  any measure has to pass he's got a one-boat margin of the House and he has to make a revenue neutral
• 59:38
  and he has to keep in place the tax cut that is expiring from 2017 so the idea that he's got
• 59:44
  room a lot of room for additional stimulus beyond the stimulus the economy is already enjoying
• 59:49
  and David who decides whether it's revenue neutral why can't he just jot on the back of a napkin
• 59:54
  oh there's going to be AI is going to give huge dividends and it's all going to be fine
• 59:58
  the Congressional Budget Office decides you're right he could do that but but that's its own
• 1:00:02
  uproar and he's got a one-boat margin in the House and and with all the right now that may change
• 1:00:11
  is there there's some empty seats they may hold his margin may grow ultimately to be a three-boat
• 1:00:15
  margin but it's a very narrowhouse right and as I say we're not talking about he needs not just
• 1:00:21
  the same stimulus that's in that is there from 2017 I say lapses at the end of 2025 which he
• 1:00:26
  wants to renew to get to offset the other things he wants to do he will need additional stimulus
• 1:00:31
  and he has to make a lot of money. So Elon and Vivek are going to have to do a really good job
• 1:00:35
  of finding some extra money to pay for these tax cuts or he has to overrule the Congressional
• 1:00:39
  Budget Office and say you know what I decree that it's revenue neutral but that's another fight.
• 1:00:44
  So just before we put before we leave the subject of immigration it does amaze me that like
• 1:00:50
  there is not more support and maybe you can shine some light on this for a system in which
• 1:00:58
  there is more verification of employment in the United States to discourage the inward flow like
• 1:01:04
  when I got to the States and realized that my Social Security card was a piece of cardboard
• 1:01:09
  with some numbers stamped on it and that and when my immigration attorney told me that I
• 1:01:16
  could do work and could pay tax on that and could report my income to the IRS without that being
• 1:01:23
  reported to immigration that was extraordinary I mean if I get a job that was in 2006.
• 1:01:33
  Yes okay that's a very crucial one. Is that changed? Yes so one of the reasons we have the kind
• 1:01:39
  of immigration crisis we have now is that after about 2008 the United States did get much better
• 1:01:45
  at cracking down on exactly the kind of abuse that you're invited to commit.
• 1:01:49
  Which I didn't by the way I ended up paying the immigration attorney thousands and thousands
• 1:01:53
  and thousands of dollars to get me an I-1 visa instead. Very good good for you but
• 1:01:58
  but and the result of that was we saw a reduction in illegal immigration of the traditional type
• 1:02:07
  so we used to have a crisis which was mostly young mostly young mostly mad mostly from Mexico
• 1:02:14
  walking across the border trying to evade the authorities in order to work illegally off the
• 1:02:19
  books using a fake Social Security number and taking money sending money home to their families
• 1:02:25
  who were made in Mexico or maybe Central America. We have become more and more effective at cracking
• 1:02:31
  down on that kind of abuse and so we have less and less of illegal immigration classic and we have
• 1:02:36
  a new kind of problem which is asylum abuse. The people across the border now come as families
• 1:02:42
  and they don't try to elude contact with the authorities they turn themselves in I see I see
• 1:02:46
  see here I am I'm seeking asylum and that means I am not illegal I I have signed up for and this
• 1:02:53
  has happened in Australia too. Now I get a number in the queue and I'm looking forward to my
• 1:02:59
  asylum hearing sometime in the 2040s and pending one so in fact a wall would not even fix that
• 1:03:06
  because they would just come to the gate and they'd say I'm declaring asylum yeah well the wall
• 1:03:10
  would help because what you can do is say you know what the gate is locked and although our law
• 1:03:15
  requires us to let you into the gate in fact we have a deal with the Mexicans where you get
• 1:03:21
  questioned on the Mexican side of the border and then you stay in Mexico this is how Trump dealt
• 1:03:25
  there was an immigration crisis in the early part of the Trump presidency and he developed this
• 1:03:28
  remain in Mexico policy that said you're hearing until you get your hero you stay in Mexico you don't
• 1:03:33
  can't work in and this is basically what Australia does you're not going to set foot on Australian
• 1:03:37
  soil coming here by boat like you're going to be processed offshore no that's and that's the correct
• 1:03:41
  answer and Biden reversed that and destroyed his presidency and it was a foolish thing of him to do
• 1:03:48
  and Trump could go back to returning to Mexico remain in Mexico but remain in Mexico requires
• 1:03:53
  cooperation with Mexico and remember Trump's policy is tariffs on Mexico and shooting rockets into
• 1:03:59
  Mexican territory right right all right let's talk about that in Greenland and NATO and everything I
• 1:04:06
  mean the biggest thing that I'm afraid of over the next not just Trump presidency but quarter
• 1:04:13
  century or I expose this century is that the painstakingly put together coalition of peace
• 1:04:23
  that we established after World War II is going to break down and that we'll return to the
• 1:04:28
  civilizational human norm of countries randomly invading each other and even if you're not one of
• 1:04:34
  the countries that gets invaded that means you're going to have to spend tremendous amounts of
• 1:04:38
  wealth and energy and ingenuity on your military and on figuring out ways not to get invaded and
• 1:04:43
  on making complicated bilateral or multilateral arrangements instead of just relying on the
• 1:04:49
  linchpin of American power plus NATO plus mutually assured destruction or whatever it however
• 1:04:55
  you want to conceive of it the UN Security Council how much damage can he do a lot has been done
• 1:05:02
  already and that's this Greenland business I mean it seems farcical and there's of course a
• 1:05:08
  core of a real problem there which is you know Greenland does control the access from northern
• 1:05:15
  Russian waters into the North Atlantic so since World War II there have been American naval
• 1:05:22
  bases and British naval presence as well and the Royal Navy used to police the area that waters
• 1:05:29
  Greenland in a way that it doesn't do anymore that there's some real problems there and there is
• 1:05:34
  this NATO got smug and lazy and complacent and under invested and and the waters around Greenland
• 1:05:40
  are one of the places where you see the consequences of the NATO under-adversement but as you say
• 1:05:45
  well why do you see them because the British have so many fewer ships and they did in the 19
• 1:05:50
  coast because well that what happens if you're worried that a hostile power Russia or China may try
• 1:05:58
  to sidel warships pass Greenland into the North Atlantic from the the Russian
• 1:06:05
  Russia's northern waters mermaids can places like that you want the British Navy they're
• 1:06:09
  put trawling it or else the Americans I mean to do what there are thousands and thousands and
• 1:06:12
  thousands of miles of frigid Canadian coastline that they have to pass by before they get to the
• 1:06:16
  United States just to know where they are so to know so you as you want what you want to know is
• 1:06:22
  if there's a conflict that we have identified where every Russian or Chinese warship is and it
• 1:06:25
  can be neutralized in the first minutes of the conflict I see I see but yeah you can't do anything
• 1:06:30
  to them in peacetime they these are international waters of course they can flow but it's important
• 1:06:34
  to know where they are so that if there's if they're on their way to do something bad they can
• 1:06:38
  be neutralized quickly okay so there's a problem here but the answer to every problem is you so
• 1:06:44
  eloquently said just now since 1945 since 1941 has been collective action and we've had this
• 1:06:51
  tremendous success of the two most dangerous enemies the Democratic world ever faced Japan and
• 1:06:56
  Germany have now been recruited into two of the most potent allies the Democratic world has
• 1:07:00
  and we're all stronger for their cooperation we wish they would do more but they do something
• 1:07:05
  and it's better to have them with us than against us and and so that core alliance of the
• 1:07:11
  English-speaking countries has been reinforced and fortified and lots of small democracies like
• 1:07:14
  Denmark play their part and this is a tremendous achievement led by the United States but not by
• 1:07:20
  Americans only Australians and Canadians played an important part in building all of these institutions
• 1:07:25
  and Trump really does not respect them fears them and is intuitively instinctively hostile to
• 1:07:32
  democratic allies what do you think's going on there at bottom if you're a normal democratic politician
• 1:07:46
  prime minister or president you wander into the poorest town in your country and go to the
• 1:07:53
  meanest street and meet the person with the worst job and that person is your boss he votes for you
• 1:08:02
  you work for him and however high and mighty you are when you're with the great
• 1:08:07
  shielding the United States you are in the end a public employee and and you work the the lowest
• 1:08:12
  person in your country is your boss and I think Donald Trump hates that thought hates it with every
• 1:08:17
  fiber of his being what he admires are the reason the reason that that with Putin and with
• 1:08:23
  Xi and with the dictators of other countries Venezuela she seems to have the string generation for
• 1:08:28
  they are the masters there's no what the the people obey them the people owe them gratitude
• 1:08:34
  my mount trump would always talk about how people should be nicer to him and give him gratitude
• 1:08:40
  and it was a story in Bill Clinton's memoirs and Clinton was governor bark and saw
• 1:08:44
  he was the term was only two years so he's up for reelection all the time and he tells the story
• 1:08:50
  in his book about being at a county fair and there's a local person we know so he's always been a
• 1:08:55
  supporter and he asked him Jim Bob can I count on your support in the next election and Jim Bob says
• 1:09:02
  well I'm thinking about it governor thinking about it real hard and Clinton says what I've done this
• 1:09:07
  I've done this I've done this and Jim Bob in your town on your street in your high school I did
• 1:09:12
  this this and this what do you mean you're thinking about it and Jim Bob replies well got paid
• 1:09:16
  every two weeks didn't you meaning I don't owe you for the new high school that's my money
• 1:09:24
  that paid for the high school you thank you for doing it I guess but I don't owe you gratitude you
• 1:09:28
  worked for me and if you did a good job I will think about reelection you worked for me so Trump
• 1:09:34
  think doesn't accept that and he and he thinks it would be much better to be someone like Putin
• 1:09:38
  who doesn't have to be nice to Jim Bob you know he would say to Jim Bob I gave you this
• 1:09:43
  you owe me thanks I think there's a isn't there a scene in might be madman where one of the female
• 1:09:49
  characters says to her boss I just wish I had more respect around here and he says that's why we pay
• 1:09:54
  you money you know what do you want yeah I completely agree yeah that that definitely makes
• 1:10:04
  sense I mean when you think about gee when you were talking about the the person in the poorest
• 1:10:10
  town it made me think of the contrast between Trump and Carter yeah Jimmy Carter continued doing
• 1:10:16
  Sunday school lessons and he was in his 90s giving Sunday school lessons for free to you know
• 1:10:22
  young people imagine Trump giving you know doing charitable service each week to talk to the
• 1:10:30
  spiritual values of you know a younger generation it's yes it's an onion headline at that point
• 1:10:38
  you know Trump trying to teach young people about what's really important pussy and money
• 1:10:44
  so yeah all right final thoughts I guess what's best case worst case actually before we get
• 1:10:52
  to best case worst case scenario you were talking about the beginning about this weird tingling
• 1:10:58
  that people get when Trump touches their mean side when he gives them permission to
• 1:11:10
  love things that they would otherwise regard as being beneath them that he speaks to our worst
• 1:11:15
  interests and I must say I felt like I feel a bit of that I feel like this inauguration there's
• 1:11:27
  95% me with my face in my palm going I can't believe this maniac is coming back into power
• 1:11:36
  and 5% of me is like I mean what if your only metric was what makes America great and if you had
• 1:11:46
  to threaten to invade Denmark to get Greenland you just fucking did it what if you were so unhinged
• 1:11:52
  you just said fuck it all to every single norm and you are like we are the greatest country in
• 1:11:57
  the world and everyone can go fuck themselves for the next four years we're gonna do whatever the
• 1:12:03
  we want yeah like there is do you feel any of the frisson or am I just 5% evil no no you you
• 1:12:12
  I feel it in the sense that I'm aware of it um I think I probably is somewhat more religious
• 1:12:19
  person than you are and as an atheist that would be a fair statement yeah okay um I remember when
• 1:12:26
  Trump gave just before the COVID-19 pandemic he gave a fourth of July speech on the
• 1:12:31
  mall in Washington when the speech was all about the military greatness of the United States and we
• 1:12:35
  conquered this and we did that and we settled the West and there's nothing about the constitution
• 1:12:41
  there's nothing but democracy there's nothing but the ideals I found myself remembering this
• 1:12:46
  poem by Roger Kipling called Recessional where he talks uh uh uh this is where the phrase that's
• 1:12:54
  gotten Kipling into a lot of trouble he then breeds without the law and people hear that quote and
• 1:12:58
  think he's talking about poor people or Africans he's talking about the Germans because he said
• 1:13:04
  he then breed without the law of people who boast and brag and who put their trust in canon
• 1:13:10
  and gun and not in the word of God and uh that is that that boastful I have to say just
• 1:13:19
  I have this that when you are talking like that you're not that greatness you're Aussie
• 1:13:25
  Mandius you're just a whole heart because the the real greatness of America has been when it has
• 1:13:31
  aligned its enormous power for good um and that power has often been used for ill and for through
• 1:13:37
  the um first 70 years of this country American military power was often used to capture
• 1:13:42
  recapture slaves or to protect slaving ships on on the high seas American power has often been
• 1:13:47
  used for ill and other times in history too but um the justification for that power yes it's exciting
• 1:13:53
  that you can do anything but there's this moral impulse it says the justification for power
• 1:14:02
  is how it's used and isn't used in service and that that boastfulness and that it's blasphemous
• 1:14:07
  it's it's frustrating to me it's blasphemous um and uh so I hear it I hear
• 1:14:16
  something Luciferian in that way of talking um and that and that boasts precedes the fall
• 1:14:24
  yeah it's also so short-sighted because it assumes that you're going to be the one with the power
• 1:14:34
  forever you know also assumes you don't need friends why is the you know
• 1:14:41
  in international relations theory they'll contradict the story of the the western world has been
• 1:14:45
  of one great power rising to dominance after the other the Hobbesburgs, Louis the 14th, the
• 1:14:50
  Kaiser's Germany and each of them is eventually brought down because they so frightened everybody else
• 1:14:54
  they conjure against them coalitions of neighbors each of them smaller than the great power but
• 1:14:59
  cumulatively greater than the great power together the the the the coalition against the great power
• 1:15:03
  destroys the great power right well the United States has been the strongest power in the world since
• 1:15:09
  probably 1918 uh and it's never encountered that because it what it's given everybody a better deal
• 1:15:16
  which is actually you know um you want to work with us because we'll make uh we actually will
• 1:15:22
  not constantly be asserting our most narrow and immediate selfish interests um we define our
• 1:15:27
  interests as what's good for you is also good for us and when you feel secure we feel more secure
• 1:15:32
  and so there's never been that anti-American coalition that was formed against the Hobbesburgs
• 1:15:35
  against Louis the 14th against the Kaiser's Germany um because the conscious you know what
• 1:15:41
  cheap military protection and access to a collectively protected global common market that's a sweet
• 1:15:50
  deal yeah sweet deal um okay uh we're not gonna combine against you we're going to combine with you
• 1:15:55
  and that is an exception to everything that international relations theory would tell you should
• 1:15:59
  happen so it's not just being a nice person it's also defeating the logic of great power politics
• 1:16:07
  because the United States has just found is you're more secure with friends and allies especially
• 1:16:11
  with highly capable friends and allies than you are as a lone dominating empire that's really
• 1:16:17
  interesting I had never really thought about the fact that yeah I mean the European Union has more
• 1:16:21
  people than the United States and it has more money than the United States it may not have quite
• 1:16:24
  as many bombs as the United States but it wouldn't take very long to make them and if you you know
• 1:16:28
  if the rest of NATO sends USA plus Australia and Japan and a whole and a coalition of other countries
• 1:16:36
  were in a war with the United States you couldn't guarantee that the US would win it and that's
• 1:16:41
  without looking at Russia or China or any other great power that we might align ourselves with and
• 1:16:48
  yeah but when we're all on the same side it's a force maximizer yeah um meanwhile the the alternative
• 1:16:53
  power sources China's the leading one China surrounded by enemies you know go around go around
• 1:17:00
  the clock Korea Japan Vietnam the Philippines India and potentially even Russia though right now
• 1:17:09
  they're in alignment that China China cannot fight a war against any of its neighbors without
• 1:17:15
  worrying that the other neighbors will take advantage of that to harm China in some way um whereas
• 1:17:20
  the United States is surrounded by water and friends and or used to be and reinforced by friends
• 1:17:26
  and that those networks of friendship they are powerful powerful resources and the way you get
• 1:17:30
  the networks of friendship is by doing unto others as you would have others do unto you
• 1:17:38
  what's the worst case scenario in the best case scenario for the next four years um
• 1:17:45
  they're the worst they're worst case but best block swan scenarios are really unlikely events
• 1:17:50
  but if we're doing sort of a conservative case the worst case scenario is interest rates rise
• 1:17:55
  in the second half of 25 keep rising in 2026 trump does the tariffs does a very uh
• 1:18:01
  thoughtless uh immigration crackdown we plunge into a recession uh in 2026 that's hard to get out of
• 1:18:09
  and darker case worst case scenario is he gets us into a shooting war in Mexico because he starts
• 1:18:13
  firing missiles into Mexico and the cartels start retaliating in American cities and we're now
• 1:18:17
  into a kind of continental counterinsurgency that we don't have any way to win or solve
• 1:18:22
  and when you say the cartels um counter presumably they don't have um the uh equipment to be
• 1:18:29
  able to do so from Mexico you're talking about a civil you're talking about civil actions in
• 1:18:33
  the car cartels are the cartels are present in the United States and yeah and they have green cards
• 1:18:39
  and um yeah so it wouldn't be much hard these criminal cartels try to do their best to avoid contact
• 1:18:45
  with American power the last thing they want is to get the United States involved in Mexico
• 1:18:49
  and they go out of their way to avoid and anytime the United States gets mad at them they back off
• 1:18:53
  there's an incident a couple years ago where four Americans were uh interest were seized by the
• 1:18:59
  cartels on the Mexican side of the border uh forget which border town uh the cartels thought they
• 1:19:04
  were Haitians was their black Americans they thought their Haitians could come in to do some
• 1:19:08
  freelance narco trafficking they murdered two of them tortured the two others and only after
• 1:19:13
  the two people were killed did they realize he was a American passport holders at which point
• 1:19:17
  they released the surviving two and are turned the six people who supposedly did the kidnapping
• 1:19:23
  turn themselves theatrically turn themselves into the Mexican authorities and said we did this
• 1:19:27
  we will accept whatever punishment of course there was no punishment um but uh an elaborate
• 1:19:33
  demonstration we do not want to tangle with the United States but if the United States consists
• 1:19:38
  on tangling with them uh they have a lot of ways of striking back like what like letting off
• 1:19:45
  carn bombs in San Antonio and San Diego and um like doing inside the United States with they now do
• 1:19:51
  inside Mexico shooting judges okay is that the end of your worst case uh sorry because that's
• 1:19:58
  pretty fun no I can I can go into even worse case NATO collapses the Russians take over Ukraine
• 1:20:05
  Israel is emboldened into an all-out war with Iran uh that it turns into a major missile
• 1:20:11
  exchange in the Middle East a lot of bad things can happen but the things I most worry about
• 1:20:16
  I'd say are um a real crisis in the American economy caused by tariffs and immigration
• 1:20:22
  restriction at the same time as we're having um uh interest rates rising for reasons
• 1:20:28
  independent of all of those and real conflict inside Mexico best case scenario okay we're talking
• 1:20:34
  in four years time you know there's been a Democrat elected uh and uh we're like you know what
• 1:20:42
  okay yeah the best case scenario is that uh the shock of losing to Trump in 2024 chases the
• 1:20:49
  Democrats and and makes them say you know what criminals really do belong in prison uh drugs
• 1:20:55
  really are bad borders do have to be protected you know what and if somebody makes an unfortunate
• 1:21:01
  joke you can just not laugh what happens to your party though David well I left the Republican
• 1:21:10
  party after many many years after the reelection of Donald Trump because I realized you know what
• 1:21:15
  it's not going to get better in my lifetime that what I stuck around as unhappy as I was because
• 1:21:20
  you know what as you said you mentioned the Iraq war I mean I was part of the things that went
• 1:21:24
  wrong and it's my duty and my obligation and my honor to do whatever little bit I could to put
• 1:21:31
  party back on the McCain Romney path after Trump but it's not going to happen in my active lifetime
• 1:21:36
  I can see that so there's no point sticking around um I'm certainly not a liberal or a Democrat um
• 1:21:44
  I I remain what I always was a free trader believer in collective security a believer in the
• 1:21:48
  goodness and worth of the American experiment a believer in uh the western civilization is bigger
• 1:21:53
  and better than any of its detractors are willing to admit um someone who thinks that we should
• 1:21:58
  look at the enlightenment and um liberalism without guilt or shame even though we acknowledge
• 1:22:02
  that bad things were done because of and in the name of those ideas um and
• 1:22:09
  I don't worry too much about where is there a home that my head is enough home
• 1:22:14
  David from happy inauguration day thank you that was great
• 1:22:27
  you