Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: I think Biden's in trouble on the Middle East. Biden
Speaker 2: who has increasingly publicly broken with the Israeli Prime Minister,
Speaker 2: not with Israel, but with the Prime Minister, and has
Speaker 2: told him in very strong terms, you're not allowing in
Speaker 2: humanitarian aid. That's unacceptable. You're not accepting a two state solution,
Speaker 2: that's unacceptable. And the Israeli Prime Minister and more broadly,
Speaker 2: the Israeli war cabinet is telling the vastly more powerful
Speaker 2: United States, telling them to go screw themselves. That is
Speaker 2: a horrible look for Biden.
Speaker 1: Welcome to the City of London, the City of the
Speaker 1: City of the City of London.
Speaker 2: He's mind the gap between the tree and the financial
Speaker 2: hearts of the country, the city, the city.
Speaker 1: Welcome to in the city.
Speaker 3: Stand clear of the doors. Welcome everyone to another episode
Speaker 3: of the Bloomberg podcast that dissects the stories captivating policymakers
Speaker 3: and power brokers the world over.
Speaker 1: I'm Francinaqua and I'm alegra Stratton. So for those of
Speaker 1: you who don't have a kind of encyclopedia memory of
Speaker 1: all of the Inner City editions, we spoke to Ian
Speaker 1: Bremer Eurasia As President and founder, who you just heard
Speaker 1: from at the top of the show at the beginning
Speaker 1: of the year, to get his insights into the predictions
Speaker 1: he is making for the twenty twenty four So we're
Speaker 1: obviously now slap bang in the middle of the year,
Speaker 1: and we thought we would go back to him.
Speaker 3: Basically in January he comes out with his top ten
Speaker 3: risks and at the time, you know, he was talking
Speaker 3: about the three wars that will dominate of world affairs,
Speaker 3: Russia versus Ukraine is Rahamas and then his number one
Speaker 3: risk in January was the United States versus itself because
Speaker 3: of the US election. It's quite lucky actually that we
Speaker 3: speak to Ian Bremmer just after the former US president,
Speaker 3: Donald Trump is now also convicted felon and we try
Speaker 3: and figure out what that means for the US elections
Speaker 3: in November.
Speaker 1: And actually I found this conversation less depressing than I
Speaker 1: found much season incredibly learned and well connected and informed gentlemen.
Speaker 1: I did find it a very bleak conversation in January.
Speaker 1: But brand you think that I'm just desensitized, I do think.
Speaker 3: That you No, I mean, you're not naive at all, well,
Speaker 3: but he you know, he makes a point actually that
Speaker 3: we're desensitized because there's so much things that have gone
Speaker 3: wrong that we're kind of normalizing even trials wars that
Speaker 3: three years ago would have been unthinkable. Okay, let's get
Speaker 3: to our conversation with Ian Bremer. You raise a group
Speaker 3: president and founder, Ian Bremmer, thank you so much for
Speaker 3: joining us. So a lot of you said has come
Speaker 3: to fruition. But then Donald Trump just getting I mean,
Speaker 3: this is for the first time someone who's trying to
Speaker 3: become president, who's a felon. How will it play out
Speaker 3: in the voting Well.
Speaker 2: I mean, unprecedented things are happening in US politics on
Speaker 2: a weekly basis, and Americans are normalizing those things. You're
Speaker 2: just getting used to it. It's not a sign of
Speaker 2: a stable democracy. And of course there are no Trump
Speaker 2: supporters in the United States that believe that this was
Speaker 2: a legitimate trial. It's a horrible time for an election.
Speaker 2: The likelihood of political violence I think has gone up
Speaker 2: as a consequence of the verdict that we just saw,
Speaker 2: And on balance, maybe Biden is a little more likely
Speaker 2: to win. But Trump can absolutely still win this election,
Speaker 2: and he will win it. If he does, as a
Speaker 2: convicted felon with political enemies that he intends to go after,
Speaker 2: that means that a new McCarthyism. It's not the US
Speaker 2: becoming a dictatorship. It's not China, it's not Russia. But
Speaker 2: perhaps it's more like Hungary or Poland or Turkey. And
Speaker 2: that's one thing when we talk about small peripheral European countries.
Speaker 2: It's another one. You're talking about the most powerful country
Speaker 2: in the world, the most powerful defense in the world, military,
Speaker 2: the reserve currency. It's a very very dangerous place to
Speaker 2: be and of course that's why it was our top
Speaker 2: risk for twenty twenty four.
Speaker 3: Well, Donald Trump go to prison, and does that make
Speaker 3: a difference. He can still campaign from prison.
Speaker 2: I don't think it makes a difference. If he does
Speaker 2: get a prison charge, I suspect it will be nominal,
Speaker 2: and he finds he gets will also be nominal compared
Speaker 2: to his net worth. He will almost certainly appeal, And
Speaker 2: I suspect that whatever sentence, if a sentence is handed down,
Speaker 2: is likely to be suspended while the appeal is playing out.
Speaker 2: And I also think that none of this is going
Speaker 2: to have much impact, especially since the election is six
Speaker 2: months out.
Speaker 1: I mean, presumably it does have some kind of chilling
Speaker 1: effect on waivering voters.
Speaker 2: I think that the independents are more likely to vote
Speaker 2: against Trump or not vote at all as a consequence
Speaker 2: of this conviction. For right now, I have a hard
Speaker 2: time seeing that persist for six months now. I also
Speaker 2: think if Nicki Hayley and you know, there are a
Speaker 2: lot of people out there are Centrists, Independence as well
Speaker 2: as you know, sort of undecided Republican voters that have
Speaker 2: been turning out for Nicki, And if Nicki had decided
Speaker 2: that she actually wanted to persist with her stated beliefs
Speaker 2: that Trump is unfit for office, then I think it
Speaker 2: could have made a significant difference. She could have been
Speaker 2: out there telling those voters that are still coming out
Speaker 2: twenty twenty five percent, even though she's not running anymore
Speaker 2: for the nomination right her name and saying, no, you know,
Speaker 2: you can't vote for Trump. You know, just don't vote
Speaker 2: at all or write in somebody, but you can't vote
Speaker 2: for Trump in this environment. He's a danger democracy. She
Speaker 2: is not doing that. Her political ambition comes first. She
Speaker 2: wants to be Secretary of State. She has a very
Speaker 2: good shot of getting that a vote for Trump is
Speaker 2: now a vote for Haley, and I think that we
Speaker 2: cannot underestimate how important it is that the personal ambitions
Speaker 2: and the venality of the overwhelming majority of Republican leaders,
Speaker 2: Republican donors, Republican journalists that are continuing to support this
Speaker 2: man irrespective of what he does, has done, and represents,
Speaker 2: is one of the major reasons why US democracy is
Speaker 2: in crisis today.
Speaker 3: Wall Street billionaires are also financial elites, are throwing their
Speaker 3: weight behind Trump. Why are they still sticking with Trump?
Speaker 2: Again? This is revealed preference. If most people I know
Speaker 2: that are billion not all, but most, especially billionaires that
Speaker 2: made that money through their own efforts as opposed to
Speaker 2: through a marriage or through their parents or whatever. They
Speaker 2: are people who have spent most of their time working
Speaker 2: incredibly hard because they value money, right, I mean, that
Speaker 2: is their goal, That is their reveal preference. And Trump
Speaker 2: is better for their money than Biden. So I mean,
Speaker 2: if that is the most important thing to you, not
Speaker 2: the state of democracy, not abortion, not the border, not
Speaker 2: US foreign policy, not climate, the most important thing to
Speaker 2: you is money, then of course you shouldn't be surprised
Speaker 2: they're putting their money behind the guy that's going to be,
Speaker 2: you know, regulatory rollback captured by special interests in the cabinet,
Speaker 2: lower taxes, good for the financial services.
Speaker 1: And that's the economy as seen and felt and experienced
Speaker 1: by billionaires. But what about the economy seen and felt
Speaker 1: and experienced by humble every day Joe's.
Speaker 2: Overall, this inflation environment hurts the average American and that
Speaker 2: has driven them to believe that Trump is better for
Speaker 2: them on the economy than Biden. Now having said that,
Speaker 2: it is also in a polarized environment, in an algorithmically
Speaker 2: driven environment where people believe that their political orientation determines
Speaker 2: a lot of not only how they feel about conviction,
Speaker 2: but also how they feel about the economy. So if
Speaker 2: you support Trump, you think the economy is doing badly.
Speaker 2: If supports Biden, you think it's doing well. And you
Speaker 2: felt exactly the opposite just before Biden became president. So
Speaker 2: there is a lot of nonsense and noise that obscures
Speaker 2: the fact that a lot of Americans are not doing
Speaker 2: so well in this economy.
Speaker 3: Ian, how is the war between Israel and Hamas actually
Speaker 3: impacting the US election? And does it somehow undermine I
Speaker 3: guess what Joe Biden has tried to do, which is temper.
Speaker 3: What Benjamin is Now's force in gozen Rafa particularly has been.
Speaker 2: Well. He hasn't tried very hard, and he hasn't tried
Speaker 2: the very early, and that has hurt him with his
Speaker 2: own base. Maybe I should say, first more broadly, that
Speaker 2: this is not an election being determined by economics. I
Speaker 2: think this is an election being determined much more by
Speaker 2: national security broadly defined. Number one being the border, Number
Speaker 2: two being Gaza, Number three being the state of US democracy.
Speaker 2: And if you put those three things together, you actually
Speaker 2: have a pretty significant component of why people are going
Speaker 2: to vote one way or the other.
Speaker 4: That's very unusual.
Speaker 2: It's not unprecedented, but certainly since Vietnam days, we haven't
Speaker 2: seen an election like that. So I think that it's
Speaker 2: just worth keeping that in the back of your head
Speaker 2: as we talk about this. I think Biden's in trouble
Speaker 2: on the Middle East. This election is going badly. Biden
Speaker 2: is seeing on again by the left. Biden is seen
Speaker 2: as supporting a genocide. He is seen as promoting the
Speaker 2: interests of a bully in the Middle East against an underdog.
Speaker 2: With the war continuing on and on, and on. Most
Speaker 2: Democrats are more sympathetic to the Palestinian cause, not to Hamas,
Speaker 2: but to the Palestinian cause than they are to the Israelis.
Speaker 2: That having been said, Biden, who has increasingly publicly broken
Speaker 2: with the Israeli Prime Minister, not with Israel, but with
Speaker 2: the Prime Minister, and has told him in very strong terms,
Speaker 2: you're not allowing in humanitarian aid. That's unacceptable. You are
Speaker 2: not accepting a two state solution. That's unacceptable. You have
Speaker 2: to allow all of these people to get out safely
Speaker 2: before you go into Rafa. It's unacceptable. And the Israeli
Speaker 2: Prime Minister and more broadly, the Israeli war cabinet is
Speaker 2: telling the vastly more powerful United States, on the back
Speaker 2: of providing billions and billions of dollars of defense aid,
Speaker 2: telling them to go screw themselves. That is a horrible
Speaker 2: look for Biden. It is a horrible look for Biden.
Speaker 2: He looks weak. And of course the Republicans are saying
Speaker 2: he's too soft on Iran, that's why this whole thing started.
Speaker 2: They're also saying that smart he's not actually strong enough
Speaker 2: in support of Israel. How can you undermine your ally
Speaker 2: after the horrors of the terrorist attacks on October seventh.
Speaker 2: This is a no win situation, and I will certainly
Speaker 2: tell you that inside the Biden administration they're increasingly very
Speaker 2: uncomfortable with where he is, with where they are, and
Speaker 2: you're now starting to see high level resignations for members
Speaker 2: of the Biden team. Again, these are full time bureaucrats, administrators, diplomats,
Speaker 2: that kind of thing, because they oppose on principle Biden's
Speaker 2: support for Israel in this environment. Remember, the United States
Speaker 2: is pretty much by itself right now in the degree
Speaker 2: to which they are supporting this Israeli war in Gaza.
Speaker 2: I do think that the war is going to continue
Speaker 2: for the coming at least months, seven months, no idea,
Speaker 2: but it's not one month. And you know, a lot
Speaker 2: of the paramilitary, the terrorists that have been fighting in Rafa,
Speaker 2: you know, I've gotten a briefing recently that at least
Speaker 2: half of them are believed to have left Rafa and
Speaker 2: are now popped back up in other parts of Gaza.
Speaker 2: So increasingly, where the Israelis go, Hamas then disperses. And
Speaker 2: it is a problem because if you are Israel and
Speaker 2: you have to telegraph this is where we're going to attack,
Speaker 2: and we've got to send leaflets and we try to
Speaker 2: you know, reduce civilian casualties ineffectively. To be sure, it
Speaker 2: also means that Hamas has the ability with a symmetric
Speaker 2: warfare to continue to take advantage of that. And now
Speaker 2: we're seeing you know, more rocket strikes from other parts
Speaker 2: of Gaza that the Israelis were supposed to have already
Speaker 2: cleaned up in terms of Hamas' capability. So as long
Speaker 2: as your goal is we're going to destroy this organization,
Speaker 2: their military capabilities, their leadership, it is going to take
Speaker 2: a lot longer.
Speaker 1: In in January, when we last spoke to you, you
Speaker 1: said that Europe was a bright spot and you didn't
Speaker 1: think that the elections which are now very soon, you
Speaker 1: didn't think that they that they were going to cause
Speaker 1: much trouble at all. In that time, we have seen,
Speaker 1: for instance, in Germany, we have seen some of the
Speaker 1: polling for the for the yeah, exactly going down fall
Speaker 1: a part in your words, Okay, do you think that
Speaker 1: will end up being You'll be proven right on.
Speaker 2: That, yeah, I do. Again, it's messy because of course
Speaker 2: in France, but Le Penn and her supporters are doing
Speaker 2: better than they have been. And of course there has
Speaker 2: been an effort to form an alliance between Maloney, which
Speaker 2: if you will, is the kind of reconstructed far right,
Speaker 2: as opposed to Lapen, who is the unreconstructed far right.
Speaker 2: I don't think that's going to work, so even though
Speaker 2: on balance overall the far right will do better in
Speaker 2: these parliament elections in Germany, the biggest economy, most powerful
Speaker 2: country is the big exception here. Nonetheless, I think that
Speaker 2: the outcome for the EU will be strong support for
Speaker 2: the EU. In other words, I don't see irredentist decentralization
Speaker 2: trends in governance in the EU. In fact, I see
Speaker 2: greater panic because of what's happening in the US, making
Speaker 2: the Europeans recognize they need to do more on collective defense.
Speaker 2: They need the EU more, they need NATO more. There
Speaker 2: needs to be a European pillar, that's what they talk about,
Speaker 2: a European pillar from NATO. That's very different from strategic
Speaker 2: autonomy from NATO, which is what Macron had been discussing
Speaker 2: before the war started. Now, also, of course you have
Speaker 2: the UK. Labor should win very easily. That election is
Speaker 2: just a matter of a few weeks because the UK
Speaker 2: is much more sensible about how short their election cycle
Speaker 2: is than the Americans, and that will also create stabilization
Speaker 2: in their EU relationships. So on balance, yeah, I think
Speaker 2: the Europeans, under pressure from every corner of the world,
Speaker 2: is becoming more coherent and more strong as a union.
Speaker 3: In what will change, so it's defense, but it's also
Speaker 3: the Green transition. Depending on who gets to power in
Speaker 3: the EU, then we could have a whole abandonment of
Speaker 3: the Green New Deal.
Speaker 2: I think that, for example, the willingness of the Europeans
Speaker 2: to align completely with the US on China is limited. Yes,
Speaker 2: there's going to be tariffs on Chinese cvs, but they're
Speaker 2: not going to be one hundred percent this Then there's
Speaker 2: going to be partnerships. And I look at what the
Speaker 2: Spaniards are doing right now on transition and it's very impressive.
Speaker 2: And I look at how fast the Germans were able
Speaker 2: to get away from right gas and a lot of that,
Speaker 2: of course was coal and extending nuclear for a short
Speaker 2: period of time, but a lot of it was efficiency.
Speaker 2: Instead of taking a look at what today's policy is
Speaker 2: versus tomorrow's, but instead the state of the play and
Speaker 2: the trajectory that the Europeans are on. I still see
Speaker 2: them as leading an effort to go post carbon and
Speaker 2: the world is failing at this. We're not going to
Speaker 2: hit one point five, we're not going to hit two.
Speaker 2: But we're still more upbeat about where we are going
Speaker 2: long term than people were ten twenty thirty years ago.
Speaker 2: I think that's still true.
Speaker 1: Has anything happened in this half of the year that
Speaker 1: you didn't see coming?
Speaker 2: Oil prices are a little bit lower than I would
Speaker 2: have expected, you know, given all of the concerns in
Speaker 2: the Middle East, given the fact that the Huthis are
Speaker 2: disrupting traffic in the Red Sea, given the fact that
Speaker 2: the Ukrainians are targeting Russian refining capability. You know, even
Speaker 2: with the economy being a little less robust on the
Speaker 2: demain inside, I would have expected oil to be a
Speaker 2: little higher.
Speaker 4: We're at the low eighties right now, and I mean,
Speaker 4: I still think that the risks for oil there are
Speaker 4: significant tail risks for them to be much higher depending
Speaker 4: on what happens in the Middle East.
Speaker 2: But it's coming at an environment where the Chinese have
Speaker 2: a lot of spare refining capacity, and also where there
Speaker 2: are millions of barrels that are offline for opek, and
Speaker 2: the US is producing with in historically unprecedented fashion. A
Speaker 2: little surprised on that. I will also say another thing
Speaker 2: I'm not surprised about, but I could end up being
Speaker 2: wrong on is we had as a red herring that
Speaker 2: the US China relationship would be well managed and a
Speaker 2: lot more stable than it has been now for the
Speaker 2: first half of this year, we've been absolutely right, and
Speaker 2: people were surprised about that. At the beginning of the year,
Speaker 2: they thought the Taiwan election was going to be a
Speaker 2: big problem. We said, no, live is going to win,
Speaker 2: will be well managed. But the pressure on the US
Speaker 2: election definitely means that there is a lot more willingness
Speaker 2: in the US to hit the Chinese than Biden would like.
Speaker 2: And we've seen that with the TikTok and we've seen
Speaker 2: that with the additional tariffs, including a one hundred percent
Speaker 2: tarif on Chinese evs. That is not the direction of
Speaker 2: travel that Biden thought he would be on back in January.
Speaker 2: So if you asked me to project to the end
Speaker 2: of this year, I think that there is I think
Speaker 2: we're still right, but I think that there's a possibility
Speaker 2: that US China will get more confrontational because of that,
Speaker 2: so we should watch.
Speaker 3: That space And thank you so much for joining us today.
Speaker 2: Yeah, great to talk to you guys.
Speaker 3: Thanks for listening to this week's In the City from Bloomberg.
Speaker 3: This episode was hosted by me fran Saint Lacla and
Speaker 3: Allegra Stranton. It was produced by Summersati Show Open Design,
Speaker 3: and additional editing by Moses and Them. Brendan Francis Newman
Speaker 3: is our executive producer, Sah Bauman, Head of Podcasts, and
Speaker 3: special thanks to Ian Bremmer. Please subscribe, rate, and review
Speaker 3: wherever you listen to podcasts.