WEBVTT - Fed and Geopolitical Risks in 2025 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, podcasts, radio news. 0:00:12.480 --> 0:00:16.560 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.560 --> 0:00:19.880 at seven am Eastern on Apple CarPlay or Android Auto 0:00:19.920 --> 0:00:23.159 with the Bloomberg Business app. Listen on demand wherever you 0:00:23.239 --> 0:00:26.440 get your podcasts, or watch us live on YouTube. 0:00:26.920 --> 0:00:29.120 Richard Claret is here, the vice chairman of the FED, 0:00:29.160 --> 0:00:36.400 a prodigious economists associated with dynamics stochastic general equilibrium theory. 0:00:36.520 --> 0:00:39.559 We're not going there. People drive off the road, but 0:00:39.640 --> 0:00:42.239 we are thrilled at the former vice chairman is with 0:00:42.360 --> 0:00:46.880 us this morning. James Carter, James o'carter has to fill 0:00:46.960 --> 0:00:51.280 Michael Blumenthal's slot. He migrates the FED chare over the 0:00:51.320 --> 0:00:56.480 Treasury Secretary and goes, now what and he picked Paul Voker. 0:00:57.080 --> 0:00:59.720 Where were you when he did that? And it's seventy nine. 0:01:00.080 --> 0:01:01.880 You would at Illinois at the time. 0:01:02.480 --> 0:01:03.000 I was not. 0:01:03.200 --> 0:01:06.480 I had just graduated Illinois and I think I was 0:01:06.520 --> 0:01:09.360 in my car driving out to Boston to start graduate school. 0:01:09.560 --> 0:01:11.399 Did you go Paul who? Oh? 0:01:11.440 --> 0:01:15.360 No, that he was already known at least in macro 0:01:15.520 --> 0:01:16.200 circles then. 0:01:16.280 --> 0:01:17.840 But yeah, it's. 0:01:17.560 --> 0:01:18.800 It's just a big deal. 0:01:18.880 --> 0:01:21.360 It was a big It was a huge deal. Yeah, 0:01:21.760 --> 0:01:24.880 the store the inflation worries we have now, and part 0:01:24.920 --> 0:01:28.240 of that is, OMG, back to the sixties, that we're 0:01:28.240 --> 0:01:31.600 going to get inflation, not like what vulgar faced, but 0:01:31.840 --> 0:01:34.039 a higher inflation. Do you buy it? 0:01:35.319 --> 0:01:35.840 Oh no, No. 0:01:36.280 --> 0:01:38.080 Ultimately we're going to get the rate of inflation the 0:01:38.120 --> 0:01:41.319 FED once and and I think the FED once inflation. 0:01:41.040 --> 0:01:42.400 Around two percent. 0:01:42.440 --> 0:01:44.880 There's always shocks and noise, but but that's where we're 0:01:44.880 --> 0:01:45.520 going to end up. 0:01:46.160 --> 0:01:47.400 How are we going to get there? I mean, are 0:01:47.400 --> 0:01:50.000 they going to have to? I mean it just feels 0:01:50.000 --> 0:01:53.240 like that that inflation is kind of stickier around this level. 0:01:53.280 --> 0:01:57.520 Here's how do you think this is going to play out? 0:01:58.480 --> 0:01:59.559 Well? I agree. 0:01:59.640 --> 0:02:02.120 In fact, if anything, you know, the bumpy road analogy 0:02:02.160 --> 0:02:06.440 has proven to be a good one. Progress continued in 0:02:06.520 --> 0:02:08.880 twenty four but slowed, you know. 0:02:09.000 --> 0:02:10.480 I think we maybe discussed. 0:02:10.080 --> 0:02:13.760 When I was on your show before hearkening back to 0:02:13.800 --> 0:02:17.120 the eighties, and so what we could see is what 0:02:17.160 --> 0:02:20.440 we used to call opportunistic disinflation. That is, you do 0:02:20.480 --> 0:02:22.800 the heavy lift and get inflation close to where you 0:02:22.840 --> 0:02:24.800 want it, so now say two and a half, but 0:02:24.840 --> 0:02:27.680 you basically wait till the next recession to cover that 0:02:27.760 --> 0:02:30.880 last mile, and so that's what we may see inflation 0:02:31.120 --> 0:02:34.640 in the load of mid twos until the next downturn. 0:02:35.720 --> 0:02:37.840 Are you forecasting a downturn anytime? 0:02:38.280 --> 0:02:41.560 Oh no, no, no, no, But remember we haven't repealed 0:02:41.560 --> 0:02:44.960 the business cycle so on. I think the unconditional chance 0:02:45.000 --> 0:02:46.600 of a recession is about one and six. 0:02:46.680 --> 0:02:48.440 So at some point we're going to have a recession. 0:02:48.560 --> 0:02:50.840 April of four years back when the Red Sox had 0:02:50.840 --> 0:02:55.400 a chance, Richard Claire to fed let me quote exactly, folks, 0:02:55.639 --> 0:02:57.480 I mean, I mean, this is just what it's about. 0:02:58.040 --> 0:03:01.160 Get the Sparta gets angry at me when I quote Latin. Okay, 0:03:01.240 --> 0:03:04.880 he's like, you know, time, give it up, Clarita. Inflation 0:03:05.000 --> 0:03:07.960 to average is two percent over time represents an ex 0:03:08.040 --> 0:03:13.440 anti aspiration of the FOMC, but not a time inconsistent 0:03:14.080 --> 0:03:17.359 ex post commitment. Yeah, you lost some of us there, 0:03:17.400 --> 0:03:22.040 all difference equation, guy, What is a time inconsistent ex 0:03:22.160 --> 0:03:23.080 post commitment? 0:03:23.560 --> 0:03:27.000 Well yeah, I think that was probably why share Clarido 0:03:27.120 --> 0:03:32.560 channeling Professor Clarita. The basic point was that price stability 0:03:32.600 --> 0:03:36.360 means that expectations of inflation are anchored at a low number, 0:03:36.400 --> 0:03:40.160 so say two percent, they're always going to be shocks, oil, shocks, whatever. 0:03:40.360 --> 0:03:42.160 But you want people to expect. 0:03:41.720 --> 0:03:44.360 Over five years that inflation is going to be two percent, 0:03:44.440 --> 0:03:48.880 and so really inflation targeting is really about targeting expected inflation. 0:03:48.920 --> 0:03:50.600 And so the basic idea there is, if. 0:03:50.520 --> 0:03:52.600 You want people to expect inflation is going to be 0:03:52.720 --> 0:03:54.840 too you want to try to keep it at two 0:03:55.000 --> 0:03:55.600 on average. 0:03:55.640 --> 0:03:57.120 Okay, I'm going to go to the New School of 0:03:57.200 --> 0:04:01.200 Social research, Kyle Brunner in company. There's something new. It's 0:04:01.240 --> 0:04:04.360 called the debt in the deficit? Are we losing our 0:04:04.440 --> 0:04:07.880 anchored ability with the debt in the deficit where it is? 0:04:08.120 --> 0:04:10.160 Well, it makes the Fed's job a hell of a 0:04:10.200 --> 0:04:12.800 lot harder, There's no doubt about it. And I'm glad 0:04:12.840 --> 0:04:15.920 Tom that you mentioned both debt and deficit because they're 0:04:15.920 --> 0:04:18.520 both relevant. The deficit is how much we're borrowing every 0:04:18.560 --> 0:04:21.120 year going forward. The debt is how much we borrowed 0:04:21.160 --> 0:04:23.880 in the last two hundred and fifty years, and that 0:04:23.960 --> 0:04:26.440 number is now north of one hundred percent of GDP. 0:04:26.640 --> 0:04:28.440 And the last time we saw a number like that 0:04:28.880 --> 0:04:30.920 was in nineteen forty five, at the end of World 0:04:31.000 --> 0:04:33.640 War Too. Indeed, Ryan Hart and Rogueoff wrote a book 0:04:33.680 --> 0:04:35.920 ten years ago that said, you know, usually when debt 0:04:35.960 --> 0:04:39.000 gets one hundred percent of GDP, bad stuff happens, and 0:04:39.040 --> 0:04:41.559 so it will make the Fed's job harder for sure. 0:04:42.080 --> 0:04:44.920 When I've been on Wall Street since nineteen eighty six, 0:04:44.960 --> 0:04:47.040 we've been talking about deficits. 0:04:46.520 --> 0:04:49.599 And the dead since nineteen eighty at least. Then is 0:04:49.640 --> 0:04:53.120 it ever going to come to roosts? What will it be? 0:04:53.160 --> 0:04:56.200 We have an auction for United States treasures and nobody 0:04:56.200 --> 0:04:56.680 shows up. 0:04:56.720 --> 0:05:00.000 Well, it's a great point because I started my career 0:05:00.080 --> 0:05:03.680 around the same time, also in Boston. Yeah, so the 0:05:03.720 --> 0:05:07.479 boy has now cried wolf for forty years, but they're 0:05:07.720 --> 0:05:10.919 back in those days people were angsting about debt and deficits, 0:05:10.960 --> 0:05:14.040 but debt was thirty percent of GDP, not one hundred 0:05:14.640 --> 0:05:17.279 and so as the numbers get bigger, but the US 0:05:17.320 --> 0:05:19.680 can kick this can down the road because we still 0:05:19.720 --> 0:05:21.320 are the global reserve currency. 0:05:21.360 --> 0:05:22.240 So let me take a while. 0:05:22.320 --> 0:05:24.880 We welcome all of you across the nation, and I 0:05:25.080 --> 0:05:26.960 can't say enough about the schedule to they thank you, 0:05:27.040 --> 0:05:30.279 liz In Saunders and Craig Moffatt, the former vice chairman 0:05:30.560 --> 0:05:33.560 the other Federal Reserve System, Richard claireta Columbia and PIMCO 0:05:34.320 --> 0:05:37.719 with us this morning. Richard Claida, let's go back to 0:05:38.200 --> 0:05:43.279 Girtler in Clarida and the theory, the mathematics, the complexities 0:05:43.320 --> 0:05:47.080 of DSGE. You've had the courage to say, I'm thinking 0:05:47.240 --> 0:05:50.520 simpler now, Oh yeah. Do we have an operative theory 0:05:50.560 --> 0:05:54.120 at the Equals Building? If everyone's thinking simpler in the 0:05:54.160 --> 0:05:56.920 new humility, well, I don't think. 0:05:56.800 --> 0:05:59.240 The Eccles building are now the Martin Building can afford 0:05:59.240 --> 0:06:02.160 to be that theoretical. Indeed, my four years at the 0:06:02.360 --> 0:06:05.679 FAD really impressed upon me that there's there's a limit 0:06:05.760 --> 0:06:07.120 to how far theory can take you. 0:06:07.160 --> 0:06:09.080 It's a good place to start, you know. 0:06:09.160 --> 0:06:11.520 I think all central banks, including the FAD, are trying 0:06:11.520 --> 0:06:15.920 to learn lessons about the inflation and the disinflation, and 0:06:16.360 --> 0:06:20.640 I think an appropriate level of humility is probably warranted 0:06:20.720 --> 0:06:21.160 right now. 0:06:22.080 --> 0:06:22.719 The labor market. 0:06:22.800 --> 0:06:25.520 We're going to get some more labor market data today 0:06:25.560 --> 0:06:28.000 with initial jobs claims and then on Friday with the 0:06:28.880 --> 0:06:32.960 non farm payrolls. I don't know, four point two percent. 0:06:33.000 --> 0:06:34.640 That seems like a good labor market. 0:06:35.360 --> 0:06:36.560 It's a great labor market. 0:06:36.880 --> 0:06:40.080 You know. The the unemployment rate right before the pandemic 0:06:40.800 --> 0:06:45.320 was running right around three point nine four percent. The 0:06:45.400 --> 0:06:49.679 unemployment right now is historically low. Wage gains exceed inflation. 0:06:49.800 --> 0:06:52.640 It is a good labor market. The labor market clearly 0:06:52.680 --> 0:06:54.120 was overheating a couple of years ago. 0:06:54.200 --> 0:06:55.400 But it is a good labor You. 0:06:55.320 --> 0:06:57.760 Just said it's a great it's a good labor market. 0:06:57.800 --> 0:07:00.240 I've heard you say it's a solid economy. We had 0:07:00.320 --> 0:07:03.359 eighty two point eight percent of our listeners and viewers 0:07:03.360 --> 0:07:06.720 saying the vice chairman's nuts, okay, and that it's a 0:07:06.800 --> 0:07:12.200 disaggregated economy. Well, and there's people out there, charge card debt, bankruptcies, 0:07:12.360 --> 0:07:16.239 people can't get jobs, et cetera. Rent's coming down out west. 0:07:16.520 --> 0:07:20.120 How does a FED prosecute a barbel America? 0:07:20.400 --> 0:07:23.400 Well, okay, so I'm glad you gave me an entree here. 0:07:23.440 --> 0:07:25.400 So when I said it's a good labor market, you 0:07:25.400 --> 0:07:28.080 would rather be operating with a four percent unemployment than 0:07:28.080 --> 0:07:32.000 a fourteen percent unemployment. But absolutely, Tom, Indeed, if anything, 0:07:32.040 --> 0:07:34.360 I think the last five years have impressed upon me 0:07:35.040 --> 0:07:38.040 how important it is both for macro economists and thinking 0:07:38.080 --> 0:07:42.000 about the political economy of macro to understand that there's 0:07:42.080 --> 0:07:44.600 you know, there are halves and has nuts. And you know, 0:07:44.600 --> 0:07:46.680 if you own your home and if you own stocks, 0:07:46.680 --> 0:07:50.040 you've had a great five years. But forty percent of 0:07:50.040 --> 0:07:52.440 Americans don't own. They rent, and they don't own stocks, 0:07:52.480 --> 0:07:54.600 and for them, all of this talk about a great 0:07:54.600 --> 0:07:57.800 economy just seems like gibberish. So let me acknowledge the 0:07:57.880 --> 0:08:00.960 point thirty seconds here, just finish the thought. 0:08:01.320 --> 0:08:06.200 Can a FED prosecute one monetary policy for two John 0:08:06.320 --> 0:08:07.320 Edwards Americas? 0:08:08.840 --> 0:08:11.440 Well, the Fed only has one, really one tool, which 0:08:11.520 --> 0:08:14.320 is interest rates or job vooning about interest rates. 0:08:14.360 --> 0:08:16.480 And so what the Fed at best can do is 0:08:16.520 --> 0:08:16.880 it can. 0:08:16.880 --> 0:08:19.200 Keep the average rate of unemployment low, and it can 0:08:19.240 --> 0:08:22.680 keep the average rate of inflation low. But the factors 0:08:22.680 --> 0:08:25.160 that we just discussed and even more factors, are really 0:08:25.200 --> 0:08:27.720 beyond what monetary policy can address. 0:08:28.040 --> 0:08:31.239 Paul wants to get to the adult conversation on tariff, 0:08:31.280 --> 0:08:34.079 so I'll be the rude one. Can you serve a 0:08:34.160 --> 0:08:36.719 treasury with mister pissent? Have you made the trip to 0:08:36.800 --> 0:08:40.120 mar A Lago? Are you under any consideration by the 0:08:40.160 --> 0:08:43.080 administration for your value services? 0:08:43.080 --> 0:08:50.400 I love doing what I'm doing, so the answer is no. 0:08:48.679 --> 0:08:49.720 That's your que Paul. 0:08:49.760 --> 0:08:52.600 I was just putting the Clarity Time Out. 0:08:52.559 --> 0:08:55.760 Chair and Lisa Matteo has been reporting on more tariff 0:08:55.840 --> 0:08:58.200 news here coming from this president seems to be an 0:08:58.200 --> 0:09:01.679 economic policy tool that this incoming president really is going 0:09:01.720 --> 0:09:04.120 to rely upon. Can you give us your, I don't 0:09:04.120 --> 0:09:07.280 know your two cents on tariffs and kind of how 0:09:07.280 --> 0:09:08.240 would you think about them? 0:09:08.720 --> 0:09:12.600 Okay, tariffs are complicated because they have multiple effects. One 0:09:12.720 --> 0:09:14.960 is one thing we know for sure they do raise revenue. 0:09:16.000 --> 0:09:16.840 The other thing we. 0:09:16.800 --> 0:09:19.840 Know is they'll put upper pressure on the price of imports. 0:09:19.880 --> 0:09:24.080 How much is hard to estimate, depends on if companies 0:09:24.120 --> 0:09:29.320 absorbed in the margins. They can also invite retaliation, which 0:09:29.360 --> 0:09:31.600 also then influences our ability to. 0:09:33.160 --> 0:09:36.680 Export. And so it's really been a number of. 0:09:36.720 --> 0:09:39.880 Decades since we've had broad based tariffs. I think you'd 0:09:39.920 --> 0:09:42.319 have to go back really to the early nineteen fifties 0:09:42.360 --> 0:09:44.920 to look at levels of tariffs like some are talking 0:09:44.920 --> 0:09:47.840 about now. So pretty complicated, but we know for sure 0:09:47.840 --> 0:09:49.680 they raise revenue and they put upper pressure. 0:09:49.720 --> 0:09:51.600 Do they bene for it? Do they raise revenue for 0:09:51.600 --> 0:09:52.280 the US government? 0:09:52.920 --> 0:09:56.160 Well, mechanically, because if you import something and you have 0:09:56.200 --> 0:09:58.560 to pay a tariff on it, that revenue which is 0:09:58.600 --> 0:10:00.960 now zero roughly zero will go up. 0:10:01.080 --> 0:10:03.679 Okay, I was in the Claire didn't know this, but 0:10:03.720 --> 0:10:07.080 I was in the back of the classroom at Columbia. Okay, 0:10:07.440 --> 0:10:10.920 the curve went down when I showed up. This is 0:10:11.000 --> 0:10:14.400 way more complex than the media discusses. And the answer 0:10:14.480 --> 0:10:17.200 is there's a thing called a dead weight loss in 0:10:17.280 --> 0:10:22.280 our in our tariffs price theory, professor, describe what a 0:10:22.400 --> 0:10:25.240 dead weight loss is for our listeners and viewers. 0:10:25.880 --> 0:10:30.840 Well, boy, that's that's uh, that is econ I'm ask question. 0:10:31.000 --> 0:10:33.400 Paul Kruman caught up and said, asked him about dead weight. 0:10:33.920 --> 0:10:38.959 Essentially, the revenue that the government raises is more than 0:10:39.000 --> 0:10:42.760 offset by the losses to consumers and producers relative to 0:10:42.800 --> 0:10:47.320 their ability to either consume goods or produce goods. And 0:10:47.400 --> 0:10:49.760 so that's that's the dead weight loss. 0:10:49.320 --> 0:10:52.000 My definition, it's a lose game. 0:10:52.920 --> 0:10:56.360 Well, but the important proviso that almost any tax that 0:10:56.440 --> 0:11:00.280 raises revenue generates some sort of a loss, whether or 0:11:00.280 --> 0:11:02.319 not it's the consumption tax or investment tax. 0:11:02.520 --> 0:11:05.200 But the heart of the matter here to go to Krugman, 0:11:05.280 --> 0:11:06.120 is magnitude. 0:11:06.160 --> 0:11:07.120 Oh, sure, you can do. 0:11:07.240 --> 0:11:10.880 It's almost like negative interest rates. You can do. Tariff 0:11:11.160 --> 0:11:15.000 light doesn't matter. Yeah, and what the president elect wants 0:11:15.120 --> 0:11:18.520 is a magnitude of big tariffs. Is there a tip 0:11:18.559 --> 0:11:21.280 point where Trump's right and they work. 0:11:22.640 --> 0:11:25.920 Well? Again, it depends on how long they stay on. 0:11:26.360 --> 0:11:26.520 You know. 0:11:26.600 --> 0:11:29.360 One view is that you put tariffs on countries basically 0:11:29.480 --> 0:11:32.320 then come to the negotiating table and then they come off. 0:11:32.360 --> 0:11:33.840 And so it's very importantly going. 0:11:33.760 --> 0:11:36.800 To depend upon the detail of the tariffs, whether or 0:11:36.800 --> 0:11:39.959 not there's retaliation, and whether or not there is an endgame. 0:11:40.000 --> 0:11:42.400 And really without answering that, it's really hard to make 0:11:42.400 --> 0:11:43.880 an informed assessment. 0:11:44.400 --> 0:11:46.840 One of the economic discussions over the last year or 0:11:46.880 --> 0:11:49.199 two has been US exceptionalism. 0:11:49.280 --> 0:11:51.480 Yeah, vis be some of our large trading partners. 0:11:51.640 --> 0:11:53.600 Let's look at China here, we had some more data 0:11:53.640 --> 0:11:56.600 about the China yields falling here. As a global economic 0:11:56.640 --> 0:12:00.560 advisor at PIMCO, what is your view of China here? 0:12:00.600 --> 0:12:04.520 How concerned should the world's economy be about the Chinese economy? 0:12:04.640 --> 0:12:07.680 Well, I think, look, China is huge in terms of 0:12:07.720 --> 0:12:12.839 the size of the economy now and importantly, there are 0:12:12.840 --> 0:12:16.319 some important and I think ongoing challenges, including the fact, 0:12:16.440 --> 0:12:18.160 you know, they've got the first thing of a big 0:12:18.200 --> 0:12:21.360 real estate bubble they have a high unemployment rate among 0:12:21.400 --> 0:12:24.400 their youth, and of course the rest of the world, 0:12:24.400 --> 0:12:26.760 including the US and Europe, is going to be more 0:12:27.360 --> 0:12:30.640 aggressive in terms of resisting a surge of China exports 0:12:30.679 --> 0:12:33.440 and so near in long term, it's a challenging environment. 0:12:33.760 --> 0:12:36.160 Paul Krugman with US on Friday. Wow, it's great to 0:12:36.559 --> 0:12:40.240 have Clarinon. Krugman's what Luberg says about I have on 0:12:40.320 --> 0:12:44.760 my reading desk. I'm two chapters in Ned phelps fabulous 0:12:44.800 --> 0:12:50.000 book summarizing his work. Explain why people should read Ned Phelps. 0:12:49.800 --> 0:12:54.240 Well, Ned, my colleague and dear friend for thirty five years, 0:12:54.320 --> 0:12:56.520 is literally one of the giants of economics, won the 0:12:56.559 --> 0:13:00.800 Nobel Prize, incredibly creative, along with Milton free Even, essentially 0:13:00.920 --> 0:13:05.600 began to define modern macro and also his work on 0:13:05.679 --> 0:13:10.720 growth and innovation and entrepreneurship just uh, just a treasure 0:13:10.760 --> 0:13:11.880 and brilliant. 0:13:11.520 --> 0:13:14.320 And so brilliant. He had a second career with dynamism 0:13:14.559 --> 0:13:17.600 and the enthusiasm and the economy. You heard it from 0:13:17.679 --> 0:13:20.640 Richard Clarita. Don't take it for me. I'll get Phelps's 0:13:20.720 --> 0:13:23.600 new book out on Twitter and LinkedIn. It's Jewel Even 0:13:23.679 --> 0:13:26.959 mentions Clarida. You know a Dina the party you gotta 0:13:27.640 --> 0:13:29.160 he gave Phelps' parking spot. 0:13:29.720 --> 0:13:32.120 I say, during my four years as chair, we had 0:13:32.120 --> 0:13:41.199 three Nobel laureates so here n yeah, the Barrel and 0:13:41.320 --> 0:13:44.240 then Stiglitz and then Vickory before. 0:13:43.960 --> 0:13:46.040 That, and you were not on speaking terms with any 0:13:46.040 --> 0:13:48.920 of the good. We got to go and took the fire. 0:13:49.000 --> 0:13:52.079 Richard CLAREDA thank you so much with you co. 0:13:58.280 --> 0:14:01.680 You're listening to The Bloomberg ser Valen's podcast. Catch us 0:14:01.800 --> 0:14:05.280 Live weekday afternoons from seven to ten am Eastern. Listen 0:14:05.320 --> 0:14:08.839 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:14:09.040 --> 0:14:10.840 or watch us live on YouTube. 0:14:10.960 --> 0:14:14.959 Lindsay Newman, I really can't say enough about her perspective 0:14:15.000 --> 0:14:18.080 here with G zero media, and you know there are 0:14:18.240 --> 0:14:20.640 their top ten risks and you know it's sort of 0:14:20.920 --> 0:14:23.480 pretty grim about it. It's like a G zero world 0:14:23.480 --> 0:14:26.840 and he's looking at at his jungle here, Lindsey. Sure 0:14:27.200 --> 0:14:29.920 have you been reading in on Greenland and Panama? 0:14:31.400 --> 0:14:32.000 Absolutely? 0:14:32.040 --> 0:14:32.560 Tom who was? 0:14:32.600 --> 0:14:34.480 And I have to say I've been to Panama. I 0:14:34.480 --> 0:14:36.880 have not been to Greenland. Certainly flown over Greenland living 0:14:36.920 --> 0:14:38.080 here in London. 0:14:38.360 --> 0:14:39.320 Look what we heard. 0:14:39.240 --> 0:14:43.720 Yesterday from the President elect Trump is really what strikes 0:14:43.760 --> 0:14:47.400 me most, Tom. And this is not an isolation a story. Right, 0:14:47.680 --> 0:14:50.680 If we think about the first term of President Trump, 0:14:50.680 --> 0:14:53.480 to make America greater, grant America first, it was really 0:14:53.520 --> 0:14:56.760 about bringing jobs and manufacturing back to America. There was 0:14:56.800 --> 0:14:59.760 a concern about the US turning inward. When we see 0:14:59.840 --> 0:15:03.800 him yesterday talking about perhaps annexing Canada, making it the 0:15:03.840 --> 0:15:08.040 fifty first state, taking back the Panama Canal, his ambitions 0:15:08.040 --> 0:15:10.920 for Greenland. This is a very different set of aspirations 0:15:10.920 --> 0:15:14.040 that he has for his second term foreign policy approach. 0:15:14.880 --> 0:15:17.440 You've got in your top ten risk. First of all, 0:15:17.520 --> 0:15:20.160 I had Bremer's doing the hoodie thing. Now I mean 0:15:20.160 --> 0:15:22.920 he's really you know right, he's really cutting a cash 0:15:23.000 --> 0:15:29.040 Look there, I look, Lindsay Newman, the idea of the 0:15:29.160 --> 0:15:32.480 rule of don is one of your risks. Is this 0:15:32.520 --> 0:15:35.960 a different Donald Trump this time around versus eight years ago. 0:15:37.560 --> 0:15:39.760 This is a Donald Trump who is facing down the 0:15:39.800 --> 0:15:42.800 prospects of one more term in office. And what we 0:15:42.840 --> 0:15:46.280 really see from him is he is different. His approach, 0:15:46.680 --> 0:15:49.680 not just his approach, but also his perspective is vastly 0:15:49.720 --> 0:15:52.160 different than what comes from what has come before him. 0:15:52.640 --> 0:15:55.240 If we take the nearest example of that, of course, 0:15:55.240 --> 0:15:57.680 as President Biden, and we know that administration was really 0:15:57.720 --> 0:16:01.360 about consensus building, negotiations almost to a fault. So how 0:16:01.400 --> 0:16:03.440 many envoys do we see if we take the Middle 0:16:03.480 --> 0:16:05.760 East theater, how many envoys do we see fly back 0:16:05.760 --> 0:16:08.360 and forth? Bill Burns back and forth, Anthony B. Lincoln 0:16:08.400 --> 0:16:11.480 back and forth to almost know out, you know, to 0:16:11.560 --> 0:16:13.320 no avail. We're still in the middle of the conflict. 0:16:13.320 --> 0:16:14.360 The hostages are not home. 0:16:14.800 --> 0:16:18.480 And with Trumps, he's taking a very different approach, right. 0:16:18.560 --> 0:16:21.160 The approach is, let me scan the landscape, let me 0:16:21.200 --> 0:16:23.240 look for the points of tension. Let me look and 0:16:23.280 --> 0:16:25.640 see how the US may be disadvantage. What are the 0:16:25.680 --> 0:16:28.880 interests that the US wants to pursue, and what are 0:16:28.880 --> 0:16:32.560 the levers that the administration can pull to create forcing 0:16:32.600 --> 0:16:36.640 functions and advance Trump and Trump's Administration's ambitions. And we 0:16:36.680 --> 0:16:39.080 know we saw yesterday and you Las Guest was just 0:16:39.120 --> 0:16:41.240 talking about this, We know a couple of those already. 0:16:41.280 --> 0:16:42.640 Of course, it's going to be tariffs. 0:16:42.960 --> 0:16:45.360 He sees that as the solution not just for the 0:16:46.240 --> 0:16:48.560 trade discrepancies, but he sees it as a solution for 0:16:48.600 --> 0:16:52.240 how he could perhaps pursue those ambitions with Greenland. And 0:16:52.280 --> 0:16:55.200 it's also what also came through very clearly yesterday was 0:16:55.240 --> 0:16:57.760 about energy policy, the differences in energy policy. 0:16:57.800 --> 0:16:59.280 We're going to He's saying, you know, we're going to. 0:16:59.320 --> 0:17:01.440 Drill day one, and he went on and on about 0:17:01.480 --> 0:17:03.880 those six hundred and twenty five million acres that Biden 0:17:03.880 --> 0:17:08.560 has just recently taken offline that obviously irked President elect 0:17:08.560 --> 0:17:11.480 Trump quite quite clearly. So energy policy is another lever 0:17:11.600 --> 0:17:12.560 that he's going to be pulling. 0:17:12.640 --> 0:17:13.639 Oh, I'm exhausted. 0:17:14.800 --> 0:17:18.840 It's exactly so, lindsay, how do you think our big 0:17:18.880 --> 0:17:23.000 trading partners are going to interact and deal with Trump? 0:17:23.119 --> 0:17:25.040 President elect Trump over the next four years. 0:17:25.760 --> 0:17:26.680 Yeah, it's a great question. 0:17:26.720 --> 0:17:29.359 I mean you're saying, Tom that you're already exhausted, Paul, 0:17:29.359 --> 0:17:31.399 you're asking how the Europe, how Europe is going to 0:17:31.680 --> 0:17:33.840 deal with This is actually the column before the storm, 0:17:33.880 --> 0:17:36.639 I hate to tell you. And you know, it's been 0:17:36.680 --> 0:17:38.560 a stormy week for Europe if you look at what 0:17:38.560 --> 0:17:40.120 Elon Musk has been saying. 0:17:40.359 --> 0:17:44.800 On X on that platform. We know I've been writing 0:17:44.840 --> 0:17:47.080 in my columns for G Zero that you. 0:17:47.000 --> 0:17:51.160 Know, Europe and Trump's allies, the US's historical allies, they're 0:17:51.200 --> 0:17:52.400 already packing their go bags. 0:17:52.400 --> 0:17:55.200 They're thinking about this. How are they going to be prepared? 0:17:55.240 --> 0:17:58.639 You see, for example, defensive spend is now no longer 0:17:58.680 --> 0:18:01.800 two percent is not the is Yeah right, Trump himself 0:18:01.840 --> 0:18:05.359 said yesterday five percent. That's going to raise some eyebrows 0:18:05.400 --> 0:18:08.720 in Europe today. But they're looking to be more flexible 0:18:08.720 --> 0:18:11.240 on defensive spends. Lindsay says he's going to sit He's 0:18:11.240 --> 0:18:13.280 willing to sit down. Pujin has said he's willing to 0:18:13.280 --> 0:18:17.639 sit down. So everybody's looking to be to know what 0:18:17.680 --> 0:18:18.720 it is to be in Trump world. 0:18:18.800 --> 0:18:21.320 Okay, you got the top ten risks out and folks, 0:18:21.320 --> 0:18:24.320 we're gonna, you know, instead of doing this in one interview, 0:18:24.600 --> 0:18:27.000 which I've told Ian I'll never do, We're going to 0:18:27.080 --> 0:18:29.560 spread it out over January. We're thrilled that Lindsay k 0:18:29.560 --> 0:18:33.280 Newman can be with us from Jezero Media. And you know, Lindsay, 0:18:33.520 --> 0:18:35.800 I look what Ian said to CBS. He said, it's 0:18:35.800 --> 0:18:39.399 Trump's way or the highway. What does Secretary of State 0:18:39.560 --> 0:18:42.920 Rubio do whether it's Trump's way or the highway? 0:18:44.640 --> 0:18:47.760 Well, we know that this is Ian is absolutely correct. 0:18:47.760 --> 0:18:51.280 There he's put in place. Trump has put in place 0:18:51.760 --> 0:18:53.760 a cabinet around him, or his ambition is to put 0:18:53.760 --> 0:18:56.439 together this cabinet around him that they all know. 0:18:56.560 --> 0:18:59.199 Rubyo knows that the buck stops with Trump. So Rubio 0:18:59.280 --> 0:19:00.080 has his ambition. 0:19:00.320 --> 0:19:04.000 He has his sort of hardline ways with China, his 0:19:04.600 --> 0:19:08.359 hawkishness on China, which does dovetail nicely with what Trump 0:19:08.440 --> 0:19:12.480 is after, but ultimately it will be Trump's policy, and 0:19:12.600 --> 0:19:14.560 those around him, like Rubio know that. 0:19:15.840 --> 0:19:20.240 Fascinating. I just what's are the top ten risks, Lindsay, 0:19:20.200 --> 0:19:22.959 are you really focused on? Which is the You know, 0:19:23.440 --> 0:19:25.880 I haven't even read the entire document yet, but which 0:19:25.960 --> 0:19:27.480 is the top risk for Lindsay Newman? 0:19:28.720 --> 0:19:31.840 Yeah, well, I will absolutely say that Ian's view of 0:19:31.880 --> 0:19:34.560 the world as and Eurasia groups of the world around 0:19:35.440 --> 0:19:38.439 the G zero winning, which just means that the world 0:19:38.520 --> 0:19:38.800 is in. 0:19:38.760 --> 0:19:40.680 A point of geopolitical recession. 0:19:41.560 --> 0:19:44.800 That is the lens through which Eurasia Group is seeing 0:19:44.960 --> 0:19:47.600 all of those other related risks, and that is sort 0:19:47.600 --> 0:19:50.639 of a thread line of the world in disorder. The 0:19:51.000 --> 0:19:55.360 multilateral institutions no longer having that same level of buying, 0:19:55.480 --> 0:19:58.160 the US sort of retrenching and retreating from its role 0:19:58.200 --> 0:19:59.200 as global guardian. 0:19:59.800 --> 0:20:01.920 That is the top risk for your Asia group. 0:20:02.119 --> 0:20:04.439 And I would also throw my hat and tied to 0:20:04.480 --> 0:20:07.480 Greenland these issues of ungoverned spaces. I mean, why is 0:20:07.520 --> 0:20:10.159