EU vs. Trump: Mark Blyth Breaks Down the Political & Economic Storm Ahead

00:44:54
https://www.youtube.com/watch?v=OKcO2vjPWsE

Summary

TLDRThis podcast episode features a discussion on the implications of Trump's presidency for the European Union (EU), focusing on potential disruptions from Trump's 'America First' policies. Experts highlight the uncertainty surrounding trade policies, the EU's vulnerability to tariffs, and the necessity for strategic planning. They analyze the rise of populism within Europe and the historical context of political and economic management. The conversation emphasizes the importance of a united EU front, climate policy considerations, and the need for a proactive response to maintain economic stability in this evolving landscape.

Takeaways

  • 🇺🇸 Trump's 'America First' agenda may significantly disrupt EU trade policies.
  • 📉 Tariffs could lead to inflation and impact EU's export-oriented economies.
  • 🤝 The EU needs to strategize and unify to tackle potential U.S. policy changes.
  • 🌍 Climate policies could influence global trade dynamics and economic strategies.
  • 💥 Populism's rise poses challenges to traditional political structures in Europe.
  • 📊 Contingency planning is crucial for the EU to adapt to uncertainty.
  • 🌐 Europe's relationship with China requires careful navigation amidst tensions.
  • 💡 Long-term trends may push Europe to re-evaluate consumption and production practices.
  • 🔄 A shift towards local production may mitigate dependency on U.S. imports.
  • 🏗️ Increasing investment in key sectors is essential for EU's economic resilience.

Timeline

  • 00:00:00 - 00:05:00

    The Social Europe podcast aims to bolster democracy by debating urgent political, economic, and social issues. In this episode, host Mark BL discusses the significant global ramifications of the incoming Trump presidency, particularly focusing on its impacts on the EU.

  • 00:05:00 - 00:10:00

    The conversation highlights the surprises surrounding Trump's 'America First' agenda, predicting potential trade disruptions for the EU. The guest notes the need for the EU to prepare contingency plans against such risk, noting how 2016 was a precursor of the new political normal in Europe.

  • 00:10:00 - 00:15:00

    The discussion surrounds Trump's approach towards NATO, trade, and the unpredictable nature of his presidency. There's uncertainty about policies on tariffs and emergency declarations, emphasizing that the EU needs to be equipped for various scenarios and not underestimate the disruptive political forces that are emerging.

  • 00:15:00 - 00:20:00

    Further evaluating Trump's policies, the conversation delves into the economic rationale behind mass deportations and high tariffs as tools to restore American industry. The guest outlines the problematic implications for workers and the eventual push towards a worrisome economic model driven by tariffs and immigration restrictions.

  • 00:20:00 - 00:25:00

    The implications of Trump's policies are discussed, notably how they could lead to inflation and a complicated economic rebalance in the EU. The guest also considers how these high tariffs would affect European exports, especially in the context of an already struggling German automotive industry.

  • 00:25:00 - 00:30:00

    The guest contemplates the potential fallout within Trump's coalition, analyzing how differing interests between tech billionaires and the MAGA movement could lead to fractures. The conversation touches on the consequences for US political dynamics and how they would resonate internationally, including European politics.

  • 00:30:00 - 00:35:00

    As the EU navigates uncertainties brought on by the Trump presidency, there are calls for greater unity and a more proactive approach. The guest advises on enhancing the EU's budget and formulating strategies to manage trade relations amidst increasing tensions with the US.

  • 00:35:00 - 00:44:54

    In closing, the discussion highlights the long-term implications of current geopolitical trends, emphasizing the need for Europe to adapt by focusing on internal strength while balancing relationships with both the US and China. Ultimately, the need for reform in public administration is noted as essential to address these challenges effectively.

Show more

Mind Map

Video Q&A

  • What is the 'America First' agenda?

    The 'America First' agenda refers to Trump’s policy approach prioritizing American interests in trade, immigration, and foreign relations.

  • How might Trump's presidency affect the EU?

    Trump's policies may disrupt EU trade relations, impose tariffs, and affect political stability, compelling the EU to rethink its strategies.

  • What strategies should the EU consider?

    The EU may need to increase its budget, unify its position against bilateral deals, and focus on strategic sectors to mitigate risks.

  • What are the potential impacts of tariffs on the EU?

    Tariffs could lead to inflation, economic imbalance, and strain existing EU industries reliant on exports.

  • How does populism impact European politics?

    Populism has gained traction in various European nations, potentially reshaping political landscapes and heightening divisions.

  • What role does climate policy play in future economic strategies?

    Climate policy could influence trade decisions and economic strategies, as countries adapt to global environmental expectations.

  • What challenges does the EU face in creating a unified response?

    Internal divisions, varying national interests, and populist movements pose challenges to forming a coherent EU strategy.

  • Why is contingency planning important for the EU?

    Contingency planning is critical to prepare for unpredictable U.S. policy changes and protect EU interests.

  • What long-term trends are anticipated in global trade?

    A potential rebalancing may emerge where countries adapt to reduced dependency on U.S. imports and pursue local consumption.

  • How might the EU manage relations with China?

    The EU should navigate relations carefully, balancing cooperation with maintaining autonomy amidst U.S.-China tensions.

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  • 00:00:03
    this is social Europe podcast we are
  • 00:00:06
    dedicated to strengthening democracy by
  • 00:00:08
    discussing the most pressing political
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    economic and social issues of our time
  • 00:00:14
    so welcome and enjoy the
  • 00:00:18
    conversation well Mark BL thank you very
  • 00:00:20
    much indeed for joining me on social
  • 00:00:22
    Europe podcast today on a very important
  • 00:00:25
    impression topic so we're talking about
  • 00:00:27
    the global uh repercussion and
  • 00:00:30
    especially for the EU of the incoming
  • 00:00:33
    Trump presidency and especially when it
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    comes to the political and economic
  • 00:00:37
    circumstances which we find ourselves in
  • 00:00:39
    now uh or probably in two weeks time so
  • 00:00:42
    um just to get us started maybe um if
  • 00:00:45
    you think about you know how Trump's
  • 00:00:47
    America First agenda U might play out
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    and what potential sort of trade
  • 00:00:51
    policies he might Implement um you know
  • 00:00:54
    what are the potential disruptions for
  • 00:00:56
    the EU and how do you think the EU
  • 00:00:57
    should you know deal with that risk and
  • 00:00:59
    try to mitigate it well they had four
  • 00:01:02
    years to sort of build up some sort of
  • 00:01:06
    set of strategies or you know at least
  • 00:01:08
    contingency plans for this and uh it was
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    perfectly obvious that Biden was like
  • 00:01:14
    not going to do this for at least 12
  • 00:01:16
    months and everyone still seems to be
  • 00:01:18
    surprised by this and the lesson that I
  • 00:01:20
    take from that is that everyone thought
  • 00:01:22
    2016 was an aberration but it's not it's
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    the new normal and we see this by the
  • 00:01:27
    fact that reform brought to you by the
  • 00:01:30
    guy who did brexit is Riding High in the
  • 00:01:33
    poles we see this by the fact that
  • 00:01:35
    macron BPS out it's very likely that
  • 00:01:37
    it's going to be the U National front
  • 00:01:39
    that's the lead party uh afd is confined
  • 00:01:42
    basically to the Eastern Hinterland but
  • 00:01:44
    nonetheless you can see in Austria this
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    is breaking out in lots of other places
  • 00:01:48
    so there's this weird sort of denialism
  • 00:01:51
    in Europe whereby these people these
  • 00:01:54
    disruptive people of the populace um are
  • 00:01:56
    are just sort of some error term in the
  • 00:01:58
    equation and somehow things will settled
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    down and I think that's been the biggest
  • 00:02:01
    sort of like weakness that's happened
  • 00:02:04
    now when you don't actually take it
  • 00:02:06
    seriously you don't have any contingency
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    plans then you're not prepared for
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    what's coming next and that what makes
  • 00:02:12
    it worse is it's deeply uncertain what's
  • 00:02:13
    coming next because what we can figure
  • 00:02:15
    out of the Trump Administration so far
  • 00:02:17
    is that it's filled with a bunch of
  • 00:02:19
    people who would probably like to give
  • 00:02:20
    Europe a good kicking for no apparent
  • 00:02:22
    reason uh but it depends which one's
  • 00:02:24
    still standing by the time they start
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    actually doing policy it depends what
  • 00:02:28
    happens with executive orders out of the
  • 00:02:30
    gate hell it's not completely impossible
  • 00:02:32
    that Trump comes in declares a National
  • 00:02:34
    Emergency on whatever grounds suspends
  • 00:02:36
    the Constitution and God knows where we
  • 00:02:38
    are from there so at this point sort of
  • 00:02:40
    scenario planning what can happen you
  • 00:02:43
    could go for anything this could go from
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    the worst imaginable to absolutely
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    nothing and we have no data to go on yet
  • 00:02:52
    we just don't know now having said that
  • 00:02:56
    what he does what what doesn't he like
  • 00:02:58
    he doesn't like NATO I think we've
  • 00:02:59
    established this by now that he really
  • 00:03:01
    doesn't like NATO he's put out some kind
  • 00:03:04
    of political capital in the sense that
  • 00:03:05
    I'm going to end the Ukraine war so how
  • 00:03:09
    that's going to happen we don't know if
  • 00:03:10
    it is going to happen we don't know I
  • 00:03:12
    don't see how you actually managed to
  • 00:03:14
    make that work without NATO but at the
  • 00:03:16
    same time he doesn't like NATO so
  • 00:03:17
    there's contradiction number one um
  • 00:03:19
    contradiction number two back in the day
  • 00:03:21
    used to be about cars and car exports
  • 00:03:24
    and the German Auto complex and the fact
  • 00:03:26
    that they're sell they're selling all
  • 00:03:28
    these cars in America um now that the
  • 00:03:30
    German Auto complex is largely in crisis
  • 00:03:32
    as is the greater European Auto complex
  • 00:03:34
    because of Chinese competition shift to
  • 00:03:36
    electrics I think that's actually even a
  • 00:03:38
    sort of a secondary concern at this
  • 00:03:40
    point um tariffs yeah on everyone why
  • 00:03:43
    not I mean like you know Denmark over
  • 00:03:45
    Greenland I mean we're dealing with such
  • 00:03:48
    Randomness it's very hard to have a sort
  • 00:03:50
    of a this is what's going to happen but
  • 00:03:52
    we can work through various scenarios
  • 00:03:54
    but we just don't know so even you know
  • 00:03:57
    in the US they simply
  • 00:04:00
    no idea what he's going to do on day one
  • 00:04:02
    nobody knows literally they could
  • 00:04:03
    suspend the Constitution next Tuesday we
  • 00:04:06
    don't know I mean you you can see even
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    the mean how is your assessment office
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    sort of his own stability Visa's first
  • 00:04:15
    time I mean now from what you can read
  • 00:04:17
    in the media is that the the Marga
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    movement is really you know building up
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    steam against the tech Bros and you know
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    this this kind of Coalition that sort of
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    helped him back into office again uh
  • 00:04:28
    seems very friend
  • 00:04:30
    uh you know at least when it comes to
  • 00:04:32
    topics like immigration and they could
  • 00:04:35
    completely break up the Coalition so uh
  • 00:04:38
    what's reading on this does he need the
  • 00:04:41
    Coalition I mean all like who is it
  • 00:04:43
    again I think it was Pan biano the
  • 00:04:44
    Italian political sist that did a riff
  • 00:04:47
    on rouso who basically said that once
  • 00:04:50
    every four years or so the public kind
  • 00:04:52
    of like elects a bunch of people to run
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    stuff and then once they've done that
  • 00:04:57
    there's really no control
  • 00:05:00
    and you know there's there's there's a
  • 00:05:02
    certain truth to this particularly in
  • 00:05:03
    the American system now of course he can
  • 00:05:05
    get punished in the midterms in Congress
  • 00:05:07
    all that sort of stuff but as far as
  • 00:05:08
    he's concerned you know he's got back on
  • 00:05:11
    top he's dodged Jail uh he's uh on he's
  • 00:05:15
    back in power with like you know a
  • 00:05:17
    mandate as far as he sees it because the
  • 00:05:18
    Democrats were awful and he's been quite
  • 00:05:20
    clear about what he wants to do he wants
  • 00:05:22
    to do mass deportations and tariffs now
  • 00:05:26
    let's try and put some sense into this
  • 00:05:28
    right what would be the possible reasons
  • 00:05:30
    for doing this well there is actually a
  • 00:05:32
    reason and some people around Trump do
  • 00:05:34
    tend to think this way do you remember
  • 00:05:36
    the clein and Pettis book from a few
  • 00:05:37
    years ago uh our trade Wars class
  • 00:05:40
    Wars I doubt oh you should read it it's
  • 00:05:43
    very good um it's very popular with this
  • 00:05:45
    crowd and basically what it says is that
  • 00:05:48
    the only people who really benefit from
  • 00:05:49
    globalization and trade are the large
  • 00:05:52
    corporations that get excess profits
  • 00:05:54
    from doing so and ultimately workers are
  • 00:05:57
    screwing each other in a kind of a race
  • 00:05:58
    to bomb I simplif somewhat but
  • 00:06:00
    essentially that's it and the basic
  • 00:06:02
    story is the following um you need an
  • 00:06:04
    importer for all those exporters so
  • 00:06:07
    you've got structural exporters
  • 00:06:08
    basically East Asia Germany greater
  • 00:06:11
    Europe Etc and you need one big importer
  • 00:06:14
    which is the us so we get cars and TVs
  • 00:06:17
    and computers and everything else from
  • 00:06:19
    you guys and we give you digital
  • 00:06:20
    certificates bearing 2% now it's been a
  • 00:06:23
    brilliant deal for us but it means that
  • 00:06:25
    we don't make anything anymore and if
  • 00:06:27
    you really want to be a superpower and
  • 00:06:29
    you really want to run the 21st century
  • 00:06:31
    you can't do that you can't have your
  • 00:06:33
    largest civilian employer be Walmart and
  • 00:06:36
    your largest increasing employer is
  • 00:06:38
    Amazon warehousing that that's that's
  • 00:06:41
    not good so you need to stop this and
  • 00:06:43
    there' be talked about things like doing
  • 00:06:44
    a financial transactions tax something
  • 00:06:46
    used to be very much for the left to
  • 00:06:48
    stop people holding American assets Etc
  • 00:06:50
    and in a sense wean themselves off this
  • 00:06:52
    kind of credit dependency you get from
  • 00:06:54
    the global role of the dollar now if you
  • 00:06:56
    really want to do that and you think
  • 00:06:57
    it's a good idea and remember the global
  • 00:06:59
    rebalance used to be something the left
  • 00:07:00
    talked about why would you want to do
  • 00:07:02
    this well you do this because not just
  • 00:07:04
    you're hollowing out your economy you're
  • 00:07:05
    pushing down wages because you're
  • 00:07:07
    pushing everyone at a low productivity
  • 00:07:09
    service sector employment you're taking
  • 00:07:11
    entire areas that used to be industrial
  • 00:07:13
    and just allowing them to weather and
  • 00:07:16
    that's not how you do things if you want
  • 00:07:18
    to be a superpow so what tools do you
  • 00:07:20
    have if you want to do this and I think
  • 00:07:21
    there an analogy with central banks
  • 00:07:23
    central banks are asked to do a lot but
  • 00:07:25
    they really have two tools raise and
  • 00:07:26
    lower the price of money buy and sell
  • 00:07:28
    assets and governments when they want to
  • 00:07:31
    rebalance the global economy really have
  • 00:07:33
    very few tools and one of them is
  • 00:07:35
    tariffs now let's say that you bang up
  • 00:07:37
    the tariffs and then you force
  • 00:07:38
    adjustment on the exporters they have to
  • 00:07:41
    consume their own Surplus you get some
  • 00:07:42
    rebalance and this takes years of course
  • 00:07:44
    right well what do you do in the
  • 00:07:45
    meantime to relieve the pressure well if
  • 00:07:47
    you basically take immigrant labor out
  • 00:07:49
    of the equation you cause an artificial
  • 00:07:51
    squeeze in the labor market that
  • 00:07:53
    encourages companies to do technological
  • 00:07:55
    upgrading that allows them to pay higher
  • 00:07:57
    wages to the native labor force and you
  • 00:07:59
    begin to get a virtuous virtuous circle
  • 00:08:01
    of both internationally and domestically
  • 00:08:03
    now that is the only sense I can make
  • 00:08:06
    out of this I have heard bits of thing
  • 00:08:09
    bits of that coming from the
  • 00:08:10
    administration but I've never heard
  • 00:08:12
    anyone actually in the administration
  • 00:08:14
    say here is the plan this is what we're
  • 00:08:15
    doing but if I had to think this through
  • 00:08:18
    that's what I think they're doing H and
  • 00:08:22
    uh you know if if it just take a
  • 00:08:23
    scenario where in which he he just slaps
  • 00:08:26
    Tas on pretty much everything I mean
  • 00:08:28
    before there is this of benign a
  • 00:08:30
    virtuous cycle of sort of rebalancing I
  • 00:08:32
    mean isn't there a big inflation danger
  • 00:08:34
    in the short term and especially fueling
  • 00:08:37
    fueling already uh but why do you think
  • 00:08:39
    living crisis why do you think they want
  • 00:08:41
    to pump an extra 3 million bottles of
  • 00:08:43
    gas a day because we're self-sufficient
  • 00:08:46
    in energy and if we crush the price down
  • 00:08:48
    to $25 a barel we'll piss off our wildc
  • 00:08:51
    cars but we'll basically Crush Energy
  • 00:08:53
    prices and input prices so the cost of
  • 00:08:55
    living Spike you get through Imports
  • 00:08:57
    which you want to do less of anyway is
  • 00:08:59
    to in part compensated by lower energy
  • 00:09:02
    costs so an expansion of the own drill
  • 00:09:04
    baby drill absolutely but for
  • 00:09:07
    macroeconomic reasons Scott Besson is
  • 00:09:09
    not a fool there the reason he wants 3%
  • 00:09:12
    interest rates and 3 million bars a
  • 00:09:16
    day okay and in such a scenario I mean
  • 00:09:19
    obviously Dev would have huge superc on
  • 00:09:21
    on the European Union so what oh my God
  • 00:09:22
    absolutely there's the problem when
  • 00:09:24
    you're long exports this is the bit that
  • 00:09:26
    a people like you and me have been
  • 00:09:28
    saying this for years right when you're
  • 00:09:30
    long exports You're vulnerable to the
  • 00:09:32
    person who buys your export saying
  • 00:09:34
    thanks but no thanks and when you do
  • 00:09:37
    that at a time when particularly German
  • 00:09:39
    industry is into emerging into a secular
  • 00:09:42
    crisis so it's you know another round of
  • 00:09:45
    uh let's cut wages and Welfare benefits
  • 00:09:47
    is not going to solve the problem that
  • 00:09:49
    you're on the technologically wrong side
  • 00:09:51
    of the street but nonetheless you're
  • 00:09:53
    into a secular crisis exactly the time
  • 00:09:55
    when they're going to start doing tars
  • 00:09:56
    your ability to rebalance is ham Strong
  • 00:09:59
    by the fact that you run an export
  • 00:10:01
    oriented macro policy undervalued
  • 00:10:03
    exchange rate debt break low debt low
  • 00:10:06
    consumption you're going to have to
  • 00:10:08
    boost your consumption you're going to
  • 00:10:09
    have to spend more you're going to have
  • 00:10:10
    to go against all of the learnings shall
  • 00:10:13
    we say that Europe has had on how to run
  • 00:10:15
    an economy for the past 30 years have
  • 00:10:17
    they start doing this well I mean the uh
  • 00:10:20
    uh I mean as we talked about for years I
  • 00:10:23
    mean the there's a lack of investment in
  • 00:10:24
    Germany and in pure financial terms you
  • 00:10:27
    know recycling the the the current uh
  • 00:10:29
    Surplus in Germany uh um you know
  • 00:10:32
    especially if the debt break is
  • 00:10:33
    hopefully being reformed at the
  • 00:10:35
    beginning of the next parliamentary term
  • 00:10:37
    uh that's one thing but the the danger
  • 00:10:39
    as far as I can see is look he's going
  • 00:10:41
    to say uh to Volkswagen and all the
  • 00:10:43
    others you can still sell CI but you got
  • 00:10:45
    to produ him here as well yeah that's
  • 00:10:46
    right right so so that's the other way
  • 00:10:49
    you do rebalancing like the tar is not
  • 00:10:51
    an end in itself the tar of is like you
  • 00:10:52
    can still stall a $220,000 car here but
  • 00:10:55
    you need to make it here for it to be
  • 00:10:56
    $220,000 that's exactly it exactly yeah
  • 00:10:59
    so Chattanooga you know you you you got
  • 00:11:02
    to produce to Volkswagen in Tennessee
  • 00:11:04
    not in wburg yeah and then your Global
  • 00:11:06
    Supply chains that you do with the
  • 00:11:08
    higher end products for example the
  • 00:11:10
    Transmissions that I think are made in
  • 00:11:11
    Romania which end up in pretty much cars
  • 00:11:13
    all over the world that model becomes
  • 00:11:15
    really problematic because you're going
  • 00:11:16
    to have to localize the supply
  • 00:11:18
    chains but wasn't that I mean if you if
  • 00:11:22
    I remember correctly there especially
  • 00:11:24
    you know in the in the first time he he
  • 00:11:27
    put terorist on and threaten terorist
  • 00:11:28
    said especially you know when Once the
  • 00:11:30
    end product once the production I was in
  • 00:11:32
    the US the inputs in the value chain
  • 00:11:35
    they were exempt from from terce yeah no
  • 00:11:38
    and it could be that like I say you
  • 00:11:39
    let's go back to our original
  • 00:11:40
    conversation nobody knows anything
  • 00:11:43
    nobody knows what's going to happen
  • 00:11:44
    right I'm sketching out the best I can
  • 00:11:47
    figure out what these people might be
  • 00:11:48
    doing in a macro sense and I could be
  • 00:11:51
    utterly wrong but that's how I tend to
  • 00:11:53
    think about it until I've got other
  • 00:11:55
    information okay well let's let's go at
  • 00:11:57
    it slowly who do you think are the key
  • 00:11:59
    people who are the brains behind the
  • 00:12:01
    policy that I don't actually know and I
  • 00:12:04
    I think it's kind of pointless naming
  • 00:12:06
    names at this point uh do you remember
  • 00:12:08
    Scara muchi who was very briefly the
  • 00:12:10
    press secretary right scar was 10 days
  • 00:12:12
    though was 10 days right no but he he
  • 00:12:14
    had a great line on this a few months
  • 00:12:16
    ago where he says you know people are
  • 00:12:17
    trying to guess who's in the Inner
  • 00:12:18
    Circle the Outer Circle it doesn't
  • 00:12:20
    matter unless your family you eventually
  • 00:12:22
    end up in the wood
  • 00:12:25
    chipper and I think that that's true
  • 00:12:27
    right so Scott besson's obviously in
  • 00:12:29
    charge now can't it's Gerald guy that
  • 00:12:31
    they've got on the treasury um your your
  • 00:12:34
    cabinet is basically filled with tech
  • 00:12:36
    billionaires there's going to be huge
  • 00:12:38
    action on crypto which is going to cause
  • 00:12:40
    an enormous flood of money in the crypto
  • 00:12:42
    huge huge Ponzi bubble and eventual
  • 00:12:44
    burst I will be buying at that point um
  • 00:12:48
    yeah there's a lot of things that can
  • 00:12:49
    happen but you know when you start
  • 00:12:50
    saying well you know this person's going
  • 00:12:52
    to who knows it's just pointless okay
  • 00:12:55
    remember remember what they used to say
  • 00:12:57
    about Europe was like the American
  • 00:12:58
    president would complain I don't know
  • 00:12:59
    who to call when I call Europe right now
  • 00:13:02
    nobody knows who to call because if you
  • 00:13:04
    don't talk to Donald directly nobody
  • 00:13:06
    knows who you're talking to oh dear okay
  • 00:13:09
    so we established uh the policy is
  • 00:13:11
    anybody's guess the people is any
  • 00:13:14
    anybody's guess at this stage so in a
  • 00:13:17
    time frame when do you think we will
  • 00:13:19
    have a broad idea how things are going
  • 00:13:22
    to shake out will that happen really
  • 00:13:25
    from you know the 20th 21st of January
  • 00:13:28
    and you know
  • 00:13:30
    have a good idea I think by the middle
  • 00:13:32
    of next week we're all going to have a
  • 00:13:33
    very good idea what's going on I expect
  • 00:13:35
    a blitz of executive orders like an
  • 00:13:38
    absolute snowstorm uh on everything and
  • 00:13:42
    then once we shake out that and figure
  • 00:13:44
    out who's going to counter Su and how
  • 00:13:45
    the courts are going to deal with it Etc
  • 00:13:48
    then we'll have a a rough understanding
  • 00:13:51
    of what they want to achieve in certain
  • 00:13:53
    areas uh ultimately it's Congress that
  • 00:13:56
    passes legislation that means he doesn't
  • 00:13:59
    just get to write it and we will do this
  • 00:14:02
    uh we'll see what he does on
  • 00:14:03
    deportations this is going to be a
  • 00:14:06
    really really hard one to do for
  • 00:14:07
    multiple reasons um not just because it
  • 00:14:10
    looks really bad but because it's very
  • 00:14:13
    expensive and logistically really
  • 00:14:14
    challenging is he going to issue an
  • 00:14:16
    executive order to empower the military
  • 00:14:18
    and the National Guard at a state level
  • 00:14:20
    to intercept people on suspicion of
  • 00:14:22
    being foreign I wouldn't I wouldn't say
  • 00:14:26
    no and once you do that I mean wow
  • 00:14:29
    where do we go from there I mean and one
  • 00:14:32
    of the things that you know is it's
  • 00:14:35
    always seems to be the thing that has
  • 00:14:37
    got his latest attention right so he's
  • 00:14:39
    easily distracted in in in in that sense
  • 00:14:41
    so but what time how long do you do you
  • 00:14:43
    think it takes before his Coalition as
  • 00:14:45
    we talked earlier you know the tech
  • 00:14:47
    billionaires on the one end and the the
  • 00:14:49
    Marga movement the St bannons and and
  • 00:14:52
    the likes on the other hand you know uh
  • 00:14:54
    you know when when when is the falling
  • 00:14:56
    out I mean it I think the falling out is
  • 00:14:59
    I think the falling out is already there
  • 00:15:00
    but the question is like what's the
  • 00:15:01
    consequence of the falling out so you
  • 00:15:04
    know can you push Maga out of the room
  • 00:15:06
    no you can't that's basically the entire
  • 00:15:09
    thing um the tech Bros musk particularly
  • 00:15:12
    made a brilliant move 250 million doll
  • 00:15:15
    investment $200 billion in value added
  • 00:15:18
    to his companies um 40% of uh Tesla's
  • 00:15:22
    profits come from Trading carbon credits
  • 00:15:24
    these guys want will want to keep part
  • 00:15:26
    of the IRA and so on and so forth Maga
  • 00:15:29
    wants to burn the whole thing to the
  • 00:15:30
    ground um it's very hard to foresee
  • 00:15:33
    exactly who's going to win on this one
  • 00:15:36
    because in a sense if you want to talk
  • 00:15:38
    about you know Bess and and treasury is
  • 00:15:40
    essentially being the Wall Street people
  • 00:15:42
    versus the tech people versus the Maga
  • 00:15:44
    people well you know ultimately if Maga
  • 00:15:47
    withdraws support republicans in
  • 00:15:49
    Congress get weaker does Trump really
  • 00:15:51
    care about that or does he just care
  • 00:15:52
    about the fact that he's the big boss
  • 00:15:53
    and he gets to showout
  • 00:15:57
    everybody okay and if you we now look at
  • 00:16:00
    the European Union you know obviously
  • 00:16:02
    the the funel commission uh the new
  • 00:16:04
    fundel commission has just about started
  • 00:16:07
    its uh its mandate it's its term and
  • 00:16:10
    obviously he's looking at all of this uh
  • 00:16:13
    probably with uh um with an element of
  • 00:16:16
    in concern shall we say concern concern
  • 00:16:19
    concern yes might be despair uh who
  • 00:16:22
    knows but you know from what what do you
  • 00:16:26
    think the European Union should do in
  • 00:16:27
    order to obviously you cannot isolate
  • 00:16:29
    yourself from this but in order to
  • 00:16:31
    prepare strategically and and and S of
  • 00:16:34
    what kind of policies to protect the
  • 00:16:36
    interests well the first thing you
  • 00:16:37
    should do is probably double the eu's
  • 00:16:39
    budget which would be very unpopular but
  • 00:16:42
    they got to have some room to maneuver
  • 00:16:44
    to do certain things and to incentivize
  • 00:16:46
    certain behaviors um you got to stop
  • 00:16:48
    Italy doing side deals you got to stop
  • 00:16:50
    Hungary doing side deals there has to be
  • 00:16:52
    a United position uh if the sanctions
  • 00:16:55
    are there you should think about what
  • 00:16:57
    the sanctions are there for and what
  • 00:16:58
    they're trying to achieve if those
  • 00:17:00
    sanctions are likely to rob you of your
  • 00:17:02
    car industry I can imagine putting back
  • 00:17:04
    reciprocal sanctions on things that hurt
  • 00:17:07
    the Americans but the problem is they
  • 00:17:09
    don't apart from like you know soy oil
  • 00:17:12
    guns planes they don't really you know
  • 00:17:15
    do a lot and you know you're
  • 00:17:17
    self-sufficient with Airbus because
  • 00:17:18
    Boeing doesn't work so you know it's not
  • 00:17:21
    you're going to t t you know tar of
  • 00:17:23
    Harley-Davidson's I mean yeah right so
  • 00:17:25
    it's a bit asymmetrical that way he can
  • 00:17:27
    hurt you more he can hurt them um let's
  • 00:17:29
    think through the car example uh let's
  • 00:17:32
    say for example well the biggest input
  • 00:17:33
    obviously is gas liquid gas are we not
  • 00:17:35
    going to no also but but the thing is
  • 00:17:37
    Europe given the crisis in Ukraine is
  • 00:17:39
    now long American LNG Imports right so
  • 00:17:42
    he you know he's got you there as well
  • 00:17:44
    right so it's I would say it's a
  • 00:17:46
    question of thinking through what are
  • 00:17:47
    the Strategic sectors that you really
  • 00:17:49
    care about over the long run what would
  • 00:17:51
    happen if these tariffs came in can you
  • 00:17:54
    survive that is there a way around it if
  • 00:17:56
    you for example were to move more car
  • 00:17:58
    prod uction in the United States if that
  • 00:18:00
    resulted in more demand is that
  • 00:18:02
    necessarily bad could that then be
  • 00:18:04
    filtered back into Europe does Europe
  • 00:18:07
    need to consume more on its own it
  • 00:18:09
    probably does you know the rebalancing
  • 00:18:11
    isn't a bad idea so maybe this is an
  • 00:18:13
    opportunity to say okay we don't want
  • 00:18:16
    you to do the rebalancing or readjusting
  • 00:18:18
    this is something we've needed to do for
  • 00:18:20
    a while let's use this as an opportunity
  • 00:18:22
    to do
  • 00:18:24
    that well I mean in terms of uh you
  • 00:18:27
    mentioned the inner division within the
  • 00:18:29
    European Union right so at the moment it
  • 00:18:31
    is very hard to see how if you have
  • 00:18:33
    actors such as Alan and Malone in Italy
  • 00:18:36
    and who knows how any future Austrian uh
  • 00:18:40
    new CH not to mention whatever happens
  • 00:18:42
    in Ukraine is going to be UK's the eu's
  • 00:18:44
    problem much more than America's problem
  • 00:18:46
    oh well absolutely absolutely and uh I
  • 00:18:49
    mean in the in the last episode of the
  • 00:18:50
    podcast we talked about the the new sort
  • 00:18:53
    of the the the policy to rejuvenate the
  • 00:18:55
    European idea is around security it's
  • 00:18:58
    around security
  • 00:18:59
    always double edged on that one I mean
  • 00:19:01
    at the end of the day look the Americans
  • 00:19:03
    if Trump wins are about to go on a
  • 00:19:05
    carbon Bonanza right there's people who
  • 00:19:07
    are like oh they're going to keep the
  • 00:19:08
    IRA credits whatever I don't think they
  • 00:19:10
    are I think they're going to demolish
  • 00:19:11
    the whole lot um if you think about the
  • 00:19:13
    United States as an economy it's really
  • 00:19:15
    two economies one's based on carbon and
  • 00:19:17
    one's post carbon and they really map
  • 00:19:19
    onto red and blue areas so if you're mag
  • 00:19:22
    and out you're going to drill baby drill
  • 00:19:24
    you're going to double down in the
  • 00:19:25
    carbon economy the whole thing forget it
  • 00:19:27
    they're out of Paris they're out of
  • 00:19:28
    everything right they'll probably shut
  • 00:19:29
    down Noah um they probably ban
  • 00:19:32
    government agencies from talking about
  • 00:19:33
    climate change I mean we're really at
  • 00:19:35
    that stage um so if you do that and and
  • 00:19:38
    Europe's only response is we need to
  • 00:19:40
    weaponize and securitize everything then
  • 00:19:42
    you're just shooting yourself in the
  • 00:19:43
    head because the only other play you've
  • 00:19:45
    got is China and you're big enough and
  • 00:19:48
    important enough that you can actually
  • 00:19:50
    get good deals with China it doesn't
  • 00:19:52
    need to be this thing where you're
  • 00:19:53
    overrun by them right uh yes you got
  • 00:19:56
    strategically wrong footed on electric
  • 00:19:58
    cars you should have seen that coming
  • 00:20:00
    but your car industries were crap now
  • 00:20:02
    you're at this point where you're
  • 00:20:03
    deliberately not putting in charging
  • 00:20:05
    stations which is harming your
  • 00:20:07
    transition as well as keeping out
  • 00:20:09
    Chinese Imports and this whole
  • 00:20:10
    weaponization of China is just going to
  • 00:20:12
    leave Europe on its own because you're
  • 00:20:14
    not going to side with the Americans on
  • 00:20:16
    this stuff and yet you're excluding
  • 00:20:18
    China so then you just become an island
  • 00:20:20
    on your own but you don't consume enough
  • 00:20:23
    so what are you going to do how is that
  • 00:20:24
    going to work out I I worry about this
  • 00:20:26
    weaponization of everything
  • 00:20:29
    I mean the well the security policy is
  • 00:20:31
    that is that you really have to build up
  • 00:20:33
    the the Strategic capacity the military
  • 00:20:35
    capacity in the European unit right so
  • 00:20:37
    that's certainly one absolutely that's
  • 00:20:39
    that's the point we wanted to make you
  • 00:20:41
    know that that requires a lot of
  • 00:20:43
    additional investment that requires
  • 00:20:45
    probably some sort of joint debt
  • 00:20:46
    instrument in order to achieve that that
  • 00:20:48
    is also something you can intuitively
  • 00:20:50
    sell to the European population because
  • 00:20:53
    it it intuitively makes sense that you
  • 00:20:55
    know Germany with a with the bundes that
  • 00:20:57
    hasn't has had a lack of investment for
  • 00:21:00
    decades is not going to is not going to
  • 00:21:02
    run its own it's also providing an
  • 00:21:04
    opportunity to rebuild ties with the
  • 00:21:06
    United Kingdom because obviously the UK
  • 00:21:10
    has strategic all of that is true and
  • 00:21:13
    good and overdue the thing is though
  • 00:21:15
    exactly you're building up against what
  • 00:21:17
    I mean is it sort of against just
  • 00:21:18
    basically the Russian revanchism fair
  • 00:21:20
    enough right but so much of this is also
  • 00:21:22
    tied into sort of security concerns
  • 00:21:24
    about China but at the same time you
  • 00:21:26
    don't want to be bullied and by the
  • 00:21:27
    Americans into being Uber China Hawks
  • 00:21:30
    which I totally understand so I'm just
  • 00:21:31
    pointing out that it leaves Europe in
  • 00:21:33
    this precarious position whereby it's
  • 00:21:35
    building up internal strength but at the
  • 00:21:37
    same time it sort of external relations
  • 00:21:39
    are becoming more frictitious because
  • 00:21:41
    you're not going to side with Maga
  • 00:21:43
    America you actually have much more in
  • 00:21:45
    common with China despite lots of other
  • 00:21:48
    things you don't like about them and it
  • 00:21:50
    seems to me you're kind of like
  • 00:21:51
    negotiating the worst possible place
  • 00:21:54
    between the Rock and the hard
  • 00:21:57
    place so you you would ease sort of the
  • 00:22:00
    the policy with with China and it's not
  • 00:22:03
    that I would do this I just think that
  • 00:22:04
    when you figure out what Maga foreign
  • 00:22:06
    policy really is and what America First
  • 00:22:08
    really policy is any Illusions you have
  • 00:22:11
    about like NATO and the transatlantic
  • 00:22:13
    Alliance and everything they're finally
  • 00:22:15
    over you can put them to bed right what
  • 00:22:17
    happened with Biden and blinkin and
  • 00:22:19
    these people was just like the last tour
  • 00:22:22
    of the Beatles right they came out of
  • 00:22:24
    retirement and everybody loved the songs
  • 00:22:27
    but ultimately they're
  • 00:22:29
    done but that leads to an interesting
  • 00:22:32
    point mark I mean you mentioned before
  • 00:22:33
    that a lot of people wrongly thought
  • 00:22:35
    that 2016 was the aberration right right
  • 00:22:39
    but you know as it stands
  • 00:22:40
    constitutionally this is the second and
  • 00:22:42
    final term of of President Trump right
  • 00:22:45
    do he suspends the till he suspends the
  • 00:22:48
    Constitution that's why I say as it
  • 00:22:50
    stands at the moment constitutionally
  • 00:22:51
    that's at least where we are um as we as
  • 00:22:54
    we speak but you know is there is the
  • 00:22:57
    Marg Beyond him personally is is this
  • 00:23:00
    now all the main is this the new
  • 00:23:02
    mainstream of of us politics I I think
  • 00:23:05
    it's the mainstream of everywhere
  • 00:23:06
    politics I mean if you if you think
  • 00:23:08
    about you know just look at you know
  • 00:23:10
    trust in Center parties trust in
  • 00:23:12
    domestic you know usual institutions Etc
  • 00:23:14
    and it's utterly collapsed now you know
  • 00:23:16
    part of this has been sort of the the
  • 00:23:19
    the Arrogant sort of uh how going I put
  • 00:23:21
    it the epistemic arrogance of our class
  • 00:23:24
    right that didn't see the financial
  • 00:23:26
    crisis coming that solved it by
  • 00:23:27
    basically doing QE which gave even more
  • 00:23:30
    resources to the rich uh we did
  • 00:23:32
    austerity we know we spoke about that
  • 00:23:34
    one a few times sorry about the pings
  • 00:23:36
    going off here should have silence those
  • 00:23:38
    uh we had a decade of austerity a decade
  • 00:23:40
    of lost growth the whole sort of stuff
  • 00:23:42
    immigration is an enormous concern of
  • 00:23:44
    European populations for right or wrong
  • 00:23:46
    the fact is it's a fact they're
  • 00:23:47
    concerned about this for 15 years there
  • 00:23:50
    was a consensus amongst European policy
  • 00:23:51
    Elites it was basically anyone who talks
  • 00:23:53
    about immigrations are racist and that
  • 00:23:55
    just absolutely fed the backlash from
  • 00:23:57
    the right so you know know our own sort
  • 00:23:59
    of mishandling has to be acknowledged
  • 00:24:01
    right number one but secondly I mean
  • 00:24:03
    I'll give you a little story about this
  • 00:24:05
    I went to the Euros in the summer and
  • 00:24:07
    after that I went to Scotland I me
  • 00:24:09
    Scotland a very long time and I went to
  • 00:24:10
    my hometown of Dundee now Dundee back in
  • 00:24:13
    the 1980s was already pretty depressed
  • 00:24:17
    place by many measures we used to joke
  • 00:24:19
    that if there was a boom in the economy
  • 00:24:21
    we would have 10% unemployment a slump
  • 00:24:23
    would have a living our traditional
  • 00:24:25
    industries were things like jute which
  • 00:24:27
    started the decline in the 19 50s little
  • 00:24:29
    old ship building Etc which was more on
  • 00:24:31
    the coud side in Glasgow uh but
  • 00:24:33
    nonetheless the city was prosperous if
  • 00:24:35
    you went downtown every single store was
  • 00:24:37
    filled the Main Street reform Street had
  • 00:24:40
    like you know solicitors offices and
  • 00:24:42
    expensive restaurants and all that the
  • 00:24:44
    high sort of stuff I went back this
  • 00:24:46
    summer and it was astonishing how poor
  • 00:24:49
    the place had become onethird of the
  • 00:24:51
    street was of the stores downtown were
  • 00:24:53
    boarded up uh that reform street is now
  • 00:24:56
    filled with Turkish Barbers and tatto
  • 00:24:58
    parlor and other things at sweet shops
  • 00:25:00
    that you do for money laundering
  • 00:25:02
    basically um and it's incredibly poor
  • 00:25:04
    and you can go to small towns all over
  • 00:25:06
    Europe and that's what's happened and
  • 00:25:08
    the people who live there are mightily
  • 00:25:11
    pissed off because every four years our
  • 00:25:13
    class shows up and says hey things are
  • 00:25:15
    going great look at these numbers and
  • 00:25:17
    they're like what does that have to do
  • 00:25:19
    with my life I mean the NHS actually has
  • 00:25:21
    a term for this is called life
  • 00:25:24
    syndrome like that's actually a
  • 00:25:26
    diagnosis right so you know you know
  • 00:25:29
    we're worrying about these things you
  • 00:25:31
    know as if sort of like it's some kind
  • 00:25:32
    of aberration that's been you know made
  • 00:25:34
    up by these fenales why does someone
  • 00:25:36
    like farage get support he gets support
  • 00:25:39
    because he's willing to basically
  • 00:25:42
    acknowledge the the the the folks who
  • 00:25:45
    have been in charged or charged with the
  • 00:25:47
    people charged have let most people down
  • 00:25:49
    and that really resonates so I think
  • 00:25:52
    this Maga politics is what we're getting
  • 00:25:54
    for the next decade I think that we had
  • 00:25:56
    a chance to do something about this and
  • 00:25:58
    did buger all and now this is the
  • 00:26:01
    consequence I mean yeah the uh if you
  • 00:26:04
    look at the the research uh on on on
  • 00:26:06
    populism it's about either the the
  • 00:26:09
    ruling class doesn't want to do anything
  • 00:26:11
    about the problems or uh is not able to
  • 00:26:14
    do anything about the problem so either
  • 00:26:16
    you know they're taking back control
  • 00:26:18
    narrative yes which is very very
  • 00:26:20
    powerful absolutely I mean you know it's
  • 00:26:22
    incredible you think of something farage
  • 00:26:23
    like farage brought you brexit brexit
  • 00:26:26
    was a monumentally stupid idea
  • 00:26:28
    and yet he not only survived he's now
  • 00:26:30
    running high in the poles I mean it
  • 00:26:33
    tells you that people have zero faith in
  • 00:26:35
    the
  • 00:26:35
    mainstream that is really alarming but
  • 00:26:38
    that's where we
  • 00:26:40
    are so and where would you say the
  • 00:26:42
    mainstream uh needs to needs to turn the
  • 00:26:45
    the corner so what needs been I mean of
  • 00:26:46
    course acknowledging well it's a bit
  • 00:26:48
    late maybe for acknowledging say may
  • 00:26:51
    we've been we've been yeah sorry sorry
  • 00:26:53
    we screwed over all these areas all
  • 00:26:55
    these things and you know it it's not
  • 00:26:56
    just them it was the processes the whe
  • 00:26:58
    Unleashed it was globalization it was
  • 00:27:00
    de-industrialization it was automation
  • 00:27:02
    all these things kicked in at once but
  • 00:27:04
    the fact is we've just lived with a
  • 00:27:05
    giant income skew which has been papered
  • 00:27:08
    over in many countries by credit which
  • 00:27:11
    had a heart attack in 2008 and has been
  • 00:27:13
    basically hobbling Along on life support
  • 00:27:15
    from central banks ever since and you
  • 00:27:17
    have a look at growth rates you know
  • 00:27:19
    have a look at investment all of it
  • 00:27:21
    right around it's it's all down and part
  • 00:27:23
    of this is also the skew because what
  • 00:27:25
    what wealth we did generate has gone
  • 00:27:26
    into fewer and fewer hands
  • 00:27:28
    so you know what should we do well think
  • 00:27:30
    about you know the politics of the
  • 00:27:32
    moment you got the British government
  • 00:27:33
    being talked into a financial crisis by
  • 00:27:36
    essentially the owner of x uh over
  • 00:27:39
    historic sexual abuse allegations which
  • 00:27:41
    is very weird um but then the government
  • 00:27:44
    doesn't help itself I mean rather than
  • 00:27:45
    coming in and saying okay we've had 14
  • 00:27:47
    years of Tory mismanagement com you know
  • 00:27:49
    communities have suffered Etc we we're
  • 00:27:51
    going to rebuild and we're going to do
  • 00:27:53
    it this way and doing something sensible
  • 00:27:54
    like we need a massive house building
  • 00:27:56
    project we're going to focus on this if
  • 00:27:58
    you do house building you get skills
  • 00:28:00
    with skills you get training with those
  • 00:28:01
    training and skills we can actually do
  • 00:28:03
    green transformation stuff appropo
  • 00:28:05
    Germany and the whole heat heat pump
  • 00:28:07
    debacco right you can build it through
  • 00:28:09
    that you could have a coherent program
  • 00:28:10
    people would understand this it would
  • 00:28:12
    actually touch the lives of people in
  • 00:28:13
    these communities instead of which we
  • 00:28:15
    have a 22 billion hole in the finances
  • 00:28:17
    that needs to be papered over by taking
  • 00:28:19
    money away from pensioners I mean who
  • 00:28:22
    thought that was a good idea they've
  • 00:28:24
    talked the animal spirits in the British
  • 00:28:26
    economy into the ground and now they're
  • 00:28:28
    looking for growth so again it's just
  • 00:28:30
    sort of like chronic mismanagement
  • 00:28:32
    unfortunately on the part of the
  • 00:28:33
    mainstream I I don't see the mainstream
  • 00:28:36
    surviving I lit I don't I think we're in
  • 00:28:38
    for a decade of Maga that's it I mean to
  • 00:28:42
    to my mind you know one of the
  • 00:28:44
    preconditions is it's it's a necessary
  • 00:28:46
    but not a sufficient condition but it's
  • 00:28:48
    it's actually a public administration
  • 00:28:50
    reform I mean I've just come back now
  • 00:28:52
    out of um half a decade St different
  • 00:28:54
    types types of government and I've Penn
  • 00:28:56
    the longish article in the Frank fort
  • 00:28:58
    arged saitong in October um and
  • 00:29:01
    basically uh because of the structures
  • 00:29:03
    that are still largely based on 19th
  • 00:29:05
    century Prussian principles in most in
  • 00:29:08
    most European
  • 00:29:09
    administrations um you're structurally
  • 00:29:12
    unable to deliver on the things that you
  • 00:29:14
    even want to do in promise I give you
  • 00:29:16
    one example that's why I got to it uh
  • 00:29:18
    because you mentioned house building one
  • 00:29:20
    of the very few quantifiable um targets
  • 00:29:23
    of the last German the outgoing German
  • 00:29:25
    government was a house building Target
  • 00:29:28
    so the target was to build 400,000 Flats
  • 00:29:31
    per year and this by by no stretch of
  • 00:29:34
    the imagination was that that wasn't an
  • 00:29:35
    outlandish Target because guess what in
  • 00:29:38
    the 1970s we build 400,000 Flats per
  • 00:29:42
    year yep right so but we missed it not
  • 00:29:44
    by a whisker but we missed it by a
  • 00:29:46
    country mile right out of the 400,000
  • 00:29:49
    100,000 was supposed to be social
  • 00:29:50
    housing so the the the number is the
  • 00:29:53
    social housing is less than 50,000 right
  • 00:29:55
    and the the overall Target is is pretty
  • 00:29:57
    much 50% of what was you know and and
  • 00:30:01
    what was supposed to be built and that
  • 00:30:03
    that creates a problem it's not as it's
  • 00:30:04
    not that all of FR didn't want to do it
  • 00:30:06
    it's not that there was a financial
  • 00:30:07
    problem it's it's it's multi-level
  • 00:30:10
    governance you know there was a federal
  • 00:30:12
    there was a federal progam yeah planning
  • 00:30:15
    it was Federal money but you know
  • 00:30:16
    there's the the states have to you know
  • 00:30:19
    transform it into programs but the
  • 00:30:21
    planning permission is local government
  • 00:30:23
    that's like yet another level so and the
  • 00:30:26
    deregulation f for the goes along in
  • 00:30:28
    this moment actually is not misplaced in
  • 00:30:30
    many cases even sort of like good
  • 00:30:33
    liberals in the United States who write
  • 00:30:35
    about this sort of stuff there's a
  • 00:30:36
    couple of books in political science
  • 00:30:37
    coming out about this that basically we
  • 00:30:39
    can't build anything anymore because we
  • 00:30:40
    got so obsessed with procedure that
  • 00:30:43
    making sure that everything was done
  • 00:30:44
    exactly the right way that nothing gets
  • 00:30:47
    done and it costs an absolute Fortune
  • 00:30:49
    Larry Summers made Larry Summers made
  • 00:30:51
    this point ages ago and I kind of
  • 00:30:53
    dismissed it at the time but he was
  • 00:30:54
    absolutely right years ago when they
  • 00:30:56
    were talking about shovel ready projects
  • 00:30:58
    and the stimulus and all this sort of
  • 00:31:00
    stuff um uh he said look this there's a
  • 00:31:02
    bridge outside my window at Harvard this
  • 00:31:04
    the Charles River Bridge and it's in a
  • 00:31:07
    terrible State and you know it's taken
  • 00:31:09
    about 5 years to even get one side of
  • 00:31:12
    the thing done so I started to look into
  • 00:31:14
    this well why is it well first of all
  • 00:31:15
    you have to ask everybody who lives
  • 00:31:16
    within 2 square miles then you got to
  • 00:31:18
    sound the opinions then you got to do
  • 00:31:20
    the environmental impact assessment then
  • 00:31:22
    you got to have the hearing on the and
  • 00:31:24
    you just keep going on and on and
  • 00:31:25
    eventually nothing gets done and the
  • 00:31:26
    bridge starts to fall down so yeah
  • 00:31:28
    absolutely I mean add that into the sort
  • 00:31:31
    of like to use that great word the end
  • 00:31:33
    ification of everything I mean the
  • 00:31:37
    the the the fundamental point is and I
  • 00:31:39
    think you can really trace it back down
  • 00:31:40
    to Max vber right so when Max vber uh
  • 00:31:43
    wrote his typology of the bureaucratic
  • 00:31:46
    uh leadership uh he obviously made the
  • 00:31:48
    distinction between a charismatic leader
  • 00:31:51
    a bureaucratic leadership and a monarch
  • 00:31:53
    right you know at at the time you know
  • 00:31:55
    that that was you know due process was
  • 00:31:58
    leg that was The Cutting Edge of
  • 00:31:59
    modernity but remember what did they
  • 00:32:01
    have to do in those days the most
  • 00:32:03
    complex thing they had to do was hand
  • 00:32:05
    out
  • 00:32:07
    pensions exactly and if you wanted to
  • 00:32:09
    build something you just went off and
  • 00:32:11
    built
  • 00:32:13
    it no not going to happen absolutely I
  • 00:32:17
    mean now the whole that that was
  • 00:32:19
    basically my punchline in this article
  • 00:32:21
    is the whole systems process driven and
  • 00:32:23
    not outcome driven at all I totally and
  • 00:32:25
    you need you you need to you need to be
  • 00:32:27
    out driven and that leads to counter
  • 00:32:29
    intuitive conclusion in some areas for
  • 00:32:32
    some specific purposes there is a
  • 00:32:34
    progressive case with d regulation yeah
  • 00:32:36
    absolutely I'm 100% on that I mean I'll
  • 00:32:38
    give you a micro example from uh from
  • 00:32:41
    where I live I got a mate who lives uh
  • 00:32:43
    too close to the water right put it that
  • 00:32:45
    way and every now and again flood right
  • 00:32:48
    so what you can do is and they've all
  • 00:32:50
    got these big boulders are largely
  • 00:32:52
    decorative and one of the neighbors
  • 00:32:55
    basically cemented The Boulders together
  • 00:32:56
    because then it creates a sea
  • 00:32:58
    and the local government came along and
  • 00:32:59
    find him $155,000 and told him to take
  • 00:33:02
    it down and he said well why would I do
  • 00:33:04
    that he said cuz you don't have
  • 00:33:05
    permission to do that we don't allow you
  • 00:33:06
    that go but I'm a structural engineer
  • 00:33:08
    this is creating a seaw wall we all of
  • 00:33:10
    these Boulders if we do this we won't
  • 00:33:11
    flood and then everyone will save money
  • 00:33:14
    and they're like no sorry mate computer
  • 00:33:15
    says no you can't do that exactly
  • 00:33:18
    computer says no computer says no right
  • 00:33:20
    the rule book says now and that's why it
  • 00:33:22
    cannot be done that's a problem and and
  • 00:33:25
    that's why even on Progressive policies
  • 00:33:27
    and if if you look at the policy areas I
  • 00:33:29
    mean you touched upon it that seem to be
  • 00:33:31
    press you know higher at the top of the
  • 00:33:34
    pyramid it's the it's the prent butter
  • 00:33:37
    stuff it's cost of living it's housing
  • 00:33:39
    totally you know it's that kind of stuff
  • 00:33:42
    where you actually need to deliver yeah
  • 00:33:44
    and if you if you look at the regulation
  • 00:33:46
    I mean you can actually make the
  • 00:33:47
    argument if you operate a system that is
  • 00:33:50
    process driven MH the outcome is very
  • 00:33:53
    often processed because you know
  • 00:33:55
    regulation by way yeah there a great
  • 00:33:58
    example of that was Adam 2's a couple of
  • 00:34:00
    years ago he wrote This brilliant
  • 00:34:02
    substock piece about how the global
  • 00:34:04
    climate change effort is actually just
  • 00:34:07
    basically an industry of people who go
  • 00:34:09
    from conference to conference making
  • 00:34:11
    proposals and then writing procedures
  • 00:34:13
    and then nothing happens and then they
  • 00:34:15
    go to the next conference and do the
  • 00:34:17
    same thing over and over again and it's
  • 00:34:18
    like yeah this is what this is in a
  • 00:34:20
    sense what the graduates of these Pro
  • 00:34:22
    our our universities do right they
  • 00:34:24
    become Consultants of sorts and then
  • 00:34:26
    everything is about like well we got a
  • 00:34:28
    plan and a process right did you
  • 00:34:29
    implement it did you invest it no we
  • 00:34:31
    just went to the next place and did the
  • 00:34:32
    same thing yeah totally yeah I mean I
  • 00:34:34
    mean if you look at what what is
  • 00:34:36
    regulation regulation to a large extent
  • 00:34:38
    is a definition of process for other
  • 00:34:39
    people yeah right so and that that's why
  • 00:34:42
    it's maybe not surprising that the
  • 00:34:44
    system that is driven by process itself
  • 00:34:46
    uh is producing lots of regulations AB
  • 00:34:50
    every but everything that is deliverable
  • 00:34:52
    really deliverable like housing you know
  • 00:34:56
    uh digiti ation you know all of these
  • 00:34:59
    projects where you really have to
  • 00:35:01
    implement the project and actually
  • 00:35:03
    create deliverables all of this has
  • 00:35:05
    become so difficult and and that's why
  • 00:35:08
    that's why at least part of the reason
  • 00:35:10
    in my mind that's why I'm you know I'm
  • 00:35:11
    getting involved here in the in the in
  • 00:35:13
    the efforts to try to reform public
  • 00:35:15
    administration to make it outcome driven
  • 00:35:17
    rather than process driven uh that's a
  • 00:35:20
    precondition because otherwise what will
  • 00:35:21
    happen is the next government will come
  • 00:35:23
    in yeah and the same thing will happen
  • 00:35:24
    again
  • 00:35:25
    AB yeah a great example of this was high
  • 00:35:28
    speeded 2 in the United Kingdom they
  • 00:35:30
    spent hundreds and hundreds of millions
  • 00:35:32
    if not billions of of pounds basically
  • 00:35:34
    connecting Birmingham to London and and
  • 00:35:37
    why was this well because everyone got
  • 00:35:39
    involved in the planning regulations and
  • 00:35:40
    I believe 60% of the track ended up
  • 00:35:42
    being buried cuz nobody wanted to look
  • 00:35:45
    at a train it's like no you can't do
  • 00:35:48
    that right if if it's n if the only
  • 00:35:51
    thing that matters is not in my backyard
  • 00:35:53
    nothing ever gets done and that's what
  • 00:35:55
    we've allowed to grow up so that's I
  • 00:35:57
    agree that's a huge part of it but again
  • 00:35:59
    just simple sort of like dissatisfaction
  • 00:36:02
    with you know the way things are
  • 00:36:04
    people's future prospects Etc how much
  • 00:36:06
    let me think about for example the Brit
  • 00:36:08
    I keep going back to Britain because I
  • 00:36:09
    know the place really well right but you
  • 00:36:11
    know think about what they did to
  • 00:36:12
    universi so you had some of the best
  • 00:36:13
    universities in the world you decided
  • 00:36:15
    you do an off balance sheet move and
  • 00:36:17
    basically give them fees you gave them
  • 00:36:20
    fees that kind of paid the way then you
  • 00:36:22
    allowed them to go to 9,000 quid 9,000
  • 00:36:25
    quid was only going to work if you allow
  • 00:36:27
    ,000 quid to go up because your costs go
  • 00:36:29
    up they then become huge land owners
  • 00:36:32
    basically building lots and lots of
  • 00:36:34
    accommodation for students usually
  • 00:36:35
    there's banking on China coming in so
  • 00:36:38
    they're basically long real estate at
  • 00:36:40
    this point in time their balance sheets
  • 00:36:41
    are completely contingent upon these
  • 00:36:43
    fees coming in all the time but then
  • 00:36:45
    there's a cap on the fees and they just
  • 00:36:47
    start to like run out of cash and now
  • 00:36:49
    the entire sector's in crisis either you
  • 00:36:51
    take it back in the public balance sheet
  • 00:36:53
    which they simply can't afford to do
  • 00:36:54
    after a decade of having a off balance
  • 00:36:56
    sheet or you basically start charging
  • 00:36:58
    American levels of fees and if you do
  • 00:37:00
    that then higher education becomes a
  • 00:37:02
    luxury good so you know when you've
  • 00:37:04
    taken really and the really ironic thing
  • 00:37:06
    is that uh it depends how you count it
  • 00:37:09
    the higher education is actually the
  • 00:37:11
    fourth or fifth biggest export that the
  • 00:37:13
    United States H so the United Kingdom
  • 00:37:15
    has by bringing people in and banking it
  • 00:37:17
    as a Services export so you know you
  • 00:37:19
    basically turn domestic higher education
  • 00:37:21
    into an export earner with a cap on the
  • 00:37:25
    price I mean it's just like why would
  • 00:37:27
    you do that and you cut yourself off
  • 00:37:30
    from the biggest Market as well through
  • 00:37:31
    brexit yeah and you cut yourself off the
  • 00:37:33
    biggest Market through brexit absolutely
  • 00:37:34
    so you know selfharm on self harm there
  • 00:37:37
    there so it's not it's not a happy time
  • 00:37:40
    I mean it's not a happy time but at the
  • 00:37:42
    same time you know let's let's let's try
  • 00:37:44
    and put sort of like you know not
  • 00:37:45
    something positive in it you know
  • 00:37:47
    there's only so much technocratic
  • 00:37:48
    nudging that we can do before the system
  • 00:37:52
    and blows up and you know I think we've
  • 00:37:53
    reached its limits I was I did an
  • 00:37:56
    interview with the radio program over
  • 00:37:58
    here a little while ago I'll repeat what
  • 00:37:59
    I said there cuz it's it's actually
  • 00:38:01
    Henry farell who came up with this it's
  • 00:38:03
    on a substack programmable mutter which
  • 00:38:05
    is really worth a look um but
  • 00:38:07
    essentially the Democratic part is
  • 00:38:09
    filled with people who don't actually
  • 00:38:10
    think things need to change that much we
  • 00:38:12
    need to have some rights for people that
  • 00:38:15
    like are on the margins whether they
  • 00:38:16
    happen to be you know gay or transexual
  • 00:38:18
    or whatever uh we need to be thorough on
  • 00:38:21
    civil rights and make sure the minority
  • 00:38:22
    communities are protected um economic
  • 00:38:25
    redistribution no we don't really do
  • 00:38:27
    that one maybe a little bit more higher
  • 00:38:29
    taxes but fundamentally things are okay
  • 00:38:31
    let's put in a few airbags right and
  • 00:38:33
    that and also trust us we know what's
  • 00:38:35
    going on we're the best people to manage
  • 00:38:37
    things and I just don't think that
  • 00:38:39
    anybody believes that anymore and there
  • 00:38:41
    are huge parts of Western communities
  • 00:38:44
    that essentially want things to change
  • 00:38:46
    now do they want them to change in a
  • 00:38:48
    progressive way no I mean the whole
  • 00:38:49
    immigration story is just a tragedy of
  • 00:38:53
    mismanagement we should have had a
  • 00:38:55
    proper conversation about immigration we
  • 00:38:57
    should have actually you know really
  • 00:38:59
    said look do communities have the right
  • 00:39:01
    to decide who lives amongst them or not
  • 00:39:03
    right because you know we're a democracy
  • 00:39:05
    do we allow this or not if we don't
  • 00:39:07
    allow this what are we actually saying
  • 00:39:08
    at the same time you've got aging
  • 00:39:10
    populations they're becoming less
  • 00:39:12
    healthy as they get older healthc Care
  • 00:39:14
    Systems throughout Europe and also in
  • 00:39:16
    the United States are basically held up
  • 00:39:17
    by skilled immigrant labor do you really
  • 00:39:19
    want to ban all that right so this is a
  • 00:39:22
    huge mess of a policy area and we're
  • 00:39:25
    really really screwed up by basically
  • 00:39:27
    nobody talk about it for the next 15
  • 00:39:29
    years that was just really really dumb
  • 00:39:31
    and it's handed the whole thing to the
  • 00:39:33
    right because they'll they'll talk about
  • 00:39:34
    it as long as you
  • 00:39:36
    want well I mean my uh as it looks the
  • 00:39:40
    in the German election the thecenter
  • 00:39:41
    will hold at least once more so but that
  • 00:39:44
    that is really I wouldn't quite say the
  • 00:39:45
    last sh but it's going to be a critical
  • 00:39:48
    government coming in uh now in uh in the
  • 00:39:51
    spring not just for Germany but also
  • 00:39:53
    obviously for Europe right with a lot of
  • 00:39:55
    other countries in uh in in political
  • 00:39:58
    difficulties so this is going to be a
  • 00:40:01
    pivotal time now in the second half of
  • 00:40:03
    the 2020s uh whether we can turn the
  • 00:40:05
    corner or not I mean we've mentioned an
  • 00:40:08
    awful lot of uh difficult issues but as
  • 00:40:10
    we as we close Mark give me one reason
  • 00:40:13
    to be cheerful reasons to be cheerful
  • 00:40:16
    it's it's really hard at the moment I
  • 00:40:18
    mean you know I'm living in a country
  • 00:40:19
    whereby they might suspend the
  • 00:40:20
    Constitution next week um all right so
  • 00:40:23
    you know what continues a pace right I
  • 00:40:26
    think the longterm play on this is and
  • 00:40:28
    this is sort of the next book that I'm
  • 00:40:30
    I'm writing which is essentially
  • 00:40:32
    America's about to make a really big
  • 00:40:34
    mistake and the big mistake is to double
  • 00:40:36
    down on carbon because at the end of the
  • 00:40:38
    day climate change is a problem of
  • 00:40:41
    physics it's not a problem of politics
  • 00:40:43
    and it doesn't care what you think and
  • 00:40:45
    it doesn't care if you deny it and even
  • 00:40:49
    though there are sort of you anti-green
  • 00:40:50
    populist moves in the in the EU you
  • 00:40:53
    don't really have the type of intense
  • 00:40:55
    carbon coalitions and lobbyists for
  • 00:40:57
    carbon in the EU that you have in the
  • 00:41:00
    United States it's more fragmented
  • 00:41:02
    you've got examples like Norway whereby
  • 00:41:04
    they live off carbon but then they build
  • 00:41:06
    a green economy right um Denmark and
  • 00:41:09
    other places like show that this can be
  • 00:41:11
    done Austria didn't give a crap about
  • 00:41:13
    green stuff now because its firms are
  • 00:41:15
    key and key parts of the supply chains
  • 00:41:18
    of firms that want to get into this
  • 00:41:19
    space they start doing it so there's
  • 00:41:22
    lots of momentum apart from policy and
  • 00:41:24
    still in policy in Europe to push us in
  • 00:41:26
    a kind of green trans I Direction um
  • 00:41:29
    China is 100% serious about this yes
  • 00:41:31
    they open coal mines but they open coal
  • 00:41:33
    mines to make the electricity to make
  • 00:41:34
    the poly silicon to put up the solar uh
  • 00:41:37
    and now that America's decided it
  • 00:41:39
    doesn't want to do that it's basically
  • 00:41:40
    going to dominate and Supply essentially
  • 00:41:43
    in a very Progressive Way the rest of
  • 00:41:46
    the world with the Green Tech it needs
  • 00:41:48
    to adapt and that's going to go ahead
  • 00:41:50
    either and I think that sadly 10 years
  • 00:41:52
    from now when America comes off its
  • 00:41:53
    carbon binge a bit like sort of the frat
  • 00:41:56
    boy that discovers the the keg of beer
  • 00:41:57
    at 2: in the morning that when you get
  • 00:41:59
    to 600 and you drunk the lot nobody
  • 00:42:02
    really cares anymore and the part is
  • 00:42:03
    over at that point in time I think
  • 00:42:06
    America has to make some hard choices
  • 00:42:08
    but in for the next decade in a world
  • 00:42:10
    that's carbon short in a world that even
  • 00:42:13
    with a a a huge on supply of carbon
  • 00:42:15
    coming from Argentina Guana Brazil
  • 00:42:19
    Indonesia America is not the swing
  • 00:42:21
    producer in the way that Saudi is but it
  • 00:42:23
    can live with really low prices it can
  • 00:42:25
    help lower costs it can do lot of things
  • 00:42:27
    they're they're going to go down this
  • 00:42:29
    way and in the short term it's going to
  • 00:42:30
    make a lot of cash and you know it's
  • 00:42:32
    going to work but I think in the long
  • 00:42:34
    term what it does is it just really
  • 00:42:36
    questions the future role of American
  • 00:42:38
    leadership cuz the rest of the world the
  • 00:42:40
    other
  • 00:42:41
    7.7 billion people are just going to go
  • 00:42:45
    no we're going to go that way mate it's
  • 00:42:47
    a different direction and I think that
  • 00:42:49
    that long-term travel that that that's
  • 00:42:51
    just the long-term direction of travel
  • 00:42:53
    and America's about to put itself in the
  • 00:42:55
    wrong foot so it's not a hopeful one in
  • 00:42:58
    the sense that I think what it does is
  • 00:42:59
    it causes a lot of disruption um if we
  • 00:43:02
    end up with high tariffs if five years
  • 00:43:04
    after that we end up with rebalancing if
  • 00:43:07
    we end up with the Germans much less
  • 00:43:08
    addicted to doing exports and able to
  • 00:43:11
    consume given that they've got the quote
  • 00:43:13
    unquote fiscal space hate that term
  • 00:43:15
    don't think it's real but nonetheless
  • 00:43:17
    right um You can actually then build you
  • 00:43:20
    can do the infrastructure you can do the
  • 00:43:22
    things you need to do you can consume
  • 00:43:23
    more you can rebalance a rebalanced
  • 00:43:25
    world economy over the next decade would
  • 00:43:27
    be much better than the permanently
  • 00:43:29
    imbalanced one that we've got now that
  • 00:43:30
    is addicted to the supply of treasury
  • 00:43:32
    bills to keep it going so I think that
  • 00:43:34
    if you take those bigger macro trends
  • 00:43:37
    that are going to dominate the next 10
  • 00:43:39
    years yeah it's going to be rough for a
  • 00:43:41
    while but at the end of the day if we
  • 00:43:43
    want to survive as a species and most of
  • 00:43:45
    us do that's the direction of travel
  • 00:43:48
    it's just a tragedy that America's about
  • 00:43:50
    to go in another
  • 00:43:51
    Direction well Mark on that note thank
  • 00:43:54
    you very much uh again for joining me
  • 00:43:56
    today to discuss these matters I mean
  • 00:43:58
    obviously this one calls for an
  • 00:44:01
    extension at some point down down the
  • 00:44:03
    down the lane yeah I mean we should
  • 00:44:05
    check basically we should check in in
  • 00:44:06
    three months and see exactly what has
  • 00:44:08
    happened what they want to do how wrong
  • 00:44:10
    I was about everything that I said here
  • 00:44:13
    and then do a course correction and and
  • 00:44:15
    see whether the Constitution is still in
  • 00:44:16
    place exactly I mean you know who knows
  • 00:44:19
    who knows you might have to try and find
  • 00:44:20
    me in one of the interment
  • 00:44:23
    cars well that's that's certainly not
  • 00:44:25
    going to happen I'm pretty confident
  • 00:44:27
    about that so Mark let's catch up soon
  • 00:44:30
    again and uh see how the thing goes
  • 00:44:32
    thank you very much all the
  • 00:44:37
    best this is social Europe podcast we
  • 00:44:41
    are dedicated to strengthening democracy
  • 00:44:43
    by discussing the most pressing
  • 00:44:45
    political economic and social issues of
  • 00:44:48
    our time so welcome and enjoy the
  • 00:44:51
    conversation
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