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Speaker 1: Bloomberg Audio Studios, podcasts, radio news at the top of

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Speaker 1: the news again this week, in the wake of the

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Speaker 1: Iranian strikes against Israel last weekend and then Israel's drone

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Speaker 1: strikes in retaliation at the end of the week, we

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Speaker 1: asked Abssador Richard has OF's Centerview partners and author of

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Speaker 1: the News that Are Home in a way, how much

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Speaker 1: escalation we could see.

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Speaker 2: We're potentially into a cycle of escalation, not definitely, and

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Speaker 2: if it were to happen, I think the most obvious area,

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Speaker 2: other than the emotional reaction to violence, there would be

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Speaker 2: did the Iranians take steps to close down the straits

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Speaker 2: of home mooos?

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Speaker 1: Did the calculus change, even if subtly, with the role,

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Speaker 1: whether tacit or active, of Saudi Arabia, UAE and Jordan,

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Speaker 1: Because in retrospect there are reports that in fact that

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Speaker 1: helped with the Israeli defenses, which I think may be

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Speaker 1: something different in that region.

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Speaker 2: It does, and it shows you just how alienated they

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Speaker 2: are from Iran and how worried they are about the

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Speaker 2: Iranian threat. But at the same time, when Iran is

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Speaker 2: not front and center, and if we recover cycle back

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Speaker 2: to Gaza or the West Bank. It's difficult for these

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Speaker 2: countries to move closer to Israel given their differences over

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Speaker 2: the Palestinian issue. So you've almost got a Middle East

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Speaker 2: now that's operating along different fault lines, the Israeli Iranian

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Speaker 2: one directly, what's happening in Gaza, what's happening in the North,

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Speaker 2: which has gotten worse in the last few days, between

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Speaker 2: Israel and Osbola.

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Speaker 1: Many of us follow the news carefully, whether on TV

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Speaker 1: or reading the New York Times, Wall Street Journal, but

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Speaker 1: much of what's going on we don't see. It's below

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Speaker 1: the services were You were part of that when you

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Speaker 1: were in the State Department with Colin Powle. You've been

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Speaker 1: in those rooms. Give us some sense of what you

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Speaker 1: think maybe going on that we don't know about it,

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Speaker 1: and particularly what the US role is or should be.

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Speaker 3: In this well.

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Speaker 2: The big thing is is the US is trying to

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Speaker 2: be reassuring to Israel at the same time they're trying

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Speaker 2: to urge them not to respond against Iran. The parallel here,

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Speaker 2: David is when I was at the White House in

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Speaker 2: nineteen ninety one, it was the opening days of the

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Speaker 2: go for Iraqi scuds, were landing on Israel, and the

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Speaker 2: Bush administration Bush forty one prevailed upon the Israelis not

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Speaker 2: to retaliate directly against Iraq. We were worried that could

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Speaker 2: break apart this coalition we had built, but.

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Speaker 3: We were in a very strong position.

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Speaker 2: Then. We had half a million American men and women

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Speaker 2: in uniform over in the Middle East. We were at

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Speaker 2: the center of it. The Biden administration does not have

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Speaker 2: that kind of influence over Israel right now, so I

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Speaker 2: think It's hand is somewhat weaker.

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Speaker 3: Turn four mo.

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Speaker 1: If you went to Ukraine, there are a lot of

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Speaker 1: reports that the Russians are really putting more and more

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Speaker 1: pressure on Ukrainian forces in the east of the country.

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Speaker 1: And we have this debate going on the United States

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Speaker 1: and efforts in Europe to try to give more support

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Speaker 1: to Ukraine. How bad is the situation do.

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Speaker 3: You think, Well, it's bad, it's getting worse.

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Speaker 2: The shortages of munitions, the shortages of equipment is it's frustrating,

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Speaker 2: it's tragic, it's irresponsible, let's be honest. Hopefully the House

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Speaker 2: of Representatives will correct this and reopen this figot of

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Speaker 2: aid to Ukraine, and if they do, Ukraine will not

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Speaker 2: be able to liberate Crimea or the Eastern Lands, but

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Speaker 2: they'll be able to hold the Russians at bay, as

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Speaker 2: they've pretty much done for the best part of the

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Speaker 2: last two years.

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Speaker 3: So this is critical.

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Speaker 2: This is critical not just for Ukraine, but for stability

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Speaker 2: in Europe, and this is critical really for stability.

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Speaker 3: In the world.

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Speaker 2: Chinese are taking note what we're doing here, and people

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Speaker 2: are judging the United States. You know, when you're a

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Speaker 2: great power, you don't have the luxury of doing things

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Speaker 2: in isolation. What you do on one square of the

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Speaker 2: chessboard affects inevitably how you're perceived by friends and foes

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Speaker 2: alike everywhere else.

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Speaker 1: Richard, you always take a strategic view of these things,

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Speaker 1: not just tactical, but given what you just said about Ukraine,

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Speaker 1: at this point, realistically, are we, if I can put

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Speaker 1: us together with Ukraine in the Western world, are we

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Speaker 1: playing for a tie rather than a win? As you said,

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Speaker 1: it's unlikely that Ukraine anytime soon is going to liberate

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Speaker 1: the eastern part of the country.

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Speaker 2: Look, tie is not as good as a win, but

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Speaker 2: hell of a lot better than a loss. And I

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Speaker 2: believe given Russia's scale, given its war economy. The best

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Speaker 2: Ukraine can get for the foreseeable future through military force

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Speaker 2: is a tie. Then I think over time, and this

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Speaker 2: may have to wait, David beyond Vladimir Putin. I think Ukraine,

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Speaker 2: if it has close ties to the EU, close ties

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Speaker 2: to NATO, we continue to arm it can play for

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Speaker 2: a win, not through military liberation, but through diplomacy and

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Speaker 2: the use of economic coercion. So you almost need to

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Speaker 2: break this down in phases. For the foreseeable future, Let's

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Speaker 2: get a tie. Let's get a situation where Ukraine can

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Speaker 2: continue to exist as a viable, successful country, where Putin

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Speaker 2: is frustrated.

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Speaker 3: Then over time we can get Ukraine what's rightfully theirs.

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Speaker 1: So Richard will of course try to address long term investors,

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Speaker 1: big time investors here at Bloomberg. Give us your best

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Speaker 1: advice that you would give to investors right now, you

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Speaker 1: talk about the Middle East, you talk about Ukraine. By

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Speaker 1: the way, we haven't mentioned China, with now new tariffs

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Speaker 1: on Chinese steel coming in in an election year. We

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Speaker 1: have an election year which itself may pose some real

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Speaker 1: issues for the United States and even for financial markets.

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Speaker 1: If you're an investor, what do you need to have

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Speaker 1: on your dashboard. What do you need to be most

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Speaker 1: concerned about.

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Speaker 3: You need to have a seat belt and keep it.

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Speaker 2: Fastened, David, more than anything else. Look, you've got the

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Speaker 2: two parties competing over how tough they can be on China,

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Speaker 2: over protectionism to some extent, which is all problematic and

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Speaker 2: obviously has all sorts of consequences for inflation.

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Speaker 3: The pressure will be to titan.

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Speaker 2: Flows across the border whatever, even though that's a good thing,

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Speaker 2: I would argue in terms of security. Also, again, that

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Speaker 2: could add to inflationary pressures if we suddenly don't have

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Speaker 2: so much labor that's available. I worry, David about the

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Speaker 2: seventy five days between election day and inauguration day. That's

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Speaker 2: the period four years ago when January sixth happened.

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Speaker 3: Imagine this is a close contest.

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Speaker 2: Imagine we have not just division and dysfunction, but political violence.

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Speaker 3: A lot of people around the world could get unnerved.

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Speaker 2: A lot of foes around the world might see that

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Speaker 2: as a moment of opportunity.

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Speaker 3: And then again after inauguration day.

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Speaker 2: What would be functional or dysfunctional is what's happening over

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Speaker 2: this aid bill. Is that an exception to the rule.

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Speaker 2: Will that be the rule after the election. So I

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Speaker 2: think there's lots of issues that obviously, if mister Trump

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Speaker 2: water to win, does he try to undo a lot

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Speaker 2: of the architecture in the world that has served this

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Speaker 2: country well over seventy five years. So if you're an investor,

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Speaker 2: there's a degree of uncertainty, this combination of geopolitics in

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Speaker 2: the world against the backdrop of America that's no longer

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Speaker 2: certain or united as to its role.

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Speaker 3: This is actually the most dangerous.

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Speaker 2: Moment, I would argue, not just since the end of

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Speaker 2: the Cold War, but in many ways since the end

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Speaker 2: of World War Two.

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Speaker 1: And you talk about that, as I recall in your

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Speaker 1: most recent book, Bill of Obligations, And I guess my

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Speaker 1: question to try to end on something we'll hope. Do

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Speaker 1: you see any progress? You talk about the risks and

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Speaker 1: the dissension and the real danger for the fundamentals of

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Speaker 1: our democracy. Are you seeing any progress at all?

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Speaker 3: Well, I see lots of progress.

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Speaker 2: You just had the visit of the Japanese Prime Minister,

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Speaker 2: the cow robust japan Is and mis alliances. We've seen

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Speaker 2: the improvement and ties between Japan and South Korea. We

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Speaker 2: see India doing pretty well economically, so yeah, I see

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Speaker 2: some positive things around the world. What's happened in Ukraine

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Speaker 2: until recently, the fact that the United States and Europe

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Speaker 2: were willing and able to step up to make Ukraine

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Speaker 2: put help put Ukraine in a position where it could

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Speaker 2: frustrate Russian aggression and ambitions.

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Speaker 3: That was pretty impressive.

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Speaker 2: So to me, the biggest single question is whether we

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Speaker 2: come together or a minimum avoid really severe dysfunction and

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Speaker 2: violence during those critical seventy five days after the election

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Speaker 2: that we see no reprise of January sixth. Then afterwards

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Speaker 2: we'll see who's sitting in the Oval office, sitting who's

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Speaker 2: controlling the House and the Senate.

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Speaker 3: Can we essentially govern?

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Speaker 2: You know, I don't have a crystal wall, but all

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Speaker 2: I know is David, that so much depends upon our

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Speaker 2: role in the world. The world is not self ordering,

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Speaker 2: self organizing. We have got to play a large, a

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Speaker 2: large role, and the real question is is whether we're

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Speaker 2: able to And I would say the people watching the show,

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Speaker 2: they have a big stake in this. You know, the

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Speaker 2: rule of law here at home, a stable world is

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Speaker 2: this provides the context for everything American business does. So

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Speaker 2: I would basically say the CEOs and others. They'd ought

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Speaker 2: to really think hard about what they could do to influence,

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Speaker 2: to make this election in the sense of make it

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Speaker 2: easy for their people to vote, give them opportunities to

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Speaker 2: get informed, to support policies that are a pro democracy

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Speaker 2: here at home and pro internationalist.

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Speaker 3: In the world. They have an enormous stake in that