December 18, 2024 • 51 mins
An eventful election year concludes with the curtain soon to rise on a second Trump presidency and the possibility of dramatic changes to how Washington conducts itself.
Kimberley Strassel, the Wall Street Journal’s “Potomac Watch” columnist, joins Hoover senior fellows Niall Ferguson, John Cochrane, and H.R. McMaster for a temperature check on Trump’s comeback: the odds of his ending lawfare and weeding out recalcitrant bureaucracy while also extending his 2017 tax cuts; plus whether Elon Musk’s DOGE initiative will indeed make the federal government more efficient. Later, the fellows offer their choices of 2024’s winners and losers, and what they got right and wrong this past year, as well as something big to expect in 2025. Finally, Sir Niall reflects on the emotional pull of knighthood, having recently been on the kneeling side of his investiture ceremony at Windsor Castle.
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[MUSIC]
>> Bill Whalen (00:08):
It's Tuesday, December 17, 2024.
And welcome back to GoodFellows, a HooverInstitution broadcast examining social,
economic, political, andgeopolitical concerns.
I'm Bill Whalen,a Hoover Distinguished Policy Fellow.
I'll be your moderator forthe course in the next hour or so.
Looking forward to a spirited conversationfeaturing the three stars of our show,
the GoodFellows, as we call them.
And who are the GoodFellows?
They are the eminent historian Sir NiallFerguson, the economist John Cochrane, and
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former presidential national securityadvisor, Lieutenant General H.R. McMaster.
Niall, John, and H.R.are all Hoover Senior Fellows.
So, gentlemen, good to see you today.
We have two segments in mind.
The second half of the show,we're gonna look back at 2024,
talk about a few things we learned, pick afew winners and losers, if you're willing.
But first, the A block, we're gonnatalk about what's in store for 2025,
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specifically, what is heading Washington,DC's way.
And in times where we wanna talk aboutwhat's gonna happen on the banks of
the Potomac River, we need to talk toan expert on all things Washington.
We have the perfect guest today,that is Kimberley Strassel.
Kim Strassel is the author of the WallStreet Journal's Potomac Watch column as
well as a frequent panelist onthe podcast bearing the same name.
She also hosts a podcast in her own right,it's called All Things with Kim Strassel.
(01:14):
The latest show dropped earlier today.
She picks winners and losers.
Kim, I listened to it on the wayover to work, thank you for
not putting Hoovers in the loser column.
>> Kimberley Strassel (01:21):
Thank you, Bill [LAUGH].
>> Bill Whalen (01:24):
So, on with the show, Kim,
I see a disturbing patternin the American presidency.
If you go back to the last six presidents,going back to Bush 41, moving forward,
here's the problem.
One of two things happens, Kim,either their rule ends prematurely,
they leave after four years, orif they're given a second term,
that second term ends on a sour note.
So here we have Donald Trump, Kim,coming to Washington for a second term.
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He's brimming with ideas that are goingto fundamentally transform Washington,
the kind of ideas that meet resistance.
So two questions for you, Kim,number one, how does Donald Trump,
the inveterate golfer, avoid landing inthe same sand trap as his predecessors?
And question two, Kim,as you're a columnist,
that also makes you something ofa greater of all things Washington.
So what does President Elect Trumphave to do, Kim,
(02:07):
to get a passing gradefrom Professor Strassel?
>> Kimberley Strassel (02:10):
[LAUGH] Okay, wow, I wish I were as illustrious as you all.
I wish I deserved the professortitle instead of mere columnist and
talking head.
Look, I strongly,strongly believe that Donald Trump,
if he wants any hope of havinga further three years of productivity,
his first year is goingto have to be slam dunk.
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And the way he's gonna have to do that isto follow up on the priorities that he
laid out on the campaign trail.
In particular immigration andthe border, energy.
But also this tax reform.
And that tax reform,
as we all know that many of the provisionsexpire at the end of the year.
And I know that there is a greatdeal of enthusiasm right now,
(02:55):
as there always is in partiesfollowing an electoral victory.
But as we're seeing right now, asRepublicans go to the mat simply to pass
a government funding extension,they're clawing each other's eyes
out over something that should justbe as straightforward as can be.
I mean, that is nothing next tothe complexity of a tax reform.
(03:18):
So that's one thing thatwe should remember.
Mike Johnson's gonna havea two-member majority in the House,
that's not a lot of room for any error.
But the second thing that worries me justbriefly is I think that we're seeing a bit
of a movement in the Republican Partymore toward populist economic policies.
(03:40):
Whatever you think of those,
those were not necessarily the stapleof Donald Trump's first term.
And I think if they're gonna go down thatroad, they might face the prospect of
not having a replication of the economicsuccess that he did in his first term.
And I think those are the stakesof his first year.
And when we get a year from now, we willsee if they have passed something, and
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more importantly,we will see what it looks like.
A great A from Professor Strasselwould be a pro-growth Republican tax
package that really did help the economy.
>> Niall Ferguson (04:14):
Kim, I have a question,
I was in an argument with Larry Summerslast week in which he said, well,
in the second term, the ratio of hubristo competence is always very high.
And my response was this is nota regular second term, they just had
four years to figure out what theydidn't get right in the first term.
(04:36):
This has only happened once before.
Doesn't it make a big difference thatthis is a non-consecutive second term?
And isn't it gonna be, in that sense,fundamentally different from
the precedents that Billbegan his question with?
>> Kimberley Strassel (04:50):
I think it's two sides of a coin.
On one hand,I think you're absolutely right,
what those four years did was allowthem to work out what they did wrong.
And I think it's so important thatone of the top priorities everyone's
mentioning right now is this venture byElon Musk and Vivek Ramaswamy, and Doge.
(05:10):
Because one of the big lessons they tookaway from the first four years is that if
you have an entire federal bureaucracythat is arrayed against you in your
policies, you're gonna have a veryhard time getting anything done.
So I do hope that they continueto make that a priority.
It's gonna be really essential if theywanna get some of this sweeping agenda
accomplished.
(05:30):
On the other hand, andI think this gets to my point,
is that over those four years, you alsohad a lot of Republicans, I think,
took the wrong message fromDonald Trump's victory.
And like I said, doubled down on someideas that I don't necessarily think
are great for governance orsuccessful presidencies.
And those ideas are now floating around.
(05:50):
And our next door to Donald Trump,for instance,
many of them coming from hisvice presidential candidate.
And you're hearing Donald Trump say a lotof things this time around from a policy
perspective that he didn'tsay the last time around.
I don't necessarily think that thoseare improvements on first term.
I think that they are chasingthe political fortunes rather than
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good policy.
>> John Cochrane (06:13):
I ask them to what extent you see the chance for fundamental,
even more deeper fundamental changes?
Trump has reportedly transformed,especially by the assassination attempt.
He's got a competent team going in.
I see a chance forreally fundamental changes.
The Doges, if they can get throughthe thicket that regulation actually is.
(06:37):
It's not as easy as just burnhalf of the rule book, and
there's a whole lot of stuff standing inyour way, but it seems very exciting.
Are they gonna take the lawfare and simplydo unto others as was done unto them,
or are they gonna take this asa chance to sheath that sword and
put that thing away, fundamentally repair?
Are they gonna extend this tax or
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instead do a really fundamentalgrowth-oriented reform?
Are they going to deporta bunch of people or
fix the immigrationsystem in a durable way?
They've got this wonderful opportunity.
The vibe shift is, as Niall's brilliantcommon column put it out, for
(07:20):
big fundamental changes andthe temptation to
some unforced errors like createtrade wars that you don't need to do.
Do you see the chance of this happening,or is this just gonna be
a little more Washington picking back andforth as usual?
>> Kimberley Strassel (07:35):
Well, let's give them credit for some really big ideas,
right?
And I'd like to highlight two,one of them is Doge.
How long has it been sincewe've had a serious discussion
about fundamentallyrethinking Washington and
the way it works and the bureaucracy andthe operations of the federal government?
I would guess maybe the Grace Commission.
(07:57):
I mean, that's sometime in coming,so I think that, That's a big idea.
Also, Donald Trump's vision for energyproduction in this country, I think, are.
You cannot underestimate how importantthat is, because as we were beginning to
see at the end of his last term, theimplications not just for the US economy,
but from the nationalsecurity perspective.
Imagine a US that is a majorswing producer in the world,
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not beholden in any wayto other influences,
able to break some of Putin'shold over Europe, for instance.
Those are really big things.
I'd like to hope that there'san appetite to do some even bigger ones.
I think the question is whether ornot there's the time and space to do it.
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I mean, right there, those threethings that you've talked about, and
you also add immigration in there, and
what a huge challenge it would be to puta durable reform, as you say, John, in.
Right there if you got some of those done,
that would be more accomplished ina presidency than in a long time.
We obviously have some much biggerproblems that I'd like to see them
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addressed because we have this opening andthis vibe, as Niall said.
For instance, entitlement reform,social security,
the trust fund is going torun out of money here soon.
But the other piece of this I'd justlike to mention is you can have all
the great ideas in the world thatyou want in the White House.
And all the ambition and all the mettle togo out there and do it, and if Congress
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remains even half as dysfunctionalas it has been in recent years,
nothing will get done.
So that's the other piece.
The executive branch is one branch.
The legislative branch, let's justbe honest, has been a disaster for
a very long time.
>> H.R. McMaster (09:43):
Hey, Kim, can I pick up on one aspect of John's question,
which was specifically about the DOJ and
the degree to which it's important toreverse what you might call the far left,
you know, capture or influence indepartments and agencies [COUGH].
I'd like to ask you about DOJ as wellas the Department of Defense, and
I've written about the degree to whichthis radical DEI that pursues equality of
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outcome rather thanequality of opportunity.
And various elements ofcritical theories that judge or
evaluate people by theiridentity category.
And these are destructive to the warriorethos and combat effectiveness.
But what I'm concerned about in DOJ andthe Department of Defense in particular.
They're in need of real reform andreversal of some of these initiatives and
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propensities, but that mightthe cure be worse than the disease.
Is what I'm concerned about inpoliticizing further those departments and
agencies?
And what's your sense of the degree towhich there will be kind of responsible
reform that can help restore what Ithink is a fundamental problem or
confidence in our institutions?
>> Kimberley Strassel (10:48):
Yeah, from your lips to Trump's ears.
I mean,I can't think of a better way to put it.
And it does concern me.
We've had a lot of peoplethat have been nominated for
some of these positions, and I hear theword kind of retribution out of there or
elements of that as muchas I do rule of law.
(11:09):
And all we should be hearis the words rule of law.
And in a perfect world, andI keep saying this to everyone,
we want a DOJ that you rarely hearfrom unless they are out there
talking about super badguys that they took down,
the terrorists, the drug rings,etc, and so on.
(11:30):
When you're hearing from a DOJ that'sgoing after political figures or
a DOJ that is going after certainbusinesses in certain industries,
because those are disfavoredindustries at the time,
that's not a DOJ that'soperating under the rule of law.
It's operating under politics.
And, I mean, I really,really hope I'd like to.
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I've been talking to some senatorswho have been, for instance,
doing interviews with Kash Patel andothers.
They say that they feel encouragedby the focus of rule of law,
and also promises that tothe extent that anybody needs to
look into prior malfeasanceat some of these agencies.
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And let's be clear, misbehaving is notalways the same as breaking the law, okay.
And we need to make those distinctions.
You can be a bad official anddo bad things and not break the law.
And we need to make those clarifications.
But to the extent there needs to be someof that done, what they're hearing is that
the Trump administration wantsCongress to engage in that oversight.
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I think that's a different andbetter approach to it than having
Department of Justice go out andfurther politicize itself.
>> Niall Ferguson (12:47):
Kim, you're a keen observer of these processes of nomination
and confirmation.
How are they doing?
Clearly, it feels like a slickeroperation than eight years ago, but
I'm no Washington pro.
Give me a sense of how it looks to you.
>> Kimberley Strassel (13:04):
Heck, yeah, I mean, look, I think it said something.
Overall, if you look at Trump's nominees,I think it is fair this time to say that
they are a bit edgier thanthe last crew that came through.
And yet when it comes down to it,
I think most of them are ona glide path to be confirmed.
In some ways,it was a kind of clever strategy.
(13:26):
They flooded the zone with [LAUGH] somany names.
I was laughing with my bossthe other day on the phone.
I was like, remember those old days whenthe left would just take the nominee for
the cabinet that they cared about the mostand then they would just unleash on them?
Last time around it wasScott Pruitt at EPA.
(13:47):
They don't even have time to thinkabout Lee Zeldin's nomination for
EPA because [LAUGH] there's so
many folks out there that they'respreading their time around on.
So, I mean, I think even the onesthat kind of had a rocky entrance,
Hegseth, for instance,they are rebuilding some trust.
I still think the nominations thatare gonna have the hardest time, and
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that doesn't surprise me because ofthe names and their histories are Tulsi,
Gabbard and RFK JR.
Just because if you really lookat their records, they are so
in conflict with some of the bedrockprinciples of the conservative movement.
And in the end, I think some Republicansenators might have difficulty wrapping
their heads around that.
>> Bill Whalen (14:32):
Kim, I noticed with the Hessek nomination that he did something
that nominees do not dowhen they get into trouble.
Usually nominees historically, they hide,they just go talk to senators,
they stop the radar screen.
He did the opposite.
He went on a media offensive.
Does this suggest that maybe the ruleshave changed for nominations?
I'm also curious, Kim, as your thoughts onhow congressional Republicans feel about
Trump, do they fear Trump?
(14:53):
For example, Joni Ernst, she kindof quickly came around and Hexith,
why she's up for reelection in 2026.
>> Kimberley Strassel (14:58):
Yeah, I mean,
definitely electoral politicsare going to play in to this.
I mean, some of those Republicansenators who you might expect to be
a little bit more opposed to some of thesenominees are going to to think twice.
I mean, Joni Ernst,
there's that Tillis in North Carolina,some of these guys are up for reelection.
(15:20):
Interestingly, Susan Collins, she lives ina state that is actually blue enough that
it might even help her to vote againsta couple of [LAUGH] these nominees.
So I think that's a little bit ofa different scenario just for her.
I think the rules fornominees are a little different for
Trump's nominees and that ifthe Trump team has learned anything,
(15:43):
is that you get nowhere by turningaround and letting them beat on you.
They obviously love a fight andthrowing back a punch.
I also think it's that particularone that you mentioned is a little,
maybe even a little bit more unique toPete Hegseth, if you've ever met him.
He's a very outgoing kind of.
Kinda open person and
I think it's in his nature to wanna kindof get this out there and clear his name.
>> John Cochrane (16:05):
Kim, can I ask you as a Washington insider, sorry, you are one,
[LAUGH] you're our favorite spy.
>> Kimberley Strassel (16:11):
Thank you.
>> John Cochrane (16:13):
Once you can, you can be nominated,
you can become head of an agency, butif you're a little bit wacko and the,
all the, I dare not use the word deepstate, but you know what I mean.
If everybody in there is dead set againstyou, they know the rules and regulations.
Can you have any effect at all orwill those, they simply turn you off,
(16:35):
wait it out four years, I've heard somestories of how they can sandbag the chief.
Just don't tell you aboutEthics Rule 307-B4.2 and, and
next thing you know,you're in deep trouble.
>> Kimberley Strassel (16:47):
Yeah I'm about to write a column that is gonna be pro tips
for incoming Trump nominees.
And my first pro tip is going tobe chain yourself to the lawyer.
Because they wait for you to doan ethics violation something and
then they go to the press andthey rely on the press to turn it into a,
to make a mountain out of any molehill.
(17:09):
And they're just gonna have to be on theirguard for that, one of the biggest things,
and not to go too big into the weeds,but it's why the Doge effort is so
important is what we have seen.
I mean, obviously you look at thosevoting numbers for Republicans and
Democrats in Washington D.C.
it gives you a pretty good sense of whatdirection the entire bureaucracy leans.
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96% for Joe Biden anda lot of those people live there and
in the surrounding communities.
We know that this is a leftleaning bureaucracy, but
what they have figured out how to dois kind of move themselves around
the civil employee rules that we have,the civil service rules.
Which is supposed to guard againstpeople who were political activists or
(17:56):
prior political appointees from beingin very senior positions in government.
And there's these clever ways that they goabout do that, it's called burrowing in.
And those are the people everybodyneeds to be on the lookout for and
aware of because theywield enormous power.
If you think about the averagesize of any one of these agencies,
(18:17):
you're talking about tensof thousands of people.
The person at the top has to delegate,and it's those people that get the jobs,
the important jobs of making it done,you need to know who that layer is.
And one of the things Doge is looking at,and it was something that President Trump
was doing when he was on the way outlast time, and then Biden reversed it.
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But it's a provision thatwould allow you to remove or
move people in those positions givenby categorizing them as something else,
as someone with very seniordecision making ability.
It's not clear if that will withstandlegal scrutiny, it was something,
as I said, it was a regulationTrump was rolling out as he left.
(19:01):
They're certainly gonna try it again, butthat's gonna be key, what you just said.
>> John Cochrane (19:05):
Screen, You can't just fire people and you got to get them to do
what you want, and that's a talent, youhave to know how these organizations work.
>> Kimberley Strassel (19:12):
Yeah, you can't just say pretty please either,
that's not gonna get you anywhere.
>> H.R. McMaster (19:16):
Yeah one of the things I noticed as we were working on
President Trump's nationalsecurity strategy.
Was that there were a lot ofpeople within the departments and
agencies who knew that thesepolicies had to change 180 degrees.
The approach to China the approach tothe Middle east and Iran in particular,
and the more senior peoplewere the biggest impediments.
(19:39):
So I'm wondering if you thinkthere's an option for like,
early retirement,kinda like what Brian Chesky and
other other CEOs have done to say,hey here's a package for you.
This might be the time for you to leave,and in particular I'll tell you,
I never anticipatedthis would be the case.
But the most difficult department forme to work with oftentimes, or
really to collaborate with.
(20:00):
To give the President options orto assist with the implementation of
the President's very clear decisionswas the Department of Defense.
So I think that I think there is certainlyroom to move some people on, but again,
I hope the cure is notworse than the disease and
politicizes these departments andagencies even further.
I mean, I think the way it's doneis going to be really important.
>> Kimberley Strassel (20:22):
Well, I mean,
you're even better to talk about this thanI am because you had to live through it,
so you know about that kind ofresistance that you can face.
Like I said, I've just been exceptionallyencouraged by some of the more
granular ideas I've heard coming out ofDoge, and some of them are very technical.
And I mean, the ones that catcheveryone's attention are when Vivek says
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let's just fire everybody's whosename starts with an S or who didn't,
who didn't show up for work yesterday.
If you're teleworking andyou don't show up, you're gone.
There are some problems inherent in that,
but there is like some really smartpeople that are really digging
(21:07):
in right now to ways in which youcan unblock that bureaucracy.
And shift things around and
better ensure that you have a shotat getting your agenda in place.
>> H.R. McMaster (21:19):
Kim, just quickly then, I think there are a lot of efficiencies
too, I mean, all these government leasedbuildings, who's in those buildings?
Why do they need to be there?
How many of them are contractors, right?
So now with, with the AI relatedtechnologies, large language models,
I mean, we're,
I think we're overstructured in the areasof intelligence and analysts for example.
And many of them are they'refrom big they're big,
(21:41):
from big beltway bandit firms.
So I think there are, there are someof these techniques you can use,
like who the hell is leased buildingsthat can maybe simplify it a bit.
>> John Cochrane (21:51):
We don't want to just do bad things efficiently,
we want to reorient whatthe government does.
>> Kimberley Strassel (21:56):
That's kinda, I wrote something about that not long ago,
which is you need to care,it's not about the head count, right?
It's about going through government andmaking like the reason these people
exist is because they have a lot ofbad missions they've been given.
So get rid of the bad missions andthen they don't need to exist anymore.
(22:19):
The example I always gave is, I rememberI had a very well meaning congressman who
called me after the IRS targeting scandal.
And he said, what kind of rules can we setup to make sure that the IRS employees
can't do this again?
And I said, I think that's a verywell meaning thought process.
But if you really want to makesure that there aren't 60,000 IRS
agents that all have discretionto look at people's tax returns.
(22:43):
Come up with a flat tax, and then you haveno reason for them to be there anymore.
And that's your way of guarding against,so
get rid of the mission andyou can get rid of a lot of these people.
And I hope that's what another good ideaI'm hearing, and I hope they double.
They did it a little bit inthe first Trump term is not only
do we need to shut down or sell offsome of these buildings in Washington,
(23:05):
some of which, by the way,are only 20% used at the moment,.
That is a true figure.
But if you're going to open an office,make it be out in the heartland,
put it in the west coast,put it somewhere next to the people.
For instance, that the Interior Departmentis actually regulating rather than
the middle of D.C.It is actually like in the Interior maybe.
(23:27):
Yes, in the Interior.
>> John Cochrane (23:29):
[COUGH] There's lots of really good people in these agencies who
are hamstrung by ruleafter rule after rule,
many of them ethics rules anddisclosure rules and all this other stuff.
They kinda know what they want to do,they kinda know how to do it better, but
you dare not even move.
I think a great example came up last week,Boeing can't deliver for
(23:51):
four $3 billion a rehab 747 for Trump.
It's taken them 12 years, $3 billioncan't do it, the same company that,
Churned out 12,500 B17s in fouryears back in 1944, why is that?
Well, among other things,
everybody who works on this hasto have a top security clearance.
Well, how many guys who know how to wireup a bolt into an airplane have a top
(24:13):
security.
But there's a reason forthe top security clearance.
It's cleaning up rules,takes a lot of time and effort.
>> Kimberley Strassel (24:21):
The thing that should inspire everyone is if you want to
know why Elon Musk got soexcited about this idea, I don't know.
Have any of you readWalter Isaacson's biography of him?
>> Niall Ferguson (24:32):
Guilty.
>> Kimberley Strassel (24:33):
And there's some great anecdotes of his,
like he's losing his mindduring his SpaceX stuff.
Why are we paying for a $12,000 hinge for
this piece on the rocket when I can gobuy it at Home Depot for three bucks?
And you need someone who's asking why,why do we do it this way,
(24:56):
why must we do it this way?
I think he's kind of a perfectlypositioned person for that job.
>> Bill Whalen (25:01):
Can we have just a couple of minutes left of the segment?
So let's turn our attention to Joe Biden,last I saw,
he's still the President of United States,question,
the Hunter Biden pardon, what kind ofpall did that put over Washington?
And how do you think Trump isgonna handle the pardon issue?
He could come into office andhand out pardons to all J6 people.
Is he gonna hold back on pardons,what do you think is gonna happen next?
>> Kimberley Strassel (25:21):
The thing that was remarkable about that pardon,
it wasn't just that it was so stinky.
Obviously he'd said he wasn'tgoing to do it and then he did.
It's his own family member, I meanthe nepotism is extraordinary there.
But also the sweeping nature ofthat thing, all infractions,
anything he might have possibly done for10 whole years.
(25:43):
And in my mind what it is,is put aside the Hunter part of this.
This is just the latestexample of Joe Biden and
Democrats who lecture peopleall the time about the need for
standards and norms,breaking all the standards and norms.
Because of course water runs downhill and
the minute that that pardon came out,everyone was claiming he now issue
(26:07):
even more open ended pardons to otherpeople that you might come after.
That is just begging, by the way,
to have an enormous public debate aboutthe presidential pardon power and
people to talk about ways thatyou might end up restricting it.
I mean we're alreadyseeing those Articles,
we don't need to be having this argument.
The reason we are is because this guy,and he's done it in so
(26:29):
many ways,Democrats have over recent years.
I'm so tired of hearing the wordunprecedented in Washington.
We need to have four years where nobodyuses the word unprecedented in Washington.
>> H.R. McMaster (26:43):
Hey, as a historian, I'm all for that.
I mean, every time somebody use,I'm, well,
there may be a few times this hashappened in the past [LAUGH].
>> Niall Ferguson (26:50):
What unprecedented means, when you hear somebody say that
something's unprecedented, what they're infact telling you is they know no history.
And there are precedents fora lot that we've been talking about.
I keep coming back to that momentin 1980 when Ronald Reagan won,
in some ways a more emphatic victory, insome ways a less emphatic victory because
(27:12):
he didn't have the House, he had exactlythe same majority in the Senate.
He didn't really have the court.
In some ways, Trump enters Washington in asomewhat stronger position institutionally
than Ronald Reagan.
He's regarded with the same disdain bythe liberal elites that Ronald Reagan was
regarded with.
There are all kinds of foreign policyproblems, some of which are gonna, I
(27:34):
think, fall into Trump's lap just the waythe Iran hostage crisis fell into his lap.
Others of which are gonna be intractablein the way that some of the problems
Reagan had to grapple with were.
So there are precedents formuch of this, but
I don't think I can think of a precedentfor the Musk Trump partnership.
Kim, is this not something novel andwhat does it mean?
(27:56):
Because if you ask me who's the secondmost important person In Washington after
January 20,it's not the Secretary of State,
it's not the Treasury Secretary,it's Elon Musk.
>> Kimberley Strassel (28:07):
I think you're right.
I mean, the idea of the most powerfulpolitical figure in the world,
which Donald Trump, if he's not already,
he will be as soon as he takes up office,pairing up with the wealthiest and
kind of most big thinkingentrepreneur in the world.
It's kind of mind blowing consideringwhat could come out of that,
(28:29):
I do think that's unprecedented.
And my other unprecedent more things likeit was unprecedented to have an FBI raid
a president's house.
It was unprecedented to have a specialcounsel bring felony convictions against
an ex president.
Those are the unprecedented that I hopewe don't hear any more of in Washington.
>> John Cochrane (28:48):
There is a President Truman's Kulage's,
Treasury Secretary Mellon was the ElonMusk of his age and they got together and
cut the crap out of federal [LAUGH] andtaxes lowered taxes from 70% to 25%.
So there's always a precedent.
>> Niall Ferguson (29:04):
Nicely done, nicely done, John.
Nicely done,you get your historian's badge.
>> Bill Whalen (29:09):
Okay, Kim, unfortunately, we have to bounce this a lot more I'd love
to talk to you about, butI have a suggestion for you.
In 2025, I see three gentlemen who wouldbe excellent guests for your podcast.
>> Kimberley Strassel (29:19):
My gosh, I see four in fact.
It'll be wonderful,
I want all of your commitments topromise to come do my podcast soon.
>> John Cochrane (29:26):
Anytime.
>> Bill Whalen (29:27):
Okay fellows we are on [INAUDIBLE].
>> H.R. McMaster (29:29):
Thanks so much.
>> Kimberley Strassel (29:30):
Thank you, thank you guys.
>> Bill Whalen (29:31):
On the B block Gentlemen, adios, Reva Dirche, and
goodbye to 2024, let me begin witha question to the three of you.
For the second time now,
Donald Trump has been named Timemagazine's person of the Year.
Your choice for the individual of theyear, it could be somebody very obvious in
the news orsomebody who flew under the radar screen.
So, Niall, you wanna start?
>> Niall Ferguson (29:51):
Javier Milei, the president of Argentina,
has done what DOGE canonly talk about doing.
Because he took on pretty muchthe toughest assignment in the world,
which is clean up government in Argentina,bring inflation under control in
Argentina, stabilize publicfinances in Argentina.
(30:12):
I mean, it's mission impossible, andthe man has achieved extraordinary things.
And he didn't even have majoritiesin the Argentine parliament.
So he's my man of the year, he'sshowing that libertarian policies are,
in fact, doable andyou can reduce the deficit and be popular.
(30:33):
This is amazing stuff and
it should inspire all of us who believein free markets and above all, freedom.
Yeah, libertad carajo, go Milei.
>> Bill Whalen (30:42):
Let's turn to John Cochran,
who probably is now a crossing Mileioffice list of who [LAUGH] has managed to.
>> John Cochrane (30:47):
I just feel robbed.
The libertarian economist whosedogs are named Von Hayek and
Mises and Niall stole it from [LAUGH].
Yeah [LAUGH], I think the obvious personof the year isn't a person at all,
it's the artificial person.
AI is still growing by leaps andbounds, and
we're only gonna begin tosee what that leads to.
>> Bill Whalen (31:10):
HR.
>> H.R. McMaster (31:11):
Well, as a former National Security Advisor,
I wanna do a shout out to the appointedNational Security Advisor, Mike Waltz.
And I think he's just a great guy,he's not been really covered very much in
the media, but he served his countryextremely well in the army and then was
very, I think, active and a really strongvoice in the House of Representatives.
(31:32):
A lot of people don't know the work thathe did in the House on countering Chinese
influence in the Western Hemispherein particular.
So he comes in with a broadrange of knowledge,
I think an understanding of his role.
And so I wish him the best, so if one ofthe criteria is somebody who you want
to be the person of the year and, andwanna get behind, it's Mike Waltz.
>> Bill Whalen (31:51):
My choice honoring John Cochran is not an individual of an entity,
and I go with the state of Israel,which, in Michael Corleone fashion,
seemed to settle all scoreswith enemies this year.
>> John Cochrane (32:00):
Yeah, I was going to one of the biggest turnarounds.
I think we were forecasting bad things forhim a year ago and boy, him and
his state of Israel have really.
>> Bill Whalen (32:11):
Okay, guys, the flip side of the coin,
I don't want to call this person orindividual the loser of the year, but
just somebody who had a really,really wretched 2024, Sir Niall.
>> Niall Ferguson (32:20):
Well, I was about to nominate the Australian break dancer at
the Olympics who became the global figureof fun with the kangaroo breakdancing.
But you've prompted me, Bill,
to change my pick tothe Supreme Leader Khamenei.
Because Iran has surelybeen loser of the year if
(32:42):
Bibi Netanyahu has turnedit around spectacularly.
The principal loser of that turnaroundis surely the Islamic Republic of Iran,
which turned out to have verylittle air offensive capability.
Two major strikes in Israel,neither of them really landed a punch.
And then it revealed itself to have verylittle in the way of air defenses when it
(33:02):
came under attack from Israel.
And now the regime is,
is really on the ropes in a way thatvery few people predicted a year ago.
So I'll go with loser of the year,the Iranian Supreme Leader.
>> Bill Whalen (33:14):
HR.
>> H.R. McMaster (33:15):
I'll stay in the same category as Axis of Aggressors [LAUGH],
and, and I'll say Vladimir Putin,because there still
is this narrative among much of the westthat he's some kind of a strong man.
I see him as both a bully anda coward at the same time.
People characterize himas a great strategist.
I mean, look at the folly that he'sengaged in, not only in Europe with
(33:39):
the assault on Ukraine, butalso in Syria where he's the big loser.
President Trump used to say, hey,do you like calling terrorists losers?
He would ask me.
I'm like, yeah,I like calling them losers.
I think he should realize thatVladimir Putin is a loser.
600, 000 casualties in Ukraine,withdrawing and
bombing their equipment on theirway out as they run out of Syria.
(34:03):
He's sitting on a pile ofcash that he can't convert or
use in any payment systems.
He tried to sell bonds and failed.
Spending 47% of his GDP on defense andstagflation is setting in.
And hey, he's a loser.
And I hope that President Trumprealizes that and
recognizes that he's in a positionof strength relative to Putin and
(34:24):
should bolster the Ukrainians and dealwith Putin from this position of strength.
>> Bill Whalen (34:30):
John.
>> John Cochrane (34:31):
In trouble, personifying it.
This is really a remarkable moment.
We've seen the vibe shift.
Well, we're past peak woke andit's on the way down.
It's fighting hard, butit's on the way down.
Who is the person who mostpersonifies what is about
to be swept away in this wonderful tide?
(34:51):
I'm having trouble finding it within myown narrow discipline of economics I'll
pick the, the Piketty, the Stiglitz,the lists of dozens of Nobel Prize winning
economists who once a year signjoint letters saying that malaise,
Argentina is going to fail.
Venezuela is wonderful, Donald Trumpis going to ruin the world and
whatever the heck goes on.
(35:12):
And then a year later,they're completely wrong.
The tide of history is sweepingthis whole movement out.
Maybe you guys can have a betterpersonification of just what is
being swept out, but that I'm stilllooking for the person most in charge.
>> Bill Whalen (35:29):
John, this is your chance to say goodbye to Paul Cronman.
[LAUGH] Idea.
Small but.
Okay, guys, something you got rightin 2024 is something you got wrong.
HR you want to kick off?
>> H.R. McMaster (35:41):
Hey, well, it's been for years.
It's been for years.
I wrote about this in At War WithOurselves when I was recounting really how
Putin and
Erdogan tried to create this illusion thatAssad was in a strong position, right?
It was inevitable that he would remainin place after the Syrian civil war.
And I list all the reasons in the book forwhy Assad was profoundly weak.
(36:03):
I always thought he was profoundly weakand of course he was profoundly weak.
And that his weakness was exposedafter Israel's decisive action that
John alluded to earlier against Hezbollahand kicked the legs out from under Assad,
who was reliant on Hezbollah andIran's proxies broadly.
(36:24):
So, yeah, I think I was right about Assad.
>> Bill Whalen (36:26):
Okay, so, Niall Ferguson, you never get anything wrong, right?
>> Niall Ferguson (36:30):
Everybody gets things wrong.
It's very important to keep score andrecognize what you got wrong.
I'll come to what I got wrong in a minute,but I did predict consistently not
only that Trump would be reelected,but that he would get the nomination,
which was by no means everybody'sexpectation 12 months ago.
So I'll go back and look with prideon my Spectator cover story on
(36:52):
Trump's second act,which came out in the spring of 2023.
What I got wrong, I thought the electionwould be closer than it was.
And in that sense, I fell victim to polldelusion instead of just listening to
the financial markets andthe prediction markets,
who turned out to be much moreaccurate than the pollsters.
>> Bill Whalen (37:11):
Did you. Who was closer in their prediction, you or
Ion Persieli, your wife?
>> Niall Ferguson (37:16):
That's a good question.
I think she was.
She's got much better judgmenton politics than I have.
And she was more confidentin the final few days when
I got quite jumpy andnervous about the polls.
So, yeah, she was able to justignore the rogue Iowa poll,
(37:37):
whereas I was kind ofgnashing my teeth about it.
So she's always going to beat me onpolitical judgment because she's actually
done politics where all I do is sitin libraries and read about it.
>> Bill Whalen (37:47):
Mm hmm, hey, John, we waited for you.
We read it.Saving the best for last.
Give us something you got right in2024 and something you whiffed on.
>> John Cochrane (37:54):
Well, the most important thing,
given limited time is what I whiffed on.
And I am so glad I was wrong.
I also thought,would it be a little closer election.
But I thought no matterwhat the election would do,
that there would be chaos afterwards.
And I think I went on this show andmade that prediction over and
over again that there would belegal battles, that there would
(38:14):
be a repeat of battles in the streetsthat made 2020 look like nothing.
There would be the hashtag resistance.
There would be heaven knowswhat on the inauguration.
There would be lawfare like crazy.
There would be an attempt to notcertify Trump's election in the Iowa.
Well, we'll see, butthat's not going to happen.
(38:35):
That the Democrats and the whole left,
that the woke religion wouldjust fold over and give up.
I think is just remarkable so that we'renot having civil disorder about this is
good enough news, but that everybodyseems to accept Trump is the legitimate
president and now we gotta run to him andget our little policy wins in.
(38:58):
This is just remarkable goodnews that I was wrong about.
Thank goodness.
>> Bill Whalen (39:03):
I'm with both you and Niall and John.
John, with both you and Niall on this.
I was also surprised by the breadth ofthe victory for Trump and also surprised,
John, that just all the resistancehas just really calmed down so far.
Winning the popular vote cando magical things, I guess.
Okay, guys,channeling your inner HR McMaster,
give me a reason for optimism in 2025.
And HR, since this is your name,your rules, your game, you go first.
(39:26):
Reason for optimism.
>> H.R. McMaster (39:27):
Okay, I think that contrary to expectations, Donald Trump
will be a tremendous source of stabilityin the world in the coming year.
And the reason is, when you look aroundto other leaders across the free world,
these countries are in a periodof political turbulence.
And a lot of Trump's agenda,I mean, is the agenda for
(39:48):
Europe and Japan andother parts of the free world.
I mean, energy security, supply chainresilience, invigorating the industrial
base, for example,countering Chinese economic aggression.
The list goes on.
So, I think there'sa tremendous opportunity for
the Trump administration to putforward a very powerful international
(40:09):
agenda that will be quitecontrary to the expectations.
And in fact,alliances could be stronger and
there could be a great deal moreinternational cooperation on these issues.
>> Bill Whalen (40:20):
John, an optimistic note for 2025.
>> John Cochrane (40:23):
Well, I'll again plug Niall's vibe shift essay,
which I thought was just wonderful.
This is a wonderful moment,there's a worldwide vibe shift.
Yes, there's a libertarianpresident of Argentina,
there's Giorgia Meloni in Italy.
There is soon that man of the yearnext year is gonna be Pierre Polavier,
who's gonna take over in Canada.
(40:43):
Looks like the Tories are gonna wakeup in Britain and throw Labor out and
maybe rediscover theirinner Margaret Thatcher.
The Europeans have figured out thatthey've regulated themselves to death,
their economic policies are awful,and that they need a doge, and
their immigration policies need fixing.
Climate catastrophism isgiving its way to pro-growth
(41:08):
policies around the world andpoliticians who embody.
Yeah, there's some populism in there,there's some potential tariffs and stuff.
But compared to the sizeof the vibe shift, and
our enemies are folding[LAUGH] before our eyes,
just the threat of little Donald Trumpcoming in and they seem to fall apart.
(41:30):
Look what's happened in Syria.
There's opportunities, there's dangers,but it's just a wonderful inflection
point and great opportunities with dangersfor wonderful things to happen and
kind of the nightmare of the last fourto eight years or 12 years to be over.
>> Bill Whalen (41:47):
John, I want you to share with the panel something we
were talking about beforewe came on the air.
And I was lamenting how many countrieshave political chaos right now, and
you were saying that, well, a little chaosevery now and then is not a bad thing.
Democracy is supposedto be chaotic [LAUGH].
>> John Cochrane (42:00):
Yeah, I think we said there was a unified government with
a unified policy in Russia in 1950s andin Germany in 1939,
that wasn't so great [LAUGH].
People debating within norms, rules,tradition, the ability to lose
elections and come back another day,rule of law and stuff and stuff.
But a little bit of chaos is a wonderfulthing, especially right now.
(42:23):
There are times when,they say decades happen in a week,
and then weeks happen take decades.
We're in a decades happen in a weak momentwith some wonderful opportunities and
chaos along the way, great.
>> Niall Ferguson (42:34):
Just to reassure our listeners, John wasn't quoting Lennon
there because that quote is oftenattributed wrongly to Lennon.
It's actually correctly attributedto Friedrich Engels, so,
only slightly better, John.
Or it's Jefferson, a little revolutionarynow and there, it's not a bad thing.
But Niall, do you wanna buildon what John just said and
(42:55):
then give us your prediction for 2025?
So, I worry about the vibe shift being so
universally hailed that we all succumbto euphoria and perhaps even hubris.
I'm kind of racking my brains thinking,
what is it that I'm missingthat's gonna ruin this?
(43:20):
Because it does feel a bittoo good to be true, and
history tells you to watch out forthat thing that you took your eye off.
What is the thing that will happennext year that will blindside us,
that we will curse ourselves fornot seeing?
And I throw a reason to be nervous.
(43:42):
I mean, I look at the stock market,it's tremendously elevated on the back of,
well, amongst other things,fiscal profligacy for four years.
And the new administration is committed,yeah, to renewing tax cuts, but
also to some kind of fiscal stabilization.
(44:02):
And I just keep asking myself,
if you combine that with a prettyaggressive policy towards China,
60% tariffs, maybe you have a littlebit more pressure on the Taiwan issue.
Taiwan is where all the semiconductorscome from that the AI boom depends on.
So, while everybody's feeling euphoric,being a Glaswegian,
(44:23):
I have to sit there worrying aboutthe thing that we're missing,
and the thing we could miss is thatsentiment in financial markets.
John will confirm this,can change dramatically from
bullish to bearish without whatseems that big a vibe shift.
So, I'm gonna just put up a warning,that you can have a very,
(44:45):
very enjoyable post election vibe shift.
I think the minute he's sworn in,and leaves Mar-a-Lago for
the icy wastes of Washington DCentirely surrounded,
as Kim said earlier,by Democrats in the bureaucracy.
I think the vibe is gonna shiftagain in a different direction, and
(45:07):
some of the realities are gonna hit homethat perhaps investors won't find quite so
delicious when they're being enacted.
So, just a little word of caution,
as I brought vibe shift into the globaldomain, beware the vibe reverse.
>> John Cochrane (45:23):
I wanna follow on just quickly.
Yeah, an Uber driver was recentlyasking me about Bitcoin and
which stocks he thought.
And I remembered my historythat in the 1920s people say,
every waiter in busboy is asking forstock tips, and
that's when I forget which financier said,that's when I knew to sell [LAUGH].
>> Bill Whalen (45:42):
Niall, almost got you off the hook, Niall,
reason for hope, reason foroptimism in 2025.
>> Niall Ferguson (45:47):
Well, I'm really looking forward to the great dynastic
union that will bring the twohouses of Trump and Musk together,
cementing at least threegenerations of dynastic unity.
So, my prediction for
2025 is that the wedding of the yearwill be Barron Trumps to Vivien Musk.
(46:08):
Only through marriage can these two greathouses be united, and all the predictions
that they'll fall out and the afternoonof inauguration day be laid to rest.
Think Game of Thrones, people.
>> Bill Whalen (46:19):
Okay, well put.
Gentlemen, good segment, we're gonnaclose this by talking about 2024,
which went from the surreal to surreal.
And what I'd like to point out to ourviewers is that actually we now officially
have an actual night on the show.
Sir Niall Ferguson,
recently invested into knighthood,receiving his honor from King Charles.
Niall, I want your thoughts on, what wereyou thinking when this was going on?
(46:41):
Besides, obviously, please, I don't wannafall off while I'm kneeling down, but
just, what goes through a man's mindwhen he's getting this incredible honor?
>> Niall Ferguson (46:49):
It's true that one worries quite a lot about tripping or
bungling the quite complexchoreography of an investiture.
But I was thinking quite hardabout all the people and
institutions that I owed for that honor.
(47:11):
And I do feel strongly that any kindof recognition one receives, and
I dare say HR feels the sameway about his military honors.
It's really not about you,it's about your role, really,
as an intermediary between your parents,your grandparents,
the institutions that taught you, andthat which you have sought to serve.
(47:35):
And I did feel tremendous sense ofpride that that had happened and
my mother had lived to see it.
That meant a huge amount to me,as I said to His Royal Highness.
And that was my next question,what did your mother say?
Well, the Scots are cautiousabout any expression of pride.
(47:56):
In fact, my mother alwayscomments that she was bright.
Brought up not to feel pride, and
I think that's a kinda salutarywest of Scotland sentiment.
But, yeah, it meant a lot,I think, it meant a lot, and
it would have meant a hell ofa lot to my grandparents, too.
So, yeah, one sort of connectedthrough the generations,
(48:19):
Edmund Burke has this great line in thereflections of the revolution in France.
When he says that the real socialcontract is between the generations,
between the living, andthe dead, and the unborn.
I tell you,I've never felt that contract so
binding as at Windsor Castlekneeling before the king.
(48:41):
The sense of one's small place inthe great scheme of the generations
across the centuries washumbling in a very powerful way.
>> Bill Whalen (48:52):
John and HR were not doing a live show for a while, but
should we do an all kilt showthe next time we get together or
just have Sir Niall in his kilt?
>> Niall Ferguson (48:59):
Well, I recommend the kilt as an article of attire, and
I think the names McMaster and Cochraneare eminently eligible for kilt wearing.
>> H.R. McMaster (49:07):
We could all be wearing them right now and no one would know.
>> John Cochrane (49:10):
[LAUGH] Niall, I'll celebrate what you just said,
Americans are kinda footloose,the sense that you just evoked of
a connection to family and place,that goes over and institutions.
That goes over generations,over centuries and hundreds of years,
we Americans largely don't have that,so congratulations for it.
>> Niall Ferguson (49:32):
Thank you, John.
>> Bill Whalen (49:34):
Before we sign off for 2024, a housekeeping note,
the four of us on the show would liketo congratulate Shauna Farley for
being named the Hoover Institution'sinaugural Chief Creative Officer.
Why am I mentioning this?
Because it was almost five years ago thatShana had an epiphany, the way she saw it,
we had three prominent Hooverscholars under house arrest
thanks to Covid restrictions.
So why not put the threeof them on air and
(49:54):
share their wisdom with the rest of theworld, and thus was created GoodFellows.
Shana, congratulations,we treasure working with you,
and I hope you don't feel likeOppenheimer having all kinds of regrets
over what you've unleashed upon mankind.
[LAUGH] Gentlemen,anything you'd like to add?
>> H.R. McMaster (50:09):
Hey, Shana, you're the best.
Yay.
>> Niall Ferguson (50:12):
Congratulations.
>> John Cochrane (50:13):
It's such a pleasure working with you,
creative stuff done, hang in there.
>> Bill Whalen (50:19):
Let me be the first to say, hail to the chief.
>> Shana Farley (50:22):
Thank you guys so much.
[LAUGH]>> Bill Whalen: And on that note, we're
going to end Goodfellows for 2024, butfear not, we'll be back in about middle of
January, right about the time Donald Trumpis taking office with a new show.
So we wish you and yours a very happy,very joyous holiday,
on behalf of my colleagues, Sir NiallFerguson, John Cochrane, H.R. McMaster.
(50:42):
Our guest today, Kim Strassel,also here at the Hoover Institution,
thanks again for watching.
Thanks foryour continued support of the show,
look forward to seeing you next year,take care.
[MUSIC]
If you enjoyed this show and
are interested in watchingmore content featuring H.R.
McMaster, watch Battlegrounds,also available at hoover.org.
[MUSIC]
>> Bill Whalen (00:08):
It's Tuesday, December 17, 2024.
And welcome back to GoodFellows, a HooverInstitution broadcast examining social,
economic, political, andgeopolitical concerns.
I'm Bill Whalen,a Hoover Distinguished Policy Fellow.
I'll be your moderator forthe course in the next hour or so.
Looking forward to a spirited conversationfeaturing the three stars of our show,
the GoodFellows, as we call them.
And who are the GoodFellows?
They are the eminent historian Sir NiallFerguson, the economist John Cochrane, and
(00:32):
former presidential national securityadvisor, Lieutenant General H.R. McMaster.
Niall, John, and H.R.are all Hoover Senior Fellows.
So, gentlemen, good to see you today.
We have two segments in mind.
The second half of the show,we're gonna look back at 2024,
talk about a few things we learned, pick afew winners and losers, if you're willing.
But first, the A block, we're gonnatalk about what's in store for 2025,
(00:53):
specifically, what is heading Washington,DC's way.
And in times where we wanna talk aboutwhat's gonna happen on the banks of
the Potomac River, we need to talk toan expert on all things Washington.
We have the perfect guest today,that is Kimberley Strassel.
Kim Strassel is the author of the WallStreet Journal's Potomac Watch column as
well as a frequent panelist onthe podcast bearing the same name.
She also hosts a podcast in her own right,it's called All Things with Kim Strassel.
(01:14):
The latest show dropped earlier today.
She picks winners and losers.
Kim, I listened to it on the wayover to work, thank you for
not putting Hoovers in the loser column.
>> Kimberley Strassel (01:21):
Thank you, Bill [LAUGH].
>> Bill Whalen (01:24):
So, on with the show, Kim,
I see a disturbing patternin the American presidency.
If you go back to the last six presidents,going back to Bush 41, moving forward,
here's the problem.
One of two things happens, Kim,either their rule ends prematurely,
they leave after four years, orif they're given a second term,
that second term ends on a sour note.
So here we have Donald Trump, Kim,coming to Washington for a second term.
(01:47):
He's brimming with ideas that are goingto fundamentally transform Washington,
the kind of ideas that meet resistance.
So two questions for you, Kim,number one, how does Donald Trump,
the inveterate golfer, avoid landing inthe same sand trap as his predecessors?
And question two, Kim,as you're a columnist,
that also makes you something ofa greater of all things Washington.
So what does President Elect Trumphave to do, Kim,
(02:07):
to get a passing gradefrom Professor Strassel?
>> Kimberley Strassel (02:10):
[LAUGH] Okay, wow, I wish I were as illustrious as you all.
I wish I deserved the professortitle instead of mere columnist and
talking head.
Look, I strongly,strongly believe that Donald Trump,
if he wants any hope of havinga further three years of productivity,
his first year is goingto have to be slam dunk.
(02:32):
And the way he's gonna have to do that isto follow up on the priorities that he
laid out on the campaign trail.
In particular immigration andthe border, energy.
But also this tax reform.
And that tax reform,
as we all know that many of the provisionsexpire at the end of the year.
And I know that there is a greatdeal of enthusiasm right now,
(02:55):
as there always is in partiesfollowing an electoral victory.
But as we're seeing right now, asRepublicans go to the mat simply to pass
a government funding extension,they're clawing each other's eyes
out over something that should justbe as straightforward as can be.
I mean, that is nothing next tothe complexity of a tax reform.
(03:18):
So that's one thing thatwe should remember.
Mike Johnson's gonna havea two-member majority in the House,
that's not a lot of room for any error.
But the second thing that worries me justbriefly is I think that we're seeing a bit
of a movement in the Republican Partymore toward populist economic policies.
(03:40):
Whatever you think of those,
those were not necessarily the stapleof Donald Trump's first term.
And I think if they're gonna go down thatroad, they might face the prospect of
not having a replication of the economicsuccess that he did in his first term.
And I think those are the stakesof his first year.
And when we get a year from now, we willsee if they have passed something, and
(04:04):
more importantly,we will see what it looks like.
A great A from Professor Strasselwould be a pro-growth Republican tax
package that really did help the economy.
>> Niall Ferguson (04:14):
Kim, I have a question,
I was in an argument with Larry Summerslast week in which he said, well,
in the second term, the ratio of hubristo competence is always very high.
And my response was this is nota regular second term, they just had
four years to figure out what theydidn't get right in the first term.
(04:36):
This has only happened once before.
Doesn't it make a big difference thatthis is a non-consecutive second term?
And isn't it gonna be, in that sense,fundamentally different from
the precedents that Billbegan his question with?
>> Kimberley Strassel (04:50):
I think it's two sides of a coin.
On one hand,I think you're absolutely right,
what those four years did was allowthem to work out what they did wrong.
And I think it's so important thatone of the top priorities everyone's
mentioning right now is this venture byElon Musk and Vivek Ramaswamy, and Doge.
(05:10):
Because one of the big lessons they tookaway from the first four years is that if
you have an entire federal bureaucracythat is arrayed against you in your
policies, you're gonna have a veryhard time getting anything done.
So I do hope that they continueto make that a priority.
It's gonna be really essential if theywanna get some of this sweeping agenda
accomplished.
(05:30):
On the other hand, andI think this gets to my point,
is that over those four years, you alsohad a lot of Republicans, I think,
took the wrong message fromDonald Trump's victory.
And like I said, doubled down on someideas that I don't necessarily think
are great for governance orsuccessful presidencies.
And those ideas are now floating around.
(05:50):
And our next door to Donald Trump,for instance,
many of them coming from hisvice presidential candidate.
And you're hearing Donald Trump say a lotof things this time around from a policy
perspective that he didn'tsay the last time around.
I don't necessarily think that thoseare improvements on first term.
I think that they are chasingthe political fortunes rather than
(06:12):
good policy.
>> John Cochrane (06:13):
I ask them to what extent you see the chance for fundamental,
even more deeper fundamental changes?
Trump has reportedly transformed,especially by the assassination attempt.
He's got a competent team going in.
I see a chance forreally fundamental changes.
The Doges, if they can get throughthe thicket that regulation actually is.
(06:37):
It's not as easy as just burnhalf of the rule book, and
there's a whole lot of stuff standing inyour way, but it seems very exciting.
Are they gonna take the lawfare and simplydo unto others as was done unto them,
or are they gonna take this asa chance to sheath that sword and
put that thing away, fundamentally repair?
Are they gonna extend this tax or
(07:00):
instead do a really fundamentalgrowth-oriented reform?
Are they going to deporta bunch of people or
fix the immigrationsystem in a durable way?
They've got this wonderful opportunity.
The vibe shift is, as Niall's brilliantcommon column put it out, for
(07:20):
big fundamental changes andthe temptation to
some unforced errors like createtrade wars that you don't need to do.
Do you see the chance of this happening,or is this just gonna be
a little more Washington picking back andforth as usual?
>> Kimberley Strassel (07:35):
Well, let's give them credit for some really big ideas,
right?
And I'd like to highlight two,one of them is Doge.
How long has it been sincewe've had a serious discussion
about fundamentallyrethinking Washington and
the way it works and the bureaucracy andthe operations of the federal government?
I would guess maybe the Grace Commission.
(07:57):
I mean, that's sometime in coming,so I think that, That's a big idea.
Also, Donald Trump's vision for energyproduction in this country, I think, are.
You cannot underestimate how importantthat is, because as we were beginning to
see at the end of his last term, theimplications not just for the US economy,
but from the nationalsecurity perspective.
Imagine a US that is a majorswing producer in the world,
(08:21):
not beholden in any wayto other influences,
able to break some of Putin'shold over Europe, for instance.
Those are really big things.
I'd like to hope that there'san appetite to do some even bigger ones.
I think the question is whether ornot there's the time and space to do it.
(08:42):
I mean, right there, those threethings that you've talked about, and
you also add immigration in there, and
what a huge challenge it would be to puta durable reform, as you say, John, in.
Right there if you got some of those done,
that would be more accomplished ina presidency than in a long time.
We obviously have some much biggerproblems that I'd like to see them
(09:04):
addressed because we have this opening andthis vibe, as Niall said.
For instance, entitlement reform,social security,
the trust fund is going torun out of money here soon.
But the other piece of this I'd justlike to mention is you can have all
the great ideas in the world thatyou want in the White House.
And all the ambition and all the mettle togo out there and do it, and if Congress
(09:28):
remains even half as dysfunctionalas it has been in recent years,
nothing will get done.
So that's the other piece.
The executive branch is one branch.
The legislative branch, let's justbe honest, has been a disaster for
a very long time.
>> H.R. McMaster (09:43):
Hey, Kim, can I pick up on one aspect of John's question,
which was specifically about the DOJ and
the degree to which it's important toreverse what you might call the far left,
you know, capture or influence indepartments and agencies [COUGH].
I'd like to ask you about DOJ as wellas the Department of Defense, and
I've written about the degree to whichthis radical DEI that pursues equality of
(10:05):
outcome rather thanequality of opportunity.
And various elements ofcritical theories that judge or
evaluate people by theiridentity category.
And these are destructive to the warriorethos and combat effectiveness.
But what I'm concerned about in DOJ andthe Department of Defense in particular.
They're in need of real reform andreversal of some of these initiatives and
(10:29):
propensities, but that mightthe cure be worse than the disease.
Is what I'm concerned about inpoliticizing further those departments and
agencies?
And what's your sense of the degree towhich there will be kind of responsible
reform that can help restore what Ithink is a fundamental problem or
confidence in our institutions?
>> Kimberley Strassel (10:48):
Yeah, from your lips to Trump's ears.
I mean,I can't think of a better way to put it.
And it does concern me.
We've had a lot of peoplethat have been nominated for
some of these positions, and I hear theword kind of retribution out of there or
elements of that as muchas I do rule of law.
(11:09):
And all we should be hearis the words rule of law.
And in a perfect world, andI keep saying this to everyone,
we want a DOJ that you rarely hearfrom unless they are out there
talking about super badguys that they took down,
the terrorists, the drug rings,etc, and so on.
(11:30):
When you're hearing from a DOJ that'sgoing after political figures or
a DOJ that is going after certainbusinesses in certain industries,
because those are disfavoredindustries at the time,
that's not a DOJ that'soperating under the rule of law.
It's operating under politics.
And, I mean, I really,really hope I'd like to.
(11:52):
I've been talking to some senatorswho have been, for instance,
doing interviews with Kash Patel andothers.
They say that they feel encouragedby the focus of rule of law,
and also promises that tothe extent that anybody needs to
look into prior malfeasanceat some of these agencies.
(12:12):
And let's be clear, misbehaving is notalways the same as breaking the law, okay.
And we need to make those distinctions.
You can be a bad official anddo bad things and not break the law.
And we need to make those clarifications.
But to the extent there needs to be someof that done, what they're hearing is that
the Trump administration wantsCongress to engage in that oversight.
(12:36):
I think that's a different andbetter approach to it than having
Department of Justice go out andfurther politicize itself.
>> Niall Ferguson (12:47):
Kim, you're a keen observer of these processes of nomination
and confirmation.
How are they doing?
Clearly, it feels like a slickeroperation than eight years ago, but
I'm no Washington pro.
Give me a sense of how it looks to you.
>> Kimberley Strassel (13:04):
Heck, yeah, I mean, look, I think it said something.
Overall, if you look at Trump's nominees,I think it is fair this time to say that
they are a bit edgier thanthe last crew that came through.
And yet when it comes down to it,
I think most of them are ona glide path to be confirmed.
In some ways,it was a kind of clever strategy.
(13:26):
They flooded the zone with [LAUGH] somany names.
I was laughing with my bossthe other day on the phone.
I was like, remember those old days whenthe left would just take the nominee for
the cabinet that they cared about the mostand then they would just unleash on them?
Last time around it wasScott Pruitt at EPA.
(13:47):
They don't even have time to thinkabout Lee Zeldin's nomination for
EPA because [LAUGH] there's so
many folks out there that they'respreading their time around on.
So, I mean, I think even the onesthat kind of had a rocky entrance,
Hegseth, for instance,they are rebuilding some trust.
I still think the nominations thatare gonna have the hardest time, and
(14:11):
that doesn't surprise me because ofthe names and their histories are Tulsi,
Gabbard and RFK JR.
Just because if you really lookat their records, they are so
in conflict with some of the bedrockprinciples of the conservative movement.
And in the end, I think some Republicansenators might have difficulty wrapping
their heads around that.
>> Bill Whalen (14:32):
Kim, I noticed with the Hessek nomination that he did something
that nominees do not dowhen they get into trouble.
Usually nominees historically, they hide,they just go talk to senators,
they stop the radar screen.
He did the opposite.
He went on a media offensive.
Does this suggest that maybe the ruleshave changed for nominations?
I'm also curious, Kim, as your thoughts onhow congressional Republicans feel about
Trump, do they fear Trump?
(14:53):
For example, Joni Ernst, she kindof quickly came around and Hexith,
why she's up for reelection in 2026.
>> Kimberley Strassel (14:58):
Yeah, I mean,
definitely electoral politicsare going to play in to this.
I mean, some of those Republicansenators who you might expect to be
a little bit more opposed to some of thesenominees are going to to think twice.
I mean, Joni Ernst,
there's that Tillis in North Carolina,some of these guys are up for reelection.
(15:20):
Interestingly, Susan Collins, she lives ina state that is actually blue enough that
it might even help her to vote againsta couple of [LAUGH] these nominees.
So I think that's a little bit ofa different scenario just for her.
I think the rules fornominees are a little different for
Trump's nominees and that ifthe Trump team has learned anything,
(15:43):
is that you get nowhere by turningaround and letting them beat on you.
They obviously love a fight andthrowing back a punch.
I also think it's that particularone that you mentioned is a little,
maybe even a little bit more unique toPete Hegseth, if you've ever met him.
He's a very outgoing kind of.
Kinda open person and
I think it's in his nature to wanna kindof get this out there and clear his name.
>> John Cochrane (16:05):
Kim, can I ask you as a Washington insider, sorry, you are one,
[LAUGH] you're our favorite spy.
>> Kimberley Strassel (16:11):
Thank you.
>> John Cochrane (16:13):
Once you can, you can be nominated,
you can become head of an agency, butif you're a little bit wacko and the,
all the, I dare not use the word deepstate, but you know what I mean.
If everybody in there is dead set againstyou, they know the rules and regulations.
Can you have any effect at all orwill those, they simply turn you off,
(16:35):
wait it out four years, I've heard somestories of how they can sandbag the chief.
Just don't tell you aboutEthics Rule 307-B4.2 and, and
next thing you know,you're in deep trouble.
>> Kimberley Strassel (16:47):
Yeah I'm about to write a column that is gonna be pro tips
for incoming Trump nominees.
And my first pro tip is going tobe chain yourself to the lawyer.
Because they wait for you to doan ethics violation something and
then they go to the press andthey rely on the press to turn it into a,
to make a mountain out of any molehill.
(17:09):
And they're just gonna have to be on theirguard for that, one of the biggest things,
and not to go too big into the weeds,but it's why the Doge effort is so
important is what we have seen.
I mean, obviously you look at thosevoting numbers for Republicans and
Democrats in Washington D.C.
it gives you a pretty good sense of whatdirection the entire bureaucracy leans.
(17:31):
96% for Joe Biden anda lot of those people live there and
in the surrounding communities.
We know that this is a leftleaning bureaucracy, but
what they have figured out how to dois kind of move themselves around
the civil employee rules that we have,the civil service rules.
Which is supposed to guard againstpeople who were political activists or
(17:56):
prior political appointees from beingin very senior positions in government.
And there's these clever ways that they goabout do that, it's called burrowing in.
And those are the people everybodyneeds to be on the lookout for and
aware of because theywield enormous power.
If you think about the averagesize of any one of these agencies,
(18:17):
you're talking about tensof thousands of people.
The person at the top has to delegate,and it's those people that get the jobs,
the important jobs of making it done,you need to know who that layer is.
And one of the things Doge is looking at,and it was something that President Trump
was doing when he was on the way outlast time, and then Biden reversed it.
(18:39):
But it's a provision thatwould allow you to remove or
move people in those positions givenby categorizing them as something else,
as someone with very seniordecision making ability.
It's not clear if that will withstandlegal scrutiny, it was something,
as I said, it was a regulationTrump was rolling out as he left.
(19:01):
They're certainly gonna try it again, butthat's gonna be key, what you just said.
>> John Cochrane (19:05):
Screen, You can't just fire people and you got to get them to do
what you want, and that's a talent, youhave to know how these organizations work.
>> Kimberley Strassel (19:12):
Yeah, you can't just say pretty please either,
that's not gonna get you anywhere.
>> H.R. McMaster (19:16):
Yeah one of the things I noticed as we were working on
President Trump's nationalsecurity strategy.
Was that there were a lot ofpeople within the departments and
agencies who knew that thesepolicies had to change 180 degrees.
The approach to China the approach tothe Middle east and Iran in particular,
and the more senior peoplewere the biggest impediments.
(19:39):
So I'm wondering if you thinkthere's an option for like,
early retirement,kinda like what Brian Chesky and
other other CEOs have done to say,hey here's a package for you.
This might be the time for you to leave,and in particular I'll tell you,
I never anticipatedthis would be the case.
But the most difficult department forme to work with oftentimes, or
really to collaborate with.
(20:00):
To give the President options orto assist with the implementation of
the President's very clear decisionswas the Department of Defense.
So I think that I think there is certainlyroom to move some people on, but again,
I hope the cure is notworse than the disease and
politicizes these departments andagencies even further.
I mean, I think the way it's doneis going to be really important.
>> Kimberley Strassel (20:22):
Well, I mean,
you're even better to talk about this thanI am because you had to live through it,
so you know about that kind ofresistance that you can face.
Like I said, I've just been exceptionallyencouraged by some of the more
granular ideas I've heard coming out ofDoge, and some of them are very technical.
And I mean, the ones that catcheveryone's attention are when Vivek says
(20:47):
let's just fire everybody's whosename starts with an S or who didn't,
who didn't show up for work yesterday.
If you're teleworking andyou don't show up, you're gone.
There are some problems inherent in that,
but there is like some really smartpeople that are really digging
(21:07):
in right now to ways in which youcan unblock that bureaucracy.
And shift things around and
better ensure that you have a shotat getting your agenda in place.
>> H.R. McMaster (21:19):
Kim, just quickly then, I think there are a lot of efficiencies
too, I mean, all these government leasedbuildings, who's in those buildings?
Why do they need to be there?
How many of them are contractors, right?
So now with, with the AI relatedtechnologies, large language models,
I mean, we're,
I think we're overstructured in the areasof intelligence and analysts for example.
And many of them are they'refrom big they're big,
(21:41):
from big beltway bandit firms.
So I think there are, there are someof these techniques you can use,
like who the hell is leased buildingsthat can maybe simplify it a bit.
>> John Cochrane (21:51):
We don't want to just do bad things efficiently,
we want to reorient whatthe government does.
>> Kimberley Strassel (21:56):
That's kinda, I wrote something about that not long ago,
which is you need to care,it's not about the head count, right?
It's about going through government andmaking like the reason these people
exist is because they have a lot ofbad missions they've been given.
So get rid of the bad missions andthen they don't need to exist anymore.
(22:19):
The example I always gave is, I rememberI had a very well meaning congressman who
called me after the IRS targeting scandal.
And he said, what kind of rules can we setup to make sure that the IRS employees
can't do this again?
And I said, I think that's a verywell meaning thought process.
But if you really want to makesure that there aren't 60,000 IRS
agents that all have discretionto look at people's tax returns.
(22:43):
Come up with a flat tax, and then you haveno reason for them to be there anymore.
And that's your way of guarding against,so
get rid of the mission andyou can get rid of a lot of these people.
And I hope that's what another good ideaI'm hearing, and I hope they double.
They did it a little bit inthe first Trump term is not only
do we need to shut down or sell offsome of these buildings in Washington,
(23:05):
some of which, by the way,are only 20% used at the moment,.
That is a true figure.
But if you're going to open an office,make it be out in the heartland,
put it in the west coast,put it somewhere next to the people.
For instance, that the Interior Departmentis actually regulating rather than
the middle of D.C.It is actually like in the Interior maybe.
(23:27):
Yes, in the Interior.
>> John Cochrane (23:29):
[COUGH] There's lots of really good people in these agencies who
are hamstrung by ruleafter rule after rule,
many of them ethics rules anddisclosure rules and all this other stuff.
They kinda know what they want to do,they kinda know how to do it better, but
you dare not even move.
I think a great example came up last week,Boeing can't deliver for
(23:51):
four $3 billion a rehab 747 for Trump.
It's taken them 12 years, $3 billioncan't do it, the same company that,
Churned out 12,500 B17s in fouryears back in 1944, why is that?
Well, among other things,
everybody who works on this hasto have a top security clearance.
Well, how many guys who know how to wireup a bolt into an airplane have a top
(24:13):
security.
But there's a reason forthe top security clearance.
It's cleaning up rules,takes a lot of time and effort.
>> Kimberley Strassel (24:21):
The thing that should inspire everyone is if you want to
know why Elon Musk got soexcited about this idea, I don't know.
Have any of you readWalter Isaacson's biography of him?
>> Niall Ferguson (24:32):
Guilty.
>> Kimberley Strassel (24:33):
And there's some great anecdotes of his,
like he's losing his mindduring his SpaceX stuff.
Why are we paying for a $12,000 hinge for
this piece on the rocket when I can gobuy it at Home Depot for three bucks?
And you need someone who's asking why,why do we do it this way,
(24:56):
why must we do it this way?
I think he's kind of a perfectlypositioned person for that job.
>> Bill Whalen (25:01):
Can we have just a couple of minutes left of the segment?
So let's turn our attention to Joe Biden,last I saw,
he's still the President of United States,question,
the Hunter Biden pardon, what kind ofpall did that put over Washington?
And how do you think Trump isgonna handle the pardon issue?
He could come into office andhand out pardons to all J6 people.
Is he gonna hold back on pardons,what do you think is gonna happen next?
>> Kimberley Strassel (25:21):
The thing that was remarkable about that pardon,
it wasn't just that it was so stinky.
Obviously he'd said he wasn'tgoing to do it and then he did.
It's his own family member, I meanthe nepotism is extraordinary there.
But also the sweeping nature ofthat thing, all infractions,
anything he might have possibly done for10 whole years.
(25:43):
And in my mind what it is,is put aside the Hunter part of this.
This is just the latestexample of Joe Biden and
Democrats who lecture peopleall the time about the need for
standards and norms,breaking all the standards and norms.
Because of course water runs downhill and
the minute that that pardon came out,everyone was claiming he now issue
(26:07):
even more open ended pardons to otherpeople that you might come after.
That is just begging, by the way,
to have an enormous public debate aboutthe presidential pardon power and
people to talk about ways thatyou might end up restricting it.
I mean we're alreadyseeing those Articles,
we don't need to be having this argument.
The reason we are is because this guy,and he's done it in so
(26:29):
many ways,Democrats have over recent years.
I'm so tired of hearing the wordunprecedented in Washington.
We need to have four years where nobodyuses the word unprecedented in Washington.
>> H.R. McMaster (26:43):
Hey, as a historian, I'm all for that.
I mean, every time somebody use,I'm, well,
there may be a few times this hashappened in the past [LAUGH].
>> Niall Ferguson (26:50):
What unprecedented means, when you hear somebody say that
something's unprecedented, what they're infact telling you is they know no history.
And there are precedents fora lot that we've been talking about.
I keep coming back to that momentin 1980 when Ronald Reagan won,
in some ways a more emphatic victory, insome ways a less emphatic victory because
(27:12):
he didn't have the House, he had exactlythe same majority in the Senate.
He didn't really have the court.
In some ways, Trump enters Washington in asomewhat stronger position institutionally
than Ronald Reagan.
He's regarded with the same disdain bythe liberal elites that Ronald Reagan was
regarded with.
There are all kinds of foreign policyproblems, some of which are gonna, I
(27:34):
think, fall into Trump's lap just the waythe Iran hostage crisis fell into his lap.
Others of which are gonna be intractablein the way that some of the problems
Reagan had to grapple with were.
So there are precedents formuch of this, but
I don't think I can think of a precedentfor the Musk Trump partnership.
Kim, is this not something novel andwhat does it mean?
(27:56):
Because if you ask me who's the secondmost important person In Washington after
January 20,it's not the Secretary of State,
it's not the Treasury Secretary,it's Elon Musk.
>> Kimberley Strassel (28:07):
I think you're right.
I mean, the idea of the most powerfulpolitical figure in the world,
which Donald Trump, if he's not already,
he will be as soon as he takes up office,pairing up with the wealthiest and
kind of most big thinkingentrepreneur in the world.
It's kind of mind blowing consideringwhat could come out of that,
(28:29):
I do think that's unprecedented.
And my other unprecedent more things likeit was unprecedented to have an FBI raid
a president's house.
It was unprecedented to have a specialcounsel bring felony convictions against
an ex president.
Those are the unprecedented that I hopewe don't hear any more of in Washington.
>> John Cochrane (28:48):
There is a President Truman's Kulage's,
Treasury Secretary Mellon was the ElonMusk of his age and they got together and
cut the crap out of federal [LAUGH] andtaxes lowered taxes from 70% to 25%.
So there's always a precedent.
>> Niall Ferguson (29:04):
Nicely done, nicely done, John.
Nicely done,you get your historian's badge.
>> Bill Whalen (29:09):
Okay, Kim, unfortunately, we have to bounce this a lot more I'd love
to talk to you about, butI have a suggestion for you.
In 2025, I see three gentlemen who wouldbe excellent guests for your podcast.
>> Kimberley Strassel (29:19):
My gosh, I see four in fact.
It'll be wonderful,
I want all of your commitments topromise to come do my podcast soon.
>> John Cochrane (29:26):
Anytime.
>> Bill Whalen (29:27):
Okay fellows we are on [INAUDIBLE].
>> H.R. McMaster (29:29):
Thanks so much.
>> Kimberley Strassel (29:30):
Thank you, thank you guys.
>> Bill Whalen (29:31):
On the B block Gentlemen, adios, Reva Dirche, and
goodbye to 2024, let me begin witha question to the three of you.
For the second time now,
Donald Trump has been named Timemagazine's person of the Year.
Your choice for the individual of theyear, it could be somebody very obvious in
the news orsomebody who flew under the radar screen.
So, Niall, you wanna start?
>> Niall Ferguson (29:51):
Javier Milei, the president of Argentina,
has done what DOGE canonly talk about doing.
Because he took on pretty muchthe toughest assignment in the world,
which is clean up government in Argentina,bring inflation under control in
Argentina, stabilize publicfinances in Argentina.
(30:12):
I mean, it's mission impossible, andthe man has achieved extraordinary things.
And he didn't even have majoritiesin the Argentine parliament.
So he's my man of the year, he'sshowing that libertarian policies are,
in fact, doable andyou can reduce the deficit and be popular.
(30:33):
This is amazing stuff and
it should inspire all of us who believein free markets and above all, freedom.
Yeah, libertad carajo, go Milei.
>> Bill Whalen (30:42):
Let's turn to John Cochran,
who probably is now a crossing Mileioffice list of who [LAUGH] has managed to.
>> John Cochrane (30:47):
I just feel robbed.
The libertarian economist whosedogs are named Von Hayek and
Mises and Niall stole it from [LAUGH].
Yeah [LAUGH], I think the obvious personof the year isn't a person at all,
it's the artificial person.
AI is still growing by leaps andbounds, and
we're only gonna begin tosee what that leads to.
>> Bill Whalen (31:10):
HR.
>> H.R. McMaster (31:11):
Well, as a former National Security Advisor,
I wanna do a shout out to the appointedNational Security Advisor, Mike Waltz.
And I think he's just a great guy,he's not been really covered very much in
the media, but he served his countryextremely well in the army and then was
very, I think, active and a really strongvoice in the House of Representatives.
(31:32):
A lot of people don't know the work thathe did in the House on countering Chinese
influence in the Western Hemispherein particular.
So he comes in with a broadrange of knowledge,
I think an understanding of his role.
And so I wish him the best, so if one ofthe criteria is somebody who you want
to be the person of the year and, andwanna get behind, it's Mike Waltz.
>> Bill Whalen (31:51):
My choice honoring John Cochran is not an individual of an entity,
and I go with the state of Israel,which, in Michael Corleone fashion,
seemed to settle all scoreswith enemies this year.
>> John Cochrane (32:00):
Yeah, I was going to one of the biggest turnarounds.
I think we were forecasting bad things forhim a year ago and boy, him and
his state of Israel have really.
>> Bill Whalen (32:11):
Okay, guys, the flip side of the coin,
I don't want to call this person orindividual the loser of the year, but
just somebody who had a really,really wretched 2024, Sir Niall.
>> Niall Ferguson (32:20):
Well, I was about to nominate the Australian break dancer at
the Olympics who became the global figureof fun with the kangaroo breakdancing.
But you've prompted me, Bill,
to change my pick tothe Supreme Leader Khamenei.
Because Iran has surelybeen loser of the year if
(32:42):
Bibi Netanyahu has turnedit around spectacularly.
The principal loser of that turnaroundis surely the Islamic Republic of Iran,
which turned out to have verylittle air offensive capability.
Two major strikes in Israel,neither of them really landed a punch.
And then it revealed itself to have verylittle in the way of air defenses when it
(33:02):
came under attack from Israel.
And now the regime is,
is really on the ropes in a way thatvery few people predicted a year ago.
So I'll go with loser of the year,the Iranian Supreme Leader.
>> Bill Whalen (33:14):
HR.
>> H.R. McMaster (33:15):
I'll stay in the same category as Axis of Aggressors [LAUGH],
and, and I'll say Vladimir Putin,because there still
is this narrative among much of the westthat he's some kind of a strong man.
I see him as both a bully anda coward at the same time.
People characterize himas a great strategist.
I mean, look at the folly that he'sengaged in, not only in Europe with
(33:39):
the assault on Ukraine, butalso in Syria where he's the big loser.
President Trump used to say, hey,do you like calling terrorists losers?
He would ask me.
I'm like, yeah,I like calling them losers.
I think he should realize thatVladimir Putin is a loser.
600, 000 casualties in Ukraine,withdrawing and
bombing their equipment on theirway out as they run out of Syria.
(34:03):
He's sitting on a pile ofcash that he can't convert or
use in any payment systems.
He tried to sell bonds and failed.
Spending 47% of his GDP on defense andstagflation is setting in.
And hey, he's a loser.
And I hope that President Trumprealizes that and
recognizes that he's in a positionof strength relative to Putin and
(34:24):
should bolster the Ukrainians and dealwith Putin from this position of strength.
>> Bill Whalen (34:30):
John.
>> John Cochrane (34:31):
In trouble, personifying it.
This is really a remarkable moment.
We've seen the vibe shift.
Well, we're past peak woke andit's on the way down.
It's fighting hard, butit's on the way down.
Who is the person who mostpersonifies what is about
to be swept away in this wonderful tide?
(34:51):
I'm having trouble finding it within myown narrow discipline of economics I'll
pick the, the Piketty, the Stiglitz,the lists of dozens of Nobel Prize winning
economists who once a year signjoint letters saying that malaise,
Argentina is going to fail.
Venezuela is wonderful, Donald Trumpis going to ruin the world and
whatever the heck goes on.
(35:12):
And then a year later,they're completely wrong.
The tide of history is sweepingthis whole movement out.
Maybe you guys can have a betterpersonification of just what is
being swept out, but that I'm stilllooking for the person most in charge.
>> Bill Whalen (35:29):
John, this is your chance to say goodbye to Paul Cronman.
[LAUGH] Idea.
Small but.
Okay, guys, something you got rightin 2024 is something you got wrong.
HR you want to kick off?
>> H.R. McMaster (35:41):
Hey, well, it's been for years.
It's been for years.
I wrote about this in At War WithOurselves when I was recounting really how
Putin and
Erdogan tried to create this illusion thatAssad was in a strong position, right?
It was inevitable that he would remainin place after the Syrian civil war.
And I list all the reasons in the book forwhy Assad was profoundly weak.
(36:03):
I always thought he was profoundly weakand of course he was profoundly weak.
And that his weakness was exposedafter Israel's decisive action that
John alluded to earlier against Hezbollahand kicked the legs out from under Assad,
who was reliant on Hezbollah andIran's proxies broadly.
(36:24):
So, yeah, I think I was right about Assad.
>> Bill Whalen (36:26):
Okay, so, Niall Ferguson, you never get anything wrong, right?
>> Niall Ferguson (36:30):
Everybody gets things wrong.
It's very important to keep score andrecognize what you got wrong.
I'll come to what I got wrong in a minute,but I did predict consistently not
only that Trump would be reelected,but that he would get the nomination,
which was by no means everybody'sexpectation 12 months ago.
So I'll go back and look with prideon my Spectator cover story on
(36:52):
Trump's second act,which came out in the spring of 2023.
What I got wrong, I thought the electionwould be closer than it was.
And in that sense, I fell victim to polldelusion instead of just listening to
the financial markets andthe prediction markets,
who turned out to be much moreaccurate than the pollsters.
>> Bill Whalen (37:11):
Did you. Who was closer in their prediction, you or
Ion Persieli, your wife?
>> Niall Ferguson (37:16):
That's a good question.
I think she was.
She's got much better judgmenton politics than I have.
And she was more confidentin the final few days when
I got quite jumpy andnervous about the polls.
So, yeah, she was able to justignore the rogue Iowa poll,
(37:37):
whereas I was kind ofgnashing my teeth about it.
So she's always going to beat me onpolitical judgment because she's actually
done politics where all I do is sitin libraries and read about it.
>> Bill Whalen (37:47):
Mm hmm, hey, John, we waited for you.
We read it.Saving the best for last.
Give us something you got right in2024 and something you whiffed on.
>> John Cochrane (37:54):
Well, the most important thing,
given limited time is what I whiffed on.
And I am so glad I was wrong.
I also thought,would it be a little closer election.
But I thought no matterwhat the election would do,
that there would be chaos afterwards.
And I think I went on this show andmade that prediction over and
over again that there would belegal battles, that there would
(38:14):
be a repeat of battles in the streetsthat made 2020 look like nothing.
There would be the hashtag resistance.
There would be heaven knowswhat on the inauguration.
There would be lawfare like crazy.
There would be an attempt to notcertify Trump's election in the Iowa.
Well, we'll see, butthat's not going to happen.
(38:35):
That the Democrats and the whole left,
that the woke religion wouldjust fold over and give up.
I think is just remarkable so that we'renot having civil disorder about this is
good enough news, but that everybodyseems to accept Trump is the legitimate
president and now we gotta run to him andget our little policy wins in.
(38:58):
This is just remarkable goodnews that I was wrong about.
Thank goodness.
>> Bill Whalen (39:03):
I'm with both you and Niall and John.
John, with both you and Niall on this.
I was also surprised by the breadth ofthe victory for Trump and also surprised,
John, that just all the resistancehas just really calmed down so far.
Winning the popular vote cando magical things, I guess.
Okay, guys,channeling your inner HR McMaster,
give me a reason for optimism in 2025.
And HR, since this is your name,your rules, your game, you go first.
(39:26):
Reason for optimism.
>> H.R. McMaster (39:27):
Okay, I think that contrary to expectations, Donald Trump
will be a tremendous source of stabilityin the world in the coming year.
And the reason is, when you look aroundto other leaders across the free world,
these countries are in a periodof political turbulence.
And a lot of Trump's agenda,I mean, is the agenda for
(39:48):
Europe and Japan andother parts of the free world.
I mean, energy security, supply chainresilience, invigorating the industrial
base, for example,countering Chinese economic aggression.
The list goes on.
So, I think there'sa tremendous opportunity for
the Trump administration to putforward a very powerful international
(40:09):
agenda that will be quitecontrary to the expectations.
And in fact,alliances could be stronger and
there could be a great deal moreinternational cooperation on these issues.
>> Bill Whalen (40:20):
John, an optimistic note for 2025.
>> John Cochrane (40:23):
Well, I'll again plug Niall's vibe shift essay,
which I thought was just wonderful.
This is a wonderful moment,there's a worldwide vibe shift.
Yes, there's a libertarianpresident of Argentina,
there's Giorgia Meloni in Italy.
There is soon that man of the yearnext year is gonna be Pierre Polavier,
who's gonna take over in Canada.
(40:43):
Looks like the Tories are gonna wakeup in Britain and throw Labor out and
maybe rediscover theirinner Margaret Thatcher.
The Europeans have figured out thatthey've regulated themselves to death,
their economic policies are awful,and that they need a doge, and
their immigration policies need fixing.
Climate catastrophism isgiving its way to pro-growth
(41:08):
policies around the world andpoliticians who embody.
Yeah, there's some populism in there,there's some potential tariffs and stuff.
But compared to the sizeof the vibe shift, and
our enemies are folding[LAUGH] before our eyes,
just the threat of little Donald Trumpcoming in and they seem to fall apart.
(41:30):
Look what's happened in Syria.
There's opportunities, there's dangers,but it's just a wonderful inflection
point and great opportunities with dangersfor wonderful things to happen and
kind of the nightmare of the last fourto eight years or 12 years to be over.
>> Bill Whalen (41:47):
John, I want you to share with the panel something we
were talking about beforewe came on the air.
And I was lamenting how many countrieshave political chaos right now, and
you were saying that, well, a little chaosevery now and then is not a bad thing.
Democracy is supposedto be chaotic [LAUGH].
>> John Cochrane (42:00):
Yeah, I think we said there was a unified government with
a unified policy in Russia in 1950s andin Germany in 1939,
that wasn't so great [LAUGH].
People debating within norms, rules,tradition, the ability to lose
elections and come back another day,rule of law and stuff and stuff.
But a little bit of chaos is a wonderfulthing, especially right now.
(42:23):
There are times when,they say decades happen in a week,
and then weeks happen take decades.
We're in a decades happen in a weak momentwith some wonderful opportunities and
chaos along the way, great.
>> Niall Ferguson (42:34):
Just to reassure our listeners, John wasn't quoting Lennon
there because that quote is oftenattributed wrongly to Lennon.
It's actually correctly attributedto Friedrich Engels, so,
only slightly better, John.
Or it's Jefferson, a little revolutionarynow and there, it's not a bad thing.
But Niall, do you wanna buildon what John just said and
(42:55):
then give us your prediction for 2025?
So, I worry about the vibe shift being so
universally hailed that we all succumbto euphoria and perhaps even hubris.
I'm kind of racking my brains thinking,
what is it that I'm missingthat's gonna ruin this?
(43:20):
Because it does feel a bittoo good to be true, and
history tells you to watch out forthat thing that you took your eye off.
What is the thing that will happennext year that will blindside us,
that we will curse ourselves fornot seeing?
And I throw a reason to be nervous.
(43:42):
I mean, I look at the stock market,it's tremendously elevated on the back of,
well, amongst other things,fiscal profligacy for four years.
And the new administration is committed,yeah, to renewing tax cuts, but
also to some kind of fiscal stabilization.
(44:02):
And I just keep asking myself,
if you combine that with a prettyaggressive policy towards China,
60% tariffs, maybe you have a littlebit more pressure on the Taiwan issue.
Taiwan is where all the semiconductorscome from that the AI boom depends on.
So, while everybody's feeling euphoric,being a Glaswegian,
(44:23):
I have to sit there worrying aboutthe thing that we're missing,
and the thing we could miss is thatsentiment in financial markets.
John will confirm this,can change dramatically from
bullish to bearish without whatseems that big a vibe shift.
So, I'm gonna just put up a warning,that you can have a very,
(44:45):
very enjoyable post election vibe shift.
I think the minute he's sworn in,and leaves Mar-a-Lago for
the icy wastes of Washington DCentirely surrounded,
as Kim said earlier,by Democrats in the bureaucracy.
I think the vibe is gonna shiftagain in a different direction, and
(45:07):
some of the realities are gonna hit homethat perhaps investors won't find quite so
delicious when they're being enacted.
So, just a little word of caution,
as I brought vibe shift into the globaldomain, beware the vibe reverse.
>> John Cochrane (45:23):
I wanna follow on just quickly.
Yeah, an Uber driver was recentlyasking me about Bitcoin and
which stocks he thought.
And I remembered my historythat in the 1920s people say,
every waiter in busboy is asking forstock tips, and
that's when I forget which financier said,that's when I knew to sell [LAUGH].
>> Bill Whalen (45:42):
Niall, almost got you off the hook, Niall,
reason for hope, reason foroptimism in 2025.
>> Niall Ferguson (45:47):
Well, I'm really looking forward to the great dynastic
union that will bring the twohouses of Trump and Musk together,
cementing at least threegenerations of dynastic unity.
So, my prediction for
2025 is that the wedding of the yearwill be Barron Trumps to Vivien Musk.
(46:08):
Only through marriage can these two greathouses be united, and all the predictions
that they'll fall out and the afternoonof inauguration day be laid to rest.
Think Game of Thrones, people.
>> Bill Whalen (46:19):
Okay, well put.
Gentlemen, good segment, we're gonnaclose this by talking about 2024,
which went from the surreal to surreal.
And what I'd like to point out to ourviewers is that actually we now officially
have an actual night on the show.
Sir Niall Ferguson,
recently invested into knighthood,receiving his honor from King Charles.
Niall, I want your thoughts on, what wereyou thinking when this was going on?
(46:41):
Besides, obviously, please, I don't wannafall off while I'm kneeling down, but
just, what goes through a man's mindwhen he's getting this incredible honor?
>> Niall Ferguson (46:49):
It's true that one worries quite a lot about tripping or
bungling the quite complexchoreography of an investiture.
But I was thinking quite hardabout all the people and
institutions that I owed for that honor.
(47:11):
And I do feel strongly that any kindof recognition one receives, and
I dare say HR feels the sameway about his military honors.
It's really not about you,it's about your role, really,
as an intermediary between your parents,your grandparents,
the institutions that taught you, andthat which you have sought to serve.
(47:35):
And I did feel tremendous sense ofpride that that had happened and
my mother had lived to see it.
That meant a huge amount to me,as I said to His Royal Highness.
And that was my next question,what did your mother say?
Well, the Scots are cautiousabout any expression of pride.
(47:56):
In fact, my mother alwayscomments that she was bright.
Brought up not to feel pride, and
I think that's a kinda salutarywest of Scotland sentiment.
But, yeah, it meant a lot,I think, it meant a lot, and
it would have meant a hell ofa lot to my grandparents, too.
So, yeah, one sort of connectedthrough the generations,
(48:19):
Edmund Burke has this great line in thereflections of the revolution in France.
When he says that the real socialcontract is between the generations,
between the living, andthe dead, and the unborn.
I tell you,I've never felt that contract so
binding as at Windsor Castlekneeling before the king.
(48:41):
The sense of one's small place inthe great scheme of the generations
across the centuries washumbling in a very powerful way.
>> Bill Whalen (48:52):
John and HR were not doing a live show for a while, but
should we do an all kilt showthe next time we get together or
just have Sir Niall in his kilt?
>> Niall Ferguson (48:59):
Well, I recommend the kilt as an article of attire, and
I think the names McMaster and Cochraneare eminently eligible for kilt wearing.
>> H.R. McMaster (49:07):
We could all be wearing them right now and no one would know.
>> John Cochrane (49:10):
[LAUGH] Niall, I'll celebrate what you just said,
Americans are kinda footloose,the sense that you just evoked of
a connection to family and place,that goes over and institutions.
That goes over generations,over centuries and hundreds of years,
we Americans largely don't have that,so congratulations for it.
>> Niall Ferguson (49:32):
Thank you, John.
>> Bill Whalen (49:34):
Before we sign off for 2024, a housekeeping note,
the four of us on the show would liketo congratulate Shauna Farley for
being named the Hoover Institution'sinaugural Chief Creative Officer.
Why am I mentioning this?
Because it was almost five years ago thatShana had an epiphany, the way she saw it,
we had three prominent Hooverscholars under house arrest
thanks to Covid restrictions.
So why not put the threeof them on air and
(49:54):
share their wisdom with the rest of theworld, and thus was created GoodFellows.
Shana, congratulations,we treasure working with you,
and I hope you don't feel likeOppenheimer having all kinds of regrets
over what you've unleashed upon mankind.
[LAUGH] Gentlemen,anything you'd like to add?
>> H.R. McMaster (50:09):
Hey, Shana, you're the best.
Yay.
>> Niall Ferguson (50:12):
Congratulations.
>> John Cochrane (50:13):
It's such a pleasure working with you,
creative stuff done, hang in there.
>> Bill Whalen (50:19):
Let me be the first to say, hail to the chief.
>> Shana Farley (50:22):
Thank you guys so much.
[LAUGH]>> Bill Whalen: And on that note, we're
going to end Goodfellows for 2024, butfear not, we'll be back in about middle of
January, right about the time Donald Trumpis taking office with a new show.
So we wish you and yours a very happy,very joyous holiday,
on behalf of my colleagues, Sir NiallFerguson, John Cochrane, H.R. McMaster.
(50:42):
Our guest today, Kim Strassel,also here at the Hoover Institution,
thanks again for watching.
Thanks foryour continued support of the show,
look forward to seeing you next year,take care.
[MUSIC]
If you enjoyed this show and
are interested in watchingmore content featuring H.R.
McMaster, watch Battlegrounds,also available at hoover.org.
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