Speaker 1: Well, I think one of the things that coronavirus has done,
Speaker 1: just like bar the fact that our globalized economy is
Speaker 1: an economy that really works for China first and foremost,
Speaker 1: and not for the United States, certainly not for American workers.
Speaker 1: Are supply chains where are they now in China? Our
Speaker 1: medical devices where they made China? Are pharmaceuticals where they
Speaker 1: made China? Are big tech companies who do they want
Speaker 1: to do business with China? I think it's time that
Speaker 1: we asked ourselves what kind of an economy have we
Speaker 1: allowed to be created and what is it doing for
Speaker 1: American workers? We need some structural reform at Senator Josh Holly,
Speaker 1: This might be the biggest thing that comes out of
Speaker 1: the coronavirus. On the other end is a different relationship
Speaker 1: with China. We've been kind of ignoring the fact that
Speaker 1: we use, we allow slave labor to bring us cheap
Speaker 1: socks and that sort of thing for years. But so
Speaker 1: let's talk about that with Ian Bremer, President and founder
Speaker 1: of Eurasia Group. It's always a pleasure Ian, how are you, sir?
Speaker 1: Very well? But you know, I mean the Chinese are
Speaker 1: too expensive to make our socks right now. That's largely
Speaker 1: Bangladesh excellent so but cheap consumer goods electronics in particular.
Speaker 1: To fixate on socks at this moment I think would
Speaker 1: be a mistake. The bigger pictures give you that. I mean,
Speaker 1: why are you focusing on thought that was a for
Speaker 1: instance and maybe it was a bad for instance in
Speaker 1: generally and that so, hey, do you think this is
Speaker 1: going to be an inflection point, as the kids say,
Speaker 1: and and how big a one in terms of the
Speaker 1: world and specifically the US is willingness to be in
Speaker 1: bed economically with China? I do, because especially most people
Speaker 1: are quarantining right now, which means they're not wearing shoes,
Speaker 1: they're walking around their house in suck. So we're gonna
Speaker 1: need We're gonna need a lot more. It's becoming a
Speaker 1: nationally strategic important asset. And if all of them are
Speaker 1: coming from China, clearly we're gonna need to stop that.
Speaker 1: We're gonna need to bring that production back to the
Speaker 1: Unit States. Most of us didn't realize that so many
Speaker 1: of our drugs remain in China, and then and then
Speaker 1: the fact that they can lie to us and unleasha
Speaker 1: virus like this on us, and all this stuff it's
Speaker 1: just it seems to have changed our view. Is that
Speaker 1: you think that's correct? Well, the fact is, guys, we
Speaker 1: have a just in time supply chain. It is incredibly efficient,
Speaker 1: It leads to a lot of growth, and we've all
Speaker 1: our companies have made a lot of money, shareholders have
Speaker 1: made a lot of money. What we don't have is
Speaker 1: it just in case supply chain. If anything breaks, if
Speaker 1: you suddenly have a major disruption, we're in a lot
Speaker 1: of trouble. And a lot of that supply chain comes
Speaker 1: out of China, whether it is electronics or major consumer durables,
Speaker 1: or our medical supply chain, our health care, so much
Speaker 1: of that is reliance on China. They don't have rule
Speaker 1: of law. Um, they don't have an independent judiciary. Uh.
Speaker 1: Their state has much more influence over their economy than
Speaker 1: the private sector companies do. So it's hardly a free market.
Speaker 1: It's state capitalists and uh and and our relationship with
Speaker 1: them right now is not good and it's probably going
Speaker 1: to get a lot worse. So, I mean, given all
Speaker 1: of that, it's pretty clear that we're gonna need to
Speaker 1: think very differently about our supply chain, and we're gonna
Speaker 1: bring a lot more manufacturing closer to where we actually
Speaker 1: consume those goods. But keep in mind that labor also
Speaker 1: is less important to capital. We don't need. Not only
Speaker 1: has Chinese labor gotten a lot more expensive, um, but
Speaker 1: also with robotics and automation and big data and deep
Speaker 1: learning and and uh you know, and and and and
Speaker 1: new types of manufacturing processes, you just don't need anywhere
Speaker 1: near the amount of labor to produce this stuff. So
Speaker 1: a lot of operations had been thinking about changing their
Speaker 1: supply chain for a long time, and they didn't because
Speaker 1: they were making so much money. The CEOs didn't last
Speaker 1: very long. It's like, let's have somebody else do that.
Speaker 1: Now that's going to happen. So the point that you
Speaker 1: made before we talked about socks is that the most important,
Speaker 1: the most important thing coming out of this crisis, that
Speaker 1: we're gonna have a very different relationship with China. I
Speaker 1: think is absolutely case. The questions do we go so
Speaker 1: far that it becomes a cold war? Um? And I
Speaker 1: think it's plausible. And we also have to recognize China
Speaker 1: is a lot more powerful today than they worked during
Speaker 1: the SARS crisis or during two thousand eight, And there
Speaker 1: are a lot of countries around the world right now
Speaker 1: that see the way that Chinese have responded to this
Speaker 1: coronavirus crisis or the China virus as Trump is saying,
Speaker 1: and how they're willing to provide a lot of humanitarian
Speaker 1: aid to the Europeans in the Middle Easterns and others.
Speaker 1: There's gonna be a lot more hedging of American allies
Speaker 1: towards Beijing and away from Washington. And that matters too. Really,
Speaker 1: that's an interesting twist. Did not see that? I mean,
Speaker 1: think about after nine eleven when Alwa lead from Saudi
Speaker 1: Arabia and the Saudia is approximately responsible for all of that.
Speaker 1: That's where most of the bombers came from, offered money
Speaker 1: to the New York to New York, so then Mayor
Speaker 1: Giuliani told him to go scratch. When Jack Ma comes
Speaker 1: to the United States and offers us five hundred thousand
Speaker 1: masks and test kits that we can't produce ourselves right now,
Speaker 1: first of all, it hurts your heart, But second of all,
Speaker 1: it tells you just how how different this global environment is.
Speaker 1: And we need to get our heads out of our
Speaker 1: asses a bit. We need to stop with the American exceptionalism.
Speaker 1: We have the best of everything, including health care. We don't,
Speaker 1: and we're gonna have to actually start making sure that
Speaker 1: we do again. So A and Bremer, president founder of
Speaker 1: Eurasia Group, is on the line. I watched the video.
Speaker 1: I'm sure you have two of the spokesperson for the
Speaker 1: Chinese Bureau of Foreign Affairs in essence saying there will
Speaker 1: be no decoupling. This is foolish, that you need to
Speaker 1: stop slandering China, etcetera. How how concerned are the Chinese
Speaker 1: about how this whole uh you know, the era has
Speaker 1: has hurt their reputation. Um. I think they're much less
Speaker 1: worried about how it's hurt their reputation. UM. You know,
Speaker 1: I remember during the earthquake in Indonesia, the big one
Speaker 1: and the tsunami that came afterwards, wiping out all of
Speaker 1: those towns. The Americans were boots on the ground in
Speaker 1: Indonesia almost immediately, and I mean the massive grassroots support
Speaker 1: for the United States that came out of that was extraordinary.
Speaker 1: And the Japanese put a lot of money in real fast,
Speaker 1: the government down the private sector, and the Chinese were
Speaker 1: late and did almost nothing. I think they offered two
Speaker 1: or four million dollars, like a couple of weeks after
Speaker 1: the fact, and and it really I mean they were like, well,
Speaker 1: we're poor, we can't do anything. But it really undermined
Speaker 1: China as this you know, have all this economic influence,
Speaker 1: all this trade, but really not not a properly functioning government.
Speaker 1: This is a very different place. And so even though
Speaker 1: the Chinese did cover up um this coronavirus, and while
Speaker 1: they were covering it up, allowed over a million people
Speaker 1: from Uhan to travel outside to China and other countries.
Speaker 1: And that's why we suddenly this massive expansion, this explosion
Speaker 1: of cases, not just across China, but also in Washington State,
Speaker 1: in Iran and Italy. I mean, where did this come from.
Speaker 1: It came from Wuhan. UM. But since then they cracked
Speaker 1: down very severely. They've gotten out of the depths of
Speaker 1: this um uh epidemiological crisis, even though their economy is
Speaker 1: still very slow, very quickly. While the Europeans are the
Speaker 1: epidemiological center of this breakout in the Americans are only
Speaker 1: a couple of weeks behind um and the Chinese, who
Speaker 1: produced the vast majority of the world's medical supplies and
Speaker 1: also have an awful lot of medical personnel are now
Speaker 1: using that both in terms of selling it but also
Speaker 1: providing it um for and there will be a bill
Speaker 1: to be paid long term um to all these countries
Speaker 1: around the world. It's it's very clear the Chinese feel
Speaker 1: in a much stronger place. Where after the two thousand
Speaker 1: and eight financial crisis, it was the Americans that we're
Speaker 1: leading the charge. In the G twenty, we were the
Speaker 1: ones doing the big stimulus, both for Wall Street and
Speaker 1: for Detroit. We were the ones coordinating with other central
Speaker 1: bank governors around the world. There's been no such coordination
Speaker 1: this time around, and there doesn't seem to be any planned.
Speaker 1: New York Times had this video they put together of
Speaker 1: China's propaganda effort, both domestically there in China and for
Speaker 1: the world. That was pretty impressive that I was looking
Speaker 1: at something that they have these TV shows that look
Speaker 1: like Ellen and Oprah, and they're spouting all this crap
Speaker 1: about what a great job they did of handling it,
Speaker 1: and isn't g amazing and all this sort of stuff.
Speaker 1: They're really good at that sort of thing, aren't they. Yeah,
Speaker 1: they really are. We used to be really good at
Speaker 1: We had radio for Europe UM, and uh, you know,
Speaker 1: we would really propound American values and it wasn't hard
Speaker 1: to do because the United States was doing so well
Speaker 1: and leading by example in so many ways. Um that
Speaker 1: now today I would argue that the Chinese a lot
Speaker 1: of it is propaganda, as the treatment of the average
Speaker 1: Chinese citizen, of course, is nothing that anyone in the
Speaker 1: United States or Europe or Canada would tolerate. But their
Speaker 1: propaganda has gotten certainly, they're putting a lot more money
Speaker 1: into it. The production values are very high, and they
Speaker 1: also increasingly have some messages that they can actually sell
Speaker 1: that that that resonates with others around the world. So
Speaker 1: I mean, coming out of this crisis, the Chinese model
Speaker 1: is going to look a lot more robust and no
Speaker 1: one will be able to say it's the US leado
Speaker 1: order anymore. I mean that that that will be formally gone. Interesting.
Speaker 1: Ian Bremmer, President and founder of Eurasia Group, always enjoy
Speaker 1: the Chattian. Thanks for a carveness out a couple of minutes.
Speaker 1: Let's talk again soon. Good talking, guys. Thanks. You know,
Speaker 1: the the the I'm up with America part of me,
Speaker 1: which is a lot of me, It's like most of me,
Speaker 1: it's practically all of me. Really hates hearing people saying that.
Speaker 1: In my my reaction is always some people saying that
Speaker 1: sort of stuff. But if but if China makes most
Speaker 1: the world's medical supplies, for instance, that means most of
Speaker 1: the world is on the hook to the Chinese, that
Speaker 1: means something right and they and they're they're the one
Speaker 1: that get to yank the leash this way or that,
Speaker 1: not us right the way it was for a very
Speaker 1: long time with practically everything. Yeah, yeah, well, listen, there
Speaker 1: are a couple of kinds of patriotism. There's the raw
Speaker 1: raw all the time, dance and Uncle Sam outfit type
Speaker 1: of patriotism, which is fine. It's it has its role.
Speaker 1: But you know, I just I tend and people who
Speaker 1: I talked to about the country tend to have more
Speaker 1: of a I don't know, I maybe a good example
Speaker 1: be like Bill Belichick, the head coach of the Patriots.
Speaker 1: He loves the Patriots and the Patriots organization. Therefore, he
Speaker 1: has utterly clear eyed about what it does well, what
Speaker 1: it needs to work on, and what it's doing poorly.
Speaker 1: And he's utterly clear headed about the Patriots opponents and
Speaker 1: what they're going well, and how we need to counter them.
Speaker 1: And and a lot of other countries are in our
Speaker 1: opponents at all, not in a significant way. China is
Speaker 1: an opponent absolutely, And so to say, wow, we've really
Speaker 1: become dependent on China and we've lost our manufacturing capacity
Speaker 1: and something like pharmaceuticals, which is critical to national security.
Speaker 1: That's that's not a lack of patriotism, man, that's being honest.
Speaker 1: It reminds me to keep the sports thing going of
Speaker 1: when you've got like a team you're rooting for is
Speaker 1: really good, and hey, and we might as well keep
Speaker 1: on this metaphor because there ain't any real sports, right.
Speaker 1: Go ahead. When a team is you know, like a
Speaker 1: championship team or whatever, it happens with them all the
Speaker 1: time and they kind of get in their head that
Speaker 1: they're gonna win just because of your jersey, just because
Speaker 1: the name on the jersey. You Yeah, we automatic we're
Speaker 1: better than everybody else. Right, Well, sometimes you get exposed
Speaker 1: as for having some problems. The good thing is sometimes
Speaker 1: it's just you just need to be reminded because you
Speaker 1: actually are better than everybody else. Yes we are that
Speaker 1: we are actually the championship team. Just not playing like
Speaker 1: it for a while, right, Not perfect, absolutely a great
Speaker 1: deal to be proud of. And our system is better
Speaker 1: than their system, right, oh yeah, and we just have
Speaker 1: to make sure it stays that way. And so, you know,
Speaker 1: it's a realistic person understands both are true. We are
Speaker 1: the greatest country on earth with the greatest system and
Speaker 1: the greatest constitution and the rest of it, and we
Speaker 1: have stuff we need to work on. Don't believe the
Speaker 1: crap coming out of the universities that America is the
Speaker 1: most racist country on earth and that's based on slavery,
Speaker 1: and know, please, that's garbage. But you know, be a realist.
Speaker 1: So I've been complaining about you prepper weirdos. Somebody pointed out,
Speaker 1: I've got my anger pointing in the wrong direction.