Martin Wolf on the US midterms: Is American democracy safe?

0:00This episode is brought to you by Hard Lessons, a Morgan Stanley podcast. Iconic investors like Stan Druckenmiller, John Gray, and Rick Reeder break down calls that worked. I knew that this stock would go up for at least two or three years and go up a lot. Ones that didn't. I quite frankly thought the company could have reversed course. They didn't. And what they learned in between. When you buy everything and it goes up, it doesn't train you to be a great investor. It's these hard lessons that make all the difference. Listen to Hard Lessons wherever you get your podcasts. I don't feel I need to be living under Vladimir Putin tomorrow in order to say that we're heading in the direction of dictatorship.

0:36I just think it's very hard for people to imagine this happening in America, but clearly it is happening. I wish I saw a deeper commitment on a part of the American people to the principles of the Declaration and the Constitution, rather than for them to be only concerned if it's hitting their gas prices or if somebody they know that they like has been deported. Is American democracy safe? I'm Martin Wolf, chief economics commentator at the Financial Times. Americans head to the polls for the midterms on November the 3rd, and I'm worried. Worried about what the result will tell us about the future of democracy.

1:11Can the United States continue to be the leader of the free world? My family's history taught me what happens when democracy fails. My mother was a Dutch Jewish refugee who fled the Nazis in 1940. My father was Austrian, also a Jewish refugee, who fled to the safety of Britain in 1937. Which is why I'm talking to leading thinkers about what's at stake in these midterms, for Donald Trump, for American democracy, and for the rest of the world.

1:53I wanted to kick off this series about the U.S. midterm elections on November the 3rd with a former Republican scholar, Robert Bob Kagan. He's someone who has been sounding the alarm ever since Donald Trump first round for president in 2016. Bob, welcome to the show. Thank you, Martin. Great to be here. We last spoke for another podcast series that I did on the future of democratic capitalism back in 2023. That was ahead of a US election that saw Trump voted in as president for the second time. And you were already warning then about the dangers of America slipping into autocracy. You've since gone further, saying the US is not merely on a path towards dictatorship, but effectively already in one.

2:48So to put it bluntly, are these midterms just a waste of time, a foregone conclusion? So what's really at stake? What do you think? It's a good question. I guess I feel like there is hope in the midterms, but I do think that we need to understand that these midterms take place in the context in which, as you say, we've already moved well into dictatorship. I find it rather remarkable to be able to take this for granted that the Justice Department has been completely subverted in its mission, that it is that the Justice Department, which is the law enforcement agency of the United States, is now entirely a personal fiefdom of Donald Trump doing his bidding, going after his opponents, using the power of the law against people he doesn't like, whether they've committed any kind of possible crime or not.

3:40We have an FBI that is completely controlled by the administration. We have a Pentagon and a military that is being turned into a personal arm of the president. We've had major elements of the federal bureaucracy destroyed, and most professional people have been fired. That is a big shift from where we've been throughout most of American history, And I think it's worth keeping that in mind. Now, even in full-scale dictatorships who hold elections for whatever reason, they do have to worry about elections and a bad electoral result can be a problem for them. The question that I have is, since it looks like that Trump is going to have a bad electoral result, is he going to allow that to happen?

4:24And I must say right now, I think that it'll be difficult for him to overturn a lopsided election, but it will not be difficult for him to disrupt the counting and perhaps even the seating of the next Congress. So I think that we're still very much at risk. And then even if there is a big Democratic victory, Trump has been operating pretty much without Congress, without permission from Congress, and with pretty solid support among his own party. He may continue to ignore Congress. We haven't seen what he would do with an opposition Congress yet, but I suspect that he will not play ball the way most presidents normally do.

5:05Before we go deeper into this, let's consider sort of a bit of pushback. There are still elections. It seems likely there will be some sort of midterm. We'll discuss it more in detail. The courts are certainly still blocking the administration, including occasionally even the Supreme Court. State officials have resisted federal demands, and state officials still are elected and have power. the press still attacks the president. So why do you think this is a dictatorship rather than just a severely degraded and threatened democracy? Well, as I say, it's not a completed dictatorship. It's, you know, if anything, it's in a transition, but it's well down that transition is what I'm trying to say.

5:49And just the fact that we're having an election doesn't mean that we're out of the woods because elections have been part of transitions to dictatorship before. And I just think it's worth keeping in mind. Now, we can't predict necessarily what Trump is going to do, but I must say that he seems more unhinged than ever. He is taking actions which normal presidents would not take on many issues. And I just don't rule out the possibility that he will attempt to use his power. And I think that's the most important point. It is possible he won't do it, but he certainly has the power to do it. He is in full control of what in other countries would call the power ministries.

6:29He can choose not to use them. He can choose not to try to attempt to consolidate his dictatorship further. But I think it's the jury's out as to whether he will or he won't. And he certainly has people working in his administration whose sole purpose is to attempt to overturn the election. We see the Justice Department sending out, they're promising to send out a historic number of election monitors. Under this administration, those people who look at elections have done all kinds of things to disrupt them, including questioning people's rights to vote, et cetera, and possibly intimidating people.

7:02So I would like to be hopeful that sort of the overall will of the American people, which seems increasingly opposed to Trump, will have an effect. And I don't rule out that it will. I just am worried that we are in the presence of a government that has the power. And I think it's reasonable to think that they have the will to try to prevent this election from leading to a fundamental change of power. Could you say from your perspective, at what point, what might happen that would allow you to say, with confidence, we've crossed the Rubicon, this is now a consolidated autocracy? Well, obviously, any effort to prevent this Congress from being seated would be would be it.

7:44I mean, I think that even if all we do is move into what you might call a constitutional crisis, then we will be in a sort of state of of civil conflict in a certain way. And what the outcome of that is hard to say. The outcome of that could be the victory of democratic forces. But the fact that we would be in that struggle, to me, is enough to be worried about. You know, I mean, I don't feel I need to be living under Vladimir Putin tomorrow in order to say that we're heading in the direction of dictatorship. I just think it's very hard for people to imagine this happening in America. But clearly it is happening.

8:20I have to say, personally, I thought it was quite plausible once he was reelected. Indeed, even when he wasn't convicted in the impeachment case after the previous election. Let me talk a bit about your own experience in the following sense. You were a member of the Ronald Reagan administration. You have been engaged with Republicans in government. you know many of the senior uh republicans and no doubt some people you know well have accommodated themselves to or even fully embraced what's going on more than some well what do you how does that feel how do you explain that to yourself how astonished are you that people who after all the republican party is the party of lincoln this would feel i would have thought, like the most extraordinary betrayal.

9:14How do you explain that to yourself? Human beings behaving like human beings. That seems to be obvious. I mean, I was shocked initially when I saw that some people that I thought I knew were willing to go along with the whole Trump movement, but they do it for the reasons that people always do it. They do it for reasons of careerism. They do it for reasons of belonging. You know, people are in Washington because they want to be part of the power structure in some way or another. And if you are at odds with your party, then you're out of the power structure. And I think the number of Republicans who have refused to go along with Trump have just become irrelevant.

9:52So that's the choice you face. You become irrelevant, you become ostracized, or you go along. And I think that in the majority of the case, unfortunately, of human beings, And, you know, this has been a kind of, for me, a kind of acid test of who has principle and who really doesn't ultimately. But I guess I haven't really been shocked to discover that the great majority don't. Do you think fear is an important factor or is it, as it were, greed and opportunism are much more important? It depends who you are. I think for a lot of the sort of senior Republicans, they're all out there making a lot of money right now.

10:27They're all in consulting firms. firms they rely on on business support which means they need to have a decent relationship with the trump administration so i think at the upper levels it's more greed and ambition but for other people it is a matter of fear because of course you know if you're talking about people who are in their 30s or 40s and they're married with children and they have to make a living and this is how they've made their living so they're fearful of going in the wrong direction now you may be talking about a more profound fear and that exists also i think fear of being uh come after by by the government in some way is also out there and and with very good reason if you look at the number of people that trump has gone after for no particular reason for like a rain for taking a picture of some shells on a seashore um uh it's not unreasonable to imagine that you could get in the crosshairs of the government fear is a big part of it but so is ambition and greed so if you go back um 10 years ago perhaps even earlier but that's when he really burst on the scenes a little bit more than 10 years ago in early 2016.

11:31I wrote my first column in March 2016 under the heading, Donald Trump is how great republics meet their end. So I think it was a reasonable call as it turned out. But he's achieved this extraordinary power. The way he governs now is completely different for the government of the first term. How has this happened? How has he accumulated this power in the context of what we all thought was a pretty well-established, consolidated, trustworthy Republican constitution? Well, starting from the end of that, what we've learned and I think what we should have always known is that the institutions that were established in the constitution were not self-enforcing.

12:17They were not like a machine that snaps into place when there's a threat. They depend on people to carry them out. And, you know, I think it turns out the founders weren't anticipating political parties. And I think political parties, while in some ways they're beneficial to democracy, are also clearly a potential hazard to democracy because you have party solidarity superseding fidelity to the Constitution, basically. And And that's what you're seeing in Congress. But then why does he have so much more power than maybe he did in the first term? And I think that answer is obvious. It was the winning of a second election.

12:57I mean, he had democratic legitimacy. And he also came back also basically getting a free pass to do whatever he wanted to do by the Supreme Court. I mean, you say the Supreme Court has been blocking him. I would say they whatever they're doing now pales next to their declaration effectively that a president could do whatever he wanted in office, whether it was legal or illegal. And Trump is taking full advantage of that. But, you know, between our misunderstanding of the strength of our institutions and the fact that Trump won a popular victory and the fact that he personally is an unusual character in the degree of his megalomania, not unprecedented.

13:40but certainly I would say compared to past American presidents, we're dealing with a megalomania that we've not seen before. All those ingredients together take you where you are right now. I suppose one other factor is that over the years, a real group has emerged. Obviously, the heritage nation played a big part in this. To me, fanatics. I mean, people who were genuinely committed to the complete transformation of the American state and the American constitution. And that takes time, doesn't it? So he's now got a group of people around him who have a plan. They've worked it out and they're implementing it.

14:20And we we underestimated that. Well, some did. And that's a big part of why they're getting so far, isn't it? No, absolutely. And, you know, when Trump came into office in the first term, first of all, I don't think he ever expected to win the presidency when he started running in 2015 or whatever it was. And then so when he came in, he really didn't have a, you know, most most presidents come in with some kind of entourage and he really didn't have much in the way of that. And he he picked a lot of Republicans sort of stalwarts or one kind of people who are nominal Republicans with base. And they and they obviously were not the best people to be carrying out his mission.

14:55In the second term, he has true believers, true believers in him and true believers in the mission of changing the American system. Fundamentally, they have a different ideology. They are not liberal. They're anti liberal. They're post liberal. They want to live in a society of hierarchy, of race and religion and sex. And that's what they're trying to create right now. So I wouldn't call them fanatics, but we should identify them as fundamentally hostile, not just to the American Constitution, but more importantly, to the principles of the Declaration of Independence, which the Constitution was designed to protect.

15:28So it seems to me that one of the principles they're putting forward here about the president is that, in fact, he has the powers of an absolute monarch. Yeah. But for them, you know, for a purpose. You know, for Trump, it's for himself. But I don't think that they're so much interested in the monarchical aspect of it as they are in re-establishing a racial and religious hierarchy in the United States. I think that's their number one goal. Trump has been a vehicle of that goal. And by the way, you might say, and I'm sure they feel this way, a very imperfect vehicle. I hate to think of how much more effective they would have been in accomplishing their objectives if they were not dealing with an egomaniac who ultimately is more concerned about himself than any mission.

16:13I mean, in this respect, he's not Adolf Hitler. Adolf Hitler was the ambition and the mission fused into one person. In the case of Trump, he's sort of a vessel rather than the author of these views. If you look at the rulers today around the world, the sort of autocrat, fairly representative, there are quite a few of them, and to compare them with what we had in the 20s, 30s, communism, fascism, and so forth, the difference was that many of the latter were genuine fanatics. while these people, many of them, are a few exceptions, look more just like gangsters. Although, again, I don't think it's normal to view a dictator like Putin as without ideological content.

17:00But Putin definitely stands for a fundamental anti-liberal ideology. And, you know, insofar as he's selling anything in Russia, it's very much a traditional conservatism, which is why, of course, so many of the post-liberal, anti-liberals in the United States view Putin as something to be emulated, not as an enemy. And I think, you know, as we look at Trump and the administration dealing with Russia, it's worth realizing that they do not regard what Putin is as something, and what he stands for, as something that's bad. That is rather clear. indeed, I've touched on this. Now, if you look at the major institutions of the government and the constitution, Congress, political party, the courts, particularly the Supreme Court, the bureaucracy, the military, the press, which is, of course, not strictly speaking an institution of the state, but clearly was seen as having a very important role in a free country.

18:01Does any of them, in your view, come out of what has been happening with its reputation enhanced and its courage clearly established or reestablished in these difficult circumstances? Has any of them covered themselves with any glory or even a tiny shint of it? Right. The overall picture, and I'm going to come up with one minor caveat to it, but the overall picture is a complete collapse of the American elite. If you want to ask me what I've been surprised about, it certainly has been the degree to which initially, at least, the legal community caved to Trump, you know, those big New York firms that cut deals with him, the degree to which the universities have, I understand their plight and I feel badly for them, but the degree to which they've allowed the federal government to bully them into all kinds of agreements on specious grounds, etc.

18:55I am shocked that the retired military, a lot of the people who are out there, you know, speaking about one thing or another are not clamoring about how the U.S. military is being turned into a personal arm of Trump and the Trump movement. I would say the press, if you're talking about journalists in particular, I think the journalists have been the bravest and the ones who have been fighting back the most. I have all kinds of criticism about the way the press deals with Trump, and I wish they were tougher and I wish they had a better understanding of what their role is in this situation. But the headline, Martin, is, yes, it's been shocking the degree to which elites who did not have to cave so quickly accommodated themselves, even before he was elected.

19:37You know, Jamie Dimon was out there giving talks at Davos, making it clear that he was down with Trump if necessary. He was cool with it so that he and the rest of the corporate community could get right with the new boss. If we look at possible constraints on him, there does seem to be pretty clear evidence from polls, which are still being taken, that his popularity, his approval and approval ratings are pretty poor. Indeed, remarkably so. Is that a serious liability for him or isn't it because he really doesn't think it'll affect him at all because he's going to, to put it crudely, rig it? The fact that he is unpopular and that we are going to hold elections is a problem for him.

20:27You know, I think that, you know, all things being considered, he'd rather that there were no elections. He's not going to annul the election. I think more likely we're going to move into some period of chaos, constitutional crisis, and in a certain sense, civil crisis, which is bad enough. But I don't know that he has the capacity to do that. And this sort of gets back to what I was saying before about he's just a vessel. He's not a particularly his egomania gets in the way of successful accomplishment of his objective. You know, he's unpopular because of two decisions that he made that had nothing to do with him being an autocrat, nothing to do with consolidating power, but which have damaged him.

21:05Getting into the Iran war and the tariff policy have created conditions, economic in particular, conditions that have led to a lot of discontent. I hate to think of what would be where we would be right now if he hadn't gotten into the Iran war and he hadn't pursued this absurd tariff policy. And if things were sort of moving along swimmingly and gas prices were closer to$3 into$4, I'm not sure we would be seeing a great rebellion against Donald Trump. So while I'm happy to see, you know, the fact that he's gotten himself into this pickle, I would love to have a better view of what it actually means.

21:45And the only thing I would say is that Democrats running for office, for the most part, as far as I could tell, I live in Virginia and I see the ads that they're running. They don't want to talk about Trump at all. They don't want to say we're in the middle of a constitutional crisis, that the fate of democracy is at stake. They want to talk about dynamic pricing and data centers, which, you know, if that's the way to get elected, that's fine. But it's not as if we're having a referendum on democracy here either, you know. I only say that just because I don't want to get too optimistic about the American people yet.

22:14I've not seen among the American people or the elite institutions the kind of horror at what is happening in our country that is appropriate to the situation. It does at least suggest, slight upside, that even an authoritarian president, an increasingly authoritarian president, is vulnerable to ordinary political failures and misjudgments. And he seems to be capable of making real loo-loos in this area. No, I think that's true. And look, we're in uncharted territory here. There's never been a country like the United States. And the United States has never gone through this particular kind of a crisis before.

22:53So we're in inconceivable territory right now. I love looking for shoots of optimism. But the fact is, we're already, you know, at the gates of hell, as far as I'm concerned. Even if we get a democratic victory or a change of government in 2029, the damage that's been done to our institutions, I don't know exactly how we're going to be able to fix everything. Well, that's clearly a very important point, which I would like to discuss. One other issue, maybe a secondary moment when one felt, at least from this side of the Atlantic, that there was a reaction which shook them a little. And that was the overreach, put it mildly, by ICE.

23:33in Minnesota. Was that a moment that you felt actually ordinary Americans started behaving the way you thought ordinary Americans should? You know, I think everybody was like, it's great that the people of Minnesota are fighting back, but I didn't see anybody else in the streets, anywhere else protesting on behalf of the Minnesotans. It was sort of like, if it isn't happening to me, it's not a problem. And I, you know, unfortunately, that ugly quality of human beings has been well revealed in this whole period. And I think particularly about all the people of Latin descent who voted for Trump, and many of whom even today believe that the only people who are being deported are the people who should be deported, and as long as it's not them.

24:17And then, of course, when it does get close to them, they decide that it's horrible. And so I wish I saw something that would look a little bit more like civic virtue out there, that I wish I saw a deeper commitment on a part of the American people to the principles of the Declaration and the Constitution, rather than for them to be only concerned if it's hitting their gas prices or if somebody they know that they like has been deported. You know, I'm afraid one of the things that this whole episode has revealed is how shallow true conviction is, even in the most, the longest standing democratic country in the world, to fundamental liberal values.

24:57Let's suppose, you know, Trump and his men and women have a plan to make sure they don't lose power. I've always assumed they would do everything they could to ensure they won't lose power. So how might that play out? What could they do? How might they be stopped? Well, there's obviously a number of different sequences of events that one could imagine. One is that for whatever reason, they have election monitors at polls and they claim that there has been some kind of fraudulent voting. and therefore the Justice Department decides, as the FBI did in Georgia, to go and seize the ballot boxes because we have to make sure that this has all been on the up and up.

25:39And so now we will have to wait for that investigation and the elections are on hold. The results of the elections are on hold until we get there. And that could, and maybe that goes on for weeks or maybe it goes on for months and you don't really have the seating of a new Congress. And that's sort of the mild version. I would say there's a more worrying scenario where, for instance, some types of government officials, whether it's ICE or the National Guard, starts at least being in the vicinity of polling areas and potentially intimidating people, which then leads to protests against them. Then the Republicans will claim that the radical left communist Islamist jihadists are trying to overturn our elections.

26:26And then you would say, OK, so what happens when we're now in the streets, we're battling, people are being arrested? Do we think Republicans will say, oh, no, that's horrendous. You can't do that. This is not fair. This is not. Or are they going to say, yes, it's radical Islamic jihadists. We've got to do something. I think the latter. I think you can count on Mike Johnson, the Speaker of the House, to support whatever Trump's doing. I think You can count on John Thune, the Senate majority leader, to duck his head no matter what Trump is doing. And so I don't think you can count on the political leadership to say, no, you can't do that.

27:00That leaves it to the people in the streets. And that is not the democratic process at that point. That's why I say at that point, you're sort of in an extra constitutional civil conflict. But the states have powers of their own in elections. I mean, America is still a federation. Yeah. And many states are democratic. Isn't it true, and certainly what we've seen elsewhere, that the margin of victory makes a difference? Rigging things at the margin, not counting ballots in certain specific, very black cities, say, is one thing. But actually overturning an election, if actually they've lost decisively, which does seem possible, is going to be pretty tough because he doesn't actually control everything.

27:46If these polls hold up even marginally, it'll be hard to claim that there's some kind of surprise since everybody knows and that therefore there needs to be an explanation as to why this happened. It certainly makes it harder for him. And again, I don't foresee him overturning the election. I don't think that is possible for the reason that you say. I think if the polls were much closer and it was a matter of this district here and that district there, I think that would be closer. That does not seem to be the case. So the only other option is basically to throw the system into turmoil. But I think that is a possibility.

28:21I do think that the idea that Mike Johnson will not seat a new Congress because there are irregularities that still need to be investigated, etc., is a real possibility. And now where does that lead? I don't know where that leads, but that's because we would be in no man's land at that point. We've not had that situation in America yet, and so it's hard to predict how it would turn out. It could be that there'll be such a popular outrage at what's happening and that will be reflected in the politicians' behavior that, you know, things will be righted in some way. But I also think that once you crack the system, then once you've sort of moved past having a fair election that is tabulated and the results are announced and the new Congress is seated, once you're out of that lane and now you're into a kind of nether area between, you know, what should happen and what is happening.

29:11I don't know what happens at that point. I don't know how you get out of that necessarily. And in all of that, he doesn't need a Congress seated. So from Trump's point of view, he's still president in all of this. So it's no skin off his nose if Congress is never seated. For him, then he just moves on. So if the U.S. remains without a Congress and he just moves on, as you say, this will really clearly be a coup. The executive closes down in some obvious sense or captures the Parliament, Congress completely. This is quite demonstrably a completely different constitutional setup. It's not going to be a clean cut.

29:51Oh, look, the president's conducting a coup. There's going to be a huge national argument about what's happening when you have major news organizations that are under the control of the administration and you have an entire Congress full of Republicans who are now absolutely committed. They have nowhere else to go but to support the president under those circumstances. It'll be very risky to break from the party at that point. All kinds of things have been done that ought to have caused so much outrage as to be inconceivable, and yet Republicans have repeatedly endorsed them. The Republican Party has become the party of dictatorship.

30:27It cannot be relied upon to ever stand up. And that's why it's so important to get a Democratic Congress in right now. So let's talk about that possibility. The elections turn out to be relatively normal. The result is a pretty decisive victory. And then we have a Democratic Congress, possibly in both houses. What might happen then? Could it start a civil war? Could it do something quite different? What do you think? I think if there's a full, if there's an elected Democratic Congress, especially if it controls both houses, that that is a big deal and that that is the best hope we've yet had of basically trying to turn things around.

31:11At that point, Trump would have to go into full dictatorship mode. And I'm not sure the country is ready for that, I guess. This is where I feel like he hasn't had enough time really to consolidate the situation. People still think we're living in a democracy. So Republicans are behaving as if they're having elections. You know, they are turning against Trump to some extent on some things, which is a hopeful sign. And if there is a huge Democratic victory and politicians are still concerned about getting themselves elected rather than in marching behind Il Duce, then you can imagine basically a breakdown of MAGA.

31:50And I could see if Trump is not running in 2028, I think the Republican Party is going to fracture. I think there is no leader to take charge from, to sort of take over for Trump. I think the party has got a lot of different factions now and that they'll have a hard time. So I do think that if you successfully get a Democratic Congress in this election, they will spend all their time demanding impeachment, demanding hearings, or whether people show up to these hearings or not. But even so, I think the Democrats will be in a much stronger position. And just the national repudiation of Trumpism, I think, is what is probably most important, because that is my hope out of all of this, that Trump has done such a horrendous job, both for the American economy and with the Iran war and with ICE and all the things that we could list.

32:43And this election will represent a repudiation of that. And it's important not just to defeat Trump electorally, but really to defeat the whole movement of ideas that has fueled his success. We're quite fortunate that he is in many ways such a fool. Do you think there are people in America, and I've thought about this quite a lot, particularly the former presidents, and you can think about some of them, who could have articulated more effectively as it were, because they're not part of the current political game, what is at stake now and how extraordinary the behavior is and what a catastrophe the disappearance of America as a functioning Democratic Republic would be.

33:31I've been surprised at how little we seem to be hearing, as it were, from people who obviously must think this. Are you talking about George W. Bush? No, I was thinking among other people of Barack Obama, who certainly must understand this. Well, I think for Barack Obama, it's complicated because he himself is sort of a reviled figure among the certain part of the Republican Party. And therefore, him speaking up against this maybe isn't as helpful as other people. But the person that I've been most disappointed in has been George W. Bush, because not only should Bush be upset about what Trump is doing to our republic, but there are some very specific things that Trump has done to repudiate policies that Bush undertook that he was very proud of.

34:24And one of those was PEPFAR, which was, you know, the HIV program in Africa and other foreign aid programs, which Bush, you know, was personally very deeply committed to. And the other thing was his policy on immigration. I mean, Bush was very open on the question of immigration, very much pro-immigration in the context of his time. And so he should be horrified. And of course, I'm sure he says to himself that, you know, former president should keep out of things. But that didn't stop him from endorsing some Republican candidates for Senate recently. And I think the real reason is, is the same reason that all these Republican big figures have refused to break.

35:01They just won't break from the party. It's like a big country club. They can't imagine it, which is just appalling. I think George W. Bush should really be embarrassed for his failure at this critical moment. We know very well that you identified America and American influence in the world, particularly in the post-war period, with the promotion of freedom, liberal democracy, constitutional order. What do you feel and how do you make sense of the fact that, as you describe it, basically America's on the opposite side? What does this say to you about America, about democracy, about the stability of values?

35:44Does it sort of suggest that the darkness is always there and we're sort of very likely to fall back into it? I would say if there seems to be one thing that has emerged in American history, and I find this very much in the case on foreign policy, but it looks maybe also increasingly to be the case on domestic policy, is that the one constant is oscillation. We are constantly moving back and forth between two different poles. On the domestic front, it's sort of the battle over American identity, between the identity of a white Christian nation and the identity of a polyglot, you know, nation of immigrants, and also a nation that believes in universal human rights.

36:27And we've gone back and forth on it. And, you know, people sort of forget that in the 1920s and 30s, especially the 1920s, were a high point of American racism as sort of a major fixture of our society and higher than it had been before. And on foreign policy, and in terms of what America's role in the world is, it is worth remembering that at least a sizable portion of the population in the 1930s, and certainly this was true of a sizable number of the elites, had decided that democracy didn't work. Some of them decided that only communism was the right answer, and some of them thought that fascism was the right answer.

37:09There were people like Joseph Kennedy and others in the America First movement, Charles Lindbergh, and others who genuinely thought that perhaps fascism was the future. And so we're perfectly capable of doing this. And I think what happened was we mistook what was a period of liberal ascendancy, which was very much the consequence of events. The Great Depression and World War II basically discredited a strain of American conservatism and led to a kind of liberal ascendancy, which lasted up until, you know, fairly recently. I think you could see signs of it deteriorating and eroding in the 2000s.

37:47So that's where we are now. I would say we've been much more in a period of reaction. And it's as if the America First movement really had won in the 1930s in terms of our relations with other autocratic powers, because they were perfectly willing to do business with Hitler and Mussolini, but they were never in power. Now we've got people like that who are in power. So I guess what this ultimately suggests, and I think this is probably true, is that this is not the end of the story. Now, the one thing that I would worry about is that if Trump was able actually to consolidate a dictatorship, then you might break out of the cycles that we've been in because the institution would not permit the changes necessary for those cycles to play out.

38:28But if, in fact, we're about to have elections where the Democrats won and the popular will is actually expressed, I don't rule out the possibility that we will now go through another phase in the oscillation, both in terms of our domestic approach and in terms of our foreign policy. On the foreign policy front, the problem will be it is it is too late because Trump will already have destroyed the world order. But I do think in terms of America, we could be in yet another phase of oscillation. How easy is it actually to undo this? Because as you rightly be pointed out, they've obviously done enormous damage to the institutions of federal government.

39:08They've done enormous damage to other very important institutions, universities, the law, science. They've affected people's confidence in America. That doesn't sound like the sort of thing that you can sort of turn a switch and say, that's all over. We're going back to where we were before, because you need new people, you need new credible people, you need to rebuild and destroying things, as you know very well, is so much easier than rebuilding them. Is that plausible, a plausible perspective that we, at least in the outside world, have to say to ourselves, the old America we loved, admired, respected, and thought would look after us has gone.

39:50And similarly, in America itself, the institutions we thought were strong, robust, and vigorous, so important, not gone, but they've been damaged for a long time. Well, in terms of America's role in the world, you should think that there is no going back to where we were before. And the most optimistic scenario is that we are now in a world where other countries cannot really depend on the United States for their fundamental security, as they have for decades, and therefore need to be able to find ways to look after their own security, but in a world in which the United States is positively inclined toward them and their values.

40:27I mean, so if America emerges as not the global hegemon that it was, but as sort of a more limited superpower, if you will, but on the right side, I think that that will be good. Now, that nevertheless is a world of incredible complexity. Domestically, take the Justice Department, for instance. I think that you're pretty much going to have to fire everyone. If a Democrat comes in, you have to fire everyone who was brought in. There's election deniers. There are people who are clearly substandard, and they're in there just because they're willing to pay fealty to Trump, et cetera. And so you're going to have to have a complete change.

41:04And I think that's going to be true, certainly, at the top levels of the FBI and in other institutions and the State Department. And then you're in a situation in America which we'd gotten away from, which is when a new administration comes in, you clean house. You basically have done away with a real reliable civil service. I don't know how you reestablish this. Maybe everybody just agrees that we're going to try to go back to the way things were. But certainly in the near term, it's going to be a bloodbath. And how does a Democratic president now create a Justice Department that is even more independent from the presidency as before when, of course, a president still wants to be able to use the Justice Department.

41:42So there's going to be all kinds of complexity in making things right. And then at the largest level, can we reinstill sort of some basic values of fidelity to liberal values and the Constitution among the American people? Because at the end of the day, let's face it, the American people did this. You know, they're not the victims in this case. They chose Donald Trump. They continue to support Donald Trump. I mean, not everybody, but enough. And again, what I think has been most revealed in this period has been the shallowness of Americans' commitment to the basic principles on which our country was founded.

42:19Now, maybe that can be re-infused, as it was after World War II, but I hesitate to ask what kind of crisis would be necessary to do that. So I think it is going to be very hard to right the ship. And certainly from the rest of the world's point of view, The best you can hope for is a more benevolent America, but I don't think that there's any returning to the role that the United States played before. And we haven't even discussed the scale of the corruption. Well, and we should, actually, but because, you know, from a foreign policy point of view, that's quite relevant. The United States is now a predatory criminal enterprise.

42:54It's not really a foreign policy anymore. It's just where is the dough and how can we get it? And we'll use the powers of the government to do that. Now, that I think you can get over, but the damage being done in the meantime is really quite extraordinary. It's certainly extraordinary and unbelievable to me that the main question that seems to be being asked by the people responsible in relationship to the conflict between Russia and Ukraine is how we can do a profitable deal with Russia, and who cares what the outcome of that is for anybody. Except for the people whose wallets will be fattened.

43:31who are quite close to the president. Thank you very much, Bob. I think that was perhaps not the most cheerful of conversations, but realistic, and people need to be realistic about what is happening and what we might confront. Thank you.

44:17We'll see you next time. more mortgage-eligible people. Banks win and francs win. Lenders win and so do Lindas. When you build credit scores the right way, everybody wins. Get started at VantageScore.com. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. Listen at schwapp.com slash Washington Wise.