What Worries Former Pentagon Chief Robert Gates

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2:13Bloomberg Audio Studios. Podcasts. Radio. News. Tonight, a Russian explosive drone slamming into a... Now to Israel, issuing new evacuation orders in Gaza. Dozens of Palestinians were killed by Israeli fire as it waited for food in northern Gaza. China now striking back. Hiking tariffs on U.S. goods arriving in China to 125%. And tonight here, American farmers worry that China will now turn elsewhere. I think that it's the most, in many respects, the most perilous time since the late 40s, maybe ever. Robert Gates has had a storied career in national security. Of the eight presidents I worked for, five were Republicans, three were Democrats.

3:01Ironically, my career was bookended by two Democrats, Lyndon Johnson and Barack Obama. Over many decades of public service, Gates served as Secretary of Defense for two presidents consecutively and as the director of the CIA. And since Gates left government in 2011, he has remained influential as an author and as an advisor. Then-President-elect Trump sought Gates' counsel before he started his first term. And today, Gates runs a strategic consulting firm with President George W. Bush's Secretary of State Condoleezza Rice, alongside other officials from the Bush administration. I wanted to get Gates' perspective on this perilous moment in history, as he put it.

3:44I wanted to hear about what he's watching closely, what worries him, and what's at stake for the world.

3:53I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, my conversation with former Secretary of Defense Robert Gates. I sat down with him away from Washington in Colorado at the Aspen Security Forum. This is one of several interviews I did there with some of the biggest names in foreign policy and national security. We'll share those with you over the next few weeks.

4:21I wanted to ask you first, given your experience and your knowledge of history, how you're thinking about this moment. Well, first of all, I think that it's the most, in many respects, the most perilous time since the late 40s, maybe ever. We have never confronted aggressive nuclear-armed great powers in both Asia and Europe at the same time. We have a major war going on in Europe, major war going on in the Middle East, a threatened war in Asia. And this all comes at a time when we as Americans are divided about our role in the world, about our politics, about everything else. And lots of things that need fixing aren't getting fixed from the deficit and the debt to figuring out once again how to do military construction, how to rebuild defense industries.

5:26So it's a pretty tough time. It's also a time of, you know, it's been hyped and headlined and everything, but it really is kind of an inflection point in terms of taking a hard, cold look at our government and seeing how we can do it better. As I like to put it, in any institution over decades, barnacles build up. It's true of every organization I've led, CIA, Boy Scouts, Texas A &M, and defense. And the challenge for a leader is how do you preserve the traditions and the culture that made the institutions great in the first place, but scrape off all those barnacles and make the reforms that are needed to be successful in the future.

6:21I think that's the challenge and I don't think we're facing it very well. I'm going to ask you about a few of these military conflicts that are ongoing in a moment, but first I wanted to ask you about the trade war. We focus a lot on the economic ramifications of that, what it's going to mean for trading relationships. How do you see that in the context of national security? How does waging this war stand to change the relationships between, yes, trading partners, but nation states as well? So interestingly, I think the trade imbalances actually began as a national security matter. And that was after the war, the United States gave huge trade advantages to Germany and Japan, but also the Europeans trying to recover from the war.

7:07And we actually basically said, we'll take a hit economically because it's really important for our security, for these countries to get back up on their feet, have a working economy, that's what's going to keep the communists out, work pretty well. But we never turned back to those advantages that we had given. And over the years, those disadvantages piled up against the United States. And nobody really wanted to take them on. Because obviously with our allies, that was a very sensitive subject. And then with the advent of China into the WTO, it sort of put rocket fuel behind these trade issues.

7:52and mainly because China didn't abide by the rules when China joined WTO and we and other developed countries failed to hold them accountable. This should have begun in 2001, 2002, saying you can't do that. You can't steal that IP. You can't dump over here. There are a lot of things you can't do, but we let it go. And so in a way, I would regard what's going on right now as kind of a reckoning to readdress the imbalances that have existed with some countries since after World War II in the early 50s and then have built up since the creation of the WTO and with China and so on. You know, are there better ways to do it?

8:40Maybe. But in some ways, let me use the analogy of the Europeans' decisions on arms control, on arms buildup, on defense spending. I, among many, many others, berated the Europeans for years, decades, to increase their defense spending. And we had no luck. We literally failed. So in comes President Trump with his two by four, and he's got their attention. And guess what? They've decided that they will spend more on defense. Now, he had, I think, a lot of help from Putin, from Vladimir Putin, who may not scare the American people, but he sure scares the Europeans. So I think we're kind of reckoning with both in terms of trade, but also defense spending on the part of the Europeans of readdressing or addressing problems that have been long extant.

9:40But we really haven't had the political fortitude or the willingness to potentially offend people to take them on. The war in Gaza has gone on now for more than 650 days. And I wonder how you see the path forward to resolution. Is it evident to you? How long is this going to last, do you think? Well, I hear people betting on different times, you know, will it end this year, whenever? Well, the fastest way for it would end would be for Hamas to own up to the fact that they destroyed Gaza. Their attack on October 7th began all of this. And they created an environment in which Israel said enough is enough.

10:22And we're not going to put up with these attacks every few years. We're going to solve this problem one way or another. Now, ideally, you would have some kind of political entity for the Palestinians that would have some credibility internationally, if not with Israel. And, you know, that can't be the Palestinian Authority in the West Bank, which everybody knows is corrupt and incompetent to boot. So where are the Palestinians find the leaders to say, enough is enough. We need to start rebuilding Gaza. And I personally think this thing will – this horrible thing will come to an end when Hamas finally concludes they can't win.

11:10They're not winning support abroad and their people are being destroyed. Right. Benjamin Netanyahu is somebody you know and have dealt with over these many years. What have you noticed or observed about his behavior in this conflict and how much is that path to resolution going to be shaped by his political fortunes? Well, I've known Bibi a long time and we've had our disagreements along the way, I think it's fair to say. But I will give Netanyahu credit for this. Since October 7th, he has changed the strategic environment in the Middle East in a very significant way. Iran counted on its surrogates, Hezbollah, Hamas, the Houthis, the tribesmen in northern Iraq, and others to intimidate others in the region and to attack Israel.

11:58And taking advantage of that attack, or in response to that attack, Netanyahu and I think the Israelis in general said enough. And so they went after Hezbollah. They went after Hamas. They certainly played a role in the overthrow of Assad. Hezbollah can't be rearmed now because that path was through Syria from Iran and dramatically weakened Iran, first through the initial attack and then through the more recent one that involved the United States. So I think Iran is very much on its back foot at this point. Whether we've long-term solved any problems, I think remains to be seen. But And Netanyahu's made it pretty clear that if the Iranians resume that nuclear program, he'll go back in and, as he puts it, mow the grass.

12:45You were not so – But the bottom line is the strategic environment in the whole region has been changed subsequent to October 7th. And the truth is, if some kind of a solution can be found for the Palestinians, then I think the opportunities in terms of Israel, Saudi Arabia, the other Arab states beyond the UAE and Qatar and so on are really pretty extraordinary. These guys are all interested in business. They want to expand. They want investment. They want to diversify their economy. They see Israel as a technological giant in the region. So there's a lot of potential there. but they've got to get past the Palestinian problem.

13:27You are not somebody who was agitating for strikes on nuclear facilities in Iran. And as the dust settles on those strikes, how do you gauge their efficacy? And where does that lead, do you think? Well, this verse came up when I was Secretary of Defense under President Bush. So back in 2007, 2008, I said, you know, there's no doubt we can do a lot of damage to those facilities. And they hadn't started going really deep at that point. And my position from then until today has been you can significantly damage and set back Iran's nuclear program, but you cannot eliminate it militarily. They can't unlearn what they've already learned.

14:11The Israelis are now saying that they probably scattered the enriched uranium at three sites, Esfahan, Fordow, and Natanz. So they probably have some of that. They have some centrifuges. My view, what I was telling President Bush 15 years ago, was you can damage it, but you can't destroy it. You're just buying time. And the question is whether the time that has been bought can be translated into some kind of an agreement. My conversation with former Defense Secretary Robert Gates continues after the break.

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16:58After former Defense Secretary Robert Gates and I discussed the trade war and the war in Gaza, we turn to another major conflict playing out today in Ukraine. How do you see President Putin's calculus in that conflict? We see the economic vice the country is in, the incredible loss of life. Where do you see all of that headed? I think Putin is not all that difficult to understand. Vladimir Putin believes it is his personal destiny to recreate the Russian Empire. And as my old mentor Spig Brzezinski used to say, there can be no Russian Empire without Ukraine. And so Putin sees it as his personal destiny to bring Ukraine back into the fold of the Russian Empire.

17:43If not as an integral part of Russia, then as a client state, basically does what Russia wants it to. And his objectives have not changed from day one. He wants the four provinces in the east. He wants Ukraine disarmed. He wants a pro-Russian government in Kiev. He wants a ban on Ukrainian membership in NATO and the EU. That's all. And he hasn't wavered one whit from the very beginning. And he is willing to pay whatever price is involved. And it is beginning to bite. There was a sugar rush from a lot of the defense industry's investments and a lot of the things coming from China and so on. But I think they've run through that.

18:24The inflation is really beginning to ramp up. 21 % interest rates. That's just the formal interest rate. Who knows what the real one is? Life's getting a little harder in Russia. So I don't see any breakthroughs. That's one of those predictions that may turn out to be very embarrassing. But the Ukrainians have been able to hold their ground pretty well in the East as it's kind of a drone versus drone war out there. But Putin is clearly putting the pressure on the domestic side in Ukraine with these attacks by hundreds of drones every single night. What did you make of what seemed like a change in tack from President Trump a few days ago?

19:09Seems to be growing frustrated with President Putin. There was a lot of talk about them meeting and having a summit and negotiating this themselves. His patience seems to be being tested here. Most of the presidents that I worked with felt that, I mean, they got themselves elected president of the United States. They basically feel like they can win anybody over. I've seen it with Benny. And, you know, it started with Franklin Roosevelt and Uncle Joe, Stalin. You know, I can win this guy over. And a lot of presidents feel that way, that they can develop a personal chemistry with the other guy that will make great things possible.

19:44And most of them end up disappointed. And I think that's what's happened here. I don't think President Trump was unique in thinking he could bring Putin around, nor is he unique in being disappointed. The president has Steve Witkoff, his friend, a businessman, not somebody who was in the Foreign Service or a diplomat before, leading the negotiations that he's been having with Russia, with President Putin. Do you see wisdom in that, using somebody who doesn't have that font of experience from government and diplomacy, or does it raise questions for you about how they're approaching this? Well, lots of different presidents use lots of different techniques.

20:21When we were first starting to reach out to the Soviet Union and to the Chinese and so on, U.S. businessmen would be used as intermediaries to carry the message, if you will. I think that other presidents have used special envoys. President Obama liked special envoys, and he had a bunch of them. I personally have found there are a few instances where those have worked. So on the Northern Ireland problem, George Mitchell, that worked out pretty well. But on Afghanistan, Pakistan, Richard Holbrook, that didn't work. So I'm inclined to give presidents a lot of leeway in the tools that they want to use.

21:04And it's always also the fact that when appointing ambassadors, I always thought it was most important to the host government, not that they had somebody super experienced as the U.S. ambassador, but somebody who could pick up the telephone and call the president of the United States. It strikes me that the balance that we've had between hard power and soft power and economic power isn't at the equilibrium it was at before. Do you agree with that? How much of a problem is it that we have an administration that six months in has leaned very heavily on airstrikes and using hard power to solve some of these problems while it's been cutting State Department, USAID, other foreign aid.

21:43I've been a long believer in that while the Cold War was fought against the backdrop of the biggest arms race in the history of the world, because we were able to avoid a direct military conflict, that conflict was resolved by non-military instruments of power, economics, technology, strategic communications, development assistance, ideology, intelligence, and so on. The most powerful of those are economics and technology. And we are very good at using those. I wish we could use them more in harness with one another of tariffs, trade, sanctions, and so on, because in some cases, one might work better than the other, but we kind of use them independently, and I think we diminish their effectiveness that way.

22:41But with our economic power, that is a big deal, and we're seeing that in relationship, particularly with China and Russia right now. I think on strategic communications and foreign assistance, the Chinese under Hu Hu Jintao invested like$7 billion in strategic communication. There isn't a country in the world where you can't get Chinese television, Chinese radio, Chinese social media, Chinese print media, television, you name it. And they've spread all over the world. We're cutting everything back. Our voice will not be heard around the world. we can't tell the Kyrgyz why it's important not to let the Chinese have too much power in their country, or the Kazakhs, or people in the Middle East, or people in South America.

23:33I don't think we've used trade effectively. China is now the biggest trading partner with 120 countries in the world, all the countries in South America except Colombia. So my problem is that we have all these tools that are really powerful for the United States, but we've decided to keep them in our backpack. And if we're to avoid a conflict with China, all these tools will matter in this long-term contest. And the whole line is for the hearts and minds, but the fact is those hearts and minds also have security arrangements, they're economic markets, they're potential sources of instability and terrorism.

24:10So I think pulling back on all of those is really a mistake. Now, that said, all of them are in serious need of reform. I mean, Congress itself dismantled USIA in 1998. They tried to dismantle USAID then, but Bill Clinton wouldn't let them, but he reduced the size and brought it inside the State Department. There were a lot of problems with a lot of the aid programs. When the Millennium Challenge Corporation was established by Congress under the second President Bush, there were a lot of conservatives who said, let's do that because of its rules in terms of accountability, local buy-in, and so on.

24:52So one of the things that I'm trying to do through a global policy center affiliated with William & Mary is bring together people on both sides of the aisle and experts and say, kind of what new path forward can we have in these different, using these tools that gets away from all the mistakes of the past, gets away from all the bureaucracy and the barnacles of the past, and points a way forward to make us much more effective and cost effective in these programs. My conversation with former Defense Secretary Robert Gates at the Aspen Security Forum continues after the break.

25:54Thank you. pays off, deep in the work that moves the business. Let's create smarter business, IBM. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers.

26:32Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise.

27:11From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.