357. Political New Year's resolutions, Elon Musk, and what happens next in Taiwan?

24:40So the whole post war system believes that the way that you stop wars, stop the first war, war, second war war was based on four things. One of them was making sure that there was open trade. So economies were interlinked and the great example there obviously is Germany France where they decided that the way to avoid going to war again was to get into this European Union. The second thing that people decided is that you needed generous international assistance to rebuild economies. And that was the Marshall plan. That was rebuilding Germany and Japan after the war. The third thing was setting up for this rule based international order which was the International Court of Justice and eventually the International Criminal Court and the UN and all these attempts to try to create an international system with rules and those rules were around respecting borders.

25:30So put an on invading curate or Ukraine, but also respecting human rights, which is doesn't matter if you're a Western ally or not, you should be held accountable if you commit war crimes. And the final thing was American hegemony that put this whole thing together. And I think the problem with Trump is he hits every single one of those four things. He replaces open trade with protectionism. He replaces a rule based international order with co -zing up to tyrants. He replaces development and support for other countries with cutting development age in America first. And he puts America into an isolated position that's undercutting world order over you.

26:11Yeah, I think it's potentially horrific. I guess, and maybe this is a wishful thinking, I was sort of, I was talking to somebody who was trying to explain to me. He is not naturally republican but did vote for Trump, who was trying to explain to me why he thought that he is not going to be as bad as we thought this time. That last time he wasn't very well prepared and it was all totally chaotic. This time he's much better prepared and he's doing what classic sort of art to the deal negotiation of staking a very, very tough position or all sorts of difficult issues. And then he's going to sort of, you know, wind his neck in a fair bit.

26:52I don't know if that's right or wrong. I do think on Ukraine, the one interesting thing I took out of that interview he did not long after the election. He did a big TV interview. He was definitely signaling a kind of change of tone on Ukraine. Either to the one that he was pursuing the election or that the ones that the real kind of, you know, the JD vanses who say, have nothing to do with it, we're saying. So it may be that he'll be, he'll be different. I think is, I think his economic stuff. If he goes ahead with the sort of, you know, tariff is the most beautiful word in the English language line that he had during the campaign.

27:26I think that could be a disaster for the world economy. But again, is that sort of part of a, you know, I'm the tough guy, get used to dealing with me, approach to things. I don't know. But no, I think it's alarming. But the fact is that, you know, we're going to have to live with it for four years. Well, predicting the American economy is a mugs game. And people predicted, you know, people I might immensely like Larry Summers predicted recessions and inflation that didn't happen. But it is true that he's taking over an American economy that's very different from 2017 because there's higher inflation and interest rates are higher.

28:01So if he decides to push ahead with tariff barriers, which will drive up the costs of goods, say, you know, 110 % import tariffs on Chinese electric vehicles or 60 % general tariffs on Chinese Chinese goods. If he does that, if he throws out 11 million undocumented migrants, illegal immigrants, that will create a labor shortage crunch. If he begins spending like Billy O through on defense and cutting taxes very dramatically, that'll roar up the deficit. So the worst case scenario you could see is that you end up with inflation taking off the cost of servicing the debt taking off and America finding itself in stackflation, finding itself in a situation where it's got inflation and recession at the same time.

28:49And we're not really factoring that in. And I don't know what percentage chance you put on that is that 20, 30 % chance. But my gut is that too many of the kind of people that we meet working in the markets have been so excited by the fact that the stock markets respond positively to Trump and that they see him as a business guy. And they're focusing too much on the appointment of the Treasury Secretary who reassures him because he's a hedge funder and not enough on the Thomas home and Stephen Miller stuff that's going on, which is the appointment of these much more right wing anti -immigrant pro tariff, more aggressive figures within the administration.

29:28So and that will change a lot of things because we're in a conversation in Europe where we've gone from five years ago thinking we all need to be like Germany to thinking we all need to be like the US. Now that will cease if the US economy begins to falter. Yeah, yeah. What about Musk? How worried do you think we should be about Musk? Again, we're back to talk about Farage again. I'm afraid because of course just before Christmas, one of the things that happened was forage and there's billionaire property developer Nick Candy, you know, Musk and Mara Lago. I'm Anthony Scaramucci who I like a great deal and we love his podcast with Cati K, but he did get something very, very badly wrong in the past because he told me absolutely hand on heart is not going to happen Donald Trump will never ever be present again.

30:17Now he's saying to us and on heart Trump and Musk it's done. It's finished. Musk is, you know, he's just pandered dream now. I'm not convinced about that. I get the sense that Musk is is really, really locked in there and is very, very powerful within it. And one of my favorite tweets towards the end of the year from our friend Tommy Vita at Potsay, America. I personally think having a ketamine adult billionaire, Oligar deciding which bills get passed by Congress is a great way to run the government. Now, and I think that the, I also, I did, you know, you know, it was really weird about these right wing people.

30:55And I know social media is not a great place for ironies, not great, but you know, when Tice and Farage and Rupert Lowe and these people were all saying absolutely nothing wrong. If Elon Musk wants to give 100 million dollars. Just for listens, these are all the reform MPs. The reform guys, yeah, you know, why are we getting so excited? These are the same people who used to sort of invent conspiracy theories about George Soros buying elections around the world. And this was terrible. So in response to this, I did this, I did a tweet breaking news. French billionaire Jean -Louis Lourish and German industrialist Hans Dietrich Geltman have decided to donate 200 million euros to a new campaign to get Britain back into the European Union after the disaster of Brexit.

31:38I'm happy to announce I will be campaign director. I'm sure that Nigel Farage and will see nothing wrong with this at all, common sense in it. You would not believe how many people took that seriously. One of them actually said your podcast should be called the rest of this hypocrisy. Why is it wrong for Musk to do this? But it's okay for this friction, German couple to do. I mean, absolutely madness. But the principle is that is the principle. If it is okay for Elon Musk to give money to reform, then it's okay for French people, Chinese people, Russian people, before we get on to the sort of big, or as you must campaign finance reform in the United Kingdom.

32:20Oh, got to work backwards. Absolutely. If it is even theoretically possible for somebody to give 100 million to any party, it should be stopped at once. Well, for an American citizen to do it, should be stopped for five pounds. Our elections at the moment go at about 10, 20 million pounds. 100 million pounds coming in is completely insane. It would be like, you know, aged 18 sitting down to the poker table and suddenly realizing that one of the people sitting down to the poker table is able to put 10 ,000 pounds on the table when you're all betting a fiver. I mean, it's mad and we need to change the rules to prevent that from happening.

32:58I think Musk is more of a threat than Trump. I think he's a genuine fascist. I think that he is somebody who loves the idea of being connected to stirring up a massive political movement. He loves the propaganda tool and he's showing the power of social media. X is a small platform with a few members, but he's doing something with it that nobody's tried to do with social media before. We saw with Facebook and Twitter in the Arab Spring that it was dangerous. But in those days, it was still just about pretending to play by the rules. If you put a weapon like that in the hands of somebody who actually wants to promote tweets from far -right groups in Germany, Austria, troll the British Prime Minister, fan a vision of anti -immigration, anti -climate, anti -development aid, you're doing something which is extraordinary.

33:53It's like the 100 million pounds coming into the British election. And I think nobody should underestimate Musk. I think he's incredibly clever. He's very, very ruthless. Look what he just did in backing Californian policies. He bucked the Californian policy on restricting his rivals so that he could then boost his business. And he's been like that ever since he was at PayPal. So I think he'll stick with Trump because he's actually a pragmatic businessman and a very ruthless businessman. And he thinks being close to Trump is going to allow him to get away with this crazy fantasy. And does Trump stick with him?

34:29I mean, the Mochis convinced that Trump has already decided he's outlived himself. And I saw that guy Adam Kinziger, the former Republican who sort of turned against Trump. He has started to call Musk, President Musk and vice president Trump. That's how he now defines them. Which is a clever way of undermining both Trump and JD Vance. Yeah, yeah, yeah, yeah. Exactly. I think that's right. I think the more you lean into the idea that Elon Musk is the first husband. The more you can begin to irritate both Musk and Trump. But just on the funding thing, you see, and I think this is again, is part they start at 100 million.

35:12They're probably going to end up where they say, well, why, if we can't give 100 million, why can't we give 50? Why can't we give 20 or heavier? But the fact is, when Kamala Harris was up against Donald Trump, I had so many people saying to me, why can't we donate? This is an election that matters to us as well. But you cannot, as a British citizen, you cannot donate to an American politician. Two principles in that. It should be a British citizen. The second is, even if it's a British citizen, nobody should be able to give 100 million, even if they wanted to. It's completely a grotesque, totally grotesque.

35:44And we need to stop a conservative party being funded by hedge funds, oligarchs, and a Labour Party being funded by trade unions, and all of them being in hocked. And we need to move, I think, to something that everybody hates, which is state funding of political parties, or very, very strict restrictions on how much you have. And I don't know whether the Labour government is yet really focused on the potential danger and damage that this can do. Look, and the thing that we're worried about as well as if they do bring it in campaign reform, funding reform, which they should have done anyway, the idea that it's going to be seen just as a way to try and stop for our country, which then again allows him to play the sort of, I'm the little guy up against the establishment, they're all trying to stop me, blah, blah, blah, blah, blah.

36:34Okay, Anastya, halfway through, rest of 2025 to come after a break.

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38:38What about you, Robore? Here's a start of a 10. Who do you think will be the German Chancellor after February 23rd? Well, we know the answer to that because you've told us the answer to that. And you're presumably 99 % on that. So tell us who will be the next German Chancellor. Well, probably three drickmen out. Who's the leader of the union, the Christian Democrats and CSU, the Bavaria Party. And the great survivor, Alistair, is we picked up in the Angela Merkel interview because he was going to arrive all back in the day 20 years ago. Yeah, when Stoiba was the kind of the Chancellor candidate, hovering in the background, you had Angela Merkel and three three melts.

39:17And they didn't really get on that well. Merch is a little, is to the right of, he's probably more of a conservative than Angela Merkel. But there's a part of Merch that I like, Gory, which is, I know how obsessed you are with politicians and their hair. If you may know that I really don't like this bit of my hair, this sort of, this one, this one, this one means nothing to you, but this sort of Steve Clarage thing that comes down the front of my forehead. But Merch, if you look at him, he's got this isolation from the rest of his hair. So he's sort of bald, but with this little sliver at the front.

39:50But I think he's going to well, I think it's well ahead in the polls. But listen, we are living in such volatile times that, you know, you can't rule anything out. Scholz really does look like a man who thinks he can do something in this campaign. I mean, interestingly, I mean, he can look a bit from a distance like a kind of Biden figure. I mean, he's almost 70. He's got there by just hanging around and never giving up on the way that Biden did who kept losing his chance. So, so, so Biden obviously ran for the presidency many times beginning in the 1980s, never really worked out, just kept plugging along and eventually came through.

40:28And Merch is an older guy who you get a bit of that sense as somebody who's just stuck with it, been in the system, made it through. Or am I underestimating him? Has he got more of an edge to him than Biden had? Yeah, I think so. I think I think also he's getting on towards 70. He's got a lot of energy. He's definitely got energy. He's pretty strong Ukraine. I think what both of them have, but of course it's better to think about in common. So, it's much easier for the person out of government and the person in government. Neither of them are really articulating a strategy that says that the German economy, which we all used to think was kind of humming away nicely, is going to get back on track.

41:05But I'll tell you the other thing that's really been interesting in the election so far, much, much, much more robust campaigning, more aggressive campaigning than the Germans maybe I used to. And I wonder again whether that's the influence of the alternative for Deutschland or the way that they campaign. Presumably one of the things that we may see and to look at as we go into this is what happens to the AFD on the right and what happens to the far left, the Vulcan Connect party. Yeah, well listen, it's a totally different voting system. Whoever wins in quotes will have to form some sort of coalition with other parties.

41:42I think it's possible that you end up with a grand coalition between the CDU and the STP, but that's why the nature of the campaign is maybe interesting. But look, it's going to be one of the most important elections in 2025. And I could be wrong, but I think that's will be the next chancellor. Now what about France Roy, Beru at the time of recording is the prime minister. They had four in 2024. But can you see that last thing? Yes, I can't, I'm afraid, but it may be that I'm just becoming a French bear. I mean, it's true that they have had this thing called cohabitation in the past occasionally, but it's a very unstable situation.

42:24Their constitution to goals constitution basically creates the super power for president and assumes that they're going to be able to work with the parliament with the prime minister. And Macron by triggering this election has created this situation where I can't see how you keep things going if fundamentally either the far right under the pen or the far left under me no shong can pull the rug out from under you almost whenever they want or rather they can together if they decide to do it together. So I guess he's trying again, but I can't really see why you would be more optimistic about this than you would be about bunny it who any managed to last a few weeks.

43:04Yeah, no, it's the number. This is what happens with with with elections and maybe particularly snap elections is that the way the numbers fall. That's what the politicians then have to pick up and the numbers just don't work. The difference with cohabitation was was having a president of like I'm a Muishera can just a president of one party a government headed by the other what macro seems to be doing is trying to get prime ministers that essentially he wants them to be pretty much in his political space. Baniay to the right bill in the center but maybe leaning a little bit more towards the all men Tom category of politics but the france is is going to be so interesting this year because Macron certainly doesn't strike me as the sort of guy is going to throw in the towel early he's got the whole of this year and fair bit of the next before he has to go to you know leave office.

44:03So can you keep having sort of changes the prime minister does it become a bit like you know Italy used to be a laughing stock change is prime minister the whole time we were laughing stock change in the prime minister the whole time. Yeah, but but people point out that actually the problem is that it's more of a problem in France because France is so heavily centralized on Paris. Yeah Belgium you pointed out I think the podcast has had a lot of primal system frequent moments where it doesn't have government. But I then got called by Belgian friend who said yes but in Belgium there's a much much stronger decentralized devolved state system going on.

44:39It matters much less whereas France everything is drawn into the center everything's drawn into Paris and if they can't get a functioning relationship to prime minister parliament and the president. France is in much more trouble than these other countries and and of course the French president matters much more for Europe than the Italian prime minister or the Belgian prime minister. Yeah have you heard of Patrice de MacMahon who sounds like he ought to be a Scott MacMahon but in fact his family going way back descended from a former high king of Ireland. But Patrice de MacMahon was president of France and in 1879 he resigned after a similarly ill advised decision to have a snap election although ironically he was doing it because he wanted parliament to have more power than they then had vis -a -vis the powers of the president.

45:30Oh very good. I'm pretty amazing. You know we're responsible for the whole thing because it was actually John Law who was a Scott who managed to bankrupt the ancien regime and basically set the seats of the revolution with his amazingly cunning financial speculation. Well Patrice de MacMahon he was president and he resigned after losing support but we'll see whether we'll see where my friend Emmanuel Macron will do we'll do the same. So Rory I think this time last year or was it this time two years ago but you were sort of pretty sure that China Taiwan was going to kick off. I think what I've said is I think consistently but people can call me up is that there is a very big chance of it kicking off.

46:14So I keep trying to say 30 40 percent which is a way of saying I'm not saying it's certain that it's going to do it. It's probably less than 50 percent but people are underestimating the risk that as the Chinese economy struggles as Xi Jinping looks to try to regain popularity with his working class base. Nationalism becomes quite appealing and a lot of that I think will depend on his calculation of whether the Chinese military is ready and his view on how the world is going to respond. And if he thinks the world is in a relatively soft place where people aren't going to want to get into a cycle of sanctions and counter sanctions with China.

46:54Then there's no doubt in my mind that he sees part of his legacy being reincorporating Taiwan to China although he'd prefer to do it non militarily. And do we think that Trump's arrival makes China more or less likely to think that going after Taiwan is feasible? I think you're getting into this very strange question of mindset of very isolated leaders so Xi Jinping is now in for life already part of a polypuro and he will be guessing on the basis of pretty uncertain intelligence how Trump will respond. I mean after all you and I didn't really know how Trump would respond because he's got two competing instincts in his mind.

47:39He hates being humiliated which might mean that he wants to show strength but he's got another very very strong isolationist view which is this is none of our business and let me put it in really blunt terms. The only way of deterring China from going into Taiwan is with the US and that means US aircraft carriers. US aircraft carrier turns up it sunk by Chinese drone attacks 3 ,800 US servicemen die instantly is Trump the Trump that saw the Iraq and Afghan wars as terrible waste of time and energy going to want to explain to the American people why he's just lost nearly 4000 lives defending an island that will feel a very long way away from the United States.

48:24So I tend to the view that Trump will bark but in the end he's not going to want to deploy America militarily against China. Middle East more or less optimistic than 20, 24 new year about the possibility ever of a peaceful two -state solution. I think very unlikely to see sadly immediately a two -state solution might happen but it would be a miracle because Netanyahu smart rich and bangavir have no interest in a two -state solution. Trump's new ambassador Huckabee has no interest in two -state solution. I don't understand why Israel is continuing to bomb Gaza. I can't see what the strategic importance of that is apart from some strange internal negotiation with the right wing of Netanyahu's government.

49:15I think Trump will want the violence to cease and he'll try to put together some kind of version of his Abraham Accords but I think it's very unlikely that Saudi Arabia is going to play ball because the vast majority of the Saudi population is unbelievably angry and alienated by what they've seen in Gaza and I think they're very unlikely to feel that they want to make peace with Israel at this moment. I can't see a two -state solution coming but let me throw something else back. One of the problems is this crazy unknown unknowns. We've just seen in Syria how a situation that seemed static for seven years changed in a week.

49:57It's perfectly conceivable that we could see stuff that nobody's talking about. We could see the Iranian regime collapse and the Iranian regime could collapse and two directions could collapse and a positive direction and it could collapse in a negative direction. It's also perfectly possible that we could see things spreading. The sort of movement that we're seeing in Syria could spill over towards Iraq or Lebanon. We could see Turkey re -emerge as a player. This is in some ways a Turkish success. A Trump world where America withdraws more could be a world next year of Middle Power, Saudi, UAE, Qatar, Turkey playing not just in the Middle East but in the Sahel and the Horn of Africa.

50:43Yeah, anyway over you. I think another unknown unknown sort of feels very bubbly. This kind of American economy vibe at the moment. I wonder whether that's going to hold and I don't understand that. I can't pretend to be great understand of the whole crypto world but it feels very fragile to me. I wonder whether there won't be quite something of a crash in the US this year. Let's finally worry on Ukraine. Will Ukraine be the same Ukraine territory at the end of 2025 that it is now? I think that depends on whether you think Europe or bits of Europe are going to step up. So a lot depends on whether Poland, Nordic, Baltic countries and the UK step up.

51:30Yeah. Signs on that are pretty good I'd say. Yeah, but interesting. I mean, is it significant that Kierstamer hasn't visited Ukraine when Johnson and Rishi Sinat were perpetually going on? Well, John Healey, the Defense Secretary was there shortly before Christmas and announcing a whole new package of support. I think Poland is really interesting in this regard. I think Poland has really stepped up in terms of this commitment. The whole sort of talk is that Trump will offer some kind of bitter land, a bit of non -NATO commitment, whatever it might be. But I'm not convinced. I think there's a chance that provided Europe does hold for them.

52:06There's a chance that Ukraine will be the same. There's a very interesting thing at the centre of the Labour government that we don't talk about very much, which is that John Healey, as you say, has been a great defense secretary. We've got a leading interview coming up with Ben Wallace who pays tribute to him. But one of the appointments that maybe people who aren't being geeky haven't focused on very much is Alistair Khan's, who's a junior defense minister. And Alistair Khan's is extraordinary. I mean, it's a very, very unusual politician. He is an amazing fighting rar Marine. I mean, he's a real operations guy who played a very, very central role in what the United Kingdom was doing in Ukraine, which he doesn't talk about.

52:54But he's probably the most serious operational fighting soldier that's been in the British Parliament almost since the second mobile. And he's right there in the MOD. Now, he's not been given a big operational role. He's been given a veteran's role, which is a bit eccentric for somebody who's like a absolute kind of warrior. But that's a very interesting addition to the team and maybe a sign that I don't maybe be reading too much into it that Britain may lean in more operation into Ukraine. OK, Roy, final, final, final, final thing for 2025. Reasons to be cheerful. OK, OK, let me just before I go cheerful, I'm going to go really gloomy and then I'm going to go cheerful.

53:36So really gloomy. Sometimes we should talk about the significant risk of a dirty nuclear bomb going off in one of our cities. And we should talk about North Korea flinging nukes around. But reasons to be optimistic. I think if Europe sees Trump's retreat as a reason to step up and it begins to actually take more responsibility for defense and security and the new German Chancellor comes in with a bit of momentum behind him. It's likely to be him and forms a good alliance with Kirsta. You've got two big European economies that could begin to frame something not within European Union. But maybe with Poland with Donald Tusk and we've got the presidential action coming in in Poland next year.

54:22Things could begin to come together. We're actually this could be the beginning of Europe standing up a little bit more doing a bit more in the world. And that probably would be a good thing. OK, well my reason to be cheerful is Roy, things can only get better. Great. Well, listen, have a lovely new year. I'll know that you're seeing lots and lots of you through the year. Thank you to everybody who listened and watched last year and will listen and watch this year. Have a very happy new year everybody. Bye bye.