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How America Will Pivot and Ask Allies to Pay If Trump Wins

Published Jul 17, 2024, 2:30 PM

What could a second Donald Trump presidency look like, should he defeat US President Joe Biden in November, and how could the Republican’s policies shape markets and the world economy?

We discuss with Elbridge Colby, a member of the first Trump administration and potential National Security Advisor if there’s a second one.

Also on this episode, a conversation with Bloomberg political correspondent Nancy Cook, who joins from the Republican National Convention in Milwaukee. And finally, Bloomberg Editor in Chief John Micklethwait discusses his column on what lessons the Republicans could glean from the recent defeat of the Conservatives in the UK. 

Bloomberg Audio Studios, podcasts, radio News.

Welcome to voter Nomics, where politics and markets collide. This year, voters around the world have the ability to affect markets, countries, and whole economies like never before, so we've created this series to help you make sense of it all. I'm Stephanie Flanders.

I'm made Room Woodridge, and I'm alegra Stratton.

So I think I lost track at some point, but I think our last two episodes were on the ground in the UK and France on the day after very different elections, two countries where garnering around a third of the vote produced very different outcomes for Sirkir Starmer's Labor Party and Marine Le Penz Rassan Lemont National. France has been a mess since then, as predicted, but the new UK government has been a hive of active In the lead up to the vote, we said there was no options for anybody. Everything was locked in. The economic situation was terrible, and suddenly it feels like horizons are opening up. But we're going to ignore all that because the focus hasn't It has irrevocably shifted in the last few days.

Well, we've had a failed assassination to attempt on Donald Trump, which was an extraordinary piece of news. We've had what looks as though it was a failed attempt to ease Biden out of the nomination. So Biden looks as though he will be the nominee, increasingly as though he will be the nominee. And now we've got the Republican Convention with all the rasmatas entails.

You're talking about failed attempts, but you haven't included the euros for England. I didn't want about that, but it wasn't It is interesting. I looked at that my news feed this morning and a British government story was sort of item number seven. And given we've had what are we what are we like? Ten days in now maybe two weeks into the new government, that is amazing.

It's been very striking in President Trump is named Senator JD Vance as his running mate in November. So not someone who would necessarily be reaching out to new potential Republican voters very much, someone who is if not a mini Meed, then someone someone who certainly is can follow the Maga tradition. And we've also seen sort of struck by some sympathetic business leaders, including Elon Musk and Bill Lackman now taking the excuse to publicly throw their support behind Donald Trump.

Yes, and I think that made partly partly because it does look as Joe Biden and the Democrats are fading, and you will always back a winner if you're a sensible business person. But I think there's more to it than that. Both both Musk and Atmen are very sensitive on the culture wars issue. They're very angry about what's happened to the left and the wokification of the left, and quite frankly, they want, you know, a guy who's going to probably low their taxes and low their corporate taxes.

But from the perspectives of the labor government. David Lammy, who's the Foreign Secretory, has been very busy in the six months before the election making friends with the guests We're going to talk to you later, Elbridge, Colby, but also jd Vance, So he has met jd Vance this morning, this morning or yesterday. It was slightly troubled that relationship when a footage emerged of jd Vance seeming to mock the UK's new government. I don't know the extent to which we should take the video that seriously whether or not it was off the cuff or a joke, but I think it probably does speak to some kind of beneath the surface of an apparently very strong relationship between the labor government and people in the Trump team. Some ambiguity.

Yeah, so okay. So in a week where it does seem as though Donald Trump has more momentum than ever, certainly the Republicans have more momentum than ever going into November, we wanted to take a look at what a second Trump administration could look like, both domestically and internationally, and how his policies could shape market and the world economy. To provide an international perspective, we'll speak with Elbridge Colby, who's a former member of the first Trump administration and a co founder and principle of the Maratha Initiative, nonprofit focused on national security issues, and later we're also going to have a conversation about the lessons for Republicans in the Conservative's demise in the UK with Bloomberg editor in chief John Micklethwaite. But first we're going to go to our on the ground voice for the week, senior reporter Nancy Cook, who joins us from where Else the Republican National Convention in Milwaukee. Nancy, I think you've had the pleasure of attending a few Republican National conventions. But from those of us who we certainly will have heard Night one and night two, seen some of the pageantry there, the feeling triumphant return of Donald Trump. But how's it felt felt for you?

Well, I would say this security is very, very tight after the assassination attempt, which is no surprise. I mean it is like Milwaukee, Wisconsin is like a fortress, the downtown area. And then you know, I was on the mention floor on Monday night when Trump appeared in public for the first time after he was shot at, and I was.

Just with his bandage.

Yeah, you could see his big white bandage on his ear. He didn't actually speak, but he sat through the last hour or so of the programming, and you know, he still is just so popular among Republican primary voters. I mean you could just see it was almost like God had shown up there. People sort of had guessed that he was coming, So people were starting to line up at the entrance where they knew he was going to walk in about an hour ahead of time. There was like a huge crunch of people, similar to the indictment or the two impeachments. You know, him getting shot really just galvanized the republic his Republican primary voters even more, and they're sort of even more amped up and excited about his candidacy.

Now it's a different feeling than Nancy. It does feel different, does it.

It feels different. And it also just feels like this is a moment when both parties in the US, Democrats and Republicans are really showing a lot of sympathy for him, and people feel horrible about what happened, and I think his campaign is really going to try to capitalize on that by bringing new voters into the Republican tent. You know, white suburban women who they've had problems with, or you know, black men who they've been trying to court, or Hispanic men. You know, they're really trying to take this moment to a portray the Republican Party as sort of a party for all people. And so I think the tone of the convention moving forward is going to be a bit different than it would have been a week ago, when it just would have been you know, very anti Biden and very dark.

Do you get the sense that these are people who are pretty confident of winning in November.

I think the Trump people are extremely confident of winning in November. And you know, you saw with the selection of Senator JD. Vance as the vice presidential pick, that's really an effort on their part to lock up the three states that really help win the election, Pennsylvania, Wisconsin, and Michigan. But I mean, the Trump people that I talk to you feel like at this point there's so many paths to victory to them, not just through like sort of the eight swing states, but that they could even expand the map and turn states that have not voted Republican in the past to Republicans. So they're looking now at could they get New Hampshire, Virginia, Minnesota. I mean, the people I talked to think that there's going to be a huge electoral blowout for Republicans in November now, both given the assassination attempt, Trump's popularity with his base and also just concerns about Biden's age. But they are just anticipating potentially huge electoral win and also that gives them a ton of advantages with down ballot races. The Senate is really up for grabs and the House too.

I mean that is so interesting though, because of course, and you now start talking about enormous coattails, as they say, for the presidents bringing along with him whoever in a given place, whoever is the person or the congressional candidate. I mean, that is the exact opposite of twenty twenty two exactly. See when you were going We went into the midterms, and actually it felt very much as though the candidates who were closest to Trump were the ones who did worse that in that surprisingly positive result for Democrats. So it's such a short time that this has changed.

I think part of it, though, is also the quality of the candidate. I think last time in the midterms, you know, Trump backed a number of candidates, so I think voters just felt like we're too extreme or too fringy. I think a lot of the Republican senatorial candidates this time are you know, a bit more centrist, you know, a bit more appealing to like a wider swath of voter. So they've picked better candidates. But also, you know, right, you're right, it's just really riding the cotails. And I can't overstate that voters here are just not here in Wisconsin, but just like across the country in the US are just really not enthusiastic about Biden. They have deep concerns about his age that the party has you know, sort of glossed over for months, and you sort of can't get slight people on that.

Senator Vance though, I mean, if you were looking, you talked about sort of broadening the numerous paths to victory and broadening out to states that have traditioned have for many years voted Democrat. You know, we had been led to think that maybe that would mean a different kind of pick for vice president, a woman potentially, or someone who or someone like Marco Rubio who would be reaching out to the sort of non white, non core voter. So that's a bit of a surprise, right. This is a very core voter candidate.

Absolutely, And I think it's interesting because it's also really setting up Senator Vance as the heir apparent to the MAGA movement when Trump, you know, he can only serve for one term. I think that there was you know, people inside the Trump campaign, including Trump's campaign manager, who is a woman from Florida, who really wanted him to pick Rubio for that reason. You know, Rubio speaks Spanish to appeal to Hispanic voters. But I think that Rubio and Trump sort of never had the chemistry that the Trump had with Governor Bergham or with Senator Vance, and I think that does matter. And Senator Vance also had really powerful backers in the Trump family, including his son Don Junior, who was really pushing for him, and I think that helped as well.

If you can step away from where you are right now, what do you think is going to happen regarding Biden and the back and forth over whether or not he lasts all the way through to November.

Well, I think that there's a huge chance that Biden just stays in the race. Now. I mean the past week, the conversation has really changed so that, you know, people aren't really talking about Biden dropping out of the race anymore since the assassination attempt, you know, all the focus has been on Trump, and that has bought Biden more time. I mean, I think his strategy was always to kind of run out the clock till the convention and sort of not step down. I don't think he thinks he needs to step down, and that's what we're seeing.

Them do and at the convention of people pretty happy with the Vance choice.

Yeah, people at the convention seemed happy. I mean, you know, there were some advisors in Trump world who wanted different candidates, but everyone will get in line. And I think people are also very excited about the idea of Senator Vance, you know, who is a very articulate person and extremely good at debating people and appearing on TV. I think people are really excited about, you know, how he will debate Vice President Kamala Harris.

Another trend for Yale Law School.

Yeah, Nazi, I did want to mention that you were one of the people who sat down with the editor of BusinessWeek and head of our White House team in Mara Lago with former President Donald Trump a couple of weeks ago, and that interview is coming out in BusinessWeek. I think will have just come out when this goes out. You know, everything's gone pretty well for former President Trump since you had that interview. But he was already looking like a had a very strong chance when we did it. For those wanting to think about now, very focused very clearly, particularly outside the US, on what a Trump two point administration will be like. What did you really take away from that sit.

Down, Well, we spent about ninety minutes with him, and I think that one of the most interesting global things he said that surprise me was just that he is very cool to the idea of supporting Taiwan and having the US sort of continue to defend Taiwan. He talked at one point about how he didn't really understand why the US is the insurance policy for Taiwan, and he felt like, you know, Taiwan had taken away a lot of the US chips business and he didn't really see the need to protect them. And I just thought that was an incredible foreshadowing of the way that he could really change the global order and also just US's approached to foreign policy if he wins reelection.

In terms of his style of leadership. The other thing that struck me when I was looking at the transcript was just how much he's talking in terms of personal relationships and one on one relationships and the weather. You know, so and so business leader has a problem with tariffs. You know, they should just come and talk to me. I mean, there was no fa to disguise that this is going to be a very personal, very transactional approach to leading.

It will be. And he told us a story when we were there about how Tim Cook of Apple was upset about some tariffs, and he complimented Tim Cook. He said he thought Tim Cook was a great business leader because rather than sort of hire an army of lobbyists to try to influence the people around Trump, Tim Cook just called Trump directly and said may I come see you, which also flattered him, I think, and Tim Cook came to the White House and they had a discussion, the two of them, and Trump recounted this to us as an example of like someone he thought was a good business leader. And so I do think that offers a lot of clues about how both CEOs and world leaders and the ones who are successful actually interact with him.

And if you want access to Morrow Lago, you've got to pay a higher price for membership come October. Is that right?

Well, he sort of let it slip in the conversation at one point that the club manager walked through and he introduced us to him, and then he was bragging about his property. How he said, it's the best location in the best house. And then he said, tell them how much it costs to get a membership, and the club manager said, well, you know, right now at seven hundred thousand dollars, and he said that's up from you know, twenty five thousand when I first started, when he first bought the club, which was many years ago. And then he said in October it's going up to a million dollars, which is interesting because that's a month before the US elections.

Nancy, thank you so much for joining us, and I hope you get enough for enough sleep in the amid all the pageantry and madness in Milwaukee this week.

Thanks for having me. I appreciate it.

So we're delighted now to welcome Elbridge Colby. He's co founder and principal of the Marathon Initiative, which is a nonprofit focused on national security issues. He's a former Deputy Assistant Sector of Defense for Strategy and Force Development during the first Trump administration, and he has been tipped to be Trump's national security advisor should there be a second administration, although he's going to tell us that he doesn't speak for the Trump administration and he doesn't know what job he's going to get. Thank you very much for joining us. Albert. We're speaking on Tuesday, just the day after the announcement of Daily Evans as vice presidential pick by Donald Trump. He is known for having what Europeans would consider to be use on your foreign policy, which Europeans would be nervous about, particularly with regard to Ukraine. So I'm just wondering how you think we should interpret the choice on the ticket.

Sure well, great to be with you, Thank you. Let me just be clear upfront that I don't speak for President Trump or the Trump Vance campaign or sender Vance, and I certainly don't make any presumptions about any future role on my part, so I'm just speaking for myself. So I mean, I think on the issue of President Trump and sender Vance, I think what they're actually saying is is that we need to have a foreign policy that actually practically works for Americans' interests, that puts americans interests first, which I think is kind of an unremarkable statement. Most countries' foreign policies do try to put their people's interests first, and I think if you look at what sendor Vance, for instance, wrote in The Financial Times a few months ago around it and his remarks of the Munich Security Conference, he's calling attention to the scarcity that the United States faces in terms of our industrial capacity, in terms of the weapons and military readiness we have available. Those are facts, and I mean I think there's a lot of sort of stormone drawing on the European part, where there's a lot of resistance or sort of unhappiness about that. But again my view is that it's most important to communicate clearly to a friend an ally the reality of the situation and what can realistically be expected so they have time to move. And I think what's really interesting is that Europe is actually starting to move. If you're a European or an American who cares about an internationally area and foreign policy, the best thing is we need to sort of reboot our foreign policy to one that's more realistically like a business. Frankly, the more realistically correlates the resources we have available, what we can provide with what we can actually promise, and that's right now there's a yawning gap between those two things exacerbate under the Biden administration.

All three of us are clamoring to pick some of what you just said. There's a lot there, And at the reason NATO Summit, I think all the European leaders there were recognizing the role that Donald Trump had played in forcing Europe to get to a better place on defense, the realism that we might expect in a future Trump administration, there's certainly two different parts of that. I think there is an understanding that there would be something of a pivot from Europe to Asia, which I know that you've supported, and we can get into what that means. I think specifically on Ukraine, and certainly the comments that I've heard Senator Vance make about what outcomes are feasible in any kind of resolution of the situation in Ukraine visa v Russia. What would you see as the change in a Trump administration or what would you like to see in a future Trump administration with regard to as sort of what a solution might be for Ukraine and Russia's approach to it.

Sure, well, again, let me just stress that I you know, I'm not speaking for the Trump Vans campaign or so, you know, I really can't. I can give you my own, my own views and my own recommendations. I'd say first, my own view is that we do need to focus on China. Really, President Trump was was crucial, I mean historic shift in orientation towards confronting the reality of a much more greater and more ambitious and aggressive China, and I think, you know, that's a real area of broad consensus within the United States and certainly among Republicans and independents. I think, you know, Senator Vance has been one of the most articulate sort of exponents or vocalizers of the reality of the situation where we're behind in the middle balance and other respects in the Asia Pacific. I mean, I think on the on the on this sort of Ukraine issue. I know, President Trump, like Dwight Eisenower in nineteen fifty two, like Richard Nixon in ninetey sixty eight, like Ronald Reagan in nineteen eighty, in the case of Korea Vietnam and the hostage crisis, has said I want to, you know, bring peace to the situation. So I certainly support that and hope that that we're able to get to peace. I think most most people really are, and I think looking at the reality of the situation, I mean, you know, look at the reports of the New York Times recently about the reality of the situation on battlefield. You know, we're talking about a pretty stalemated situation, probably at best. So I think you know what Senator Vance has been saying, you know what President Trump has been saying, I think those are proceeding from a kind of reality about the situation. I was in Washington during the NATO summit, is that there's there's sort of this soaring rhetoric, you know, John F. Kennedy's inaugural address, from President Biden, from some European leaders, and then you kind of check the facts and it's a totally different world. I mean, one of the things that's bizarre is that Biden administration's own position is that the war will end through negotiations. So how critical can people be of the idea that we should begin negotiations to end the war. It doesn't make any sense. And it's not like the Biden administration is dramatically increasing defense spending. It's not. So. Again, I don't think it's an exaggeration to say that we're on the verge of World War iie or my metaphor kind of have a titanic obsession that we're heading towards the Iceberg. Is because we're there's a very large war in Ukraine that's not going well and certainly doesn't seem on the verge of ending Putin as in the Kremlin are remilitarizing Russian the Russian economy. They seem to be pretty confident. Unfortunately, there's a war in Gaza, largest attack on the Jewish people since the Holocaust. The Hutis are still attacking shipping. Despite our having used up significant amounts of our inventory of critical missiles for a China fight. North Korea is becoming more aggressive helping Russia out. You can be sure the Russians are paying them back. And of course China. Don't take it from me. Any secretary of the Air Force in this administration, by an administration, Frank Kendall says they're preparing for war. Now. We don't know what's going to happen, but war. I mean, this is a bad situation. And at home, despite a lot of rhetoric, our defense industrial base is not fixed. It's in sorry shape. And this is why it's so important what the Republican platform is saying, we need to reindustrialize. But there's a huge discordance between rhetoric and reality, and that is an extremely dangerous situation, like it would be for a company.

Given the reality of this dangerous world shouldn't you be doing more to invest in your alliances and reassure your allies, your very close allies. Surely one of America's greatest strengths, built up laboriously since the Second World War, is this web of global alliances. And you've referred twice to Ronald Reagan. I mean, Ronald Reagan believed that America needed to exercise hard power, but he also believed that he had this extraordinary reservoir of values of soft power. Shouldn't we be strengthening the Western Alliance rather than questioning it at this difficult time.

Indeed, we should be strengthening. But the second word you said is not the way to do that. And we've seen that because reassuring our allies too much enables the very free riding that is not only dangerous to Americans, but is especially dangerous to Europeans. So cheap talk and high flying flying rhetoric about how great the situation and will always be there to fight for the rules based international order, that does not help you. I mean you're in London, That does not help you. If you're sitting in Poland or the Baltic States, or Finland, or South Korea or Taiwan because a Americans don't most Americans don't care know what the rules based in national order is. I don't even know what it is. It keeps changing its meaning. It tends to be tendentious and self serving. And second of all, there are limits to what Americans can do. And by the way, look, I mean, Ronald Reaguer is a great president. I'm a big fan of his, but he's not like I mean, there's a certain segment of the Republican Party that sort of wants to bring him, you know, like cryogenically unfrees him. And we're in a different situation. We need more realism. Soft power is nice, but there's too much emphasis on that talk is cheap. What we need and what deters the Putins of the world, the Hijinpings of the world, the Kim jong Uns of the world, the accomnees of the world, is hard military power in the right place at the right time. And this is why I hammer on the second point on reassurance. We actually need people who are going to get real backed the situation. And let me stress something that's really important and why I think President Trump's center vans the way they're acting is actually more consistent with the Cold War legacy, because during the Cold War we had very, very tough conversations with our allies Democrats. Lyndon Johnson, you look back at the balance of payments crisis in the nineteen sixties and the issue of the stationing of US force in West Germany. Look at what President Eisenhower was saying, President Reagan, the Plaza accords a lot of pressure on our allies because you know what, it was supposed to be a real alliance, not just a photo op, right, And that's right now. I think we're in the photo opp business, and we need to be in the real military alliance business.

I'm not disdisagreeing with you about talk being cheap and hard power being absolutely essential. But isn't the fact that we're the good guys, We're the guys who stand for freedom, democracy, the rule of law, and the rest of it absolutely vital to our claim, particularly to other wavering nations against the bad guys, against Russia, against China, against North Korea and the rest of them. It's an invaluable resource, and you're in danger of undervaluing it.

I think we are, you know, on the side of freedom and democracy and I think, but and I don't think we should be shy about that. And I don't think President Trump or Center Vance or the Republican Party is shy about that. What I would say is we're high on rhetoric, and at the end of the day, American forim policy, if you go back to the purpose of the Constitution, if you read the Federals papers, it's supposed to be in the practical interests. And at the other thing I would say is some of the rhetoric, especially that's attractive to Northern and Western Europeans, a lot of this rhetoric actually doesn't travel very well. It doesn't actually resonate in a lot of parts of the world. I think what you know, for instance, if you look back at what President Trump said in his Warsaw speech or in other speeches at the United Nations, a foreign policy that's based on an approach that respects the autonomy and sovereignty of other nations. India, many of the countries in Southeast Asia, Japan, for instance, et cetera. I mean, look at President Biden referring to India and Japan as xenophobic a few months ago. I think there's a there's a different approach that at least the kind of conservative realist approach that I advocate for that goes back again to President Eisenhower or Jim Baker, these kinds of things. I think actually that could resonate a lot more. It might not be as popular in Northern and Western Europe, but you know that's okay.

You've mentioned realism and being realistic. Does NATO deterripute in if America is focused elsewhere?

Well, it can if the Europeans step up. So that's the I mean, it's it's a numbers it's a numbers game.

It's a numbers game. And you've you've talked about the Polish five GDP on defense. But in the UK we're in a debate about two point five percent and the labor of the Labor Party, which I think we'd all have to talk about your relationships with them. But Labor is saying they agree it needs to go to two point five, but they've not given us a time on that. Just talk us through. You know how quickly you're going to want to hear a time from labor than the government on the two point five And it doesn't sound to me like it's enough.

There's a phrase from the Bible that I was using a lot with former Foreign Secretary Cameron, which is, remove the mote from thy own eye, friend, you know, remove the piece, you know, the obstruction from your own eye, which is.

What did he say?

What did you tell us?

What he says? I don't know. I don't know, but the British people have spoken, so we have a different a different situation now. But the points that I'm making that I think Senator Vance was pointing to in his Minisecurity conference and FT pieces is just the reality of scarcity a couple a couple of points. Our military readiness is a historic looths, the defense industrial bases in bad shape. And moreover, defense spending again, I don't know. I can't speak for the advanced campaign or anything President Trump, but I don't see dramatic increases in defense spending as part of the political conversation here. I mean, we know the debt to GDP issue. There's pressure on the deficit. I hope there's some headroom, but it's not going to be a doubling in the defense budget, I would imagine. So, you know, a lot of this has to come from Europe, and if you go back I mean the American people, we've all been spending three three and a half percent of our income every year. So you know, Germany they've been spending one point two and they have universal health care, right, So like, I mean, there's a little bit of like really, But of course President Trump raised this issue eight years ago and there was progress, but a lot of it was kind of and right now a lot of it is sort of like, Oh, we're moving some pension funds around and we're going to get to two percent by twenty thirty five. I think if you're serious about the Russia threat. I think the Russia threat is serious, move as fast as you can. And I think the government in the UK, the new government. Again, I'm a conservative, but I think back to the point I was just saying, I think this foreign policy of common sense America first, is compatible with other countries with various political orientations as long as they're practical, self reliant, serious and focused. But I think the most important thing, again will be concrete results on not only defense spending, which is very important, but also outputs.

The editor of BusinessWeek and some of our senior Washington reporters sat down with former President Trump a couple of weeks ago in Mara Lago. That interview is coming out I think will have just come out when we speak, So I apologize I'm talking about something that you haven't seen the wording of. But when we asked him about Taiwan, he said, you were dumb, quote to let Taiwan steal the US chip business, and also that the Taiwan should be paying the US for its protection like an insurance policy. He also sounded extremely sort of focused on the practical obstacles to defending Taiwan. The fact he cited how many thousands of miles the US was from Taipei versus know less than seventy miles from China. So I just wondered, I know you certainly don't speak for Donald Trump now or in terms of future policy, but it does often sound like Donald Trump is very wary of foreign entanglements and expensive commitments, whether it's Asia or anywhere else. And I just wonder if that squares with the kind of quite full, full throated pivot that we've been talking about in this from Europe to Asia, and certainly a focus on Asia and China's threat that we've been talking about here.

Well, I also am very wary of foreign entanglements and expenses and costly wars. And I think George Washington was too, he talked about in his farewell address. So again, I think that's kind of common sense. I think in the case of the defensive Taiwan look present, as I understand it, President Trump has been stuck basically to the traditional strategic ambiguity policy on the question defense. My point when I was in the Pentagon and since then has been it's the job of the defense and Security establishment to give the President of United States the best possible capacity to defend Taiwan. So if you read my book, and if you go back to what I'm writing, read over the years and saying I've always I've described Taiwan as like a seventy out of one hundred value. Taiwan is very important to the United States, and it's important to the anti hed what I call the anti hegemonic coalition, but it's not existential for the United States now. If Taiwan were to fall, god forbid, to China, that would be a very serious setback for the United States position and the position of the anti hegemonic coalition in Japan, India, Australia, Philippines, South Korea, et cetera. It would actually be a worse situation for us. But what the key things that I've been arguing for the last six five or six years are, First, the United States should be husbanding its scarce resources to give us the best possible basis for defending Taiwan, to keep the costs and risks of doing so as low as possible. Unfortunately, we now have not done that, and despite the arguments of people like sender Van, we've sent a lot of the critical weapons and money and political resolve to Europe and to some extent, the Middle East. So we're now in a weaker position that President Biden is kind of leaving us with. And secondly, and critically, the Taiwanes need to step up dramatically. The points I'm saying to you about Europe are tenfold the case in Taiwan, but Taiwan spends less than three percent, and in fact, Taiwan itself has been advocating for US to send capabilities to Ukraine. So, and this is very important because I think of Republicans today and the idea of alliances is really much more about hey, how much skin do these people have in how serious are they? And this gets the kind of the bottom line, which is, I think America will be more likely to help those who help themselves. And this is very important in Taiwan, and it's very important in Europe as well.

What would be some of the implications of a more sustainable defense position for the United States in terms of the industrial base of the United States providing the munitions that you need, and in terms more broadly of your economy make policy towards China.

Well, I mean, I'm mostly focused on the security side. I think President Trump and people like investor Lighteheiser have been very clear on the economic sort of agenda, which I support. But I think on the security side, both President Trump and Center Vance have been very clear about this. The roots, the root of the situation is fixing our industrial base, and particularly our defense industrial base. Why well, if we can produce a lot of stuff quickly at scale, then our own forces will be better equipped and more formidable and thus more likely to deter and thus more likely to preserve peace. Moreover, we can sell or give those weapons to our allies and partners who are most likely to use them. Israel, India, South Korea, Poland, et cetera. These are the kind of key countries. Others, you know, Vietnam maybe you know that are Philippines that are ready to kind of defend their own interests. That's better for us and it's better for our allies. So that's kind of the root of the situation. And so I think this in a say, if we just increase the defense budget and poured it into the current system, I don't think we'd get a very big output. But this is why the solving the defense problem is also inherently an economic issue, because we do need to reindustrialize, because we're not going to solve the defense industrial based issues without also reindustrializing because one of the problems is, for instance, we don't have enough welders to maintain our ships or build our ships. Why don't we have enough welders because we're down having a large enough industry to sustain it.

In the UK, we've been developing relationships with the Pacific. We call it the Pacific tilt. So there's Orcus and then there's something called the Hiroshimira Records, which is a UK relationship with Japan. Is that helpful or is that a distraction? If you're wanting the UK to be I mean, some of the things you said about your relationship with David Lammie was that you found it refreshing to hear a UK government talking about its European relationships.

First, yeah, I've been skeptical of the tilt and I told the last government that over the years. I think, look, it's obviously at a diplomatic level or in from an investment point of view, that's up to the United Kingdom. But certainly I know Defense Secretary Heally gave a very articulate and I think compelling speech on this point about a year ago, where he pointed out it doesn't make a lot of sense. I mean the United Kingdom. I mean partially thanks to the government of Prime Minister then Prime Minister Cameron, the UK military is in a pretty parless state. And I say that with respect ours is also in a lot of trouble. So I think the best thing for the UK, given its interests and its views on Russia and Ukraine and its capabilities, is to focus on much more on Europe. And I would say I think this is a general principle. I mean, I've been struck in the last kind of year or so that the Japanese government has been very much like Prime Minister Kashida came to the United States and advocated for US to pass a supplemental that was overwhelmingly oriented towards Europe. I think the Japanese government should be much more focused on making sure that it's ready to defend itself and contribute to collective defense. I mean, two percent by twenty twenty seven of the twenty twenty two budget. That's not especially impressive when you look at the scale of the Chinese build up and there's a lot of high fiving going on. And again, I think Taiwan is sort of the most stark and urgent example of a country where the level of effort is seriously below what's needed. But Japan also, and then you compare that with country like South Korea, with India some extent, with Australia, with poland certainly I think that's the kind of model that we want to encourage, which is, hey, focus on your defense in a serious, practical, more self reliant, business, hard nosed way. That's very compatible I think with an America first approach. And again, if your government's left right center, green, blah blah, blah. You know whatever, It doesn't matter as long as we can, as long as we can work in a sort of hard nosed way together on shared interests.

Rich Kolby, I don't know whether he is or isn't a senior figure in the second Trump administration. We do know he is the author of the strategy of denial American defense in an age of great power conflict. Thank you very much for joining us, my pleasure. We'll joined now by John Wickthwaite, editor in chief of Bloomberg, who is on his way to Milwaukee the Republican Convention, but has just lingering on his route to chat to us. I was completely struck by a piece that you wrote with Adrian on the lessons that Republicans can learn from the British Tories' recent defeat. I mean, I have to say, when I first saw this, I thought, wow, this is just a desperate effort to still as a British journalist, to still have something relevant to say to Republicans in the convention.

But I think it's obviously mainly that.

But why on earth should they care about what just happened to the Duk's Tories.

Well, I think there's at least two or three reasons. The first reason is there has always been a historic link between the two. They've tended to advance in lockstep. In fact, the interesting thing on that is that the Tories have tended. What's happened for the Tories has tended to happen to the Republicans. Thatcher came in just before Reagan breaks, it happened just before Trump. But the more interesting fact is that the Tories completely imploded. And I think some of the things that went wrong with the Tories are things that could now be going wrong with the Republicans, and that those are things that the Republicans should look at very hard, even if those particular chickens don't come home to roost for another four years, but maybe also if something changes on the Democratic side, they could come earlier. And it's that basic problem of committing yourself to a very kind of populist, chaotic version of government, and that seems to be the way in which the Republicans are going.

Does jd.

Vance's appointment or nomination does that change it in any way? Because I think we all agree that he's an intellectual vice presidential candidate. You know, he has a theory of change. He has a number of leavers he wants to pull, and he doesn't seem chaotic.

I think he's less chaotic than Trump. But I think the basic core of it, you know, you go back to why the Conservatives and Republicans have been so good at winning elections, and there's sort of two reasons for it. I think fundamentally, the first is that conservatism is about competence. It's about being able to deliver things. That has always been the main sort of appeal of parties on the right. The Trump first term had moments of chaos. It feels like the second one could well go that way. You saw what happened with Johnson first and with the trusts in Britain. The Conservatives basically trash their idea of competence, and the other side of kind of modern conservative movements has been this idea of a kind of small state of keeping keeping the government off your backs. People like Vance and Trump have that to some degree. They talk about kind of burning up regulations, but fundamentally they're about increasing the debt, about pushing those things out. And I think there is a bigger and bigger contradiction which really got the Tories and could yet get the Republicans between promising one thing to the competent business side, ie, you're going to be the party that's going to make the economy work really well, you're going to open things up, you're going to compete in a global world, and on the other hand, telling a group of especially white working class voters that we are going to protect you. And there is a fundamental conflict between those two things.

I think the appointment of Vance is incredibly interesting. I would qualify that by saying, if you're playing second fiddle to Trump, you're paying certain fiddle. I mean, there's no doubt that Trump is the boss, and you have to make certain that you don't try and claim credit for what he's doing. We will suffer a sort of Steeve Bannon eclipse. But Vance is more of a populist, more of a nationalist, and more of a sort of anti business person than Trump is. He's very skeptical about business. Vance very pro the working classes and the injustices that they've received, in his view, very pro protectionism. So he is deepening the sort of the populist side of the Trump coalition and also raising questions of big government because he's a big government person and raising questions of competence because he is, you know, he's very ideologically opposed to an important part of the Republican coalition, which is the business world.

So if you look in the UK, I think you talk John there about the small state and so on. The person that's probably or rather during the last election that probably articulated that most clearly was Pharage. But actually Nigel Faraj and JD. Vance have different agendas. It was quite striking to hear farajhs during the last election campaign talking about slashing taxes. Was it twenty billion worth of tax carts might have been fifty billion? I lost, I lose track. So but actually, if I think about the JD. Vance portfolio, that is something that would connect with the you know, not just the colactons, but the Red Wall and so on, rather than necessarily people really like Nigel Pharage's rhetoric, but actually when you look closely at his policy platform, I don't know if it connects popular.

Stature and JD. Vance is a populist Boris site in many ways, you know, appealing to the working classes, taking up the culture war. But even more deeply than Boris, Vance really doesn't like the people that he had to associate with at Yale Law School. He doesn't like the liberal elites even more than Trump. You know, there's a very deep disdain for those people.

Just to push back and ask John, I mean, I think it's clearly it's a very thought provoking piece. Certainly many people have looked at what's happened to the Republican Party and it's kind of completely brought home crystallized by the convention and the way that the Republican Party and Donald Trump are more or less fused now in a way that they weren't before. So it's interesting to think about whether they've moved too far from their sort of core appeal. But I mean, you could make the argument that US is just really different and the things that are going to happen, that things that have happened in the UK will not happen in the US. For example, under the Conservatives, Britain left it the European Union, so it became more close to its biggest trading partner. That's not going to help you all the people you're trying to appeal to economically, if you're a medium sized, very open economy, very reliant on trade. Actually tariff's and a more mechantilist approach can work if you're the biggest market in the world. Equally, if you have a presidential system. There are just a lot fewer obstacles in the way of Donald Trump than there were in the way of Boris Johnson. I mean, the Party could get rid of Boris in a way that would not now be conceivable in the US because the Party has become the presidency. I mean you could argue that a more slightly more efficient version of Boris, had he been in a presidential system, might still be around and might actually have been furthering that conservative revolution.

I think there's a bit of truth in that, and there is definitely a difference when we Edri and I wrote a book a long time ago called The Right Nation, which was partly about the conservative movement inside America, but also making the point that America was also to some extent a right nation on the international stage. You know, by many measures, people like Hillary Clinton were to the right of day Cameron back then. Anyway, that's part one. I would argue back on several things. Firstly, I think the Republican Party has become unusually sort of subject to one man. It's much closer to kind of Berlasconi version of a party at the moment, where a lot of policies are simply kind of Trump will fix this, you know. That applies to immigration, it applies to Gaza, applies to Ukraine and so on. I think secondly, there is this sort of misapprehension that there is something sort of different about the way in which they want to get alienating the commercial classes just doesn't really strike me as being at the core of conservatism wherever you go. And finally, I think this is the biggest problem for them is I think they are they're being lulled into a kind of false sort of positive and that is that they just like Johnson, thought that he won the election all those years ago when it becomes increasingly obvious that actually Jeremy Corbyn lost it. Jeremy Corbyn was completely unelectable. The main reason why Donald Trump is doing so well at the moment is not just things that have that he's done. And obviously there's a lot of sympathy for him the moment because what happened the weekend, but fundamentally because people do not think Biden is a good candidate and so if you know, if the Republicans were to read too much into the idea that this is Trump has got everything right, which I think is the sort of starting point of your question. I just don't think that's likely to stand up. You know, imagine that if it was somebody else other than Biden, with a more centrist Democratic Party, which seemed perhaps they's geriatric at the at the front, then I think you might have a very different battle.

If Trump becomes president. What's going to stop him? I mean, what's going to stop consolidating this power, even if he's lucky to get it.

One thing that can happen in America which can't happen in Britain is he can lose the Senate and he can lose the House, which.

Looks very unlikely.

No, no, no, I'm not I think the first time around, but after two years, the checks and balances can assert themselves very quickly and you get a paralyzed president.

I think the answer is yes. You know, at the moment, it looks likely that Trump will win for lots of reasons, not least what happened at the weekend. He's got all that momentum behind him. But the big thing that comes through pole after poll after poll. At the moment is the idea that most people, really very large amount of Americans do not want either Trump or Biden. You're at seventy eighty percent. So you have to think that, notwithstanding the fact that the ruving Party is now so fully committed to Trump, that if the Democrats were to come up with someone else other than Biden, that would actually become a much more realistic battle. And it's that is quite and that I think could make a difference.

Who is that person? Can you see them coming through there? I mean, the time scale being talked about here is in the next two to four years. Who would come through that would make the Trump vance double ticket unravel?

I think it has to be someone from the kind of pragmatic center. And one of the strange, strange ironies about what's happened over the past few days is on the obviously the sort of failed assassination Tempters strengthened Trump. The other thing is it's given Biden a little bit of a breathing space as well, because as we were going into that and so you could end up with almost the best possible scenario from the point of your Trump whereby he is strengthened and Biden is weakened, but not so much as to as to be moved on. In my looking at it, I think there is still quite a lot of support for the idea of a fresh face coming through. That's something that many many people want. But I think it would be a mistake of the Republicans, and it may not be very obvious that this precise moment is certainly not going to be obvious in Milwaukee. It would be a mistake to sort of regard everything that's happening at the moment is pro Trump, when in fact there's a lot of people who are against Biden. There's a lot of people don't want either of them, and that is that's that is. That is not the same as having the same kind of revolution that happened when Thatcher and Reagan came in.

The evidence in the UK and the evidence in the US, though I'm sure you can correct me. Possibly why he chose Jodie Vance is that people do want that big a state. They wanted it in the UK election, So I suppose.

They don't want to pay for it.

No, no, But the question I.

Have planning to pay for it either put into.

One side the old fashioned question of how you pay for something. Is the Republican Party under Trump, Trump and Vance moving that way because it is quote unquote you know what the people want.

You could bring all these things together. You could say, look around the world, and you've got people like Maloney, you had Johnson again was a little bit in the thing. You've got people who are saying that, you know, the modern conservatism is about slightly bigger. Yes, we want to provide more services, we want to protect our people. We're not just about free markets and free trade and government of your back. But there's no doubt that one part of conservatism has always been talking to the business classes and saying, look, we you know, we are the efficient people. We're going to deliver government that works. We're going to do it cheaply and without causing you too much difficulty. And there is a very big contradiction between those and the difficulty about trying to pursue both those aims. As the Conservatives discovered in Britain's you often end up delivering neither. You end up neither shrinking the state in a way that business people think might be great, nor, on the other hand, delivering the services that people want, and on things like immigration, you get yourself into the most almighty mess. What I think we're saying is, look, the Republicans definitely look as if they're in the ascendency at the moment, and that has only been reinforced by what happened over the weekend and by all the problems to do with Joe Biden. But look underneath it, and they could have exactly the same thing as happened to the British Conservatives going on underneath.

I think the most important consequence of the failed assassination attempt will not be in the long term to strengthen Trump, because as we saw with Reagan, you get a bounce and then that bounce goes down. It will be to give Biden the breathing room that he needs to remain as the candidate. I think there was enough momentum building up perhaps two for them to have changed. I think that that window is now very rapidly closing, and I think he will be the candidates. The election will be a referendum on Biden rather than the referendum on Trump, and a referendum Biden is something that Biden loses.

What Republicans can learn from the Tories. I'm fascinated to hear later in the week how that note of caution goes down when John Wickfaitt tries to explain it to all the Republicans in Milwaukie. But thank you very much, thank you, thanks for listening to this week's voter nomics from Bloomberg. This episode was hosted by Me Stephanie Flanders, with a leg of Stratton and Adrian Waldrich. Was produced by Samasadi with booking support from Chris martinloom production support and sound design by Moses and am Brendan Francis Newnham is our executive producer. Sage Bowman is Head of Podcasts and special thanks to Elbridge Colby, John mcothwaite and Nancy Cook. Do subscribe, rate, and review highly this podcast wherever you

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