A week into Donald Trump’s “second first term,” the GoodFellows drink from the proverbial fire hose trying to keep up with the news: a flurry of presidential executive orders; a freezing of US foreign aid; policy spats with multiple nations; at Davos, the world’s globalists contending with MAGA; a Chinese advancement in artificial intelligence that prompted a market selloff and evokes memories of the Cold War’s space race.
Hoover senior fellows Niall Ferguson, John Cochrane, and H.R. McMaster discuss the significance of the aid freeze; what Colombia’s agreement to accept deportees after threats of a tariff war portends for Trump-brand foreign policy; how the times have changed at Davos’s annual World Economic Forum; plus whether the emergence of China’s DeepSeek app will trigger a modern-day “moonshot” within the AI sector. Next, the fellows discuss matters they deem neglected (are Russia and Iran’s regimes on the ropes?), a DEI executive order, whether Trump’s revoking of security clearances and dignitary protection was justified or vindictive, plus the three fellows’ Super Bowl plans.
Recorded on January 28, 2025.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
>> Donald Trump (00:00):
This is very unusual when you hear a deep seek, when you hear
somebody come up with something, we alwayshave the ideas, we're always first.
So I would say that's a positive.
That could be very mucha positive development.
Instead of spending billions andbillions, you'll spend less and
you'll come up withhopefully the same solution.
>> Bill Whalen (00:21):
It's Tuesday, January 28, 2025.
And welcome back to Goodfellows, a HooverInstitution broadcast examining social,
economic, political andgeopolitical concerns.
I'm Bill Whelan, I'm a Hooverdistinguished policy fellow moderator.
I'd like to introduce you to the starsof our show that would include former
presidential national security advisor,Lt Gen. H.R. McMaster and
making his long awaited return, the grumpyeconomist himself, John Cochrane.
(00:45):
John, I turned to you.
I had several very distraught friendsasking where you were on the last show.
It seems when John Cochraneis not on this show,
people's universesare fundamentally unsettled.
So how are you, my friend?
>> John Cochrane (00:56):
I'm fine, thank you.
I had a tiny little surgery in my tonguewhich meant I couldn't speak for a week,
which forme is just an unmitigated disaster.
But let me say a little vote of thanks formodern medicine.
Even tiny little routine things are lifechanging for our perceptions of life.
If you ever think you want to go back andlive in a Victorian novel, think twice.
(01:20):
HR I thought maybe we could do fiveminutes on every show talking about
various medical ailments, but that kindof be a depressing segment of the show.
>> H.R. McMaster (01:27):
[LAUGH] How about male pattern baldness?
We can talk about that maybe.
>> [LAUGH]>> Bill Whalen: Four older guys talking
about deterioration.
We call it the Hoover Institution Hair club for men.
I'm one of the founding members.
>> Bill Whalen (01:41):
Exactly.
>> [LAUGH]>> Bill Whalen: So here we are.
Let me point out that Niall Ferguson issupposedly joining us at some point, so
hopefully he will jump in from whereverin the world Niall happens to be.
But gentlemen, let's start with this.
As we record, it is exactly one week and
one day to Donald Trump takingoffice as a 47th president.
And to me at least, this is through theproverbial drinking out of a fire hose,
(02:03):
where what has not happenedin the last eight days?
We've had a flurry of executive orders.
We have had Trump get into it with, by mycount, at least four different nations.
When Niall Joyce us, he'll talk aboutwhat he saw at the World Economic Forum.
We've had all kinds ofcreativeness on Wall Street.
A trillion dollar sell off, John,
that I want you to talk to addressin terms of artificial Intelligence.
Trump came out to Californiato talk fires action.
(02:27):
So, HR Let me pose it to you this way.
Winston Churchill famously complainedabout being given a pudding
without a theme.
What is the theme to the truck pudding?
>> H.R. McMaster (02:36):
Well, I think it's first of all to reverse a lot of
what the Biden administration didthat he thinks makes no sense,
which I think a lot of us wouldagree maybe makes no sense.
And then to just make good oon kind of his top priorities,
where he is utterly consistent right?
Border security, reciprocal trade forexample, and, and deregulation.
(02:58):
So, I mean, all these themes that we heardduring the campaign, he's making good on.
And of course, what we're seeingis he's a heck of a lot more
organized the administrationis than it was in 2017.
And so a lot of these executive orders aregonna be contested by the courts and so
forth, but you don't really have anythinglike the initial travel ban in 2017 that
(03:19):
just didn't get anywhere.
So I think you're seeing a higherlevel of organization and
you're seeing Trump make good ona lot of campaign promises and
really focus on the areas where he doesn'treally carry any dissonance with him.
I mean, he's really consistentin a lot of these areas.
>> Bill Whalen (03:35):
John?
>> John Cochrane (03:36):
Yeah, I think it was Hamilton who said he wanted energy in
the executive.
Well boy,did we ever get energy in the executive.
I do also admire the organization.
They seem to know what they're doing.
They parish Internet agencies andknow where the bodies are buried.
It is an out of the box moment.
(03:58):
Trump is showing his willingness tothink out of the little verities
that have circled around for decades thatpeople pass around without thinking,
why don't we buy Greenland?
That's a good idea.
Why did nobody ever talkabout this in public before?
Why don't the Arab countrieslet people from Gaza in there?
There's an idea [LAUGH].
Trump's willing to say andthink kind of perfectly obvious things.
(04:21):
So it's a time of high volatility.
There's some bad stuff on the way, buttimes of high volatility in my asset
pricing career can often be greatif you can pick the good stuff and
hopefully the bad stuff won't get you.
So very interesting time,which I won't give a long lecture now.
We have lots to say.
And here's Niall to say some more, too.
>> Bill Whalen (04:40):
Yes, you say David's up like Beetlejuice.
And here he is, our friend,historian Sir Niall Ferguson hello, Niall.
>> Niall Ferguson (04:46):
Please sir I'm sorry I'm late.
>> Bill Whalen (04:48):
So to catch you up here, I asked John and HR if there was a theme to
the Trump pudding in the eight days ofhis presidency so far your thoughts?
>> Niall Ferguson (04:56):
And part of the reason I'm late is that there is just so
much to contend with.
There hasn't been somuch to contend with in the first week of
a presidency sinceFranklin Delano Roosevelt in 1933.
And I think we need torecognize that his record for
(05:16):
the number of executive ordersin the first 100 days is almost
certain to be broken byDonald Trump in his second term.
The way I'm thinking about this is it'sthe new deal, only with the sign changed.
Because if you think back to whatthe New Deal was, it was this radical,
(05:37):
transformative response to a terribledepression in which what we think of as
the federal governmenttoday was largely created.
All those agencies andentities and regulatory bodies,
they were all called intobeing in that first term.
Well, Trump's come to powerat the end of a boom, and
part of his task is todismantle the New Deal state.
(06:01):
That's what the Departmentof Government Efficiency,
in Elon's dreams at least, is going to do.
In the same way that the Rooseveltadministration at the beginning was
the ultimate isolationist administrationthat basically shut down American foreign
policy.
The only thing it did of note wasto cut off arms sales to everybody,
(06:21):
even countries under attack.
And the Trump foreign policy islike the entire opposite of that,
where nobody knows what Trump isgonna do from one day to the next,
except that it will be to upset bothallies and in most cases, adversaries.
So I'm thinking of this as I'm in 1933,but it's sort of a negative.
(06:44):
It's a mirror image of thattransformative hundred days.
And I'm struggling to keep up.
I think I have a handle on some of it, but
it's a full time jobkeeping track of this.
>> Bill Whalen (06:59):
I'm glad you mentioned 1933,
because we keep getting stories inthe press about how this is 1933 redux and
it's only a matter of time beforehe burns down the Reichstag.
>> Niall Ferguson (07:08):
Yeah, wrong country, right year, wrong country.
>> Bill Whalen (07:11):
And we had a kerfuffle over Elon Musk,
maybe not offering a Nazi salute.
So, John, what are Trump's opponentsgonna do for the next four years?
Just run around.
>> Niall Ferguson (07:19):
Can I just interject?
>> Bill Whalen (07:20):
Yes. >> Niall Ferguson
a Nazi slip.
I mean, that was one ofthose things that makes you
realize there's a lot ofstupidity out there because.
>> Elon Musk (07:28):
My heart goes out to you.
>> Niall Ferguson (07:30):
Elon's pretty awkward gestures on stage,
which are not ever particularlydelightful to watch.
Couldn't have resembled less.
And that's his salute unless you'd neverseen an actual Nazi salute I mean, really.
>> Bill Whalen (07:47):
Yeah.
>> John Cochrane (07:47):
Well, I think that's one's a great it kind of answers your
question.
An insight into the progressive mind.
Let's just think.
Take a breath and think.
Is it at all possible that Elon Muskis a secret Nazi, and, I mean,
a real Hitler loving Nazi?
And chose the moment of a speech atthe inaugural to reveal to all his friends
(08:09):
that we are secret Hitler loving Nazis andto give the signal that it's on.
This is just completely insane,NPR went with it.
Now, do they really believe that?
Hard to tell, butit is part of the machine,
I could see the machine trying to go.
Members of Congress repeat it,the media repeats it, is Elon a Nazi?
(08:31):
When do we need investigationsinto Elon's past?
Is there a high schoolyearbook photo in which he is
seen cavorting with somebody whomight have descended from some Nazi?
Blah, blah, blah, blah, blah,it obviously went nowhere cuz it is so
completely ridiculous.
But you can see one element of thattrain trying to get going, and
it's an interesting train to watch asit has now crashed and burned [LAUGH].
>> Bill Whalen (08:54):
Well, HR, what are Trump's opponents gonna do for
the next four years?
They don't have votes for impeachment,you can only drop play the Nazi card so
many times.
What are they gonna do?
>> H.R. McMaster (09:01):
Well, they'll resist anything that they can.
I mean, I do think though that it's clearthat President Trump has the initiative at
this stage.
I think,
what he's been able to do is what he'sdone is actually not surprising, right?
Is anybody surprised by anyof the executive orders?
I mean, the thing with Donald Trumpis a lot of politicians,
(09:22):
they kinda hide what they're gonna do.
They're obscure about their intentions,
they're afraid of alienating soportions of their constituency.
But with Trump, I mean,what you see is what you get and, I think,
that whereas a lot of people,of course, find what he says or
(09:44):
what he does offensive orarresting or upsetting.
I mean, I think, a lot of people are justhappy that what you see is what you get,
and there isn't reallyan ulterior motive with him.
>> John Cochrane (09:58):
Half of what Trump's doing is not Roosevelt in a way.
Half of what he's doingis cleaning up the mess,
the ungodly mess left behind by energypolicy, by DEI programs, by you name it.
The whole federal bureaucracy is a mess.
So cleaning up the mess is a littledifferent than expanding the state in
(10:19):
order to deal with an emergency.
Let me offer maybe whathis opponents should do.
Number one, govern responsibly [LAUGH].
It will be lovely if the nextelection could come along and
they could point to San Franciscoas a well run blue city,
we'll do like this forthe rest of the country.
And the other is the rule of law question,so
(10:41):
we do not elect a king for four years.
I like the policy results, butgovernment by executive order and
national emergency isdubious in the long run.
The next Democrat willcertainly come in and
declare a national emergency on climateand gender equity, and here we go again.
So, I think, a principled opposition whotries to return to normal process and
(11:07):
constrains not just on the policyoutcome by whatever means.
>> Donald Trump (11:12):
But constrains the method could be a useful thing for the country.
>> Bill Whalen (11:19):
Let's talk about a few things Trump is doing and
let's play a game I call Big deal,little deal or no deal at all.
[MUSIC]
So item number one, the President signs an executive order calling
for a 90 day review of all US foreign aid.
Marco Rubio, our Secretary of State,does indeed issue the freeze,
(11:41):
the freeze does notapply to emergency aid.
It does not apply to military funding forIsrael, but
it does apply to military funding forUkraine.
Gentlemen, big deal,little deal, no deal at all.
>> H.R. McMaster (11:52):
Yeah, I think it's a big deal because when you suspend it,
a lot of these programs someof which need to go and
are not effective,are hard to restart, right?
Because you have people who are hired,who are delivering whatever that aid or
that assistance is.
Some of this is has to do withyour very successful programs in
(12:12):
preventive medicine, forexample, the PEPFAR program.
So I do think that's a big deal.
And again, it's just one of thesethings where it makes, I think,
President Trump feel good to do it.
But if his overall objective is to getrid of programs that don't deliver or
to stop giving assistance to peoplewho oppose America's agenda abroad,
(12:34):
I mean, I'm all for that.
We did a review of this in 2017 to2018 of all foreign assistance.
And we compared foreign assistanceto certain countries with the voting
records as one of the measures ofthose countries in the United nations.
And prepared forPresident Trump options for
(12:55):
curtailing assistance to countrieswho are consistently opposing us.
Not only in the UN but in other four andin other ways as well.
So, hey, I'm all for the overall objectiveof getting rid of useless programs or
wants to cut against our interests.
But again,
this is one of the areas where [LAUGH]President Trump's disruptive, right?
(13:16):
There's a lot that needs to be disrupted,but sometimes he's so disruptive that
he disrupts his own agenda or makes itdifficult for us to pursue our interests.
>> Niall Ferguson (13:26):
It is a big deal, it's a big deal,
though, not an entirely in a negative way.
I quite like the fact thatMarco Rubio's three questions are,
does it make America safer?
Does it make America stronger?
Does it make America more prosperous?
And if the answer isn't yes,why are we doing it?
(13:47):
And, I think, it will createleverage on a lot of countries, and
that could be quite useful.
The Ukraine military aid question bill,
is not quite as clear cutas you made it sound.
At least my understandingis that is not impacted,
except insofar as it's aid thatcomes out of State Department Funds,
(14:10):
and that is a very small partof the military aid to Ukraine.
So I wouldn't want our listeners to getthe impression that Trump just cut Ukraine
off, cuz, in fact, he didn't.
The real big news that, I think,has caught many people by surprise is
that Trump's election victory has notbeen good news for Vladimir Putin.
(14:33):
And bad news for Volodymyr Zelenskyy, but
just the opposite, I think,that's a very big deal indeed.
And it makes me more optimistic thatwe'll see an end to the war that
won't be entirely on Putin's terms.
Putin's on the back foot.
That's clear from Trump's recenttruth social statement, but
(14:55):
it's also clear from other thingsthat I'm hearing from Ukraine.
So let's just make that clear.
>> Bill Whalen (15:03):
Okay, John?
>> John Cochrane (15:04):
Military aid, [COUGH] there's two parts.
Are we willing to send weapons to peoplewho might even have the cash to buy it
from us versus are we willingto give them the cash?
The number one question is the first one[LAUGH] send them the weapons, especially
the Ukrainians and the Israelis, andlet's worry about who pays for it later.
Non-military aid is a rat hole,
(15:25):
and I do think it needssome way of looking at it.
So much ends up insuitcases full of cash that
wind up in people's Swiss bank accounts.
So much ends up subsidizing our enemies.
Most of Hamas was subsidized by us andthe Europeans through the United Nations.
So that's reallycounterproductive in many ways,
(15:47):
so stopping and looking at it,reforming it is important.
>> Bill Whalen (15:52):
All right, next question, the Colombian president refuses to accept
US Military flights bringingdeportees into his nation.
Donald Trump threatens economic sanctions.
Colombia's president promptly backs down,gentlemen, big deal, little deal, no deal.
Let me add to that, what happenswhen Trump starts punching down?
A little bit so far, he's gotten thesquabbles with Colombia, Denmark, Canada.
No offense to these nations, butthey're not to be confused with China or
(16:15):
Russia, Niall.
>> Niall Ferguson (16:16):
I think it's part of a big deal.
I mean, the big deal is obviouslythat there is gonna be a concerted
effort to deport illegalimmigrants from the United States.
And we're told it's gonna be ona larger scale than anything
we've seen in recent times.
I think it's quite a big deal ifyou combine it with the closure,
(16:39):
or at least much more tightpolicing of the southern border.
John will explainthe economics in a minute.
But if one thinks about howthis is actually gonna be done,
two things need to happen.
One, there need to be significantresources voted by Congress for
these deportations to happen,otherwise they're not gonna happen.
(17:02):
And we'll see how much Congress isprepared to put into this effort.
The other thing that has to happen isthat Latin American countries need to
cooperate.
And if they don't, again,the whole thing becomes impossible.
Now, the Colombian case was interestingbecause the Colombian president
made a mistake, which was to pick a fighton social media with Donald Trump.
(17:25):
That didn't last long.
And I think that is not a mistake that hisMexican counterpart is ever gonna make.
Claudia Sheinbaum is very clearlyplaying a clever game in making
sure that she does not get onthe wrong side of President Trump.
And I think that's more important, ofcourse, than what goes on with Colombia.
(17:47):
Notice also, the Trump administrationseems ready to deal with the most odious
regime in the region,the Venezuelan regime of Nicolas Maduro,
if it can get cooperation fromhim with the deportation plan.
So I think it's part of a big deal.
And John is gonna tell us,if he feels like it,
why a sudden change to the US labormarket brought about by these
(18:10):
radical policies might bea big macro-deal, John.
>> John Cochrane (18:15):
Well, if we deported a substantial fraction of the over
10 million [COUGH] peopleworking here illegally,
that would be difficult for the economy.
Both good luck getting anything built,good luck getting your garden clean, but
also all sorts of peopleworking other jobs.
(18:35):
So the big question is, is it goingto be a mass deportation of peaceful,
hard working people, oris it gonna be something else?
And I think that's still up in the air.
For the moment, this is mostly onthe symbolic scale, one plane load.
Does Colombia take it or not?
[COUGH] SoI don't think it's going to go that far as
(18:57):
sending 11 million peopleto other countries.
That would be a big shockto the labor market.
A lot of why the US has grown sowell is our labor force has grown.
There's more people working inthe US unlike other places.
But so far, we're not reallyheading in that direction.
>> Bill Whalen (19:16):
HR. >> H.R. McMaster
a big deal.
Petro too, the president in Colombia,he's a far left ideologue and
he's not very popular in his own country.
So I mean, that's somebody, I think,who Trump did use a wrestling term,
is pretty appropriate forTrump to elbow-drop.
And I just hope he's harder on Maduro.
I mean, I'm worried aboutthis deal with Venezuela, and
(19:39):
this is what you get with Trump.
You get somebody who's tough, right?
But then also he loves a big deal.
And he's got a lot of, I think,shady business people in his ear saying,
hey man,
we need to deal with Venezuela becausethey wanna make money again in Venezuela.
And of course, with the very clearelection results that cut against Maduro,
(19:59):
him remaining in power,I think Trump wanna make him a prey and
really put the screws to him.
Yeah, the Biden administrationalleviated the sanctions on Maduro.
That didn't work.
And so anyway, with Trump,it's a double-edged sword.
I think he's tough.
He was tough with Petro.
I think that was good in this case.
I hope he's tough with Maduro as well.
(20:20):
Let's stick with you, HR.
Trump's also called for
NATO countries to increase theirdefense commitments to 5% of their GDP.
Again, I ask, big deal,little deal, no deal at all?
>> H.R. McMaster (20:30):
Yeah, it's a big deal,
because he got results last time whenhe really hit burn shearing hard.
I mean, [LAUGH] it was funny like when heset meetings with Chancellor Markowitz.
So Angle.
If you love NATO so much,why don't you pay your dues.
And [LAUGH] you're feedingPutin's ATM with this pipeline,
we're over here defending you,how does that make sense?
(20:54):
And he was right about that.
And of course,Germany's declared the Zeitenwende, but
they haven't really done much about it interms of increases in defense spending.
So I think it's a big deal.
I hope we make good on that as wellbecause our military has a huge bow wave
of deferred modernization.
We have capacity issues and
our procurement budgethas been going way down.
(21:17):
The Biden administration defense budgetswere real reductions when adjusted for
inflation, andthe world's being a more dangerous place.
So I'm thinking of Senator Wicker'sreport on the defense budget.
I hope that Donald Trump overrulesthe budget hawks in his administration and
realizes that you're not gonnasolve the deficit problem or
(21:38):
the debt problem onthe defense budget side.
What you'll have is you'llbe weak fiscally and
you'll be weak militarily as well.
>> Bill Whalen (21:46):
John, that conversation with NATO includes,
yes, another threat of tariffs.
>> John Cochrane (21:50):
Well, let me, yes, and
let's hope that those are threats cuzthe whole point of NATO is an alliance.
And the whole point of tariffs is,I'm gonna take from you and give to us,
which is not a very nicething to do with your allies.
So let's hope it's just threats.
But the spending thing, I think,well, the idea is a nice one.
(22:11):
Focusing on how much you spend, especiallywhen you're talking to Europeans,
I think is a mistake.
You need to focus on what you buy forwhat you spend.
And looking all around us,the squishiness of cost is, I think,
one of the great lessons of our time.
You can spend billions and billions ofdollars on highways in the US or on
(22:33):
spaceships from Boeing rather [LAUGH] thanElon Musk that just go down big rat holes.
And certainly,European welfare states could spend
money on a military budgetthat goes down a rat hole.
But then HR might fill us in,
how many operational tanksare there in Germany ready to go?
That's the number I wanna know.
>> H.R. McMaster (22:54):
[CROSSTALK] like a battalion like, hey, John.
Hey, you know who made this point, this isa really good point that you're making,
was President Niinistö,the former President of Finland.
He gave a talk at Chatham House last week,I recommend it to our listeners.
It's worth reading.
And he's a very wise person,
I really enjoyed my interactions with himwhen I was National Security Advisor.
(23:15):
And he was great with President Trump.
I mean, he really helped President Trumpunderstand better kind of the threat
to Europe broadly bythe Russian threat to Europe.
And this is pre-reinvasion of Ukraine.
But you're absolutely right on this, it'snot just how much money you spend, right,
it's what you get from that spending.
>> John Cochrane (23:32):
Because welfare states,
we could spend it ondiversity coordinators,
we could spend it on pensions,we could spend it on veterans' healthcare.
That's all military spending,does no good.
I wanna know, are you ready to go?
The spending business, he who picks upthe bill gets to pick the restaurant,
which is something we should remember.
If the Europeans start spendingtheir own defense, well,
(23:53):
then they get a better right to saywhen it does and doesn't get used.
Conversely, to the Europeans, I would say,
he who picks up the bill decidesWhat restaurant we're going to?
And if they want a different policy onRussia and Ukraine than we do, well, then
that's why they should want to spend ontheir own rather than due to our threats.
>> Bill Whalen (24:10):
Niall, I wanted you to go last because you recently were at
the World Economic Forum where you wrotejust a brilliant column talking about
Davos Man.
I want you to tell uswho this Davo man is?
Who would play him in the movies?
But what is the perception of Trump,the second Trump president siege in Davos?
Cuz for me to your commentssounds like things have changed.
>> Niall Ferguson (24:29):
Well, I'm sure HR has suffered Davos at least once in his
career, if not more often, not sure ifif John ever accepted the invitation.
But the World Economic Forum is wellknown, I suspect to most of our
listeners as the great Bazaar that takesplace in Switzerland each January.
(24:50):
When the the business eliteof the world converge
to meet with a smattering ofworld leaders and academics.
Well, according tothe conspiracy theories,
to lay the foundations forworld government, in reality to engage in
(25:11):
an enormous number of businessmeetings in a frenzy of speed dating.
I was there,it was a tough choice inauguration Davos.
I felt the patriotic thing wasto go behind enemy lines and
see what the globalists were up to ratherthan to go partying in Washington.
I left that to my wife.
(25:31):
And what did I find?
Well, what a transformationfive years ago when I was there
on the eve of the pandemic thatbrought us together as the Goodfellow.
The conversation was not aboutthe pandemic, no one else had noticed.
It was about the wickedness ofDonald Trump and in particular,
his utter irresponsibility onthe sacred issue of climate change.
(25:54):
Greta Thunberg was also in town fiveyears ago, she was fated, he was hated,
it's all over, it's all changed now.
Now the European business leaders,not only privately, but publicly,
say, we wish we had Trump here in Europe.
We want mega make Europe great again.
Can we have musk too?
This is what we need, so five years on,
there's been a completevibe shift at Davos.
(26:16):
And so, Davos man is now mega man, hewants Europe to get the Trump treatments.
You name it, they're ready to do it,and you can see why.
Because Europe has so conspicuously fallenbehind the United States in terms of
economic performance,technological innovation.
And part of the reason is, as has beenpointed out at Davos several times,
(26:41):
that Europe's regulatoryregime discourages innovation,
imposes regulation on anything novel.
And also layers on costs inthe name of climate change that
make German manufacturingsimply uncompetitive.
So that's the vibe shift and it relatesto this defense spending issue too.
(27:04):
Because I found myself at one ofthe Davos sessions having a little bit of
a contretemps with Wolfgang Ischingerof the Munich Security Conference.
When he made the absolutely extraordinarysuggestion that maybe the Chinese
could provide troops if Ukraine neededa security guarantee after a ceasefire.
(27:24):
It certainly couldn't be Germans that didit, and I'm afraid this set me off rather.
And I'm hoping our producer willprovide the clip because it was
one of my better foraysat Davos in recent years.
I spent many years, many years studying German history,
I speak German, I know the country well.
(27:46):
And I say to my German friends,including you, Wolfgang,
if you want to confirm the worstpossible impressions that Americans,
not just mega Americans.
But Americans have of Europe andparticularly of Germany,
go suggest Chinese troops in Ukraine.
>> [LAUGH].
>> Speaker 7 (28:07):
Cuz that is the single worst idea I've heard at Davos in 10 years.
>> [APPLAUSE].
>> Bill Whalen (28:12):
John, why don't you go to Davos?
>> John Cochrane (28:14):
Well, I haven't been invited to start with and
I hate cocktail parties,so I have two reasons.
I would go to Davos and I would go skiing,but maybe the slopes will be empty.
>> H.R. McMaster (28:24):
Hey, the one party to go to the salesforce party.
Great music man, great music, I mean,that's what you don't want to miss.
>> Niall Ferguson (28:31):
I knew you'd been there.
>> John Cochrane (28:34):
It's not just Trump.
Trump is reflecting what you calledpretty increasingly the vibes shift,
which is what you're seeing at Davos andcertainly Davos and Europe.
My sense is Europe has figured outwe regulated our economies to death.
We are all past peak woke,the great awakening is over and
(28:57):
imploding around us, andthat's not just Trump.
Europe doesn't quite seem to getit as far as energy and climate,
as far as I can see.
And the regulatory burden is enormouson companies are still having
to file scope 3 emissions everytime they sneeze in Europe.
So they quite haven't put two to twotogether on how much they killed their
(29:21):
economies on the altar of completelyineffective climate policies.
I mean, were this actually doing any good,there might be something to say about it.
They also don't seem to have quitegotten the fiscal discipline.
I was interested by Mario Draghi'sreport that said, hey,
we've regulated ourselves to death.
The answer is we're going to have theEuropean Union issue hundreds of billions
(29:44):
of Euros of bonds and throw them downvarious industrial policy rat holes.
So has Davos, man, really come around?
And second question, you said it, so I'mgonna ask you the question, it's gorgeous.
Is what Europe needs reallytwo dozen Javier Miles rather
than a Donald Trump [LAUGH]?
>> Niall Ferguson (30:03):
Yeah, that's actually right.
I mean, I do think thatthe idea that you could sort
of do Trump on Europe misses the point.
The United States can afford Trump becauseof the strength that it has accumulated,
particularly in the technology domain.
But also because of the enormous naturalresources that it has at its disposal.
(30:23):
Europe doesn't have these advantages,
its problems are closer toArgentina's than America's.
And so, my recommendation was,in fact, Javier Malay, I think,
we probably need 27 of them,wouldn't they, John?
>> John Cochrane (30:37):
Well, yeah, sorry, I got the number.
>> [LAUGH].>> John Cochrane: And
Marshall Evangeline cannot from Brusselsissue executive orders the way Trump can.
So Europe it doesn't just need one Trump,it needs, if any, a lot of them.
>> Bill Whalen (30:49):
Niall, mentioned technology that is my opening to ask
you guys about Deep Seq, and I want youto run with this for a little while.
So yesterday we had a $1trillion sell off on Wall Street.
DeepSeek, if you're not aware,is a low cost Chinese AI model.
This comes right after a $500 billionpledge for Start Gate to do AI for
infrastructure here in the United States.
(31:10):
John, you wrote eloquently aboutthis in your grumpy Economist blog.
So tell us about DeepSeek, and if youwanna put it in this category, a big deal,
little deal, no deal at all,feel free to do so.
>> John Cochrane (31:20):
Big deal.
>> Bill Whalen (31:21):
Ginormous deal.
>> John Cochrane (31:22):
[LAUGH] Well, if true, so
there's always a question ofexactly how much did it cost.
But the basic news is speakingof the squishiness of cost AI,
[COUGH] the basic ideais computations free.
So we'll just throw spaghetti atthe ceiling and see what sticks.
And then you scale that up to the $100million and all of a sudden it's not so
(31:46):
free anymore.
So that in the grand history of things,huge costs that have been revealed
to produce something useful lead toinnovation on how do we do it cheaper.
This one seemed to be mostly softer,I will also note.
That the export controls on advanced chipsspurred the Chinese to figure out how to
do it without advanced chips.
(32:07):
So much forthe effectiveness of the export controls.
Good thing we didn't run hundreds ofbillions of dollars of industrial policy
on the US way of doing things before wefound out it could be done much cheaper.
So this is just wonderful overall,
the idea that AI can bedone at one tenth the cost.
(32:28):
Now, the stock market felt,let me remind people,
the stock market is not the economy.
Stock market measuresthe value of profits,
not the value of goodthings to the economy.
So a dramatic fall in the cost of AImeans if you Nvidia had the, you know,
the patent on the chips that were needed,well,
all of a sudden we don't need those chips.
Nvidia's stock goes down, butthat's great for the rest of us.
(32:51):
That's great for AI users,that's great for the economy.
The stock market is not the economy.
And so overall, don't measure it that way.
>> Bill Whalen (33:00):
Niall, Marc Andreessen called this AI Sputnik moment.
>> Niall Ferguson (33:04):
Yeah, I saw that and I thought it was, it was interesting because
we've known for a while that DeepSeekwas making significant advances.
It's not quite clear at thispoint how far they were able to
use the most sophisticatedsemiconductors or
whether they were doing it by justpiling on the next grade down.
(33:29):
I've certainly heard it suggested thatthere must have been some illicitly
obtained, maybe via Singapore.
But why is the Sputnikmoment the right analogy?
1957, to remind our less historicallyminded listeners, the Soviets
successfully get a satellite up intoorbit and didn't do much other than beep.
(33:50):
But it was up there and it scared the hellout of Americans in the policy elite and
the wider public because the Sovietsturned out to be able to do that.
And I think you could certainly saythere's something of the Sputnik
moments about realizing that the Chinesecan do an LLM as good as open
(34:10):
AI's best at a 27th of the cost.
But what's the real moral of the story?
I would say, HR, tell me if you disagreethat the Sputnik moment spurred
the United States on to win the spacerace, which it decisively did,
landing a man on the moon 12 years later.
And I think the same will be true here.
I think we needed a bit ofan incentive to get this right.
(34:34):
Chinese competition has beenthe incentive for some years now.
I don't think we would be putting nearlyas much money into AI if the Chinese
weren't competing with us.
And I think if it is the Sputnik moment,the outcome is still likely
to be the same that the United Statesprevails, but not certain.
I think it's very important to understandthat in this AI race we can't win by
(34:56):
technological containment, John,I think you and I agree about this.
We're not gonna win by justhoarding the best GPUs,
especially since they're manufacturedright next door to China on Taiwan.
We're only gonna win if wedo better engineering and
we can solve some ofthe physical constraints,
the electricity generationchallenges that are implicit.
(35:19):
There is a quest on here,at least in the minds of the US
companies to get toAGI Artificial General Intelligence.
I don't think that's whatthe Chinese are trying to do.
I think the Chinese are just tryingto produce a commercial winner in
the large language model market.
And just as TikTok turned out to bea commercial winner in the social video
(35:43):
market, maybe DeepSeek willbe a commercial winner, but
it is still a case of anything we can do,they can do cheaper at bottom, isn't it?
>> John Cochrane (35:52):
[INAUDIBLE] This isn't really like Sputnik cuz that was a throw
billions of dollars at it and
we turned out to have more billionsof dollars than the Soviets did.
[LAUGH] This is a cost race.
This is an efficiency race.
It's sort of like Chinesemanufacturing was the first down and
it's very important that it's open source.
I'm not quite sure whythey made it open source.
I think that was to allthe natural security hysteria
(36:16):
that would go fromanything involving China.
But, if you don't like it censorship,fine, it's open source,
take out the censorship, build a new one.
They shared all that intellectual propertywith us for free so that the advantage
that they'll have from the programmingis not gonna last very long at all.
That'll all get incorporated into the waythe US stuff does remarkably quickly.
(36:39):
So thank you for sending that to us, it isthe energy thing is kind of interesting.
Nuclear power stocks went down as well,which I think is quite sad,
one of the great impetuses we had toget nuclear power going is now back
into the Nuclear Regulatory Commission.
And yes, this would not, if we had beenwalled off, we would not have felt that
(37:02):
competition if it was a private thing inChina, closed source only done in China,
we would never know you could do it forone tenth the price.
So that's very important to stay that way.
>> Bill Whalen (37:12):
Finally HR the- >> John Cochrane
the national security on this.
We've been doing China, China,China and HR sitting there,
slowly building up ahead of steam.
Yeah.
The national security angle HR butalso how it fits in the larger China
conversation having to do with tariffs andmilitary competition.
>> H.R. McMaster (37:28):
Yeah, so I think that if the technology can be weaponized against
you, can be used tothreaten your security,
we should impede the transfer of thattechnology or at least not underwrite it.
What's, happened over many yearswith China is that we've invested
in Chinese companies with dumbmoney flows into index funds and
(37:50):
so forth, into companies thatmanufactured their weapon systems.
We allow many of those companiesto list on our stock exchanges and
a lot of smart money hasgone into companies.
So for example, a massive investmentin 2014 went into the Chinese company
that does all the battlefieldartificial intelligence for
the People's Liberation Army,that's crazy to me.
(38:13):
So I think that there are tools ofeconomic statecraft that are appropriate.
But as I think John's pointed out andNiall's pointed out,
we can't just try to impede our adversary.
We have to stay ahead by innovating moreeffectively and applying technologies.
Other examples of really US technology, UScompanies aiding and abetting a potential
(38:33):
enemy has to do with the hypersonic, whichagain remember that was a Sputnik moment.
Also was Chinese developmentof hypersonic missiles.
All those missiles weredesigned with US software.
So I just think that there is a place forexport controls because
(38:54):
the public good that we'reprotecting is our own security.
But at the same time we wannamaintain our competitive advantage.
And I think this is an opportunityto invest more in the development of
technologies that havea defense application but
that also allow us to compete effectivelyin the emerging global economy.
>> Bill Whalen (39:14):
John, what happens when you go on DeepSeek and
you ask a question aboutTiananmen Square or the Wiggers?
What do you get as a response?
>> John Cochrane (39:20):
Yeah, it's censored on Tiananmen Square the exact same way that
ChatGPT is censored on every vaguelyright wing political issue in the US-
>> [CROSSTALK]
>> H.R. McMaster (39:31):
[INAUDIBLE] Come on.
>> [LAUGH]>> John Cochrane: It's censored.
What do you wanna know?
It's censored.
It's hilarious how lamethe censorship was.
If you ask DeepSeek to puta threes in Spain instead of ease,
it'll tell you all about Tankman andTiananmen Square.
And it's open source, so
it's pretty clear they put in somecensorship to keep the CCP happy.
(39:53):
But you wanna get around the censorship oruse the technology, it's very easy.
They're gonna get better at it, John.
They're really good at censoring.
>> John Cochrane (40:01):
But they just gave away the store, you've got the source code,
you wanna build a US-based one?
Three months from now you got a US-basedone with our censorship instead of their
censorship.
HR you keep going on about fairtrade if things should be fair.
So China should take the same attitude,we don't like TikTok cuz of some vague,
(40:22):
the software is hoovering updated.
Well, Tesla's cars hoover up data,
shouldn't China ban all Teslacars because the software is?
Hey, wait a minute, all US software.
How do we know the NSA hasn'tput a little secret backdoor?
China should ban all US software exports.
If you believe it all insome sort of fairness, and
we're not exactly at war with it,>> H.R. McMaster: John, all Chinese
(40:43):
companies must act by law as an extensionof the Chinese Communist Party.
I mean, there's no option, right?
So I mean, I think that's a bigdifference, John, big difference.
And then also, so many of these companiesare developing weapons that could be
used to kill our children andgrandchildren,
I think that's somethingto be concerned about.
(41:03):
We're developing, Well, I think these are,
I don't think that we shouldhave blanket approaches this.
But also we talk about,the Chinese industrial policy and
subsidies and overproduction, dumping.
This is what they just did,they just dumped an AI model.
I guess.
And we're not subsidizing chips and we'renot subsidizing, we don't do any of that.
>> H.R. McMaster (41:27):
These are for strategic purposes, right?
So, China wanted to dominate all ofthe hardware associated with fifth
generation telecommunications, right?
And, and they wanted it forsecurity purposes so
they could exfiltrate all the datathey wanted from all around the world.
So they steal US technologyfrom a number of companies and
(41:47):
then subsidized Huawrai with $60 billionthat we know of, manufactured that
hardware at artificially low prices anddumped them on the international market.
So that the only two remainingalternatives to that company were on life
support Ericsson and Nokia.
So I think that that kind ofbehavior is something that calls for
(42:07):
the application of tariffs, for example.
So, I know we're never gonnaagree on this completely, but
I thought that in some cases, right?
In some cases where the public good thatyou're protecting is national security,
then you don't I mean,then it's appropriate.
>> John Cochrane (42:26):
If it's well and clearly defined and not just China, China, China,
but let's put off the larger discussion.
I just wanted to add one greatpiece of technological news that my
computer lit up while we were talking.
Boom, the American supersonicairplane company just broke the speed
of sound with the firstprivate supersonic aircraft.
(42:48):
So your time to fly to DC back andforth again might just get cut in half.
Let's talk about wondersof private sector.
>> Bill Whalen (42:55):
Let us ponder for a second what happens to Niall Ferguson's world if
there's access to supersonic aircraft.
>> John Cochrane (43:00):
Or hypersonic.
>> [LAUGH]>> Niall Ferguson: Well, I must admit I'm
almost at the point of renouncingtravel or secretly hoping for
another pandemic so that I don'thave to go to Davos next year.
Perish the thought to be serious fora minute,
can I just remind us all thatSputnik moments cut both ways.
(43:22):
It is less than 10 years since Chinawas supposedly having a Sputnik moment
when AlphaGo defeated China'sgreatest player of the board game go.
And if you think about the history of AI,
that was the moment that Xi Jinping andco realized, we've got to do AI.
(43:43):
So the thing about Sputnik moments isinteresting is that they actually are,
if you think about it, a mistake from thevantage point of the person who initiates.
If you give your adversarya Sputnik moment,
they may turn around and up their game.
I think we should, we should try anddo fewer Sputnik moments,
that's my conclusion.
>> Bill Whalen (44:03):
All right, gentlemen, onto the lightning round.
[SOUND] All right,three questions for you this week.
The first one, I'd like each ofyou to name one story that or
one development that did not getthe attention it deserved HR you go first.
The Philadelphia Eagles do not count.
>> [LAUGH]>> H.R. McMaster: Well,
this goes to something Niall said earlier.
(44:23):
I think Russia is in a very weak position,
Putin's in a very weakposition economically.
But I think one of the stories that itdidn't get enough attention is that
North Korea is pulling their troops out ofthe Kursk area because they're suffering
such significant losses.
And as I mentioned before, you know,all armies have breaking points, and
(44:45):
I think the time is now to be tough onthe Kremlin and supportive of Ukraine.
So Donald Trump can go in to any kind ofa negotiation in a position of strength.
I think the opportunity is there,if President Trump wants to take it.
>> Niall Ferguson (44:57):
Well, I wanna give a shout out to Christopher Caldwell for
a terrific new piece in the Free Press.
The headline, the biggest policychange of the century, and
he makes the point that most peoplehave barely noticed that last Tuesday,
President Trump repealed affirmativeaction by executive order.
That undoes half centuryof social engineering, and
(45:20):
that is indeed a much biggerdeal than you would think if
you'd been tracking thisin the mainstream media.
>> Bill Whalen (45:28):
John?
>> John Cochrane (45:29):
Yeah, which of the many?
I'll just choose that the as longas we're on AI that Trump turned
canceled Biden's AI executive order, whichmeans we will not kill AI in its infancy.
The way Europe is going,part of that we're
not gonna follow them down tocommitting suicide on our economy.
>> Bill Whalen (45:53):
All right, gentlemen, Donald Trump last week revoked security
protection for John Bolton andMike Pompeo and Anthony Fauci.
He also revoked the security clearances of51 intelligence officials who had claimed
that Hunter Biden's laptop was a Russianruse, your thoughts on the matter HR?
>> H.R. McMaster (46:08):
Well, I think it's unfortunate, okay?
Unless, who knows whatelse President Trump did,
I hope what he did is inadvance of doing that.
Got a message to Ayatollah and the RGC.
If any harm is done toany of these individuals,
you're essentially committing suicide.
I mean, that would have been a goodmessage to give him in advance of pulling
(46:30):
the security, butthese are people who are at risk or
they wouldn't have had security,and I think it's regrettable.
>> Bill Whalen (46:37):
John.
>> John Cochrane (46:38):
Well, security clearance versus the security protection are two
separate.
I don't want people gunned down in thestreets removing the security clearance
for an egregious politicalact from security,
people who are supposedto not do such things.
That's the lightest punishmentthat I could imagine.
Yeah, if you're gonna behave like that,
you shouldn't have access to any nationalsecrets, that seems the least he could do.
>> Bill Whalen (47:02):
Niall, your thoughts,
keeping in mind that securityprotection is very personal for you.
>> Niall Ferguson (47:06):
Yeah, I have to say this is one of these vindictive acts
that I can't endorse,especially as Mike Pompeo and
John Bolton have been threatenedby the Iranian government.
I mean, there's no question that theyare threatened by a hostile foreign power.
(47:27):
And I'd say the thing thatI find most puzzling about
this aspect of the pastweek is that it's part of
a surprisingly dovishstance towards Tehran and
I really was not expecting.
And I don't like the specificsof leaving Mike Pompeo and
(47:50):
John Bolton,who are distinguished public servants,
exposed like this, butI also don't like the strangely dovish,
Tilt towards Iran,it makes no sense to me.
I think there was a coherent strategythat was available which was to take on
the axis of authoritarian powers andtake advantage of Iran's weakness.
(48:15):
But it's the Tucker Carlson tendency,
getting at least somepart of what it wants.
It's not getting what it wants on Russia,at least not so far.
So they seem to have decided to turntheir attention to the Middle east and
make arguments that are not onlypro Iranian, but anti Israel.
(48:35):
And I find that a very questionable
policy turn, I hope it won't last.
I'm fairly sure it won't lastbecause it makes no sense.
>> H.R. McMaster (48:47):
I could see it coming, Niall.
I mean, I tell the story in the book aboutthe summer of 2017 when President Trump
wanted to talk with Iranis.
I told him, hey,you're wasting your time, I mean,
and the Iranians know this too, right?
The Iranians are on the ropes,
they want Donald Trump tohelp them get off the ropes.
And that jackass Serif, was just onFareed Zakaria's program in Davos,
(49:09):
and then published an op ed in foreignaffairs, and it's the same line.
The same line from the Iranians.
Well, if you're just nicer to us,welcome us back into
the international order and,>> Niall Ferguson: We'll stop trying to
assassinate people on your soil.
No, I'm totally with you, HR, I thinkthis is a really bad turn of events.
I'm just hoping that it won't lastbecause it's hard to see that there
(49:32):
really can be any lasting dealbetween Tehran and Washington.
And I think there are plenty of peoplein Tehran who don't wanna do it because,
I mean, there's a division right inTehran as much as there is in Washington.
I think the national security strategy ofthe new Trump administration right now is
like a free forall between multiple factions.
The China first people are fightingwith the, let's modify Tehran.
(49:58):
People who are fighting with the let'sfocus on deportation people who
are fighting on.
Who are fighting with the,we got to worry about the economy people.
I mean,
it's got a lot more complicated than itwas at Mar a Lago when he was just king.
Now it's the federal government and
the full bureaucratic turf war isunderway, and may the best faction win.
>> John Cochrane (50:19):
And the same is true of economic policy.
But let me ask you guys, somaybe it's just that my, what?
Twitter's algorithm sends me, X,sorry, X's algorithm sends me.
But there is a good possibilitythat both Russia and
Iran are on the edge of collapse.
And this is the moment where just a littlebit being harder might push it under.
(50:42):
But also,
I wonder whether our intelligenceagencies are capable of knowing that.
One of the topics that we talkedabout today potentially was the CIA
finally figuring out that Wuhan justmaybe did come from a lab leak after all.
Something perfectly obvious to anyonewho reads even mainstream media for
(51:04):
three years.
Not giving me great confidencethat these guys are on the secret,
just how weak things are inside Russia or
Iran and how one little coup d'erasmight be the moment to do it.
>> Niall Ferguson (51:16):
Yeah, I mean,
I certainly think the Iranianeconomy is very vulnerable.
And indeed, as they have barelyfunctioning air defenses at this point,
they're vulnerable in other ways too.
>> John Cochrane (51:27):
Absolutely vulnerable, everybody hates them.
>> Niall Ferguson (51:29):
Yeah, and the Russian story is interesting because it's clear
that the Putin's war economy is reallyreaching breaking point financially.
He also has been taking casualties thatI'm sure HR would agree are absolutely
unsustainable.
>> H.R. McMaster (51:43):
Unsustainable, 30, 000 at least a month, right?
Some days, 1500, 1800 a day.
>> Niall Ferguson (51:51):
US was losing at peak, this many men in Vietnam in a year.
So it is a hard for me to see how Putincan sustain the current war effort.
He will need some kind of ceasefire soon.
And that, I think, is one reason whyTrump may have foreign policy success
(52:14):
in this area if he keeps the pressureup and indeed increase the pressure.
>> John Cochrane (52:19):
Sky high interest rates, a wave of bankruptcies potentially coming,
effectively most of the economydiverted to military uses.
This cannot go on very well.
>> H.R. McMaster (52:32):
Yeah, 47% equivalent to GDP in defense.
>> John Cochrane (52:35):
Okay, thank you for the number.
>> H.R. McMaster (52:36):
Yeah, I think it's 30% inflation now, really tight labor market,
sitting on piles of cash you can't convertor use, so, yeah, it's pretty grim.
>> Niall Ferguson (52:47):
So this is why, John, I think the implication of your question is
the smart strategy would be to leanon all the authoritarian powers and
not to cut any of themslack at this point.
Whereas, leaning on Canada, Denmark, etc,
that feels like you'releaning on the wrong people.
>> John Cochrane (53:06):
Yeah, if it's,- >> Niall Ferguson
Absolutely.
Actually implementing tariffs on the EU,Canada and Mexico would be
a terrible idea and drive the LatinAmericans into the arms of China,
cleaning up some of the mess that we'veleft sitting around, even with Canada.
And on the other end, we still havetariffs on lumber from Canada.
(53:29):
That kind of stuff's ridiculous,I would hope we would clean that up.
The Denmark thing's interesting, Greenlandwould be a great buy for the US and
Denmark doesn't seem toknow what to do with it.
But that could be handledmuch more politely, I agree.
>> Bill Whalen (53:42):
All right, speaking of terrible ideas, or
at least what Niall Fergusonconsiders a terrible ideal,
the super bowl fast approaches.
So, Eagle Super Fan HR McMaster,where are you gonna be on Sunday the 9th?
Are you gonna be at the game hosting aparty or does business take you elsewhere?
>> H.R. McMaster (53:56):
I think we'll be traveling, but hopefully it'll be in
front of a television by the timegame time, so, yeah, go Eagles.
>> Bill Whalen (54:05):
All right, John, it runs from about 3 o'clock to 7 o'clock in
the afternoon, California time,where are you gonna be, my friend?
>> John Cochrane (54:10):
I love super bowl weekend cuz everybody stays home and
watches tv.
I will either be at a normallycrowded restaurant or
I will be on the slopes of myfavorite Sugar bowl ski resort,
depending on the day,enjoying everybody else not being there.
>> Bill Whalen (54:28):
And Niall, it kicks off at about 11:30 PM London time,
is this a cure for insomnia?
>> Niall Ferguson (54:33):
I just want HR's team to win.
>> John Cochrane (54:36):
Whichever one that was.
>> Niall Ferguson (54:37):
I'm now taking an uncomplicated view of American football.
I can't seem to make it go away, soI'm with HR, okay, I'm with the Eagles.
>> H.R. McMaster (54:47):
And, how does Scotland look for the six nations,
Six nations is coming up in.
>> Niall Ferguson (54:53):
Well, Bill shared with me a particularly moving scene from
the dressing room after Scotlandbeat England in a recent calc.
It would, I'm sure,gladden the hearts of our
viewers to hearthe Victoria Scotland team sing.
We're a few weeks out from Scotland,England at Twickenham, February 21st.
(55:19):
I'm taking my youngest son, Campbell, forhis first ever rugby international and
that will be one ofthe highlights of the year.
But yeah, we'll talk about that nearerthe time, anything with an oval
ball is all right by me,whether forward passes are allowed or not.
>> Bill Whalen (55:38):
Niall, if you believe the guy has a sense of humor,
your son is going to fall in love with anNFL team much the way he fell in love with
the NBA team.
And he's gonna have to dragyou to an NFL game in London.
>> Niall Ferguson (55:48):
It's fine, let a thousand Anglo American sports flourish.
Whether the ball is round oroval, large or small,
sports are part of whathave made us great.
And so I've just decided to make mypeace with all these different sports.
>> Bill Whalen (56:08):
Gentlemen, we're gonna leave it there, great conversation.
What a busy eight days it's been,and it's only just begun.
On behalf of the good fellows, Sir NiallFerguson, John Cochrane, Lt Gen. H.R.
McMaster, all of us hereat the Hoover Institution,
we hope you enjoyed this conversation.
We hope you follow usregularly on YouTube,
please subscribe if you wouldn't mind,and stay tuned for our next show,
which will be, as I mentioned, in earlyFebruary, not long after the Super Bowl.
(56:30):
Till then, take care,thanks again for watching.
[MUSIC]
This is very unusual when you hear a deep seek, when you hear
somebody come up with something, we alwayshave the ideas, we're always first.
So I would say that's a positive.
That could be very mucha positive development.
Instead of spending billions andbillions, you'll spend less and
you'll come up withhopefully the same solution.
>> Bill Whalen (00:21):
It's Tuesday, January 28, 2025.
And welcome back to Goodfellows, a HooverInstitution broadcast examining social,
economic, political andgeopolitical concerns.
I'm Bill Whelan, I'm a Hooverdistinguished policy fellow moderator.
I'd like to introduce you to the starsof our show that would include former
presidential national security advisor,Lt Gen. H.R. McMaster and
making his long awaited return, the grumpyeconomist himself, John Cochrane.
(00:45):
John, I turned to you.
I had several very distraught friendsasking where you were on the last show.
It seems when John Cochraneis not on this show,
people's universesare fundamentally unsettled.
So how are you, my friend?
>> John Cochrane (00:56):
I'm fine, thank you.
I had a tiny little surgery in my tonguewhich meant I couldn't speak for a week,
which forme is just an unmitigated disaster.
But let me say a little vote of thanks formodern medicine.
Even tiny little routine things are lifechanging for our perceptions of life.
If you ever think you want to go back andlive in a Victorian novel, think twice.
(01:20):
HR I thought maybe we could do fiveminutes on every show talking about
various medical ailments, but that kindof be a depressing segment of the show.
>> H.R. McMaster (01:27):
[LAUGH] How about male pattern baldness?
We can talk about that maybe.
>> [LAUGH]>> Bill Whalen: Four older guys talking
about deterioration.
We call it the Hoover Institution Hair club for men.
I'm one of the founding members.
>> Bill Whalen (01:41):
Exactly.
>> [LAUGH]>> Bill Whalen: So here we are.
Let me point out that Niall Ferguson issupposedly joining us at some point, so
hopefully he will jump in from whereverin the world Niall happens to be.
But gentlemen, let's start with this.
As we record, it is exactly one week and
one day to Donald Trump takingoffice as a 47th president.
And to me at least, this is through theproverbial drinking out of a fire hose,
(02:03):
where what has not happenedin the last eight days?
We've had a flurry of executive orders.
We have had Trump get into it with, by mycount, at least four different nations.
When Niall Joyce us, he'll talk aboutwhat he saw at the World Economic Forum.
We've had all kinds ofcreativeness on Wall Street.
A trillion dollar sell off, John,
that I want you to talk to addressin terms of artificial Intelligence.
Trump came out to Californiato talk fires action.
(02:27):
So, HR Let me pose it to you this way.
Winston Churchill famously complainedabout being given a pudding
without a theme.
What is the theme to the truck pudding?
>> H.R. McMaster (02:36):
Well, I think it's first of all to reverse a lot of
what the Biden administration didthat he thinks makes no sense,
which I think a lot of us wouldagree maybe makes no sense.
And then to just make good oon kind of his top priorities,
where he is utterly consistent right?
Border security, reciprocal trade forexample, and, and deregulation.
(02:58):
So, I mean, all these themes that we heardduring the campaign, he's making good on.
And of course, what we're seeingis he's a heck of a lot more
organized the administrationis than it was in 2017.
And so a lot of these executive orders aregonna be contested by the courts and so
forth, but you don't really have anythinglike the initial travel ban in 2017 that
(03:19):
just didn't get anywhere.
So I think you're seeing a higherlevel of organization and
you're seeing Trump make good ona lot of campaign promises and
really focus on the areas where he doesn'treally carry any dissonance with him.
I mean, he's really consistentin a lot of these areas.
>> Bill Whalen (03:35):
John?
>> John Cochrane (03:36):
Yeah, I think it was Hamilton who said he wanted energy in
the executive.
Well boy,did we ever get energy in the executive.
I do also admire the organization.
They seem to know what they're doing.
They parish Internet agencies andknow where the bodies are buried.
It is an out of the box moment.
(03:58):
Trump is showing his willingness tothink out of the little verities
that have circled around for decades thatpeople pass around without thinking,
why don't we buy Greenland?
That's a good idea.
Why did nobody ever talkabout this in public before?
Why don't the Arab countrieslet people from Gaza in there?
There's an idea [LAUGH].
Trump's willing to say andthink kind of perfectly obvious things.
(04:21):
So it's a time of high volatility.
There's some bad stuff on the way, buttimes of high volatility in my asset
pricing career can often be greatif you can pick the good stuff and
hopefully the bad stuff won't get you.
So very interesting time,which I won't give a long lecture now.
We have lots to say.
And here's Niall to say some more, too.
>> Bill Whalen (04:40):
Yes, you say David's up like Beetlejuice.
And here he is, our friend,historian Sir Niall Ferguson hello, Niall.
>> Niall Ferguson (04:46):
Please sir I'm sorry I'm late.
>> Bill Whalen (04:48):
So to catch you up here, I asked John and HR if there was a theme to
the Trump pudding in the eight days ofhis presidency so far your thoughts?
>> Niall Ferguson (04:56):
And part of the reason I'm late is that there is just so
much to contend with.
There hasn't been somuch to contend with in the first week of
a presidency sinceFranklin Delano Roosevelt in 1933.
And I think we need torecognize that his record for
(05:16):
the number of executive ordersin the first 100 days is almost
certain to be broken byDonald Trump in his second term.
The way I'm thinking about this is it'sthe new deal, only with the sign changed.
Because if you think back to whatthe New Deal was, it was this radical,
(05:37):
transformative response to a terribledepression in which what we think of as
the federal governmenttoday was largely created.
All those agencies andentities and regulatory bodies,
they were all called intobeing in that first term.
Well, Trump's come to powerat the end of a boom, and
part of his task is todismantle the New Deal state.
(06:01):
That's what the Departmentof Government Efficiency,
in Elon's dreams at least, is going to do.
In the same way that the Rooseveltadministration at the beginning was
the ultimate isolationist administrationthat basically shut down American foreign
policy.
The only thing it did of note wasto cut off arms sales to everybody,
(06:21):
even countries under attack.
And the Trump foreign policy islike the entire opposite of that,
where nobody knows what Trump isgonna do from one day to the next,
except that it will be to upset bothallies and in most cases, adversaries.
So I'm thinking of this as I'm in 1933,but it's sort of a negative.
(06:44):
It's a mirror image of thattransformative hundred days.
And I'm struggling to keep up.
I think I have a handle on some of it, but
it's a full time jobkeeping track of this.
>> Bill Whalen (06:59):
I'm glad you mentioned 1933,
because we keep getting stories inthe press about how this is 1933 redux and
it's only a matter of time beforehe burns down the Reichstag.
>> Niall Ferguson (07:08):
Yeah, wrong country, right year, wrong country.
>> Bill Whalen (07:11):
And we had a kerfuffle over Elon Musk,
maybe not offering a Nazi salute.
So, John, what are Trump's opponentsgonna do for the next four years?
Just run around.
>> Niall Ferguson (07:19):
Can I just interject?
>> Bill Whalen (07:20):
Yes. >> Niall Ferguson
a Nazi slip.
I mean, that was one ofthose things that makes you
realize there's a lot ofstupidity out there because.
>> Elon Musk (07:28):
My heart goes out to you.
>> Niall Ferguson (07:30):
Elon's pretty awkward gestures on stage,
which are not ever particularlydelightful to watch.
Couldn't have resembled less.
And that's his salute unless you'd neverseen an actual Nazi salute I mean, really.
>> Bill Whalen (07:47):
Yeah.
>> John Cochrane (07:47):
Well, I think that's one's a great it kind of answers your
question.
An insight into the progressive mind.
Let's just think.
Take a breath and think.
Is it at all possible that Elon Muskis a secret Nazi, and, I mean,
a real Hitler loving Nazi?
And chose the moment of a speech atthe inaugural to reveal to all his friends
(08:09):
that we are secret Hitler loving Nazis andto give the signal that it's on.
This is just completely insane,NPR went with it.
Now, do they really believe that?
Hard to tell, butit is part of the machine,
I could see the machine trying to go.
Members of Congress repeat it,the media repeats it, is Elon a Nazi?
(08:31):
When do we need investigationsinto Elon's past?
Is there a high schoolyearbook photo in which he is
seen cavorting with somebody whomight have descended from some Nazi?
Blah, blah, blah, blah, blah,it obviously went nowhere cuz it is so
completely ridiculous.
But you can see one element of thattrain trying to get going, and
it's an interesting train to watch asit has now crashed and burned [LAUGH].
>> Bill Whalen (08:54):
Well, HR, what are Trump's opponents gonna do for
the next four years?
They don't have votes for impeachment,you can only drop play the Nazi card so
many times.
What are they gonna do?
>> H.R. McMaster (09:01):
Well, they'll resist anything that they can.
I mean, I do think though that it's clearthat President Trump has the initiative at
this stage.
I think,
what he's been able to do is what he'sdone is actually not surprising, right?
Is anybody surprised by anyof the executive orders?
I mean, the thing with Donald Trumpis a lot of politicians,
(09:22):
they kinda hide what they're gonna do.
They're obscure about their intentions,
they're afraid of alienating soportions of their constituency.
But with Trump, I mean,what you see is what you get and, I think,
that whereas a lot of people,of course, find what he says or
(09:44):
what he does offensive orarresting or upsetting.
I mean, I think, a lot of people are justhappy that what you see is what you get,
and there isn't reallyan ulterior motive with him.
>> John Cochrane (09:58):
Half of what Trump's doing is not Roosevelt in a way.
Half of what he's doingis cleaning up the mess,
the ungodly mess left behind by energypolicy, by DEI programs, by you name it.
The whole federal bureaucracy is a mess.
So cleaning up the mess is a littledifferent than expanding the state in
(10:19):
order to deal with an emergency.
Let me offer maybe whathis opponents should do.
Number one, govern responsibly [LAUGH].
It will be lovely if the nextelection could come along and
they could point to San Franciscoas a well run blue city,
we'll do like this forthe rest of the country.
And the other is the rule of law question,so
(10:41):
we do not elect a king for four years.
I like the policy results, butgovernment by executive order and
national emergency isdubious in the long run.
The next Democrat willcertainly come in and
declare a national emergency on climateand gender equity, and here we go again.
So, I think, a principled opposition whotries to return to normal process and
(11:07):
constrains not just on the policyoutcome by whatever means.
>> Donald Trump (11:12):
But constrains the method could be a useful thing for the country.
>> Bill Whalen (11:19):
Let's talk about a few things Trump is doing and
let's play a game I call Big deal,little deal or no deal at all.
[MUSIC]
So item number one, the President signs an executive order calling
for a 90 day review of all US foreign aid.
Marco Rubio, our Secretary of State,does indeed issue the freeze,
(11:41):
the freeze does notapply to emergency aid.
It does not apply to military funding forIsrael, but
it does apply to military funding forUkraine.
Gentlemen, big deal,little deal, no deal at all.
>> H.R. McMaster (11:52):
Yeah, I think it's a big deal because when you suspend it,
a lot of these programs someof which need to go and
are not effective,are hard to restart, right?
Because you have people who are hired,who are delivering whatever that aid or
that assistance is.
Some of this is has to do withyour very successful programs in
(12:12):
preventive medicine, forexample, the PEPFAR program.
So I do think that's a big deal.
And again, it's just one of thesethings where it makes, I think,
President Trump feel good to do it.
But if his overall objective is to getrid of programs that don't deliver or
to stop giving assistance to peoplewho oppose America's agenda abroad,
(12:34):
I mean, I'm all for that.
We did a review of this in 2017 to2018 of all foreign assistance.
And we compared foreign assistanceto certain countries with the voting
records as one of the measures ofthose countries in the United nations.
And prepared forPresident Trump options for
(12:55):
curtailing assistance to countrieswho are consistently opposing us.
Not only in the UN but in other four andin other ways as well.
So, hey, I'm all for the overall objectiveof getting rid of useless programs or
wants to cut against our interests.
But again,
this is one of the areas where [LAUGH]President Trump's disruptive, right?
(13:16):
There's a lot that needs to be disrupted,but sometimes he's so disruptive that
he disrupts his own agenda or makes itdifficult for us to pursue our interests.
>> Niall Ferguson (13:26):
It is a big deal, it's a big deal,
though, not an entirely in a negative way.
I quite like the fact thatMarco Rubio's three questions are,
does it make America safer?
Does it make America stronger?
Does it make America more prosperous?
And if the answer isn't yes,why are we doing it?
(13:47):
And, I think, it will createleverage on a lot of countries, and
that could be quite useful.
The Ukraine military aid question bill,
is not quite as clear cutas you made it sound.
At least my understandingis that is not impacted,
except insofar as it's aid thatcomes out of State Department Funds,
(14:10):
and that is a very small partof the military aid to Ukraine.
So I wouldn't want our listeners to getthe impression that Trump just cut Ukraine
off, cuz, in fact, he didn't.
The real big news that, I think,has caught many people by surprise is
that Trump's election victory has notbeen good news for Vladimir Putin.
(14:33):
And bad news for Volodymyr Zelenskyy, but
just the opposite, I think,that's a very big deal indeed.
And it makes me more optimistic thatwe'll see an end to the war that
won't be entirely on Putin's terms.
Putin's on the back foot.
That's clear from Trump's recenttruth social statement, but
(14:55):
it's also clear from other thingsthat I'm hearing from Ukraine.
So let's just make that clear.
>> Bill Whalen (15:03):
Okay, John?
>> John Cochrane (15:04):
Military aid, [COUGH] there's two parts.
Are we willing to send weapons to peoplewho might even have the cash to buy it
from us versus are we willingto give them the cash?
The number one question is the first one[LAUGH] send them the weapons, especially
the Ukrainians and the Israelis, andlet's worry about who pays for it later.
Non-military aid is a rat hole,
(15:25):
and I do think it needssome way of looking at it.
So much ends up insuitcases full of cash that
wind up in people's Swiss bank accounts.
So much ends up subsidizing our enemies.
Most of Hamas was subsidized by us andthe Europeans through the United Nations.
So that's reallycounterproductive in many ways,
(15:47):
so stopping and looking at it,reforming it is important.
>> Bill Whalen (15:52):
All right, next question, the Colombian president refuses to accept
US Military flights bringingdeportees into his nation.
Donald Trump threatens economic sanctions.
Colombia's president promptly backs down,gentlemen, big deal, little deal, no deal.
Let me add to that, what happenswhen Trump starts punching down?
A little bit so far, he's gotten thesquabbles with Colombia, Denmark, Canada.
No offense to these nations, butthey're not to be confused with China or
(16:15):
Russia, Niall.
>> Niall Ferguson (16:16):
I think it's part of a big deal.
I mean, the big deal is obviouslythat there is gonna be a concerted
effort to deport illegalimmigrants from the United States.
And we're told it's gonna be ona larger scale than anything
we've seen in recent times.
I think it's quite a big deal ifyou combine it with the closure,
(16:39):
or at least much more tightpolicing of the southern border.
John will explainthe economics in a minute.
But if one thinks about howthis is actually gonna be done,
two things need to happen.
One, there need to be significantresources voted by Congress for
these deportations to happen,otherwise they're not gonna happen.
(17:02):
And we'll see how much Congress isprepared to put into this effort.
The other thing that has to happen isthat Latin American countries need to
cooperate.
And if they don't, again,the whole thing becomes impossible.
Now, the Colombian case was interestingbecause the Colombian president
made a mistake, which was to pick a fighton social media with Donald Trump.
(17:25):
That didn't last long.
And I think that is not a mistake that hisMexican counterpart is ever gonna make.
Claudia Sheinbaum is very clearlyplaying a clever game in making
sure that she does not get onthe wrong side of President Trump.
And I think that's more important, ofcourse, than what goes on with Colombia.
(17:47):
Notice also, the Trump administrationseems ready to deal with the most odious
regime in the region,the Venezuelan regime of Nicolas Maduro,
if it can get cooperation fromhim with the deportation plan.
So I think it's part of a big deal.
And John is gonna tell us,if he feels like it,
why a sudden change to the US labormarket brought about by these
(18:10):
radical policies might bea big macro-deal, John.
>> John Cochrane (18:15):
Well, if we deported a substantial fraction of the over
10 million [COUGH] peopleworking here illegally,
that would be difficult for the economy.
Both good luck getting anything built,good luck getting your garden clean, but
also all sorts of peopleworking other jobs.
(18:35):
So the big question is, is it goingto be a mass deportation of peaceful,
hard working people, oris it gonna be something else?
And I think that's still up in the air.
For the moment, this is mostly onthe symbolic scale, one plane load.
Does Colombia take it or not?
[COUGH] SoI don't think it's going to go that far as
(18:57):
sending 11 million peopleto other countries.
That would be a big shockto the labor market.
A lot of why the US has grown sowell is our labor force has grown.
There's more people working inthe US unlike other places.
But so far, we're not reallyheading in that direction.
>> Bill Whalen (19:16):
HR. >> H.R. McMaster
a big deal.
Petro too, the president in Colombia,he's a far left ideologue and
he's not very popular in his own country.
So I mean, that's somebody, I think,who Trump did use a wrestling term,
is pretty appropriate forTrump to elbow-drop.
And I just hope he's harder on Maduro.
I mean, I'm worried aboutthis deal with Venezuela, and
(19:39):
this is what you get with Trump.
You get somebody who's tough, right?
But then also he loves a big deal.
And he's got a lot of, I think,shady business people in his ear saying,
hey man,
we need to deal with Venezuela becausethey wanna make money again in Venezuela.
And of course, with the very clearelection results that cut against Maduro,
(19:59):
him remaining in power,I think Trump wanna make him a prey and
really put the screws to him.
Yeah, the Biden administrationalleviated the sanctions on Maduro.
That didn't work.
And so anyway, with Trump,it's a double-edged sword.
I think he's tough.
He was tough with Petro.
I think that was good in this case.
I hope he's tough with Maduro as well.
(20:20):
Let's stick with you, HR.
Trump's also called for
NATO countries to increase theirdefense commitments to 5% of their GDP.
Again, I ask, big deal,little deal, no deal at all?
>> H.R. McMaster (20:30):
Yeah, it's a big deal,
because he got results last time whenhe really hit burn shearing hard.
I mean, [LAUGH] it was funny like when heset meetings with Chancellor Markowitz.
So Angle.
If you love NATO so much,why don't you pay your dues.
And [LAUGH] you're feedingPutin's ATM with this pipeline,
we're over here defending you,how does that make sense?
(20:54):
And he was right about that.
And of course,Germany's declared the Zeitenwende, but
they haven't really done much about it interms of increases in defense spending.
So I think it's a big deal.
I hope we make good on that as wellbecause our military has a huge bow wave
of deferred modernization.
We have capacity issues and
our procurement budgethas been going way down.
(21:17):
The Biden administration defense budgetswere real reductions when adjusted for
inflation, andthe world's being a more dangerous place.
So I'm thinking of Senator Wicker'sreport on the defense budget.
I hope that Donald Trump overrulesthe budget hawks in his administration and
realizes that you're not gonnasolve the deficit problem or
(21:38):
the debt problem onthe defense budget side.
What you'll have is you'llbe weak fiscally and
you'll be weak militarily as well.
>> Bill Whalen (21:46):
John, that conversation with NATO includes,
yes, another threat of tariffs.
>> John Cochrane (21:50):
Well, let me, yes, and
let's hope that those are threats cuzthe whole point of NATO is an alliance.
And the whole point of tariffs is,I'm gonna take from you and give to us,
which is not a very nicething to do with your allies.
So let's hope it's just threats.
But the spending thing, I think,well, the idea is a nice one.
(22:11):
Focusing on how much you spend, especiallywhen you're talking to Europeans,
I think is a mistake.
You need to focus on what you buy forwhat you spend.
And looking all around us,the squishiness of cost is, I think,
one of the great lessons of our time.
You can spend billions and billions ofdollars on highways in the US or on
(22:33):
spaceships from Boeing rather [LAUGH] thanElon Musk that just go down big rat holes.
And certainly,European welfare states could spend
money on a military budgetthat goes down a rat hole.
But then HR might fill us in,
how many operational tanksare there in Germany ready to go?
That's the number I wanna know.
>> H.R. McMaster (22:54):
[CROSSTALK] like a battalion like, hey, John.
Hey, you know who made this point, this isa really good point that you're making,
was President Niinistö,the former President of Finland.
He gave a talk at Chatham House last week,I recommend it to our listeners.
It's worth reading.
And he's a very wise person,
I really enjoyed my interactions with himwhen I was National Security Advisor.
(23:15):
And he was great with President Trump.
I mean, he really helped President Trumpunderstand better kind of the threat
to Europe broadly bythe Russian threat to Europe.
And this is pre-reinvasion of Ukraine.
But you're absolutely right on this, it'snot just how much money you spend, right,
it's what you get from that spending.
>> John Cochrane (23:32):
Because welfare states,
we could spend it ondiversity coordinators,
we could spend it on pensions,we could spend it on veterans' healthcare.
That's all military spending,does no good.
I wanna know, are you ready to go?
The spending business, he who picks upthe bill gets to pick the restaurant,
which is something we should remember.
If the Europeans start spendingtheir own defense, well,
(23:53):
then they get a better right to saywhen it does and doesn't get used.
Conversely, to the Europeans, I would say,
he who picks up the bill decidesWhat restaurant we're going to?
And if they want a different policy onRussia and Ukraine than we do, well, then
that's why they should want to spend ontheir own rather than due to our threats.
>> Bill Whalen (24:10):
Niall, I wanted you to go last because you recently were at
the World Economic Forum where you wrotejust a brilliant column talking about
Davos Man.
I want you to tell uswho this Davo man is?
Who would play him in the movies?
But what is the perception of Trump,the second Trump president siege in Davos?
Cuz for me to your commentssounds like things have changed.
>> Niall Ferguson (24:29):
Well, I'm sure HR has suffered Davos at least once in his
career, if not more often, not sure ifif John ever accepted the invitation.
But the World Economic Forum is wellknown, I suspect to most of our
listeners as the great Bazaar that takesplace in Switzerland each January.
(24:50):
When the the business eliteof the world converge
to meet with a smattering ofworld leaders and academics.
Well, according tothe conspiracy theories,
to lay the foundations forworld government, in reality to engage in
(25:11):
an enormous number of businessmeetings in a frenzy of speed dating.
I was there,it was a tough choice inauguration Davos.
I felt the patriotic thing wasto go behind enemy lines and
see what the globalists were up to ratherthan to go partying in Washington.
I left that to my wife.
(25:31):
And what did I find?
Well, what a transformationfive years ago when I was there
on the eve of the pandemic thatbrought us together as the Goodfellow.
The conversation was not aboutthe pandemic, no one else had noticed.
It was about the wickedness ofDonald Trump and in particular,
his utter irresponsibility onthe sacred issue of climate change.
(25:54):
Greta Thunberg was also in town fiveyears ago, she was fated, he was hated,
it's all over, it's all changed now.
Now the European business leaders,not only privately, but publicly,
say, we wish we had Trump here in Europe.
We want mega make Europe great again.
Can we have musk too?
This is what we need, so five years on,
there's been a completevibe shift at Davos.
(26:16):
And so, Davos man is now mega man, hewants Europe to get the Trump treatments.
You name it, they're ready to do it,and you can see why.
Because Europe has so conspicuously fallenbehind the United States in terms of
economic performance,technological innovation.
And part of the reason is, as has beenpointed out at Davos several times,
(26:41):
that Europe's regulatoryregime discourages innovation,
imposes regulation on anything novel.
And also layers on costs inthe name of climate change that
make German manufacturingsimply uncompetitive.
So that's the vibe shift and it relatesto this defense spending issue too.
(27:04):
Because I found myself at one ofthe Davos sessions having a little bit of
a contretemps with Wolfgang Ischingerof the Munich Security Conference.
When he made the absolutely extraordinarysuggestion that maybe the Chinese
could provide troops if Ukraine neededa security guarantee after a ceasefire.
(27:24):
It certainly couldn't be Germans that didit, and I'm afraid this set me off rather.
And I'm hoping our producer willprovide the clip because it was
one of my better foraysat Davos in recent years.
I spent many years, many years studying German history,
I speak German, I know the country well.
(27:46):
And I say to my German friends,including you, Wolfgang,
if you want to confirm the worstpossible impressions that Americans,
not just mega Americans.
But Americans have of Europe andparticularly of Germany,
go suggest Chinese troops in Ukraine.
>> [LAUGH].
>> Speaker 7 (28:07):
Cuz that is the single worst idea I've heard at Davos in 10 years.
>> [APPLAUSE].
>> Bill Whalen (28:12):
John, why don't you go to Davos?
>> John Cochrane (28:14):
Well, I haven't been invited to start with and
I hate cocktail parties,so I have two reasons.
I would go to Davos and I would go skiing,but maybe the slopes will be empty.
>> H.R. McMaster (28:24):
Hey, the one party to go to the salesforce party.
Great music man, great music, I mean,that's what you don't want to miss.
>> Niall Ferguson (28:31):
I knew you'd been there.
>> John Cochrane (28:34):
It's not just Trump.
Trump is reflecting what you calledpretty increasingly the vibes shift,
which is what you're seeing at Davos andcertainly Davos and Europe.
My sense is Europe has figured outwe regulated our economies to death.
We are all past peak woke,the great awakening is over and
(28:57):
imploding around us, andthat's not just Trump.
Europe doesn't quite seem to getit as far as energy and climate,
as far as I can see.
And the regulatory burden is enormouson companies are still having
to file scope 3 emissions everytime they sneeze in Europe.
So they quite haven't put two to twotogether on how much they killed their
(29:21):
economies on the altar of completelyineffective climate policies.
I mean, were this actually doing any good,there might be something to say about it.
They also don't seem to have quitegotten the fiscal discipline.
I was interested by Mario Draghi'sreport that said, hey,
we've regulated ourselves to death.
The answer is we're going to have theEuropean Union issue hundreds of billions
(29:44):
of Euros of bonds and throw them downvarious industrial policy rat holes.
So has Davos, man, really come around?
And second question, you said it, so I'mgonna ask you the question, it's gorgeous.
Is what Europe needs reallytwo dozen Javier Miles rather
than a Donald Trump [LAUGH]?
>> Niall Ferguson (30:03):
Yeah, that's actually right.
I mean, I do think thatthe idea that you could sort
of do Trump on Europe misses the point.
The United States can afford Trump becauseof the strength that it has accumulated,
particularly in the technology domain.
But also because of the enormous naturalresources that it has at its disposal.
(30:23):
Europe doesn't have these advantages,
its problems are closer toArgentina's than America's.
And so, my recommendation was,in fact, Javier Malay, I think,
we probably need 27 of them,wouldn't they, John?
>> John Cochrane (30:37):
Well, yeah, sorry, I got the number.
>> [LAUGH].>> John Cochrane: And
Marshall Evangeline cannot from Brusselsissue executive orders the way Trump can.
So Europe it doesn't just need one Trump,it needs, if any, a lot of them.
>> Bill Whalen (30:49):
Niall, mentioned technology that is my opening to ask
you guys about Deep Seq, and I want youto run with this for a little while.
So yesterday we had a $1trillion sell off on Wall Street.
DeepSeek, if you're not aware,is a low cost Chinese AI model.
This comes right after a $500 billionpledge for Start Gate to do AI for
infrastructure here in the United States.
(31:10):
John, you wrote eloquently aboutthis in your grumpy Economist blog.
So tell us about DeepSeek, and if youwanna put it in this category, a big deal,
little deal, no deal at all,feel free to do so.
>> John Cochrane (31:20):
Big deal.
>> Bill Whalen (31:21):
Ginormous deal.
>> John Cochrane (31:22):
[LAUGH] Well, if true, so
there's always a question ofexactly how much did it cost.
But the basic news is speakingof the squishiness of cost AI,
[COUGH] the basic ideais computations free.
So we'll just throw spaghetti atthe ceiling and see what sticks.
And then you scale that up to the $100million and all of a sudden it's not so
(31:46):
free anymore.
So that in the grand history of things,huge costs that have been revealed
to produce something useful lead toinnovation on how do we do it cheaper.
This one seemed to be mostly softer,I will also note.
That the export controls on advanced chipsspurred the Chinese to figure out how to
do it without advanced chips.
(32:07):
So much forthe effectiveness of the export controls.
Good thing we didn't run hundreds ofbillions of dollars of industrial policy
on the US way of doing things before wefound out it could be done much cheaper.
So this is just wonderful overall,
the idea that AI can bedone at one tenth the cost.
(32:28):
Now, the stock market felt,let me remind people,
the stock market is not the economy.
Stock market measuresthe value of profits,
not the value of goodthings to the economy.
So a dramatic fall in the cost of AImeans if you Nvidia had the, you know,
the patent on the chips that were needed,well,
all of a sudden we don't need those chips.
Nvidia's stock goes down, butthat's great for the rest of us.
(32:51):
That's great for AI users,that's great for the economy.
The stock market is not the economy.
And so overall, don't measure it that way.
>> Bill Whalen (33:00):
Niall, Marc Andreessen called this AI Sputnik moment.
>> Niall Ferguson (33:04):
Yeah, I saw that and I thought it was, it was interesting because
we've known for a while that DeepSeekwas making significant advances.
It's not quite clear at thispoint how far they were able to
use the most sophisticatedsemiconductors or
whether they were doing it by justpiling on the next grade down.
(33:29):
I've certainly heard it suggested thatthere must have been some illicitly
obtained, maybe via Singapore.
But why is the Sputnikmoment the right analogy?
1957, to remind our less historicallyminded listeners, the Soviets
successfully get a satellite up intoorbit and didn't do much other than beep.
(33:50):
But it was up there and it scared the hellout of Americans in the policy elite and
the wider public because the Sovietsturned out to be able to do that.
And I think you could certainly saythere's something of the Sputnik
moments about realizing that the Chinesecan do an LLM as good as open
(34:10):
AI's best at a 27th of the cost.
But what's the real moral of the story?
I would say, HR, tell me if you disagreethat the Sputnik moment spurred
the United States on to win the spacerace, which it decisively did,
landing a man on the moon 12 years later.
And I think the same will be true here.
I think we needed a bit ofan incentive to get this right.
(34:34):
Chinese competition has beenthe incentive for some years now.
I don't think we would be putting nearlyas much money into AI if the Chinese
weren't competing with us.
And I think if it is the Sputnik moment,the outcome is still likely
to be the same that the United Statesprevails, but not certain.
I think it's very important to understandthat in this AI race we can't win by
(34:56):
technological containment, John,I think you and I agree about this.
We're not gonna win by justhoarding the best GPUs,
especially since they're manufacturedright next door to China on Taiwan.
We're only gonna win if wedo better engineering and
we can solve some ofthe physical constraints,
the electricity generationchallenges that are implicit.
(35:19):
There is a quest on here,at least in the minds of the US
companies to get toAGI Artificial General Intelligence.
I don't think that's whatthe Chinese are trying to do.
I think the Chinese are just tryingto produce a commercial winner in
the large language model market.
And just as TikTok turned out to bea commercial winner in the social video
(35:43):
market, maybe DeepSeek willbe a commercial winner, but
it is still a case of anything we can do,they can do cheaper at bottom, isn't it?
>> John Cochrane (35:52):
[INAUDIBLE] This isn't really like Sputnik cuz that was a throw
billions of dollars at it and
we turned out to have more billionsof dollars than the Soviets did.
[LAUGH] This is a cost race.
This is an efficiency race.
It's sort of like Chinesemanufacturing was the first down and
it's very important that it's open source.
I'm not quite sure whythey made it open source.
I think that was to allthe natural security hysteria
(36:16):
that would go fromanything involving China.
But, if you don't like it censorship,fine, it's open source,
take out the censorship, build a new one.
They shared all that intellectual propertywith us for free so that the advantage
that they'll have from the programmingis not gonna last very long at all.
That'll all get incorporated into the waythe US stuff does remarkably quickly.
(36:39):
So thank you for sending that to us, it isthe energy thing is kind of interesting.
Nuclear power stocks went down as well,which I think is quite sad,
one of the great impetuses we had toget nuclear power going is now back
into the Nuclear Regulatory Commission.
And yes, this would not, if we had beenwalled off, we would not have felt that
(37:02):
competition if it was a private thing inChina, closed source only done in China,
we would never know you could do it forone tenth the price.
So that's very important to stay that way.
>> Bill Whalen (37:12):
Finally HR the- >> John Cochrane
the national security on this.
We've been doing China, China,China and HR sitting there,
slowly building up ahead of steam.
Yeah.
The national security angle HR butalso how it fits in the larger China
conversation having to do with tariffs andmilitary competition.
>> H.R. McMaster (37:28):
Yeah, so I think that if the technology can be weaponized against
you, can be used tothreaten your security,
we should impede the transfer of thattechnology or at least not underwrite it.
What's, happened over many yearswith China is that we've invested
in Chinese companies with dumbmoney flows into index funds and
(37:50):
so forth, into companies thatmanufactured their weapon systems.
We allow many of those companiesto list on our stock exchanges and
a lot of smart money hasgone into companies.
So for example, a massive investmentin 2014 went into the Chinese company
that does all the battlefieldartificial intelligence for
the People's Liberation Army,that's crazy to me.
(38:13):
So I think that there are tools ofeconomic statecraft that are appropriate.
But as I think John's pointed out andNiall's pointed out,
we can't just try to impede our adversary.
We have to stay ahead by innovating moreeffectively and applying technologies.
Other examples of really US technology, UScompanies aiding and abetting a potential
(38:33):
enemy has to do with the hypersonic, whichagain remember that was a Sputnik moment.
Also was Chinese developmentof hypersonic missiles.
All those missiles weredesigned with US software.
So I just think that there is a place forexport controls because
(38:54):
the public good that we'reprotecting is our own security.
But at the same time we wannamaintain our competitive advantage.
And I think this is an opportunityto invest more in the development of
technologies that havea defense application but
that also allow us to compete effectivelyin the emerging global economy.
>> Bill Whalen (39:14):
John, what happens when you go on DeepSeek and
you ask a question aboutTiananmen Square or the Wiggers?
What do you get as a response?
>> John Cochrane (39:20):
Yeah, it's censored on Tiananmen Square the exact same way that
ChatGPT is censored on every vaguelyright wing political issue in the US-
>> [CROSSTALK]
>> H.R. McMaster (39:31):
[INAUDIBLE] Come on.
>> [LAUGH]>> John Cochrane: It's censored.
What do you wanna know?
It's censored.
It's hilarious how lamethe censorship was.
If you ask DeepSeek to puta threes in Spain instead of ease,
it'll tell you all about Tankman andTiananmen Square.
And it's open source, so
it's pretty clear they put in somecensorship to keep the CCP happy.
(39:53):
But you wanna get around the censorship oruse the technology, it's very easy.
They're gonna get better at it, John.
They're really good at censoring.
>> John Cochrane (40:01):
But they just gave away the store, you've got the source code,
you wanna build a US-based one?
Three months from now you got a US-basedone with our censorship instead of their
censorship.
HR you keep going on about fairtrade if things should be fair.
So China should take the same attitude,we don't like TikTok cuz of some vague,
(40:22):
the software is hoovering updated.
Well, Tesla's cars hoover up data,
shouldn't China ban all Teslacars because the software is?
Hey, wait a minute, all US software.
How do we know the NSA hasn'tput a little secret backdoor?
China should ban all US software exports.
If you believe it all insome sort of fairness, and
we're not exactly at war with it,>> H.R. McMaster: John, all Chinese
(40:43):
companies must act by law as an extensionof the Chinese Communist Party.
I mean, there's no option, right?
So I mean, I think that's a bigdifference, John, big difference.
And then also, so many of these companiesare developing weapons that could be
used to kill our children andgrandchildren,
I think that's somethingto be concerned about.
(41:03):
We're developing, Well, I think these are,
I don't think that we shouldhave blanket approaches this.
But also we talk about,the Chinese industrial policy and
subsidies and overproduction, dumping.
This is what they just did,they just dumped an AI model.
I guess.
And we're not subsidizing chips and we'renot subsidizing, we don't do any of that.
>> H.R. McMaster (41:27):
These are for strategic purposes, right?
So, China wanted to dominate all ofthe hardware associated with fifth
generation telecommunications, right?
And, and they wanted it forsecurity purposes so
they could exfiltrate all the datathey wanted from all around the world.
So they steal US technologyfrom a number of companies and
(41:47):
then subsidized Huawrai with $60 billionthat we know of, manufactured that
hardware at artificially low prices anddumped them on the international market.
So that the only two remainingalternatives to that company were on life
support Ericsson and Nokia.
So I think that that kind ofbehavior is something that calls for
(42:07):
the application of tariffs, for example.
So, I know we're never gonnaagree on this completely, but
I thought that in some cases, right?
In some cases where the public good thatyou're protecting is national security,
then you don't I mean,then it's appropriate.
>> John Cochrane (42:26):
If it's well and clearly defined and not just China, China, China,
but let's put off the larger discussion.
I just wanted to add one greatpiece of technological news that my
computer lit up while we were talking.
Boom, the American supersonicairplane company just broke the speed
of sound with the firstprivate supersonic aircraft.
(42:48):
So your time to fly to DC back andforth again might just get cut in half.
Let's talk about wondersof private sector.
>> Bill Whalen (42:55):
Let us ponder for a second what happens to Niall Ferguson's world if
there's access to supersonic aircraft.
>> John Cochrane (43:00):
Or hypersonic.
>> [LAUGH]>> Niall Ferguson: Well, I must admit I'm
almost at the point of renouncingtravel or secretly hoping for
another pandemic so that I don'thave to go to Davos next year.
Perish the thought to be serious fora minute,
can I just remind us all thatSputnik moments cut both ways.
(43:22):
It is less than 10 years since Chinawas supposedly having a Sputnik moment
when AlphaGo defeated China'sgreatest player of the board game go.
And if you think about the history of AI,
that was the moment that Xi Jinping andco realized, we've got to do AI.
(43:43):
So the thing about Sputnik moments isinteresting is that they actually are,
if you think about it, a mistake from thevantage point of the person who initiates.
If you give your adversarya Sputnik moment,
they may turn around and up their game.
I think we should, we should try anddo fewer Sputnik moments,
that's my conclusion.
>> Bill Whalen (44:03):
All right, gentlemen, onto the lightning round.
[SOUND] All right,three questions for you this week.
The first one, I'd like each ofyou to name one story that or
one development that did not getthe attention it deserved HR you go first.
The Philadelphia Eagles do not count.
>> [LAUGH]>> H.R. McMaster: Well,
this goes to something Niall said earlier.
(44:23):
I think Russia is in a very weak position,
Putin's in a very weakposition economically.
But I think one of the stories that itdidn't get enough attention is that
North Korea is pulling their troops out ofthe Kursk area because they're suffering
such significant losses.
And as I mentioned before, you know,all armies have breaking points, and
(44:45):
I think the time is now to be tough onthe Kremlin and supportive of Ukraine.
So Donald Trump can go in to any kind ofa negotiation in a position of strength.
I think the opportunity is there,if President Trump wants to take it.
>> Niall Ferguson (44:57):
Well, I wanna give a shout out to Christopher Caldwell for
a terrific new piece in the Free Press.
The headline, the biggest policychange of the century, and
he makes the point that most peoplehave barely noticed that last Tuesday,
President Trump repealed affirmativeaction by executive order.
That undoes half centuryof social engineering, and
(45:20):
that is indeed a much biggerdeal than you would think if
you'd been tracking thisin the mainstream media.
>> Bill Whalen (45:28):
John?
>> John Cochrane (45:29):
Yeah, which of the many?
I'll just choose that the as longas we're on AI that Trump turned
canceled Biden's AI executive order, whichmeans we will not kill AI in its infancy.
The way Europe is going,part of that we're
not gonna follow them down tocommitting suicide on our economy.
>> Bill Whalen (45:53):
All right, gentlemen, Donald Trump last week revoked security
protection for John Bolton andMike Pompeo and Anthony Fauci.
He also revoked the security clearances of51 intelligence officials who had claimed
that Hunter Biden's laptop was a Russianruse, your thoughts on the matter HR?
>> H.R. McMaster (46:08):
Well, I think it's unfortunate, okay?
Unless, who knows whatelse President Trump did,
I hope what he did is inadvance of doing that.
Got a message to Ayatollah and the RGC.
If any harm is done toany of these individuals,
you're essentially committing suicide.
I mean, that would have been a goodmessage to give him in advance of pulling
(46:30):
the security, butthese are people who are at risk or
they wouldn't have had security,and I think it's regrettable.
>> Bill Whalen (46:37):
John.
>> John Cochrane (46:38):
Well, security clearance versus the security protection are two
separate.
I don't want people gunned down in thestreets removing the security clearance
for an egregious politicalact from security,
people who are supposedto not do such things.
That's the lightest punishmentthat I could imagine.
Yeah, if you're gonna behave like that,
you shouldn't have access to any nationalsecrets, that seems the least he could do.
>> Bill Whalen (47:02):
Niall, your thoughts,
keeping in mind that securityprotection is very personal for you.
>> Niall Ferguson (47:06):
Yeah, I have to say this is one of these vindictive acts
that I can't endorse,especially as Mike Pompeo and
John Bolton have been threatenedby the Iranian government.
I mean, there's no question that theyare threatened by a hostile foreign power.
(47:27):
And I'd say the thing thatI find most puzzling about
this aspect of the pastweek is that it's part of
a surprisingly dovishstance towards Tehran and
I really was not expecting.
And I don't like the specificsof leaving Mike Pompeo and
(47:50):
John Bolton,who are distinguished public servants,
exposed like this, butI also don't like the strangely dovish,
Tilt towards Iran,it makes no sense to me.
I think there was a coherent strategythat was available which was to take on
the axis of authoritarian powers andtake advantage of Iran's weakness.
(48:15):
But it's the Tucker Carlson tendency,
getting at least somepart of what it wants.
It's not getting what it wants on Russia,at least not so far.
So they seem to have decided to turntheir attention to the Middle east and
make arguments that are not onlypro Iranian, but anti Israel.
(48:35):
And I find that a very questionable
policy turn, I hope it won't last.
I'm fairly sure it won't lastbecause it makes no sense.
>> H.R. McMaster (48:47):
I could see it coming, Niall.
I mean, I tell the story in the book aboutthe summer of 2017 when President Trump
wanted to talk with Iranis.
I told him, hey,you're wasting your time, I mean,
and the Iranians know this too, right?
The Iranians are on the ropes,
they want Donald Trump tohelp them get off the ropes.
And that jackass Serif, was just onFareed Zakaria's program in Davos,
(49:09):
and then published an op ed in foreignaffairs, and it's the same line.
The same line from the Iranians.
Well, if you're just nicer to us,welcome us back into
the international order and,>> Niall Ferguson: We'll stop trying to
assassinate people on your soil.
No, I'm totally with you, HR, I thinkthis is a really bad turn of events.
I'm just hoping that it won't lastbecause it's hard to see that there
(49:32):
really can be any lasting dealbetween Tehran and Washington.
And I think there are plenty of peoplein Tehran who don't wanna do it because,
I mean, there's a division right inTehran as much as there is in Washington.
I think the national security strategy ofthe new Trump administration right now is
like a free forall between multiple factions.
The China first people are fightingwith the, let's modify Tehran.
(49:58):
People who are fighting with the let'sfocus on deportation people who
are fighting on.
Who are fighting with the,we got to worry about the economy people.
I mean,
it's got a lot more complicated than itwas at Mar a Lago when he was just king.
Now it's the federal government and
the full bureaucratic turf war isunderway, and may the best faction win.
>> John Cochrane (50:19):
And the same is true of economic policy.
But let me ask you guys, somaybe it's just that my, what?
Twitter's algorithm sends me, X,sorry, X's algorithm sends me.
But there is a good possibilitythat both Russia and
Iran are on the edge of collapse.
And this is the moment where just a littlebit being harder might push it under.
(50:42):
But also,
I wonder whether our intelligenceagencies are capable of knowing that.
One of the topics that we talkedabout today potentially was the CIA
finally figuring out that Wuhan justmaybe did come from a lab leak after all.
Something perfectly obvious to anyonewho reads even mainstream media for
(51:04):
three years.
Not giving me great confidencethat these guys are on the secret,
just how weak things are inside Russia or
Iran and how one little coup d'erasmight be the moment to do it.
>> Niall Ferguson (51:16):
Yeah, I mean,
I certainly think the Iranianeconomy is very vulnerable.
And indeed, as they have barelyfunctioning air defenses at this point,
they're vulnerable in other ways too.
>> John Cochrane (51:27):
Absolutely vulnerable, everybody hates them.
>> Niall Ferguson (51:29):
Yeah, and the Russian story is interesting because it's clear
that the Putin's war economy is reallyreaching breaking point financially.
He also has been taking casualties thatI'm sure HR would agree are absolutely
unsustainable.
>> H.R. McMaster (51:43):
Unsustainable, 30, 000 at least a month, right?
Some days, 1500, 1800 a day.
>> Niall Ferguson (51:51):
US was losing at peak, this many men in Vietnam in a year.
So it is a hard for me to see how Putincan sustain the current war effort.
He will need some kind of ceasefire soon.
And that, I think, is one reason whyTrump may have foreign policy success
(52:14):
in this area if he keeps the pressureup and indeed increase the pressure.
>> John Cochrane (52:19):
Sky high interest rates, a wave of bankruptcies potentially coming,
effectively most of the economydiverted to military uses.
This cannot go on very well.
>> H.R. McMaster (52:32):
Yeah, 47% equivalent to GDP in defense.
>> John Cochrane (52:35):
Okay, thank you for the number.
>> H.R. McMaster (52:36):
Yeah, I think it's 30% inflation now, really tight labor market,
sitting on piles of cash you can't convertor use, so, yeah, it's pretty grim.
>> Niall Ferguson (52:47):
So this is why, John, I think the implication of your question is
the smart strategy would be to leanon all the authoritarian powers and
not to cut any of themslack at this point.
Whereas, leaning on Canada, Denmark, etc,
that feels like you'releaning on the wrong people.
>> John Cochrane (53:06):
Yeah, if it's,- >> Niall Ferguson
Absolutely.
Actually implementing tariffs on the EU,Canada and Mexico would be
a terrible idea and drive the LatinAmericans into the arms of China,
cleaning up some of the mess that we'veleft sitting around, even with Canada.
And on the other end, we still havetariffs on lumber from Canada.
(53:29):
That kind of stuff's ridiculous,I would hope we would clean that up.
The Denmark thing's interesting, Greenlandwould be a great buy for the US and
Denmark doesn't seem toknow what to do with it.
But that could be handledmuch more politely, I agree.
>> Bill Whalen (53:42):
All right, speaking of terrible ideas, or
at least what Niall Fergusonconsiders a terrible ideal,
the super bowl fast approaches.
So, Eagle Super Fan HR McMaster,where are you gonna be on Sunday the 9th?
Are you gonna be at the game hosting aparty or does business take you elsewhere?
>> H.R. McMaster (53:56):
I think we'll be traveling, but hopefully it'll be in
front of a television by the timegame time, so, yeah, go Eagles.
>> Bill Whalen (54:05):
All right, John, it runs from about 3 o'clock to 7 o'clock in
the afternoon, California time,where are you gonna be, my friend?
>> John Cochrane (54:10):
I love super bowl weekend cuz everybody stays home and
watches tv.
I will either be at a normallycrowded restaurant or
I will be on the slopes of myfavorite Sugar bowl ski resort,
depending on the day,enjoying everybody else not being there.
>> Bill Whalen (54:28):
And Niall, it kicks off at about 11:30 PM London time,
is this a cure for insomnia?
>> Niall Ferguson (54:33):
I just want HR's team to win.
>> John Cochrane (54:36):
Whichever one that was.
>> Niall Ferguson (54:37):
I'm now taking an uncomplicated view of American football.
I can't seem to make it go away, soI'm with HR, okay, I'm with the Eagles.
>> H.R. McMaster (54:47):
And, how does Scotland look for the six nations,
Six nations is coming up in.
>> Niall Ferguson (54:53):
Well, Bill shared with me a particularly moving scene from
the dressing room after Scotlandbeat England in a recent calc.
It would, I'm sure,gladden the hearts of our
viewers to hearthe Victoria Scotland team sing.
We're a few weeks out from Scotland,England at Twickenham, February 21st.
(55:19):
I'm taking my youngest son, Campbell, forhis first ever rugby international and
that will be one ofthe highlights of the year.
But yeah, we'll talk about that nearerthe time, anything with an oval
ball is all right by me,whether forward passes are allowed or not.
>> Bill Whalen (55:38):
Niall, if you believe the guy has a sense of humor,
your son is going to fall in love with anNFL team much the way he fell in love with
the NBA team.
And he's gonna have to dragyou to an NFL game in London.
>> Niall Ferguson (55:48):
It's fine, let a thousand Anglo American sports flourish.
Whether the ball is round oroval, large or small,
sports are part of whathave made us great.
And so I've just decided to make mypeace with all these different sports.
>> Bill Whalen (56:08):
Gentlemen, we're gonna leave it there, great conversation.
What a busy eight days it's been,and it's only just begun.
On behalf of the good fellows, Sir NiallFerguson, John Cochrane, Lt Gen. H.R.
McMaster, all of us hereat the Hoover Institution,
we hope you enjoyed this conversation.
We hope you follow usregularly on YouTube,
please subscribe if you wouldn't mind,and stay tuned for our next show,
which will be, as I mentioned, in earlyFebruary, not long after the Super Bowl.
(56:30):
Till then, take care,thanks again for watching.
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