AI transcript
0:00:01 (upbeat music)
0:00:04 Support for the show comes from Into the Mix,
0:00:07 a Ben and Jerry’s podcast about joy and justice
0:00:09 produced with Vox Creative.
0:00:12 Ainez Bordeaux is a self-described hellraiser,
0:00:14 and she became an activist
0:00:16 after being caught up in the criminal legal system
0:00:19 when she couldn’t afford her bond.
0:00:20 And without a trial,
0:00:23 Ainez was sent to a St. Louis detention facility
0:00:25 known as the Workhouse,
0:00:28 notorious for its poor living conditions.
0:00:31 Here how she and other advocates fought to shut it down
0:00:33 and won on the first episode
0:00:36 of this special three-part series out now.
0:00:39 Subscribe to Into the Mix, a Ben and Jerry’s podcast.
0:00:43 – Hey, this is Scott Galloway,
0:00:45 host of the PropG podcast.
0:00:47 One of my favorite things I get to do on this show
0:00:48 is hear from our listeners
0:00:50 and answer their burning questions
0:00:51 about all sorts of things,
0:00:54 including work, life, school, you name it.
0:00:55 And this summer, we’re bringing back the hits
0:00:58 and covering some of our favorite questions
0:00:58 and takes.
0:01:00 We’re talking business, career advice,
0:01:01 and even hearing a brand new,
0:01:04 never been aired interview about parenthood.
0:01:06 So tune in to the best of office hours,
0:01:08 the special series from the PropG podcast
0:01:10 sponsored by Mint Mobile.
0:01:12 You can find it on the PropG feed
0:01:14 wherever you get your podcasts.
0:01:18 – Episode 311, 311 is the number in NYC
0:01:20 you call for non-emergency city services.
0:01:21 Choose to it.
0:01:23 I’m what’s called 911 and said,
0:01:25 “I am masturbating too much,” and the operator said,
0:01:27 “That’s not really a problem.”
0:01:29 So I put him on speaker phone and said,
0:01:32 “See mom, get off my case.”
0:01:36 Go, go, go!
0:01:38 (upbeat music)
0:01:47 – Welcome to the 311th episode of the PropG pod.
0:01:49 In today’s episode, we speak with Neil Ferguson,
0:01:51 the Millbank family senior fellow
0:01:53 at the Hoover Institution, Stanford University,
0:01:55 and a senior faculty fellow
0:01:58 at the Belfer Center for Science and International Affairs
0:01:59 at Harvard.
0:02:01 He’s also a columnist at the Free Press
0:02:02 and the author of 16 books.
0:02:04 We discussed with Neil why he believes
0:02:06 we are currently in Cold War II,
0:02:07 the state of play with the wars in Ukraine
0:02:08 and the Middle East,
0:02:10 and who he thinks is likely to prevail
0:02:12 in the upcoming presidential election.
0:02:14 I’m a huge fan of Neil.
0:02:17 I love, you know, Neil’s a real deal.
0:02:19 Neil writes these incredibly intense,
0:02:22 long, really well researched books.
0:02:25 He loves writing and then he’s used his platform
0:02:27 as kind of a world-class historian
0:02:29 to launch a consulting business called Green Mantle
0:02:31 that is really powerful, very similar,
0:02:34 kind of along the same veins as the Eurasia Group
0:02:35 with Ian Bremmer.
0:02:37 But anyways, I’m a huge fan of Neil.
0:02:38 He’s a great thinker.
0:02:41 We have almost nothing in common politically.
0:02:42 His views are much different than mine,
0:02:45 but he views informed mine
0:02:47 because he’s such a clear blue flame thinker.
0:02:49 And I love how he couches everything
0:02:50 in a historical reference.
0:02:52 Okay, before we get to that,
0:02:53 what’s happening?
0:02:54 What’s happening?
0:02:55 Where’s the dog barking?
0:02:57 Who let the dogs out?
0:02:58 Where’s he barking?
0:03:00 I am still in Aspen,
0:03:02 but I’m heading to Nantucket this weekend
0:03:04 on the Privilege White douchebag tour.
0:03:05 That’s right.
0:03:07 Why am I headed to Nantucket?
0:03:09 So let’s talk a little bit about the two.
0:03:10 I love Aspen.
0:03:11 This is where I’m definitely gonna hang out
0:03:13 about a home here.
0:03:15 And then on Tucket, I did not want to like.
0:03:17 Why did I not want to like Nantucket?
0:03:19 I think of myself as being sort of Eurofabulous.
0:03:20 I have the impression of myself
0:03:23 that I’m a little cool, a little edgy.
0:03:24 None of those things.
0:03:26 And then Nantucket is very Americana.
0:03:31 Like the pink shorts, the kind of cobblestone streets.
0:03:32 It’s actually a really interesting town.
0:03:34 It’s sort of where venture capital originated.
0:03:37 The captain would raise money, pull together a team
0:03:40 and then go hunting for whales and then come back.
0:03:42 And if they got a bunch of whales and make a bunch of money
0:03:44 and it is spectacularly beautiful.
0:03:47 And I like places where my boys can just go free
0:03:49 and not get into too much trouble.
0:03:51 My parents were worried about me getting in too much trouble.
0:03:53 I’m worried my boys are gonna get into too little.
0:03:55 So I like pushing them out and shoving them out
0:03:57 and hoping that they find some fun.
0:03:59 But I absolutely love it there.
0:04:02 And it gives me a chance to come back to New York and work.
0:04:04 What did I vacation when I was younger?
0:04:07 First vacation I ever took, my mom took me to Niagara Falls.
0:04:08 No joke.
0:04:12 We went to, we saw the Canadian side of the waterfall,
0:04:13 which is much more impressive.
0:04:15 And then we went to this,
0:04:19 we went to the kind of this camp where we stayed in a cabin
0:04:23 with her other single mother friend and their daughter
0:04:24 or her daughter Annette.
0:04:27 And we went to kind of this little camp where,
0:04:29 the big highlight was a tire swing.
0:04:32 So my vacationing is a much different complexion now.
0:04:33 But it was a ton of fun
0:04:36 when you’re a kid being outdoors, having a lot of fun.
0:04:37 I don’t know how I got here.
0:04:39 Should we get back to the podcast?
0:04:41 Okay, so moving on.
0:04:44 Google got hit with a massive antitrust hammer.
0:04:47 Boom, said the FTC and the DOJ.
0:04:52 Oh my God, couldn’t happen to a nicer group of people.
0:04:54 What do you know, a federal judge ruled on Monday
0:04:56 that Google is an illegal monopoly
0:04:58 when it comes to its search business.
0:05:01 The ruling claims that Google has not achieved its stronghold
0:05:04 on search just by happenstance.
0:05:05 It’s hard, highly skilled engineers
0:05:08 innovated consistently and made shrewd business decisions.
0:05:10 Okay, I’m not sure that makes their case.
0:05:13 But anyways, what they are, I believe guilty of
0:05:15 is something called monopoly maintenance.
0:05:16 What do we mean by that?
0:05:18 And that is search is really unusual
0:05:21 in the sense that it ages in reverse.
0:05:22 What do I mean by that?
0:05:24 The companies that have any shot
0:05:25 have become a trillion dollar company.
0:05:28 And I think this is something entrepreneurs should take note
0:05:29 is they age in reverse.
0:05:31 It’s what I call the Benjamin Button effect.
0:05:34 And I wrote about this in my New York Times bestseller
0:05:35 The Four by Scott Galloway,
0:05:36 which by the way has been an option
0:05:37 for an original scripted drama.
0:05:38 We’ll see how that goes.
0:05:40 I’m going to LA this week to pitch a bunch of the platforms.
0:05:42 Literally the biggest story that’s never been told
0:05:44 or not told yet is about big tech.
0:05:46 And anyways, we’ll see.
0:05:49 But effectively the companies that in fact
0:05:52 run to a trillion dollars defy biology.
0:05:55 Benjamin Button, a short story by F. Scott Fitzgerald
0:05:56 about a father whose heart is broken
0:05:58 ’cause he loses his son in World War I
0:06:00 and thinks that if he builds a clock
0:06:01 that perfectly goes in reverse
0:06:03 and maybe he can reverse time and bring back his son.
0:06:05 It’s actually a really lovely story
0:06:08 and was made into a wonderful movie
0:06:10 starring Brad Pitt and Kate Blanchett
0:06:12 who are just really easy on the eyes.
0:06:13 Oh my God.
0:06:15 Anyways, where was I?
0:06:17 Oh, Benjamin Button aging in reverse.
0:06:20 That is what trillion dollar companies do.
0:06:21 They age in reverse.
0:06:22 They defy biology.
0:06:25 What happens when you drive a car off the lot?
0:06:27 It loses about 30% of its value.
0:06:28 Literally when you drive off the lot,
0:06:30 when you twist the cap off of toothpaste,
0:06:32 it loses 100% of its value.
0:06:34 You just can’t, it’s not resaleable.
0:06:35 That is the pace of most companies
0:06:37 or that’s the cadence in most products
0:06:38 is they age in reverse.
0:06:39 I’m sitting here looking at all this equipment,
0:06:43 a ring light that makes me look like Joe Biden in 10 years.
0:06:45 Jesus Christ, look how fucking ugly I am.
0:06:49 Anyway, all of this shit ages like everything.
0:06:51 Most business mimics biology,
0:06:53 but the company is the best to move towards a trillion,
0:06:56 defy biology and they age in reverse,
0:06:58 mostly through network effects or agility
0:07:00 and search is one of those.
0:07:02 And that is every time someone searches,
0:07:04 the next search gets better
0:07:06 because the links you pick and form,
0:07:09 which links are the best links to present higher
0:07:12 in the query results than the search before it.
0:07:13 So it ages in reverse.
0:07:18 So size matters and creates a better search product,
0:07:21 such that it makes sense for Google or Alphabet
0:07:23 to go and pay Apple $20 billion
0:07:26 to become the default search engine.
0:07:28 And what happens, that gets some additional traffic,
0:07:29 gives them more pricing power
0:07:31 and slowly but surely they run away with it.
0:07:34 And they have these deals with a variety
0:07:36 of different companies.
0:07:37 And essentially they become,
0:07:39 their position has become unassailable.
0:07:41 Now, was that the smart thing to do?
0:07:44 Yeah, but as it create monopoly power and monopoly abuse
0:07:47 where they charge greater rents on advertisers,
0:07:49 basically every other company in the world.
0:07:50 Yes, as a matter of fact,
0:07:53 since the Airbnb, which is my largest position,
0:07:56 the reason why Airbnb is so powerful for shareholders
0:07:58 is it’s one of the few companies that’s been able
0:08:01 to exit the stranglehold that is Google or Meta.
0:08:01 What do I mean by that?
0:08:04 These are giant toll booths add an Amazon
0:08:05 to basically every e-commerce,
0:08:07 every information age company,
0:08:09 every institution or organization
0:08:11 that wants to acquire customers online.
0:08:13 See above everybody has to go and pay a toll
0:08:14 through one of these three organizations
0:08:17 and slowly but surely they have increased the rents
0:08:19 on the rest of the corporate world.
0:08:21 So what would be the biggest tax cut in history?
0:08:23 The biggest tax cut in history
0:08:25 is if you made these markets more competitive
0:08:26 and broke them up.
0:08:28 And effectively that’s what they’re saying here
0:08:30 is that the monopoly rents they are charging
0:08:32 because everybody has to use Google
0:08:34 is gotten to the point where it is stifling competition.
0:08:37 And because they have access to cheaper and cheaper capital
0:08:38 because of the monopoly position,
0:08:41 they can become go out and basically buy their position
0:08:44 as the default search engine across the largest platforms
0:08:46 and effectively run away with it.
0:08:49 And this is what you refer to as monopoly maintenance.
0:08:51 One of the important points the ruling makes
0:08:52 is that in fact that Google charges
0:08:55 a supra competitive prices for general search ads
0:08:58 meaning that they’re getting unfair rents.
0:08:59 I think there’s tremendous innovation
0:09:02 to be unlocked in search once they in fact
0:09:03 break these companies up.
0:09:05 As a matter of fact, you kind of could argue
0:09:08 that chatGPT is a function of the innovators dilemma
0:09:12 where this $170 billion business called search, right?
0:09:13 It’s actually $175 billion,
0:09:16 had no vested interest in innovating.
0:09:19 And as a result chatGPT or AI came in and said
0:09:22 we’re not gonna give you every answer in 0.0055 seconds.
0:09:24 We’re not gonna give you 1,100 results.
0:09:25 We’re gonna give you one
0:09:26 and we’re gonna try and do our best
0:09:27 to give you the best answer.
0:09:28 But still this is a good decision.
0:09:32 This is absolutely evidence of what I think
0:09:34 is the smartest thing to oxygenate the economy
0:09:37 and the complexion of the Biden-Harris administration
0:09:38 around making markets more competitive
0:09:39 and breaking up big tech.
0:09:42 So I think this is good for the ecosystem,
0:09:44 good for the planet, good for consumers.
0:09:46 And also I believe it’s good for Alphabet.
0:09:48 If you’re an Alphabet shareholder,
0:09:50 I think you want YouTube spawn.
0:09:52 I don’t think you want them cooperating
0:09:54 and coordinating with Google search.
0:09:57 I think YouTube on its own probably trades,
0:09:58 would trade at a greater multiple
0:09:59 ’cause it is the premier.
0:10:01 Everyone talks about Netflix, TikTok.
0:10:05 I actually think arguably the most dominant video search
0:10:08 and video platform amongst people under the age of 30
0:10:10 is probably YouTube.
0:10:13 And I just think it’s fantastic
0:10:16 that Lena Khan and Jonathan Cantor
0:10:18 have taken a more aggressive approach to this.
0:10:19 What will be the remedy?
0:10:21 That’ll be really interesting.
0:10:23 Could they break them up?
0:10:25 Could, I don’t think they’ll do a fine
0:10:27 ’cause that doesn’t mean anything for these companies.
0:10:30 Will they maybe ask Apple or demand
0:10:32 that those players present multiple options
0:10:34 and then you get to pick which search engine you want?
0:10:36 I don’t know, we’re gonna see, it’s gonna be really,
0:10:37 the remedy part of this case
0:10:38 is gonna be super interesting.
0:10:40 We’ve already seen TikTok playing an interesting role
0:10:43 in search, particularly for Gen Z.
0:10:46 Axios reported that 21% of 18 to 24 year olds
0:10:48 start their search journey with TikTok.
0:10:52 Oh my God, 21% search share on TikTok.
0:10:53 Who would have thought that?
0:10:54 Lucky it’s not controlled by an adversary
0:10:58 that wants to deposition America
0:10:59 and train our youth to hate America.
0:11:01 But anyways, Amazon, Instagram, Snap,
0:11:04 and of course, ChatGPT have also played a big part
0:11:06 in where and what people search for.
0:11:09 Google shares closed down 4 1/2% on Monday
0:11:10 because of the ruling analysts speculate
0:11:12 that Apple would face a blow
0:11:14 if one of the court remedies prevents Google from paying
0:11:16 to be the default search engine.
0:11:19 You gotta imagine that $20 billion a year payment,
0:11:21 about 19.9 of it hits the bottom line
0:11:24 and then their multiple on profits,
0:11:26 I think is about 30 or 33.
0:11:28 So you’re looking at about a $600 billion
0:11:31 hit to their share price if all of a sudden it were to,
0:11:34 if shareholders were to decide, okay,
0:11:37 they’re gonna have their EBITDA reduced by 20% here.
0:11:39 I don’t know if it’s gonna have a big impact on Apple
0:11:40 ’cause I think what Apple could probably do
0:11:44 is get that same $20 billion, can they get $20 billion?
0:11:45 I don’t know, they control custody
0:11:49 to the billion wealthiest people in the world called iOS users.
0:11:51 And if it’s not Google, it’s gonna be someone else
0:11:52 that they’ll backfill and say,
0:11:57 do you wanna be the premier or the default search query AI here?
0:11:59 I think they’re still in a pretty good position.
0:12:02 Alphabet also, I don’t think,
0:12:04 I don’t think their shareholders are gonna get hurt
0:12:05 ’cause I think a breakup would actually be good
0:12:08 for the company, but this definitely sends,
0:12:11 I think a healthy flare across the bow of these companies
0:12:14 which have become way too powerful.
0:12:15 What’s some evidence down that way?
0:12:17 If you got your flight canceled a few Fridays ago,
0:12:19 it’s because of the concentration in the tech industry
0:12:21 where basically entire airlines were shut down
0:12:24 because one company CrowdStrike had to be integrated
0:12:28 into the dominant operating system, which is Microsoft.
0:12:29 And effectively they found they were so reliant.
0:12:31 What was really interesting is the COA Bastion
0:12:34 came out and announced a half a billion dollar lawsuit
0:12:36 against CrowdStrike and Microsoft,
0:12:38 but he didn’t say we’re switching vendors
0:12:39 or switching technology, why?
0:12:42 ‘Cause he can’t because see above monopoly power.
0:12:45 The best thing we could do to oxygenate the economy
0:12:47 would be one, to restore Sino-US relations,
0:12:51 the first and second largest economy kissing and making up
0:12:53 would bring down the price of everything globally.
0:12:55 They got manufacturing and supply chain down,
0:12:58 we got IV innovation and consumer demand.
0:12:59 Come on, let’s kiss and make up.
0:13:01 Anyways, anyways, that would be the number one tax cut.
0:13:04 The number two tax cut would be the break up of big tech
0:13:07 who are every day increasing their rents
0:13:09 on essentially every business in the world.
0:13:13 We’ll be right back for our conversation with Neil Ferguson.
0:13:19 – Fox Creative.
0:13:23 – This is advertiser content from Zell.
0:13:25 – The recruiter said all he needed to do
0:13:28 was send $500 to cover mandatory safety training
0:13:31 and the job was mine.
0:13:32 – In a world where financial crimes
0:13:34 are more and more sophisticated,
0:13:37 there’s a team that’s got your back.
0:13:38 Yee-haw!
0:13:42 – Come in, Safe Squad, we got a 10-3.
0:13:45 – Copy that dispatch, we’re on it.
0:13:47 Hop in, Skip, we got a phony recruiter.
0:13:51 – Safe Squad.
0:13:54 – The crime drama everyone is talking about.
0:13:56 – I know it’s only my first day,
0:13:59 but that sounds like a pretty cut-and-dry job scam.
0:14:00 – Strap in, rookie.
0:14:02 – These days criminals can even make it look like
0:14:06 it’s your bank calm, but that’s where we come in.
0:14:07 – My what?
0:14:10 It’s my savings account, compromised.
0:14:12 No, I won’t hold.
0:14:16 No, I didn’t authorize a $12,000 withdrawal.
0:14:18 That’s my life savings.
0:14:19 – Why don’t you come with me?
0:14:22 I’ll show you how to report to the FTC.
0:14:23 – What payment platform to choose?
0:14:25 Let’s contact them too.
0:14:29 – Don’t miss the TV event of the season, Safe Squad.
0:14:30 – Hey Ace.
0:14:31 – Yeah, kid?
0:14:32 – You’re right.
0:14:35 That was one hell of a first day.
0:14:37 – Learn how you can spot the signs of a scam
0:14:39 so you don’t have to call the Safe Squad
0:14:44 by visiting www.vox.com/SafeSquadHQ.
0:14:47 – Remember, never send money online
0:14:50 to people you don’t already know and trust.
0:14:53 (upbeat music)
0:14:54 Support for the show comes from Fetch.
0:14:56 I love doing ads for Fetch.
0:14:58 I am a huge dog person, I think you know this,
0:15:00 both Leia and Gangster, my Great Dane,
0:15:02 and my Puerto Rican rescue ham.
0:15:04 We think he’s a dox, and by the way,
0:15:06 Leia is big and scary-looking.
0:15:09 You can go up and literally poke Leia in the eye
0:15:12 or take her food from her, and she’s not gonna do anything,
0:15:15 except maybe rear up her hind quarters against you,
0:15:17 whereas the little one will snap your finger off,
0:15:18 the little cute one.
0:15:20 Anyways, pet parents know better than anyone
0:15:22 how much joy and whimsy an animal can bring to a family,
0:15:24 but they also know that it’s only a matter of time
0:15:26 before the unexpected happens.
0:15:29 And the unexpected is also unfortunately usually expensive,
0:15:31 so unless you happen to have thousands of dollars
0:15:34 lying around to drop at the vet, you might wanna try Fetch.
0:15:36 Fetch is the most comprehensive pet insurance
0:15:38 covering what other providers charge extra for
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0:15:57 Get your free quote today at fetchpet.com/propg.
0:16:02 That’s fetchpet.com/propg, fetchpet.com/propg.
0:16:08 – Support for the show comes from Into the Mix,
0:16:11 a Ben and Jerry’s podcast about joy and justice
0:16:13 produced with Vox Creative.
0:16:16 Would you have $25,000 to post bail?
0:16:19 That’s how much Inez Bordeaux had to pay
0:16:21 when she was arrested in 2016.
0:16:23 And since she couldn’t afford it,
0:16:24 she was sent to the workhouse,
0:16:27 a pre-trial detention center in St. Louis.
0:16:30 Inez and the other detainees weren’t locked up
0:16:32 because they’d been convicted,
0:16:35 but because they couldn’t afford their bail.
0:16:38 – Experiencing what I experienced in watching
0:16:40 other women go through it
0:16:45 and know that there were thousands before us
0:16:47 and there were thousands after us
0:16:52 who had experienced those same things,
0:16:54 that’s where I was radicalized.
0:16:56 – She spent a month at the workhouse
0:16:58 and witnessed abject conditions,
0:17:00 extreme heat and cold,
0:17:03 mold and pest infestations and poor medical care.
0:17:05 Eventually her charge was vacated,
0:17:09 but the experience changed her.
0:17:11 – We’re starting a campaign to close the workhouse,
0:17:12 are you interested?
0:17:15 And I was like, hell yeah, hell yeah, I’m interested.
0:17:17 – Hear how she and other advocates fought
0:17:19 to shut it down and won.
0:17:22 On the first episode of this special three-part series
0:17:24 out now, hosted by Ashley Seaford,
0:17:28 subscribe to Into the Mix, a Ben and Jerry’s podcast.
0:17:35 (upbeat music)
0:17:38 (upbeat music)
0:17:44 – Welcome back, here’s our conversation with Neil Ferguson,
0:17:46 the Millbank Family Senior Fellow
0:17:48 at the Hoover Institution, Stanford University
0:17:50 and a Senior Faculty Fellow at the Belford Center
0:17:53 for Science and International Affairs at Harvard.
0:17:55 – Neil Ferguson, where does this podcast find you?
0:17:58 – I cannot disclose my location
0:18:01 for reasons of national security,
0:18:04 but I’ll say New England.
0:18:05 – New England, wow, very mysterious.
0:18:08 So first off, let’s bust right into it.
0:18:10 Starting with something topical,
0:18:13 the Wall Street Journal reporter, Evan Gershkovich,
0:18:15 has been freed as part of what the White House
0:18:18 National Security Advisor described as a historic exchange,
0:18:20 something not seen since the Cold War.
0:18:22 Neil, what do you make of this?
0:18:24 – Well, I’ve been saying for the last six years
0:18:29 that we’re in Cold War II, and there you go.
0:18:33 It’s a very Cold War thing to do prisoner exchanges
0:18:35 with the other side.
0:18:39 And so for me, it’s fresh evidence
0:18:44 if fresh evidence were needed that we’re in a new Cold War
0:18:49 and Russia, as in the first Cold War, is on the other side.
0:18:53 So of course, it’s China, so is Iran, so is North Korea.
0:18:57 But this is a good day because obviously,
0:19:00 Evan’s release was something that everybody
0:19:04 who has any connection with journalism was praying for.
0:19:07 And although, of course,
0:19:12 we’ve had to let some Russian spies go to get him out,
0:19:17 I’m inclined to think that that is a price worth paying.
0:19:23 – Let me ask you that when Brittany Griner was exchanged
0:19:28 for this merchant of death, I think his name was Victor Boot,
0:19:30 I was worried we were setting up a series of incentives
0:19:33 that encouraged Russia and other kind of,
0:19:36 for lack of a better term, access of evil nations
0:19:39 to take more and more people prisoner
0:19:42 on unfounded charges, do you have any,
0:19:45 and we don’t know what they’re trading for here,
0:19:47 but do you think this sets up poor incentives
0:19:51 that will only result in more Americans being incarcerated?
0:19:52 – It’s possible.
0:19:58 On the other hand, they’re not gonna stop spying
0:20:02 and we’re not gonna stop trying to catch their spies.
0:20:07 If the lesson of the Cold War is relevant here,
0:20:12 that didn’t produce an escalating cycle of prisoner taking.
0:20:16 And so I wouldn’t expect that to happen.
0:20:21 In this case, mainly because there are bigger pieces
0:20:25 on the chessboard than spies and journalists.
0:20:29 And in the end, the Cold War is like a massive game of chess
0:20:34 and these are pawns, or if there were pieces smaller
0:20:37 than pawns, they would be those.
0:20:41 And the Russians have much bigger pieces
0:20:44 that they want to move and bigger pieces of ours
0:20:47 that they want to take, like, say, Ukraine.
0:20:51 And in that sense, there’s no obvious rationale
0:20:56 in their accumulating more ill will
0:20:58 by arresting more journalists.
0:20:59 And I’d be surprised if it happened
0:21:02 on a larger scale in the coming years.
0:21:04 – So let’s use that as a jumping out point,
0:21:06 talking about the war on Ukraine.
0:21:08 Give us what you think the state of play is there,
0:21:11 what you think a likely outcome is
0:21:13 and how you would approach it
0:21:14 or what advice you would have
0:21:17 for Western policymakers as it relates to Ukraine?
0:21:20 – Well, there are two, perhaps more than two,
0:21:23 but two plausible futures
0:21:29 depending on who wins the election on November 5th.
0:21:35 In the scenario in which Kamala Harris wins,
0:21:37 there’ll be a continuity of the policy
0:21:40 that has got us to where we are.
0:21:45 And that policy has been outwardly to support Ukraine
0:21:51 and its maximum war aims by saying,
0:21:55 Ukraine sets the war aims privately
0:21:59 to continue the war at such a level
0:22:02 of support that Ukraine doesn’t lose,
0:22:05 but not at such a level that it can win.
0:22:10 That policy, I imagine, would continue
0:22:17 into the next four years if Harris wins
0:22:20 because I wouldn’t expect a big change
0:22:23 to the national security strategy or team.
0:22:24 There’d be some changes,
0:22:26 but I don’t think there would be a huge shift.
0:22:31 And the danger with that policy became obvious last year
0:22:33 and earlier this year.
0:22:38 If the US stops its support for Ukraine,
0:22:42 then Ukraine loses for six months.
0:22:45 The House of Representatives cut off financial military aid
0:22:48 from the US to Ukraine.
0:22:51 The Europeans couldn’t compensate for the shortfall
0:22:53 and Ukraine started to lose the war
0:22:57 because it simply cannot maintain its defenses
0:23:01 along this now very long front without American support.
0:23:05 And so the risk of a protracted war without a conclusion
0:23:09 is that at some point we lose interest
0:23:11 or politics leads us to lose interest.
0:23:13 And then I think Ukraine loses the war.
0:23:16 I was always against prolonging the war.
0:23:21 I said in late 2022 when it was going well for Ukraine
0:23:24 that it would have been ideal to lock in
0:23:28 some kind of peace negotiation then
0:23:31 when Ukraine’s fortunes were at their height.
0:23:34 Because if it dragged on,
0:23:37 the sheer superiority of Russian resources
0:23:39 would be bound to tell.
0:23:43 So that’s one future and it’s not one that I
0:23:46 or indeed my Ukrainian friends find very appetizing,
0:23:50 especially because in this future,
0:23:54 you’d expect a President Harris to be as easily intimidated
0:23:58 by threats of nuclear escalation as President Biden has been.
0:24:00 From a very early stage in the war,
0:24:04 the Russians realized that if they said nuclear weapons,
0:24:07 the Biden administration would kind of pull back.
0:24:09 And this has put a lid on the support
0:24:12 that the Biden administration has given Ukraine.
0:24:16 It’s, I think, the best explanation for why support
0:24:19 has been enough not to lose but not enough to win.
0:24:22 So now let’s imagine scenario two
0:24:24 in which Donald Trump is reelected
0:24:26 after a four year intermission.
0:24:27 What would that be like?
0:24:30 Many people wrongly assume that Trump
0:24:33 would just throw Zelensky, President Zelensky of Ukraine
0:24:36 under the nearest available bus
0:24:39 and do a deal with Vladimir Putin,
0:24:41 the Russian president that would be hugely favorable
0:24:42 for Russia.
0:24:44 That is not, I think, what would happen.
0:24:48 And the reason I say that is that one national security
0:24:52 spokesman after another on the Republican side
0:24:55 has come out against that kind of isolationist,
0:24:57 the hell with Ukraine stance,
0:24:59 in recent months.
0:25:01 If you look closely at what Trump says,
0:25:04 if you look closely at what JD Van said
0:25:06 to the New York Times last week,
0:25:09 you’ll see that the Trump plan is radically different.
0:25:14 The Trump plan is to put huge pressure on Russia,
0:25:18 economic and military, make the sanctions bite more,
0:25:22 make the weapons available to Ukraine more powerful
0:25:25 in order to force Putin to the negotiating table.
0:25:29 And then you’re gonna try and rerun the Korean piece
0:25:32 of 1953, where you don’t actually ever get
0:25:33 to a peace agreement,
0:25:36 but you have an armistice of the fighting stops.
0:25:40 And then this nasty border just kind of stabilizes
0:25:41 roughly where it is.
0:25:44 I think that’s the very different future
0:25:46 that we’ll get if Trump wins.
0:25:50 – That sounds like in some sort of an endorsement
0:25:53 of the Trump plan as it relates to Ukraine.
0:25:55 And what I would say is, and I don’t know this
0:25:57 as well as I’m trying as closely,
0:26:01 but I remember Trump saying I’d have this done in a day.
0:26:06 And my sense is that Putin and his supporters
0:26:09 are bigger fans or are hoping for a Trump administration,
0:26:12 but you think that actually a Trump administration
0:26:15 would in fact go harder at Russia in the short term
0:26:17 trying to force a deal.
0:26:20 – Well, that’s, I think, exactly what Mike Pompeo said
0:26:23 in the Wall Street Journal earlier this week.
0:26:27 He said the sanctions have not been enforced
0:26:29 nearly hard enough.
0:26:32 We need to go after the Russian banks.
0:26:35 We need to really make the Russian economy hurt.
0:26:38 We need to confiscate the reserves
0:26:41 and make them available to Ukraine as reparations.
0:26:45 And we need to step up the firepower that we give Ukraine
0:26:49 in order to force a negotiation upon the Russians.
0:26:53 And I’m not endorsing Donald Trump when I say
0:26:56 that that makes more sense to me as a plan
0:27:00 than carrying on with what we’re currently doing,
0:27:02 which I think will lead to Ukraine’s defeat.
0:27:07 The longer this lasts and the more we drip feed weapons
0:27:10 to Ukraine, the more likely it is
0:27:13 that ultimately Russia’s superior manpower,
0:27:15 superior raw materials, superior resources
0:27:18 together lead to victory.
0:27:21 And we really have to avoid a Russian victory.
0:27:24 So I think it makes sense to try and get to an armistice.
0:27:27 And what’s interesting is that if you talk to people
0:27:32 close to Zelensky, they will privately say,
0:27:37 we kind of prefer this to what we’re getting from Biden,
0:27:40 which is this drip feeding of support
0:27:43 and this constant language of de-escalation.
0:27:45 The problem about the word de-escalation,
0:27:48 which the Biden administration loves as a word,
0:27:51 is that in practice, it means the opposite of deterrence.
0:27:54 And you need to have some deterrence.
0:27:57 You have to make it clear to Russia
0:27:59 that it will cost them to carry on this war
0:28:01 if you’re gonna have any kind of peace negotiation.
0:28:03 Of course, it doesn’t get done in a day.
0:28:05 These things never get done in a day.
0:28:07 It’ll take six months, 12 months.
0:28:10 And I don’t think even at the end of 12 months,
0:28:12 there’ll be agreement on everything.
0:28:16 But if you can get an armistice, a ceasefire even,
0:28:19 that usually helps Ukraine even at the cost
0:28:23 of accepting for who knows how long
0:28:25 that the Russians control the part of their territory
0:28:27 and that the frontier between them and the bad guys
0:28:29 would be a very dangerous place
0:28:31 for quite a long time to come.
0:28:34 – So just for the purpose of the discussion, some pushback,
0:28:37 I see that Biden and Harris have distinctive
0:28:40 some dysfunction in Congress that as you said,
0:28:42 delayed funding for the war for six months,
0:28:45 which was, I think, I would describe more of a lack
0:28:46 of leadership on the part of Congress,
0:28:48 not necessarily Biden and Harris.
0:28:51 And that this has been, in my view,
0:28:54 I think of the president as the CEO responsible
0:28:56 for allocating resources to their greatest return.
0:28:59 I would argue this return has been one
0:29:01 of the greatest investments the West has ever made.
0:29:04 We’ve taken out what a third of Russia’s kinetic power
0:29:07 defanged the reputation of the supposedly ferocious army
0:29:12 given she pause before he tries to invade Taiwan
0:29:14 without ever even putting a boot on the ground,
0:29:15 an American boot on the ground,
0:29:18 NATO is out of its brain coma, Europe is finally unified.
0:29:20 And I don’t want to in any way diminish the incredible loss
0:29:22 of human life on both sides.
0:29:26 And then on the other side, this notion that
0:29:28 the Trump administration would put forward more pressure.
0:29:31 When I hear J.D. Vance consistently saying
0:29:33 he’s indifferent and doesn’t care about Ukraine,
0:29:38 you don’t worry that it emboldens Putin to be less apt
0:29:41 or inclined to accept some sort of deal or armistice here.
0:29:42 I see the opposite.
0:29:45 I see this emboldening Russia not getting them
0:29:46 to the negotiation table.
0:29:51 – The problem with your first point is this business strategy
0:29:55 as you describe it, doesn’t look good.
0:29:59 If after three years, your enterprise goes bust.
0:30:02 If after three years–
0:30:04 – You mean Ukraine loses, right?
0:30:06 – You mean if Ukraine were just a lose, got it.
0:30:09 – And that’s a highly likely scenario.
0:30:13 It’s not a surprise that the United States
0:30:17 embarks on a war and then after two years finds
0:30:20 that domestic support for it ebbs away.
0:30:21 That’s not new.
0:30:25 Domestic support for aid to multiple countries
0:30:28 in Cold War I faded.
0:30:30 And so to say that it’s all the force
0:30:33 of the House of Representatives is to slightly miss the point.
0:30:36 It was obvious from the outset that there would be
0:30:41 a finite amount of domestic patients in channeling resources
0:30:44 to a war in Eastern Europe that really ought to be
0:30:47 much more a concern of Europeans than Americans.
0:30:51 I think the risk that they ran
0:30:53 when they said to themselves, which they did,
0:30:56 let’s keep this going ’cause we’re really destroying
0:30:57 Russia’s military capability.
0:31:01 The risk that they ran was that in the end,
0:31:04 if Russia won, albeit at a high cost,
0:31:07 then Putin would be the winner.
0:31:09 So I think this was a very poor business strategy
0:31:11 and I said so at the time.
0:31:12 It would have been much smarter to try
0:31:15 and push for a peace or at least an armistice
0:31:18 when the war was going really badly for the Russians,
0:31:20 which it was in late 2022.
0:31:21 When they were driven back from Kharkiv,
0:31:22 they nearly lost a large amount
0:31:25 of their military outside Hurston.
0:31:27 That was a moment when I think
0:31:30 you could have attempted a negotiation
0:31:33 and we didn’t do that ’cause we thought we’re so clever.
0:31:35 We’re gonna fight the last Ukrainian
0:31:38 and exhaust Russia’s military, point one.
0:31:40 Point two, Vance has changed his tone
0:31:43 because it’s been explained to him
0:31:45 and to Speaker Mike Johnson
0:31:47 and to all the people in the House.
0:31:50 This is what happens if Ukraine loses
0:31:52 and what’s been fascinating to me, Scott,
0:31:56 over the last six months or so has been to see
0:31:59 that the isolationist faction
0:32:01 within the Republican Party,
0:32:03 which is quite well represented
0:32:04 in the House of Representatives,
0:32:09 has been routed and the reason that it’s been routed
0:32:12 is that they had it explained to them
0:32:14 in, I presume, intelligence briefings.
0:32:17 What would happen if Ukraine lost?
0:32:19 And then they realized
0:32:21 that not only would Putin be laughing,
0:32:23 but so would Xi Jinping.
0:32:25 And what’s interesting in this past six months
0:32:28 is that the argument that I made last year
0:32:32 is now almost conventional wisdom amongst Republicans,
0:32:33 namely that there is an axis
0:32:36 of China, Russia, Iran, North Korea,
0:32:39 that it is engaged in a Cold War
0:32:42 against the United States and its allies.
0:32:44 And a victory for Russia and Ukraine
0:32:45 is a victory for Xi Jinping,
0:32:48 as surely as it’s a victory for Vladimir Putin.
0:32:51 Republicans have had that explained to them.
0:32:53 They’ve had it drummed into their heads
0:32:55 that if you let Russia win,
0:32:59 it’s a very bad outcome for the US and its allies
0:33:02 and a very good outcome for China and its allies.
0:33:04 So I think there’s been a big shift.
0:33:05 Not everybody’s noticed this,
0:33:06 but I think it’s very important
0:33:09 ’cause it means that Putin,
0:33:11 who is certainly paying attention,
0:33:13 is realizing that a Trump administration
0:33:17 won’t simply hand in Ukraine in a phone call.
0:33:20 I think that scenario was never very likely
0:33:22 and it’s certainly not gonna happen there.
0:33:25 – So that’s on the war in the Middle East?
0:33:29 – Well, we’re speaking on what could be the eve
0:33:32 of a new war,
0:33:35 the one that is brewing between Israel and Hezbollah.
0:33:39 Probability that that war happens this August
0:33:44 is, I think, high now after the events of recent days.
0:33:48 It’s pretty clear that Benjamin Netanyahu
0:33:50 came back from Washington
0:33:53 and made like Al Pacino and the Godfather
0:33:57 and settled family business with the succession
0:34:02 of remarkable hits against Israel’s enemies.
0:34:06 It’s difficult for me to see
0:34:09 that there isn’t retaliation for that.
0:34:11 I think the Israelis expect it.
0:34:16 It’s possible that the Iranians and Hezbollah duck
0:34:19 ’cause they don’t wanna be drawn into that conflict.
0:34:21 On the other hand, they may realize
0:34:23 that there’s some non-trivial probability
0:34:24 that Donald Trump gets reelected,
0:34:27 in which case their situation’s gonna be
0:34:30 much worse next year because Trump will ramp up
0:34:34 the pressure on Iran in a way that Biden has not.
0:34:37 So I’m afraid we’re probably on the eve of a war
0:34:40 that will make the war against Hamas look quite small
0:34:44 because Hezbollah has much, much better armed than Hamas.
0:34:48 It has a formidable arsenal of weapons and missiles.
0:34:51 And if this war does break out,
0:34:53 as I think it is increasingly likely,
0:34:55 it’s going to be a bloody war for both sides.
0:34:58 And Israel will certainly suffer more casualties
0:35:01 than it has in the war in Gaza.
0:35:02 – It appears that the calculation
0:35:04 is that Israel’s decided they’re ready,
0:35:07 that they’re up for that fight.
0:35:07 Your thoughts?
0:35:10 – It’s been a debate within the government
0:35:12 since October the 7th.
0:35:16 I was in Israel in the spring
0:35:18 and met with members of the government,
0:35:22 as well as with their opponents
0:35:25 and the critics of Mr. Netanyahu.
0:35:28 And what struck me was that
0:35:30 although the political divisions remain very deep
0:35:33 in Israel and hostility to Bibi is something
0:35:36 that is very widespread,
0:35:40 nevertheless, October the 7th changed something in Israel
0:35:44 and created a new unity, not a political unity,
0:35:47 but a unity of purpose.
0:35:52 The sense that a second Holocaust was premeditated
0:35:56 was being planned by the likes of Hamas,
0:35:59 has greatly changed the atmosphere and country,
0:36:03 and it has made even my liberal friends in Tel Aviv
0:36:08 more or less write off the idea of the Palestinian state
0:36:13 and more or less acquiesce in a very aggressive policy
0:36:17 directed against Hamas, Palestinian Islamic jihad
0:36:18 and now Hezbollah.
0:36:23 So if you go back to the days after October the 7th,
0:36:26 when we were all reeling from the sheer horror
0:36:29 of what was done by Hamas and its Confederates,
0:36:31 the debate that was going on
0:36:35 within the Israeli government was,
0:36:39 do we hit Hamas or do we actually go after Hezbollah?
0:36:44 And Defense Minister Galant and other military advisers said,
0:36:46 we should go after Hezbollah
0:36:48 ’cause it’s the stronger of our enemies.
0:36:50 And the planes were on their way.
0:36:52 They had taken off to hit Hezbollah
0:36:56 when Netanyahu overruled that decision
0:36:59 and said, no, we go after Hamas first.
0:37:02 So as always, the Middle East needs to be understood partly
0:37:05 through the lens of Israeli domestic politics.
0:37:08 Many people forget just how important that is.
0:37:10 Given it’s the only democracy in the region,
0:37:12 you have to follow its democracy closely.
0:37:16 And that battle about when do we hit Hezbollah
0:37:18 has been going on ever since October.
0:37:22 And I think ultimately the realization is
0:37:26 you can’t postpone indefinitely a showdown.
0:37:29 A, because they keep acquiring more weaponry.
0:37:32 B, because your people near the Lebanese border
0:37:35 were evacuated many months ago now
0:37:36 and they wanna go back to their homes.
0:37:39 You’ve got a very large displaced population
0:37:42 that was moved away from the Lebanese border.
0:37:44 If you wanna get them back in time for the school year,
0:37:46 you have to do this now in August.
0:37:49 So I think, although one can never be certain,
0:37:51 I think we’re quite close to the brink of a new phase
0:37:53 of the Middle Eastern conflict,
0:37:57 which in many cases is a multi-front war already.
0:37:58 It’s not just about Gaza,
0:38:01 though that’s what has dominated media coverage.
0:38:05 It’s also about Iran’s direct attacks on Israel.
0:38:07 It’s about the Houthis.
0:38:10 This is a very complex picture,
0:38:13 but Hezbollah is the organization
0:38:17 that poses the most clear and present threat to Israel.
0:38:20 And sooner or later, there’s gonna be a showdown.
0:38:23 And I think the argument that has been made
0:38:26 by the Israeli security services and armed services
0:38:28 is why wait for them to hit us first?
0:38:30 Why give them the initiative?
0:38:32 If we take the initiative,
0:38:34 then we’re likely to suffer fewer casualties
0:38:35 than if they do.
0:38:38 – Yeah, I felt as if, I don’t know if assassinations
0:38:39 are the right word or strikes.
0:38:42 – We’re pretty bold in that Israel,
0:38:44 the way I read it was Israel believes
0:38:47 that they are coming to an end of the war in Gaza,
0:38:49 that the tunnels are nearly taken out.
0:38:51 They’ve kind of cut the region in half
0:38:53 and controlling the flow of Hamas.
0:38:56 I was actually struck by how bold this was
0:38:58 that they’re effectively willing to open up
0:38:59 a two-front war.
0:39:01 Is that your sense of it?
0:39:05 – Yes, I don’t think it’s born of overconfidence though,
0:39:06 rather the opposite.
0:39:10 I think there’s considerable disquiet
0:39:14 about the extent to which Hamas has really been destroyed.
0:39:18 There’s a sense that Israel has to act now
0:39:21 because the longer it waits,
0:39:24 the worse the situation becomes.
0:39:29 So I think this decision to force the issue
0:39:31 with Iran and with Hezbollah
0:39:35 has been taken because they realize
0:39:38 that they’re getting nowhere
0:39:39 with ceasefire negotiations,
0:39:42 with the hostage negotiations,
0:39:45 because there’s no good faith on the side of Hamas.
0:39:48 Their situation internationally
0:39:51 is one of relative isolation.
0:39:53 That’s not new in the history of Israel.
0:39:57 And the support that they’ve received
0:40:01 from Biden administration has been tepid and bivalance
0:40:03 and there are elements of the administration
0:40:06 that clearly still somehow to believe
0:40:08 that you can reach a modus invendi
0:40:11 with Iran or resuscitate the Iran nuclear deal.
0:40:15 So the Israelis have decided it might as well be now.
0:40:18 It’s not ideal, but if not now,
0:40:21 when is our situation really gonna be better next year?
0:40:24 I think that’s what’s going on.
0:40:27 – You think it’s fair to call the Biden support of Israel
0:40:28 or involvement of Israel as tepid?
0:40:31 My understanding is it’d be difficult to point to any country
0:40:32 in the world, in my view,
0:40:36 that has provided more steadfast support than the US,
0:40:38 immediately deploying carrier strike forces,
0:40:40 coordinating around intelligence,
0:40:43 coordinating around defense systems
0:40:45 for the missile attack from Iran.
0:40:47 You really think it’s fair to call the support
0:40:48 from the US tepid?
0:40:50 – Yeah, I do.
0:40:55 I mean, because apart from the initial fine words
0:40:57 that Joe Biden uttered,
0:41:03 that the support has been publicly internationally tepid.
0:41:08 Of course, these things are all relative.
0:41:10 The US is more supportive of Israel
0:41:12 than any European country.
0:41:14 Yeah, I mean, there are European countries
0:41:17 that are recognizing a Palestinian state this year,
0:41:19 even though it doesn’t exist,
0:41:21 doesn’t seem likely to exist.
0:41:24 But if you compare Biden’s administration
0:41:27 with say, Richard Nixon’s in 1973,
0:41:31 which was the last time Israel suffered a surprise attack,
0:41:34 the scale of the support was far greater then.
0:41:37 The US support for Israel is much less important economically
0:41:39 than it was 50 years ago.
0:41:42 Much, much smaller share of Israeli GDP
0:41:45 because the Israeli economy is actually a much bigger
0:41:46 and more innovative economy.
0:41:49 So one mustn’t make the mistake of thinking
0:41:52 that the US is absolutely crucial to Israel.
0:41:56 It’s much less crucial than it was from a military
0:41:58 as well as an economic standpoint,
0:42:00 but it’s not indispensable.
0:42:02 And so, for example, the big problem
0:42:04 that doesn’t get talked about nearly enough
0:42:07 is that Iran is now very close
0:42:09 to having a nuclear capability.
0:42:12 I asked a Biden official not so long ago,
0:42:16 are you in fact acting like they do have nuclear capability?
0:42:19 Are you treating them as if they already are
0:42:20 a nuclear arm power?
0:42:23 Because although you sent to aircraft carrier groups,
0:42:26 they didn’t actually do anything to punish Iran
0:42:29 for its obvious complicity in October the 7th.
0:42:33 And on the whole, the administration tried
0:42:36 after October the 7th to pretend like Iran wasn’t involved,
0:42:38 which got hard to do when the Iranians
0:42:41 unleashed a direct drone missile attack on Israel
0:42:44 for the first time in the history of the Islamic Republic.
0:42:47 So I think this kind of ambivalence
0:42:51 which characterizes the administration as a whole
0:42:53 is in marked contrast to the support
0:42:55 Israel could count on in the 70s
0:42:59 when that support was absolutely indispensable.
0:43:01 I’ll add one other point.
0:43:04 Back in the 70s, you did not have a wing
0:43:08 of the Democratic Party, the progressive wing
0:43:10 taking the side of the Palestinians.
0:43:15 And so the politics is very different in 2024
0:43:18 as compared with 1974.
0:43:21 In 1974, the Democratic Party was pretty strongly supportive
0:43:26 of Israel and had a significant Jewish element
0:43:28 which Nixon used to complain about
0:43:29 because he would always bitch
0:43:30 that he was doing so much for Israel.
0:43:33 And where was the gratitude typical Nixon?
0:43:34 But we’re in a very different world today
0:43:38 where, you know, although Joe Biden’s still kind of rooted
0:43:41 in that era, and I think he means it
0:43:44 when he talks about the US commitment to Israel,
0:43:47 there are plenty of people to the left of Joe Biden
0:43:49 who certainly don’t feel that way.
0:43:51 We’ll be right back.
0:43:56 – Hey, this is Scott Galloway,
0:43:58 host of the PropG podcast.
0:44:00 One of my favorite things I get to do on this show
0:44:01 is hear from our listeners
0:44:02 and answer their burning questions
0:44:04 about all sorts of things,
0:44:06 including work, life, school, you name it.
0:44:08 And this summer, we’re bringing back the hits
0:44:11 and covering some of our favorite questions and takes.
0:44:13 We’re talking business career advice
0:44:14 and even hearing a brand new,
0:44:17 never been aired interview about parenthood.
0:44:19 So tune into the best of office hours,
0:44:21 the special series from the PropG podcast
0:44:23 sponsored by Mint Mobile.
0:44:25 You can find it on the PropG feed
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0:45:16 ♪ It’s time for Tim’s ♪
0:45:17 – So let’s move to the US.
0:45:22 You said that Vice President Harris
0:45:24 is a California Democrat through and through,
0:45:27 therefore it’ll be hard to draw in moderate voters.
0:45:29 And also you’ve described the Republicans remain
0:45:31 the captives of the personality called the MAGA movement
0:45:35 and the Democrats remain the captives of the donor crats,
0:45:37 the wealthy friends of the Clintons and the Obamas.
0:45:39 Give us what you think the state of play is in the election
0:45:43 and who do you think is likely to prevail in November?
0:45:45 – Well, anybody who tells you
0:45:47 that you know the answer to that question
0:45:52 in August of an election year I think is having you on.
0:45:57 It’s once again, close to a coin toss.
0:46:02 We’ve gone back to where we were on the eve of the debate
0:46:06 that blew Joe Biden’s hopes of reelection up.
0:46:09 And the polls are gonna be noisy
0:46:11 probably for the next few weeks
0:46:14 because not only do you have the bounce
0:46:18 that comes with the novel nominee
0:46:19 but you have the problem bounce
0:46:22 that comes with the convention.
0:46:26 So my sense is that when all of this bouncing is over
0:46:28 and we get to Labor Day,
0:46:33 there will be some return to where we were in June
0:46:38 with Trump slightly ahead
0:46:41 but with some polls putting Harris ahead
0:46:43 and within the margin of error.
0:46:45 And then you’ll look at the states that are in play
0:46:49 and you’ll say, well, it’s still pretty close
0:46:51 in Pennsylvania and Wisconsin and Michigan
0:46:53 and maybe there are some other states
0:46:55 that have changed a bit since Harris became the nominee
0:46:58 but it’s close and that’s not surprising
0:47:02 because if you set aside the personalities of the candidates
0:47:07 which media they pay more attention to than is wanted,
0:47:11 American politics is really run by two machines,
0:47:13 Republican and Democratic party machines.
0:47:15 And these machines are very good at delivering
0:47:19 most states and most counties within most states
0:47:24 to one or other party leaving very little contested ground.
0:47:28 And the contested ground is contested partly
0:47:31 because it just has demographic peculiarities
0:47:34 and partly because there are independent voters
0:47:38 who are up for grabs who vote one way in one election
0:47:39 and another way in another.
0:47:42 So when you kind of take a step back
0:47:43 and look at American politics,
0:47:44 two things are really striking.
0:47:47 One, it’s a two-party system still
0:47:50 and there aren’t any others like that everywhere else
0:47:51 including in the English speaking world
0:47:54 where they used to have two-party systems like the UK,
0:47:56 doesn’t have a two-party system anymore
0:48:00 but the US has institutionalized duopoly
0:48:05 and it’s extraordinarily difficult to break that duopoly
0:48:08 even though about a third of the electorates
0:48:09 say they’re independents
0:48:12 and would rather that they had another option.
0:48:15 Second really striking thing is that one party
0:48:19 has retained elite control Democrats.
0:48:21 That’s why I use the term donor crats
0:48:25 ’cause the wealthy elites currently in the Hamptons
0:48:28 or in Aspen, that elite still controls the party.
0:48:31 They determined that Biden was no longer viable
0:48:33 and they agreed that it would be Harris
0:48:36 and that they wouldn’t have a contested or open convention.
0:48:39 All of this was done with phone calls and texts
0:48:44 between, oh, perhaps a dozen people who made the decision.
0:48:46 The difference with the Republican Party
0:48:48 is that their equivalents,
0:48:51 the wealthy Republican donors,
0:48:52 no longer control the party.
0:48:54 Those people would have far rather,
0:48:56 Ron DeSantis was the nominee
0:48:57 and when that didn’t work out,
0:48:59 they would far rather have had Nikki Haley
0:49:03 but they failed because a MAGA movement
0:49:06 that is in part a personality cult around Donald Trump
0:49:09 now controls the Republican Party.
0:49:11 And that’s what makes this election close
0:49:15 because if you had a better organized,
0:49:17 better disciplined Republican machine
0:49:20 and a more conventional candidate,
0:49:22 you would absolutely clean up in this election.
0:49:27 The Democrats are very vulnerable on key issues.
0:49:30 They had an inflation mistake that was predictable
0:49:32 and people haven’t forgiven them.
0:49:34 They have an immigration problem on their hands
0:49:36 because of the Southern border.
0:49:39 Those two issues alone should ensure
0:49:41 that the next president’s a Republican
0:49:45 but because the Republican Party is no longer
0:49:47 under the control of its elites,
0:49:51 it’s capable of making tremendous self-harming mistakes
0:49:55 and that may give Kamala Harris a chance
0:49:57 to be President of the United States.
0:49:59 – So just on the inflation issue,
0:50:03 I would argue it’s unfair to lay it at the feet of Biden.
0:50:05 My sense of inflation is too many dollars
0:50:06 facing too few products.
0:50:09 And with the amount of stimulus presented
0:50:11 with in both the Trump and Biden administration
0:50:14 where 85% of it was saved and it just went into the market
0:50:17 which sent prices skyrocketing
0:50:19 and had more money chasing too few products.
0:50:21 And ultimately, I would argue the culprit of inflation
0:50:24 is Putin who interrupted the supply chain.
0:50:27 Don’t you think both Trump and Biden share equal blame
0:50:29 along with Putin for inflation?
0:50:30 I just think it’s unfair to say
0:50:32 that Biden had a misstep around inflation
0:50:34 that’s any greater than the misstep around Trump.
0:50:35 Your thoughts?
0:50:39 – Scott, I seem to remember that your family,
0:50:43 Hales, as mine does from the East and from the East.
0:50:45 I don’t remember anybody in Shepard.
0:50:46 – Sandy Hills.
0:50:49 – Nobody in Sandy Hills ever said life was fair.
0:50:53 In fact, it was a recurrent refrain of my childhood.
0:50:56 Life isn’t fair, get used to it.
0:50:58 No, of course, politics is not fair
0:51:02 and the voters are deeply unfair to Joe Biden
0:51:04 when it comes to the performance of the economy
0:51:08 which practically any president of the last 100 years
0:51:11 would have seized with both hands
0:51:13 if it had been offered.
0:51:14 Here’s the deal.
0:51:18 You get full employment, you get surgeon growth,
0:51:21 you get investment in manufacturing structures.
0:51:24 – Markets touching all time highs.
0:51:26 – And the stock markets roaring
0:51:31 and inflation has a 9% high in the midterm year
0:51:35 and then it falls back towards 2%.
0:51:39 I mean, the presidents going all the way back 100 years
0:51:41 would have taken the data
0:51:46 that this president has presided over with relish
0:51:49 and yet the voters bitch about economy
0:51:53 to every pollster who calls them up and why is that?
0:51:55 So there are two theories as you know, Scott.
0:51:58 Theory one is they just don’t forgive 9%
0:52:01 because they got real, really used
0:52:02 to low single digit inflation
0:52:05 and high single digit inflation has made them mad
0:52:06 and they like the price level.
0:52:10 They don’t care about core CPI or core PCE.
0:52:12 They just like, hey, it’s still expensive
0:52:13 compared with what it was.
0:52:16 That’s explanation number one.
0:52:17 I have a lot of sympathy with that explanation
0:52:19 ’cause it tracks with my observation
0:52:21 of how ordinary people think about the economy.
0:52:23 But then there’s the Larry Summers point
0:52:24 which you probably know,
0:52:25 which is well, actually higher rates
0:52:27 might not hurt you through your mortgage
0:52:28 if you have a 30 year mortgage,
0:52:31 but it hurts you through a whole bunch of other things.
0:52:32 A whole bunch of other debts you have.
0:52:33 So you take your pick.
0:52:37 My basic view of this is that the Democrats
0:52:39 were dreaming last year when they said
0:52:41 they were gonna run on Bidenomics
0:52:45 ’cause the voters hate Bidenomics and it’s unfair.
0:52:51 I will add the fair part is that the inflation overshoot
0:52:55 in the US was a direct consequence of fiscal overkill
0:52:59 in 2021 that was the result of hubris
0:53:01 in the Biden administration.
0:53:03 They did not need to throw so much money at the economy
0:53:07 when the vaccine said 90% plus efficacy.
0:53:09 And I said that at the time,
0:53:10 Summers also said it,
0:53:14 that this was an avoidable policy error.
0:53:16 They did not need to juice the economy as aggressively
0:53:18 as they did most of the inflation in Europe
0:53:20 was Putin’s fault.
0:53:22 It was basically a supply shock.
0:53:25 About half or more the inflation in the US
0:53:26 was a demand effect,
0:53:30 which I think came from keeping the stimulus going too long
0:53:33 after the pandemic was beginning to dissipate.
0:53:37 – And then finally, as we wrap up here,
0:53:40 both of us have spent time in different directions
0:53:42 in different tenures and different parts of our life,
0:53:43 but in the UK and the US,
0:53:44 I would argue those are the two nations,
0:53:46 you know the best, they’re the two nations,
0:53:47 I know the best.
0:53:49 And my understanding is you’re now spending more time
0:53:52 in the UK after spending a lot of time in the US.
0:53:55 Can you compare and contrast what the difference
0:53:58 between business and politics and general lifestyle
0:54:01 between your observations, having spent time in both countries
0:54:03 and what it says about us?
0:54:08 – Yes, well, Britain, the United Kingdom of Great Britain
0:54:10 and Northern Ireland to be precise
0:54:15 is despite a brief foray with Republican government
0:54:16 in the mid 17th century,
0:54:20 a monarchy that retains a hereditary aristocracy,
0:54:22 even though they’ve just lost their seats
0:54:23 in the House of Lords.
0:54:26 It is a society still bound
0:54:30 to a striking extent by tradition.
0:54:33 And I noticed this having returned to spend more time
0:54:34 in the UK for family reasons,
0:54:38 because I’ve spent most of the last 20 years
0:54:41 in this revolutionary republic,
0:54:43 the United States of America,
0:54:47 which still has the character of a revolutionary republic.
0:54:50 When you view it through British eyes,
0:54:54 the way in which this election is being conducted,
0:54:56 the vituperation, the threat of violence,
0:54:59 the sheer nastiness is very reminiscent
0:55:02 of the American politics Charles Dickens encountered
0:55:07 when he visited early in the 19th century and was appalled.
0:55:10 British politics is still a game of cricket
0:55:13 between people who went to Oxford.
0:55:16 And you saw that very clearly when Rishi Sunak
0:55:21 was roundly defeated by Sir Keir Starmer on July 4th.
0:55:27 The handshakes, the jokes that I sail,
0:55:30 chap, Johnny Good Show, bad luck, oh boy.
0:55:33 I mean, all of that is exactly the way
0:55:36 in which British politicians have conducted themselves
0:55:38 over 200 years.
0:55:43 And so there’s a sense in which that continuity limits
0:55:46 the range of outcomes in British politics.
0:55:50 Even after a period of turmoil that Brexit created,
0:55:53 that period of turmoil was like periods of turmoil
0:55:55 in the 19th century over the corn laws,
0:55:59 over protectionism, turmoil over the Irish question.
0:56:01 Although we have periods of turmoil
0:56:04 and we’ve had years of multiple prime ministers before,
0:56:07 the system remains stable around,
0:56:09 particularly around Oxford University
0:56:13 because there seems to be one rule of British politics
0:56:14 and that is that the prime minister
0:56:15 has to have been to Oxford.
0:56:18 There are very, very few exceptions to that rule.
0:56:22 Having said all that, we would be deluding ourselves
0:56:26 if we didn’t recognize some similarities
0:56:28 and points of convergence.
0:56:31 I don’t think Taylor Swift is a smaller deal
0:56:34 in the UK than in the US.
0:56:36 I don’t think AI is a smaller deal.
0:56:38 – That’s what unites us, Taylor.
0:56:39 – I was the first.
0:56:41 The second was, of course, AI.
0:56:43 And the third is this potential
0:56:45 for conflict over immigration.
0:56:47 It’s tragic that three little girls were murdered
0:56:52 by, it appears, the teenage son of immigrants from Rwanda
0:56:57 when the girls were attending a Taylor Swift dance class.
0:57:02 And this has unleashed a kind of classic summer time
0:57:06 period of violence in the UK
0:57:09 that reminds us that it’s not all cricket
0:57:11 and well done, old Chuck,
0:57:14 that some of the trends that have produced populism
0:57:17 and political violence in the US
0:57:22 are in fact still to be found in the United Kingdom too.
0:57:23 – It’s interesting.
0:57:24 If I understand you, Greg,
0:57:26 you’re saying the coarseness of our discourse in the US
0:57:28 might be a feature, not a bug.
0:57:30 – Oh, it’s absolutely a feature.
0:57:35 And visitors commented on it from very early on
0:57:39 in the Republic, the sense that politics in America
0:57:42 is a contact sport, perhaps even a blood sport,
0:57:44 whereas in Britain, it’s cricket.
0:57:47 That goes back a very, very long way indeed.
0:57:50 But, you know, we’re divided by a common language,
0:57:55 united by a great deal of increasingly global,
0:57:58 popular culture, and both the United States
0:58:03 and the United Kingdom face the same sociological dilemma.
0:58:05 We are aging societies.
0:58:10 Half of the electorate in the United States is over 50.
0:58:13 It’s somewhat similar, perhaps even older in the UK.
0:58:16 Older voters are not only more numerous
0:58:17 relative than they used to be,
0:58:20 but they also turn out at higher rates than younger voters.
0:58:24 And older voters want two contradictory things.
0:58:27 They don’t really like inflation, that’s nothing new,
0:58:29 but they also don’t like immigration.
0:58:32 The problem is that if you don’t have large-scale immigration,
0:58:33 the inflation would have been higher.
0:58:36 Think about the counterfactual of closed borders
0:58:39 in the period of the last four years.
0:58:40 The inflation would certainly have been higher
0:58:43 ’cause the tight labor markets would have driven wages up.
0:58:45 And so it’s very hard to satisfy
0:58:48 what old American and old British voters want.
0:58:50 They also want healthcare.
0:58:52 In the US, this manifests itself
0:58:55 as a sort of health insurance inflation problem.
0:58:58 In the UK, the National Health Service rations healthcare,
0:59:01 and so everybody’s always grumbling that they take weeks,
0:59:03 take weeks to get a doctor’s appointment
0:59:07 and months, if not years, to get a surgical procedure.
0:59:09 But it’s the same basic problem.
0:59:11 It’s just that the systems are radically different
0:59:12 in the way that they work.
0:59:16 So as I go back and forth across the Atlantic,
0:59:17 which I have to do far too often,
0:59:19 I’m struck by the fact that
0:59:22 although we think of ourselves as being very different,
0:59:25 and in some institutional respects we are,
0:59:28 there’s real convergence in the experience
0:59:30 of being British and the experience of being American,
0:59:34 whether you’re an oldie or a table swift fan.
0:59:36 – Sir Neil Ferguson is a Millbank family senior fellow
0:59:39 at the Hoover Institution, Stanford University,
0:59:41 and a senior faculty fellow
0:59:42 at the Belfer Center for Science
0:59:44 and International Affairs at Harvard.
0:59:46 He’s also a columnist at the Free Press
0:59:48 and the author of 16 books,
0:59:51 including The Pity of War, The House of Rothschild,
0:59:54 and Kissinger, 1923 to 1968.
0:59:57 The idealist, which won the Council on Foreign Relations,
0:59:58 Arthur Ross Brice.
1:00:01 In 2024, he was knighted by King Charles III
1:00:02 for services to literature.
1:00:05 What a nice moment for you, Neil.
1:00:08 Congratulations on that, that’s a nice,
1:00:10 just a really nice thing for you and your family.
1:00:13 And he joins us from somewhere in New England.
1:00:16 Neil, I always love hearing from you as do our listeners.
1:00:18 It’s just, you just kind of have,
1:00:20 your comments are totally puncturing
1:00:22 and open me up to a viewpoint quite frankly
1:00:24 that I don’t share most of the time.
1:00:26 But really appreciate all your good work
1:00:28 and welcome back to the U.K.
1:00:30 Anyways, it’s great to catch up with you.
1:00:33 (upbeat music)
1:00:44 – Outdoor of happiness, where to live?
1:00:46 So I had two close friends,
1:00:48 Eddie Blau and David Frey,
1:00:50 who were my roommates, my sophomore year,
1:00:53 come hang out with me at Aspen
1:00:55 and they brought another close friend
1:00:57 from the fraternity, Michael Baruch.
1:01:00 It was just so wonderful to see all three of them.
1:01:02 But one thing I think they’ve missed out on
1:01:04 and that I’ve gotten right,
1:01:06 and that is I have lived in five different cities
1:01:08 and they chose not to leave their city.
1:01:11 And I understand they have nice lives.
1:01:13 But my advice to any young person
1:01:17 would be to take a risk and live in another city.
1:01:17 I think it informs you,
1:01:19 I think it’s an incredible experience.
1:01:22 And I think the analysis that young people do
1:01:23 is that they say,
1:01:26 well, I could never do better than to live in this city.
1:01:28 I have family here, I have friends here,
1:01:29 I’m doing well here.
1:01:30 I totally get that.
1:01:32 Now I’m living in London right now.
1:01:35 To be honest, I don’t like it as much as New York.
1:01:37 I don’t like Europe as much as the U.S.
1:01:39 But the key is not necessarily to do better,
1:01:40 it’s to do different.
1:01:42 And it informs you,
1:01:45 it creates a different appreciation
1:01:47 to look at the world through a different lens.
1:01:49 I think it’s really interesting to look at America
1:01:49 through a different lens.
1:01:51 What is looking in America
1:01:53 through a European lens done for me
1:01:55 makes me appreciate America more.
1:01:57 And despite all of our faults, all of our weirdness,
1:02:00 I mean, some of the things I love about the UK,
1:02:03 there’s not a discussion around assault rifles
1:02:06 or transgender rights or bodily autonomy for women.
1:02:07 These are givens there.
1:02:10 It’s like, well, of course we don’t allow assault weapons
1:02:11 in the general public.
1:02:13 Well, of course a woman should be able to decide
1:02:14 if she wants to terminate a pregnancy.
1:02:18 And I really enjoy that or appreciate it, I should say.
1:02:21 But I also recognize that there’s something about the U.S.
1:02:22 we’re willing to take risks.
1:02:23 We embrace risk.
1:02:25 It’s you meet with people around business.
1:02:27 It’s like, okay, we’re not interested
1:02:30 or we are interested, let’s go.
1:02:33 People are much more willing to take risks.
1:02:34 They’re kind of the distinction
1:02:36 or the thing that summarizes the distinction
1:02:39 between Europe and the U.S. for me is simple.
1:02:42 Millions of people looked around and said,
1:02:43 “You know what, I’m gonna get on a steamship
1:02:46 and go to this place, an unknown,
1:02:48 and I’m gonna try and forge a new life
1:02:50 and stake my claim if you will.”
1:02:52 And tens of millions of people decided,
1:02:53 “No, I’m just gonna hang here.”
1:02:55 That is the distinction.
1:02:58 The DNA, the type of people that came to America,
1:03:00 immigrants from all over the world decided to take a risk.
1:03:03 And it’s made me appreciate the risk aggressiveness,
1:03:06 the diversity of the U.S.,
1:03:09 the action orientation, sort of the ready-fire aim.
1:03:11 But I wouldn’t have that perspective
1:03:12 unless I’d lived in Europe.
1:03:14 And what I would suggest to any young person
1:03:15 is that if you have the ability,
1:03:17 especially with remote work,
1:03:20 if before you have aging parents
1:03:22 or you have kids of your own,
1:03:25 by all means, brother, get on a boat, a plane, a bus,
1:03:26 and live in a different city.
1:03:29 You don’t need to do better.
1:03:30 You need to do different.
1:03:32 (upbeat music)
1:03:34 This episode was produced by Caroline Shagren.
1:03:36 Jennifer Sanchez is our associate producer
1:03:38 and Drew Burroughs is our technical director.
1:03:40 Thank you for listening to The Property Pod
1:03:42 from the Vox Media Podcast Network.
1:03:43 We will catch you on Saturday
1:03:46 for “No Mercy, No Malice” as read by George Han.
1:03:48 And please follow our Property Markets Pod
1:03:50 wherever you get your pods for new episodes
1:03:53 every Monday and Thursday.
1:03:55 (upbeat music)
1:04:02 – Little muffin.
1:04:07 – Support for the show comes from Into the Mix,
1:04:09 a Ben and Jerry’s podcast about joy and justice
1:04:11 produced with Vox Creative.
1:04:14 Into the Mix is back for a new season
1:04:16 and welcomes you in with four new stories
1:04:18 that take listeners beyond the headlines
1:04:21 and into the lives of ordinary people
1:04:23 fighting for justice in their communities.
1:04:25 Starting with Ainez Bordeaux,
1:04:27 an activist and St. Louis native
1:04:30 who fought to shut down the workhouse,
1:04:32 a notorious pretrial detention center
1:04:35 that she says functioned like a debtor’s prison.
1:04:38 Subscribe to Into the Mix, a Ben and Jerry’s podcast
1:04:40 to listen to the first episode
1:04:42 of the special three-part series “Out Now.”
1:04:46 – Hey, this is Scott Galloway,
1:04:47 host of the Property Podcast.
1:04:50 One of my favorite things I get to do on this show
1:04:51 is hear from our listeners
1:04:52 and answer their burning questions
1:04:53 about all sorts of things,
1:04:56 including work, life, school, you name it.
1:04:58 And this summer, we’re bringing back the hits
1:05:01 and covering some of our favorite questions and takes.
1:05:03 We’re talking business, career advice,
1:05:04 and even hearing a brand new,
1:05:07 never been aired interview about parenthood.
1:05:09 So tune into the best of office hours
1:05:11 for a special series from the Property Podcast
1:05:13 sponsored by Mint Mobile.
1:05:14 You can find it on the Property Feed
1:05:16 wherever you get your podcasts.
0:00:04 Support for the show comes from Into the Mix,
0:00:07 a Ben and Jerry’s podcast about joy and justice
0:00:09 produced with Vox Creative.
0:00:12 Ainez Bordeaux is a self-described hellraiser,
0:00:14 and she became an activist
0:00:16 after being caught up in the criminal legal system
0:00:19 when she couldn’t afford her bond.
0:00:20 And without a trial,
0:00:23 Ainez was sent to a St. Louis detention facility
0:00:25 known as the Workhouse,
0:00:28 notorious for its poor living conditions.
0:00:31 Here how she and other advocates fought to shut it down
0:00:33 and won on the first episode
0:00:36 of this special three-part series out now.
0:00:39 Subscribe to Into the Mix, a Ben and Jerry’s podcast.
0:00:43 – Hey, this is Scott Galloway,
0:00:45 host of the PropG podcast.
0:00:47 One of my favorite things I get to do on this show
0:00:48 is hear from our listeners
0:00:50 and answer their burning questions
0:00:51 about all sorts of things,
0:00:54 including work, life, school, you name it.
0:00:55 And this summer, we’re bringing back the hits
0:00:58 and covering some of our favorite questions
0:00:58 and takes.
0:01:00 We’re talking business, career advice,
0:01:01 and even hearing a brand new,
0:01:04 never been aired interview about parenthood.
0:01:06 So tune in to the best of office hours,
0:01:08 the special series from the PropG podcast
0:01:10 sponsored by Mint Mobile.
0:01:12 You can find it on the PropG feed
0:01:14 wherever you get your podcasts.
0:01:18 – Episode 311, 311 is the number in NYC
0:01:20 you call for non-emergency city services.
0:01:21 Choose to it.
0:01:23 I’m what’s called 911 and said,
0:01:25 “I am masturbating too much,” and the operator said,
0:01:27 “That’s not really a problem.”
0:01:29 So I put him on speaker phone and said,
0:01:32 “See mom, get off my case.”
0:01:36 Go, go, go!
0:01:38 (upbeat music)
0:01:47 – Welcome to the 311th episode of the PropG pod.
0:01:49 In today’s episode, we speak with Neil Ferguson,
0:01:51 the Millbank family senior fellow
0:01:53 at the Hoover Institution, Stanford University,
0:01:55 and a senior faculty fellow
0:01:58 at the Belfer Center for Science and International Affairs
0:01:59 at Harvard.
0:02:01 He’s also a columnist at the Free Press
0:02:02 and the author of 16 books.
0:02:04 We discussed with Neil why he believes
0:02:06 we are currently in Cold War II,
0:02:07 the state of play with the wars in Ukraine
0:02:08 and the Middle East,
0:02:10 and who he thinks is likely to prevail
0:02:12 in the upcoming presidential election.
0:02:14 I’m a huge fan of Neil.
0:02:17 I love, you know, Neil’s a real deal.
0:02:19 Neil writes these incredibly intense,
0:02:22 long, really well researched books.
0:02:25 He loves writing and then he’s used his platform
0:02:27 as kind of a world-class historian
0:02:29 to launch a consulting business called Green Mantle
0:02:31 that is really powerful, very similar,
0:02:34 kind of along the same veins as the Eurasia Group
0:02:35 with Ian Bremmer.
0:02:37 But anyways, I’m a huge fan of Neil.
0:02:38 He’s a great thinker.
0:02:41 We have almost nothing in common politically.
0:02:42 His views are much different than mine,
0:02:45 but he views informed mine
0:02:47 because he’s such a clear blue flame thinker.
0:02:49 And I love how he couches everything
0:02:50 in a historical reference.
0:02:52 Okay, before we get to that,
0:02:53 what’s happening?
0:02:54 What’s happening?
0:02:55 Where’s the dog barking?
0:02:57 Who let the dogs out?
0:02:58 Where’s he barking?
0:03:00 I am still in Aspen,
0:03:02 but I’m heading to Nantucket this weekend
0:03:04 on the Privilege White douchebag tour.
0:03:05 That’s right.
0:03:07 Why am I headed to Nantucket?
0:03:09 So let’s talk a little bit about the two.
0:03:10 I love Aspen.
0:03:11 This is where I’m definitely gonna hang out
0:03:13 about a home here.
0:03:15 And then on Tucket, I did not want to like.
0:03:17 Why did I not want to like Nantucket?
0:03:19 I think of myself as being sort of Eurofabulous.
0:03:20 I have the impression of myself
0:03:23 that I’m a little cool, a little edgy.
0:03:24 None of those things.
0:03:26 And then Nantucket is very Americana.
0:03:31 Like the pink shorts, the kind of cobblestone streets.
0:03:32 It’s actually a really interesting town.
0:03:34 It’s sort of where venture capital originated.
0:03:37 The captain would raise money, pull together a team
0:03:40 and then go hunting for whales and then come back.
0:03:42 And if they got a bunch of whales and make a bunch of money
0:03:44 and it is spectacularly beautiful.
0:03:47 And I like places where my boys can just go free
0:03:49 and not get into too much trouble.
0:03:51 My parents were worried about me getting in too much trouble.
0:03:53 I’m worried my boys are gonna get into too little.
0:03:55 So I like pushing them out and shoving them out
0:03:57 and hoping that they find some fun.
0:03:59 But I absolutely love it there.
0:04:02 And it gives me a chance to come back to New York and work.
0:04:04 What did I vacation when I was younger?
0:04:07 First vacation I ever took, my mom took me to Niagara Falls.
0:04:08 No joke.
0:04:12 We went to, we saw the Canadian side of the waterfall,
0:04:13 which is much more impressive.
0:04:15 And then we went to this,
0:04:19 we went to the kind of this camp where we stayed in a cabin
0:04:23 with her other single mother friend and their daughter
0:04:24 or her daughter Annette.
0:04:27 And we went to kind of this little camp where,
0:04:29 the big highlight was a tire swing.
0:04:32 So my vacationing is a much different complexion now.
0:04:33 But it was a ton of fun
0:04:36 when you’re a kid being outdoors, having a lot of fun.
0:04:37 I don’t know how I got here.
0:04:39 Should we get back to the podcast?
0:04:41 Okay, so moving on.
0:04:44 Google got hit with a massive antitrust hammer.
0:04:47 Boom, said the FTC and the DOJ.
0:04:52 Oh my God, couldn’t happen to a nicer group of people.
0:04:54 What do you know, a federal judge ruled on Monday
0:04:56 that Google is an illegal monopoly
0:04:58 when it comes to its search business.
0:05:01 The ruling claims that Google has not achieved its stronghold
0:05:04 on search just by happenstance.
0:05:05 It’s hard, highly skilled engineers
0:05:08 innovated consistently and made shrewd business decisions.
0:05:10 Okay, I’m not sure that makes their case.
0:05:13 But anyways, what they are, I believe guilty of
0:05:15 is something called monopoly maintenance.
0:05:16 What do we mean by that?
0:05:18 And that is search is really unusual
0:05:21 in the sense that it ages in reverse.
0:05:22 What do I mean by that?
0:05:24 The companies that have any shot
0:05:25 have become a trillion dollar company.
0:05:28 And I think this is something entrepreneurs should take note
0:05:29 is they age in reverse.
0:05:31 It’s what I call the Benjamin Button effect.
0:05:34 And I wrote about this in my New York Times bestseller
0:05:35 The Four by Scott Galloway,
0:05:36 which by the way has been an option
0:05:37 for an original scripted drama.
0:05:38 We’ll see how that goes.
0:05:40 I’m going to LA this week to pitch a bunch of the platforms.
0:05:42 Literally the biggest story that’s never been told
0:05:44 or not told yet is about big tech.
0:05:46 And anyways, we’ll see.
0:05:49 But effectively the companies that in fact
0:05:52 run to a trillion dollars defy biology.
0:05:55 Benjamin Button, a short story by F. Scott Fitzgerald
0:05:56 about a father whose heart is broken
0:05:58 ’cause he loses his son in World War I
0:06:00 and thinks that if he builds a clock
0:06:01 that perfectly goes in reverse
0:06:03 and maybe he can reverse time and bring back his son.
0:06:05 It’s actually a really lovely story
0:06:08 and was made into a wonderful movie
0:06:10 starring Brad Pitt and Kate Blanchett
0:06:12 who are just really easy on the eyes.
0:06:13 Oh my God.
0:06:15 Anyways, where was I?
0:06:17 Oh, Benjamin Button aging in reverse.
0:06:20 That is what trillion dollar companies do.
0:06:21 They age in reverse.
0:06:22 They defy biology.
0:06:25 What happens when you drive a car off the lot?
0:06:27 It loses about 30% of its value.
0:06:28 Literally when you drive off the lot,
0:06:30 when you twist the cap off of toothpaste,
0:06:32 it loses 100% of its value.
0:06:34 You just can’t, it’s not resaleable.
0:06:35 That is the pace of most companies
0:06:37 or that’s the cadence in most products
0:06:38 is they age in reverse.
0:06:39 I’m sitting here looking at all this equipment,
0:06:43 a ring light that makes me look like Joe Biden in 10 years.
0:06:45 Jesus Christ, look how fucking ugly I am.
0:06:49 Anyway, all of this shit ages like everything.
0:06:51 Most business mimics biology,
0:06:53 but the company is the best to move towards a trillion,
0:06:56 defy biology and they age in reverse,
0:06:58 mostly through network effects or agility
0:07:00 and search is one of those.
0:07:02 And that is every time someone searches,
0:07:04 the next search gets better
0:07:06 because the links you pick and form,
0:07:09 which links are the best links to present higher
0:07:12 in the query results than the search before it.
0:07:13 So it ages in reverse.
0:07:18 So size matters and creates a better search product,
0:07:21 such that it makes sense for Google or Alphabet
0:07:23 to go and pay Apple $20 billion
0:07:26 to become the default search engine.
0:07:28 And what happens, that gets some additional traffic,
0:07:29 gives them more pricing power
0:07:31 and slowly but surely they run away with it.
0:07:34 And they have these deals with a variety
0:07:36 of different companies.
0:07:37 And essentially they become,
0:07:39 their position has become unassailable.
0:07:41 Now, was that the smart thing to do?
0:07:44 Yeah, but as it create monopoly power and monopoly abuse
0:07:47 where they charge greater rents on advertisers,
0:07:49 basically every other company in the world.
0:07:50 Yes, as a matter of fact,
0:07:53 since the Airbnb, which is my largest position,
0:07:56 the reason why Airbnb is so powerful for shareholders
0:07:58 is it’s one of the few companies that’s been able
0:08:01 to exit the stranglehold that is Google or Meta.
0:08:01 What do I mean by that?
0:08:04 These are giant toll booths add an Amazon
0:08:05 to basically every e-commerce,
0:08:07 every information age company,
0:08:09 every institution or organization
0:08:11 that wants to acquire customers online.
0:08:13 See above everybody has to go and pay a toll
0:08:14 through one of these three organizations
0:08:17 and slowly but surely they have increased the rents
0:08:19 on the rest of the corporate world.
0:08:21 So what would be the biggest tax cut in history?
0:08:23 The biggest tax cut in history
0:08:25 is if you made these markets more competitive
0:08:26 and broke them up.
0:08:28 And effectively that’s what they’re saying here
0:08:30 is that the monopoly rents they are charging
0:08:32 because everybody has to use Google
0:08:34 is gotten to the point where it is stifling competition.
0:08:37 And because they have access to cheaper and cheaper capital
0:08:38 because of the monopoly position,
0:08:41 they can become go out and basically buy their position
0:08:44 as the default search engine across the largest platforms
0:08:46 and effectively run away with it.
0:08:49 And this is what you refer to as monopoly maintenance.
0:08:51 One of the important points the ruling makes
0:08:52 is that in fact that Google charges
0:08:55 a supra competitive prices for general search ads
0:08:58 meaning that they’re getting unfair rents.
0:08:59 I think there’s tremendous innovation
0:09:02 to be unlocked in search once they in fact
0:09:03 break these companies up.
0:09:05 As a matter of fact, you kind of could argue
0:09:08 that chatGPT is a function of the innovators dilemma
0:09:12 where this $170 billion business called search, right?
0:09:13 It’s actually $175 billion,
0:09:16 had no vested interest in innovating.
0:09:19 And as a result chatGPT or AI came in and said
0:09:22 we’re not gonna give you every answer in 0.0055 seconds.
0:09:24 We’re not gonna give you 1,100 results.
0:09:25 We’re gonna give you one
0:09:26 and we’re gonna try and do our best
0:09:27 to give you the best answer.
0:09:28 But still this is a good decision.
0:09:32 This is absolutely evidence of what I think
0:09:34 is the smartest thing to oxygenate the economy
0:09:37 and the complexion of the Biden-Harris administration
0:09:38 around making markets more competitive
0:09:39 and breaking up big tech.
0:09:42 So I think this is good for the ecosystem,
0:09:44 good for the planet, good for consumers.
0:09:46 And also I believe it’s good for Alphabet.
0:09:48 If you’re an Alphabet shareholder,
0:09:50 I think you want YouTube spawn.
0:09:52 I don’t think you want them cooperating
0:09:54 and coordinating with Google search.
0:09:57 I think YouTube on its own probably trades,
0:09:58 would trade at a greater multiple
0:09:59 ’cause it is the premier.
0:10:01 Everyone talks about Netflix, TikTok.
0:10:05 I actually think arguably the most dominant video search
0:10:08 and video platform amongst people under the age of 30
0:10:10 is probably YouTube.
0:10:13 And I just think it’s fantastic
0:10:16 that Lena Khan and Jonathan Cantor
0:10:18 have taken a more aggressive approach to this.
0:10:19 What will be the remedy?
0:10:21 That’ll be really interesting.
0:10:23 Could they break them up?
0:10:25 Could, I don’t think they’ll do a fine
0:10:27 ’cause that doesn’t mean anything for these companies.
0:10:30 Will they maybe ask Apple or demand
0:10:32 that those players present multiple options
0:10:34 and then you get to pick which search engine you want?
0:10:36 I don’t know, we’re gonna see, it’s gonna be really,
0:10:37 the remedy part of this case
0:10:38 is gonna be super interesting.
0:10:40 We’ve already seen TikTok playing an interesting role
0:10:43 in search, particularly for Gen Z.
0:10:46 Axios reported that 21% of 18 to 24 year olds
0:10:48 start their search journey with TikTok.
0:10:52 Oh my God, 21% search share on TikTok.
0:10:53 Who would have thought that?
0:10:54 Lucky it’s not controlled by an adversary
0:10:58 that wants to deposition America
0:10:59 and train our youth to hate America.
0:11:01 But anyways, Amazon, Instagram, Snap,
0:11:04 and of course, ChatGPT have also played a big part
0:11:06 in where and what people search for.
0:11:09 Google shares closed down 4 1/2% on Monday
0:11:10 because of the ruling analysts speculate
0:11:12 that Apple would face a blow
0:11:14 if one of the court remedies prevents Google from paying
0:11:16 to be the default search engine.
0:11:19 You gotta imagine that $20 billion a year payment,
0:11:21 about 19.9 of it hits the bottom line
0:11:24 and then their multiple on profits,
0:11:26 I think is about 30 or 33.
0:11:28 So you’re looking at about a $600 billion
0:11:31 hit to their share price if all of a sudden it were to,
0:11:34 if shareholders were to decide, okay,
0:11:37 they’re gonna have their EBITDA reduced by 20% here.
0:11:39 I don’t know if it’s gonna have a big impact on Apple
0:11:40 ’cause I think what Apple could probably do
0:11:44 is get that same $20 billion, can they get $20 billion?
0:11:45 I don’t know, they control custody
0:11:49 to the billion wealthiest people in the world called iOS users.
0:11:51 And if it’s not Google, it’s gonna be someone else
0:11:52 that they’ll backfill and say,
0:11:57 do you wanna be the premier or the default search query AI here?
0:11:59 I think they’re still in a pretty good position.
0:12:02 Alphabet also, I don’t think,
0:12:04 I don’t think their shareholders are gonna get hurt
0:12:05 ’cause I think a breakup would actually be good
0:12:08 for the company, but this definitely sends,
0:12:11 I think a healthy flare across the bow of these companies
0:12:14 which have become way too powerful.
0:12:15 What’s some evidence down that way?
0:12:17 If you got your flight canceled a few Fridays ago,
0:12:19 it’s because of the concentration in the tech industry
0:12:21 where basically entire airlines were shut down
0:12:24 because one company CrowdStrike had to be integrated
0:12:28 into the dominant operating system, which is Microsoft.
0:12:29 And effectively they found they were so reliant.
0:12:31 What was really interesting is the COA Bastion
0:12:34 came out and announced a half a billion dollar lawsuit
0:12:36 against CrowdStrike and Microsoft,
0:12:38 but he didn’t say we’re switching vendors
0:12:39 or switching technology, why?
0:12:42 ‘Cause he can’t because see above monopoly power.
0:12:45 The best thing we could do to oxygenate the economy
0:12:47 would be one, to restore Sino-US relations,
0:12:51 the first and second largest economy kissing and making up
0:12:53 would bring down the price of everything globally.
0:12:55 They got manufacturing and supply chain down,
0:12:58 we got IV innovation and consumer demand.
0:12:59 Come on, let’s kiss and make up.
0:13:01 Anyways, anyways, that would be the number one tax cut.
0:13:04 The number two tax cut would be the break up of big tech
0:13:07 who are every day increasing their rents
0:13:09 on essentially every business in the world.
0:13:13 We’ll be right back for our conversation with Neil Ferguson.
0:13:19 – Fox Creative.
0:13:23 – This is advertiser content from Zell.
0:13:25 – The recruiter said all he needed to do
0:13:28 was send $500 to cover mandatory safety training
0:13:31 and the job was mine.
0:13:32 – In a world where financial crimes
0:13:34 are more and more sophisticated,
0:13:37 there’s a team that’s got your back.
0:13:38 Yee-haw!
0:13:42 – Come in, Safe Squad, we got a 10-3.
0:13:45 – Copy that dispatch, we’re on it.
0:13:47 Hop in, Skip, we got a phony recruiter.
0:13:51 – Safe Squad.
0:13:54 – The crime drama everyone is talking about.
0:13:56 – I know it’s only my first day,
0:13:59 but that sounds like a pretty cut-and-dry job scam.
0:14:00 – Strap in, rookie.
0:14:02 – These days criminals can even make it look like
0:14:06 it’s your bank calm, but that’s where we come in.
0:14:07 – My what?
0:14:10 It’s my savings account, compromised.
0:14:12 No, I won’t hold.
0:14:16 No, I didn’t authorize a $12,000 withdrawal.
0:14:18 That’s my life savings.
0:14:19 – Why don’t you come with me?
0:14:22 I’ll show you how to report to the FTC.
0:14:23 – What payment platform to choose?
0:14:25 Let’s contact them too.
0:14:29 – Don’t miss the TV event of the season, Safe Squad.
0:14:30 – Hey Ace.
0:14:31 – Yeah, kid?
0:14:32 – You’re right.
0:14:35 That was one hell of a first day.
0:14:37 – Learn how you can spot the signs of a scam
0:14:39 so you don’t have to call the Safe Squad
0:14:44 by visiting www.vox.com/SafeSquadHQ.
0:14:47 – Remember, never send money online
0:14:50 to people you don’t already know and trust.
0:14:53 (upbeat music)
0:14:54 Support for the show comes from Fetch.
0:14:56 I love doing ads for Fetch.
0:14:58 I am a huge dog person, I think you know this,
0:15:00 both Leia and Gangster, my Great Dane,
0:15:02 and my Puerto Rican rescue ham.
0:15:04 We think he’s a dox, and by the way,
0:15:06 Leia is big and scary-looking.
0:15:09 You can go up and literally poke Leia in the eye
0:15:12 or take her food from her, and she’s not gonna do anything,
0:15:15 except maybe rear up her hind quarters against you,
0:15:17 whereas the little one will snap your finger off,
0:15:18 the little cute one.
0:15:20 Anyways, pet parents know better than anyone
0:15:22 how much joy and whimsy an animal can bring to a family,
0:15:24 but they also know that it’s only a matter of time
0:15:26 before the unexpected happens.
0:15:29 And the unexpected is also unfortunately usually expensive,
0:15:31 so unless you happen to have thousands of dollars
0:15:34 lying around to drop at the vet, you might wanna try Fetch.
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0:16:02 That’s fetchpet.com/propg, fetchpet.com/propg.
0:16:08 – Support for the show comes from Into the Mix,
0:16:11 a Ben and Jerry’s podcast about joy and justice
0:16:13 produced with Vox Creative.
0:16:16 Would you have $25,000 to post bail?
0:16:19 That’s how much Inez Bordeaux had to pay
0:16:21 when she was arrested in 2016.
0:16:23 And since she couldn’t afford it,
0:16:24 she was sent to the workhouse,
0:16:27 a pre-trial detention center in St. Louis.
0:16:30 Inez and the other detainees weren’t locked up
0:16:32 because they’d been convicted,
0:16:35 but because they couldn’t afford their bail.
0:16:38 – Experiencing what I experienced in watching
0:16:40 other women go through it
0:16:45 and know that there were thousands before us
0:16:47 and there were thousands after us
0:16:52 who had experienced those same things,
0:16:54 that’s where I was radicalized.
0:16:56 – She spent a month at the workhouse
0:16:58 and witnessed abject conditions,
0:17:00 extreme heat and cold,
0:17:03 mold and pest infestations and poor medical care.
0:17:05 Eventually her charge was vacated,
0:17:09 but the experience changed her.
0:17:11 – We’re starting a campaign to close the workhouse,
0:17:12 are you interested?
0:17:15 And I was like, hell yeah, hell yeah, I’m interested.
0:17:17 – Hear how she and other advocates fought
0:17:19 to shut it down and won.
0:17:22 On the first episode of this special three-part series
0:17:24 out now, hosted by Ashley Seaford,
0:17:28 subscribe to Into the Mix, a Ben and Jerry’s podcast.
0:17:35 (upbeat music)
0:17:38 (upbeat music)
0:17:44 – Welcome back, here’s our conversation with Neil Ferguson,
0:17:46 the Millbank Family Senior Fellow
0:17:48 at the Hoover Institution, Stanford University
0:17:50 and a Senior Faculty Fellow at the Belford Center
0:17:53 for Science and International Affairs at Harvard.
0:17:55 – Neil Ferguson, where does this podcast find you?
0:17:58 – I cannot disclose my location
0:18:01 for reasons of national security,
0:18:04 but I’ll say New England.
0:18:05 – New England, wow, very mysterious.
0:18:08 So first off, let’s bust right into it.
0:18:10 Starting with something topical,
0:18:13 the Wall Street Journal reporter, Evan Gershkovich,
0:18:15 has been freed as part of what the White House
0:18:18 National Security Advisor described as a historic exchange,
0:18:20 something not seen since the Cold War.
0:18:22 Neil, what do you make of this?
0:18:24 – Well, I’ve been saying for the last six years
0:18:29 that we’re in Cold War II, and there you go.
0:18:33 It’s a very Cold War thing to do prisoner exchanges
0:18:35 with the other side.
0:18:39 And so for me, it’s fresh evidence
0:18:44 if fresh evidence were needed that we’re in a new Cold War
0:18:49 and Russia, as in the first Cold War, is on the other side.
0:18:53 So of course, it’s China, so is Iran, so is North Korea.
0:18:57 But this is a good day because obviously,
0:19:00 Evan’s release was something that everybody
0:19:04 who has any connection with journalism was praying for.
0:19:07 And although, of course,
0:19:12 we’ve had to let some Russian spies go to get him out,
0:19:17 I’m inclined to think that that is a price worth paying.
0:19:23 – Let me ask you that when Brittany Griner was exchanged
0:19:28 for this merchant of death, I think his name was Victor Boot,
0:19:30 I was worried we were setting up a series of incentives
0:19:33 that encouraged Russia and other kind of,
0:19:36 for lack of a better term, access of evil nations
0:19:39 to take more and more people prisoner
0:19:42 on unfounded charges, do you have any,
0:19:45 and we don’t know what they’re trading for here,
0:19:47 but do you think this sets up poor incentives
0:19:51 that will only result in more Americans being incarcerated?
0:19:52 – It’s possible.
0:19:58 On the other hand, they’re not gonna stop spying
0:20:02 and we’re not gonna stop trying to catch their spies.
0:20:07 If the lesson of the Cold War is relevant here,
0:20:12 that didn’t produce an escalating cycle of prisoner taking.
0:20:16 And so I wouldn’t expect that to happen.
0:20:21 In this case, mainly because there are bigger pieces
0:20:25 on the chessboard than spies and journalists.
0:20:29 And in the end, the Cold War is like a massive game of chess
0:20:34 and these are pawns, or if there were pieces smaller
0:20:37 than pawns, they would be those.
0:20:41 And the Russians have much bigger pieces
0:20:44 that they want to move and bigger pieces of ours
0:20:47 that they want to take, like, say, Ukraine.
0:20:51 And in that sense, there’s no obvious rationale
0:20:56 in their accumulating more ill will
0:20:58 by arresting more journalists.
0:20:59 And I’d be surprised if it happened
0:21:02 on a larger scale in the coming years.
0:21:04 – So let’s use that as a jumping out point,
0:21:06 talking about the war on Ukraine.
0:21:08 Give us what you think the state of play is there,
0:21:11 what you think a likely outcome is
0:21:13 and how you would approach it
0:21:14 or what advice you would have
0:21:17 for Western policymakers as it relates to Ukraine?
0:21:20 – Well, there are two, perhaps more than two,
0:21:23 but two plausible futures
0:21:29 depending on who wins the election on November 5th.
0:21:35 In the scenario in which Kamala Harris wins,
0:21:37 there’ll be a continuity of the policy
0:21:40 that has got us to where we are.
0:21:45 And that policy has been outwardly to support Ukraine
0:21:51 and its maximum war aims by saying,
0:21:55 Ukraine sets the war aims privately
0:21:59 to continue the war at such a level
0:22:02 of support that Ukraine doesn’t lose,
0:22:05 but not at such a level that it can win.
0:22:10 That policy, I imagine, would continue
0:22:17 into the next four years if Harris wins
0:22:20 because I wouldn’t expect a big change
0:22:23 to the national security strategy or team.
0:22:24 There’d be some changes,
0:22:26 but I don’t think there would be a huge shift.
0:22:31 And the danger with that policy became obvious last year
0:22:33 and earlier this year.
0:22:38 If the US stops its support for Ukraine,
0:22:42 then Ukraine loses for six months.
0:22:45 The House of Representatives cut off financial military aid
0:22:48 from the US to Ukraine.
0:22:51 The Europeans couldn’t compensate for the shortfall
0:22:53 and Ukraine started to lose the war
0:22:57 because it simply cannot maintain its defenses
0:23:01 along this now very long front without American support.
0:23:05 And so the risk of a protracted war without a conclusion
0:23:09 is that at some point we lose interest
0:23:11 or politics leads us to lose interest.
0:23:13 And then I think Ukraine loses the war.
0:23:16 I was always against prolonging the war.
0:23:21 I said in late 2022 when it was going well for Ukraine
0:23:24 that it would have been ideal to lock in
0:23:28 some kind of peace negotiation then
0:23:31 when Ukraine’s fortunes were at their height.
0:23:34 Because if it dragged on,
0:23:37 the sheer superiority of Russian resources
0:23:39 would be bound to tell.
0:23:43 So that’s one future and it’s not one that I
0:23:46 or indeed my Ukrainian friends find very appetizing,
0:23:50 especially because in this future,
0:23:54 you’d expect a President Harris to be as easily intimidated
0:23:58 by threats of nuclear escalation as President Biden has been.
0:24:00 From a very early stage in the war,
0:24:04 the Russians realized that if they said nuclear weapons,
0:24:07 the Biden administration would kind of pull back.
0:24:09 And this has put a lid on the support
0:24:12 that the Biden administration has given Ukraine.
0:24:16 It’s, I think, the best explanation for why support
0:24:19 has been enough not to lose but not enough to win.
0:24:22 So now let’s imagine scenario two
0:24:24 in which Donald Trump is reelected
0:24:26 after a four year intermission.
0:24:27 What would that be like?
0:24:30 Many people wrongly assume that Trump
0:24:33 would just throw Zelensky, President Zelensky of Ukraine
0:24:36 under the nearest available bus
0:24:39 and do a deal with Vladimir Putin,
0:24:41 the Russian president that would be hugely favorable
0:24:42 for Russia.
0:24:44 That is not, I think, what would happen.
0:24:48 And the reason I say that is that one national security
0:24:52 spokesman after another on the Republican side
0:24:55 has come out against that kind of isolationist,
0:24:57 the hell with Ukraine stance,
0:24:59 in recent months.
0:25:01 If you look closely at what Trump says,
0:25:04 if you look closely at what JD Van said
0:25:06 to the New York Times last week,
0:25:09 you’ll see that the Trump plan is radically different.
0:25:14 The Trump plan is to put huge pressure on Russia,
0:25:18 economic and military, make the sanctions bite more,
0:25:22 make the weapons available to Ukraine more powerful
0:25:25 in order to force Putin to the negotiating table.
0:25:29 And then you’re gonna try and rerun the Korean piece
0:25:32 of 1953, where you don’t actually ever get
0:25:33 to a peace agreement,
0:25:36 but you have an armistice of the fighting stops.
0:25:40 And then this nasty border just kind of stabilizes
0:25:41 roughly where it is.
0:25:44 I think that’s the very different future
0:25:46 that we’ll get if Trump wins.
0:25:50 – That sounds like in some sort of an endorsement
0:25:53 of the Trump plan as it relates to Ukraine.
0:25:55 And what I would say is, and I don’t know this
0:25:57 as well as I’m trying as closely,
0:26:01 but I remember Trump saying I’d have this done in a day.
0:26:06 And my sense is that Putin and his supporters
0:26:09 are bigger fans or are hoping for a Trump administration,
0:26:12 but you think that actually a Trump administration
0:26:15 would in fact go harder at Russia in the short term
0:26:17 trying to force a deal.
0:26:20 – Well, that’s, I think, exactly what Mike Pompeo said
0:26:23 in the Wall Street Journal earlier this week.
0:26:27 He said the sanctions have not been enforced
0:26:29 nearly hard enough.
0:26:32 We need to go after the Russian banks.
0:26:35 We need to really make the Russian economy hurt.
0:26:38 We need to confiscate the reserves
0:26:41 and make them available to Ukraine as reparations.
0:26:45 And we need to step up the firepower that we give Ukraine
0:26:49 in order to force a negotiation upon the Russians.
0:26:53 And I’m not endorsing Donald Trump when I say
0:26:56 that that makes more sense to me as a plan
0:27:00 than carrying on with what we’re currently doing,
0:27:02 which I think will lead to Ukraine’s defeat.
0:27:07 The longer this lasts and the more we drip feed weapons
0:27:10 to Ukraine, the more likely it is
0:27:13 that ultimately Russia’s superior manpower,
0:27:15 superior raw materials, superior resources
0:27:18 together lead to victory.
0:27:21 And we really have to avoid a Russian victory.
0:27:24 So I think it makes sense to try and get to an armistice.
0:27:27 And what’s interesting is that if you talk to people
0:27:32 close to Zelensky, they will privately say,
0:27:37 we kind of prefer this to what we’re getting from Biden,
0:27:40 which is this drip feeding of support
0:27:43 and this constant language of de-escalation.
0:27:45 The problem about the word de-escalation,
0:27:48 which the Biden administration loves as a word,
0:27:51 is that in practice, it means the opposite of deterrence.
0:27:54 And you need to have some deterrence.
0:27:57 You have to make it clear to Russia
0:27:59 that it will cost them to carry on this war
0:28:01 if you’re gonna have any kind of peace negotiation.
0:28:03 Of course, it doesn’t get done in a day.
0:28:05 These things never get done in a day.
0:28:07 It’ll take six months, 12 months.
0:28:10 And I don’t think even at the end of 12 months,
0:28:12 there’ll be agreement on everything.
0:28:16 But if you can get an armistice, a ceasefire even,
0:28:19 that usually helps Ukraine even at the cost
0:28:23 of accepting for who knows how long
0:28:25 that the Russians control the part of their territory
0:28:27 and that the frontier between them and the bad guys
0:28:29 would be a very dangerous place
0:28:31 for quite a long time to come.
0:28:34 – So just for the purpose of the discussion, some pushback,
0:28:37 I see that Biden and Harris have distinctive
0:28:40 some dysfunction in Congress that as you said,
0:28:42 delayed funding for the war for six months,
0:28:45 which was, I think, I would describe more of a lack
0:28:46 of leadership on the part of Congress,
0:28:48 not necessarily Biden and Harris.
0:28:51 And that this has been, in my view,
0:28:54 I think of the president as the CEO responsible
0:28:56 for allocating resources to their greatest return.
0:28:59 I would argue this return has been one
0:29:01 of the greatest investments the West has ever made.
0:29:04 We’ve taken out what a third of Russia’s kinetic power
0:29:07 defanged the reputation of the supposedly ferocious army
0:29:12 given she pause before he tries to invade Taiwan
0:29:14 without ever even putting a boot on the ground,
0:29:15 an American boot on the ground,
0:29:18 NATO is out of its brain coma, Europe is finally unified.
0:29:20 And I don’t want to in any way diminish the incredible loss
0:29:22 of human life on both sides.
0:29:26 And then on the other side, this notion that
0:29:28 the Trump administration would put forward more pressure.
0:29:31 When I hear J.D. Vance consistently saying
0:29:33 he’s indifferent and doesn’t care about Ukraine,
0:29:38 you don’t worry that it emboldens Putin to be less apt
0:29:41 or inclined to accept some sort of deal or armistice here.
0:29:42 I see the opposite.
0:29:45 I see this emboldening Russia not getting them
0:29:46 to the negotiation table.
0:29:51 – The problem with your first point is this business strategy
0:29:55 as you describe it, doesn’t look good.
0:29:59 If after three years, your enterprise goes bust.
0:30:02 If after three years–
0:30:04 – You mean Ukraine loses, right?
0:30:06 – You mean if Ukraine were just a lose, got it.
0:30:09 – And that’s a highly likely scenario.
0:30:13 It’s not a surprise that the United States
0:30:17 embarks on a war and then after two years finds
0:30:20 that domestic support for it ebbs away.
0:30:21 That’s not new.
0:30:25 Domestic support for aid to multiple countries
0:30:28 in Cold War I faded.
0:30:30 And so to say that it’s all the force
0:30:33 of the House of Representatives is to slightly miss the point.
0:30:36 It was obvious from the outset that there would be
0:30:41 a finite amount of domestic patients in channeling resources
0:30:44 to a war in Eastern Europe that really ought to be
0:30:47 much more a concern of Europeans than Americans.
0:30:51 I think the risk that they ran
0:30:53 when they said to themselves, which they did,
0:30:56 let’s keep this going ’cause we’re really destroying
0:30:57 Russia’s military capability.
0:31:01 The risk that they ran was that in the end,
0:31:04 if Russia won, albeit at a high cost,
0:31:07 then Putin would be the winner.
0:31:09 So I think this was a very poor business strategy
0:31:11 and I said so at the time.
0:31:12 It would have been much smarter to try
0:31:15 and push for a peace or at least an armistice
0:31:18 when the war was going really badly for the Russians,
0:31:20 which it was in late 2022.
0:31:21 When they were driven back from Kharkiv,
0:31:22 they nearly lost a large amount
0:31:25 of their military outside Hurston.
0:31:27 That was a moment when I think
0:31:30 you could have attempted a negotiation
0:31:33 and we didn’t do that ’cause we thought we’re so clever.
0:31:35 We’re gonna fight the last Ukrainian
0:31:38 and exhaust Russia’s military, point one.
0:31:40 Point two, Vance has changed his tone
0:31:43 because it’s been explained to him
0:31:45 and to Speaker Mike Johnson
0:31:47 and to all the people in the House.
0:31:50 This is what happens if Ukraine loses
0:31:52 and what’s been fascinating to me, Scott,
0:31:56 over the last six months or so has been to see
0:31:59 that the isolationist faction
0:32:01 within the Republican Party,
0:32:03 which is quite well represented
0:32:04 in the House of Representatives,
0:32:09 has been routed and the reason that it’s been routed
0:32:12 is that they had it explained to them
0:32:14 in, I presume, intelligence briefings.
0:32:17 What would happen if Ukraine lost?
0:32:19 And then they realized
0:32:21 that not only would Putin be laughing,
0:32:23 but so would Xi Jinping.
0:32:25 And what’s interesting in this past six months
0:32:28 is that the argument that I made last year
0:32:32 is now almost conventional wisdom amongst Republicans,
0:32:33 namely that there is an axis
0:32:36 of China, Russia, Iran, North Korea,
0:32:39 that it is engaged in a Cold War
0:32:42 against the United States and its allies.
0:32:44 And a victory for Russia and Ukraine
0:32:45 is a victory for Xi Jinping,
0:32:48 as surely as it’s a victory for Vladimir Putin.
0:32:51 Republicans have had that explained to them.
0:32:53 They’ve had it drummed into their heads
0:32:55 that if you let Russia win,
0:32:59 it’s a very bad outcome for the US and its allies
0:33:02 and a very good outcome for China and its allies.
0:33:04 So I think there’s been a big shift.
0:33:05 Not everybody’s noticed this,
0:33:06 but I think it’s very important
0:33:09 ’cause it means that Putin,
0:33:11 who is certainly paying attention,
0:33:13 is realizing that a Trump administration
0:33:17 won’t simply hand in Ukraine in a phone call.
0:33:20 I think that scenario was never very likely
0:33:22 and it’s certainly not gonna happen there.
0:33:25 – So that’s on the war in the Middle East?
0:33:29 – Well, we’re speaking on what could be the eve
0:33:32 of a new war,
0:33:35 the one that is brewing between Israel and Hezbollah.
0:33:39 Probability that that war happens this August
0:33:44 is, I think, high now after the events of recent days.
0:33:48 It’s pretty clear that Benjamin Netanyahu
0:33:50 came back from Washington
0:33:53 and made like Al Pacino and the Godfather
0:33:57 and settled family business with the succession
0:34:02 of remarkable hits against Israel’s enemies.
0:34:06 It’s difficult for me to see
0:34:09 that there isn’t retaliation for that.
0:34:11 I think the Israelis expect it.
0:34:16 It’s possible that the Iranians and Hezbollah duck
0:34:19 ’cause they don’t wanna be drawn into that conflict.
0:34:21 On the other hand, they may realize
0:34:23 that there’s some non-trivial probability
0:34:24 that Donald Trump gets reelected,
0:34:27 in which case their situation’s gonna be
0:34:30 much worse next year because Trump will ramp up
0:34:34 the pressure on Iran in a way that Biden has not.
0:34:37 So I’m afraid we’re probably on the eve of a war
0:34:40 that will make the war against Hamas look quite small
0:34:44 because Hezbollah has much, much better armed than Hamas.
0:34:48 It has a formidable arsenal of weapons and missiles.
0:34:51 And if this war does break out,
0:34:53 as I think it is increasingly likely,
0:34:55 it’s going to be a bloody war for both sides.
0:34:58 And Israel will certainly suffer more casualties
0:35:01 than it has in the war in Gaza.
0:35:02 – It appears that the calculation
0:35:04 is that Israel’s decided they’re ready,
0:35:07 that they’re up for that fight.
0:35:07 Your thoughts?
0:35:10 – It’s been a debate within the government
0:35:12 since October the 7th.
0:35:16 I was in Israel in the spring
0:35:18 and met with members of the government,
0:35:22 as well as with their opponents
0:35:25 and the critics of Mr. Netanyahu.
0:35:28 And what struck me was that
0:35:30 although the political divisions remain very deep
0:35:33 in Israel and hostility to Bibi is something
0:35:36 that is very widespread,
0:35:40 nevertheless, October the 7th changed something in Israel
0:35:44 and created a new unity, not a political unity,
0:35:47 but a unity of purpose.
0:35:52 The sense that a second Holocaust was premeditated
0:35:56 was being planned by the likes of Hamas,
0:35:59 has greatly changed the atmosphere and country,
0:36:03 and it has made even my liberal friends in Tel Aviv
0:36:08 more or less write off the idea of the Palestinian state
0:36:13 and more or less acquiesce in a very aggressive policy
0:36:17 directed against Hamas, Palestinian Islamic jihad
0:36:18 and now Hezbollah.
0:36:23 So if you go back to the days after October the 7th,
0:36:26 when we were all reeling from the sheer horror
0:36:29 of what was done by Hamas and its Confederates,
0:36:31 the debate that was going on
0:36:35 within the Israeli government was,
0:36:39 do we hit Hamas or do we actually go after Hezbollah?
0:36:44 And Defense Minister Galant and other military advisers said,
0:36:46 we should go after Hezbollah
0:36:48 ’cause it’s the stronger of our enemies.
0:36:50 And the planes were on their way.
0:36:52 They had taken off to hit Hezbollah
0:36:56 when Netanyahu overruled that decision
0:36:59 and said, no, we go after Hamas first.
0:37:02 So as always, the Middle East needs to be understood partly
0:37:05 through the lens of Israeli domestic politics.
0:37:08 Many people forget just how important that is.
0:37:10 Given it’s the only democracy in the region,
0:37:12 you have to follow its democracy closely.
0:37:16 And that battle about when do we hit Hezbollah
0:37:18 has been going on ever since October.
0:37:22 And I think ultimately the realization is
0:37:26 you can’t postpone indefinitely a showdown.
0:37:29 A, because they keep acquiring more weaponry.
0:37:32 B, because your people near the Lebanese border
0:37:35 were evacuated many months ago now
0:37:36 and they wanna go back to their homes.
0:37:39 You’ve got a very large displaced population
0:37:42 that was moved away from the Lebanese border.
0:37:44 If you wanna get them back in time for the school year,
0:37:46 you have to do this now in August.
0:37:49 So I think, although one can never be certain,
0:37:51 I think we’re quite close to the brink of a new phase
0:37:53 of the Middle Eastern conflict,
0:37:57 which in many cases is a multi-front war already.
0:37:58 It’s not just about Gaza,
0:38:01 though that’s what has dominated media coverage.
0:38:05 It’s also about Iran’s direct attacks on Israel.
0:38:07 It’s about the Houthis.
0:38:10 This is a very complex picture,
0:38:13 but Hezbollah is the organization
0:38:17 that poses the most clear and present threat to Israel.
0:38:20 And sooner or later, there’s gonna be a showdown.
0:38:23 And I think the argument that has been made
0:38:26 by the Israeli security services and armed services
0:38:28 is why wait for them to hit us first?
0:38:30 Why give them the initiative?
0:38:32 If we take the initiative,
0:38:34 then we’re likely to suffer fewer casualties
0:38:35 than if they do.
0:38:38 – Yeah, I felt as if, I don’t know if assassinations
0:38:39 are the right word or strikes.
0:38:42 – We’re pretty bold in that Israel,
0:38:44 the way I read it was Israel believes
0:38:47 that they are coming to an end of the war in Gaza,
0:38:49 that the tunnels are nearly taken out.
0:38:51 They’ve kind of cut the region in half
0:38:53 and controlling the flow of Hamas.
0:38:56 I was actually struck by how bold this was
0:38:58 that they’re effectively willing to open up
0:38:59 a two-front war.
0:39:01 Is that your sense of it?
0:39:05 – Yes, I don’t think it’s born of overconfidence though,
0:39:06 rather the opposite.
0:39:10 I think there’s considerable disquiet
0:39:14 about the extent to which Hamas has really been destroyed.
0:39:18 There’s a sense that Israel has to act now
0:39:21 because the longer it waits,
0:39:24 the worse the situation becomes.
0:39:29 So I think this decision to force the issue
0:39:31 with Iran and with Hezbollah
0:39:35 has been taken because they realize
0:39:38 that they’re getting nowhere
0:39:39 with ceasefire negotiations,
0:39:42 with the hostage negotiations,
0:39:45 because there’s no good faith on the side of Hamas.
0:39:48 Their situation internationally
0:39:51 is one of relative isolation.
0:39:53 That’s not new in the history of Israel.
0:39:57 And the support that they’ve received
0:40:01 from Biden administration has been tepid and bivalance
0:40:03 and there are elements of the administration
0:40:06 that clearly still somehow to believe
0:40:08 that you can reach a modus invendi
0:40:11 with Iran or resuscitate the Iran nuclear deal.
0:40:15 So the Israelis have decided it might as well be now.
0:40:18 It’s not ideal, but if not now,
0:40:21 when is our situation really gonna be better next year?
0:40:24 I think that’s what’s going on.
0:40:27 – You think it’s fair to call the Biden support of Israel
0:40:28 or involvement of Israel as tepid?
0:40:31 My understanding is it’d be difficult to point to any country
0:40:32 in the world, in my view,
0:40:36 that has provided more steadfast support than the US,
0:40:38 immediately deploying carrier strike forces,
0:40:40 coordinating around intelligence,
0:40:43 coordinating around defense systems
0:40:45 for the missile attack from Iran.
0:40:47 You really think it’s fair to call the support
0:40:48 from the US tepid?
0:40:50 – Yeah, I do.
0:40:55 I mean, because apart from the initial fine words
0:40:57 that Joe Biden uttered,
0:41:03 that the support has been publicly internationally tepid.
0:41:08 Of course, these things are all relative.
0:41:10 The US is more supportive of Israel
0:41:12 than any European country.
0:41:14 Yeah, I mean, there are European countries
0:41:17 that are recognizing a Palestinian state this year,
0:41:19 even though it doesn’t exist,
0:41:21 doesn’t seem likely to exist.
0:41:24 But if you compare Biden’s administration
0:41:27 with say, Richard Nixon’s in 1973,
0:41:31 which was the last time Israel suffered a surprise attack,
0:41:34 the scale of the support was far greater then.
0:41:37 The US support for Israel is much less important economically
0:41:39 than it was 50 years ago.
0:41:42 Much, much smaller share of Israeli GDP
0:41:45 because the Israeli economy is actually a much bigger
0:41:46 and more innovative economy.
0:41:49 So one mustn’t make the mistake of thinking
0:41:52 that the US is absolutely crucial to Israel.
0:41:56 It’s much less crucial than it was from a military
0:41:58 as well as an economic standpoint,
0:42:00 but it’s not indispensable.
0:42:02 And so, for example, the big problem
0:42:04 that doesn’t get talked about nearly enough
0:42:07 is that Iran is now very close
0:42:09 to having a nuclear capability.
0:42:12 I asked a Biden official not so long ago,
0:42:16 are you in fact acting like they do have nuclear capability?
0:42:19 Are you treating them as if they already are
0:42:20 a nuclear arm power?
0:42:23 Because although you sent to aircraft carrier groups,
0:42:26 they didn’t actually do anything to punish Iran
0:42:29 for its obvious complicity in October the 7th.
0:42:33 And on the whole, the administration tried
0:42:36 after October the 7th to pretend like Iran wasn’t involved,
0:42:38 which got hard to do when the Iranians
0:42:41 unleashed a direct drone missile attack on Israel
0:42:44 for the first time in the history of the Islamic Republic.
0:42:47 So I think this kind of ambivalence
0:42:51 which characterizes the administration as a whole
0:42:53 is in marked contrast to the support
0:42:55 Israel could count on in the 70s
0:42:59 when that support was absolutely indispensable.
0:43:01 I’ll add one other point.
0:43:04 Back in the 70s, you did not have a wing
0:43:08 of the Democratic Party, the progressive wing
0:43:10 taking the side of the Palestinians.
0:43:15 And so the politics is very different in 2024
0:43:18 as compared with 1974.
0:43:21 In 1974, the Democratic Party was pretty strongly supportive
0:43:26 of Israel and had a significant Jewish element
0:43:28 which Nixon used to complain about
0:43:29 because he would always bitch
0:43:30 that he was doing so much for Israel.
0:43:33 And where was the gratitude typical Nixon?
0:43:34 But we’re in a very different world today
0:43:38 where, you know, although Joe Biden’s still kind of rooted
0:43:41 in that era, and I think he means it
0:43:44 when he talks about the US commitment to Israel,
0:43:47 there are plenty of people to the left of Joe Biden
0:43:49 who certainly don’t feel that way.
0:43:51 We’ll be right back.
0:43:56 – Hey, this is Scott Galloway,
0:43:58 host of the PropG podcast.
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0:45:16 ♪ It’s time for Tim’s ♪
0:45:17 – So let’s move to the US.
0:45:22 You said that Vice President Harris
0:45:24 is a California Democrat through and through,
0:45:27 therefore it’ll be hard to draw in moderate voters.
0:45:29 And also you’ve described the Republicans remain
0:45:31 the captives of the personality called the MAGA movement
0:45:35 and the Democrats remain the captives of the donor crats,
0:45:37 the wealthy friends of the Clintons and the Obamas.
0:45:39 Give us what you think the state of play is in the election
0:45:43 and who do you think is likely to prevail in November?
0:45:45 – Well, anybody who tells you
0:45:47 that you know the answer to that question
0:45:52 in August of an election year I think is having you on.
0:45:57 It’s once again, close to a coin toss.
0:46:02 We’ve gone back to where we were on the eve of the debate
0:46:06 that blew Joe Biden’s hopes of reelection up.
0:46:09 And the polls are gonna be noisy
0:46:11 probably for the next few weeks
0:46:14 because not only do you have the bounce
0:46:18 that comes with the novel nominee
0:46:19 but you have the problem bounce
0:46:22 that comes with the convention.
0:46:26 So my sense is that when all of this bouncing is over
0:46:28 and we get to Labor Day,
0:46:33 there will be some return to where we were in June
0:46:38 with Trump slightly ahead
0:46:41 but with some polls putting Harris ahead
0:46:43 and within the margin of error.
0:46:45 And then you’ll look at the states that are in play
0:46:49 and you’ll say, well, it’s still pretty close
0:46:51 in Pennsylvania and Wisconsin and Michigan
0:46:53 and maybe there are some other states
0:46:55 that have changed a bit since Harris became the nominee
0:46:58 but it’s close and that’s not surprising
0:47:02 because if you set aside the personalities of the candidates
0:47:07 which media they pay more attention to than is wanted,
0:47:11 American politics is really run by two machines,
0:47:13 Republican and Democratic party machines.
0:47:15 And these machines are very good at delivering
0:47:19 most states and most counties within most states
0:47:24 to one or other party leaving very little contested ground.
0:47:28 And the contested ground is contested partly
0:47:31 because it just has demographic peculiarities
0:47:34 and partly because there are independent voters
0:47:38 who are up for grabs who vote one way in one election
0:47:39 and another way in another.
0:47:42 So when you kind of take a step back
0:47:43 and look at American politics,
0:47:44 two things are really striking.
0:47:47 One, it’s a two-party system still
0:47:50 and there aren’t any others like that everywhere else
0:47:51 including in the English speaking world
0:47:54 where they used to have two-party systems like the UK,
0:47:56 doesn’t have a two-party system anymore
0:48:00 but the US has institutionalized duopoly
0:48:05 and it’s extraordinarily difficult to break that duopoly
0:48:08 even though about a third of the electorates
0:48:09 say they’re independents
0:48:12 and would rather that they had another option.
0:48:15 Second really striking thing is that one party
0:48:19 has retained elite control Democrats.
0:48:21 That’s why I use the term donor crats
0:48:25 ’cause the wealthy elites currently in the Hamptons
0:48:28 or in Aspen, that elite still controls the party.
0:48:31 They determined that Biden was no longer viable
0:48:33 and they agreed that it would be Harris
0:48:36 and that they wouldn’t have a contested or open convention.
0:48:39 All of this was done with phone calls and texts
0:48:44 between, oh, perhaps a dozen people who made the decision.
0:48:46 The difference with the Republican Party
0:48:48 is that their equivalents,
0:48:51 the wealthy Republican donors,
0:48:52 no longer control the party.
0:48:54 Those people would have far rather,
0:48:56 Ron DeSantis was the nominee
0:48:57 and when that didn’t work out,
0:48:59 they would far rather have had Nikki Haley
0:49:03 but they failed because a MAGA movement
0:49:06 that is in part a personality cult around Donald Trump
0:49:09 now controls the Republican Party.
0:49:11 And that’s what makes this election close
0:49:15 because if you had a better organized,
0:49:17 better disciplined Republican machine
0:49:20 and a more conventional candidate,
0:49:22 you would absolutely clean up in this election.
0:49:27 The Democrats are very vulnerable on key issues.
0:49:30 They had an inflation mistake that was predictable
0:49:32 and people haven’t forgiven them.
0:49:34 They have an immigration problem on their hands
0:49:36 because of the Southern border.
0:49:39 Those two issues alone should ensure
0:49:41 that the next president’s a Republican
0:49:45 but because the Republican Party is no longer
0:49:47 under the control of its elites,
0:49:51 it’s capable of making tremendous self-harming mistakes
0:49:55 and that may give Kamala Harris a chance
0:49:57 to be President of the United States.
0:49:59 – So just on the inflation issue,
0:50:03 I would argue it’s unfair to lay it at the feet of Biden.
0:50:05 My sense of inflation is too many dollars
0:50:06 facing too few products.
0:50:09 And with the amount of stimulus presented
0:50:11 with in both the Trump and Biden administration
0:50:14 where 85% of it was saved and it just went into the market
0:50:17 which sent prices skyrocketing
0:50:19 and had more money chasing too few products.
0:50:21 And ultimately, I would argue the culprit of inflation
0:50:24 is Putin who interrupted the supply chain.
0:50:27 Don’t you think both Trump and Biden share equal blame
0:50:29 along with Putin for inflation?
0:50:30 I just think it’s unfair to say
0:50:32 that Biden had a misstep around inflation
0:50:34 that’s any greater than the misstep around Trump.
0:50:35 Your thoughts?
0:50:39 – Scott, I seem to remember that your family,
0:50:43 Hales, as mine does from the East and from the East.
0:50:45 I don’t remember anybody in Shepard.
0:50:46 – Sandy Hills.
0:50:49 – Nobody in Sandy Hills ever said life was fair.
0:50:53 In fact, it was a recurrent refrain of my childhood.
0:50:56 Life isn’t fair, get used to it.
0:50:58 No, of course, politics is not fair
0:51:02 and the voters are deeply unfair to Joe Biden
0:51:04 when it comes to the performance of the economy
0:51:08 which practically any president of the last 100 years
0:51:11 would have seized with both hands
0:51:13 if it had been offered.
0:51:14 Here’s the deal.
0:51:18 You get full employment, you get surgeon growth,
0:51:21 you get investment in manufacturing structures.
0:51:24 – Markets touching all time highs.
0:51:26 – And the stock markets roaring
0:51:31 and inflation has a 9% high in the midterm year
0:51:35 and then it falls back towards 2%.
0:51:39 I mean, the presidents going all the way back 100 years
0:51:41 would have taken the data
0:51:46 that this president has presided over with relish
0:51:49 and yet the voters bitch about economy
0:51:53 to every pollster who calls them up and why is that?
0:51:55 So there are two theories as you know, Scott.
0:51:58 Theory one is they just don’t forgive 9%
0:52:01 because they got real, really used
0:52:02 to low single digit inflation
0:52:05 and high single digit inflation has made them mad
0:52:06 and they like the price level.
0:52:10 They don’t care about core CPI or core PCE.
0:52:12 They just like, hey, it’s still expensive
0:52:13 compared with what it was.
0:52:16 That’s explanation number one.
0:52:17 I have a lot of sympathy with that explanation
0:52:19 ’cause it tracks with my observation
0:52:21 of how ordinary people think about the economy.
0:52:23 But then there’s the Larry Summers point
0:52:24 which you probably know,
0:52:25 which is well, actually higher rates
0:52:27 might not hurt you through your mortgage
0:52:28 if you have a 30 year mortgage,
0:52:31 but it hurts you through a whole bunch of other things.
0:52:32 A whole bunch of other debts you have.
0:52:33 So you take your pick.
0:52:37 My basic view of this is that the Democrats
0:52:39 were dreaming last year when they said
0:52:41 they were gonna run on Bidenomics
0:52:45 ’cause the voters hate Bidenomics and it’s unfair.
0:52:51 I will add the fair part is that the inflation overshoot
0:52:55 in the US was a direct consequence of fiscal overkill
0:52:59 in 2021 that was the result of hubris
0:53:01 in the Biden administration.
0:53:03 They did not need to throw so much money at the economy
0:53:07 when the vaccine said 90% plus efficacy.
0:53:09 And I said that at the time,
0:53:10 Summers also said it,
0:53:14 that this was an avoidable policy error.
0:53:16 They did not need to juice the economy as aggressively
0:53:18 as they did most of the inflation in Europe
0:53:20 was Putin’s fault.
0:53:22 It was basically a supply shock.
0:53:25 About half or more the inflation in the US
0:53:26 was a demand effect,
0:53:30 which I think came from keeping the stimulus going too long
0:53:33 after the pandemic was beginning to dissipate.
0:53:37 – And then finally, as we wrap up here,
0:53:40 both of us have spent time in different directions
0:53:42 in different tenures and different parts of our life,
0:53:43 but in the UK and the US,
0:53:44 I would argue those are the two nations,
0:53:46 you know the best, they’re the two nations,
0:53:47 I know the best.
0:53:49 And my understanding is you’re now spending more time
0:53:52 in the UK after spending a lot of time in the US.
0:53:55 Can you compare and contrast what the difference
0:53:58 between business and politics and general lifestyle
0:54:01 between your observations, having spent time in both countries
0:54:03 and what it says about us?
0:54:08 – Yes, well, Britain, the United Kingdom of Great Britain
0:54:10 and Northern Ireland to be precise
0:54:15 is despite a brief foray with Republican government
0:54:16 in the mid 17th century,
0:54:20 a monarchy that retains a hereditary aristocracy,
0:54:22 even though they’ve just lost their seats
0:54:23 in the House of Lords.
0:54:26 It is a society still bound
0:54:30 to a striking extent by tradition.
0:54:33 And I noticed this having returned to spend more time
0:54:34 in the UK for family reasons,
0:54:38 because I’ve spent most of the last 20 years
0:54:41 in this revolutionary republic,
0:54:43 the United States of America,
0:54:47 which still has the character of a revolutionary republic.
0:54:50 When you view it through British eyes,
0:54:54 the way in which this election is being conducted,
0:54:56 the vituperation, the threat of violence,
0:54:59 the sheer nastiness is very reminiscent
0:55:02 of the American politics Charles Dickens encountered
0:55:07 when he visited early in the 19th century and was appalled.
0:55:10 British politics is still a game of cricket
0:55:13 between people who went to Oxford.
0:55:16 And you saw that very clearly when Rishi Sunak
0:55:21 was roundly defeated by Sir Keir Starmer on July 4th.
0:55:27 The handshakes, the jokes that I sail,
0:55:30 chap, Johnny Good Show, bad luck, oh boy.
0:55:33 I mean, all of that is exactly the way
0:55:36 in which British politicians have conducted themselves
0:55:38 over 200 years.
0:55:43 And so there’s a sense in which that continuity limits
0:55:46 the range of outcomes in British politics.
0:55:50 Even after a period of turmoil that Brexit created,
0:55:53 that period of turmoil was like periods of turmoil
0:55:55 in the 19th century over the corn laws,
0:55:59 over protectionism, turmoil over the Irish question.
0:56:01 Although we have periods of turmoil
0:56:04 and we’ve had years of multiple prime ministers before,
0:56:07 the system remains stable around,
0:56:09 particularly around Oxford University
0:56:13 because there seems to be one rule of British politics
0:56:14 and that is that the prime minister
0:56:15 has to have been to Oxford.
0:56:18 There are very, very few exceptions to that rule.
0:56:22 Having said all that, we would be deluding ourselves
0:56:26 if we didn’t recognize some similarities
0:56:28 and points of convergence.
0:56:31 I don’t think Taylor Swift is a smaller deal
0:56:34 in the UK than in the US.
0:56:36 I don’t think AI is a smaller deal.
0:56:38 – That’s what unites us, Taylor.
0:56:39 – I was the first.
0:56:41 The second was, of course, AI.
0:56:43 And the third is this potential
0:56:45 for conflict over immigration.
0:56:47 It’s tragic that three little girls were murdered
0:56:52 by, it appears, the teenage son of immigrants from Rwanda
0:56:57 when the girls were attending a Taylor Swift dance class.
0:57:02 And this has unleashed a kind of classic summer time
0:57:06 period of violence in the UK
0:57:09 that reminds us that it’s not all cricket
0:57:11 and well done, old Chuck,
0:57:14 that some of the trends that have produced populism
0:57:17 and political violence in the US
0:57:22 are in fact still to be found in the United Kingdom too.
0:57:23 – It’s interesting.
0:57:24 If I understand you, Greg,
0:57:26 you’re saying the coarseness of our discourse in the US
0:57:28 might be a feature, not a bug.
0:57:30 – Oh, it’s absolutely a feature.
0:57:35 And visitors commented on it from very early on
0:57:39 in the Republic, the sense that politics in America
0:57:42 is a contact sport, perhaps even a blood sport,
0:57:44 whereas in Britain, it’s cricket.
0:57:47 That goes back a very, very long way indeed.
0:57:50 But, you know, we’re divided by a common language,
0:57:55 united by a great deal of increasingly global,
0:57:58 popular culture, and both the United States
0:58:03 and the United Kingdom face the same sociological dilemma.
0:58:05 We are aging societies.
0:58:10 Half of the electorate in the United States is over 50.
0:58:13 It’s somewhat similar, perhaps even older in the UK.
0:58:16 Older voters are not only more numerous
0:58:17 relative than they used to be,
0:58:20 but they also turn out at higher rates than younger voters.
0:58:24 And older voters want two contradictory things.
0:58:27 They don’t really like inflation, that’s nothing new,
0:58:29 but they also don’t like immigration.
0:58:32 The problem is that if you don’t have large-scale immigration,
0:58:33 the inflation would have been higher.
0:58:36 Think about the counterfactual of closed borders
0:58:39 in the period of the last four years.
0:58:40 The inflation would certainly have been higher
0:58:43 ’cause the tight labor markets would have driven wages up.
0:58:45 And so it’s very hard to satisfy
0:58:48 what old American and old British voters want.
0:58:50 They also want healthcare.
0:58:52 In the US, this manifests itself
0:58:55 as a sort of health insurance inflation problem.
0:58:58 In the UK, the National Health Service rations healthcare,
0:59:01 and so everybody’s always grumbling that they take weeks,
0:59:03 take weeks to get a doctor’s appointment
0:59:07 and months, if not years, to get a surgical procedure.
0:59:09 But it’s the same basic problem.
0:59:11 It’s just that the systems are radically different
0:59:12 in the way that they work.
0:59:16 So as I go back and forth across the Atlantic,
0:59:17 which I have to do far too often,
0:59:19 I’m struck by the fact that
0:59:22 although we think of ourselves as being very different,
0:59:25 and in some institutional respects we are,
0:59:28 there’s real convergence in the experience
0:59:30 of being British and the experience of being American,
0:59:34 whether you’re an oldie or a table swift fan.
0:59:36 – Sir Neil Ferguson is a Millbank family senior fellow
0:59:39 at the Hoover Institution, Stanford University,
0:59:41 and a senior faculty fellow
0:59:42 at the Belfer Center for Science
0:59:44 and International Affairs at Harvard.
0:59:46 He’s also a columnist at the Free Press
0:59:48 and the author of 16 books,
0:59:51 including The Pity of War, The House of Rothschild,
0:59:54 and Kissinger, 1923 to 1968.
0:59:57 The idealist, which won the Council on Foreign Relations,
0:59:58 Arthur Ross Brice.
1:00:01 In 2024, he was knighted by King Charles III
1:00:02 for services to literature.
1:00:05 What a nice moment for you, Neil.
1:00:08 Congratulations on that, that’s a nice,
1:00:10 just a really nice thing for you and your family.
1:00:13 And he joins us from somewhere in New England.
1:00:16 Neil, I always love hearing from you as do our listeners.
1:00:18 It’s just, you just kind of have,
1:00:20 your comments are totally puncturing
1:00:22 and open me up to a viewpoint quite frankly
1:00:24 that I don’t share most of the time.
1:00:26 But really appreciate all your good work
1:00:28 and welcome back to the U.K.
1:00:30 Anyways, it’s great to catch up with you.
1:00:33 (upbeat music)
1:00:44 – Outdoor of happiness, where to live?
1:00:46 So I had two close friends,
1:00:48 Eddie Blau and David Frey,
1:00:50 who were my roommates, my sophomore year,
1:00:53 come hang out with me at Aspen
1:00:55 and they brought another close friend
1:00:57 from the fraternity, Michael Baruch.
1:01:00 It was just so wonderful to see all three of them.
1:01:02 But one thing I think they’ve missed out on
1:01:04 and that I’ve gotten right,
1:01:06 and that is I have lived in five different cities
1:01:08 and they chose not to leave their city.
1:01:11 And I understand they have nice lives.
1:01:13 But my advice to any young person
1:01:17 would be to take a risk and live in another city.
1:01:17 I think it informs you,
1:01:19 I think it’s an incredible experience.
1:01:22 And I think the analysis that young people do
1:01:23 is that they say,
1:01:26 well, I could never do better than to live in this city.
1:01:28 I have family here, I have friends here,
1:01:29 I’m doing well here.
1:01:30 I totally get that.
1:01:32 Now I’m living in London right now.
1:01:35 To be honest, I don’t like it as much as New York.
1:01:37 I don’t like Europe as much as the U.S.
1:01:39 But the key is not necessarily to do better,
1:01:40 it’s to do different.
1:01:42 And it informs you,
1:01:45 it creates a different appreciation
1:01:47 to look at the world through a different lens.
1:01:49 I think it’s really interesting to look at America
1:01:49 through a different lens.
1:01:51 What is looking in America
1:01:53 through a European lens done for me
1:01:55 makes me appreciate America more.
1:01:57 And despite all of our faults, all of our weirdness,
1:02:00 I mean, some of the things I love about the UK,
1:02:03 there’s not a discussion around assault rifles
1:02:06 or transgender rights or bodily autonomy for women.
1:02:07 These are givens there.
1:02:10 It’s like, well, of course we don’t allow assault weapons
1:02:11 in the general public.
1:02:13 Well, of course a woman should be able to decide
1:02:14 if she wants to terminate a pregnancy.
1:02:18 And I really enjoy that or appreciate it, I should say.
1:02:21 But I also recognize that there’s something about the U.S.
1:02:22 we’re willing to take risks.
1:02:23 We embrace risk.
1:02:25 It’s you meet with people around business.
1:02:27 It’s like, okay, we’re not interested
1:02:30 or we are interested, let’s go.
1:02:33 People are much more willing to take risks.
1:02:34 They’re kind of the distinction
1:02:36 or the thing that summarizes the distinction
1:02:39 between Europe and the U.S. for me is simple.
1:02:42 Millions of people looked around and said,
1:02:43 “You know what, I’m gonna get on a steamship
1:02:46 and go to this place, an unknown,
1:02:48 and I’m gonna try and forge a new life
1:02:50 and stake my claim if you will.”
1:02:52 And tens of millions of people decided,
1:02:53 “No, I’m just gonna hang here.”
1:02:55 That is the distinction.
1:02:58 The DNA, the type of people that came to America,
1:03:00 immigrants from all over the world decided to take a risk.
1:03:03 And it’s made me appreciate the risk aggressiveness,
1:03:06 the diversity of the U.S.,
1:03:09 the action orientation, sort of the ready-fire aim.
1:03:11 But I wouldn’t have that perspective
1:03:12 unless I’d lived in Europe.
1:03:14 And what I would suggest to any young person
1:03:15 is that if you have the ability,
1:03:17 especially with remote work,
1:03:20 if before you have aging parents
1:03:22 or you have kids of your own,
1:03:25 by all means, brother, get on a boat, a plane, a bus,
1:03:26 and live in a different city.
1:03:29 You don’t need to do better.
1:03:30 You need to do different.
1:03:32 (upbeat music)
1:03:34 This episode was produced by Caroline Shagren.
1:03:36 Jennifer Sanchez is our associate producer
1:03:38 and Drew Burroughs is our technical director.
1:03:40 Thank you for listening to The Property Pod
1:03:42 from the Vox Media Podcast Network.
1:03:43 We will catch you on Saturday
1:03:46 for “No Mercy, No Malice” as read by George Han.
1:03:48 And please follow our Property Markets Pod
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1:03:55 (upbeat music)
1:04:02 – Little muffin.
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1:04:46 – Hey, this is Scott Galloway,
1:04:47 host of the Property Podcast.
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Scott opens with his thoughts on the DOJ’s antitrust hammer on Google.
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