Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Ferrell and Lisa Bramowitz Jaily, we bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcast, SoundCloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg terminal. Tom Kate with
Speaker 1: Im Brema. If you write a great the founder in President,
Speaker 1: you write a HQ. Morning Tom, John only said good
Speaker 1: morning to you, and it is what we do at
Speaker 1: the beginning of the year. We start strong with the
Speaker 1: top risks of your Asia group. It is a must.
Speaker 1: Reid twenty seven pages of brilliance. Far too optimistic this
Speaker 1: year on the comparative strength of American joining us with
Speaker 1: a brief throughout surveillance this morning. Ian Brehmer, Bill Dudley
Speaker 1: will join us on a divided America. Will do that
Speaker 1: in a bit, but right now not a divided China.
Speaker 1: G is at maximum power? Does it give way in
Speaker 1: two thousand three? Does this power after that Congress? Dr
Speaker 1: Bremer doesn't have it? Doesn't Uh. I'm gonna be with you, Tom,
Speaker 1: Happy New Year to you. It's always good to be
Speaker 1: kicking this off with you, Um, you know, there's no
Speaker 1: question that both for China as the second largest economy
Speaker 1: in the world, but also with she jun Ping having
Speaker 1: consolidated so much power in his hands and using it
Speaker 1: in ways that are capricious and are not in any
Speaker 1: way transparent, the global economy has never experienced anything like that,
Speaker 1: that level of uncertainty in the persona of one human being.
Speaker 1: We've we've seen it with the decision to do a
Speaker 1: complete degree bothas with the pandemic and zero COVID. We've
Speaker 1: seen it with a trillion dollars off of market value
Speaker 1: of Chinese tech stocks because she Jun pin decided that
Speaker 1: he was going to squeeze them. That level of uncertainty
Speaker 1: as China reopens their economy this year with no level
Speaker 1: of data that we used to get five ten years
Speaker 1: ago from the Chinese, even as an enormously concerning issue,
Speaker 1: this is important and this goes to your colleague in
Speaker 1: crime on this Elizabeth Economy. You see if ar now,
Speaker 1: a secretary of Ramando in Congress Economy told me years ago,
Speaker 1: don't overestimates power. Have we seen the maximum? Have we
Speaker 1: have we brought down? Do we see him weaken particularly
Speaker 1: off the COVID disaster. We see China weekend a little
Speaker 1: bit on the global stage. Certainly the lessons they're taking
Speaker 1: for Taiwan now that they've seen the United States and
Speaker 1: NATO in Ukraine. The lessons they're taking from concerns about
Speaker 1: American economic strength visa viast China on semiconductors for example,
Speaker 1: on the ability and willingness to impose export controls, and
Speaker 1: the fact that Chinese have sat on their hands. J
Speaker 1: and Ping is not in the same geopolitical position he
Speaker 1: was in before the pandemic started, but politically inside China
Speaker 1: he is only shrunk. And that is a that that
Speaker 1: is the nature of the risk. For are you lead
Speaker 1: with Russia in the top top ten risks? But how
Speaker 1: does China permeate out to all the other thinkings of
Speaker 1: the top risk this year? They just seem to dominate
Speaker 1: every conversation. Well, it's not that the Chinese do it,
Speaker 1: it's something very specific does which is the at the
Speaker 1: time that the United States democracy and economy is actually
Speaker 1: coming out more resilient and stronger than anyone out there
Speaker 1: would have imagined one to three years ago. Uh. We
Speaker 1: are seeing around the world a significant number of super
Speaker 1: empowered individuals who aren't getting great inputs from experts, who
Speaker 1: are able to act with impunity and are not getting
Speaker 1: what they want in various ways. On the global stage,
Speaker 1: Putin is one, She is another, The Iranian supreme leaders
Speaker 1: a third, and a small handful of tech center billionaires
Speaker 1: are a fourth, and those individuals are driving it. Disc
Speaker 1: menstrument amounts of global risk in the marketplace. Right now,
Speaker 1: let's look at your work G zero the concept of
Speaker 1: G twenty G seven down to a codified Bremer phrase
Speaker 1: G zero, or much more importantly, for Americans, us versus them,
Speaker 1: is the basic drama out there. How do we prosecute
Speaker 1: in two thousand twenty three a foreign policy with forget
Speaker 1: about Putin? How do we prosecute a foreign policy with
Speaker 1: China that gets something done twelve months from now? Well,
Speaker 1: two different ways. On the competitive side, you lean lean
Speaker 1: into American strength, which turns out to be national security
Speaker 1: broadly defined. So in the same way that the Germans
Speaker 1: have made mistakes for decades and the Europeans are at
Speaker 1: large and letting too much of their energy security lean
Speaker 1: on Russia, the Americans have let too much of our
Speaker 1: technology national security lean on Taiwan a hundred miles away
Speaker 1: from the mainland. Now, what we are now trying do
Speaker 1: not just the United States but with allies as well,
Speaker 1: and say we're going to redress that. We're going to
Speaker 1: redress it because of national security. So you, the Japanese, you,
Speaker 1: the South Korean's, you, the EU, the UK, the Canadians,
Speaker 1: You're all going to be with us on these export
Speaker 1: controls for anything the Chinese could use that would threaten
Speaker 1: our national security directly. And that's a policy that will
Speaker 1: align the G seven more broadly on China. That's important.
Speaker 1: But at the same time, Biden does not want to
Speaker 1: be in a cold war where the Chinese doesn't want
Speaker 1: to fight over Taiwan. He doesn't want the impact of
Speaker 1: competition on national security to bleed out into the broader
Speaker 1: economic interdependence of the For something new here, and I
Speaker 1: haven't gotten from Secretary Blank, and I don't think I've
Speaker 1: gotten from the Biden administration. Let's go back to something
Speaker 1: like the military industrial complex. This is back when Tulane
Speaker 1: had terrible football and they won a year ago. They
Speaker 1: you know, they stunned USC last night, which was great
Speaker 1: to see. But the shock of Tulane football. I'm looking
Speaker 1: for a shock in the Bremer world in your top risks.
Speaker 1: What's the thing our viewers and listeners have to look
Speaker 1: for six months in twelve months from now. Well, the
Speaker 1: shock that comes from a Chinese leader that is making
Speaker 1: policies and in the end of zero COVID. A lot
Speaker 1: of people thought that it was going to be incremental
Speaker 1: after he secured power in that for that unprecedented third
Speaker 1: term in the Party Congress, he didn't move away from
Speaker 1: at all. No, it shocked everyone. No one was expecting
Speaker 1: this even three months ago, even two months ago. Why
Speaker 1: in response to sudden demonstrations, the information got to him,
Speaker 1: and he, as an individual dictator of the second largest
Speaker 1: economy of the world, made that decision. We're going to
Speaker 1: see more uncertainty of that kind from the the most
Speaker 1: powerful individual on planet Earth. In three Putin is in
Speaker 1: a corner. I want to finish up here in China
Speaker 1: because we're gonna talk to Bill Dudley later. We're gonna
Speaker 1: talk to Mr RhoD of Australia later. Of course, focus focus,
Speaker 1: focus on Europe. We'll do that folks here in a
Speaker 1: bit with Carl Bill. Okay, fine, but is that the
Speaker 1: chemistry of China change. The history is it's city states
Speaker 1: like Shanghai and the new Hong Kong and all that
Speaker 1: versus a federal Beijing. Is that traditional calculus still in place.
Speaker 1: I haven't seen it since Mao. What's happening right now?
Speaker 1: And at the time of Mao, the enormous amount of
Speaker 1: uncertainty in China didn't matter to the global economy. They
Speaker 1: weren't interconnected to it, and they were vastly less powerful.
Speaker 1: We today have the same level of concentration of power
Speaker 1: that you had during some of the worst episodes chapters
Speaker 1: of Chinese history. To that concentration the autocratic power with confidence,
Speaker 1: but also with strategic patients. In other words, take shots
Speaker 1: when you know they are important with allies strategically. The
Speaker 1: new policy that you see from Biden is on semiconductors
Speaker 1: and export controls. That is contained a sea change, but
Speaker 1: in other areas of the economy, don't allow that to
Speaker 1: dictate what you're doing. One minute, here, we've got to
Speaker 1: get back to John and Lisa on the market's very
Speaker 1: very importantly. Here do you see a rekindling of what
Speaker 1: I'm gonna call from World War Two? MacArthur isolationism. No, no,
Speaker 1: don't want that. It's not that they don't want it.
Speaker 1: It's that everyone that throws money around in the United
Speaker 1: States strongly wants to ensure that doesn't happen. Furthermore, no
Speaker 1: American allies on the global stage. One it, not one,
Speaker 1: not one, Not the Japanese, not the Europeans. That bad
Speaker 1: in cares about that. Thirty seconds, John Ferrold demanded, I
Speaker 1: asked you this question. You nailed Merkel in Germany two
Speaker 1: risks ago, top ten risks ago. Did Merkel fail in Germany?
Speaker 1: Did Merkel? Is a reason where where we are in
Speaker 1: Europe right now to tease the Carl built? Is it
Speaker 1: because miracle failed? Merkel failed on energy policy and now
Speaker 1: they are paying the price for that. The unit the
Speaker 1: European Union is stronger today in part because of work
Speaker 1: that Merkel did. You have to give our a middle
Speaker 1: and grade that to twos. What we're gonna do with
Speaker 1: Dr Bremer here you raise your group, they celebrate the
Speaker 1: anniversary and very importantly their top ten risks stuff. William
Speaker 1: Dudley here, of course, formerly with a New York phone
Speaker 1: and ready for Bloomberg opinion Bill in your essay today
Speaker 1: for Bloomer Opinion. You focus on the fiscal part of
Speaker 1: the challenges here in the year four it is not
Speaker 1: so much a monetary impulse but a fiscal impulse. How
Speaker 1: will that change the Fed's work? Well, the MANTA policy
Speaker 1: is still gonna be tricky. How how high do you
Speaker 1: go for how long and how much slow down to
Speaker 1: you to tolerate. I think the fiscal is the big risk,
Speaker 1: so that it's not remarked on by virtually anybody. Uh,
Speaker 1: We're gonna end end this business cycle at a budget
Speaker 1: deficit of about five percent of GDP, which is a
Speaker 1: really horrible place to end the business cycle. Ad and
Speaker 1: that before we actually get all the costs associated with
Speaker 1: higher interest rates on debt service and the costs associated
Speaker 1: with social security and medicare as a baby blue generation retires.
Speaker 1: So I think the fiscal situation the US has deteriorated
Speaker 1: very sharply up to now. Markets have been extremely tolerant
Speaker 1: about this bill. Duddeley, I want to go back here,
Speaker 1: and it is a top ten risk of media, which
Speaker 1: is the gloom up there. The world's gonna end, and
Speaker 1: we're gonna have the recession to end all recessions. Take
Speaker 1: us back to your study of recession history and guessing
Speaker 1: at Berkeley years ago, can we actually guess a recession
Speaker 1: in two thousand twenty three, Well, recession is pretty likely
Speaker 1: just because of what the FIT has to do. The
Speaker 1: FED has to drive up the unemployment rates sufficiently to
Speaker 1: slow down the economy. Uh, to generate slack in the
Speaker 1: layer market, to bring wage inflation down to a level
Speaker 1: consistent with two percent inflation. But what's different this time,
Speaker 1: I think is that this if we have a recession,
Speaker 1: it's going to be a FED induced recession, and the
Speaker 1: FED can end the recession by subsequently see monitoring policy.
Speaker 1: I don't think that there's a big risk of a
Speaker 1: financial instability cataclysm that pushes the economy into a deep recession.
Speaker 1: I think this is a recession where the defense, you know,
Speaker 1: has the controls. When they need to ease, they can
Speaker 1: do so that the challenge for them is to not
Speaker 1: ease too soon. Uh. And but these in a timely way, Bill, don't.
Speaker 1: I've got time for one question, and I want to
Speaker 1: bring it over to Dr Bremer's study at you raise
Speaker 1: a group of our risks, and our division is Republican
Speaker 1: or Democrat. Monetary policy are they really all that much different?
Speaker 1: End of the day, it's really about how you treat
Speaker 1: the independence of the FED, what you actually criticize the
Speaker 1: FED through its actions, or do you leave it alone.
Speaker 1: The Democrats, really, starting with the Bill Clinton's administration, have
Speaker 1: been very hands off on the FED. Let the FED
Speaker 1: do their job. Republicans, especially under the Trump administration, and
Speaker 1: we're much more combative in terms of instructing the FIT
Speaker 1: what the FIT should do. I think the Democratic approach
Speaker 1: is better because it keeps some markets more calm, allows
Speaker 1: the FED to be more effective and translating its actions
Speaker 1: in terms of the tightening of financial conditions that it
Speaker 1: needs to have to control the growth rate of the
Speaker 1: econmy but there's a difference between the two parties in
Speaker 1: terms of how independent they treat the FIT. Too. Short
Speaker 1: of visit Bill Dudley, thank you so much for joining us,
Speaker 1: and beyond qualified to speak of the Pacific rim of
Speaker 1: his Australia and China. Is a gentleman, fluent Mandarin, a
Speaker 1: PhD from Oxford on his studies of China, and most
Speaker 1: importantly he is the new Ambassador of Australia to the
Speaker 1: United States. The former Prime Minister of the nation. Kevin
Speaker 1: Rudd joins us this morning, of course a commitment to
Speaker 1: the Eurasia Group, pushing UH ten years. Dr Rudd, I've
Speaker 1: never called you that, Dr Rudd. Thank you so much
Speaker 1: for joining us today. What is the level of power
Speaker 1: of ge the opacity that Ian Bremer talks about when
Speaker 1: we talk of China. What is your knowledge or perspective
Speaker 1: of the power of presidency? Well, great to be with you.
Speaker 1: I should correct the record slightly. I'm not yet the
Speaker 1: Australia ambass the United States that happens in March this year.
Speaker 1: I'm still president of the urge of society three months
Speaker 1: before I turned into a pumpkin. That's why I'm talking
Speaker 1: on your program. Bottom line, in terms of Chikin Pings
Speaker 1: as follows, he is numerous numero duo and numero tray
Speaker 1: in the Chinese political system. And if he wanted any
Speaker 1: evidence of that, you look at the twentieth Party Congress
Speaker 1: where anyone who did not come from his group within
Speaker 1: the party was given an exit pass, and instead we
Speaker 1: had four people elevated to the POLP euro who will
Speaker 1: who are virtually lifelong career colleagues, friends and supporters of
Speaker 1: Hi Jinping, so his authority is great. However, this policy
Speaker 1: you turn on zero COVID, which was actually cute it
Speaker 1: on seven December, will raise a whole series of questions
Speaker 1: in Chinese political circles about the fallibility of Chi Jan
Speaker 1: Pain's political judgments. And so therefore that does create a
Speaker 1: dent in the armor for the long term. I look
Speaker 1: Ian Bremer at this and Kevin Rudd turning into a
Speaker 1: pumpkin and March is part of the issue. You can
Speaker 1: speak freely, what is that we have an allied response
Speaker 1: in Europe, we have an understanding of how to respond
Speaker 1: to Putin. I don't perceive an allied response from Australia
Speaker 1: up to Japan of the Pacific. Rim against China doesn't exist. Oh,
Speaker 1: it exists. It's just no one's happy about it politically,
Speaker 1: because every ally understands that you don't want China to fail.
Speaker 1: Every ally understands that they're not happy with China's political,
Speaker 1: economic system and maximum she as Kevin and I describe it.
Speaker 1: And also every ally understands that we need to keep
Speaker 1: doing business with China even though we're concerned about what
Speaker 1: are our present level of interdependence and coupling implies. We
Speaker 1: know that we can't suddenly rip it up. Now, that
Speaker 1: underlying reality, which does align the United States with the
Speaker 1: entire G seven, is very different from the political statements
Speaker 1: that need to be made by various leaders because no
Speaker 1: one's happy with China. Scoring points off of China is
Speaker 1: very easy to do. And in between those two things,
Speaker 1: you have to find a policy where how are you
Speaker 1: going to hit the Chinese in ways that are absolutely
Speaker 1: essential to your national security without upsetting the entire relations
Speaker 1: distinction of this in Kevin rod, this is so important
Speaker 1: a question you'll answer now and not in April or May.
Speaker 1: Kevin Rodd, I look at the United States and a
Speaker 1: republican and democratic coalition against China. How should the United
Speaker 1: States advocate to the broader Pacific rim if we're all
Speaker 1: on the same page in our distrust of Beijing. Well,
Speaker 1: let's look at in these terms. I'll challenge your premise
Speaker 1: before decided there is no solidarity between in US allies
Speaker 1: in Asia to it, Australia, Japan and the Republic of
Speaker 1: Korea and partners as well such as India. And let's
Speaker 1: call it the broad thrust of administration China strategy. And
Speaker 1: I think frankly, Secretary of State Lincoln national Security Advisor
Speaker 1: Sullivan have done a good job in hurting the cats
Speaker 1: both in Asia and also frankly in Europe so far. However,
Speaker 1: for the future, what is the missing element in US
Speaker 1: grand strategy. It's called the economy stupid, and that is
Speaker 1: you cannot continue to assume that there will be collective
Speaker 1: solidarity on security questions, but on the economy, the United
Speaker 1: States happy to throw some of its allies under a bus,
Speaker 1: and for those reasons, the United States Congress needs to
Speaker 1: embrace instead a different strategy which opens its markets more
Speaker 1: to its allies in Asia and in Europe, despite the
Speaker 1: overall overriding protection and sentiment of the US Congress and
Speaker 1: political class more generally in that comments so important, you
Speaker 1: want to jump in here with the time that we've got.
Speaker 1: Why is there such an important state? And it's completely right.
Speaker 1: It's very easy to not have a common economic policy
Speaker 1: for the United States with Russia because we are literally
Speaker 1: decoupling Russia from the entirety of the G seven economy.
Speaker 1: We are not doing that with the Chinese. China is
Speaker 1: extremely important to the U s economy, the German economy,
Speaker 1: the French economy, Japanese economy, Australian economy. But we the
Speaker 1: United States, do not have a trade policy. We don't
Speaker 1: have one. And so, as Kevin said, unless Congress, the
Speaker 1: Democrats the Republicans are prepared to actually speak coherently about
Speaker 1: a long term US economic strategy. The national security policy
Speaker 1: by itself doesn't get you a union in the time
Speaker 1: that we've got left. Dr Rudd, very simply, or do
Speaker 1: you demand a week dollar to assist the Pacific rim
Speaker 1: well as a very polite as trade and we demand nothing.
Speaker 1: But my commentary would be as follows that what we
Speaker 1: want above all is to ensure that the economies of
Speaker 1: East Asia remain market competitive and with greater and greater
Speaker 1: levels of access to the American market. That lot therein
Speaker 1: lies the future success or otherwise of US grand strategy.
Speaker 1: You cannot have a strategy which has one arm tied
Speaker 1: behind its back, namely trade the economy. You must in
Speaker 1: fact have both wings flying. Otherwise this bird doesn't take
Speaker 1: off Street Northwest and Washington. He will travel in March
Speaker 1: the future Ambassador Australia to the United States, Kevin Rodden.
Speaker 1: This is the lead of the top risk this year
Speaker 1: for EUR Asia Group, and no surprise it is I'm
Speaker 1: Mr Putin and in Russia with US Dr Bremer and
Speaker 1: joining us as well someone with a European and Russia perspective.
Speaker 1: Carl Build is the former Prime Minister of Sweden. They
Speaker 1: are very much in the news, but with all sorts
Speaker 1: of other public service to his continental your Pectter Bremer,
Speaker 1: I want you to brief in here before we get
Speaker 1: to uh, Carl Build, there is an understanding of Finland
Speaker 1: and Sweden on down to Turkey. This border which you've
Speaker 1: talked about at your raise, your group for years. What
Speaker 1: is that border? That what that Eastern Front, whatever you
Speaker 1: want to call it? What does that view look like
Speaker 1: from a rogue state of Moscow, a roadue state of Russia. Yeah,
Speaker 1: well it looks a lot worse if you're a rogue state,
Speaker 1: if you find the present global order unacceptable, and if
Speaker 1: you find that you're being humiliated through acts of your
Speaker 1: own um and and trying to get yourself into a
Speaker 1: better position. What it means is that NATO is seen
Speaker 1: as aggressive, It is expanding, it is more forward deployed,
Speaker 1: and Ukraine, a non NATO country, increasingly has the best supplied,
Speaker 1: best deployed best trained, best intelligence of any military, vast
Speaker 1: capacity of any military on the ground in Europe. It
Speaker 1: could not have gone worse for former President Putin. And
Speaker 1: that border only looks more problematic when you, as Russia
Speaker 1: do not have any military strategy to countenance it. Summary
Speaker 1: from your Asia group there to go to Carl Built again,
Speaker 1: the former Prime Minister of Sweet Mr Mill, thank you
Speaker 1: so much for joining Bloomberg Surveillance today, Carl Built. How
Speaker 1: alone is Vladimir Putin? I think he's increasingly loan. I
Speaker 1: think we should understand that the decision that he took
Speaker 1: contemporary the fourth last year to launch this particular war
Speaker 1: was a decision taken by him. I think it was
Speaker 1: a very very close circle around him that was fully
Speaker 1: aware of his intentions, and of course that decision was
Speaker 1: then god doingly accepted by a lot of the Moscow elites. However,
Speaker 1: you a phrase that in the belief that he would
Speaker 1: actually succeed. But what has been happening since then is
Speaker 1: of course that he has gradually failed, failed with the
Speaker 1: one part of the strategy of another. And that means,
Speaker 1: in my opinion, that is increasingly isolated in Moscow, without
Speaker 1: that necessarily being an active opposition as it yet, but
Speaker 1: a lot of uneasiness around him can't built the tension
Speaker 1: that Mr Putin enjoys and likes, say personified and you're
Speaker 1: Sweden and Turkey. The distance from Sweden to Turkey has
Speaker 1: been noted throughout this war. How did the allies coalesced
Speaker 1: around one voice? What is the process this year to
Speaker 1: rebut this rogue state? Well, I think the last year
Speaker 1: has been and I think you'll see continuation of this
Speaker 1: year very impressive in terms of European actual solidarity and
Speaker 1: trans Atlantic bonds. I don't think. I'm very certain that
Speaker 1: put had not counted on that. He had counted on
Speaker 1: the Americans not being too engage following what happened in Afghanistan.
Speaker 1: He had counted on the on the Eupeians being divided,
Speaker 1: which sometimes happens, and he had counted on the Ukrainians
Speaker 1: not being into video that in supporting the Independent on
Speaker 1: all of these accounts, he was fundamentally wrong, and now
Speaker 1: he's gradually paying the price. What do you need from
Speaker 1: our president buying from secretary of state? Blanket from a
Speaker 1: new American, particularly with the American politics, it's new here
Speaker 1: into a presidential campaign. What do you need from America
Speaker 1: to steal for a long war? And they continued American support,
Speaker 1: both in political and military and financial terms, is very important.
Speaker 1: The European and American support is now roughly equal, but
Speaker 1: on the military side, the American support is of course
Speaker 1: much more important. And the political leadership that has to
Speaker 1: give be given by the President of the White House
Speaker 1: has been important in order to bibilize global opinion. And
Speaker 1: we sincerely hope that that will and our indications of
Speaker 1: the country that that would continue to be the case
Speaker 1: to do this implet deal that is no ahead of
Speaker 1: US Ian Bremer we do. We deal with someone there
Speaker 1: who's just still in the pragmatic reality of European politics.
Speaker 1: I want to dovetail that with a new movie that's
Speaker 1: coming out, All Quiet on the Western Front, another treatment
Speaker 1: of a classic book, a classic movie from another time.
Speaker 1: How can America assist Europe if a large part of
Speaker 1: America really doesn't want to be involved in Europe like
Speaker 1: we didn't want to be involved in the first American
Speaker 1: l en is making its way to Germany today. The
Speaker 1: United States is doing an enormous amount there by far
Speaker 1: the biggest military supporters of Ukraine. In the world today,
Speaker 1: and American technology companies by far the most important national
Speaker 1: security supporters of Ukraine in the digital space, in the cyberspace,
Speaker 1: in the virtual space. That's enormously important too. That's not
Speaker 1: being paid for by the American taxpayer. Now you put
Speaker 1: all of that together, the risk in three is not
Speaker 1: that it falls apart. It's not going to fall apart
Speaker 1: this year. The risk is that Putin increasingly loseng on
Speaker 1: the ground from a national security perspective, of a military
Speaker 1: respective and economic respective, and diplomatic expective, with no friends,
Speaker 1: becomes like a global Iran. He he is the most dangerous,
Speaker 1: most powerful rogue actor that the planet has seen in
Speaker 1: your and my lifetimes. And his willingness to go after NATO,
Speaker 1: to use a symmetric attacks when nothing on the ground
Speaker 1: or even in the air increasingly works against the well
Speaker 1: defended Ukraine. That's the risk of Trump get out front
Speaker 1: of this by questioning NATO and their commitment to their
Speaker 1: investment in NATO. Was Trump ahead on this, he he
Speaker 1: helped Putin believe that there would not be a united response.
Speaker 1: Trump's America first helped lead to Macron's more uh rhetorical
Speaker 1: strategic autonomy for France and saying that NATO was brain dead.
Speaker 1: If you're Vladimir Putin after four years of Trump, you
Speaker 1: increasingly believe for reasons that Carl mentioned that the United
Speaker 1: States and the Europeans wouldn't care about Ukraine, we need
Speaker 1: to consider this further here, Carl Bill, thank you so
Speaker 1: much for joining us. The former Prime Minister of Sweden.
Speaker 1: We'd really like to get you on surveillance fire more.
Speaker 1: It's about many many other topics that you see of
Speaker 1: those top ten risks, including a focus on energy and
Speaker 1: a focus on technology this year as well. Not even
Speaker 1: mentioned this morning is Iran, which I think is exceptionally
Speaker 1: interesting and ties in dovetails in to what we see
Speaker 1: in Russia and China. Is uh. We do another next
Speaker 1: coming days. We'll give you coverage on this and very
Speaker 1: importantly will drill down to some of those top ten
Speaker 1: risks that are a bit different. We have a perfect
Speaker 1: guest for that right now, Marcha sha k is at
Speaker 1: Stanford University. That barely describes her infinitive expert on thinking
Speaker 1: about technology and what it means for her Europe and
Speaker 1: far more, what it means for all of us around
Speaker 1: this world. And professor, thank you so much for joining
Speaker 1: us this morning. We have seen the use of technology
Speaker 1: in the war in Ukraine, the speed of information and
Speaker 1: for that matter, the use of technology as part of
Speaker 1: military operations. After what we witnessed in two thousand twenty two,
Speaker 1: this time are we tech different? Is this time tech different? Well,
Speaker 1: we see an acceleration of the use of technology in
Speaker 1: almost all aspects of our society. You mentioned the ongoing war,
Speaker 1: the unjust war in Ukraine waged by Russia, where technology
Speaker 1: plays a role cleverly used by the Ukrainians, but also
Speaker 1: when it comes to efforts to cause harm through cyber
Speaker 1: text on on the Russian parts. We should really prompt
Speaker 1: us to ask ourselves when do wars really start? Is
Speaker 1: it when tanks roll over physical borders as Russia has done,
Speaker 1: or is it when civilian infrastructure, critical infrastructure is targeted
Speaker 1: with cyber attacks, which we've seen for much much longer
Speaker 1: than since February two. Then there have been remarkable events
Speaker 1: in the last year. Of course, Elon Musk owning Twitter
Speaker 1: now and and using it as his personal playground, it
Speaker 1: seems breakthroughs in generative AI, and some of you may
Speaker 1: have been playing with that over the holidays. You know,
Speaker 1: those those chat bots that can help generate texts. I
Speaker 1: know some students are trying to have their homework being
Speaker 1: done for them. But all the all the fun and
Speaker 1: play with those new applications of a I can't really
Speaker 1: disguise the new risks that these AI applications also bring
Speaker 1: for spreading disinformation or more sophisticated span for example March.
Speaker 1: I can tell you from your that there's an American
Speaker 1: tradition to stand for university in Palo Alto for students
Speaker 1: to figure out how technology can do their homework. There's
Speaker 1: a history of that, to say the least, let me
Speaker 1: talk Let me talk about and this is cyber in
Speaker 1: sixty seconds, what you're doing with Dr Bremer at Eurasia,
Speaker 1: after what we've seen with Sam Bankman, free binance and all,
Speaker 1: and what we see in Europe our fear of cyber
Speaker 1: Do our institutions have control of technology or is it
Speaker 1: in this reality is uncontrolled as we all feel well,
Speaker 1: the question of control is a political choice. I think
Speaker 1: that that is a very important thing to keep in mind.
Speaker 1: In Europe, the choice has been made to invest in
Speaker 1: regulatory initiatives, innovations, new ways of having oversight, transparency and accountability,
Speaker 1: but in the United States not as much. And I
Speaker 1: do think that the whole FTX meltown, but also Elon
Speaker 1: Musk on Twitter beg the question will Congress finally step
Speaker 1: up an act? Well, I mean, this is so important
Speaker 1: and you know, let me let me ask you. I
Speaker 1: need to make some headlines here on on a slow
Speaker 1: Tuesday morning, MARCHA. Can Europe halt Elon musk experience at Twitter?
Speaker 1: Does Europe have the regulatory will to say to Mr Musk, No,
Speaker 1: that's not acceptable behavior. You can't do that in Europe. Absolutely.
Speaker 1: The laws that apply in Europe will apply to Elon
Speaker 1: Musk and and all other CEOs of tech companies as well.
Speaker 1: So when he decides that he would like to, for example,
Speaker 1: allow the spreading of hate speech or other kinds of
Speaker 1: harmful content, if it's against EU law, he will not
Speaker 1: be able to get away with it, just like that
Speaker 1: for European Internet users. He made these fines or questions
Speaker 1: about transparency over his algorithmic settings, and so the you
Speaker 1: has has taken a number of steps, some of the
Speaker 1: legislation still needing to enter into force, others already on
Speaker 1: the book, and must, like everyone else, will find out
Speaker 1: that the law applies to him as it does to everyone.
Speaker 1: Professor's shot, Well, I want to go to where Ian
Speaker 1: Bremer is in his ten Risks of this Year, which
Speaker 1: is a discussion of TikTok, And I am certain that
Speaker 1: every American listener and viewer want me to ask one
Speaker 1: simple question. Should we fear TikTok that our kids use?
Speaker 1: Should we look at TikTok whether it's used by undergraduates
Speaker 1: at Stanford down the little children. Should we fear that
Speaker 1: it's some form of pipeline or conduit to institutions or
Speaker 1: authorities in China. Yes, we should not be naive about it.
Speaker 1: No one should be naive about the use of data,
Speaker 1: the harvesting of data as they use social media, whether
Speaker 1: it's on TikTok or Facebook or YouTube. And I think
Speaker 1: for a long time it was American companies that dominated
Speaker 1: this mark it elsewhere. As a European I can say
Speaker 1: we were first flooded by Facebook, Instagram, YouTube, Snapchat. Now
Speaker 1: TikTok of course is very popular with kids here too,
Speaker 1: But the concern about where the data goes, who has access,
Speaker 1: what kind of profiles can be built about our children,
Speaker 1: about ourselves. What might these be used for that is
Speaker 1: not all about fun dances and jokes and and snappy videos.
Speaker 1: Is something that I really hope everybody will make time
Speaker 1: to look into, because incident after incident reveals that misuse
Speaker 1: of data, commercial harvesting and selling of data is leading
Speaker 1: to all kinds of malign uses, whether it is commercially driven,
Speaker 1: politically driven, or actually criminally driven. And so there's just really,
Speaker 1: I hope in no more room for naive day about
Speaker 1: how data is used. Blistering Mary, thank you so much
Speaker 1: for Stanford University and far more her public service. UH
Speaker 1: to European political systems. Can't say enough about that. This
Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us
Speaker 1: live weekdays from seven to ten am Eastern on Bloomberg
Speaker 1: Radio and on Bloomberg Television each day from six to
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Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg