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Speaker 1: Brought to you by B A. S F. We create Chemistry.

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Speaker 1: This is Masters in Business with Barry Ridholds on Bloomberg Radio.

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Speaker 1: This week on the podcast, I have a very special guest.

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Speaker 1: His name is Dr Richard hass He is the President

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Speaker 1: of the Council on Foreign Relations, where he has served

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Speaker 1: for the past fourteen years. I thought it would be

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Speaker 1: a great idea to get Dr hass in because, more

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Speaker 1: than any time in the past, I don't know how

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Speaker 1: many years UH, international events are driving UH not only

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Speaker 1: the debate, but but the headlines and policies that we

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Speaker 1: see everywhere, whether it's the Brexit vote in the UK,

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Speaker 1: whether it's things like Middle East issues and isis UH

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Speaker 1: and and the Iran nuclear deal, what's happening in China

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Speaker 1: with the South China, see what's happening in Russia. Even

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Speaker 1: even normalizing relations with Cuba are are significant events. And

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Speaker 1: these are all outside of the US borders. I can't

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Speaker 1: ever recall a time in recent history where overseas events

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Speaker 1: have been more significant, more important to both the global

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Speaker 1: economy and to international relations. I think you'll find Professor

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Speaker 1: hass or Doctor hass Uh. He has taught at the

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Speaker 1: Kennedy school. Uh, quite fascinating. He is about as knowledgeable

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Speaker 1: a person as you'll ever hear. He began in Democratic

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Speaker 1: Senator Claiborne Pell's office. He also served in both Bush

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Speaker 1: White Houses. He's nonpartisan. Uh. He he very much has

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Speaker 1: a fairly moderate and centrist view. He's he's an extremely

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Speaker 1: rational and logical guy. And and a lot of what

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Speaker 1: he says, uh, and a lot of the discussion that

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Speaker 1: took place today, uh, really very much is just if

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Speaker 1: you were to stop and and do a d historical

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Speaker 1: dive into each of these subjects, they would inform your

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Speaker 1: perspective and very much drive your decision making in a

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Speaker 1: certain direction. Uh. That is consistent on both a cultural, diplomatic,

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Speaker 1: and global basis. I found his conversation to be completely refreshing,

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Speaker 1: uh and quite fascinating. For those of you who are

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Speaker 1: aware of what goes on the world, you know what

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Speaker 1: an expert hass is. And for those of you who

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Speaker 1: are not very well informed about the state of the

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Speaker 1: global affairs, this is going to be a crash course

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Speaker 1: in international relations. I found it to be an absolutely

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Speaker 1: brilliant and fascinating conversation. So, with no further ado, my

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Speaker 1: conversation with Dr Richard Hass. This is Masters in Business

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Speaker 1: with Barry Ridholes on Bloomberg Radio. My special guest today

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Speaker 1: is Richard Hass. He is the President of the Council

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Speaker 1: of Foreign Relations, a position he has held for the

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Speaker 1: past fourteen years. UH fascinating career in government as a

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Speaker 1: legislative aid in the Senate in the Department of Defense.

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Speaker 1: In the State Department, he was awarded the Presidential Citizens

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Speaker 1: Medal for his contributions during the US Operation Desert Shield.

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Speaker 1: In one. He has been a special advisor to both

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Speaker 1: President George H. W. Bush Uh in the National Security Council,

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Speaker 1: as well as President George W. Bush in the Department

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Speaker 1: of State, where he served as principal advisor to Secretary

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Speaker 1: of State Colin Powell. Richard Hass, Welcome to Blomberg. I

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Speaker 1: left out half of your CV. It's it's way too long.

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Speaker 1: You are the author or editor of a dozen books.

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Speaker 1: Perhaps the one I'm our our listeners might be most

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Speaker 1: familiar with is the Reluctant Share of the United States

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Speaker 1: after the Cold War, and you have a new book

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Speaker 1: coming out in January. World in Disarray, American Foreign Policy

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Speaker 1: and the Crisis of the Old Order. I am confident

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Speaker 1: that a lot of the questions and topics we discussed

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Speaker 1: today are covered in the book. But but let's jump

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Speaker 1: right into your early career. So you leave was it Oxford?

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Speaker 1: Did I get that right? Yes? You leave Oxford with

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Speaker 1: a masters and a PhD and pretty much start as

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Speaker 1: a Senatorial aid. Is that right? That was your first

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Speaker 1: first job, and then you end up in the State

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Speaker 1: Department and the Department of Defense. How did all that

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Speaker 1: come about? Well after Oxford? Actually, during Oxford, I spent

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Speaker 1: a year splitting between my masters and my doctorate, working

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Speaker 1: in the Senate as an aid on the Senate Foreign

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Speaker 1: Relations Committee to Senator Claiborne Pell, who was a Democrat

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Speaker 1: from Rhode Island. I really just wanted some experience. I'd

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Speaker 1: been an academic and wanted to see how the sausage

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Speaker 1: was made, and I got the chance. After that, I

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Speaker 1: then spent a couple of years working at a think

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Speaker 1: tank in London, the place called the Institute for Strategic Studies,

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Speaker 1: essentially doing a post doc. And then after some conference,

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Speaker 1: I spoke at a few people who are working at

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Speaker 1: the Pentagon said hey, would you come and work with

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Speaker 1: us at the Department of Defense. So I said, great,

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Speaker 1: and so I went and worked at the Pentagon. It

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Speaker 1: was a fantastic opportunity because about less than six months

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Speaker 1: after I got there, in seventy nine, you had two

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Speaker 1: big historical events. You had the Soviet invasion of Afghanistan

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Speaker 1: and you had the revolution in Iran. And I was

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Speaker 1: assigned with a very small group of people to plan

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Speaker 1: for what would the United States do in that part

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Speaker 1: of the world, because we had very few capabilities, very

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Speaker 1: few plans. And suddenly I was thrown at this in

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Speaker 1: part because I had written my doctoral dissertation on this

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Speaker 1: part of the world, on the Middle East, on the

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Speaker 1: Middle East, on the Persian Gulf. What what was the

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Speaker 1: name of your doctoral dissertation? Filling the Vacuum? And it

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Speaker 1: was essentially the American reactions what was called the British

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Speaker 1: East of Suez withdrawal, meaning the meaning for for listeners

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Speaker 1: who may not be historians of that part of the world.

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Speaker 1: When the Brits were were occupying most of the Middle East,

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Speaker 1: at a certain point, they pretty much drew random some

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Speaker 1: people have called them random borders on their way out

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Speaker 1: and and really left the political and diplomatic borders uh

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Speaker 1: we see today to some degree as a cause of

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Speaker 1: some friction between some of these states. Well after World

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Speaker 1: War One, which is what you're alluding to, there was

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Speaker 1: the British and French ministers and their subordinates essentially did

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Speaker 1: draw the map a lot of which is the contemporary

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Speaker 1: Middle East. I was really focusing on the Persian Gulf

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Speaker 1: and where the Brits stayed longer, and they left essentially

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Speaker 1: in the early late sixties early early seventies. But soon

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Speaker 1: afterwards again you had these major tests with the twin

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Speaker 1: crises of Afghanistan and Iran, and I was lucky enough

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Speaker 1: or unlucky enough to be one of those who was

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Speaker 1: asked essentially to plan for it. So I had an

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Speaker 1: amazing early experience in the depending on indeed what's now

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Speaker 1: Central Command, the force which has fought several of the wars,

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Speaker 1: including the Gulf War, the Rock arn All that I

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Speaker 1: was involved in the creation of that force, So I

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Speaker 1: know it was a little bit of being in the

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Speaker 1: right or wrong place at the right time. And then

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Speaker 1: after that, after the Carter administration ended, I was put

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Speaker 1: on the transition team for the State Department for the

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Speaker 1: Reagan administration and went over to the Reagan State work.

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Speaker 1: You started as a Democrat under sand lerpel you you

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Speaker 1: are now in the Department Defense under Carter, and then

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Speaker 1: you're part of the transition team for the Reagan White House. Right,

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Speaker 1: And it wasn't that I was a political chameleon. I

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Speaker 1: was essentially a political at the time. I think I

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Speaker 1: was probably a registered independent at the time. At some

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Speaker 1: point I became a registered Republican. And even now I

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Speaker 1: run a skip ahead of several decade. I run a

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Speaker 1: nonpartisan institution. I don't feel particularly partisan in in my bones,

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Speaker 1: and I'd like to think maybe it's naive that there's

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Speaker 1: a place in American politics, say within the forty yard lines,

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Speaker 1: where what you might create, where conservative or moderate Democrats

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Speaker 1: and moderate Republicans can find common cause. And if we

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Speaker 1: can't we if we can't have that center, then I

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Speaker 1: think we as a society are in serious trouble. The

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Speaker 1: fascinating thing is I totally agree with you. I think

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Speaker 1: the fascinating schism is that most of the public, or

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Speaker 1: a lot of the public, lives in between the forty

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Speaker 1: yard line, so to speak. But everyone in DC seems

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Speaker 1: to be in their respective end zones. But there's a

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Speaker 1: reason for that. There's a principle that you see in

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Speaker 1: the literature of political science called intensity, and the whole

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Speaker 1: idea of intensity is what matters in American politics and

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Speaker 1: early in democratic politics more broadly, is not absolute numbers,

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Speaker 1: but it's the intensity with which political participan pence bring

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Speaker 1: to the process, whether it's voting or money or time.

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Speaker 1: So what this means of small numbers of people with

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Speaker 1: great intensity could overwhelm large numbers of people who have

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Speaker 1: virtually no intensity. It's the reason, for example, of Americans

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Speaker 1: may favor background checks, but the n r A wins

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Speaker 1: the gun control debate. That's an intensity issue. I'm Barry Ridhults.

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Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My

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Speaker 1: special guest today is Richard hass He is the President

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Speaker 1: of the Council on Foreign Relations. Not too long ago

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Speaker 1: we had the big UK vote to leave the EU.

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Speaker 1: I think a lot of people were surprised by by

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Speaker 1: the outcome of that. So let's start out, and I

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Speaker 1: know you are intensely familiar with the region because of

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Speaker 1: all the work you've done in Northern Ireland. Let's let's

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Speaker 1: start out very simply. Why was the Leave campaign victorious

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Speaker 1: in part peak US. It was a referendum on the

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Speaker 1: status quo, and people who were, for one reason or

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Speaker 1: another unhappy or disaffected or angry or worried about the

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Speaker 1: future vented and supported the LEA vote. A lot of

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Speaker 1: them were not particularly well informed exactly what would be

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Speaker 1: the precise consequences. So I think it was something of

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Speaker 1: a protest vote, and it was very hard for the

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Speaker 1: remain camp to make a persuasive case. What were they

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Speaker 1: were supposed to say? Well, things aren't perfect, but it's

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Speaker 1: better to stay than it is to leave. That that's

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Speaker 1: the case. That doesn't tend to get people out of

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Speaker 1: their seats, much less to to to vote. So you

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Speaker 1: had an anemic showing on the remain side, and you

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Speaker 1: had an impassioned, if uninformed, uh turnout on the Leave side.

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Speaker 1: And the rest, as they say, is history. You know.

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Speaker 1: In investing in the markets, um enthusiastic ignorance is not

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Speaker 1: a good way to make money, but apparently in politics

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Speaker 1: it's a successful strategy. Well, except there's an awful lot

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Speaker 1: of voters remorse and a lot of people afterwards. I think, indeed,

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Speaker 1: if the referendum were to be repeated, it would go

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Speaker 1: down in flames and if there is. There were some

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Speaker 1: people who seemed genuinely surprised that this wasn't just a

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Speaker 1: a pole, This was a policy vote with real consequences,

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Speaker 1: and even though technically Parliament disposes, this was advisory. It's

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Speaker 1: extremely difficult for British politicians to simply say never never mind.

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Speaker 1: So so one way or another, bregsit in some form

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Speaker 1: is likely to happened, I would say, and I'm prepared

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Speaker 1: now to be called an elitist. To me, it's a

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Speaker 1: real sign that you want not to be deciding major,

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Speaker 1: major matters of public policy through referendum. That's why the

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Speaker 1: founders of the American political system created something called the Congress,

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Speaker 1: created something called an executive. The whole idea was to

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Speaker 1: have representative government rather than direct democracy. And I think

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Speaker 1: what we've seen in Britain is a very expensive lesson

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Speaker 1: of what happens if you have direct rather than representative democracy.

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Speaker 1: It's quite fascinating. Your background is such that you spend

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Speaker 1: a lot of time negotiating and helping UH Northern Ireland

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Speaker 1: UH broker a series of treaties with h the UK.

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Speaker 1: Scotland recently voted to stay with the UK. UH part

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Speaker 1: of the reason was the membership in EU. Is it

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Speaker 1: possible that we're gonna see Scotland and Northern Ireland, both

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Speaker 1: of whom were strong Remain supporters, say hey, you know,

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Speaker 1: there's the benefits of being in the UK are less

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Speaker 1: than being in the EU where we're gone from the

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Speaker 1: Brits and we're going to join the continent. Or is

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Speaker 1: that just wishful thinking. It's quite possible. What will depend

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Speaker 1: What it will depend on more than anything, is if

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Speaker 1: the British government goes ahead with Brexit, the new government

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Speaker 1: under the new Prime Minister, Theresa May, and if depending

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Speaker 1: on the terms there's there's Brexit and Brexit and this

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Speaker 1: is this is totally uncharted waters, so we don't know

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Speaker 1: what would be what will be the details potentially a

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Speaker 1: new relationship between a post EU UK and in Europe.

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Speaker 1: But depending upon the details, it's quite possible that you'll

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Speaker 1: have a second Scottish referendum and in this time, if

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Speaker 1: there is one, it would pass because people would vote

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Speaker 1: to stay in Europe. And I believe there's a decent

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Speaker 1: chance you will have a so called border pole in

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Speaker 1: Northern Ireland in which people would vote to to join

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Speaker 1: Ireland so I think that Brexit one of the many

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Speaker 1: reasons I opposed. It has the potential to lead to

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Speaker 1: the dissolution of the United Kingdom. And beyond that, it

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Speaker 1: has the potential to tremendously increased centrifugal forces within Europe.

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Speaker 1: And I just say, for those who aren't familiar with it,

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Speaker 1: Europe is one of the great historic accomplishments of the

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Speaker 1: last three quarters of a century. Twice in the twentieth century,

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Speaker 1: Europe was the venue for great wars, for the two

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Speaker 1: World Wars. The whole idea after World War Two is

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Speaker 1: two so knit together, Europe and France and Germany in particular,

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Speaker 1: that war would become unthinkable. We ought not to take

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Speaker 1: that for granted. And I'm worried if bregsit goes ahead,

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Speaker 1: depending again on the details, it could have knock on

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Speaker 1: effects throughout Europe. That that makes a lot of sense.

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Speaker 1: So so, given negotiations um that you undertook in in

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Speaker 1: Ireland's um, if you were advising either the Northern Irish

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Speaker 1: or the Scots, what sort of And I don't want

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Speaker 1: to use the term elite in a negative way. Instead

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Speaker 1: of saying elite is um, let's let's say educated and

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Speaker 1: informed UH policy pronouncinations. What how would you advise them

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Speaker 1: today given the most recent Well, I would I would

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Speaker 1: wait and see what the details are whether bregsit goes forward.

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Speaker 1: If so, what are the details? Assume it goes forward,

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Speaker 1: So let me digress. Assume it goes forward. Are the

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Speaker 1: Brits going to get a better deal with the EU

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Speaker 1: or a worse deal when they're not part of it?

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Speaker 1: I'm not ducking the question, the honest answers. Nobody knows,

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Speaker 1: because there's a debate with in Brussels whether to give

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Speaker 1: them a better deal or not too because a lot

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Speaker 1: of people in Brussels feared that to give the British

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Speaker 1: a better deal would create a precedent and suddenly twenty

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Speaker 1: seven other governments may want their own, their own better deal.

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Speaker 1: So it has to be from a game theory perspective,

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Speaker 1: it has to be a worse deal than they previously had. Well,

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Speaker 1: it could be a deal that would require less of

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Speaker 1: them but would also give less less to them. And

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Speaker 1: the real question is whether net net they would come

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Speaker 1: off better. And I think if you're sitting in Northern

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Speaker 1: Ireland or you're sitting in Scotland, you then have to

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Speaker 1: make the calculation, are you better off in a post

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Speaker 1: EU UK or you better off going out on on

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Speaker 1: your own? And I think that will literally be the debate,

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Speaker 1: certainly in Scotland and potentially in Belfast and beyond. So

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Speaker 1: let's talk a little bit about um the stakes here.

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Speaker 1: You mentioned or I mentioned an uninformed electorate. How truly

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Speaker 1: uninformed were the people who were casting votes there? Uh?

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Speaker 1: Did they actually know they were voting for policy? Did

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Speaker 1: they think this was a poll? There? There have been

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Speaker 1: some suggestions that while the Remain camp was not as

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Speaker 1: crystal squeaky clean and transparent as they should have been,

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Speaker 1: the Leave campaign was industrial level fabrication. How did that

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Speaker 1: impact the actual I may steal that phrase, I like

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Speaker 1: that industrial level there's a there's a I'll send you

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Speaker 1: the link to the Scottish or Irish professor who who

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Speaker 1: I'm paraphrasing him, But but that was that was his

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Speaker 1: Two things. I think there's two things to say. One

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Speaker 1: is that, or maybe even more than that, one is

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Speaker 1: that there there were poles that came out beforehand which

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Speaker 1: suggested that the factual basis, shall we say, was incomplete.

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Speaker 1: People just in many cases didn't quite understand what the

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Speaker 1: relationship was between Britain and the EU and so far.

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Speaker 1: Second of all, there was industrial misrepresentation of the facts

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Speaker 1: about the flow of money, about consequences, about immigration issues.

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Speaker 1: So now it's a little bit like the hangover what

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Speaker 1: you have as a as a country that went out

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Speaker 1: a bit on a political binge and now has to

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Speaker 1: deal with the with the consequences. And again it reinforces

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Speaker 1: my instincts that you don't want to decide major issues

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Speaker 1: in a democracy this way. So two other questions about

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Speaker 1: Brexit that that I would be remiss if I didn't ask.

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Speaker 1: Brexit seemed to be quite the surprise to too, not

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Speaker 1: only the financial houses and and bookmakers, but lots of people.

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Speaker 1: What other European surprises might be lurking out there. Well,

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Speaker 1: it's not the first surprise we've had in Europe in

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Speaker 1: the last two or three years. We had Russia and Ukraine,

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Speaker 1: which how we say, was an unfortunate surprise. We had

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Speaker 1: the massive flow of immigrants from Syria and the Middle

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Speaker 1: East to Europe. We then had terrorism. So this, in

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Speaker 1: some ways, if you added up, is at least the

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Speaker 1: fourth surprise in the last two to three years. And

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Speaker 1: that and what's so surprising about this is that you're

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Speaker 1: for decades was the part of the world with the

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Speaker 1: fewest surprises. It seemed to be the most state and predictable.

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Speaker 1: But I would think going forward you could uh. We

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Speaker 1: still don't know what's going to happen with Brexit. We

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Speaker 1: don't know whether the countries may decide to do their

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Speaker 1: own versions of of of of an exit. We could

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Speaker 1: have problems once again in Greece on the financial side,

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Speaker 1: or with some other country. In um, Italy and southern

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Speaker 1: and in southern Europe. You know that from what it

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Speaker 1: is um you do. Unfortunately, you can imagine without a

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Speaker 1: hell of a lot of imagination, another terrorist problem in

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Speaker 1: any number of countries. There's uncertainty about Russian intentions, not

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Speaker 1: only in eastern Ukraine, but with some of the other

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Speaker 1: small states that that border it. So I had all

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Speaker 1: this up, and again I'm struck by if we had

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Speaker 1: had this conversation three years ago, we never would have

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Speaker 1: talked about Europe Old Europe boring nothing going on there,

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Speaker 1: And suddenly Europe is you sense it's in play. And

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Speaker 1: one of the less since I draw from that is

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Speaker 1: it's more difficult to have assumptions. Now it's more difficult

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Speaker 1: to have a sense of the givens. There's a sense

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Speaker 1: of greater not just speed of change, but breadth of change.

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Speaker 1: And I just went three years ago. I didn't have

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Speaker 1: the imagination, I'll be honest with you, to see a lot,

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Speaker 1: to see this coming. You know, I was just in

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Speaker 1: Europe for a conference and I was astonished at how

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Speaker 1: really soft the Greek economy is when you're on the street.

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Speaker 1: And then in Italy, Southern Italy is is better than Greece.

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Speaker 1: But Rome is like New York City. Rome is booming.

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Speaker 1: It is I don't know if it's a tourist town

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Speaker 1: or what I mean. We know it's a tourist town.

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Speaker 1: But when you look at Rome, it is a hopping city,

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Speaker 1: a very very economically active city. Makes you makes me

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Speaker 1: think twice about how Italy is broken into different halfs

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Speaker 1: and and why part of it is doing so well

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Speaker 1: and part of it isn't right. What you have in

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Speaker 1: Europe then is increased inequality. You have high levels of

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Speaker 1: unemployment and underemployment. You have demographic distributions that aren't even

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Speaker 1: in terms of wealth and unemployment, and you sense there's

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Speaker 1: a lot of fault lines in Europe. Far right and

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Speaker 1: far left policy parties both could come to the four

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Speaker 1: year U asked before about surprises. That's another part of it.

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Speaker 1: So Europe at one and the same time, there's elements

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Speaker 1: of boom and there's real elements of fragility. And as

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Speaker 1: long as we're discussing Brexit, people have tried to draw

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Speaker 1: parallels between the Brexit vote any either the Sanders or

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Speaker 1: Trump candidacy. Um, do you see any parallels between the two,

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Speaker 1: and is it possible in the United States we end

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Speaker 1: up with a Brexit like surprise? The short answer is absolutely,

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Speaker 1: I see parallels. What you see on both sides of

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Speaker 1: the Atlantic is widespread pushback, even rejection of important aspects

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Speaker 1: of globalization, whether it's immigration or or free trade uh

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Speaker 1: or or other issues. And I take the Brexit vote

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Speaker 1: is something of a wake up calling shot across the bow.

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Speaker 1: So much absolutely that we don't have a direct equivalent

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Speaker 1: to Brexit. But again, what it shows me is that,

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Speaker 1: for example, historical support for free trade agreements is just

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Speaker 1: not there. What you have right now sitting in the Congress,

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Speaker 1: a major trade agreement, the t PP, the Trans Pacific Partnership,

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Speaker 1: involves the United States and countries and I think it's

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Speaker 1: eleven other countries make up around the world economy. Right

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Speaker 1: now that trade agreement is parked, I'm not sure under

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Speaker 1: what circumstances it could muster the necessary UH support. And

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Speaker 1: what this tells me is that here's one of the

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Speaker 1: basics free trade used to be bipartisan support Democrats, Republicans

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Speaker 1: and so forth. That at the moment you'd have to

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Speaker 1: say not just a the juries out, but the forces

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Speaker 1: are probably stronger against it than in favor of Well

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Speaker 1: that that that's one of the American parallel els to bruit.

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Speaker 1: I'm Barry Ridhults. You're listening to Masters in Business on

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Speaker 1: Bloomberg Radio. My special guest today is Richard hass He

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Speaker 1: is the President of the Council on Form Relations, where

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Speaker 1: he has served for the past fourteen years. Prior to that,

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Speaker 1: he has an extensive resume both in the Department of

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Speaker 1: State and the Department of Defense, as well as the

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Speaker 1: White House in US Senate, and is the author of

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Speaker 1: twelve books on foreign relations. Let's jump right into the

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Speaker 1: conversation about trade and globalization. How important is globalization to

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Speaker 1: the modern economy? And I include not just wealth creation,

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Speaker 1: but but job creation. Well, the answer is it's it's central.

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Speaker 1: Think about it this way. We have what three million

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Speaker 1: people in the United States. That's out of a world

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Speaker 1: of roughly seven billion, that's four we're what twenty odd

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Speaker 1: percent of the world's GDP. Another way of saying, a

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Speaker 1: world g D palies outside the United States. So if

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Speaker 1: we are going to sell a lot of what it

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Speaker 1: is we we do has to be outside the borders

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Speaker 1: of our our own country with just not a large

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Speaker 1: enough market to be self sufficient. So so given that perspective,

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Speaker 1: and I know it's obvious to folks like you and me,

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Speaker 1: why is there so much opposition to trade? One way

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Speaker 1: to answer it is that trade on occasion does cost jobs,

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Speaker 1: and whether it's cheaper labor elsewhere or people produce better products.

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Speaker 1: In the area of cars was a reality for a

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Speaker 1: long time, so trade displaces. What I think also happens, though,

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Speaker 1: is that trade is blamed for things it gets scapegoaded.

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Speaker 1: So the biggest source of displacement in jobs of job

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Speaker 1: elimination is not trade, it's technology. It's productivity increases, which,

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Speaker 1: by the way, is scary for the future for things

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Speaker 1: like robotics, three D printing, artificial intelligence. If anything, the

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Speaker 1: potential for job displacement might accelerate. And I don't think

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Speaker 1: we've begun to think that through as a society what

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Speaker 1: we're going to do. But in the meantime, trade is

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Speaker 1: the scapegoat. There's inventing and just like we're talking about

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Speaker 1: breaks it before that became a vote where people expressed

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Speaker 1: a lot of their frustrations with the status quo. You

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Speaker 1: don't get a chance to vote on globalization, but you

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Speaker 1: do get a chance to vote on grade on trade.

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Speaker 1: And I think what's happening is that trade is carrying

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Speaker 1: a lot of weight that it really doesn't deserve, but

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Speaker 1: people are turning towards it to to vent their frustrations.

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Speaker 1: If you really want to be scared about automation, there's

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Speaker 1: a book out um, I think you know his name

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Speaker 1: is Ford, called Rise of the Robots. The technology discussion

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Speaker 1: is fascinating, the future impact of that technology. Technology. It's

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Speaker 1: a little Malthusian for my taste. It's a little too

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Speaker 1: end of world, um, but it there is no doubt

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Speaker 1: that there are huge societal shifts coming due to technology.

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Speaker 1: It's uneven certain types of jobs, certain sectors of the

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Speaker 1: economy are more vulnerable. I just don't think we've really

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Speaker 1: begun the public conversation about how is it we better

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Speaker 1: prepare workers to deal with some of the challenges. And

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Speaker 1: that's everything from transition assistance financially, the education and retraining.

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Speaker 1: And we just can't put a mote out there. We

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Speaker 1: can't pull up the bridge. We've got to think about

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Speaker 1: how is it we compete in this world? And the

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Speaker 1: political conversation isn't close to the conversation we need to have.

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Speaker 1: So last year we saw a ton of news out

431
00:25:24,359 --> 00:25:30,040
Speaker 1: about hacking of various institutions in the United States. Specifically,

432
00:25:30,080 --> 00:25:34,560
Speaker 1: there's a building in China that's primarily filled with their

433
00:25:34,640 --> 00:25:38,399
Speaker 1: Department of Defense and their intelligence community, and these folks

434
00:25:38,400 --> 00:25:43,600
Speaker 1: are hacking US corporate sites, US military sites, and US

435
00:25:43,720 --> 00:25:48,399
Speaker 1: government uh information. How has this gotten as out of

436
00:25:48,440 --> 00:25:51,480
Speaker 1: control as it appears to be, Is there any chance

437
00:25:51,520 --> 00:25:53,680
Speaker 1: that this has gotten better? Is going to get better?

438
00:25:54,000 --> 00:25:57,400
Speaker 1: And what sort of things might they have stolen from us? Well?

439
00:25:57,400 --> 00:26:00,000
Speaker 1: In general, in the whole area of cyber the technology

440
00:26:00,119 --> 00:26:02,760
Speaker 1: g is outpaced the rules. It's a little bit like

441
00:26:02,760 --> 00:26:05,480
Speaker 1: the old Wild West, and there's no sheriff. A lot

442
00:26:05,480 --> 00:26:07,800
Speaker 1: of people out there with guns and we're seeing it

443
00:26:07,840 --> 00:26:10,560
Speaker 1: all over. So the U. S. China relationship is simply

444
00:26:10,600 --> 00:26:14,640
Speaker 1: one part of a of a larger UH situation. Look,

445
00:26:14,720 --> 00:26:18,000
Speaker 1: some forms of espionage and the rest we carry out,

446
00:26:18,080 --> 00:26:19,639
Speaker 1: and it's carried out against us, and if we're not

447
00:26:19,680 --> 00:26:22,320
Speaker 1: protecting our data, shame on us. So the idea that

448
00:26:22,359 --> 00:26:25,479
Speaker 1: the Office of Personnel Management got hacked, that was ther

449
00:26:25,520 --> 00:26:28,440
Speaker 1: responsibility on our side. Now, the Chinese are doing more

450
00:26:28,440 --> 00:26:31,639
Speaker 1: than espionage. They're also doing property theft and that is

451
00:26:31,680 --> 00:26:34,320
Speaker 1: something that we have got to sanction them on if

452
00:26:34,320 --> 00:26:37,359
Speaker 1: they won't stop. You're talking about patents and designs and

453
00:26:37,480 --> 00:26:40,280
Speaker 1: I mean they they're some of their military aircraft and

454
00:26:40,359 --> 00:26:44,480
Speaker 1: other things. It's clear that that's not in house stuff absolutely,

455
00:26:44,480 --> 00:26:46,600
Speaker 1: So again there's a difference between It seems to me

456
00:26:46,720 --> 00:26:50,120
Speaker 1: what is espionage and we carry that out and this

457
00:26:50,200 --> 00:26:54,359
Speaker 1: is just the newest domain of espionage and intellectual property

458
00:26:54,400 --> 00:26:56,480
Speaker 1: theft which needs to be stopped, and the Chinese have

459
00:26:56,520 --> 00:26:59,239
Speaker 1: agreed to stop it. The question is whether one they

460
00:26:59,280 --> 00:27:01,639
Speaker 1: meant the agreement to whether they will then implement it.

461
00:27:01,840 --> 00:27:05,520
Speaker 1: So there's big there's big questions UH there, And this

462
00:27:05,600 --> 00:27:07,159
Speaker 1: is you know, one of the six d things on

463
00:27:07,200 --> 00:27:10,920
Speaker 1: the US Chinese agenda, and I think also in future

464
00:27:10,920 --> 00:27:13,800
Speaker 1: trade agreements, this question of intellectual property protection is going

465
00:27:13,840 --> 00:27:16,560
Speaker 1: to play a larger role. It needs to. I'm Barry Ridhults.

466
00:27:16,680 --> 00:27:20,520
Speaker 1: You're listening to Masters in Business on Bloomberg Radio. My

467
00:27:20,600 --> 00:27:23,720
Speaker 1: guest today is Richard hass He is President of the

468
00:27:23,800 --> 00:27:28,159
Speaker 1: Council on Foreign Relations. Let's jump right into some of

469
00:27:28,200 --> 00:27:31,639
Speaker 1: the rest of the world and and how what we

470
00:27:31,840 --> 00:27:36,240
Speaker 1: do here in the United States impacts our own ability

471
00:27:36,440 --> 00:27:40,520
Speaker 1: to to influence events. The two thousand oh eight oh

472
00:27:40,640 --> 00:27:45,080
Speaker 1: nine financial crisis, how did that impact the American ability

473
00:27:45,119 --> 00:27:48,239
Speaker 1: to project power around the world. Well, it hurt us

474
00:27:48,240 --> 00:27:50,000
Speaker 1: in lots of ways. It hurt us in terms of

475
00:27:50,040 --> 00:27:53,480
Speaker 1: lost resources. We simply didn't have as much wealth to

476
00:27:53,480 --> 00:27:55,600
Speaker 1: devote to what it is we do in the world.

477
00:27:56,160 --> 00:27:59,880
Speaker 1: It hurt us reputationally in many ways. Suddenly the does

478
00:28:00,040 --> 00:28:03,919
Speaker 1: are to emulate the American model was, to put it gently,

479
00:28:04,080 --> 00:28:09,040
Speaker 1: was not was not what it it was. And I

480
00:28:09,320 --> 00:28:12,119
Speaker 1: just think more broadly, it made people uncomfortable with the

481
00:28:12,160 --> 00:28:17,920
Speaker 1: world in which American leaders and officials were making decisions

482
00:28:17,920 --> 00:28:21,080
Speaker 1: that had tremendous consequence for them, over which they had

483
00:28:21,119 --> 00:28:23,280
Speaker 1: no influence, and No one likes to be in a

484
00:28:23,320 --> 00:28:26,119
Speaker 1: situation where they feel vulnerable but unable to influence, and

485
00:28:26,160 --> 00:28:28,840
Speaker 1: that's what the rest of the world felt. So here

486
00:28:28,880 --> 00:28:32,159
Speaker 1: we are. It's seven eight years later. The economy in

487
00:28:32,160 --> 00:28:35,040
Speaker 1: the US has recovered substantially. The rest of the world.

488
00:28:35,520 --> 00:28:38,280
Speaker 1: You know, someone had described us as the cleanest shirt

489
00:28:38,360 --> 00:28:41,280
Speaker 1: in the hamper um. I kind of like that description.

490
00:28:42,040 --> 00:28:45,920
Speaker 1: Given that recovery versus let's say, Japan and China and Europe,

491
00:28:46,440 --> 00:28:50,320
Speaker 1: have we regained some of that influence and or or

492
00:28:50,640 --> 00:28:55,680
Speaker 1: have we made a lasting um image problem that that's

493
00:28:55,680 --> 00:28:58,440
Speaker 1: going to affect our ability to influence events. It's a

494
00:28:58,440 --> 00:29:01,240
Speaker 1: good question. The polls would suggest we've gained somewhat, but

495
00:29:01,320 --> 00:29:04,000
Speaker 1: not that much because other areas have heard us. We

496
00:29:04,120 --> 00:29:07,240
Speaker 1: heard over issues. Our reputation gets hurt over things like

497
00:29:07,320 --> 00:29:12,000
Speaker 1: guns and violence uh in this country, or political dysfunction

498
00:29:12,520 --> 00:29:16,400
Speaker 1: has subtracted from our reputation. What we did in Iraq

499
00:29:16,560 --> 00:29:19,520
Speaker 1: and what we didn't do in Syria has has heard us.

500
00:29:19,560 --> 00:29:22,880
Speaker 1: So I think while we've recovered somewhat economically over the

501
00:29:22,960 --> 00:29:26,480
Speaker 1: last eight or so years, other aspects that affect the

502
00:29:26,480 --> 00:29:28,320
Speaker 1: way the rest of the world sees us. If it

503
00:29:28,400 --> 00:29:31,000
Speaker 1: were shaff stock, we've lost value, so I want to

504
00:29:31,040 --> 00:29:33,720
Speaker 1: come back to Iraq a little later. Let's let's let's

505
00:29:33,800 --> 00:29:37,800
Speaker 1: go through some of the recent diplomatic um breakthroughs or

506
00:29:38,080 --> 00:29:41,880
Speaker 1: or treaties that might impact us going forward. Uh. The

507
00:29:42,040 --> 00:29:46,520
Speaker 1: Iran nuclear deal. I think people generally were confused by

508
00:29:46,560 --> 00:29:49,200
Speaker 1: by that, or at least some people at first blush.

509
00:29:49,280 --> 00:29:52,320
Speaker 1: It certainly looked like a positive. It kicked uh, the

510
00:29:52,320 --> 00:29:55,960
Speaker 1: Iranian bomb ten years down the road. What's your take

511
00:29:56,040 --> 00:30:01,600
Speaker 1: on our new treaty with Iran? The joy Agreement, Uh,

512
00:30:01,640 --> 00:30:04,880
Speaker 1: to me was in principle better than either living within

513
00:30:04,920 --> 00:30:07,600
Speaker 1: Iran with nuclear weapons or going to war with Iran.

514
00:30:08,480 --> 00:30:10,800
Speaker 1: But there are aspects of the treaty that that give

515
00:30:10,840 --> 00:30:14,080
Speaker 1: me real pause. Uh. Not just a transfer of wealth,

516
00:30:14,280 --> 00:30:16,480
Speaker 1: but the fact that after ten years they can do

517
00:30:16,520 --> 00:30:19,720
Speaker 1: whatever they want when it comes to centrifugures. In fifteen years,

518
00:30:19,720 --> 00:30:23,200
Speaker 1: they can accumulate as much enriched geranium as it is

519
00:30:23,200 --> 00:30:25,360
Speaker 1: they want. So, as you said, as you rightly said,

520
00:30:25,360 --> 00:30:28,280
Speaker 1: it brought us time, but it didn't in any way

521
00:30:28,360 --> 00:30:31,600
Speaker 1: solve the problem. And there's a lot of people who said, well,

522
00:30:31,720 --> 00:30:33,760
Speaker 1: maybe in ten or fifteen years, or Ron will be

523
00:30:34,040 --> 00:30:37,719
Speaker 1: a much more reasonable, moderate place. That's possible. I wouldn't

524
00:30:37,720 --> 00:30:40,440
Speaker 1: bet I wouldn't bet a lot on it. And so

525
00:30:40,640 --> 00:30:44,040
Speaker 1: my concern is that in ten or fifteen years we're

526
00:30:44,080 --> 00:30:46,560
Speaker 1: going to face in Iran without constraints potentially, and in

527
00:30:46,600 --> 00:30:50,880
Speaker 1: the meantime, a lot of its neighbors, seeing this possibility,

528
00:30:50,920 --> 00:30:54,239
Speaker 1: may decide to develop nuclear options of their own, if

529
00:30:54,240 --> 00:30:56,640
Speaker 1: you will to hedge. So as bad as the Middle

530
00:30:56,680 --> 00:30:59,240
Speaker 1: East now is, and it's plenty bad by any and

531
00:30:59,280 --> 00:31:02,920
Speaker 1: every measure, it's conceivable to see how you could have

532
00:31:03,920 --> 00:31:08,000
Speaker 1: multiple moves towards what you might call a pre nuclear

533
00:31:08,040 --> 00:31:11,360
Speaker 1: weapons status on the part of several of Iran's neighbors,

534
00:31:11,480 --> 00:31:14,440
Speaker 1: and Iran could return to that. So this is not

535
00:31:14,840 --> 00:31:17,880
Speaker 1: a problem that's been solved. To say the least, how

536
00:31:17,920 --> 00:31:22,920
Speaker 1: important is the price of oil to not just Middle

537
00:31:22,920 --> 00:31:27,800
Speaker 1: East economy, but how how important is that to creating

538
00:31:28,000 --> 00:31:33,800
Speaker 1: a nuclear free Middle East and to at least have

539
00:31:33,960 --> 00:31:36,960
Speaker 1: people negotiating in good faith to try and resolve some

540
00:31:37,040 --> 00:31:38,880
Speaker 1: of their regional differences. You're not going to have a

541
00:31:38,960 --> 00:31:42,880
Speaker 1: nuclear free Middle East. You've got Israel that has nuclear weapons,

542
00:31:43,000 --> 00:31:47,400
Speaker 1: Pakistan Pakistan's Pakistan is not that far away, and they've

543
00:31:47,400 --> 00:31:52,040
Speaker 1: got the world's fastest growing nuclear arsenal. Iran has virtually

544
00:31:52,080 --> 00:31:55,480
Speaker 1: all the prerequisites of a of a nuclear weapon. Other

545
00:31:55,520 --> 00:31:57,960
Speaker 1: countries are beginning to put into place certain types of

546
00:31:58,000 --> 00:32:02,360
Speaker 1: nuclear power programs. So at the moment, UH, the idea

547
00:32:02,400 --> 00:32:04,200
Speaker 1: of a nuclear free Middle East looks to me like

548
00:32:04,240 --> 00:32:06,600
Speaker 1: a pipe dream. So was it a big mistake to

549
00:32:06,680 --> 00:32:10,800
Speaker 1: remove Saddam Hussein as the counterbalance to two I ran?

550
00:32:11,120 --> 00:32:13,360
Speaker 1: When Iraq and I ran, we're at each other's throats.

551
00:32:13,800 --> 00:32:17,120
Speaker 1: No one really had time to develop a nuclear program. Well, actually,

552
00:32:17,120 --> 00:32:20,240
Speaker 1: both both of them had elements of nuclear programs during

553
00:32:20,280 --> 00:32:22,520
Speaker 1: their eight year long war in the eighties. But I

554
00:32:22,680 --> 00:32:26,160
Speaker 1: take your larger point. I opposed the two thousand three

555
00:32:26,200 --> 00:32:28,160
Speaker 1: Iraq War even though I was in the government at

556
00:32:28,200 --> 00:32:31,040
Speaker 1: the time, I was at the State Department. UH. One

557
00:32:31,080 --> 00:32:33,160
Speaker 1: of the reasons was I did think that the balance

558
00:32:33,200 --> 00:32:37,720
Speaker 1: of power between Iraq and Iran suited our interests. And

559
00:32:37,760 --> 00:32:42,440
Speaker 1: I was also wildly skeptical of our ability to build

560
00:32:42,480 --> 00:32:47,000
Speaker 1: a post Saddam Iraqi society to our liking. And I

561
00:32:47,000 --> 00:32:51,080
Speaker 1: think it's fair to say that strategically, Iran was the

562
00:32:51,080 --> 00:32:54,640
Speaker 1: greatest strategic beneficiary of the Iraq War, no doubt in

563
00:32:54,680 --> 00:32:57,560
Speaker 1: my mind about that. The the enemy of my enemy

564
00:32:57,680 --> 00:33:00,480
Speaker 1: is my friend. And and that's a lesson that it

565
00:33:00,520 --> 00:33:03,240
Speaker 1: seems we occasionally, uh I forget about. I would state

566
00:33:03,280 --> 00:33:05,120
Speaker 1: the lesson differently in the Middle East. The enemy of

567
00:33:05,120 --> 00:33:08,120
Speaker 1: your enemy can still be your enemy, and we're paying

568
00:33:08,120 --> 00:33:10,600
Speaker 1: a price for that yet, no doubt about that. So

569
00:33:11,400 --> 00:33:14,800
Speaker 1: you opposed the invasion. But at the same time you

570
00:33:14,880 --> 00:33:20,160
Speaker 1: were one of the special advisers to General Colin Pale.

571
00:33:21,120 --> 00:33:24,720
Speaker 1: How did he wrestle with the issue of of going

572
00:33:24,720 --> 00:33:28,640
Speaker 1: to war in Iraq? If anybody understood the consequences, he

573
00:33:28,800 --> 00:33:32,000
Speaker 1: more so than the civilians who were agitating for war.

574
00:33:32,120 --> 00:33:35,160
Speaker 1: He he really understood what we were getting into absolutely,

575
00:33:35,240 --> 00:33:37,960
Speaker 1: And I would simply say that, like a lot of

576
00:33:38,000 --> 00:33:42,880
Speaker 1: military men, he is often very wary of large juices

577
00:33:42,920 --> 00:33:45,720
Speaker 1: of military force. He comes out of Vietnam and he

578
00:33:45,840 --> 00:33:48,560
Speaker 1: understands just how dangerous and risk he can be to

579
00:33:48,600 --> 00:33:51,960
Speaker 1: American military personnel. He doesn't see wars and abstraction. He

580
00:33:52,040 --> 00:33:55,760
Speaker 1: sees a war as as all too real. So you know,

581
00:33:56,040 --> 00:33:57,920
Speaker 1: he was the one who years ago, if you remember,

582
00:33:57,960 --> 00:34:00,200
Speaker 1: developed the quote unquote Powell doctrine, the idea, if you're

583
00:34:00,200 --> 00:34:01,840
Speaker 1: going to go to war, do it with a lot

584
00:34:01,840 --> 00:34:05,320
Speaker 1: of force. For very clear objectives. And the problem with

585
00:34:05,360 --> 00:34:07,280
Speaker 1: the two thousand three Iraq war. We did it with

586
00:34:07,320 --> 00:34:10,600
Speaker 1: the minimum a force, and we had objectives that military

587
00:34:10,640 --> 00:34:14,000
Speaker 1: force could not accomplish. Military force can destroy things, it's very,

588
00:34:14,080 --> 00:34:16,960
Speaker 1: very hard for military force to create things. So Powell

589
00:34:17,120 --> 00:34:19,560
Speaker 1: was properly skeptical. But then when it was clear the

590
00:34:19,560 --> 00:34:23,680
Speaker 1: President had made up his mind, this is President George W. Bush.

591
00:34:24,120 --> 00:34:26,960
Speaker 1: Powell then tried to influence how we would go to

592
00:34:27,040 --> 00:34:30,840
Speaker 1: war diplomatically through the U N with with and so forth.

593
00:34:31,200 --> 00:34:33,759
Speaker 1: But there I would simply say, and I'll let him

594
00:34:33,760 --> 00:34:38,600
Speaker 1: speak for himself. But the preponderance of the voices in

595
00:34:38,600 --> 00:34:42,680
Speaker 1: this administration this is uh. George W. Bush wanted to

596
00:34:42,680 --> 00:34:44,880
Speaker 1: go to war. Some for reasons. They thought that the

597
00:34:44,920 --> 00:34:48,360
Speaker 1: Iraqis might have weapons of mass destruction. Others thought that

598
00:34:48,400 --> 00:34:51,360
Speaker 1: Iraq was going to be an easy target topple Saddam.

599
00:34:51,400 --> 00:34:54,560
Speaker 1: And they actually thought, very quickly and very easily, you

600
00:34:54,600 --> 00:34:58,239
Speaker 1: could create a democracy that would set a precedent and

601
00:34:58,280 --> 00:35:00,080
Speaker 1: an example that the rest of the region would and

602
00:35:00,120 --> 00:35:04,080
Speaker 1: be able to resist. I was profoundly skeptical that that

603
00:35:04,120 --> 00:35:08,880
Speaker 1: would happen, but you couldn't prove it wrong. People believed it.

604
00:35:08,880 --> 00:35:13,400
Speaker 1: They thought this would be a transformational act, and they

605
00:35:13,520 --> 00:35:16,880
Speaker 1: and the rest again his history. In hindsight, that view

606
00:35:17,200 --> 00:35:21,960
Speaker 1: of taking our values and transferring it to a completely

607
00:35:22,000 --> 00:35:25,040
Speaker 1: different culture seems a little bit naive, doesn't it. I mean,

608
00:35:25,080 --> 00:35:28,240
Speaker 1: it's benefit of mindsight, but it didn't even need hindsight.

609
00:35:28,320 --> 00:35:31,279
Speaker 1: I thought it was wrong beforehand. It was naive. I

610
00:35:31,280 --> 00:35:34,520
Speaker 1: also thought it was arrogant and just simply and it wasn't.

611
00:35:35,000 --> 00:35:37,839
Speaker 1: It's funny. I got criticized once for suggesting it wasn't

612
00:35:37,880 --> 00:35:40,520
Speaker 1: gonna work, and being called, if you will, the foreign

613
00:35:40,600 --> 00:35:42,680
Speaker 1: policy of equivalent of a racist, and I said, no,

614
00:35:42,800 --> 00:35:46,920
Speaker 1: I'm simply saying that the prerequisites for democracy aren't to

615
00:35:47,040 --> 00:35:50,040
Speaker 1: be found in the contemporary Middle East, so we ought

616
00:35:50,080 --> 00:35:53,000
Speaker 1: not to embark on a foreign policy which posits that

617
00:35:53,239 --> 00:35:57,279
Speaker 1: as our objective. That that, that's quite fascinating. Let's talk

618
00:35:57,320 --> 00:36:00,160
Speaker 1: about Cuba, which is another change that seemed to be

619
00:36:00,840 --> 00:36:04,640
Speaker 1: so long incoming. What do you think about this, uh

620
00:36:05,040 --> 00:36:09,000
Speaker 1: re establishing relations with Cuba? What does it mean to us?

621
00:36:09,000 --> 00:36:11,000
Speaker 1: What does it mean to them? You're right, it was

622
00:36:11,040 --> 00:36:15,240
Speaker 1: a long time in coming, largely because the opponents have changed,

623
00:36:15,920 --> 00:36:18,440
Speaker 1: even though they weren't more numerous, had a great political

624
00:36:19,120 --> 00:36:23,160
Speaker 1: intensity to their South Florida and and the impact on

625
00:36:23,280 --> 00:36:27,080
Speaker 1: that allectual minority, if you will, held us back. I

626
00:36:27,120 --> 00:36:28,879
Speaker 1: think the feeling was, with the end of the Cold War,

627
00:36:28,960 --> 00:36:32,400
Speaker 1: there was no longer a strategic reason not to open

628
00:36:32,480 --> 00:36:36,360
Speaker 1: up that clearly embargo and isolation when not bringing about

629
00:36:36,400 --> 00:36:39,240
Speaker 1: the kind of political changes we wanted to see in Cuba.

630
00:36:39,600 --> 00:36:42,719
Speaker 1: So the feeling was, let's try engaging with them, Let's

631
00:36:42,719 --> 00:36:47,920
Speaker 1: try trading with them. Having tourism since ending their isolation,

632
00:36:47,960 --> 00:36:50,600
Speaker 1: you then take away the excuse of the regime that

633
00:36:50,680 --> 00:36:53,800
Speaker 1: it needs to keep control because of the American threat.

634
00:36:54,280 --> 00:36:57,120
Speaker 1: And so I think this is a worthy experiment. Uh,

635
00:36:57,160 --> 00:36:59,480
Speaker 1: the other wasn't working. After fifty years you still had

636
00:36:59,480 --> 00:37:03,480
Speaker 1: communists power. So let's let's try a different approach, and

637
00:37:03,600 --> 00:37:07,200
Speaker 1: maybe this can This can bring down or at least

638
00:37:07,239 --> 00:37:10,840
Speaker 1: bring up, bring about the mellowing the moderation of this system.

639
00:37:10,880 --> 00:37:13,320
Speaker 1: And I think there's a decent chance. We've been speaking

640
00:37:13,320 --> 00:37:16,440
Speaker 1: with Richard hass He is the President of the Council

641
00:37:16,480 --> 00:37:19,640
Speaker 1: on Foreign Relations and author of the upcoming book A

642
00:37:19,760 --> 00:37:23,840
Speaker 1: World in Disarray, American Foeign Policy and the Crisis of

643
00:37:23,880 --> 00:37:26,799
Speaker 1: the Old Order. If people want to find more of

644
00:37:26,840 --> 00:37:30,960
Speaker 1: your writings. UH, CFR dot org is that correct? C

645
00:37:31,200 --> 00:37:33,640
Speaker 1: far dot org is a good place to start. Amazon's another.

646
00:37:34,000 --> 00:37:36,560
Speaker 1: If you have enjoyed this conversation, be sure and stick

647
00:37:36,600 --> 00:37:40,240
Speaker 1: around for our podcast extras, where we continue talking about

648
00:37:40,280 --> 00:37:45,959
Speaker 1: all things UH, diplomatic and foreign policy relations. Be sure

649
00:37:46,000 --> 00:37:48,680
Speaker 1: to follow me on Twitter at Ridholts or check out

650
00:37:48,719 --> 00:37:53,400
Speaker 1: my daily column on Bloomberg dot com. I'm Barry Ridholts.

651
00:37:53,800 --> 00:37:57,240
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio,

652
00:37:57,680 --> 00:38:01,160
Speaker 1: brought to you by B A. S F. We Create Chemistry.

653
00:38:01,360 --> 00:38:03,880
Speaker 1: Welcome to the podcast. Actually, as Richard, thank you so

654
00:38:03,960 --> 00:38:07,000
Speaker 1: much for doing this. This has really been um fascinating.

655
00:38:07,400 --> 00:38:13,400
Speaker 1: I last year interviewed your predecessor, Leslie gelb uh and

656
00:38:13,440 --> 00:38:18,040
Speaker 1: it was a fascinating discussion about a different aspect of

657
00:38:18,080 --> 00:38:23,000
Speaker 1: international relations. This couldn't be more timely between everything that's

658
00:38:23,040 --> 00:38:25,520
Speaker 1: going on in the world. You know, has business ever

659
00:38:25,560 --> 00:38:30,120
Speaker 1: been better for people studying foreign relationship? It seems that

660
00:38:30,840 --> 00:38:33,239
Speaker 1: more than I can remember over the past I don't

661
00:38:33,239 --> 00:38:37,920
Speaker 1: know how many years foreign policy issues are driving the

662
00:38:38,000 --> 00:38:42,920
Speaker 1: news cycle. UH the sad answers. I think you're onto something,

663
00:38:43,520 --> 00:38:45,640
Speaker 1: but if you look at the Middle East, it's as

664
00:38:45,680 --> 00:38:48,640
Speaker 1: close to chaos as the as any part of the world.

665
00:38:49,080 --> 00:38:51,840
Speaker 1: We talked about Europe for a while that is suddenly

666
00:38:52,719 --> 00:38:59,160
Speaker 1: much more unsettled than we ever imagined. Asia very uncertain future,

667
00:38:59,200 --> 00:39:01,439
Speaker 1: given who knows how China is going to play out

668
00:39:02,000 --> 00:39:05,759
Speaker 1: issues potentially with the South China Sea, the East China Sea,

669
00:39:06,160 --> 00:39:09,720
Speaker 1: North Korea. You've got India growing at seven eight percent,

670
00:39:09,800 --> 00:39:11,920
Speaker 1: but you still have the problems with Pakistan. And then

671
00:39:11,920 --> 00:39:14,440
Speaker 1: you've got all the global issues from cyber to health,

672
00:39:15,120 --> 00:39:21,480
Speaker 1: to trade, to proliferation to terrorism. So the the international

673
00:39:21,600 --> 00:39:25,919
Speaker 1: plate is as full. And then domestically, there's probably less

674
00:39:25,920 --> 00:39:29,959
Speaker 1: consensus in this country about America's relationship with the world

675
00:39:29,960 --> 00:39:33,319
Speaker 1: than at any time during my career. So the combination

676
00:39:33,440 --> 00:39:36,560
Speaker 1: of a world that to some extent is unraveling and

677
00:39:36,640 --> 00:39:39,520
Speaker 1: the United States, where there's no longer consensus about what

678
00:39:39,640 --> 00:39:41,720
Speaker 1: role we ought to play. The combination of the two,

679
00:39:42,480 --> 00:39:45,080
Speaker 1: I think, as much as anything else, explains what's going on.

680
00:39:45,560 --> 00:39:48,000
Speaker 1: Someone wrote an essay not too long ago about a

681
00:39:48,040 --> 00:39:51,520
Speaker 1: pencil that if you want to make a pencil, it

682
00:39:51,560 --> 00:39:53,839
Speaker 1: would cost you to just make it yourself. It would

683
00:39:53,880 --> 00:39:57,560
Speaker 1: cost you about three thousand dollars, as opposed to taking

684
00:39:57,600 --> 00:39:59,880
Speaker 1: some wood and some lead and some metal and some

685
00:40:00,080 --> 00:40:03,200
Speaker 1: rubber and buying it for eleven cents from someone else.

686
00:40:03,600 --> 00:40:06,759
Speaker 1: And it was really to me a brilliant way to

687
00:40:06,840 --> 00:40:11,160
Speaker 1: explain the advantages of trade. You couldn't make this yourself,

688
00:40:11,719 --> 00:40:16,160
Speaker 1: or the cost would just be so exorbitant without free trade.

689
00:40:17,280 --> 00:40:22,000
Speaker 1: It's amazing. I wonder how you you mentioned the scapegoating

690
00:40:22,040 --> 00:40:27,600
Speaker 1: factor of it. How significant is scapegoating of trade along

691
00:40:27,600 --> 00:40:32,680
Speaker 1: with the demographic trip changes we've had globalization, automization. How

692
00:40:32,719 --> 00:40:38,600
Speaker 1: effective a technique is that for politicians trying to uh

693
00:40:38,880 --> 00:40:43,680
Speaker 1: touch a chord amongst the populaces. Look, trade is important economically,

694
00:40:43,680 --> 00:40:46,359
Speaker 1: it might even be more important strategically as a way

695
00:40:46,400 --> 00:40:52,560
Speaker 1: of bolstering allies promoting development, uh tying others who are

696
00:40:52,600 --> 00:40:56,720
Speaker 1: potential adversaries into relationships with they'll they'll think twice before

697
00:40:56,760 --> 00:41:00,239
Speaker 1: they they overturned. The problem is that there is to

698
00:41:00,239 --> 00:41:03,320
Speaker 1: the energy and the domestic debate is anti anti trade.

699
00:41:03,960 --> 00:41:06,600
Speaker 1: It's blamed for a lot of things, including job loss

700
00:41:07,200 --> 00:41:10,120
Speaker 1: and who knows what else, So it's it's gonna be

701
00:41:10,120 --> 00:41:12,160
Speaker 1: hard to win that debate. I think you know this.

702
00:41:12,200 --> 00:41:14,840
Speaker 1: President Mr Obama has a few more months left in

703
00:41:14,840 --> 00:41:18,200
Speaker 1: his term to try to begin to shape the debate

704
00:41:18,239 --> 00:41:21,719
Speaker 1: about globalization in this country's relationship with the rest of

705
00:41:21,840 --> 00:41:25,480
Speaker 1: the world. His successor indeed his successors over the years,

706
00:41:26,000 --> 00:41:30,000
Speaker 1: we'll have the same opportunity or necessity. But I but

707
00:41:30,080 --> 00:41:33,400
Speaker 1: I worry that it's part of a larger turning away

708
00:41:33,440 --> 00:41:36,400
Speaker 1: from the world. I worry about certain elements of isolationism

709
00:41:36,640 --> 00:41:38,719
Speaker 1: we've seen in both parties. It's not a republican or

710
00:41:38,719 --> 00:41:41,680
Speaker 1: a democratic problem in some ways now the biggest debates

711
00:41:41,680 --> 00:41:44,840
Speaker 1: in this country or within political parties, and we're seeing it,

712
00:41:44,880 --> 00:41:50,200
Speaker 1: whether the opposition to immigration, opposition to UH trade more broadly,

713
00:41:50,239 --> 00:41:54,040
Speaker 1: this pushback rejection of globalization, and not just in this country,

714
00:41:54,239 --> 00:41:58,240
Speaker 1: we see it throughout Europe and elsewhere. So the lesson

715
00:41:58,320 --> 00:42:00,840
Speaker 1: I take is, if you want this country, in this

716
00:42:00,960 --> 00:42:04,640
Speaker 1: society and this economy to derive the benefits of globalization,

717
00:42:05,120 --> 00:42:06,640
Speaker 1: then you had better go out and make the case.

718
00:42:06,680 --> 00:42:11,520
Speaker 1: Forn't uh is it a matter of sharing the wealth

719
00:42:11,600 --> 00:42:15,360
Speaker 1: that is generated by that or how Because you referenced

720
00:42:15,400 --> 00:42:20,080
Speaker 1: inequality in Europe and some inequalities here, how significant is

721
00:42:20,840 --> 00:42:26,920
Speaker 1: globalization as a response to income inequality or anti globalization

722
00:42:27,320 --> 00:42:30,359
Speaker 1: as a response to to income inequality? Well, here I'll

723
00:42:30,400 --> 00:42:33,040
Speaker 1: probably alienate some of your listeners, but I don't think

724
00:42:33,120 --> 00:42:36,400
Speaker 1: inequality is the real issue. I think the real issue

725
00:42:36,480 --> 00:42:40,839
Speaker 1: is a loss or absence of upward mobility. And we've

726
00:42:40,840 --> 00:42:43,359
Speaker 1: had an equality in this country since day one. What

727
00:42:43,400 --> 00:42:47,640
Speaker 1: we what we've also traditionally had those tremendous opportunity and mobility,

728
00:42:47,800 --> 00:42:51,400
Speaker 1: And to me, the goal is to resurrect that. And

729
00:42:51,440 --> 00:42:54,480
Speaker 1: as long as people see real improvements in their standard

730
00:42:54,520 --> 00:42:57,080
Speaker 1: of living and the prospects of further than I think

731
00:42:57,120 --> 00:43:00,280
Speaker 1: we do just fine as an economy and as a society,

732
00:43:00,400 --> 00:43:03,759
Speaker 1: and people don't wake up every day angry about inequality

733
00:43:03,840 --> 00:43:08,120
Speaker 1: so long as their specific circumstances are improving, are improving,

734
00:43:08,120 --> 00:43:10,880
Speaker 1: and are likely to continue to improve. So so you

735
00:43:10,920 --> 00:43:16,720
Speaker 1: mentioned UH some presidents before you served in both Bush administrations.

736
00:43:17,719 --> 00:43:21,720
Speaker 1: How do you compare and contrast the different styles of

737
00:43:21,719 --> 00:43:26,480
Speaker 1: of George SR and and and uh George W. Bush.

738
00:43:26,680 --> 00:43:30,239
Speaker 1: I would say that forty one the Father's administration was

739
00:43:31,000 --> 00:43:36,440
Speaker 1: more formal, decision making was a bit more orderly, process oriented.

740
00:43:36,520 --> 00:43:40,000
Speaker 1: Is this ste more process oriented, a little bit more careful.

741
00:43:40,040 --> 00:43:46,960
Speaker 1: I think the W's administration UH a little bit less

742
00:43:47,000 --> 00:43:50,480
Speaker 1: form a little bit less careful, And some of the

743
00:43:50,520 --> 00:43:52,600
Speaker 1: decisions as well as some of the follow ups. So

744
00:43:52,680 --> 00:43:57,200
Speaker 1: I thought that the the administration of the father, all

745
00:43:57,239 --> 00:43:59,200
Speaker 1: things being equal, I think history will judge as a

746
00:43:59,239 --> 00:44:03,680
Speaker 1: more a more successful presidency. So let's talk about the

747
00:44:04,120 --> 00:44:08,560
Speaker 1: third bush Um Jeb I was kind of surprised that

748
00:44:08,640 --> 00:44:13,960
Speaker 1: he seemed somewhat surprised by the Iraq question. How can

749
00:44:14,000 --> 00:44:17,440
Speaker 1: we put that into context? He clearly has been prepping

750
00:44:17,480 --> 00:44:20,640
Speaker 1: for this for a long time, and by all accounts,

751
00:44:20,880 --> 00:44:24,520
Speaker 1: is a really intelligent guy. That Jeb Bush is very intelligent.

752
00:44:25,160 --> 00:44:28,920
Speaker 1: I think he would have made a good president. On

753
00:44:28,960 --> 00:44:30,800
Speaker 1: the other hand, he had in campaign for a while

754
00:44:30,880 --> 00:44:33,560
Speaker 1: and just rusty is that? Is that the answers? I

755
00:44:33,560 --> 00:44:36,320
Speaker 1: can't explain it. I wasn't involved. I can't be involved

756
00:44:36,320 --> 00:44:38,920
Speaker 1: in campaigns. I'm just an observer like you are. So

757
00:44:38,920 --> 00:44:43,600
Speaker 1: whether it was rust or just people thought they could

758
00:44:43,600 --> 00:44:45,720
Speaker 1: handle a question and then it turns out they couldn't.

759
00:44:45,880 --> 00:44:51,200
Speaker 1: I can't explain why it was, why it played out

760
00:44:52,680 --> 00:44:55,239
Speaker 1: the way it uh the way it did. But it

761
00:44:55,880 --> 00:44:58,480
Speaker 1: wasn't the only area, quite honestly, where he stumbles as

762
00:44:58,520 --> 00:45:01,279
Speaker 1: a as it kind then it's quite possible. So this

763
00:45:01,880 --> 00:45:05,400
Speaker 1: two thousand, fifteen sixteen wasn't his year, he's he represented

764
00:45:05,480 --> 00:45:09,080
Speaker 1: a degree of establishment continuity. And as you saw with

765
00:45:09,080 --> 00:45:12,120
Speaker 1: with both Donald Trump and Bernie Sanders, this was not

766
00:45:12,239 --> 00:45:16,719
Speaker 1: a year of great public outpouring for establishment continuity. So

767
00:45:17,800 --> 00:45:22,560
Speaker 1: you mentioned Trump when when Trump was jabbing at Jeb

768
00:45:23,400 --> 00:45:28,600
Speaker 1: and using his brother to as a cudgel on him. Um,

769
00:45:28,760 --> 00:45:32,640
Speaker 1: he took a page out of the Democrats side of

770
00:45:32,680 --> 00:45:37,040
Speaker 1: the island said Iraq was a colossal blunder, and there

771
00:45:37,040 --> 00:45:42,360
Speaker 1: were Republicans who flocked to that position. First, was Trump

772
00:45:42,440 --> 00:45:45,440
Speaker 1: right that Iraq was the two oh three invasion of

773
00:45:45,440 --> 00:45:51,439
Speaker 1: Iraq was a colossal blunder? And seconds, um, how did

774
00:45:51,560 --> 00:45:55,319
Speaker 1: he as a Republican say that when no Republican was

775
00:45:55,360 --> 00:45:58,400
Speaker 1: willing to address that publicly in the past. Well, I

776
00:45:58,440 --> 00:46:01,560
Speaker 1: wrote a book about the tour about the Gulf War,

777
00:46:01,560 --> 00:46:04,040
Speaker 1: in the Iraq War, cold war of necessity, war of choice,

778
00:46:04,080 --> 00:46:06,800
Speaker 1: and I was a great critic of the two thousand

779
00:46:06,840 --> 00:46:12,680
Speaker 1: three War of necessity, meaning the desert shields after Saddam

780
00:46:12,719 --> 00:46:15,640
Speaker 1: invaded Kuwait absolutely, which I thought was a war that

781
00:46:15,680 --> 00:46:17,600
Speaker 1: we were right to in fight, and we fought it

782
00:46:17,640 --> 00:46:21,279
Speaker 1: in the right way, very much a Colin Powell specific

783
00:46:21,560 --> 00:46:25,120
Speaker 1: objective overwhelming force and then get out when you're done right.

784
00:46:25,200 --> 00:46:29,520
Speaker 1: It was Colin Powell was President, Bush, Brent Scotcroft, James Baker,

785
00:46:29,880 --> 00:46:31,960
Speaker 1: and Dick Cheney by the way with Secretary of Defense,

786
00:46:32,000 --> 00:46:35,520
Speaker 1: and it was a very effective team. But considerable means

787
00:46:35,520 --> 00:46:39,560
Speaker 1: for limited goals very different than the two thousand three. Uh,

788
00:46:39,719 --> 00:46:44,800
Speaker 1: considerable means for limited goals as opposed to limited means

789
00:46:44,840 --> 00:46:50,200
Speaker 1: for considerable goals. And it you know it needless to say.

790
00:46:50,200 --> 00:46:53,920
Speaker 1: And I think history will be uh extremely critical of

791
00:46:54,000 --> 00:46:56,560
Speaker 1: the two thousand three, So I think it's legitimate to

792
00:46:56,600 --> 00:46:59,080
Speaker 1: criticize it. And I think what it also shows is

793
00:46:59,239 --> 00:47:02,360
Speaker 1: uh a lot of consensus within the Republican Party about

794
00:47:02,360 --> 00:47:04,759
Speaker 1: this country's role in the world. So you those who

795
00:47:04,800 --> 00:47:07,000
Speaker 1: thought the Iraq War was a great idea at the time,

796
00:47:07,120 --> 00:47:09,960
Speaker 1: some in retrospect, many people who opposed it at the

797
00:47:10,040 --> 00:47:15,480
Speaker 1: time or certainly in retrospect. And I just find this

798
00:47:15,560 --> 00:47:18,680
Speaker 1: part of a larger pattern that the most interesting conversations

799
00:47:18,719 --> 00:47:21,719
Speaker 1: about foreign policy happened within the parties. There's not a

800
00:47:21,760 --> 00:47:27,759
Speaker 1: democratic versus Republican foreign policy that is that is quite fascinating. UM.

801
00:47:27,880 --> 00:47:30,879
Speaker 1: So let's let's move beyond the bushes and and move

802
00:47:31,000 --> 00:47:35,880
Speaker 1: beyond um spend a little more time. We we mentioned

803
00:47:36,560 --> 00:47:41,480
Speaker 1: the parallels between Brexit and and Trump, but is it

804
00:47:41,560 --> 00:47:46,239
Speaker 1: really fair to say that, uh, we're we're striking the

805
00:47:46,360 --> 00:47:50,719
Speaker 1: same populace chord. Is it immigration and and lack of

806
00:47:50,760 --> 00:47:54,560
Speaker 1: opportunity and some wealth inequality? Are those the factors that

807
00:47:54,600 --> 00:48:00,200
Speaker 1: are driving to a lesser degree the Sanders Um candidacy answers. Yes.

808
00:48:00,280 --> 00:48:03,160
Speaker 1: And you've had, as you know, for many Americans, a

809
00:48:03,239 --> 00:48:06,520
Speaker 1: lack of real increase in living standards over the last

810
00:48:06,560 --> 00:48:09,320
Speaker 1: decade decade and a half. So and this concerns about

811
00:48:09,320 --> 00:48:14,279
Speaker 1: the inadequacy of safety nets, of retirement savings, a lot

812
00:48:14,320 --> 00:48:18,080
Speaker 1: of social change in our society, and record speed. So

813
00:48:18,120 --> 00:48:20,319
Speaker 1: I think you add all this up and there's a

814
00:48:20,320 --> 00:48:24,240
Speaker 1: lot of Americans who feel uneasy, uncomfortable, threatened, anxious, choose

815
00:48:24,239 --> 00:48:27,719
Speaker 1: your your adjective, but I think it's it's widespread. And

816
00:48:27,760 --> 00:48:30,440
Speaker 1: the fact that you've had outsiders like Donald Trump and

817
00:48:30,480 --> 00:48:33,279
Speaker 1: Bernie Sanders do as well as they've done in this

818
00:48:33,320 --> 00:48:36,799
Speaker 1: political season tells you something. So let's talk You mentioned Trump,

819
00:48:36,880 --> 00:48:38,799
Speaker 1: Let's talk a little bit about I mentioned Trump, so

820
00:48:38,840 --> 00:48:41,160
Speaker 1: I can't really pin that on you. Let's let's talk

821
00:48:41,200 --> 00:48:45,879
Speaker 1: about our relationship with Mexico. My understanding has been that

822
00:48:46,040 --> 00:48:51,279
Speaker 1: following the financial crisis, we saw not immigration but immigration.

823
00:48:51,800 --> 00:48:54,920
Speaker 1: When we look at the amount of money being wired

824
00:48:55,000 --> 00:49:00,080
Speaker 1: from the US to Mexico, ostensibly by illegal Mexican in

825
00:49:00,200 --> 00:49:03,200
Speaker 1: the United States sending money back to their family, that's

826
00:49:03,239 --> 00:49:06,279
Speaker 1: really taken a big drop, and and the amount of

827
00:49:06,320 --> 00:49:10,600
Speaker 1: illegal Mexicans coming over the border seems to have reversed.

828
00:49:10,640 --> 00:49:14,400
Speaker 1: It seems to be going the opposite direction. So, first question,

829
00:49:15,520 --> 00:49:20,080
Speaker 1: are we really threatened by Mexico? And second question, are

830
00:49:20,080 --> 00:49:22,360
Speaker 1: we really going to get them to pay for a wall?

831
00:49:22,400 --> 00:49:25,239
Speaker 1: How is that going to work? As you say, there's

832
00:49:25,280 --> 00:49:28,600
Speaker 1: net migration now in the direction of Mexico. It's a

833
00:49:28,640 --> 00:49:32,200
Speaker 1: combination of slowing economy here, the economy there is doing well,

834
00:49:32,280 --> 00:49:37,240
Speaker 1: smaller family size, uh there. So that's that's essentially what's

835
00:49:38,200 --> 00:49:41,080
Speaker 1: driving it. I also think that Mexico is something of

836
00:49:41,120 --> 00:49:44,000
Speaker 1: a success story, the fact that it's you've had several

837
00:49:44,120 --> 00:49:49,160
Speaker 1: rotations of power. It's it's increasingly a peaceful, legitimate democracy.

838
00:49:49,400 --> 00:49:52,719
Speaker 1: You've got problems in some cases domestically with drug gangs

839
00:49:52,800 --> 00:49:55,040
Speaker 1: with guns and so forth, but that's really a lack

840
00:49:55,080 --> 00:49:57,200
Speaker 1: of government capacity, and that's the kind of thing that

841
00:49:57,440 --> 00:50:01,319
Speaker 1: over the years or decades, I believe canon will UH

842
00:50:01,840 --> 00:50:04,200
Speaker 1: be solved. The fact that you don't have massive flows

843
00:50:04,200 --> 00:50:06,799
Speaker 1: of people out of Mexico and the United States. I

844
00:50:06,880 --> 00:50:08,840
Speaker 1: also see in some ways there's a reflection that the

845
00:50:08,920 --> 00:50:12,560
Speaker 1: NAFTA agreement worked. Next, Mexico's economy is doing better. It

846
00:50:12,600 --> 00:50:17,040
Speaker 1: can increasingly support its own UH population and a lot

847
00:50:17,120 --> 00:50:19,120
Speaker 1: of goods which are made in one country the other,

848
00:50:19,160 --> 00:50:21,680
Speaker 1: as you know, because the supply chains are really made

849
00:50:21,680 --> 00:50:25,959
Speaker 1: increasingly in both. But to answer your question, no, there

850
00:50:26,360 --> 00:50:29,160
Speaker 1: I do not believe there will be a wall between

851
00:50:29,200 --> 00:50:33,759
Speaker 1: the United States and and Mexico. If there water be one,

852
00:50:33,800 --> 00:50:37,920
Speaker 1: it wouldn't be paid for by Mexico. I would just

853
00:50:37,960 --> 00:50:40,560
Speaker 1: make a larger point about immigration. I think we need

854
00:50:40,600 --> 00:50:42,879
Speaker 1: to break it down at the three parts. We need

855
00:50:42,920 --> 00:50:46,439
Speaker 1: to continue to have a flow of talented individuals into

856
00:50:46,440 --> 00:50:49,440
Speaker 1: this country. It's a great driver of economic success in

857
00:50:49,480 --> 00:50:51,719
Speaker 1: this country. We've got to find a way to deal

858
00:50:51,760 --> 00:50:55,080
Speaker 1: with twelve million people who had this uncertain status. We're

859
00:50:55,120 --> 00:50:57,360
Speaker 1: not going to deport them. We've got to find some

860
00:50:57,440 --> 00:51:00,440
Speaker 1: kind of a legitimate path, a conditional path to a

861
00:51:00,520 --> 00:51:04,000
Speaker 1: legal status or citizen ship. And we've got to have

862
00:51:04,040 --> 00:51:07,040
Speaker 1: real security and I'm not worried about economic migrants. I'm

863
00:51:07,040 --> 00:51:08,920
Speaker 1: worried about terrorists. So I want to make sure that

864
00:51:08,960 --> 00:51:11,239
Speaker 1: the United States is secure and its borders on its

865
00:51:11,320 --> 00:51:15,120
Speaker 1: land borders, its air borders, and its sea boarders north, southeast,

866
00:51:15,160 --> 00:51:17,680
Speaker 1: and west. So we've got to be safe, and that

867
00:51:17,760 --> 00:51:21,600
Speaker 1: to me is a a real challenge that we've got

868
00:51:21,600 --> 00:51:27,239
Speaker 1: to face up to. So, but you mentioned NAFTA, I

869
00:51:27,560 --> 00:51:32,040
Speaker 1: have to come back to the Trans Pacific Um Partnership

870
00:51:32,640 --> 00:51:37,480
Speaker 1: that that is now stuck in Congress for years. What

871
00:51:37,640 --> 00:51:41,640
Speaker 1: happens if that doesn't pass? And and what does that

872
00:51:41,680 --> 00:51:44,440
Speaker 1: say to our trading partners And what are the odds

873
00:51:44,480 --> 00:51:48,560
Speaker 1: that that under new administration, perhaps with a new Congress,

874
00:51:49,160 --> 00:51:52,560
Speaker 1: UH might might actually be fast tracked. Well, you're right

875
00:51:52,640 --> 00:51:57,080
Speaker 1: that the agreement has been parked in the Congress. There's

876
00:51:57,120 --> 00:52:00,880
Speaker 1: zero chance that gets touched before the election. If Hillary

877
00:52:00,920 --> 00:52:02,960
Speaker 1: Clinton were to win, there's some chance it could get

878
00:52:02,960 --> 00:52:05,440
Speaker 1: touched in the lame Duck. More likely though it comes

879
00:52:05,480 --> 00:52:07,880
Speaker 1: If it comes up again, it would be sometime after

880
00:52:07,920 --> 00:52:12,879
Speaker 1: the new president takes UH takes office if it If

881
00:52:12,880 --> 00:52:14,680
Speaker 1: it doesn't pass, we'd pay a little bit of an

882
00:52:14,680 --> 00:52:19,600
Speaker 1: economic price. The estimates are point three or so percentage

883
00:52:19,800 --> 00:52:22,520
Speaker 1: GDP in not a lot, not like the Brexit costs,

884
00:52:22,560 --> 00:52:25,720
Speaker 1: which is a couple of percent, much smaller, exactly much smaller.

885
00:52:25,840 --> 00:52:29,240
Speaker 1: I think the bigger costs would be strategic and reputational.

886
00:52:29,480 --> 00:52:31,520
Speaker 1: What it would sell to these other countries is the

887
00:52:31,600 --> 00:52:35,840
Speaker 1: United States is no longer reliable, dependable, predictable country. And

888
00:52:36,080 --> 00:52:38,080
Speaker 1: it would also be the biggest winner would be China.

889
00:52:38,400 --> 00:52:40,759
Speaker 1: What the Chinese would say is, oh, great, well, we're

890
00:52:40,760 --> 00:52:42,319
Speaker 1: going to do a trade agreement with you. We're going

891
00:52:42,400 --> 00:52:46,279
Speaker 1: to replace the United States economically. So I don't see

892
00:52:46,320 --> 00:52:49,200
Speaker 1: people connecting the dots in this country. And if you

893
00:52:49,239 --> 00:52:52,160
Speaker 1: want to be against t p P, that's your prerogative,

894
00:52:52,160 --> 00:52:55,120
Speaker 1: but then you have to be honest about the strategic

895
00:52:55,200 --> 00:52:59,440
Speaker 1: consequences and as well as the economic consequences being against it.

896
00:52:59,560 --> 00:53:02,640
Speaker 1: It seems to me the case for it is so strong,

897
00:53:03,120 --> 00:53:06,160
Speaker 1: and there's ways of helping people who would conceivably or

898
00:53:06,160 --> 00:53:09,400
Speaker 1: potentially be hurt by it through economic displacement. Well, then

899
00:53:09,440 --> 00:53:14,440
Speaker 1: you help them with education, retraining and transitional financial assistance.

900
00:53:14,440 --> 00:53:16,240
Speaker 1: But to throw the baby out with the bath waters

901
00:53:16,320 --> 00:53:19,320
Speaker 1: to me, a uh strategic error of the first magnitude

902
00:53:19,440 --> 00:53:21,920
Speaker 1: is that the deal that has to get done. T

903
00:53:22,120 --> 00:53:26,080
Speaker 1: p P passes, but here's money set aside for retraining

904
00:53:26,080 --> 00:53:29,640
Speaker 1: of anybody who loses their job or or whose factory

905
00:53:29,680 --> 00:53:33,200
Speaker 1: closes as a result of this path. That's the way,

906
00:53:33,280 --> 00:53:35,680
Speaker 1: quite honestly, that is the way we've passed previous Trader

907
00:53:35,719 --> 00:53:39,399
Speaker 1: graft Naft and others, is that there's always a side deal,

908
00:53:39,440 --> 00:53:43,040
Speaker 1: if you will, where you help people who are like

909
00:53:43,080 --> 00:53:46,399
Speaker 1: not everybody gains, not everybody wins from globalization. So as

910
00:53:46,400 --> 00:53:48,920
Speaker 1: a society, we've got to take care of the people

911
00:53:48,920 --> 00:53:52,440
Speaker 1: who lose from globalization. That's part of putting together a

912
00:53:52,600 --> 00:53:55,799
Speaker 1: majority that supports these agreements. So I never asked for

913
00:53:55,800 --> 00:53:58,600
Speaker 1: forecast of predictions. That's that's part of our motto. No

914
00:53:58,760 --> 00:54:02,640
Speaker 1: stock picks, no no forecasts. But I'm gonna I'm gonna

915
00:54:03,160 --> 00:54:09,160
Speaker 1: cheat over to that that area a little bit and say,

916
00:54:09,200 --> 00:54:11,600
Speaker 1: is there any chance we see t p P passed

917
00:54:11,600 --> 00:54:14,560
Speaker 1: over the next five years. The answers yes. What you

918
00:54:14,640 --> 00:54:17,200
Speaker 1: can't do is renegotiate it. You can't reopen it with

919
00:54:17,239 --> 00:54:19,319
Speaker 1: eleven other countries. So if it were to pass, what

920
00:54:19,360 --> 00:54:21,799
Speaker 1: it would take a little bit. What we've been talking

921
00:54:21,840 --> 00:54:25,400
Speaker 1: about is a side agreement between whosever president and the Congress,

922
00:54:26,000 --> 00:54:29,040
Speaker 1: which would deal with everything from various forms of assistance

923
00:54:29,160 --> 00:54:33,640
Speaker 1: for affected workers, might also deal with with perceived problems

924
00:54:33,719 --> 00:54:36,520
Speaker 1: with the agreement, for example, to deal with the potential

925
00:54:36,600 --> 00:54:40,560
Speaker 1: the currencies are manipulated so other countries exports are cheaper here,

926
00:54:40,840 --> 00:54:43,840
Speaker 1: might deal with government subsidies. So what I would expect

927
00:54:43,960 --> 00:54:46,880
Speaker 1: is you'd have a side agreement between the President the

928
00:54:46,920 --> 00:54:50,799
Speaker 1: Congress that would, together with the agreement, would provide a

929
00:54:50,880 --> 00:54:54,080
Speaker 1: package that people, even skeptics, could support. So I think

930
00:54:54,080 --> 00:54:55,799
Speaker 1: the odds of that happening over the next five years

931
00:54:55,800 --> 00:55:00,359
Speaker 1: are better than even. Since you mentioned manipulating currency, let's

932
00:55:00,400 --> 00:55:02,520
Speaker 1: talk a little bit about China. Do you think China

933
00:55:02,760 --> 00:55:06,520
Speaker 1: is a persistent currency manipulator or is that just an

934
00:55:06,520 --> 00:55:09,680
Speaker 1: easy thing to paint them with. I think they were historically,

935
00:55:09,680 --> 00:55:12,479
Speaker 1: but they've stopped and in the last year or two

936
00:55:12,920 --> 00:55:15,919
Speaker 1: the evidence just isn't there These things that criticize China

937
00:55:16,000 --> 00:55:19,080
Speaker 1: four such as well. Obviously we talked about it before,

938
00:55:19,120 --> 00:55:22,080
Speaker 1: the question of property theft. Intellectual property theft is an

939
00:55:22,080 --> 00:55:25,960
Speaker 1: issue of government subsidies, government investments, and so forth. As

940
00:55:26,080 --> 00:55:29,279
Speaker 1: there's issues I just sort of column somewhere. I can't

941
00:55:29,320 --> 00:55:34,279
Speaker 1: recall that Amazon is having a problem that they're flooded

942
00:55:34,560 --> 00:55:38,799
Speaker 1: with Chinese knockoffs of of name brand goods. So if

943
00:55:38,800 --> 00:55:41,040
Speaker 1: we have a dumping problem from China, then we have

944
00:55:41,120 --> 00:55:43,319
Speaker 1: something called the World Trade Organization and we take we

945
00:55:43,320 --> 00:55:45,840
Speaker 1: should take China to task in the w t O.

946
00:55:46,000 --> 00:55:49,080
Speaker 1: Often we get rulings in our favor. Let's use the machinery.

947
00:55:49,520 --> 00:55:52,480
Speaker 1: Not too long before we sat down to do this interview,

948
00:55:52,600 --> 00:55:57,320
Speaker 1: there was a decision by an arbitration panel that basically

949
00:55:57,400 --> 00:56:01,759
Speaker 1: says China has no historical eights to parts of the

950
00:56:01,840 --> 00:56:04,279
Speaker 1: Chinese Sea that they're the South China South China see

951
00:56:04,280 --> 00:56:07,919
Speaker 1: that they're claiming as their own. What does this mean

952
00:56:08,040 --> 00:56:11,920
Speaker 1: going forward? Is this is this have binding force? Uh

953
00:56:11,960 --> 00:56:15,520
Speaker 1: and as China still gonna be flexing military muscle off

954
00:56:15,560 --> 00:56:18,040
Speaker 1: their own coast in in in the Pacific. Well before

955
00:56:18,040 --> 00:56:21,000
Speaker 1: the decision came down, the Chinese, knowing the decision was

956
00:56:21,000 --> 00:56:23,719
Speaker 1: going to go against them, essentially preempted and said we're

957
00:56:23,719 --> 00:56:26,600
Speaker 1: going to ignore the decision and before we feel too

958
00:56:26,640 --> 00:56:28,759
Speaker 1: much holier than now about it, we would do the

959
00:56:28,800 --> 00:56:31,919
Speaker 1: same thing. As a major power. We wouldn't allow our

960
00:56:32,120 --> 00:56:36,439
Speaker 1: foreign policy to be determined by some tribunal like this,

961
00:56:36,800 --> 00:56:40,839
Speaker 1: And so I don't in that sense. There's no surprise. Now.

962
00:56:40,880 --> 00:56:44,080
Speaker 1: The real question is not whether China goes along with

963
00:56:44,120 --> 00:56:46,600
Speaker 1: the ruling. There was zero chances that. The real question

964
00:56:46,680 --> 00:56:49,000
Speaker 1: is whether in any way they adjust their behavior and

965
00:56:49,080 --> 00:56:52,759
Speaker 1: stop some of the reclamation projects, the island rebuilding projects,

966
00:56:53,160 --> 00:56:55,480
Speaker 1: whether we see a little bit more reasonable nous on

967
00:56:55,520 --> 00:56:57,920
Speaker 1: their behavior on my hunches, there's a debate within China

968
00:56:57,960 --> 00:57:01,000
Speaker 1: on that that historically over last. If you think about

969
00:57:01,000 --> 00:57:04,719
Speaker 1: a forty years, China's foreign policy has been quite restrained

970
00:57:04,800 --> 00:57:08,560
Speaker 1: because they've understood they needed a stable environment external environment

971
00:57:08,600 --> 00:57:11,759
Speaker 1: in order to develop and grow economically. In the last

972
00:57:11,760 --> 00:57:14,319
Speaker 1: couple of years, you're seeing a more assertive streak coming

973
00:57:14,320 --> 00:57:16,880
Speaker 1: out of China. So my prediction is you're going to

974
00:57:16,960 --> 00:57:20,320
Speaker 1: see something of an internal struggle between these two different schools.

975
00:57:20,320 --> 00:57:22,680
Speaker 1: I thought, can we say it's been more than forty years,

976
00:57:22,680 --> 00:57:25,600
Speaker 1: it's been about five thousand years of China not looking

977
00:57:25,600 --> 00:57:29,000
Speaker 1: to project Look at the British Empire, the Spanish, but

978
00:57:29,080 --> 00:57:32,440
Speaker 1: look look at the Napoleonic You never really got that

979
00:57:32,560 --> 00:57:35,680
Speaker 1: from China. They were much more about taking care of

980
00:57:35,720 --> 00:57:40,320
Speaker 1: their own so big territorially and demographically that that's historically

981
00:57:40,360 --> 00:57:42,320
Speaker 1: been an up and now China is a major power,

982
00:57:42,720 --> 00:57:44,840
Speaker 1: and the question is whether they want to have a

983
00:57:44,920 --> 00:57:50,560
Speaker 1: certain influence or respect, if you will, accorded them in

984
00:57:50,640 --> 00:57:54,040
Speaker 1: the in the region. They want to assert certain things,

985
00:57:54,080 --> 00:57:56,760
Speaker 1: and I think they are the juries out. But again,

986
00:57:56,840 --> 00:58:00,560
Speaker 1: as growth has slowed significantly in China, again there's two

987
00:58:00,560 --> 00:58:03,760
Speaker 1: skills a thought. One says they're gonna continue to be

988
00:58:03,800 --> 00:58:06,480
Speaker 1: restrained because they can't afford to upset the economic out

989
00:58:06,560 --> 00:58:08,800
Speaker 1: applic cart. The other is saying they're going to turn

990
00:58:08,840 --> 00:58:11,160
Speaker 1: to a more nationalist foreign policy as a way of

991
00:58:11,200 --> 00:58:15,240
Speaker 1: compensating for their their slowing economic growth. And Western observers

992
00:58:15,240 --> 00:58:18,320
Speaker 1: are divided. My hunches the Chinese themselves are divided. Do

993
00:58:18,440 --> 00:58:23,200
Speaker 1: the Chinese feel disrespected because I don't know anybody who's

994
00:58:23,240 --> 00:58:28,560
Speaker 1: not a leader in technology, in in economics, in any

995
00:58:28,720 --> 00:58:32,600
Speaker 1: global perspective that doesn't look at China as a behemoth

996
00:58:33,160 --> 00:58:36,720
Speaker 1: deserving of respect. Or are they still feeling a little

997
00:58:36,760 --> 00:58:40,640
Speaker 1: bit of a of a third World chip on their shoulder.

998
00:58:41,160 --> 00:58:43,560
Speaker 1: I'm not sure to put it quite that way, because

999
00:58:43,560 --> 00:58:45,600
Speaker 1: they're at one and the same time both the developing

1000
00:58:45,640 --> 00:58:49,000
Speaker 1: country and a power. But I do think they feel

1001
00:58:49,360 --> 00:58:51,680
Speaker 1: based on my conversations with them, and what I read

1002
00:58:51,800 --> 00:58:55,760
Speaker 1: that this is still an American dominated world. There's some

1003
00:58:55,840 --> 00:58:58,160
Speaker 1: Chinese who think that the United States gets up in

1004
00:58:58,200 --> 00:59:02,040
Speaker 1: the morning trying to block China's path. That really, uh sure,

1005
00:59:02,080 --> 00:59:04,760
Speaker 1: When we, for example, opposed over the last couple of

1006
00:59:04,800 --> 00:59:09,880
Speaker 1: years the Chinese sponsored Infrastructure Investment Bank in Asia, there's

1007
00:59:09,920 --> 00:59:15,480
Speaker 1: a certain Chinese feeling that, again, the United States wants

1008
00:59:15,520 --> 00:59:17,920
Speaker 1: to keep China in its place so it doesn't emerge

1009
00:59:17,960 --> 00:59:21,840
Speaker 1: as a full fledged uh competitor. So there's a bit

1010
00:59:21,880 --> 00:59:24,600
Speaker 1: of that in Chinese. Uh. I think in the Chinese

1011
00:59:24,640 --> 00:59:28,240
Speaker 1: political debate, aren't the Chinese already a full fledged competitor.

1012
00:59:28,240 --> 00:59:29,760
Speaker 1: I wouldn't call him full fledge, but I think they

1013
00:59:29,760 --> 00:59:32,440
Speaker 1: are a significant competitor, and they're the closest thing to

1014
00:59:32,520 --> 00:59:36,640
Speaker 1: an emerging rival great power that there that there is

1015
00:59:36,680 --> 00:59:38,360
Speaker 1: in the world. I think the real question is whether

1016
00:59:38,400 --> 00:59:40,920
Speaker 1: they can pull it off and whether they can maintain

1017
00:59:40,960 --> 00:59:45,439
Speaker 1: the political stability at home amidst lower rates of economic growth.

1018
00:59:45,440 --> 00:59:49,880
Speaker 1: So I actually think China is an underappreciated political question

1019
00:59:49,920 --> 00:59:52,720
Speaker 1: mark over the next five to ten to ten years,

1020
00:59:52,760 --> 00:59:57,840
Speaker 1: another potential surprise, like you absolutely speaking of surprises, Before

1021
00:59:57,840 --> 01:00:02,000
Speaker 1: I get to my favorite questions, we really haven't talked

1022
01:00:02,080 --> 01:00:07,000
Speaker 1: much about Russia other than their little Ukraine and crimea adventure.

1023
01:00:07,680 --> 01:00:09,720
Speaker 1: What the hell is going on in Russia? It seems

1024
01:00:09,720 --> 01:00:14,560
Speaker 1: that Putin is speaking of wild cards. He seems to

1025
01:00:14,920 --> 01:00:18,680
Speaker 1: delight in surprising the West on a regular basis. Absolutely,

1026
01:00:18,720 --> 01:00:20,800
Speaker 1: and there's nothing holding him back if he wants to

1027
01:00:20,840 --> 01:00:25,320
Speaker 1: surprise us tomorrow. Mr Putin is shall we say, unconstrained.

1028
01:00:25,760 --> 01:00:27,880
Speaker 1: He uh. There's not a lot of checks and balances

1029
01:00:27,880 --> 01:00:31,640
Speaker 1: in the Russian political system, and economically and politically, he

1030
01:00:31,680 --> 01:00:37,160
Speaker 1: has consolidated power to unprecedented degree. So he retains the

1031
01:00:37,240 --> 01:00:40,680
Speaker 1: capacity and the ability to UH, to surprise if he

1032
01:00:40,760 --> 01:00:43,000
Speaker 1: decides that it's in his interest to do so. So

1033
01:00:43,160 --> 01:00:47,600
Speaker 1: you mentioned China is focusing on growth and political stability.

1034
01:00:48,200 --> 01:00:52,920
Speaker 1: What what's driving Russia? What motivates Putin? Putin has political

1035
01:00:52,960 --> 01:00:57,080
Speaker 1: stability at home. His economy is pretty much one dimensional

1036
01:00:57,120 --> 01:01:00,600
Speaker 1: with energy. I think what he's trying for is respect

1037
01:01:00,840 --> 01:01:04,960
Speaker 1: and attention, and I think he wants to uh. He

1038
01:01:05,000 --> 01:01:08,720
Speaker 1: wants Russia to be a scene perceived, judged to be

1039
01:01:08,880 --> 01:01:11,440
Speaker 1: a major power. It's why he is doing some of

1040
01:01:11,480 --> 01:01:13,480
Speaker 1: what he's doing in the Middle East. I think you've

1041
01:01:13,520 --> 01:01:15,560
Speaker 1: got to look at the last twenty five years of history.

1042
01:01:15,640 --> 01:01:19,240
Speaker 1: For many Russians, particularly of Putin's mentality, someone from the

1043
01:01:19,280 --> 01:01:22,919
Speaker 1: security services as a humiliating era, and what Putin wants

1044
01:01:22,920 --> 01:01:26,320
Speaker 1: to do is in some ways compensate for what he

1045
01:01:26,360 --> 01:01:29,800
Speaker 1: sees to be the humiliations of losing the Cold War,

1046
01:01:30,080 --> 01:01:34,880
Speaker 1: NATO enlargement, you name it. That. Essentially, Russia has been

1047
01:01:34,960 --> 01:01:39,400
Speaker 1: kicked off its pedestal. So during the Cold War, Russia

1048
01:01:39,560 --> 01:01:46,800
Speaker 1: was constantly cranking out world class mathematicians, world class code writers,

1049
01:01:46,920 --> 01:01:51,160
Speaker 1: world class physicists. If they wanted to compete with the

1050
01:01:51,240 --> 01:01:57,800
Speaker 1: US and China on an economic capacity, uh we talked

1051
01:01:57,800 --> 01:02:04,280
Speaker 1: about more stem uh education degrees, careers. They have that

1052
01:02:04,360 --> 01:02:09,280
Speaker 1: in spades. Why haven't they taken that huge human capital

1053
01:02:09,320 --> 01:02:15,600
Speaker 1: they have and create a serious competitor to Chinese manufacturing,

1054
01:02:15,640 --> 01:02:19,760
Speaker 1: to Silicon Valley to New York finance. They have all

1055
01:02:19,800 --> 01:02:23,360
Speaker 1: the components, but they just don't seem to have the

1056
01:02:24,200 --> 01:02:27,480
Speaker 1: philosophy there. There's a simple answer to your question. If

1057
01:02:27,520 --> 01:02:29,880
Speaker 1: they were going to free up their economy to do

1058
01:02:29,960 --> 01:02:32,800
Speaker 1: exactly what you're talking about, it would have political consequences.

1059
01:02:33,120 --> 01:02:35,720
Speaker 1: One of the advantages of having such a heavy state

1060
01:02:35,800 --> 01:02:38,440
Speaker 1: run economy with so much of the wealth and oil

1061
01:02:38,480 --> 01:02:40,960
Speaker 1: and gas is the government controls things. If you had

1062
01:02:40,960 --> 01:02:43,960
Speaker 1: a real economy where people were starting up businesses where

1063
01:02:43,960 --> 01:02:47,320
Speaker 1: they could be independent, they had sources of capital outside

1064
01:02:47,360 --> 01:02:50,480
Speaker 1: the control of government, they would then demand political freedom.

1065
01:02:50,640 --> 01:02:54,080
Speaker 1: Vladimir Putin does not want to oversee Russia where he

1066
01:02:54,120 --> 01:02:56,400
Speaker 1: does not keep control. But that wouldn't be his headache.

1067
01:02:56,440 --> 01:02:59,720
Speaker 1: That would be a twenty or thirty year transformation that

1068
01:02:59,760 --> 01:03:02,600
Speaker 1: would make Russia an economic power. He's not going to

1069
01:03:02,680 --> 01:03:04,440
Speaker 1: start that process. He is not going to start that

1070
01:03:04,480 --> 01:03:08,040
Speaker 1: because you would begin to create momentum that would weaken

1071
01:03:08,520 --> 01:03:11,600
Speaker 1: the share of power or the relative role of the state.

1072
01:03:12,360 --> 01:03:14,760
Speaker 1: That is just not his vision of his country. Isn't

1073
01:03:14,760 --> 01:03:18,800
Speaker 1: that the eventual disposition that's going to happen in Russia?

1074
01:03:19,160 --> 01:03:21,800
Speaker 1: Maybe not next year or ten years from now, But well,

1075
01:03:22,400 --> 01:03:25,200
Speaker 1: are they going to have a future beyond energy? It

1076
01:03:25,240 --> 01:03:28,200
Speaker 1: has to be, but they're not. They haven't. The tentative

1077
01:03:28,200 --> 01:03:30,080
Speaker 1: states they made a few years ago in that direction

1078
01:03:30,080 --> 01:03:32,560
Speaker 1: they were going they were going to create or after

1079
01:03:32,800 --> 01:03:36,000
Speaker 1: after a few years under that, jev and Putin there

1080
01:03:36,080 --> 01:03:39,000
Speaker 1: was some experimentation about a high tech area around Roscow

1081
01:03:39,280 --> 01:03:41,240
Speaker 1: and essentially they pulled the rug out from under it

1082
01:03:41,280 --> 01:03:44,520
Speaker 1: because the same people who had the creative ideas to

1083
01:03:44,560 --> 01:03:49,520
Speaker 1: start businesses had dangerous creative ideas about politics. That's fascinating.

1084
01:03:50,120 --> 01:03:54,480
Speaker 1: Let's jump to some of our our favorite questions. Um,

1085
01:03:54,520 --> 01:03:56,880
Speaker 1: I was gonna ask what you did before you started

1086
01:03:57,000 --> 01:03:59,160
Speaker 1: at at D O D. But really you came right

1087
01:03:59,160 --> 01:04:02,280
Speaker 1: out of school and pretty much straight into government, right.

1088
01:04:02,680 --> 01:04:04,920
Speaker 1: I've been in it, Like my entire career is, it's

1089
01:04:04,920 --> 01:04:07,479
Speaker 1: a very American career. This is one of the few

1090
01:04:07,480 --> 01:04:10,720
Speaker 1: countries where you don't have to make but for the

1091
01:04:10,720 --> 01:04:13,920
Speaker 1: Oxford part, but it's very American in the sense that

1092
01:04:13,960 --> 01:04:16,640
Speaker 1: you don't have to make a single choice. Like if

1093
01:04:16,640 --> 01:04:18,920
Speaker 1: you're in Europe, you would either have to be a

1094
01:04:18,960 --> 01:04:23,560
Speaker 1: career diplomat or an academic, and you never academics. Don't

1095
01:04:23,560 --> 01:04:25,400
Speaker 1: people go back and forth here all the time. Here

1096
01:04:25,440 --> 01:04:27,120
Speaker 1: you go back and forth. We call him in and outer.

1097
01:04:27,200 --> 01:04:30,520
Speaker 1: So I've been in and outer. I've worked in four administrations.

1098
01:04:30,560 --> 01:04:33,000
Speaker 1: I've worked on the hill, I've taught a couple of

1099
01:04:33,000 --> 01:04:36,000
Speaker 1: times at universities. I've been at various think tanks, including

1100
01:04:36,040 --> 01:04:38,400
Speaker 1: the current one, the Council on Foreign Relations. So I've

1101
01:04:38,400 --> 01:04:41,000
Speaker 1: been incredibly lucky. I've been able to follow this very

1102
01:04:41,040 --> 01:04:46,160
Speaker 1: flexible set of you know jobs. So who are some

1103
01:04:46,240 --> 01:04:49,280
Speaker 1: of your early mentors You mentioned you started in Senator

1104
01:04:49,320 --> 01:04:56,280
Speaker 1: Pel's office. Who mentored you diplomatically and politically? I wouldn't say, uh,

1105
01:04:56,320 --> 01:04:58,440
Speaker 1: he did that. I admire. We disagreed on a lot,

1106
01:04:58,480 --> 01:05:01,040
Speaker 1: but I admired his principle and I admired it was

1107
01:05:01,120 --> 01:05:06,160
Speaker 1: very old school Claiborne Pell was a patrician and for him,

1108
01:05:06,200 --> 01:05:09,480
Speaker 1: politics weren't a blood sport. Politics were what gentleman did,

1109
01:05:09,480 --> 01:05:13,160
Speaker 1: and it was a higher calling, a no bless no

1110
01:05:13,240 --> 01:05:17,320
Speaker 1: bless ablusion there was. You treated your opponents with respect

1111
01:05:17,760 --> 01:05:20,320
Speaker 1: and decency. It was all very mannered. It was all

1112
01:05:20,720 --> 01:05:25,160
Speaker 1: very gentleman. It was a very different uh world. My

1113
01:05:25,240 --> 01:05:28,440
Speaker 1: mentors were more teachers in terms of people I studied

1114
01:05:28,480 --> 01:05:31,080
Speaker 1: with that say, Oberlin, where I was an undergraduate, had

1115
01:05:31,120 --> 01:05:35,200
Speaker 1: a fantastic teacher of comparative religion. I had my teachers

1116
01:05:35,520 --> 01:05:38,280
Speaker 1: give us a name, oh Man named Tom Frank, great

1117
01:05:38,280 --> 01:05:40,840
Speaker 1: professor of a New Testament. And is what got me

1118
01:05:40,880 --> 01:05:42,720
Speaker 1: interested in the Middle East, because I went off ultimately

1119
01:05:42,760 --> 01:05:44,680
Speaker 1: to do an archaeological dig, which is how I got

1120
01:05:44,720 --> 01:05:48,960
Speaker 1: interested in the Middle East. I had a series of

1121
01:05:49,000 --> 01:05:54,480
Speaker 1: wonderful professors at Oxford historian named Albert Harani, another named

1122
01:05:54,520 --> 01:05:58,960
Speaker 1: Michael Howard, alistair backin Headley Bull one of the great

1123
01:05:58,960 --> 01:06:02,800
Speaker 1: political scientists of the twentieth century. Uh So all these

1124
01:06:02,840 --> 01:06:05,720
Speaker 1: people had. In fact, I think the person who probably

1125
01:06:05,720 --> 01:06:07,640
Speaker 1: had the greatest impact on me in terms of my

1126
01:06:07,680 --> 01:06:12,360
Speaker 1: career was brentch Brncroft, who was the National Security Advisor

1127
01:06:12,520 --> 01:06:16,800
Speaker 1: at the White House for and I was the senior

1128
01:06:16,840 --> 01:06:18,880
Speaker 1: person for the Middle East and the Persian Gulf in

1129
01:06:18,960 --> 01:06:23,680
Speaker 1: South Asia and working with Brandon watching how he balanced

1130
01:06:23,680 --> 01:06:25,400
Speaker 1: the two sides of the job. He was both an

1131
01:06:25,440 --> 01:06:28,520
Speaker 1: advisor or counselor to the president, but he was also

1132
01:06:28,560 --> 01:06:31,919
Speaker 1: the person who dispensed due process and made the system work.

1133
01:06:32,400 --> 01:06:35,840
Speaker 1: And how he balanced advocacy and fairness had a tremendous

1134
01:06:35,920 --> 01:06:39,280
Speaker 1: impact on me. He's legendary. I mean, he used the

1135
01:06:39,280 --> 01:06:42,320
Speaker 1: gold standard, he used the gold step right, and this

1136
01:06:42,440 --> 01:06:47,520
Speaker 1: year's surprisingly cross party lines to endorse Hillary Clinton, which

1137
01:06:47,560 --> 01:06:51,200
Speaker 1: I was I should say I was shocked, but uh,

1138
01:06:51,520 --> 01:06:53,720
Speaker 1: not surprised. Is that a good way to describe that

1139
01:06:55,320 --> 01:06:57,440
Speaker 1: he really is? You go back and read some of

1140
01:06:57,520 --> 01:07:00,800
Speaker 1: his history. He's a rocks Are, There's no other way

1141
01:07:00,800 --> 01:07:03,040
Speaker 1: to put it. He has the gold standard of people

1142
01:07:03,080 --> 01:07:06,560
Speaker 1: who have held that critical job of national security advisor.

1143
01:07:06,600 --> 01:07:08,920
Speaker 1: It's very hard to get the balance right. To be

1144
01:07:09,000 --> 01:07:11,600
Speaker 1: an advisor, you have to be someone who all your

1145
01:07:11,640 --> 01:07:17,040
Speaker 1: colleagues trust to make the process fair and accountable, and

1146
01:07:17,120 --> 01:07:20,760
Speaker 1: Brent pulled off that balance better than any other individual

1147
01:07:20,800 --> 01:07:24,880
Speaker 1: I've ever seen. So we talked about mentors and professors.

1148
01:07:25,280 --> 01:07:29,200
Speaker 1: What thinkers have influenced your approach to foreign policy. I'd

1149
01:07:29,240 --> 01:07:33,840
Speaker 1: single out two or three. One would be Henry Kissinger.

1150
01:07:34,600 --> 01:07:39,880
Speaker 1: Kissinger's books are better than anyone else's and going from

1151
01:07:40,000 --> 01:07:43,600
Speaker 1: particular moments of history to taking a step back and

1152
01:07:43,680 --> 01:07:47,920
Speaker 1: making larger judgments or conclusions. So when I write, I

1153
01:07:48,040 --> 01:07:51,360
Speaker 1: do my best to do the same. His most recent book,

1154
01:07:51,440 --> 01:07:55,040
Speaker 1: Tom Keane cannot stop talking about it. He world. He's

1155
01:07:55,040 --> 01:07:58,000
Speaker 1: been lavishing praise on it for most for good reason.

1156
01:07:58,440 --> 01:08:02,040
Speaker 1: Uh so. Reason one second is a man named Headley

1157
01:08:02,040 --> 01:08:05,760
Speaker 1: Bull I mentioned it before, Professor. Professor, Australian academic wrote

1158
01:08:05,800 --> 01:08:08,080
Speaker 1: what I think is the single best book ever written

1159
01:08:08,240 --> 01:08:11,720
Speaker 1: in the last fifty or hundred years about my field,

1160
01:08:11,760 --> 01:08:16,320
Speaker 1: called the Anarchical Society. Anarchical society and it's a whole

1161
01:08:16,320 --> 01:08:19,360
Speaker 1: idea of international relations at anyone moment is always a

1162
01:08:19,360 --> 01:08:23,400
Speaker 1: balance between forces of anarchy and forces of society, things

1163
01:08:23,439 --> 01:08:27,519
Speaker 1: coming together, things going apart. And so I found Headley

1164
01:08:27,920 --> 01:08:30,400
Speaker 1: a great influence in his And then if some of

1165
01:08:30,400 --> 01:08:32,599
Speaker 1: my former colleagues when I taught at the Kennedy School

1166
01:08:32,600 --> 01:08:36,160
Speaker 1: at Harvard, name Dick new Stat and Ernie May, and

1167
01:08:36,200 --> 01:08:38,240
Speaker 1: they did they did a book called Thinking in Time

1168
01:08:38,760 --> 01:08:41,479
Speaker 1: and the subtitle is something like the uses of History

1169
01:08:41,479 --> 01:08:44,519
Speaker 1: for decision Makers. And the whole idea was how you

1170
01:08:44,600 --> 01:08:50,120
Speaker 1: could and should study and use history to shape challenges

1171
01:08:50,160 --> 01:08:53,280
Speaker 1: that might come into your your in box, and how

1172
01:08:53,280 --> 01:08:55,240
Speaker 1: to use it and not abuse it. And I think

1173
01:08:55,240 --> 01:08:59,880
Speaker 1: it's a fantastic primer, Thinking in Time for anyone who's

1174
01:09:00,040 --> 01:09:02,840
Speaker 1: to be in a position of decision making stat and

1175
01:09:02,920 --> 01:09:07,920
Speaker 1: who is Alright, since we're talking about books, so so

1176
01:09:08,000 --> 01:09:10,680
Speaker 1: these are the thinkers who have influenced you. What what

1177
01:09:10,720 --> 01:09:12,559
Speaker 1: are some of your favorite books? What do you like,

1178
01:09:12,800 --> 01:09:15,920
Speaker 1: whether it's related to your field or outside of it,

1179
01:09:16,120 --> 01:09:19,600
Speaker 1: and um fiction or nonfiction. I've just given you the

1180
01:09:21,880 --> 01:09:25,120
Speaker 1: my favorite books in my field. Uh yeah, I like

1181
01:09:25,160 --> 01:09:28,599
Speaker 1: reading biography as much as anybody. I've been reading much

1182
01:09:28,680 --> 01:09:30,640
Speaker 1: recently cause I've been so busy writing and when I

1183
01:09:30,640 --> 01:09:34,640
Speaker 1: write books, it's very hard to read because you're you're

1184
01:09:34,720 --> 01:09:38,840
Speaker 1: kind of more in a transmit than receive mode. Uh.

1185
01:09:38,880 --> 01:09:42,200
Speaker 1: And then in terms of I don't read a whole

1186
01:09:42,240 --> 01:09:45,240
Speaker 1: lot of fiction, though I have read the entire Jack Reacher.

1187
01:09:46,520 --> 01:09:49,840
Speaker 1: My wife loves those. Yeah, I like those two. Uh.

1188
01:09:49,920 --> 01:09:52,080
Speaker 1: My favorite line of his is I'm so cool you

1189
01:09:52,120 --> 01:09:57,400
Speaker 1: can skate on me. But the first movie, she said,

1190
01:09:57,439 --> 01:10:00,439
Speaker 1: Tom Cruise was miscast and not because should have been

1191
01:10:00,439 --> 01:10:04,960
Speaker 1: a foot too short and it ought to be a

1192
01:10:05,040 --> 01:10:09,680
Speaker 1: big bruising uh uh guy. But I don't read a

1193
01:10:09,680 --> 01:10:11,720
Speaker 1: whole lot of fiction, but I you know, I'll pick

1194
01:10:11,800 --> 01:10:15,880
Speaker 1: up the New Yorker every week, and I like, you know,

1195
01:10:16,200 --> 01:10:22,559
Speaker 1: more nonfiction. I think I gravitate uh towards. But if

1196
01:10:22,560 --> 01:10:25,480
Speaker 1: I could read anything, I usually like reading um biography.

1197
01:10:25,520 --> 01:10:29,080
Speaker 1: I find that the to me, the most interesting place

1198
01:10:29,120 --> 01:10:31,759
Speaker 1: to go. So what what do you see as having

1199
01:10:31,920 --> 01:10:35,120
Speaker 1: changed in the world of diplomacy over the past twenty

1200
01:10:35,160 --> 01:10:37,200
Speaker 1: five or thirty years? What what? What are the most

1201
01:10:37,200 --> 01:10:41,800
Speaker 1: significant shifts that have occurred? A couple come to mind.

1202
01:10:41,880 --> 01:10:43,960
Speaker 1: One is uh espetially at the end of the Cold

1203
01:10:44,000 --> 01:10:48,880
Speaker 1: War years ago, and the whole structure of international relations change. Second,

1204
01:10:48,880 --> 01:10:53,920
Speaker 1: of all, you've had a whole trend in terms of

1205
01:10:54,360 --> 01:10:57,679
Speaker 1: away from concentration of power. We now have so many

1206
01:10:57,720 --> 01:10:59,640
Speaker 1: actors and players in the world who can make a

1207
01:10:59,640 --> 01:11:03,080
Speaker 1: different it's you know, whether it's the Gates Foundation or

1208
01:11:03,120 --> 01:11:10,799
Speaker 1: groups like Doctors Without Borders, to CNN to Bloomberg two again,

1209
01:11:11,280 --> 01:11:14,240
Speaker 1: dozens of countries around the world or groups like Isis.

1210
01:11:14,640 --> 01:11:17,200
Speaker 1: So the chessboard, if you will, to use a terrible

1211
01:11:17,320 --> 01:11:21,000
Speaker 1: cliche image is much more crowded with many different types

1212
01:11:21,040 --> 01:11:24,160
Speaker 1: of things. I think also putting on my former policy

1213
01:11:24,240 --> 01:11:26,920
Speaker 1: maker had it first struck me during the Gulf War

1214
01:11:27,000 --> 01:11:31,360
Speaker 1: twenty five years ago, seven news cycle. I remember that

1215
01:11:31,360 --> 01:11:33,439
Speaker 1: that was the first time the CNN effect was real.

1216
01:11:33,600 --> 01:11:37,120
Speaker 1: I recall that explicitly. And suddenly you had one new

1217
01:11:37,200 --> 01:11:41,200
Speaker 1: cycle you couldn't wait, and that anything said in one

1218
01:11:41,240 --> 01:11:45,240
Speaker 1: place was heard everywhere, So there was no longer narrowcasting.

1219
01:11:45,320 --> 01:11:48,320
Speaker 1: Everything was broadcast everywhere. So it created And that was

1220
01:11:48,360 --> 01:11:50,840
Speaker 1: before social media. And now you've got social media, so

1221
01:11:50,880 --> 01:11:55,160
Speaker 1: you're you're much more uh exposed and you you feel

1222
01:11:55,240 --> 01:11:59,679
Speaker 1: much less in control as a as a politimate policy maker.

1223
01:11:59,720 --> 01:12:01,720
Speaker 1: And so think it's gotten tougher because also elites have

1224
01:12:01,840 --> 01:12:06,360
Speaker 1: broken down. I think the entire environment of making policy

1225
01:12:06,400 --> 01:12:10,639
Speaker 1: and carrying it out has become more decentralized. Just look,

1226
01:12:10,640 --> 01:12:12,280
Speaker 1: it's the reason you mentioned that you're nice enough to

1227
01:12:12,320 --> 01:12:14,240
Speaker 1: mention before. I have this book coming out in January

1228
01:12:14,280 --> 01:12:17,960
Speaker 1: called The World in Disarray. But I think objectively, if

1229
01:12:17,960 --> 01:12:20,320
Speaker 1: you're going to measure the trends in the world, things

1230
01:12:20,320 --> 01:12:24,120
Speaker 1: have gotten messier. Things have gotten much less orderly, whether

1231
01:12:24,160 --> 01:12:26,320
Speaker 1: at the global level, or the regional level, or the

1232
01:12:26,360 --> 01:12:30,679
Speaker 1: domestic level. So those are the changes of the recent past.

1233
01:12:30,760 --> 01:12:33,599
Speaker 1: What do you see as the changes going forward? What's

1234
01:12:33,600 --> 01:12:37,480
Speaker 1: the next shift that's going to take place in international relations?

1235
01:12:39,880 --> 01:12:42,519
Speaker 1: I feel, like Yogibertt, predictions are always difficult about the

1236
01:12:42,560 --> 01:12:44,880
Speaker 1: future here, but one as we've seen elements of it.

1237
01:12:44,880 --> 01:12:46,880
Speaker 1: I think with the globalization debate, we talked to you

1238
01:12:46,880 --> 01:12:49,120
Speaker 1: and I at some length about Brexit and as well

1239
01:12:49,160 --> 01:12:51,720
Speaker 1: as about trade in this country, I don't think that's

1240
01:12:51,720 --> 01:12:54,840
Speaker 1: a short term thing. I think that debate about how

1241
01:12:54,880 --> 01:12:59,840
Speaker 1: to how societies and individuals are to navigate globalization that

1242
01:13:00,000 --> 01:13:03,519
Speaker 1: could become a dominant debate for some time. I think

1243
01:13:03,560 --> 01:13:06,800
Speaker 1: the possibility for a North Korea issue, we're gonna wake

1244
01:13:06,880 --> 01:13:08,320
Speaker 1: up in a couple of years in North Korea is

1245
01:13:08,320 --> 01:13:10,400
Speaker 1: going to be able to put nuclear warheads on missiles

1246
01:13:10,439 --> 01:13:12,679
Speaker 1: that can reach the United States. What are we gonna

1247
01:13:12,720 --> 01:13:17,160
Speaker 1: do about that? Terrorists can at some point get ahold

1248
01:13:17,160 --> 01:13:20,800
Speaker 1: of some truly awful weapons systems. What about that we

1249
01:13:20,880 --> 01:13:24,519
Speaker 1: talked a little bit about a potential domestic crisis in China?

1250
01:13:25,479 --> 01:13:29,960
Speaker 1: You could have weakening within the you. I'm sorry, I

1251
01:13:30,160 --> 01:13:32,080
Speaker 1: don't mean to be My kids call me Debbie Downer,

1252
01:13:32,240 --> 01:13:35,320
Speaker 1: but hey, these are legitimate threats. These are things that

1253
01:13:35,320 --> 01:13:37,960
Speaker 1: that civilized societies have to think about and figure out

1254
01:13:37,960 --> 01:13:40,519
Speaker 1: ways to protection. And I'm more worried about the potential

1255
01:13:40,600 --> 01:13:44,639
Speaker 1: downside than I am optimistic about the potential upside. Again,

1256
01:13:44,680 --> 01:13:49,600
Speaker 1: it's it's an astramatic, asymmetrical risk, a small possibility, but

1257
01:13:49,640 --> 01:13:53,240
Speaker 1: with a real absolutely and and there's more things that

1258
01:13:53,280 --> 01:13:55,519
Speaker 1: could go wrong than that than that could go right.

1259
01:13:55,600 --> 01:13:57,799
Speaker 1: And that's what worries me. So our last two questions,

1260
01:13:57,800 --> 01:13:59,760
Speaker 1: because I know they're they're champing at the bit to

1261
01:13:59,800 --> 01:14:02,280
Speaker 1: get you out of here. So a millennial or a

1262
01:14:02,360 --> 01:14:05,320
Speaker 1: recent college grad comes to you and says, I'm interested

1263
01:14:05,360 --> 01:14:08,720
Speaker 1: in diplomacy. What sort of advice would you give them?

1264
01:14:09,000 --> 01:14:11,840
Speaker 1: Two things. I'm glad you asked me that one is

1265
01:14:11,880 --> 01:14:15,840
Speaker 1: read some history because it's too easy to graduate from

1266
01:14:15,880 --> 01:14:18,559
Speaker 1: too many of America's colleges and universities and not have

1267
01:14:18,600 --> 01:14:23,000
Speaker 1: any grounding in history. Second of all, uh, this look

1268
01:14:23,000 --> 01:14:25,559
Speaker 1: at me in trouble, but it's it's my general advice

1269
01:14:25,600 --> 01:14:27,679
Speaker 1: to millennials, which they need a little bit more patients.

1270
01:14:27,720 --> 01:14:32,559
Speaker 1: There's a a rush to arrive and an expectation of

1271
01:14:32,960 --> 01:14:34,479
Speaker 1: I think it's probably because too many of them got

1272
01:14:34,520 --> 01:14:39,320
Speaker 1: participation trophies when they're playing soccer. But I think people

1273
01:14:39,320 --> 01:14:41,800
Speaker 1: have got not the first person who's brought that up. Okay,

1274
01:14:41,840 --> 01:14:45,519
Speaker 1: but I but I think there's got to be a

1275
01:14:45,560 --> 01:14:47,320
Speaker 1: willingness to pay your dues a little bit. I know

1276
01:14:47,400 --> 01:14:52,360
Speaker 1: that makes me a dinosaur, and I apologize, but there's

1277
01:14:52,360 --> 01:14:54,720
Speaker 1: something to be said for slogging and to work in

1278
01:14:54,760 --> 01:14:58,840
Speaker 1: your way through and taking positions where you the print.

1279
01:14:58,920 --> 01:15:02,400
Speaker 1: The principal measure of the value of the job is

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Speaker 1: how much you learn. And our final question, which will

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Speaker 1: make Sam very happy in there, um, what is it

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01:15:09,439 --> 01:15:12,920
Speaker 1: that you know about foreign affairs and international relations today

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01:15:13,040 --> 01:15:16,200
Speaker 1: that you wish you knew when you started thirty years ago?

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01:15:19,120 --> 01:15:22,839
Speaker 1: That there's nothing inevitable, that everything is up for grabs,

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Speaker 1: and the two biggest forces out there are people and ideas.

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01:15:27,000 --> 01:15:30,080
Speaker 1: And if you can people and ideas, and if you

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Speaker 1: can come up with some ideas and harness them to

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Speaker 1: the right people, you can make a real difference. And

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Speaker 1: I've seen this in white houses or anywhere else. Uh.

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Speaker 1: There's almost nothing that's inevitable. And the good side of

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Speaker 1: that is that you can make a real positive difference.

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01:15:45,880 --> 01:15:48,160
Speaker 1: And the bad side of that is beats. Bad stuff

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01:15:48,200 --> 01:15:52,360
Speaker 1: can happen, and people can drive things off the I

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Speaker 1: didn't realize how much of history, in a funny sort

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Speaker 1: of way, it gets decided day in day out there.

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Speaker 1: The historical forces are there. I get that there's large

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Speaker 1: historical forces, but within that there's a human agency. The

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Speaker 1: difference that people can make, uh, for better and for

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Speaker 1: worse is extroyed there. Richard, thank you so much for

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01:16:13,960 --> 01:16:17,679
Speaker 1: being so generous with your time. If you have enjoyed

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01:16:17,680 --> 01:16:20,000
Speaker 1: this conversation, be sure and look up and inch ure

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01:16:20,120 --> 01:16:24,280
Speaker 1: down an inch and see the other or so conversations

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Speaker 1: that we've had over the past couple of years. I

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Speaker 1: have to thank my producer and recording engineer Charlie Volmer,

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Speaker 1: my Booker h Taylor Riggs and my head of research,

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01:16:35,560 --> 01:16:39,160
Speaker 1: Michael bat Nick, for all their assistance. You've been listening

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Speaker 1: to Masters in Business on Bloomberg Radio, brought to you

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Speaker 1: by B A s F. We create chemistry.