80. Trump's Totalitarian Playbook: War on Harvard

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0:35Hello and welcome to The Rest is Politics US. I'm Anthony Scaramucci. I am Katty Kay. A little late to this recording. I'm so sorry, Anthony. I rushed. I haven't had my coffee, but maybe somebody's going to bring me one in. So we may have a little coffee break. That's okay. You're entitled to be a little late, given some of my tardiness and like. So we're going to talk about Trump's war with the Ivy League, and we're going to talk about Harvard hitting back. We finally found a large scale institution in the United States willing to hit back at the administration. We're going to talk a little bit about the revenge tour that Trump is doing now.

1:10Is this now in full swing? And then, Cady, in the second half, we're going to talk about my favorite topic. Your probably not so favorite topic, Wall Street, how they totally misread Donald Trump and the second term playbook and how they're paying the price now and how they're all trying to figure out what to do. Lots of private calls, of course, and lots of talking to journalists off the record about what's going on because these guys are afraid of Trump. But we'll talk about that as well. But let's start with Harvard for a second, because I had an interesting conversation. I'll be vague about this, but let's just say there's 30 presidents on that list of people that signed that letter in support of Harvard.

1:48I talked to several of them last night. The story so far is the United States government does block grants out to some of our largest, most prestigious universities to do research, military research, health care research. It could be research that's top secret in nature. I can tell you that when I was at Tufts University in the mid 80s, there were two Nobel Prize physicists there that got a block grant from the United States working on anti-ballistic missiles. People may remember it was Ronald Reagan that came out with the Star Wars speech that he was going to build these ABM systems. That research became the precursor to the Iron Dome, as an example, which is used with great success in Israel.

2:32And so the president has his disposal discretionary investments, if you will, that can go into these universities. And he's holding back that money now on the universities, simply saying that he's not holding back all of it. right? Because the government spends$9 billion and they're holding back$2 billion. That's what they've said they're going to do. They're holding back$2.2 billion for now, but he's threatening to hold back the entire$9 billion. He's also threatening now to revoke Harvard's non-for-profit status. And so I'll explain that to viewers outside the United States. If you are deemed to be in the goodwill of the country and you're doing something in the country that isn't in the minds of the tax authorities, the IRS, a profitable thing to do.

3:17A hospital could be non-for-profit, a charity could be non-for-profit. And so you have a different tax designation. The money that comes into you, you don't have to pay taxes on, as an example. So if I make a donation as a member of the alma mater of Harvard, if I gave them, let's say, a dollar, they wouldn't get taxed on that dollar. That would go right into their coffers, if you will, and that they could use that to allocate across whatever spectrum that they wanted to use it for. The government is now saying, listen, you have to abide by certain rules related to what we think about protests, protests that were related to anti-Israel protests, things like that.

3:56Now, I'm a pro-Israel person. I'm someone that believes that in the right of Israel to exist dates back all the way to the 40s and the Harry Truman decision. But I'm also a free speech person where people who are protesting and expressing their point of view, as long as they're doing it in a nonviolent way, I think they have to have that opportunity in this country and other free countries. But the president is saying, no, there are certain things that cannot be allowed or abided by. Okay. That is a YouTubable moment. Katty, what do you have to say about it? How nice is my 25-year-old son? Jude, thank you very much.

4:32Giving you a thumbs up. That was very kind of you. Thank you. The 25-year-old son, very handsome young man, comes in delivering the coffee to the mother, Caddy Kay. And there's an unbelievably smug expression on Caddy's face, which, you know, I'm a little envious because I have no coffee here. I'm sitting in a hotel room with no coffee, trying not to wake up certain people that are sleeping. But anyway, this is a big topic in the U.S. right now because it's the intersection of government using its force, government being an intimidator, government projecting policy in places where it never projected policy before.

5:10So Ronald Reagan, he may not have agreed with some of the liberal professors at Harvard, maybe didn't agree with some of the liberal students, but those block grants went into place. Barack Obama, he may not have agreed with certain things that happened at right-leaning universities. Those block grants went into place. But now Trump and his people, this is right out of Project 2025, are going to flex on these universities. They told Columbia University, we're canceling$400 million. One of Caddy's friends now and co-authors of two bestselling books, Claire Shipman, is now the president of Columbia.

5:44They've gone to, I guess, two presidents now as a result of the tumult going on at Columbia. But Harvard has taken a stand. Harvard has decided if you're not going to send us the money, it's no problem. We have a big enough endowment. We have to stand. And I'm going to quote somebody that I spoke to last night. If we at Harvard don't take this stand, who will against this administration? And of course, the person also recommended to me to read the book, Caddy, How Democracies Die, which is a book that was pretty famous 24 months ago. I went back last night and looked through the table of contents of that book and skimmed various sections of the book.

6:22The Trump administration is taking the playbook out of these books. They're trying to silence debate. They want to silence dissent in the country. And they want to flex and use the wheels of the federal government to do this. So that's where we are right now. And I'd love to have you react to all the stuff that we're going to start this podcast with. Yeah, so that's a lot and a great update of where we are. I think a couple of things are happening is one, it's becoming increasingly evident that the Trump administration really wants to do all they can and go as hard as they can for as long as they can as fast as they can to destroy liberal institutions.

7:05And by that, I mean the institutions in American life and democracy that have tended to skew more liberal and those they would see as academia, the federal government, the federal workforce, very often law firms. I'm told they are going to go after the broadcast industry next, particularly cable television news next. So they want to really stamp out what conservatives have seen for a long time as dominating these institutions. And that is a kind of left leaning, liberal, coastal, elitist, educated tendency bent, however you want to put it. And they could have done this in a legal way. They could have had an investigation and then said they were going to cut the funds.

7:58That would have been the legal way to do this. I was told by somebody actually at Harvard that what the government is doing at the moment is illegal because they haven't followed process. And, you know, there's been a lot of talk about immigration and the guy that was sent to El Salvador this week as well. And somebody smart said to me just this morning, look, it's called due process. And sometimes we think of it as one phrase, but don't forget the process. In all of this, there is a process, a way that these things are done. There are systems in place. And in not following those systems, the administration is going afoul of the law.

8:31But their ethos is in the White House, move fast and break things. Let's see how fast we can get. Let's see how fast we can irrevocably change these elite universities, which for a long time have been in the crosshairs of conservatives in America. And there is a point that elite universities in the United States skew massively liberal. The rates for the faculty in some of these universities are something like 75 % are liberal, only about 5 % are conservative, the rest don't really say. But there's a very strong liberal bias in the American university faculty. And that is what the White House is trying to stamp out.

9:18And they're egged on by activists, people like Chris Ruffo, who is of Italian origin, but moved to the United States with his parents, actually went to Georgetown and has become vehemently anti-elite university and would basically like to destroy them, would like to either make these universities very conservative or take away all the federal funding. And what the conservatives say is, hold on a second, it's just not fair that Harvard is getting$9 billion a year when it already has a$53 billion endowment. It gets$9 billion of federal funds, our taxpayers' money, and yet we're funding these organizations which are so clearly politically skewed.

9:57So that's kind of, I think that I wanted to spell that out because that is the backdrop to what they are trying to do. And that is why they have quite a lot of support around the country. I mean, there's not much tears being shed for Harvard University in middle America at the moment. They think this is a political win for them. I agree. And I've spoken to people at Harvard in the last couple of days, including one very more conservative professor who says the way the administration is doing this, first of all, it's illegal. And second, it's going to do a huge amount of damage to the very things that you mentioned, Anthony, all of the research that keeps America in the forefront.

10:37It's going to hit that hard. I mean, there's no way this is not going to damage America's international competitive when it comes to America's already losing out in patent wars to China. This will further impact that. And then I think then the question is, how does this play out? The White House, I'm told, is hitting particularly universities with big hospitals because they know that hurts the universities and makes them want to cave. Does Harvard keep going in the fight back and do others join them? And does this then trickle through to other institutions like the law firms that have so far been pretty passive?

11:09in their response to Donald Trump? Well, you know, listen, I think Harvard has the muscle to fight back. And just to explain people, we've allowed these universities through the taxation code, if you will, to grow these big endowments. So again, if I make a donation, let's say I grant a billion dollars to Harvard, they're allowed to put it right into their investment vehicles untaxed. And then it grows, Katty. You know, when I was at Tufts University, as an example, They had a$65 million endowment 40 years ago. They've got almost a$3 billion endowment today. I think Harvard's endowment was like$5 or$6 billion.

11:43Now it's$50 billion today. And so they have assets on their balance sheet that they can use to sort of stave off what's going on from the government. But I guess my question to you is about the brittleness of this U.S. administration, the brittleness of this leadership. In years past and for as long as I can remember, American presidents, they may not have liked some of the liberals if they were conservative presidents at these universities. But they understood that these universities were part of the research heartbeat of the United States. And so they ignored whatever the rhetoric was. Why is this administration so brittle, Katty?

12:26I just don't think they care that much. I think they're super short term. I mean, you've often talked about, you know, chess and checkers. Trump, you know, moves in 10 minute increments or news cycle increments, right? He's not thinking, oh, damn, you know, five years down the line, this is going to mean we don't have the latest cancer therapeutic that's going to come out of Beijing or Tsinghua University. That's not the way he operates. He operates on what's a win for the moment. And they know that the right in America has hated these institutions for a long time. They also feel that Barack Obama and Joe Biden did threaten to cut funds to these universities to make them more liberal, effectively, to make them more in line with civil rights around gender and race.

13:11And so they feel, well, look, Barack Obama and Joe Biden did that. We're just going to go a step further and actually take the funds away, not just threaten to take the funds away, but actually take the funds away. And MAGA base is not going to care. And I don't see anyone in the White House saying, oh, dear, what is this going to do for America's long term security? They're thinking about what gets MAGA happy now. It's so short term, this administration, it's short term on the tariffs, it's short term, it's even short term on immigration and deporting, if they ever managed to do it, millions of people who are working in the country who are undocumented, because the American economy depends on those people.

13:49Point to me the long term thing that Donald Trump is doing that has any kind of long term consequences in terms of it. OK, we'll have to invest now. I mean, I guess he would say tariffs. He would say this is short term pain for long term gain. But most economists dispute that. This feels to me just like he wants to do it. He's pissed at the universities. Fuck it. Throw it in the air and see what happens. OK, I mean, again, I think the long term thing is the power. The long term thing is the weakening the law firms, weakening the colleges, weakening the media, taking on more power and then potentially trying to flex that power in a way that's never been flexed before in the United States.

14:33And I think that's one of the risks. So you mean he's doing it because he can, and then that shores up the presidency's power? Dominoes. Let me click this domino of the El Salvador situation by that deportation. That's a civil rights domino. That's a human rights domino. This relationship now that we're going to have with the universities, that's a domino. That's a flexing domino intimidating these universities to break their current liberal leanings, if you will, their liberal slants. The law firms, you supported too many liberal causes. Now you're going to support my causes for free. There's dominoes that are going all off now.

15:16And as they click around the table, you get to more and more presidential power and you get to more and more mutedness. We're going to talk about the Wall Street executives in a moment. They hate the tariff plan. They hate everything the administration is doing. They won't say a word to anybody because they're afraid. They're afraid for their families. They're afraid for their companies. Their boards are telling them not to do anything. So I think this is about power. But I just want to point out to people, these universities, we think of them, and some people think, okay, some kid goes to school at age 18.

15:48He graduated at age 22. He has a degree. It's an academic institution. But as Cady and I know, these universities are so much more in the United States. They're research centers, they're healthcare centers. I mean, they run like massive hospitals. Harvard's Hospital, they cut that. It's going to decimate Boston's healthcare. My mother today at age 88 is a survivor of leukemia because of the research that's been done at these universities. At the University of Pennsylvania, they discovered a way to use a new drug called Gleevec. It's 20 years old now, but it was discovered as a result of these research grants.

16:26And so this has improved the quality of life of Americans, extended people's lives, made Americans safer. Technology that we've used in the military has made our servicemen safer and frankly, the country freer. So it's a - One question I have for you, Anthony, is, okay, so now Harvard has said it's not going to capitulate. And let's see, some people at Harvard seem to think, let's see how these negotiations go. But they've made a stand. Princeton similarly has made a stand. Rutgers University, some of them not. They've started with the Ivies, but some of what are called the Big Ten, which I think is actually 18 universities.

17:00I don't know why your university system is as complicated as it is. But anyway, the next level down, they've also, some of them started to say no. So do you think there's a knock-on effect? And this is what opponents of what the president is doing in terms of trying to get executive power and have this kind of chilling effect on the institutions of American democracy. They hope this is what's going to happen is that then there is, you know, knock on effect on the law firms. I am told that they are going to go fairly soon for the broadcast media and particularly for cable television channels. Full disclosure, I regularly appear on one of them, MSNBC, which is in the crosshairs of the Trump administration, which is more of a left leaning channel.

17:42They're going to go after those broadcast media channels. Do you think if Harvard sticks to its guns, that has a kind of solidifying effect? Because that's what Democrats are hoping, right? They are longing for a fight. They're looking to anybody who's going to fight back. I don't know if it has a knock on, but it would be interesting to see if people standing up. I mean, you have to kind of read. You mentioned how democracies die, which I think is actually by two Harvard academics. It is. You know, you read Tim Snyder, you read Anne Applebaum. There's a lot of the symbolism, the power of people standing up.

18:18Do you think it translates? Well, I mean, you know, yeah, so the two authors are Steve Levinsky and Dan Zimblatt. And it's a phenomenal book, by the way. And it's a scary book. But, Caddy, here's the thing. Here's how the fight starts with a bully. The bully comes after you. You then respond to the bully. The bully always gives you one or two more counter punches to see if you've got a backbone or not. So there's something going to happen to Harvard now from this administration. Exactly what it is. I don't know. Maybe the tax exempt status they're going to push and try to make it go away. They just put the head of the IRS now.

18:58The commissioner of the IRS is the person that audited Hunter Biden. And this is what Trump does. The Secret Service guy that was in front of me at Butler now runs the Secret Service. You went after Hunter Biden. You're my guy. You're now running the IRS. And so they're going to hit Harvard again. And then the question is, is Harvard then going to capitulate? And the irony of the whole thing is that Harvard actually did things early on in the conversation. You know, they made some concessions. They dismissed some leaders for the Center of Middle Eastern Studies. They suspended a religious conflict and peace initiative person over accusations of anti-Israeli bias.

19:37And so the question now is the fight has started. Harvard has stuck up for itself. What's going to happen next? You know, Wilmer Hale, as you know, very prestigious law firm in Washington, said, hey, sorry, we're going to fight back. They won a court case. And now the next fight is going to happen. So with a bully like Donald Trump and with bullies like these, and by the way, the thing about this that I find absolutely reprehensible is the meanness. The president of El Salvador, which I did cancel my spring break to El Salvador, Caddy. So those two guys are sitting there in the Oval Office laughing at the meanness.

20:14Well, the poor guy's wife is saying, please, can you send him back again? And then the lies. It's been proven that the guy is an MS-13 gang member, which, of course, it hasn't been proven. and you have a 9-0 Supreme Court decision. So you have this intersection. It's kind of blood on the floor from the number of lies that have been massacred. There is blood on the Oval Office floor at the moment. Yeah, it's just absurd. And by the way, the Oval Office now, you know, Trump's apartment, I said, you know, wants to look like, you know, Louis XIV smoked crystal meth and made the apartment. Yeah, I remember.

20:42Now this looks like Liberace came out of the grave and showed up and said, let me throw some golden candelabras around the Oval Office, right? I mean, I mean, I don't I don't know. It's just it's just this is like it's literally like a crazy show. But I just want to say this one less thing, get you to react to it. Will they fight back when the counterpunch happens? That's the seminal question. OK, is the counterpunch is now coming. And then so what happens? Do you capitulate in the counterpunch? And then, boy, does that really embolden Donald Trump? So what do you think, Katya? We are seeing the universities coordinate more.

21:18I know they're talking to each other and they're talking to each other in different regions of the country and along, you know, different athletic conferences, whatever, the Ivies are talking to each other. So there is more coordination and they have learned, read all of the books, that they are stronger together, right? So if they push back together and don't let Donald Trump pick off the White House, pick off one institution, they have more of a chance. If he really comes after their tax-exempt status, all of this is going to hit them financially. And a couple of people I spoke to at Harvard said, look, we cannot believe how incredibly successful they have been.

21:55I mean, it's random. They're hitting the science faculties and they're hitting the hospitals when actually what they have a beef with is the liberal arts colleges and the humanities. So it's not actually hitting the most egregious parts in their view of the universities. They had a lot of time to think about it, Kat. They've had time to think about it. And the universities now are realizing they have to think about it. So that's what I mean is they have to plan what the comeback is. One thing I think is worth saying, the White House has sort of cast all of this under the umbrella of fighting anti-Semitism.

22:28Speak to every president of an Ivy League university and they will tell you they've had a problem with anti-Semitism. and that they have taken steps on campus since October the 7th and since the demonstrations that did threaten Jewish students in those organizations. They've taken pretty serious steps to rectify that. And most Jewish student groups, even at Harvard, will say, yeah, they have. They have done what we needed them to do. They've made the progress that we needed them to do. So I think the anti-Semitism thing at this stage is a bit of a fig leaf. What they really want to do is destroy the liberalism of these universities.

23:04liberalism with a big L. It's more about trying to make these universities more conservative. And that's why they're pushing to be able to dictate who the professors are that are hired, to review which students are given positions in these universities, to review what is being taught in these universities. I mean, talk about big government. I thought the whole point of this administration is they wanted government out of people's lives, not big government. This is the kind of like the ultimate definition of big government is that this is, you know, the government taking over the curriculum of big universities.

23:38I wouldn't have thought they want to get into that myself at the time that they're cutting the Department of Education. But I mean, yes, and we're going to take a break now, but I'll just say this to you that first came the chaos, but it's organized, well-planned chaos. Now comes the retribution. Now that he's got everybody on their back, back part of their foot, he's now going to start the retribution process. and we're going to take a break. But this is something the Wall Street guys are worried about. They're worried about the retribution. These guys like their yachts, Caddy, and they don't want to have their yachting life disrupted in the Mediterranean this summer.

24:14They want to be the have yachts, not the have not yachts. Yes, exactly. They want to be those guys. Okay, we're going to take a break, and we will be back to talk about Wall Street.

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