412. Is Trump Starting a Civil War? | LA Protests

25:35The details that are pretty peculiar because I've just been reminding myself, and I sort of explode and took it, but it starts with Trump doing an interview when he's went frigid meds. And he says, look, I had a great relationship with Elon, I don't know whether we will anymore. I was a bit surprised about his criticism of the bill. And Musk is watching this. And he says immediately starts tweeting out a bear might a week earlier. He'd been in the Y house in the Oval Office when Ramaphosa was there. Exactly. Absolutely. And he'd done this sort of farewell thing. Trump begins to say, you know, I think Elon's just crossed about the fact that I took away subsidies for election vehicles.

26:11And he actually, he read every word of this bill. So I've no idea what he's doing coming out, criticizing it, which is a classic thing you say when someone resides in Sensor Nasty resignation letter, right? Musk immediately fires back. He's like, whatever, yes, the subsidies were unfair, but there's nothing big or beautiful about this bill. And it's completely false. I never read it. And this guy said deficits are not allowed. At which point, we then get a real escalation. So he says, Musk says, I'm going to set up a new political party, which 80 % of Americans are going to vote for. And at that point, Trump, quite interestingly, doesn't go on the personal attacks against Musk.

26:47He begins to move on to, firstly, he says, we're going to terminate his contracts. Now, this is big problem for Musk. Two and a half billion dollars, at least, of federal contracts came in last year to Musk's companies. He's facing regulatory investigations from 11 different agencies, and things like water pollution from SpaceX, safety issues and firing off, fatal accidents, water pilot stuff. At which point, Musk comes back and says, as we said, you know, Trump is in the Epstein files. This is the real reason they've not been published. Have a nice day, DJT. Yeah. Trump then keeps saying, doesn't go personal, keeps saying, I don't understand.

27:23This is about Bill. And at which point, Musk is like, we're going to decommission the dragon spacecraft, which is a big problem for NASA. NASA is very, very dependent, actually, because all the other people Boeing's spacecraft haven't been fixed, North from Garamons, collapsing and transport. So actually, he's got the Pentagon and NASA where he wants them, and actually Trump can't build the Golden Dome at the moment without a lot of Musk's kit.

27:50And then JD Vance. And Trump's still saying nothing. Bill Accomon, this extraordinary sort of billionaire who's absolutely drunk, the Kool -Aid, says, I support both of them make peace for this great country. Hug each other. And which point Musk says, you're not wrong, and begins to back off. And now we've seen Musk supporting Trump on all the stuff he's doing in California. Yeah. I mean, I think the, just to give people a sense of the scale of these sub -succeeds, Musk likes to project himself, as a great sort of private sector genius. His companies have received $38 billion from the government over the last 20 years in the forms of loans, contracts and tax credits.

28:29Tesla, $11 .4 billion in regulatory credits from Bill at from federal and state. Tesla and space rates account for $15 .4 billion of government contracts in the last decade. After the last sale of some of the Tesla stock three years ago, people reckon he's now got 37 % of his net worth. Rich's man in the world is tied up in Tesla stock. So when Trump does some of his stuff that hits his share price, that is a really, really big deal. And he didn't hear it hard. Yeah. And they share so. So, well, Bloomberg reckoned that I think he had the biggest, second biggest single share loss in one day, 14%.

29:08And they reckon, so he's lost a lot of money in recent weeks. Bloomberg reckoned he added $100 billion to his wealth immediately after the election because Tesla was going through the roof, but that he's now lost an awful lot of money. So he's looking at that and he's thinking, maybe I need to wire my neck in a bit. The other thing you mentioned before and a lot of people have written a lot about this in the states and recent weeks is this thing about his drugs. And one of Trump's comments is, well, he longs got a problem and then they said, well, what is the problem? I don't want to talk about the problem.

29:40But it was obvious, I imagine, he was talking about this, this drug thing. So what you have a sense of when he's going through that crazy tweet after tweet after tweet is that he's kind of wild and he's out of control. Then he sort of, then he, then he comes down. But I think what could be of lasting difficulty for Trump on this is that what the, let's just assume for a minute that Musk does have genuine views about the way the economy should be run. So that when he went into to do doge, he honestly thought he was going to have massive power and he was going to be able to cut government federal spending by trillions.

30:15Yeah, two trillion, I think he talked about one moment. And he's failed. Okay. He cut 100 billion, I think he said a two trillion. And meanwhile, the bill comes along. This big beautiful bill so called and at his heart is a level of federal spending and federal borrowing and deficit and debt building that is off the scale for a fiscal conservative. And therefore, I think there must be part of him that thinks this is absolutely nuts and this is unsustainable. Add in, it's a China, I didn't know this route. Tesla's largest factory is in China. And as of last year, it's reckon they made around half of Tesla's vehicles.

30:54So the tariff stuff's kind of damaging him in all sorts of fronts. And we said last week, B .Y .D. have now overtaken Tesla. He probably was still in the when the tariff stuff was going on was probably still in the thing, well, I can, I can influence this guy, I can get this guy to the space where I want to. But actually, his economic vision is totally against tariffs. And so you've got a combination of tariffs. I was interested in this amazing German radio ARD that is a six -part podcast on Peter Till recently, which I'll talk about more when we do our thing on JD Vance, but it was really interesting.

31:30But what his part of his vision of the world, a part of more the Christian stuff, which is really, really interesting, is actually that we need more individual states. We need lots more countries because you have lots more countries. You can move your money around to different places and avoid tax, avoid regulation and so forth. And the tariff stuff, far from being America first, is actually damaging them, damaging the tech bro billionaires. And so it's a combination of these two things that I think has genuinely pushed musk off side in relation to the overall strategy. So, if you ever asked me the other day, if musk suddenly started giving loads of money to the Democrats, would I welcome that?

32:14Would I think that was a good thing? It's a very good question. I think if that happens, it will become a difficult question for the Democrats. I think my answer is no, because I think you need to expose what musk is and what he has done as part of this awful, Trumpian damage to the countries. You're complete right. And I guess that the problem politically with accepting grants from musk and somehow rehabilitating musk and the people that I can now see in my street who have swapped the sign that used to say I bought this test that before he went mad to I'm now driving this test, or again, now he's gone saying, is that if you let musk off the hook, you're basically allowing the entire Trump project off the hook.

32:52You need to explain that our problem with them is yes about policy, yes about communication, but fundamentally it's an ethical problem. It's a moral problem. Final thing to end on. So Elon Musk has been doing these very complicated calculations about how much a trillion is to try to explain to the American public how big a trillion is, but you can apply it to his own wealth. So a million seconds ago was made the 23rd, a billion seconds ago was 1993, and Elon Musk's personal wealth, which is 400 billion, is 11 ,300 BC. So every year is a every so million seconds takes you back to every second is a pound million second dollar is a dollar.

33:33So a million dollars or a million seconds is made 23rd, a billion 1993, and his 420 billion is 11 ,000 BC. And the reason one's doing this is that one tends to in one's head think the difference between a million a billion, a hundred billion is just incremental zero, but in fact, once you put it into time, you get a sense of what it means to say he has 400 times more wealth than a billion at that site, the difference between a billion seconds ago being 1993 and 400 billion seconds ago being 11 ,000 BC. So he's I think the point you're making is very, very, very wealthy. Insanely wealthy. And of course he's making the same point about the American deficit, which is just how big a trillion dollars is.

34:17Trillion dollars he worked out takes you back to 30 ,000 BC. So you can we draw my trillion, we're going to my deficit going into sort of four trillion plus. Yes, it's rising by a trillion dollars every 180 days. Well, talking of trillions of dollars, let's come back and talk about the UK economy, the spending review and events in Britain. Thank you very much.

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35:51Welcome back to the rest of this politics with me, Royce Shearth. I'm me, Anastakamble. And by the time some of our listeners are listening to this, we will have had the spending review. For others, they'll be listening just before the spending review. But I feel like he's been going on for quite a while. We've had huge announcement about nuclear today from Edmila Band. We've had hints and leaks about more money for teachers. We've had health going to be a big winner, defense going to be a big winner. And then you get the sense that some of them, particularly Andger Rayner, if it Cooper, have been arguing right out of the wire.

36:28Of course, Andger Rayner, let's not forget, we've talked about this a lot recently. One of the big pledges is 1 .5 million homes. If she's going to be struggling again on housing and local government, how to see what happens. So here's a question to start, as you've already. At the turn of the year, when we're doing our end of year, and you named Rachel Reeves as the worst politician of 2024, do you stand by that? Yeah, I do. I do, unfortunately. It's an unfair thing. I'm holding her to a very, very high standard. But I think the question of who the chance for the X -Chequer is and how they envision policy is probably the most important job in Britain at the moment.

37:10Because since 2008, we've basically been stuck in the doldrums as everyone knows. Right. Our innovations rubbish, our productivity is rubbish, our growth is stagnant, medium wages, so stuck. Highest growth in the G7 at the moment, or is? Yeah, there's pathetically pathetic sort of creeping ahead for a quarter. Just out of Japan. So what does that mean? It means that a government's come in that has said growth is absolutely central, laid out all these big missions. So breaking down barriers to opportunity, clean energy, superpowers, safer streets, and above all kickstart economic growth. And the question then that's handed to Rachel Reeves is, okay, what's the big idea?

37:52How are you doing? We know what that narrative was. For example, with Margaret Thatcher, like it all though, they had an idea. They took the idea of a geeky economist, Hayek. They simplified it, made it retail, and it was privatized, deregulate, low tax, etc. And everyone understood what the story was, and she communicated that story, and there was lots of different ways of illustrating it. She could illustrate in terms of how some budget, she could illustrate in terms of competition, efficiency, etc., right? Story. Big banks. Same with you guys in 1997. Maybe not quite a sort of radical as Thatcher, but far more refer to.

38:33But nevertheless, there was a story that we communicating, right? And you know, your toes will curl when I start over -appraising the will -hut and the Michael Barbers, the people who saw themselves as part of the kind of intellectual driving force, but nevertheless, we understood what it was. Broadly speaking, we could understand from Blair, from you, from Gordon Brown. Here was this thing, which was a third way. It was going to keep the best elements of neoliberal economics, but it was also going to be more general with investment. It had a story about equality and the way in which improving education would improve productivity and growth and create better consumer markets.

39:14We had a story, right? Since 2008, my goodness, there's been a real struggle for a story. There was George Osborne's attempt at a story which was austerity, which is now profoundly discredited. And if you look, well, it profoundly discredited. It would definitely. It would definitely. Profoundly discredited, certainly in the popular mind and in the way that most people think about it. Yeah, not a lot of the problems that labor are trying to address now flow directly. I think maybe it does, maybe it doesn't, but anyway, the austerity story has not been a popular one since David Cameron. And in fact, if you actually look at what happened is, and people have been teasing Tawson Bell about that saying, we've ended austerity when he actually posted a graph, which showed that austerity began to end really basically with Theresa May.

40:02If you look at the graph, it's an extraordinary U -shape. I think this menu of you is going to get us back just above austerity, but we're still talking about very, very tight. Tawson Bell's chart actually shows that what happened is that was about 560 billion under Gordon Brown drops down to sort of 500 billion in 2017. And then the conservatives begin to spend like drunk and sailors. Actually starts with May, continues with Johnson, continues with Suna, up to 580 billion. So above Gordon Brown by 2023. So they're taking over a world where already the Tories were spending more and more and more and you're absolutely right.

40:37Labour's intending to spend 600, you know, 650 billion pounds a year. And this is going to be a big chunk of the economy, government expenditure. But what we don't, and this is what I'm getting to, why do I think Rachel Reeves is no good? She's no good because we don't know what the story is. How, how is she generating growth? What's her answer? Now she's got ministers who had answers. Before Tawson Bell became a minister, he wrote a lovely resolution foundation which had a story. Have we heard about any of that yet? Do we know whether so to let's remind people at story was a story of that seem to be this is going to be about devolution, this is going to be about local industrial policy.

41:16Do either you or I know whether the Labour government is in favour of devolution and local industrial policy? They say they are and there's an industrial strategy coming along. But I'm not disagreeing with you at all about this lack of a big story. So the what that means is that when something like the Winterfuel payment comes along, so the Winterfuel payment was part of the story which was we're getting a group of public finances. But the politics of the Winterfuel payment became quickly very very toxic. So they've now sort of step by step. I feel like you know you've got a horrible sort of wound and they've slowly peeled off the plaster and it's still hurting quite a lot whereas I think what you should do those circuits they say right this has not been good it's incredibly unpopular.

42:03It's probably fed into the reform doing so well in the local elections, ripped the damn thing off. It never raised that much money in the first place. So the story of the spending review has essentially become all the negotiations. You know, Andrew Rainer's not happy, Vett Cooper's not happy, Bridget Phillips's a bit happier than she was all done like this sort of almost like a soap opera. Now that always happens by the way. That always happens around spending reviews because part of the process of spending reviews, although it was frankly I think counterproductive in our time. I think Gordon, if you were if he thought you were pumping out your demands publicly, it would probably turn not help your chances.

42:39And actually sorry to be fair to I think to Gordon Brown and George Osborne, they didn't actually allow the narrative around these things to be completely taken over by individual colleagues leaking to the newspapers their demands. I remember with George Osborne, of course, the one that would keep coming back, which is relevant to a retro Reeves problem was defense. So every year people like me would be out there saying we need to spend two certain on defense. But apart from that, Osborne was generally able to get to these big events with control of the narrative. Sometimes it went wrong, went wrong from his pasty tax.

43:18Many shambles, many shambles, budget. But a lot of the time there was a very, very clear story. And my goodness, Gordon Brown was good at clear stories. Gordon, you would always know by the time you got to the spending review what Gordon wanted to be the big theme out of it. It might be child poverty, it might be health, but it always be clear. And that doesn't negate the fact that by the way there was some really difficult negotiations along the way. I've actually brought you in a book rory because I've read it. I know you prefer a Kindle, but I don't, so I'm giving you this, you can have it.

43:51I think you'll actually enjoy it. It's very, very, very geeky. But it's actually, it's called the Art of Delivery by Michel Clement. And it's the story, the subtitle says it, the inside story of how the Blair government transformed Britain's public services. But it's about also how we matched the process of the spending review to the work of the delivery unit and the progress that was being made across parts. And I think I'm really looking forward to it. I mean, my sense on this is that sometimes it's a bit overblown, but that isn't really the key point. We can quibble about what the detailed impact was.

44:24There's absolutely no doubt there was a very, very clear story, which Michael Barber continues to tell to this day. Absolutely. Which we can see in this book. And when it was sent to me, I thought, oh, God, you know, heavy stuff. But actually it's very, very readable, not least because she pilfers my diaries like hell. However, what's the big story in this, which I think does relate to what's going on now? And I had sort of forgotten this, our spending reviews, once we had the delivery unit in there were very, very tied up with delivery. In other words, money that if you were going to argue for resources, Mr.

44:58Milburner Health, Mr. Blonker education, I want to see, I'm Gordon, I'm Tony, Michael Barber, David Miliband, and Andrew Adonis, we're part of the policy team. I want to see how that is being done. I want to see the metrics. It's very, very interesting. And I don't know what the what the process is at the moment. I don't know whether they're using the delivery metrics in the same way. But it's a very, very interesting, and it feels different to me this time. Well, it feels, and one reason it feels different is that what you're looking at in this book, and in 97, is a complete cultural moment where people were tired of that, John Major, and where you had this really interesting thing that we're picking up in a lot of our leading interviews of big labor beasts who had quite left -wing instincts, moving radically towards focusing on efficiency, delivery, productivity.

45:52So you can see with people like Blonker, you can see with people at Alamober, and this really interesting, um, creative tension between their commitment to social justice and their focus on efficiency and delivery. You can also hear, you hear, Alan Milburn comes out very well from Mr. Barbour's association. As he should, as he should, the greatest, the greatest section of state for health since a Niren Bevan. The other thing though that comes out is the sense in which you caught a moment where you managed to align economic commentators like Wilhut, tetracrats like Michael Barber, but also the civil servants, we interviewed Gusto Donnell, and he got it.

46:29And John Soars, for example, you know, very much had the sort of blare -eye attitude when he was coming in to do his stuff ultimately and I might say. Yeah, because I, you know, obviously, talked a lot of civil servants, and I think it is this, I think Keir's got a bit of a thing about the word narrative, and it sort of thinks that as long as you get the tech knock, you get the detail right, and by the way, you have to do that, but you always need a driving story about the country on top of it. And right now, you know, I was in the Channel Islands last week, and I was doing a few events, and one of the events somebody said, I'm really struggling to define brand Britain.

47:10And she said, you know, when you guys came in, it got, it became known as cool Britannia, but actually what it was about was modern, energetic, change, people, music. It was all that sort of cultural stuff came together. And now look, where I think it's, we're both being a bit tough on them is I think the, the climate at the moment is harder, domestically and internationally, I think it's a lot harder. However, that doesn't negate the need for something that knits everything together. Yeah, because what the politicians don't know at the moment is what their instincts are meant to be. You're absolutely right.

47:45What I'm being very, very unfettered to reef, and I'm absolutely certain that I would not be remotely able to do a good job in that role like that. She's facing huge headwinds. And obviously, this isn't an economy that has been stuttering along and hasn't managed to get off its feet. And we've had this incredible divergence with the US, which has now become much more productive, growing much faster. And we're still trying to get ahead around why, you know, what are we doing, wrong? And she's been hit by these thunder claps. So particularly from Trump, because it's not just tariffs, it's also of course, famously the fact that he's said he's not going to provide defense funding really to native partners.

48:23So she's having to do something that's basically never happened in history, which is to increase defense spending and the NHS at the same time in an environment of low growth and an environment of high borrowing costs. So really difficult. But, but, but, but, but this is where you really need great leadership, great vision, great narrative. And of course, unfortunately, the populist right are pretty good at doing that narrative. So everybody can tell you what Trump's about, right? He's about tariffs on low taxes. There's no doubt. And deregulation, my goodness, that guy deregulates his deregulating everything.

48:57Right. We can see what Javier Millay is about an Argentina. And literally he's there with the chainsaw. Hacking through. He may be torturing, but the narrative is clear. Nobody's done it. Doubt, you know, if you were what's brand -adjunctine at the moment, we can see see what Millay is trying to do, right? Macron's got a narrative, but it's again, Macron's got that. This is my point about politics being harder. But I think sometimes what people do, and this is, you know, you get locked in to the day -to -day management. What should we do about when to fuel? What should we do about Pips? What should we do about the farmers?

49:27And if you're not careful, that day -to -day becomes the driving mission of the government. And suddenly you realize you close to an acceleration and you haven't told that story about how the country's changed. Well, let me give you a micro example to try to bring it to light. So one of the problems that Britain faces is in our capital markets and in the stock exchange. So the London Stock Exchange not been growing fast, and quite a lot of companies listed on the London Stock Exchange now looking towards New York. Big, big famous example is something called Ys that used to be called Transfer Ys.

49:59Really interesting Fintech company set up 2021, I think, by an Estonian, important IPO because it happened. Absolutely. What have they just done? They've just announced that they are closing in London and they're instead listing on the New York Stock Exchange. Ditto, when we get on to UK quantum companies. So one of them has just a startup in Oxford just this week's been announced, has just been acquired by an American billionaire. But perhaps more interesting, a data center which was listed on the London Stock Exchange, being bought by an American company, taken private, taken off the London Stock Exchange.

50:34So what does all that mean?

50:39Well, the guy that's running the financial conduct was already because he's an example of the problem that retrofaces competent, technocratically good, but where's the big story? Where's his analysis? Where is the narrative of where is Britain going? Where's the narrative of why are U .S. capital markets performing better? Why is America more competitive? Why despite all the disruptions of Trump? Am I still hearing from European companies that go to the United States and are being told, come to us, we're open for business, we're deregulating, it's going to be low taxes, we're very friendly to capital, we're going to do big things.

51:17What's Britain's response to that? What's our story about why people should invest? So there's a very good piece in the F2 that we can from Andy Haldane, who was the chief economist at the Bank of England. So we're not talking a kind of radical lefty here, okay? And it did something very interesting, which I only used to do in when we were in government, which is write the story that you want to tell to the country on the eve of the next election, okay? And his story was about a program that Keir Starmer brought forward in the summer of 2025 called Lifting Lives, okay? He scrapped the two -child benefit cap.

52:01He restored Sure Start. He had a massive assault on what he called the digital divide. He did deals with tech companies and gave them tax reductions against the digital services tax to put computers into the hands of every child. Every school had a mental health clinician. And brackets, by the way, I'm hearing health is going to be the headline winner out of this spend review, but I think mental health is taking a backseat and it's not good. He restored school careers advisory services to the levels of 2010 based on a scheme that's been pioneered in Manchester. He had tax credits for companies taking part in financing local businesses courses.

52:41He had a expansion of degree apprenticeships. He got Gareth Southgate to head up a national mentoring scheme and restored youth services, football pitches, libraries, etc. Now, of course you can say, well, where's the money coming from? Well, have you, and that's why he's putting in the tax credits and he's putting in the deals with private companies, etc. But I think that's an approach which I think the government should sit down and write that. What do we want to say at the next election? What have we done? At the moment, it's stabilized economy. It's get more money into health. It's get the waiting list down.

53:16I get that. I get the micro stuff that they're doing. But at a time, you know, Keir Starmer, Mark Rutter yesterday, the head of NATO, General Secretary of NATO, and he's talking about 3 .5 % basic defense spending, GDP, 5 % total when you put in all the other uncillary defense spending. Well, that's a massive commitment. So, they are going to have to make some very, very, very big decisions on tax and spending. And back to my point about ripping off the bandaid. If the story you want to write in the next election, what are the steps towards being in the position to deliver all that? Do it now.

53:53And what it can't be, I suppose, just to sort of bring this all together, is just about accountancy. The chance that can't just be the kind of CFO balancing the books, it's a role about ideas. Yeah. Yeah. Final thing, I got approached by something called Big Tent Politica. Okay, this is a competition, Rory, which I think we should back. IUH 16 to 18, do you have a big idea to change the UK for the better? Enter the competition. Politica policy ideas for positive change. They've had a very big response, surprise, surprise, from private schools. So, can we get the state schools out there? We know we have lots of teachers and we have lots of kids.

54:33You check these guys out online, Politica, P -O -L -I -T -I -K. Can we see some of the entrance? Because I think ideas is what we need. No, and what I've said is there's part of the prize. So, what they've got to do is a thousand words on an idea, health, education, inequality, social media, whatever. And there are all sorts of things that you get for winning. But I think one of the things we should do, we will discuss on the podcast the winning idea. But it's going to be genuinely marriage -cruise. It's going to be the best idea. You're not going to bias, physically. You're not going to bias.

55:05You're not going to bias against the private schools on the basis of the idea. I'm not a judge, but whoever writes the piece explaining why they come to a benefit from getting rid of all private education, that is a big idea. Okay, well, let's, let's, we have, we said we're going to do the Scottish Violation, we said we're going to do a bit on reform, we'll do that in question time. I think we're just going to go back Greta, Tonberg. And I want to talk about cyber security. I know, you do that as well. Did you see Misha Gleines? You obviously didn't read the F -T here that we can add to you because you had Andy Haldane and Misha Gleines had an amazing piece about.

55:38Oh, good, oh, good, I'll look forward to it. Thank you. See you soon.