August 5, 2025 • 50 mins
Tonight on The Brian Crombie Hour, Brian interviews Dr. Anders Aslund about Trump and tariffs. Anders is a leading specialist on the East European economies, especially Russia and Ukraine. He is presently a senior fellow at the Stockholm Free World Forum. From 2015 to 2021, he was a senior fellow at the Atlantic Council’s Dinu Patriciu Eurasia Center with a dual appointment in its Global Business and Economics program. From 2006 to 2015, he was a senior fellow at the Peter G. Peterson Institute for International Economics in Washington, DC. He also teaches at Georgetown University. He served as an economic advisor to several governments, notably the Russian government (1991-4) and the Ukrainian government (1994-7).
Anders criticizes US economic policy, particularly the tariff strategy, which he described as arbitrary, aggressive, and lacking a theoretical basis. He argues that the tariffs, which effectively function as a regressive sales tax, are being paid by Americans and are contributing to rising inflation. Anders also contends that the US does not have a significant trade deficit when services and intellectual property are included, and he criticized Trump's approach to foreign investment and job creation as misleading and unfounded.
Anders discusses the concerning trend of American institutions and businesses complying with Trump's policies without significant resistance. Anders highlighted the worrying increase in the federal government's power over universities, media, and research funding, and emphasizes how Trump's approach to media censorship mirrors and even surpasses that of Vladimir Putin. He states that the United States is sliding into a gray zone of limited freedom, with Trump systematically using defamation laws to silence critics, while the country's ranking in press freedom has dropped significantly.
Anders criticizes US economic policy, particularly the tariff strategy, which he described as arbitrary, aggressive, and lacking a theoretical basis. He argues that the tariffs, which effectively function as a regressive sales tax, are being paid by Americans and are contributing to rising inflation. Anders also contends that the US does not have a significant trade deficit when services and intellectual property are included, and he criticized Trump's approach to foreign investment and job creation as misleading and unfounded.
Anders discusses the concerning trend of American institutions and businesses complying with Trump's policies without significant resistance. Anders highlighted the worrying increase in the federal government's power over universities, media, and research funding, and emphasizes how Trump's approach to media censorship mirrors and even surpasses that of Vladimir Putin. He states that the United States is sliding into a gray zone of limited freedom, with Trump systematically using defamation laws to silence critics, while the country's ranking in press freedom has dropped significantly.
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Transcript
Episode Transcript
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Speaker 1 (00:00):
The views expressed in the following program are those of
the participants and do not necessarily reflect the views of
Saga nine sixty am or its management.
Speaker 2 (00:18):
Good eating everyone, and welcome to the Brian Crombie Radio Hour.
I've got Andres Osland with me today. He's a senior
fellow at the Stockholm Free World Forum and he's an
adjunct professor at Georgetown University in Washington, d C. Andres
Osland is a frequent critic of US government economic policy.
He's written extensively on this. I follow him on LinkedIn,
(00:41):
and his almost hourly posts, if not hourly, at least
several times a day posts are very critical of US
government current tariff and trade policy and also in regards
to policies regarding Europe, NATO, Ukraine, etc.
Speaker 3 (00:59):
Professor oslod And, thank you very much for joining me.
Speaker 4 (01:02):
Thank you my pleasure.
Speaker 2 (01:04):
So tell me what do you think is wrong with Ukraine? Sorry,
not with Ukraine, with the US economic policy today?
Speaker 4 (01:11):
Well, pretty much everything. But if we take the tariff
policy that has now become a dominant, first of all,
there's no theory behind it, and there's no theory of
massive protectionism. This is the protection is that we last
saw being introduced in nineteen thirty in the Smooth Horley
(01:37):
Tariff Act with the tariffs around twenty percent, and the
tariffs are being paid by the population, that means by Americans.
Speaker 3 (01:52):
And so is it a sales tax effectively.
Speaker 4 (01:55):
Yeah, it is a sales tax to have the sales tax,
federal sales tax, and it's regretted.
Speaker 3 (02:07):
I was in Florida.
Speaker 2 (02:07):
I was in Florida recently on business and had dinner
with numerous people and we were commenting about this, and
they said, no, there's no inflation. Inflation is exactly the
same as it was before. So we're not paying it.
The companies or the foreigners are eating it.
Speaker 4 (02:24):
Two problems we're at. The first is that the tariffs
have not been fully implemented at yess and the second
that many importers had provided they had stocked out before,
so they are still using goods sailling goods that has
(02:45):
no tariff on top of them. And when the thirdly,
inflation is rising. Inflation is now two point seven a
percent and it's supposed to be two percent that is
fed target. So there is no theory behind that a
tariff policy, and it's extremely aggressive. This is a trade war,
(03:08):
and it's being pursued in a completely arbitrary fashion. So
Switzerland gets a thirty nine percent tariff, Britain gets a
ten percent tariff, the EU fifteen percent. India thought we
had a deal, but when they got twenty five percent
in tariff, Switzerland thought we had a deal of ten percent,
(03:32):
and then they got thirty nine percent. So it's both
that it's aggressive and that it's completely arbitrary. But Trump
puts up a figure and say, okay, now we no,
I don't like this country, so we impose a massive
(03:53):
tariff on them, for example, fifty percent tariff on Brazil
just because it likes the former president Polsonaro and the
north the current president Lula. In fact, the US has
a trade surplus on Brazil. So this is the arbitrary
(04:16):
Birthlue theory, and it's highly disruptive. It's aggressive. This is
a trade war. And Trump calls these taris recipron while
they are aggressive and unilateral and justified. So he's now
(04:37):
destroying global trading system that has been built up around
the GAP and the World Trade Organization of the World
War two for a new reason other than his aggressive emotions.
Speaker 2 (04:56):
Well, you know if you if you read Art of
the Deal, is what everyone says. His whole philosophy is
you take an extremist position and you negotiate incredibly hard,
and in the end you'll get a great deal. If
that you're reasonable in your negotiations and you take a
moderate point of view, you lose. And and he wants
(05:16):
manufacturing jobs to come back to the United States. He
thinks that numerous different countries, if not frankly, almost every
country in the world is running a trade surplus with
the United States.
Speaker 3 (05:26):
The US has a trade deficit. He wants that to correctly.
And he's also.
Speaker 2 (05:30):
Getting you know, half a trillion dollars worth of commitments
of investments in the United States. So you know, if
you read his press, it's working. He's getting the US
the EU to pay a huge tariff and and and
therefore restrict imports into the United States. He's going to
(05:51):
get manufacturing reshort from Europe to the United States. And
he's getting Europe to buy you know, high hundreds of
millions of dollars of energy from the United States.
Speaker 3 (06:04):
So is that a good deal?
Speaker 4 (06:06):
No, everything in it is a wrong to begin with.
There is not a big trade deficit over the United States.
So if you take, for example, between the European Union
and the US, if you include service trade which Trump
never does, and intellectual property, then you have a balance
(06:31):
trade between the VU and the US. Financial Times has
written substantially about this matter. So the basic assumption is wrong.
And if there is a trade deficit, it is a
kind of account deficit when we will include service and
(06:55):
it's not a giant deficit, but a moderate one. And
the course of it is that the US has a
budget deficit over six percent of a GDP, and this
has when financed by foreigners. So rather than saying that
foreigners are ripping off the United States, Trump should be
(07:19):
grateful and say thank you very much foreigners. But you
trust the US so much that you want to put
so much money into our country. This has happened, and
the foreign investments in the US securities both bonds and stocks,
(07:41):
or in the order of thirty two trillion dollars, so
approximately the level of the US DDP over the twenty
nine trillion dollars of US treasurers that are outstanding. Foreigners
own about nine trillion dollars. So what is likely to
(08:03):
happen now is that foreigners will buy less of US
treasures because the US is not reliable. And we're already
seeing that investment is going down. In the second the
quarter numbers of a GDP that just came out, business
(08:25):
investment was down by fifteen percent. That's a big number
because you don't stop business investment that fast. This is
without inventory. So he is doing the opposite. And then
Trump talks about these trillions of dollars. I think in
(08:47):
dar up to nine trillion of dollars. But he claims,
but he is getting commitments on this is a new commitment.
This is loose talk. But sometime in the distant future
we might invested a little bit in the US. And
then Trump gets happy. So this is Northrup policy should
(09:09):
be made. And this is not proper statistics. And we
saw now last week when it turns out that the
US had only got through thirty five thousand new jobs
a month during the last three months. Then immediately his
sects the head of a Bureau of Labor statistics. So
(09:35):
Trump works on no facts, no theory, and the sheer aggression.
And this is aggression against the Allies and the friends
more than against the say Russia and the China. So
what he's doing his alienating all his former allies and
(09:59):
breaking up the Western Alliance system and breaking up a
global trading system. This will be very costly economically and politically.
Speaker 2 (10:10):
I signed an interview with former Vice president and presidential
candidate Kamala Harris recently, and she said the thing that
had surprised her the most is that American people, American institutions,
American business people have sort of put up with this
all and haven't complained about it and are given in.
Speaker 3 (10:29):
To Trump's policies.
Speaker 2 (10:30):
What do you think of And she even complained about
economists that people like you weren't explaining things as as
succinctly as you have. What do you think of American
institutions of American people, American business, American law firms, American
universities sort of complied with Trump and not complained the
(10:52):
way that you think they should.
Speaker 4 (10:54):
Yeah, I think that that is a very justified criticism
and business something that I think many people wonder about.
Why are the people, as them Snyder puts it, obeying
in advance? Why are they obeying even before it has
(11:17):
been done? If you take for example, the former head
of the FBI, he resigned in advance for no good reason.
Trump wanted to have him exchange, and then he just withdraw.
And these nine law firms that have put up almost
(11:39):
one billion dollars in so called probona work for Trumper courses.
There's no reason for them to behave like this. And
I'm happy to see that we are now losing top
lawyers because a law firm, a lawyer doesn't work for
(12:00):
a law firm that doesn't even want to defend itself.
How could anybody have confidence in a law firm that
is a zu defeatist. So there you see one fact
that what is really terrible. It is all of this
(12:23):
money that is coming from the state that is now
being from the federal government that is now being cut.
So what is happening to Harvard, I think is most important.
And we see how many levels that the federal government
it can use, first two billion dollars of annual research funds,
(12:47):
mainly going to medical research. Then cutting off the right
of university to get foreign students that we won't get
a base as if I apply or study at Harvard,
and then the federal government can take away the accreditation
(13:12):
of the university, and on and on like we said,
it goes. So what we're seeing is that the federal
government has far too many levels of power, and if
you go against the government, you are in trouble. And
(13:33):
we're seeing with regard to the media, tod Trump, as
he had promised before, used the libel and defamation laws
in order to go after media that are critical of him.
ABC and the CBS have been forced to give him
fifteen and sixteen million dollars respectively for completely flawed the
(13:59):
defamation cases. And Trump collects to his Trump Library, where
he undoptedly can spread the money as he pleases later
on to families member. So this is a new system
(14:23):
of censorship. According to World Press Freedom Report by Reporters
Without Borders for last year, the US ranked fifty seven
in the world in terms of press freedom, which is
not very free. The US comes below all EU countries
(14:46):
apart from a Hungary, which is of course Trump's ideal
because it doesn't have much freedom. So even before Trump,
the federal government had so many checks on freedom in
the US that it ranked as the bottom of democratic countries.
(15:09):
And now Trump is about to or perhaps already have
switched the US from being in the democratic can to
be in the gray zone of completely free countries. Do
you mean the watchstone in the gray zone of the
countries that are not quite free? Freedom House still keeps
(15:33):
the US as a free country, but it is on
the lowest level in their measurement.
Speaker 2 (15:41):
So do you think the United States is an autocracy today?
Speaker 4 (15:45):
It's slipping down in that area. You have a big
gray area where countries are not fully democratic. So what
happens now is that Trump can steal anybody and so systematically.
If you're compared with what Putin died when he came
(16:06):
in in two thousand, Trump is moving much faster against
the big television companies when Putin.
Speaker 2 (16:15):
Trump is moving faster against the big television companies than
even Vladimir Putin did.
Speaker 4 (16:22):
Yeah. Really, that's the most question for free during pult
his first term.
Speaker 2 (16:30):
We're going to take a break for some message. This
is gonna be hard hitting conversation today with Professor andrews.
Speaker 3 (16:35):
Azeland. We're going to take a break and be back
in just two minutes. Scare with us. Everyone back in.
Speaker 1 (16:39):
Two stream US live at SAGA nine am dot C.
Speaker 2 (16:47):
A welcome back everyone to the Bran Crime. Really, I've
got unders Oslen Aschland with me today. He is a professor.
He's got really quite a very impressive background. He's got
(17:09):
a bachelor's of Arts and History Russian Polish political science
from Stockholm University. He's got a master's degree from in
economics from Stockholm School of Economics, and he's got a
University of Oxford PhD I presume in economics. And then
he's got really quite an incressible, incredible history. He was
the first secretary for the Swedish Permanent Delegation to the
(17:30):
United States. He was the first Secretary of the Embassy
of Sweden in Moscow for two years in the nineteen eighties.
That must have been a fascinating time to have been
serving in Moscow, sir. Then he was a professor in
the Stockholm School of Economics, a guest scholar at the
Brookings Institution in Washington, a senior Fellow and director of
the Russian and Eurasian Program at the Carnegie and Damond
(17:52):
for International Peace, a senior Fellow at the Peterson Institute
for International Economics, a Senior Fellow at the Atlantic Council,
And today he serves as a Senior Fellow and professor,
Ajact Professor at Georgetown University in Washington, DC. What was
it like serving in Moscow right before the fall of
the Berlin Wall.
Speaker 4 (18:13):
Well, it was fascinating. Things were happening all the time.
I was where eighty four to eighty seven. I came
just before Garbachov became a secretary general of a Communist
party in a March nineteen eighty five, and it was
(18:36):
Garbachov who drew it all during the first three years.
But so everything that was considered impossible became not only
possible but actually happened. And in particular what drew the
(18:56):
intellectual debate was the thick literary which are like books
and like the Granta Journal, if you you know. And
each month they came out with one devastating article that
(19:16):
shattered of what had been a troop before. I of
course looked mainly on the economic side, but it was
very much about the history to reveal Starlin's a terrible deeds.
(19:37):
At the same time, the KDB was hard hitting. I
bought my car sabotage eight times, so the KDB became
simply an empty of my tires. When I thought that
I had done something that I shouldn't do. If I
hadn't seen some Russian whom the thought that I shouldn't see,
(20:00):
but they emptied my tires on the car. If I
really even though you were a diplomat, yeah, it doesn't matter.
It has been like that all the time. They go
into the apartments and they leave signs that they were there,
for example a cigarette, or what they do is, for
(20:27):
example going into a bathroom and not flushing after they
have used the toilets, just to shoe that they were there.
These are typical things the KDB did and do so
at the end, I was in the summer of nineteen
eighty seven, they that is the KDB, took in my
(20:54):
acquaintances and friends for interrogation and we heard from various
people that it was between three and twelve hours interrogation.
And one of the toughest talken note of all the
names and said that there were thirty three people who
(21:15):
that they had interrogated a t could judge from his
his conversation. And I had a dinner once for polls
and all the three Poles who were in the apartment
were expelled after this. One of them was head of
(21:40):
a Polish television in the Moscow at the times. It
was a very tough place. What people said, Moscow is interesting,
but it's not pleasant.
Speaker 2 (21:52):
So this was the nineteen eighty seven. Two years later
you had the fall of the Berlin Wall. Five years
later you had the breakup of the civict Union in
nineteen eighty seven. Did you have any sense, given what
you've just described of how powerful the KGB was, et cetera.
Did you have any sense in nineteen eighty seven, the
two years later the Berlin Wall could fall and five
(22:15):
years later the USSR could break up.
Speaker 4 (22:18):
Yeah. Sure, So once saw on the one hand that
things were moving in one direction, on the other hand,
could be old repression was still very much a present.
A major event was, for example, when andrescher Venerbeltri is
(22:39):
the piece laureate and the father of at the bomb
in the Soviet Union, when he was allowed back to
Moscow in nineteen eighty six and he became then effectively
the leader of the intellectual or position in in the
(23:02):
Soviet This was a major event. But there were lots
of these kinds of events, and popular demonstrations started in
nineteen eighty seven, and what we actually as diplomats could
do was to go to certain public lectures and they
started then having open discussions in nineteen eighty seven. But
(23:28):
it was very interesting to see how people were not
used to speak their mind, so therefore they got extremely
excited when they got to the opportunity, and they lost
control over themselves and started shouting, etc. What you see
from people who are not used to public speaking. So
(23:53):
it was a very confused situation.
Speaker 2 (24:00):
Not in any way, shape or form suggesting that the
United States is the USSR, but given the current situation
that you've described and the Kamala Harris described that, you know,
law firms and universities and companies and billionaires and economists,
et cetera are effectively not opposing Donald Trump and his policies.
(24:21):
And two days ago, just to put it in perspective,
you posted, no serious economists would advocate Trump's devastating economic
policies one high teriffs for no reason, two complete uncertainty,
three massive overstimulation with rising budget deficit and public debt
for hostility to the whole world, no surprise, the economy declines.
(24:45):
Is there a leader of the intellectual opposition right now
to Donald Trump and his economic policies?
Speaker 4 (24:55):
Good question, No, there's no true. I mean people who
stand up and who are relevant. I would mention the
Larry Summers, performer Treasury is Secretary, as one of the
people who's most vocal and the most consistent in his criticism.
(25:18):
You have a Paul Krugman in the few, but there's
no clear leader. And if you look up on the
Democratic Party, you wonder where are the old leaders. This
is that Kamala Harris, as you mentioned that she spoke,
is a major thing at all, But otherwise it's a
(25:41):
number of senators whom I'm particularly like is the Senator
of Connecticut, Christmas Marphy, who's very consistent in his legal criticism.
Sheldon White Towns focuses on the corrupt side of the business,
(26:07):
and of course the part of the people a UC
and the eradicus. But there's new leader.
Speaker 2 (26:24):
You say that no surprise of the economy declines, stock
market is an all time high, GDP is still growing,
Unemployment is low. Inflation, even though it may be up
from what you wanted what the Fed is targeting, it's
still low. So is the economy actually declining today or
(26:44):
is the stock market saying the economy is doing great?
Speaker 4 (26:48):
The stock market, I don't think that want to take
pay too much attention to it has very little to
do with how the economy works. What economist and pay
most attention to in terms of actual economic growth, it
is a private says, which increased by one point nine
(27:11):
percent in the first quarter and one point two percent
in the second quarter. It's still increasing, but this is
a very low growth rate. So what the US seems
to have now is speculation as in the nineteen seventies,
inflation is still limited slightly below three percent, and growth
(27:35):
I would presume will stop at one percent or so
this year that it could get worse.
Speaker 2 (27:45):
We're going to take a break for some messages and
come back and talk about deficits because one of the
things that our professor has been very critical as well
is this overstimulation of the economy. And then we're going
to touch on what's going on in Europe, because it
is also very critical of the United States plans and
policies in regards to Ukraine.
Speaker 3 (28:05):
Say it was Everyone will be just back in two minutes.
Speaker 1 (28:12):
No Radio, No Problem stream is live on Sagay ninety
six am dot C.
Speaker 2 (28:17):
A Welcome back everyone to the Brian Crombie Radio. I've
got Professor andrews Ausland with US today. He's got just
an unbelievable career that we've talked about, where he's spent
time at the United Nations, at Academia in Moscow, and
(28:43):
now he's at Georgetown University as an adjunct professor, and
he's a big critic of US economic policy and Donald
Trump's policies. Right now, I want to turn to another
one that you mentioned. You talk about overstimulation with rising
budget deficit and public debt. This big beautiful bill has
(29:04):
dramatically increased the deficit and debt, and it was put
in place by the Republicans. And I always thought, maybe naively,
that that Republicans conservatives were for balancing the budget and
and you know the Peterson Center that that that you
were part.
Speaker 3 (29:21):
Of, uh uh, you know numerous years ago.
Speaker 2 (29:24):
You know, I think published a whole book at one
point in time about deficits and debt and how that
could destroy the US economy. But it doesn't seem to
worry the president or the Republican Party. So please explain
to me what's going on with these conservatives are increasing
debt and deficit to over you know, five percent of GDP.
Speaker 4 (29:46):
Yeah, if you look upon it historically, for the launch
the forty five years, it has been the Republicans that
have had the big deficits and increased the public debt.
Ronald Reagan the Stone did it. George W. Bush pushed
(30:06):
not financing the war in Iraq, and then Obama was
now saint in this regard about Trump sharply in priest
the deficit in his last period. So buy in Lage,
you can say that the three big sinners are Reagan,
(30:30):
George W. Bush, and then the Trump and the Republicans
have voted for their expenditures, but they have not voted
for the Democrats expenditure. The person who really changed things
was Bill Clinton. Bill Clinton had in his last two
years actually over balanced budget, and Clinton stands out as
(30:58):
the only real fiscal conservative. And for the last twenty
five years we have seen a steadily increasing public debt.
And as the public debt is normally counted, it's now
four of DDP, which is a lot. And so this
(31:23):
is at the level of Italy, which is one of
the most dangerous European countries. And it's worse because the
US has relatively high interest rate, so therefore the dept
costs much more. It costs more than one trillion dollars
a year in the debt service, and it's now increasing fast.
(31:49):
So where there's a due tax bill that the Trump
has a push through, the public debt would increase to
about one fifty percent of DDP in two thousand and
thirty five. Of course it will not happen like this,
(32:11):
but this is the dangerous situation. And previously foreigners have
been happy to buy US treasuries because it has been
the gold standard. But what is the safest thing you
can buy in the world US treasurers. And now that
is no longer the case because Trump and his advices
(32:36):
are discussing transforming foreign holdings of US treacheries into something else.
And that means they're essentially discussing defaulting on the public
debt and partial confiscation of foreign holdings, and that will
(33:00):
scare people away from the US treasurist So this is
a completely matter policy and it will cost a lot.
So you can see now that the interest rates in
the US are much higher than in Europe, about twice
(33:20):
as high. And this is not a problem of the Fed,
it's a problem of Trump.
Speaker 2 (33:26):
But if what you're saying is true, interest rates should
go up even higher as foreigners don't want to finance
the data. And if there's any chance of default or confiscation,
one would think that there'd be massive sales of US
treasures right now.
Speaker 4 (33:43):
Well true, true, but it doesn't work quite like that.
If you think of who holds this, it's enormous funds
insurance companies pent found and they move fans very slowly,
(34:04):
so there's an enormous amount of inutia. So it's more
that they don't find new staff while they hold what
we have. And it's also not this is a discussion,
it's not the concrete proposals, so people don't take it
as seriously as as yet. And uh Roud Bosher, the
(34:29):
later m I T professors, he used to say that
financial crisis normally take much longer to develop than anybody
had anticipated, but when they start, they move much faster
than any what it could have believed. And this is
(34:50):
the situation, the nature of financial crisis, and it takes
time to build out and building up. It is what
we are seeing now, and then the crisis itself happens
much later than we would have expected. So I'm very
(35:11):
cautious never to predict when a crisis will come I'll
give you one example. In twenty twelve, I went to
Cyprus because Greece had defaulted on its government bonds and
the Cypress banks held vast amounts of Greek ponds. And
(35:34):
I went to a couple of the banks and asked
them about this problem, and they said, oh, we will
be bought by a foreign bank. We are not really
in trouble. And they did not have a crisis in
front of them, although it was obvious that the capital
was already gone, but nothing had happened as yet. And
(35:58):
then a yearly everything crashed and it was so obvious
that it would crash, But the Central Bank in ciresident
that the banks I visited had no sense of crisis
at all.
Speaker 2 (36:15):
I want to turn to your thoughts about the EU
and Ukraine. You wrote in the Key of Post. The
European Union in Ukraine are facing a bizarre conundrum. How
to handle a narcissistic and lawless senile toddler who has
become the almighty President of the United States. The European
(36:35):
Union and Ukraine are facing a bizarre conundrum. Traditionally, the
United States has stood for democracy, freedom, the rule of law,
and free markets. But mister Trump's preferences are personal power,
family income, and maximum public attention. How shall the democratic
world manage such a character? The big takeaway is never
(36:55):
trust the United States as long as Trump is president.
Remember that he has claimed that our allies are were
than our enemies. In the short term, Trump has to
be managed. In the longer term, all need to learn
to how to live without the previously benevolent United States.
The EU needs to provide Ukraine with sufficient financing, and
together Europe and Ukraine must provide Ukraine.
Speaker 3 (37:15):
With the necessary arms. Wow, that's pretty hard hitting, sir.
Speaker 4 (37:21):
Oh really.
Speaker 2 (37:24):
You then go through four different case studies of people
who have handled Trump, from the president of Alsalvodor to
Victor Oban to the NATO Secretary General and finally China.
Tell me about these four different case studies and what
you think the world can learn from how to deal
(37:45):
with Trump. And obviously, given that you're talking to a
Toronto audience right now, primarily sir, I'm interested in what
you have learned from these four case studies, what your
advice to the EU and Ukraine is, and what your
advice to Canada would be given that we're in a
pretty difficult situation with Donald Trump right now as well.
Speaker 4 (38:06):
Yeah, I don't want to give advice or recommendation, but
it's interesting to see what has worked. I mean, the
president of an Salba, your book healer, he has gone
in and given a Trump serious services through his presence
(38:29):
and his lack of rule of law. This is what
Trump really likes. So this is one model to be
very close to Trump. Victor Urban shoes to the Trump.
How you can cut down the media and the university
is setting an example for Trump. That's also something that's
(38:55):
Trump likes. So in Europe, urban is a great favorite.
It doesn't matter that all About has also great relations
with China and the supports Chinese direct investment in Hungary
and that the economic performance recently in Hungary has been
(39:17):
quite bad. Trump doesn't care about that. Mark rut the
Secretary General of NATO. It's another case. And generally in
summit in Behague in June, that is just a flatter Trump.
(39:41):
A flatter works with Trump and you. They say, now
ofter the tariffs have come through, that the European Union
looks comparatively good with fifteen percent tariffs. While Buy and
Large Peace cringed seeing the president of a European commission
(40:04):
also upon the Lion coming to try Trump in turn
burn in Scotland at his golf club and behaving like
a little school girl who who is allowed to see
the headmaster. And it was such a humiliation which was
(40:26):
reflected in lots of European articles. But then perhaps that
actually worked. And then we have a China which is
in another situation that they have rare metals and magnets
that they effectively have a supply monopoly on, and Trump
(40:53):
the things that the US needs these, So therefore he's
prepared to do pretty much anything to get these. And therefore,
for example, the president of Taiwan is not allowed to
land in New York on a trip to Latin America,
(41:15):
and a meeting with taiwan is a Minister of Defense
planned at Pentagon in June was canceled because the Americans
don't want to go against the Chinese. So be you
(41:37):
have here two models if we turn to Canada about
what would be possible. One is hardboard to play like
China does. And I would suggest that that would be
the best model for Canada. That is, Canada supplies a
(42:01):
lot of oil to the US. If the US doesn't
cut down the thirty five percent tariff to say fifteen percent,
then Canada would stop delivering oil to the US. I
don't know how illegally that it would be dancing be
(42:24):
sur private companies, et cetera. But this is the kind
of hardball that for Chinese play, and that seems to
work with Trump. The other would be to disgustingly complement Trump,
which I don't think is is very likely to work.
(42:46):
And where you don't want to be is in the
neutral need that where you are neither close Trump supporter
I nor ball playing opponent. That's what a Trump does.
(43:07):
North like so they think of poor Switzerland now being
forced to pay thirty nine percent tariffs on over the
US imports will be forced to pay thirty nine percent
tariffs on whatever they import from Switzerland, So then it's
(43:29):
much better to import from the European Union where it's
only fifteen percent.
Speaker 2 (43:37):
We're going to take a break and come back with
some final comments from our guest tonight, our expert guest
economy Standards Iceland.
Speaker 3 (43:45):
We're going to ask him what the thing's going to
happen and in his prediction, stay with us. Everyone back
into MIT.
Speaker 1 (43:57):
No Radio no problem. Streamers live on SADAY ninety sixty
am dot C A.
Speaker 3 (44:14):
Welcome back everyone to the Brian Crime Radio Wire.
Speaker 2 (44:16):
We've got an economist agend professor at Georgetown University, andrews
Auslin with us today.
Speaker 3 (44:22):
It's been a fascinating.
Speaker 2 (44:23):
Discussion today, Sir, I wonder if you could predict where
we're going to go, what's going to happen. You know,
you were there in Moscow and you said that you
could anticipate some of the trends that were happening in
regards to the breakup of.
Speaker 3 (44:40):
The Eastern Bloc and of the USSR.
Speaker 2 (44:44):
You say, there's there's some intellectual opposition right now to
what Donald Trump is doing, but the Republican Party seems
completely wedded to his strategies. My sense is that the
people that I meet with from a business standpoint, that
we're maga enthusiasts, are still maga enthusiasts, and his base
(45:04):
is strongly supportive of him. The stock market is at
a high and while you say it may not be
a great barometer of what's happening, a lot of people
keep saying, look at the stock market.
Speaker 3 (45:17):
Trump keeps saying, look at the stock market. He seems
to think that the stock market.
Speaker 2 (45:21):
Is almost better than public opinion polls as to predicting
how well he's doing. While you comment and inflation is
going up, you know, two point nine percent is relatively
good relative to where we were during the pandemic.
Speaker 3 (45:36):
You know, the economy is still growing. You say stagflation,
but we're still growing. What's going to happen.
Speaker 2 (45:42):
Are people just going to put up with Trump and
we're going to have a great depression like the nineteen thirties.
Are we going to have stagflation like Japan in the
last twenty years? Is that NATO going to break up?
Is the World Trading Organization going to break up? Or
is someone going to stand up Trump and things are
going to change?
Speaker 4 (46:04):
Well, I think that it's easiest to start with the
multilateral organizations. They are losing out now. The World Trade
Organization is in practice dead. I think the best thing
would be simply to expel the US from it. That
the US withdraws so that the rest of the world
(46:25):
can maintain the free trade system. It's quite interesting that
there seems to be no other country in the world
that wants to have a tramp system, so it's only
the US that is becoming protections. It's not an international trend.
The u N I think is pretty dead, and during
(46:49):
the spring meetings on the IMF and the World Bank
there was a great worry that the US would withdraw
from them. That didn't happen. Nate, I think is in
a transitionary stage and it's not likely to survive. But
it's quite important for Ukraine now that the native functions,
(47:11):
and in effect it has got a new role now
to deliver arms for Ukraine, which are very much welcome
in the US. I can't say it depends on so
many things that I can't judge. The Epstein files, for example,
seem to be the big thing that really upset a
(47:36):
lot of Republican What will happen to the economy? These
things normally take time. The US economy was in a
wonderful shape when Trump came in. He arrived at the
laid table, and quite often these positive forces last longer
(47:59):
than one could have imagined. I particularly look upon a
decline in business investment and what happens to a private
sales and major indicators we regard to inflation. Tariffs are
going out and this will be more and more of
an effect. But the service economy, which is two thirds
(48:22):
of economy, has very little inputs in it. Imports are
only eleven percent of GDP, so it's possible that the
negative economic developments will balance out inflation so that it
does not become two striking. So that's quarters where unemployment
(48:45):
might not increase so much. Given that the immigration has
effectively stopped to the US now, so we're normally the
labor force increases by one percent a year. Now it's
zero percent, and a lot of foreigners are withdrawing from
(49:05):
from the labor of course, unknown how as yet if
I leave the country or if they appear into the economy,
so it's difficult to say how people will react. The
stock market is to be a surprise. I didn't think
(49:27):
that people would trust the US and Trump as much
as a as approven, and the stock market is always
very difficult to predict. And of course here we have
the AI boom, which is something completely different and that
(49:48):
is by and large not touched by Trump. Science and
universities are going down, but this is a long term trend.
It's to walk term the trend, so it's easier to
see the long term trend and what I wore him
most about what will happen to the road Double and Freedom.
Speaker 3 (50:14):
Doctor Professor ANDREWS. Ascelin, thank you so much for joining us.
I really appreciate it.
Speaker 2 (50:17):
I think that this is a very provocative and profound
conversation and something that a lot of people have to
listen to and give a lot of thought to. And
I appreciate your advice to Canada about taking a hard line.
Speaker 3 (50:28):
I tend to agree with it.
Speaker 2 (50:29):
That's our show for tonight, everybody, thank you for joining.
I remind you on every Monday through Friday at six
o'clock on nine to sixty am, you can stream me
online from Washington, DC or from Sweden at Triple W
SAGA nine sixty am dot CA.
Speaker 4 (50:41):
Can it everybody?
Speaker 3 (50:42):
Thank you sir.
Speaker 1 (50:47):
Stream us live at SAGA nine sixty am dot CA.
The views expressed in the following program are those of
the participants and do not necessarily reflect the views of
Saga nine sixty am or its management.
Speaker 2 (00:18):
Good eating everyone, and welcome to the Brian Crombie Radio Hour.
I've got Andres Osland with me today. He's a senior
fellow at the Stockholm Free World Forum and he's an
adjunct professor at Georgetown University in Washington, d C. Andres
Osland is a frequent critic of US government economic policy.
He's written extensively on this. I follow him on LinkedIn,
(00:41):
and his almost hourly posts, if not hourly, at least
several times a day posts are very critical of US
government current tariff and trade policy and also in regards
to policies regarding Europe, NATO, Ukraine, etc.
Speaker 3 (00:59):
Professor oslod And, thank you very much for joining me.
Speaker 4 (01:02):
Thank you my pleasure.
Speaker 2 (01:04):
So tell me what do you think is wrong with Ukraine? Sorry,
not with Ukraine, with the US economic policy today?
Speaker 4 (01:11):
Well, pretty much everything. But if we take the tariff
policy that has now become a dominant, first of all,
there's no theory behind it, and there's no theory of
massive protectionism. This is the protection is that we last
saw being introduced in nineteen thirty in the Smooth Horley
(01:37):
Tariff Act with the tariffs around twenty percent, and the
tariffs are being paid by the population, that means by Americans.
Speaker 3 (01:52):
And so is it a sales tax effectively.
Speaker 4 (01:55):
Yeah, it is a sales tax to have the sales tax,
federal sales tax, and it's regretted.
Speaker 3 (02:07):
I was in Florida.
Speaker 2 (02:07):
I was in Florida recently on business and had dinner
with numerous people and we were commenting about this, and
they said, no, there's no inflation. Inflation is exactly the
same as it was before. So we're not paying it.
The companies or the foreigners are eating it.
Speaker 4 (02:24):
Two problems we're at. The first is that the tariffs
have not been fully implemented at yess and the second
that many importers had provided they had stocked out before,
so they are still using goods sailling goods that has
(02:45):
no tariff on top of them. And when the thirdly,
inflation is rising. Inflation is now two point seven a
percent and it's supposed to be two percent that is
fed target. So there is no theory behind that a
tariff policy, and it's extremely aggressive. This is a trade war,
(03:08):
and it's being pursued in a completely arbitrary fashion. So
Switzerland gets a thirty nine percent tariff, Britain gets a
ten percent tariff, the EU fifteen percent. India thought we
had a deal, but when they got twenty five percent
in tariff, Switzerland thought we had a deal of ten percent,
(03:32):
and then they got thirty nine percent. So it's both
that it's aggressive and that it's completely arbitrary. But Trump
puts up a figure and say, okay, now we no,
I don't like this country, so we impose a massive
(03:53):
tariff on them, for example, fifty percent tariff on Brazil
just because it likes the former president Polsonaro and the
north the current president Lula. In fact, the US has
a trade surplus on Brazil. So this is the arbitrary
(04:16):
Birthlue theory, and it's highly disruptive. It's aggressive. This is
a trade war. And Trump calls these taris recipron while
they are aggressive and unilateral and justified. So he's now
(04:37):
destroying global trading system that has been built up around
the GAP and the World Trade Organization of the World
War two for a new reason other than his aggressive emotions.
Speaker 2 (04:56):
Well, you know if you if you read Art of
the Deal, is what everyone says. His whole philosophy is
you take an extremist position and you negotiate incredibly hard,
and in the end you'll get a great deal. If
that you're reasonable in your negotiations and you take a
moderate point of view, you lose. And and he wants
(05:16):
manufacturing jobs to come back to the United States. He
thinks that numerous different countries, if not frankly, almost every
country in the world is running a trade surplus with
the United States.
Speaker 3 (05:26):
The US has a trade deficit. He wants that to correctly.
And he's also.
Speaker 2 (05:30):
Getting you know, half a trillion dollars worth of commitments
of investments in the United States. So you know, if
you read his press, it's working. He's getting the US
the EU to pay a huge tariff and and and
therefore restrict imports into the United States. He's going to
(05:51):
get manufacturing reshort from Europe to the United States. And
he's getting Europe to buy you know, high hundreds of
millions of dollars of energy from the United States.
Speaker 3 (06:04):
So is that a good deal?
Speaker 4 (06:06):
No, everything in it is a wrong to begin with.
There is not a big trade deficit over the United States.
So if you take, for example, between the European Union
and the US, if you include service trade which Trump
never does, and intellectual property, then you have a balance
(06:31):
trade between the VU and the US. Financial Times has
written substantially about this matter. So the basic assumption is wrong.
And if there is a trade deficit, it is a
kind of account deficit when we will include service and
(06:55):
it's not a giant deficit, but a moderate one. And
the course of it is that the US has a
budget deficit over six percent of a GDP, and this
has when financed by foreigners. So rather than saying that
foreigners are ripping off the United States, Trump should be
(07:19):
grateful and say thank you very much foreigners. But you
trust the US so much that you want to put
so much money into our country. This has happened, and
the foreign investments in the US securities both bonds and stocks,
(07:41):
or in the order of thirty two trillion dollars, so
approximately the level of the US DDP over the twenty
nine trillion dollars of US treasurers that are outstanding. Foreigners
own about nine trillion dollars. So what is likely to
(08:03):
happen now is that foreigners will buy less of US
treasures because the US is not reliable. And we're already
seeing that investment is going down. In the second the
quarter numbers of a GDP that just came out, business
(08:25):
investment was down by fifteen percent. That's a big number
because you don't stop business investment that fast. This is
without inventory. So he is doing the opposite. And then
Trump talks about these trillions of dollars. I think in
(08:47):
dar up to nine trillion of dollars. But he claims,
but he is getting commitments on this is a new commitment.
This is loose talk. But sometime in the distant future
we might invested a little bit in the US. And
then Trump gets happy. So this is Northrup policy should
(09:09):
be made. And this is not proper statistics. And we
saw now last week when it turns out that the
US had only got through thirty five thousand new jobs
a month during the last three months. Then immediately his
sects the head of a Bureau of Labor statistics. So
(09:35):
Trump works on no facts, no theory, and the sheer aggression.
And this is aggression against the Allies and the friends
more than against the say Russia and the China. So
what he's doing his alienating all his former allies and
(09:59):
breaking up the Western Alliance system and breaking up a
global trading system. This will be very costly economically and politically.
Speaker 2 (10:10):
I signed an interview with former Vice president and presidential
candidate Kamala Harris recently, and she said the thing that
had surprised her the most is that American people, American institutions,
American business people have sort of put up with this
all and haven't complained about it and are given in.
Speaker 3 (10:29):
To Trump's policies.
Speaker 2 (10:30):
What do you think of And she even complained about
economists that people like you weren't explaining things as as
succinctly as you have. What do you think of American
institutions of American people, American business, American law firms, American
universities sort of complied with Trump and not complained the
(10:52):
way that you think they should.
Speaker 4 (10:54):
Yeah, I think that that is a very justified criticism
and business something that I think many people wonder about.
Why are the people, as them Snyder puts it, obeying
in advance? Why are they obeying even before it has
(11:17):
been done? If you take for example, the former head
of the FBI, he resigned in advance for no good reason.
Trump wanted to have him exchange, and then he just withdraw.
And these nine law firms that have put up almost
(11:39):
one billion dollars in so called probona work for Trumper courses.
There's no reason for them to behave like this. And
I'm happy to see that we are now losing top
lawyers because a law firm, a lawyer doesn't work for
(12:00):
a law firm that doesn't even want to defend itself.
How could anybody have confidence in a law firm that
is a zu defeatist. So there you see one fact
that what is really terrible. It is all of this
(12:23):
money that is coming from the state that is now
being from the federal government that is now being cut.
So what is happening to Harvard, I think is most important.
And we see how many levels that the federal government
it can use, first two billion dollars of annual research funds,
(12:47):
mainly going to medical research. Then cutting off the right
of university to get foreign students that we won't get
a base as if I apply or study at Harvard,
and then the federal government can take away the accreditation
(13:12):
of the university, and on and on like we said,
it goes. So what we're seeing is that the federal
government has far too many levels of power, and if
you go against the government, you are in trouble. And
(13:33):
we're seeing with regard to the media, tod Trump, as
he had promised before, used the libel and defamation laws
in order to go after media that are critical of him.
ABC and the CBS have been forced to give him
fifteen and sixteen million dollars respectively for completely flawed the
(13:59):
defamation cases. And Trump collects to his Trump Library, where
he undoptedly can spread the money as he pleases later
on to families member. So this is a new system
(14:23):
of censorship. According to World Press Freedom Report by Reporters
Without Borders for last year, the US ranked fifty seven
in the world in terms of press freedom, which is
not very free. The US comes below all EU countries
(14:46):
apart from a Hungary, which is of course Trump's ideal
because it doesn't have much freedom. So even before Trump,
the federal government had so many checks on freedom in
the US that it ranked as the bottom of democratic countries.
(15:09):
And now Trump is about to or perhaps already have
switched the US from being in the democratic can to
be in the gray zone of completely free countries. Do
you mean the watchstone in the gray zone of the
countries that are not quite free? Freedom House still keeps
(15:33):
the US as a free country, but it is on
the lowest level in their measurement.
Speaker 2 (15:41):
So do you think the United States is an autocracy today?
Speaker 4 (15:45):
It's slipping down in that area. You have a big
gray area where countries are not fully democratic. So what
happens now is that Trump can steal anybody and so systematically.
If you're compared with what Putin died when he came
(16:06):
in in two thousand, Trump is moving much faster against
the big television companies when Putin.
Speaker 2 (16:15):
Trump is moving faster against the big television companies than
even Vladimir Putin did.
Speaker 4 (16:22):
Yeah. Really, that's the most question for free during pult
his first term.
Speaker 2 (16:30):
We're going to take a break for some message. This
is gonna be hard hitting conversation today with Professor andrews.
Speaker 3 (16:35):
Azeland. We're going to take a break and be back
in just two minutes. Scare with us. Everyone back in.
Speaker 1 (16:39):
Two stream US live at SAGA nine am dot C.
Speaker 2 (16:47):
A welcome back everyone to the Bran Crime. Really, I've
got unders Oslen Aschland with me today. He is a professor.
He's got really quite a very impressive background. He's got
(17:09):
a bachelor's of Arts and History Russian Polish political science
from Stockholm University. He's got a master's degree from in
economics from Stockholm School of Economics, and he's got a
University of Oxford PhD I presume in economics. And then
he's got really quite an incressible, incredible history. He was
the first secretary for the Swedish Permanent Delegation to the
(17:30):
United States. He was the first Secretary of the Embassy
of Sweden in Moscow for two years in the nineteen eighties.
That must have been a fascinating time to have been
serving in Moscow, sir. Then he was a professor in
the Stockholm School of Economics, a guest scholar at the
Brookings Institution in Washington, a senior Fellow and director of
the Russian and Eurasian Program at the Carnegie and Damond
(17:52):
for International Peace, a senior Fellow at the Peterson Institute
for International Economics, a Senior Fellow at the Atlantic Council,
And today he serves as a Senior Fellow and professor,
Ajact Professor at Georgetown University in Washington, DC. What was
it like serving in Moscow right before the fall of
the Berlin Wall.
Speaker 4 (18:13):
Well, it was fascinating. Things were happening all the time.
I was where eighty four to eighty seven. I came
just before Garbachov became a secretary general of a Communist
party in a March nineteen eighty five, and it was
(18:36):
Garbachov who drew it all during the first three years.
But so everything that was considered impossible became not only
possible but actually happened. And in particular what drew the
(18:56):
intellectual debate was the thick literary which are like books
and like the Granta Journal, if you you know. And
each month they came out with one devastating article that
(19:16):
shattered of what had been a troop before. I of
course looked mainly on the economic side, but it was
very much about the history to reveal Starlin's a terrible deeds.
(19:37):
At the same time, the KDB was hard hitting. I
bought my car sabotage eight times, so the KDB became
simply an empty of my tires. When I thought that
I had done something that I shouldn't do. If I
hadn't seen some Russian whom the thought that I shouldn't see,
(20:00):
but they emptied my tires on the car. If I
really even though you were a diplomat, yeah, it doesn't matter.
It has been like that all the time. They go
into the apartments and they leave signs that they were there,
for example a cigarette, or what they do is, for
(20:27):
example going into a bathroom and not flushing after they
have used the toilets, just to shoe that they were there.
These are typical things the KDB did and do so
at the end, I was in the summer of nineteen
eighty seven, they that is the KDB, took in my
(20:54):
acquaintances and friends for interrogation and we heard from various
people that it was between three and twelve hours interrogation.
And one of the toughest talken note of all the
names and said that there were thirty three people who
(21:15):
that they had interrogated a t could judge from his
his conversation. And I had a dinner once for polls
and all the three Poles who were in the apartment
were expelled after this. One of them was head of
(21:40):
a Polish television in the Moscow at the times. It
was a very tough place. What people said, Moscow is interesting,
but it's not pleasant.
Speaker 2 (21:52):
So this was the nineteen eighty seven. Two years later
you had the fall of the Berlin Wall. Five years
later you had the breakup of the civict Union in
nineteen eighty seven. Did you have any sense, given what
you've just described of how powerful the KGB was, et cetera.
Did you have any sense in nineteen eighty seven, the
two years later the Berlin Wall could fall and five
(22:15):
years later the USSR could break up.
Speaker 4 (22:18):
Yeah. Sure, So once saw on the one hand that
things were moving in one direction, on the other hand,
could be old repression was still very much a present.
A major event was, for example, when andrescher Venerbeltri is
(22:39):
the piece laureate and the father of at the bomb
in the Soviet Union, when he was allowed back to
Moscow in nineteen eighty six and he became then effectively
the leader of the intellectual or position in in the
(23:02):
Soviet This was a major event. But there were lots
of these kinds of events, and popular demonstrations started in
nineteen eighty seven, and what we actually as diplomats could
do was to go to certain public lectures and they
started then having open discussions in nineteen eighty seven. But
(23:28):
it was very interesting to see how people were not
used to speak their mind, so therefore they got extremely
excited when they got to the opportunity, and they lost
control over themselves and started shouting, etc. What you see
from people who are not used to public speaking. So
(23:53):
it was a very confused situation.
Speaker 2 (24:00):
Not in any way, shape or form suggesting that the
United States is the USSR, but given the current situation
that you've described and the Kamala Harris described that, you know,
law firms and universities and companies and billionaires and economists,
et cetera are effectively not opposing Donald Trump and his policies.
(24:21):
And two days ago, just to put it in perspective,
you posted, no serious economists would advocate Trump's devastating economic
policies one high teriffs for no reason, two complete uncertainty,
three massive overstimulation with rising budget deficit and public debt
for hostility to the whole world, no surprise, the economy declines.
(24:45):
Is there a leader of the intellectual opposition right now
to Donald Trump and his economic policies?
Speaker 4 (24:55):
Good question, No, there's no true. I mean people who
stand up and who are relevant. I would mention the
Larry Summers, performer Treasury is Secretary, as one of the
people who's most vocal and the most consistent in his criticism.
(25:18):
You have a Paul Krugman in the few, but there's
no clear leader. And if you look up on the
Democratic Party, you wonder where are the old leaders. This
is that Kamala Harris, as you mentioned that she spoke,
is a major thing at all, But otherwise it's a
(25:41):
number of senators whom I'm particularly like is the Senator
of Connecticut, Christmas Marphy, who's very consistent in his legal criticism.
Sheldon White Towns focuses on the corrupt side of the business,
(26:07):
and of course the part of the people a UC
and the eradicus. But there's new leader.
Speaker 2 (26:24):
You say that no surprise of the economy declines, stock
market is an all time high, GDP is still growing,
Unemployment is low. Inflation, even though it may be up
from what you wanted what the Fed is targeting, it's
still low. So is the economy actually declining today or
(26:44):
is the stock market saying the economy is doing great?
Speaker 4 (26:48):
The stock market, I don't think that want to take
pay too much attention to it has very little to
do with how the economy works. What economist and pay
most attention to in terms of actual economic growth, it
is a private says, which increased by one point nine
(27:11):
percent in the first quarter and one point two percent
in the second quarter. It's still increasing, but this is
a very low growth rate. So what the US seems
to have now is speculation as in the nineteen seventies,
inflation is still limited slightly below three percent, and growth
(27:35):
I would presume will stop at one percent or so
this year that it could get worse.
Speaker 2 (27:45):
We're going to take a break for some messages and
come back and talk about deficits because one of the
things that our professor has been very critical as well
is this overstimulation of the economy. And then we're going
to touch on what's going on in Europe, because it
is also very critical of the United States plans and
policies in regards to Ukraine.
Speaker 3 (28:05):
Say it was Everyone will be just back in two minutes.
Speaker 1 (28:12):
No Radio, No Problem stream is live on Sagay ninety
six am dot C.
Speaker 2 (28:17):
A Welcome back everyone to the Brian Crombie Radio. I've
got Professor andrews Ausland with US today. He's got just
an unbelievable career that we've talked about, where he's spent
time at the United Nations, at Academia in Moscow, and
(28:43):
now he's at Georgetown University as an adjunct professor, and
he's a big critic of US economic policy and Donald
Trump's policies. Right now, I want to turn to another
one that you mentioned. You talk about overstimulation with rising
budget deficit and public debt. This big beautiful bill has
(29:04):
dramatically increased the deficit and debt, and it was put
in place by the Republicans. And I always thought, maybe naively,
that that Republicans conservatives were for balancing the budget and
and you know the Peterson Center that that that you
were part.
Speaker 3 (29:21):
Of, uh uh, you know numerous years ago.
Speaker 2 (29:24):
You know, I think published a whole book at one
point in time about deficits and debt and how that
could destroy the US economy. But it doesn't seem to
worry the president or the Republican Party. So please explain
to me what's going on with these conservatives are increasing
debt and deficit to over you know, five percent of GDP.
Speaker 4 (29:46):
Yeah, if you look upon it historically, for the launch
the forty five years, it has been the Republicans that
have had the big deficits and increased the public debt.
Ronald Reagan the Stone did it. George W. Bush pushed
(30:06):
not financing the war in Iraq, and then Obama was
now saint in this regard about Trump sharply in priest
the deficit in his last period. So buy in Lage,
you can say that the three big sinners are Reagan,
(30:30):
George W. Bush, and then the Trump and the Republicans
have voted for their expenditures, but they have not voted
for the Democrats expenditure. The person who really changed things
was Bill Clinton. Bill Clinton had in his last two
years actually over balanced budget, and Clinton stands out as
(30:58):
the only real fiscal conservative. And for the last twenty
five years we have seen a steadily increasing public debt.
And as the public debt is normally counted, it's now
four of DDP, which is a lot. And so this
(31:23):
is at the level of Italy, which is one of
the most dangerous European countries. And it's worse because the
US has relatively high interest rate, so therefore the dept
costs much more. It costs more than one trillion dollars
a year in the debt service, and it's now increasing fast.
(31:49):
So where there's a due tax bill that the Trump
has a push through, the public debt would increase to
about one fifty percent of DDP in two thousand and
thirty five. Of course it will not happen like this,
(32:11):
but this is the dangerous situation. And previously foreigners have
been happy to buy US treasuries because it has been
the gold standard. But what is the safest thing you
can buy in the world US treasurers. And now that
is no longer the case because Trump and his advices
(32:36):
are discussing transforming foreign holdings of US treacheries into something else.
And that means they're essentially discussing defaulting on the public
debt and partial confiscation of foreign holdings, and that will
(33:00):
scare people away from the US treasurist So this is
a completely matter policy and it will cost a lot.
So you can see now that the interest rates in
the US are much higher than in Europe, about twice
(33:20):
as high. And this is not a problem of the Fed,
it's a problem of Trump.
Speaker 2 (33:26):
But if what you're saying is true, interest rates should
go up even higher as foreigners don't want to finance
the data. And if there's any chance of default or confiscation,
one would think that there'd be massive sales of US
treasures right now.
Speaker 4 (33:43):
Well true, true, but it doesn't work quite like that.
If you think of who holds this, it's enormous funds
insurance companies pent found and they move fans very slowly,
(34:04):
so there's an enormous amount of inutia. So it's more
that they don't find new staff while they hold what
we have. And it's also not this is a discussion,
it's not the concrete proposals, so people don't take it
as seriously as as yet. And uh Roud Bosher, the
(34:29):
later m I T professors, he used to say that
financial crisis normally take much longer to develop than anybody
had anticipated, but when they start, they move much faster
than any what it could have believed. And this is
(34:50):
the situation, the nature of financial crisis, and it takes
time to build out and building up. It is what
we are seeing now, and then the crisis itself happens
much later than we would have expected. So I'm very
(35:11):
cautious never to predict when a crisis will come I'll
give you one example. In twenty twelve, I went to
Cyprus because Greece had defaulted on its government bonds and
the Cypress banks held vast amounts of Greek ponds. And
(35:34):
I went to a couple of the banks and asked
them about this problem, and they said, oh, we will
be bought by a foreign bank. We are not really
in trouble. And they did not have a crisis in
front of them, although it was obvious that the capital
was already gone, but nothing had happened as yet. And
(35:58):
then a yearly everything crashed and it was so obvious
that it would crash, But the Central Bank in ciresident
that the banks I visited had no sense of crisis
at all.
Speaker 2 (36:15):
I want to turn to your thoughts about the EU
and Ukraine. You wrote in the Key of Post. The
European Union in Ukraine are facing a bizarre conundrum. How
to handle a narcissistic and lawless senile toddler who has
become the almighty President of the United States. The European
(36:35):
Union and Ukraine are facing a bizarre conundrum. Traditionally, the
United States has stood for democracy, freedom, the rule of law,
and free markets. But mister Trump's preferences are personal power,
family income, and maximum public attention. How shall the democratic
world manage such a character? The big takeaway is never
(36:55):
trust the United States as long as Trump is president.
Remember that he has claimed that our allies are were
than our enemies. In the short term, Trump has to
be managed. In the longer term, all need to learn
to how to live without the previously benevolent United States.
The EU needs to provide Ukraine with sufficient financing, and
together Europe and Ukraine must provide Ukraine.
Speaker 3 (37:15):
With the necessary arms. Wow, that's pretty hard hitting, sir.
Speaker 4 (37:21):
Oh really.
Speaker 2 (37:24):
You then go through four different case studies of people
who have handled Trump, from the president of Alsalvodor to
Victor Oban to the NATO Secretary General and finally China.
Tell me about these four different case studies and what
you think the world can learn from how to deal
(37:45):
with Trump. And obviously, given that you're talking to a
Toronto audience right now, primarily sir, I'm interested in what
you have learned from these four case studies, what your
advice to the EU and Ukraine is, and what your
advice to Canada would be given that we're in a
pretty difficult situation with Donald Trump right now as well.
Speaker 4 (38:06):
Yeah, I don't want to give advice or recommendation, but
it's interesting to see what has worked. I mean, the
president of an Salba, your book healer, he has gone
in and given a Trump serious services through his presence
(38:29):
and his lack of rule of law. This is what
Trump really likes. So this is one model to be
very close to Trump. Victor Urban shoes to the Trump.
How you can cut down the media and the university
is setting an example for Trump. That's also something that's
(38:55):
Trump likes. So in Europe, urban is a great favorite.
It doesn't matter that all About has also great relations
with China and the supports Chinese direct investment in Hungary
and that the economic performance recently in Hungary has been
(39:17):
quite bad. Trump doesn't care about that. Mark rut the
Secretary General of NATO. It's another case. And generally in
summit in Behague in June, that is just a flatter Trump.
(39:41):
A flatter works with Trump and you. They say, now
ofter the tariffs have come through, that the European Union
looks comparatively good with fifteen percent tariffs. While Buy and
Large Peace cringed seeing the president of a European commission
(40:04):
also upon the Lion coming to try Trump in turn
burn in Scotland at his golf club and behaving like
a little school girl who who is allowed to see
the headmaster. And it was such a humiliation which was
(40:26):
reflected in lots of European articles. But then perhaps that
actually worked. And then we have a China which is
in another situation that they have rare metals and magnets
that they effectively have a supply monopoly on, and Trump
(40:53):
the things that the US needs these, So therefore he's
prepared to do pretty much anything to get these. And therefore,
for example, the president of Taiwan is not allowed to
land in New York on a trip to Latin America,
(41:15):
and a meeting with taiwan is a Minister of Defense
planned at Pentagon in June was canceled because the Americans
don't want to go against the Chinese. So be you
(41:37):
have here two models if we turn to Canada about
what would be possible. One is hardboard to play like
China does. And I would suggest that that would be
the best model for Canada. That is, Canada supplies a
(42:01):
lot of oil to the US. If the US doesn't
cut down the thirty five percent tariff to say fifteen percent,
then Canada would stop delivering oil to the US. I
don't know how illegally that it would be dancing be
(42:24):
sur private companies, et cetera. But this is the kind
of hardball that for Chinese play, and that seems to
work with Trump. The other would be to disgustingly complement Trump,
which I don't think is is very likely to work.
(42:46):
And where you don't want to be is in the
neutral need that where you are neither close Trump supporter
I nor ball playing opponent. That's what a Trump does.
(43:07):
North like so they think of poor Switzerland now being
forced to pay thirty nine percent tariffs on over the
US imports will be forced to pay thirty nine percent
tariffs on whatever they import from Switzerland, So then it's
(43:29):
much better to import from the European Union where it's
only fifteen percent.
Speaker 2 (43:37):
We're going to take a break and come back with
some final comments from our guest tonight, our expert guest
economy Standards Iceland.
Speaker 3 (43:45):
We're going to ask him what the thing's going to
happen and in his prediction, stay with us. Everyone back
into MIT.
Speaker 1 (43:57):
No Radio no problem. Streamers live on SADAY ninety sixty
am dot C A.
Speaker 3 (44:14):
Welcome back everyone to the Brian Crime Radio Wire.
Speaker 2 (44:16):
We've got an economist agend professor at Georgetown University, andrews
Auslin with us today.
Speaker 3 (44:22):
It's been a fascinating.
Speaker 2 (44:23):
Discussion today, Sir, I wonder if you could predict where
we're going to go, what's going to happen. You know,
you were there in Moscow and you said that you
could anticipate some of the trends that were happening in
regards to the breakup of.
Speaker 3 (44:40):
The Eastern Bloc and of the USSR.
Speaker 2 (44:44):
You say, there's there's some intellectual opposition right now to
what Donald Trump is doing, but the Republican Party seems
completely wedded to his strategies. My sense is that the
people that I meet with from a business standpoint, that
we're maga enthusiasts, are still maga enthusiasts, and his base
(45:04):
is strongly supportive of him. The stock market is at
a high and while you say it may not be
a great barometer of what's happening, a lot of people
keep saying, look at the stock market.
Speaker 3 (45:17):
Trump keeps saying, look at the stock market. He seems
to think that the stock market.
Speaker 2 (45:21):
Is almost better than public opinion polls as to predicting
how well he's doing. While you comment and inflation is
going up, you know, two point nine percent is relatively
good relative to where we were during the pandemic.
Speaker 3 (45:36):
You know, the economy is still growing. You say stagflation,
but we're still growing. What's going to happen.
Speaker 2 (45:42):
Are people just going to put up with Trump and
we're going to have a great depression like the nineteen thirties.
Are we going to have stagflation like Japan in the
last twenty years? Is that NATO going to break up?
Is the World Trading Organization going to break up? Or
is someone going to stand up Trump and things are
going to change?
Speaker 4 (46:04):
Well, I think that it's easiest to start with the
multilateral organizations. They are losing out now. The World Trade
Organization is in practice dead. I think the best thing
would be simply to expel the US from it. That
the US withdraws so that the rest of the world
(46:25):
can maintain the free trade system. It's quite interesting that
there seems to be no other country in the world
that wants to have a tramp system, so it's only
the US that is becoming protections. It's not an international trend.
The u N I think is pretty dead, and during
(46:49):
the spring meetings on the IMF and the World Bank
there was a great worry that the US would withdraw
from them. That didn't happen. Nate, I think is in
a transitionary stage and it's not likely to survive. But
it's quite important for Ukraine now that the native functions,
(47:11):
and in effect it has got a new role now
to deliver arms for Ukraine, which are very much welcome
in the US. I can't say it depends on so
many things that I can't judge. The Epstein files, for example,
seem to be the big thing that really upset a
(47:36):
lot of Republican What will happen to the economy? These
things normally take time. The US economy was in a
wonderful shape when Trump came in. He arrived at the
laid table, and quite often these positive forces last longer
(47:59):
than one could have imagined. I particularly look upon a
decline in business investment and what happens to a private
sales and major indicators we regard to inflation. Tariffs are
going out and this will be more and more of
an effect. But the service economy, which is two thirds
(48:22):
of economy, has very little inputs in it. Imports are
only eleven percent of GDP, so it's possible that the
negative economic developments will balance out inflation so that it
does not become two striking. So that's quarters where unemployment
(48:45):
might not increase so much. Given that the immigration has
effectively stopped to the US now, so we're normally the
labor force increases by one percent a year. Now it's
zero percent, and a lot of foreigners are withdrawing from
(49:05):
from the labor of course, unknown how as yet if
I leave the country or if they appear into the economy,
so it's difficult to say how people will react. The
stock market is to be a surprise. I didn't think
(49:27):
that people would trust the US and Trump as much
as a as approven, and the stock market is always
very difficult to predict. And of course here we have
the AI boom, which is something completely different and that
(49:48):
is by and large not touched by Trump. Science and
universities are going down, but this is a long term trend.
It's to walk term the trend, so it's easier to
see the long term trend and what I wore him
most about what will happen to the road Double and Freedom.
Speaker 3 (50:14):
Doctor Professor ANDREWS. Ascelin, thank you so much for joining us.
I really appreciate it.
Speaker 2 (50:17):
I think that this is a very provocative and profound
conversation and something that a lot of people have to
listen to and give a lot of thought to. And
I appreciate your advice to Canada about taking a hard line.
Speaker 3 (50:28):
I tend to agree with it.
Speaker 2 (50:29):
That's our show for tonight, everybody, thank you for joining.
I remind you on every Monday through Friday at six
o'clock on nine to sixty am, you can stream me
online from Washington, DC or from Sweden at Triple W
SAGA nine sixty am dot CA.
Speaker 4 (50:41):
Can it everybody?
Speaker 3 (50:42):
Thank you sir.
Speaker 1 (50:47):
Stream us live at SAGA nine sixty am dot CA.
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