Transcription
We have Trump because we had Obama, and China's Pakistan's best friend.
Where did the general just have lunch? Was it in Beijing or was it in Washington with the president of the United States?
If Iran regime change happens and an American friendly regime comes, will that lead at least to peace finally there? No. What's next? Would you hand Maduro back to Venezuela?
I would not kidnap presidents of other countries.
One of the things about America's winning is the dollar is just impenetrable. No, I don't even understand that argument. Venezuela's not a big difference for the US economy.
Why do the markets jump 100%?
Head of Exxon Mobile said this is not an investable country.
There's been regime change done by America. How is this particular case different? What is it about Israel and America that's so unshakable?
I have to tell you, it's a bit of a mystery.
The bipartisan objective of all of this is that there must be some war happening somewhere in the world so we can sell ammunition.
It's not so simple as that. Professor Saxs, you've been on a whirlwind here in India. You came for a personal visit. I just learned. But you've come at a time where you are in demand because there's so much changing with America and with geopolitics and it's all obviously a long, lots of changes have been happening for a long time, but it feels like in the last 10, 15 days it's all kind of just come together.
Absolute craziness. Craziness of US attacks on Venezuela, seizing ships on the high seas, but then one declaration after another by Trump and by his cronies, if I may say so, that are absolutely extraordinary. And the US leaving more than 60 international organizations in one executive order. It's a kind of madness in the last week.
Yes. So, I've been following your work for a long time, and your interviews off late and even before. I think the one thing that I really enjoyed of yours was your conversation with a gentleman whose name I'm forgetting right now, but at the Horizon magazine where you painted this beautifully elaborate picture of the whole world in the last 100 years.
So I've been a fan of yours since then. But since you've done a lot of interviews, I thought we'll just structure this a little bit differently. And, you know, just bear with me and we'll see where it goes. I'm being a little bit risky when I say that, but I thought we can kind of start with what happened yesterday, right? I mean, Lutnik coming on a podcast run by techies, you know, and just kind of very casually saying, you know, India never, you know, Modi never called Trump to close the American deal. It just sounds so callous. It just sounds so insensitive to what trade means for people, for livelihoods. And what we did in today's the Indian Express did this morning was actually a detailed fact check. I mean, Trump Modi couldn't have called Trump. We were in the middle of Operation Sindor. We were striking Pakistan at that particular point in time. He said that trade deals going forward will only get larger. So the guys who come first get the least amount of tariffs. As you go the whole staircase also we fact-checked that's not the case. After Vietnam, they did smaller deals. So, I mean, just, let me give you a few thoughts first. I'm just hearing about this statement by Lutnik today like the rest of us, and it was in an all-in show. I've participated in that show in the past.
Yes, you have. And it's interesting that's not only a group of techies, that's the inside group to the White House. So people should understand that this is a tech-owned White House. They bought the White House. So, Lutnik feels very comfortable in this environment because this particular group within the broader Silicon Valley, for example, hosted a dinner in California where they sat Trump down next to JD Vance and they explained to Trump, this is your vice president. They created Mr. Vance, who came out of their finance world. Right. So, this is a group that is very heady right now. They're intoxicated with their wealth and their power. They have it. They own the media. They own the White House. They own the AI. The Pentagon is desperately after them. So, there's a kind of intoxication of power right now. And that's why a secretary of commerce would go on a show and just casually make a statement. Hey, I don't have to be careful. I run the world and I'm with my friends and we're the small group that runs the world. So, the mindset shows. Second, to say, well, the relations between the two giant economies of the world fell apart because the prime minister didn't make a phone call. It's of course absurd and at the same time, maybe even real. Real in the sense that it's not a false statement, but a measure of how unreal our reality is right now. We have a narcissism in Trump and a power in the executive branch to do things by executive decree, by presidential order. That's extraordinary. Instead of systems, negotiation, diplomacy, technical working groups, the prime minister should have made a call. So, I don't even dispute the statement, but what I would underscore is how completely bizarre it is and how it shows the collapse of any systematic governance in the United States right now. Things that are happening, attacking Venezuela, leaving UN agencies, this is the work of a small group of people depending on a base in the US of maybe a third of the population or so that thinks they can do things on their own and they're testing every limit to see if there are any remaining limits. Then there is the substance of all of this. What kind of trade deal is the United States capable of making a trade deal? You look at the way that India has been completely and arbitrarily abused this year. 25% reciprocal tariff, 25% penalty for buying oil from Russia when everybody is buying oil from Russia. But we want to punish India for this in particular. And then specific sectors, steel and others hit by the United States. And then just this past week, Trump saying, "I'll go along with my least favorite senator in the United States, Lindsey Graham, who is, you know, really a not nice man, not a smart man, completely irresponsible, wants to put maximum pressure on Russia." And so now we're hearing about 500% tariffs that are going to be slapped on India. This is what a phone call is supposed to be about.
Yeah. The United States and a phone call when we were literally at war with Pakistan.
Did Trump end that war?
Yeah. Trump ended that war, and that became an issue that we couldn't actually, that became a diplomatic crisis of its own that he's saying it to end that war. So then it was more loaded for Modi to make that phone call. Lots of things you said, and you know, we can go many directions here, but you, one thing that you've always said is this military-industrial complex that America, the American economy, the American sort of political system actually is catering to and living for. Is Silicon Valley part of that complex, or is it now something? Is there an addition to it now? How does what is the relationship between Silicon Valley and?
That's the new thing, actually. The advent of AI in weaponry, and it's pervasive. Of course, it's pervasive for intelligence, for geospatial intelligence, it's absolutely fundamental for autonomous weapons, for the drone warfare that is being quote perfected in Ukraine and in Gaza right now. The Pentagon, which used to kind of run the show, and the old guard major military contractors, Raytheon or Boeing, General Dynamics, and so forth. They're now taking a back seat to Musk, obviously, SpaceX, which does the heavy lifting of the Pentagon's needs in space, to Palantir for facial identification to kill people, and for many, many other things. And so my feeling is that we have now a military-industrial digital complex. Silicon Valley is extremely powerful in this because the Pentagon does not have in-house capacity, of course. So everything is being contracted out, and all the big tech companies now have this extraordinary position. They dominate their sector. They are all scented billionaires in US dollars. They own the mass media, control the daily discourse, whether it's on X or whether it's on Facebook or whether it's on actually the old guard media like Bezos's ownership of the Washington Post, or Ellison's increasing media empire. So they own the mass media. They bought the White House. They have the inside track on the White House. They have the security state basically begging them for the technology, the contracts, the help. It's an extraordinary amount of power and an extraordinary giddiness. And they're also personally enriching the president and his family at the same time that he is enriching them. So there's a personal angle in all of this as well.
I can't remember an analogy. I don't think that JP Morgan or Vanderbilt or Rockefeller, though they were as rich as rich can be, had anything like the commanding power of this group. I should add one more obvious point, which is that they watch every keystroke we make and they listen to every word that we utter, whether it's through our watch or through our phone. And so the surveillance and the loss of privacy is also pervasive.
So, what an incredible combination of forces that has suddenly come on the scene in the last 10 years. It is completely unaccountable. We don't, I don't know how it operates in any detail, though I try, but you can see it pervasively everywhere.
But I don't think that publicly it seems as if they're all on the same page, right? I mean, maybe like just at one dinner, that famous dinner where, you know, Mark Zuckerberg was caught on a hot mic and, you know, saying, "I hope that was okay that I..." You know, that was a very, that was an incredible moment for everybody. But, you know, Google, Meta, you know, not the Palantir necessarily, but the other traditional big tech, when I say traditional big tech, I mean like these names that, you know, we're talking about, the Googles and the Facebooks and the Amazons. And, you know, they have actually had an up and down relationship with the American government, unlike Boeing. I mean, across the board, who, it's a bipartisan support for Boeing has always been there in American.
I think with Trump, there's no up and down, it's just up right now. Congress is supine, barely exists. Trump is buddies with Musk, with Peter Thiel, with the insiders of all of this group. Again, I don't know all of the different personalities exactly. And of course, they're competing with each other. Who can get to the moon first? Who can get to Mars first? Who can do whatever first? Who can get to a trillion dollars first? But this is a lot of raw power.
The personalization, right? The this massive personalization of the office of the president. Is that something which started with Trump, or could we go back even beyond, you know, even before Trump? I mean, you know, there was always this thing that the office of the president is institutionalized and the president is the face of this institution, which is the office of the president. It just seems to me now as an outsider looking in, and I was studying in Los Angeles for a long time. I was covering the Obama campaign for my school newspaper and I, you know, it struck me also there that there was a lot of personality making decisions even in Obama's White House, which wasn't the case before that. So, has that been something which you see as a trend?
I think there are two very important things to distinguish, but they've gone along with each other. The first is the end of constitutional control by the representative branch over foreign policy. That began immediately after World War II, or it began, of course, during World War II, but with the 1947 National Security Act, which created the Defense Department, now the War Department, and which created the CIA. Basically, foreign policy then became the purview of the executive branch. Okay. And in January 17, 1961, in his farewell address to the country, Dwight D. Eisenhower, the president, who was the Supreme Allied Commander in World War II, who was not only a general but the general in World War II, said, "We are our institutions, our core democracy is highly vulnerable to the military-industrial complex." That was quite a warning, a warning by a general to the public. It means that that process was very, very far advanced. So the wars in the last 50 years have been executive branch wars. Congress, around the edges, has sometimes tried to say, "No, don't do that," or "We restrict you." But basically, over the last 50 years, the constitutional bounds have broken. At the same time, the political system has become more and more money-drenched. And that is also a deliberate set of decisions that were taken to end restrictions on corporate giving to campaigns. So we're up to campaigns that are now 15, 20 billion campaigns. Elon Musk, you know, gave away a million dollars a day to someone who won some lottery when they were campaigning for votes for Trump in Pennsylvania in the 2024 election. So, it's a money game. And Silicon Valley bought, effectively bought the government, put Trump in power. He's got other backers like Miriam Adelson that he absolutely listens to because she gave hundreds of millions of dollars to make sure that Trump is every moment aligned with Israel, and that's serious money associated with that. If you do that long enough, things also become personalized because if you're operating on executive decision-making, you don't have the normal deliberative checks that you have in investigation in Congress. You have a report. We used to have reports. Governments told us that they were going to do things, or they had long hearings, and they were quite interesting hearings, and people testified. We don't have any of that right now. I mean, some of the formalisms remain, but basically, this is executive branch. Quantitatively, when you come to the Trump administration, there are no laws anymore, almost at all. Trump and Congress passed the fewest legislative acts in 2025 of any modern Congress. And Trump issued the most executive orders of any president. And every order that I look at, because I'm looking at a particular subset of them like the tariffs, all start with "by the powers vested in me as president of the United States" and invoking the emergency powers.
Yeah. In the international emergency economic emergency powers act. This is all declaration of one emergency after another, personalized to Trump. And we hear, and I believe it, that whoever's in the Oval Office last gives Trump the idea, you know, "Mr. President, Greenland, you should own Greenland." And Trump is not a highly sophisticated person, from all that I hear from a lot of people who meet with him. And I think that this personalization with this extreme personality of Trump, with the withering away of constitutional control, with the control of Silicon Valley, it's quite a story.
And what happens now? So, how, how would you advise, like, you know, with India's trade deal? Modi should call Trump. Now we hear from our sources in India that they kept moving the goalposts. They all the teams work, they come to an agreement, and then, "No, we don't," you know, and then the other side says, "We don't want that anymore. Now the goalposts have changed." That keeps happening, and that's based on the whims and fancies of the president, right? So, how does, how would you advise India to manage that in this scenario?
I wouldn't, because I wouldn't chase that phantom. I would rather that a great power like India, together with other great powers, behave like great powers, which is, we would like peaceful, respectful relations. We would like to negotiate, and we would like to do this properly. And I would like the United States to be run by grown-ups, frankly. So, I believe that India is, I believe with Trump's specific personality also, that any concession he views as weakness, to demand more. But in general, we can't have a world run where it's a phone call here and a phone call there. Nothing's going to stick out of that anyway. And we need systems. We need transparency. Prime Minister Modi needs to be able to return to the politicians in this country and to the public and explain, "This is the process. This is how an agreement was reached." And I, of course, believe at the basis of all of this that the United States is not the be-all and end-all for. It is for India, for the Indian economy. I think for India and for all major fast-growing economies, it is the emerging and developing countries that is by far the most interesting part of the world.
What's happened is first, the US and Europe are the slow-growing parts of the world. Europe doesn't grow anymore. It may not again because it's so divided and unable to act in a coherent manner for the moment. Germany isn't having a resurgence economically. German industry is not competitive, faces extremely high energy prices, is being outcompeted by China, and Germany's hope is to team up with China. That's what's starting to happen. And Volkswagen, for example, is saying the only way we're going to be able to make cars that are competitive is if we're using Chinese technology and advancing. Right now, other than that, no. There would not be a German recovery. There would be a continuing decline of the German automotive industry, which cannot compete with the Chinese automotive industry. Eastern European, the story is different. Poland and the smaller countries there, there seem to be a lot of growth. Eastern Europe, it's too small. Eastern Europe's success was that, and I was there to help that as an economic advisor, was that Poland, Czech Republic, Hungary built up industry that was supplying German industry. Germany was the center of the European economy. If Germany goes down, all of those countries around the edge suffer. Of course, they used to have an eastern trade as well to Russia, which they severed, which is completely suicidal in my mind. And but they've done it. And so Europe is therefore in economic crisis. The United States is not in the same kind of economic crisis, but is in a bubble because the AI is not going to, the AI valuations will not be justified because China is going to find out much cheaper ways to do a lot of this anyway. And second, the US has all of its other governance problems, including a budget deficit that's 7% of GDP, the move away from the US dollar, and all rising interest rates, a big inequality of income, a new epidemic of greed among the super, super, super rich. And so all of this means the United States is not in good shape. Also, then you have the 85% of the rest of the world, which is everything that isn't the US, Europe, and depending on how you count, maybe you could say Japan and Korea. But in any event, to my mind, India, China, Russia, the BRICS should see that 85% is where the huge growth is going to come, okay, in the next 30 years. India, of course, will be the fastest-growing large economy in the world, but it's not because it's selling its traditional items to the United States. It's going to be selling them to Southeast Asia. It's going to be selling them to Africa. It's going to be selling them to Russia, to China. So use the BRICS because that is where the big markets are going to be fast-growing.
So I thought we can break this up into a small game because we're always talking with anxiety about the unpredictability of this president. And the whole world is like, when is this going to end? So, so let's just assume we have fast-forwarded three years and the Trump presidency is over. You are now the president. Okay. And I'm going to just list down a few things, right? And you tell me, what is it that you think you can reverse? What is it that you think is too far? You can't reverse it anymore. And if you do want to reverse it, how? If you don't want to reverse it, why don't you want to reverse it? Right. So, let's start with the whole tariff regime. Three years later, you're the president. Would you want to reverse it?
I'm hoping that within days of our discussion, the Supreme Court reverses it.
Supreme Court has said they're not going to give a decision. They've held on right now. They said they're going to.
Well, they just said they weren't wouldn't give a decision yesterday as we're talking, but they will give a decision. They're they're not going to just.
And if they agree, if they say it's allowed, if they say it's legal.
Oh, if they say it goes, then of course I would reverse it. I think this is madness from an economic point of view.
And and let's get deeper to that because there is a view that America's actually winning in this tariff war. There's a 1% of GDP is coming from tariffs, that the deficit, that the annual deficit has dropped from 6.9 to 6%. There is a view amongst the voters there, or that there that that actually it's working for America.
It depends what you mean by working. The tariffs are arbitrary, regressive, not creating any kind of real industrial policy, not leading to new growth of employment in manufacturing as he claimed. Disrupting world trade, making everything less efficient and more uncertain. And I would rather have taxes other than these arbitrary tariffs in place. So the fact of the matter is Trump gave a big tax cut for the corporate sector and for the rich and then put these tariffs on. So to my mind, that's not sound fiscal policy. None of this from an economic standpoint, efficiency, industrial policy, the world system, long-term US economic growth, employment patterns, fiscal policy, economic justice. None of it to my mind makes sense. Which is why we had a consensus in the United States for many decades that open trade was a preferable policy, and that if you wanted to do something beyond that, well, then you would use specific industrial policy tools to do that. And that I think is the right answer. Of course, I'm an economist. It goes back to Adam Smith. Next year, Adam Smith's great work, The Wealth of Nations, will be the 250th anniversary. I think it has withstood the test of time, and that's what I would revert to.
So, are you saying that whatever economic growth that they're that the MAGA supporters are citing or are getting sort of are following is short, is too short-term?
It's a, there is the one thing that has happened that has underpinned the consumption this year is a high stock market. Yeah. So if you interpret that as a signal of a huge rise of American profitability in the future, you take one view. If you view it as a tech bubble, which I do, you say, okay, that's the one bright spot. But if you look at employment data, if you look at wage data, if you look at how people are hurting in the United States, by the way, if you look, you mentioned the MAGA base. The MAGA base is a third of the American population. Trump's approval rating, depending on the week and the survey you look at, maybe 40%, maybe 38%. This is not a popular president, and this has not been popular policies, and it was not voted by Congress because it never would have been voted by Congress.
The fact that the US dollar is the world's global currency, and you know, I had Larry Summers a couple of years ago, and I asked him about alternatives, and he gave me a very catchy line. He said, "Look, where will you go?" He said, "Where will you go? Japan's a nursing home, China's a jail, and Europe's a museum." Where do you take your? And so, is that something which, and you mentioned it earlier, but I wanted to kind of elaborate on that. One of the things about America's winning is the fact that the dollar is, there's a view the dollar is just impenetrable. And if it does get, and if it is shaken by alternatives like crypto and gold, it's not shaken by some other currencies. How do you think about that?
Completely wrong. In 10 years from now, the renminbi will be probably, I don't know, 15, 20% of world transactions. It's moving very fast in that direction. China is the world's lead trade partner for perhaps, oh, at least 100 countries, if not 125 to 150 countries in the world. China saves a lot more than the US. China's interest rates are lower than American interest rates, and the US has weaponized the dollar.
Yeah. And, frankly, I think it would be foolish to continue in dollar transactions knowing that that is precisely the instrument that holds the rest of the world by the throat. And so that, to my mind, is why in India's BRICS presidency, it should support a BRICS currency, not a BRICS currency, but non-dollar settlements as a routine matter. Why should India say, "Yes, we'll allow ourselves to be punished arbitrarily by any whim that the United States wants because our banks are vulnerable to being cut out from SWIFT?" Why? I don't see it. I don't think China's going to stand for it. I don't think Russia's going to stand for it. I know Brazil doesn't want to stand for it. Why should India agree? Yes, we'll allow ourselves to be abused this way. I would not do it.
But it's logistically very tough because balance of payments with any country you're buying oil from, they don't need your currency. So, how do you, how do you actually bypass the dollar?
I don't understand the argument about this at all because I'm a monetary economist. I've helped to design national currencies of the world. There's no problem in transacting in any currency in the world. You don't need the dollar to do it mechanically. It's not hard to settle in rupees. It's not hard to settle in rubles. Of course, the question then of the exchange rate and how it's managed and whether it's stable, and do you have a lender of last resort behind it, matters. There are network economies of scale in money. That money holding assets or denominating transactions in a particular currency is better if others are doing it. And that's why there's a certain lock on things. The pound sterling lasted a lot longer than the British Empire did. It finally gave up in 1947. But the dollar hangs on even as the US share of world trade continues to go down. But at this point, because of the weaponization of the dollar, there's now active movement forward.
Yeah. I believe that China will increasingly and systematically internationalize the renminbi in the coming years, and it's taking steps to do that. The China Chinese interbank payment system, CIPS, is a part of that. The BRICS bridge is a part of this. So, at a technical level, this is not a problem. If rupees are convertible into rubles or into renminbi or into other currencies, and they are selling things of interest, there's no problem. And that is how the world's going to be.
What is the US, the idea which is now a meme around the world that, for example, the US has invaded Venezuela to keep the petrodollar in order? That the dollar is used is not good economics, by the way. And the whole idea that the US dollar depended on the agreement with Saudi Arabia and to price oil in dollars is not the basis of the US role. Of course, it added to it, but the basis of the US role was goes back to the founding of the Bretton Woods system. And it goes to the size of the US economy and to the efficiency of using dollars, the depth of the US financial markets in London and in New York, their unique role, the geopolitics, definitely. But all of the things which gave the dollar its dominance are fading, especially the misuse of the dollar.
So, is it in India's interest to empower China and Russia by trading in that currency, by encouraging trade in that currency?
Yes.
And you don't, and China's Pakistan's best friend right now, everybody, you know.
Who's best, whose best friend is Pakistan? I'm a little puzzled. The which general, where did the general just have lunch? Was it in Beijing or was it in Washington with the president of the United States?
You know, we're talking post-Trump. We're talking post-Trump.
No, I don't even understand that argument. Who brought down Imran Khan? Who has emboldened the Pakistani military in the last three years?
It's all been US, more than China.
Well, wasn't it?
Yeah. It has been. Biden who brought down Imran Khan. Donald Lu, that man must go. And Trump is playing his Pakistan game. So this idea that this is a China thing.
So we can trust China more than America.
It's not a matter of trust. It's a matter that India should say, "We need grown-up superpower relations with China, stable, and especially to have our mutual regard so that the United States isn't dividing and conquering and isn't bullying us." This is extremely important. Here are the two largest countries in the world, and by the way, by mid-century, will be number one and two in the world economy, overtaking the United States. They're on a border with each other which has not been stable and easy, and where the problems go back to 1914 and Mr. McMahon. And now the two superpowers should solve that problem, not let the legacy continue to disrupt this, where the common interest of India and China in facing an unstable US and in protecting an international order are paramount. To my mind, this is a bilateral issue with India and China. And I say on the Chinese side, just to be absolutely clear, all the time, support India as the sixth member of the UN Security Council permanent seat. That's extremely important. Pro-China, so don't delay, because the real problem is not India versus China. The real problem is that the Western imperial age is over, but we don't have stability right now because of the United States.
I want to come, I want to spend more time on this, but I want to cover a few more things. So, we'll come back. But you mentioned Maduro in this piece. Again, back to my game, your sort of the president. Would you hand Maduro back to Venezuela?
Well, I certainly would not keep presidents. I would not kidnap presidents of other countries.
This is a. But now that it's done, can we reverse that?
And second, I don't know if you know, three years from now is a long time on that particular issue. But let me just say, I do not divide the world between democracies and autocracies like Biden did. I don't believe that you say, "I don't like your government, therefore I intervene." So, I don't really believe in any unilateral actions by any country vis-à-vis any other country on these grounds, other than through the United Nations. Yeah. And so if there's really a problem and if there's something desperate going on that is a threat to the global peace because it's massacre or something else, then go to the UN Security Council and get the major powers in agreement that the abuse should stop. But the claim, "I don't like him, he's a drug dealer, he's this, he's that," that is not the business for the United States to invade. That's just a narrative game.
Anyway, it's shocking. I mean, the whole world was shocked by, I mean, you know, what stops America if he has a fight with Modi coming and picking up Modi? I mean, it's just, it's just bizarre, but he's done it. So, now I just want to understand what's next. Um, for some reason, Venezuela's stock market was up 100%. After I was, I was very surprised by that.
Um, I would like you to also decode that. Why did that happen? And has the world, I mean, has America, you know, whole the whole MAGA base has been retreat like, "Don't get involved with the world, just focus on your country and your economy." That's what he claimed he would do when he started off. But he seems to be going instead, going out with the opposite happening, and his voters seem to be liking that.
I don't know what his voters like or not. No one cares about the voters in the United States. Nobody. Okay. Not in foreign policy. No one's been asked. I don't even know if opinion surveys have been done on any of this, but none of this is because of American public opinion. Okay. Or his political base. So, this is now.
Is it for the, is it good for the American economy at least that he's got so much of oil now that needs to be explored and it's, you know, it's thick oil and it's?
No. Anyway, the numbers, even even if you took the most rosy and optimistic scenario, this is a small bore stuff for the United States. Venezuela's not a big difference for the US economy. But it's interesting.
Largest oil reserves in the world. That's what we hear.
Yeah. Very expensive and and uh expensive to explore and and yeah, because it's this is heavy sludge. It's a molasses consistency. It's heavy sludge. And at the White House meeting with the oil executives yesterday, the head of Exxon Mobile said, "This is not an investable country."
Oh, I see. Okay. We don't. Okay. Okay.
This I could say, um, this is crude stuff in the other sense, but but this is not how economies.
But how is it different from all the other times there's been regime change done by America? How, how is this particular case different? Because it's happened many times in the past. Usually, when the US kills another leader or kidnaps another leader, typically.
Is masked with some humanity.
Typically, it gives an excuse.
It gives an excuse. Yes. Here it's just bravado.
Of course. Last week, the excuse was drug trafficking. They don't even mention that anymore. Now it's just oil, oil, and power is right, and we can do whatever we want. And and interestingly, though I don't know every detail on this, the original arraignment of Maduro under Trump's one term said that he was the head of the drug cartel. And now they've dropped all of that because somebody told them, "No, that phrase of the drug cartel is a slang. It doesn't actually mean a group." It was just a slang of like we say the blob in Washington. The blob isn't a formal organization. It's a slang. And so these people are stupid. Honestly, aside from everything else, but you could say, "Oh, come on, Jeff. That's just a." And my wife, when I say they're stupid, she hates that I use the word stupid, but they're really stupid.
But why are they stupid? Because they're so arrogant. Nobody calls them on that.
Yeah. And so they say these things, "Oh, he's head of this cartel that doesn't even exist." And then when they throw it out, they get away with it because it's such a noisy world.
Isn't it in a sense refreshing that there's no cloak of humanitarian excuses for this regime change? It's very clear, and he's openly saying it's for the oil.
Yeah. Yeah. No, no, it's. To that extent, it's a. We have a deputy chief of staff, Stephen Miller. Oh, he's really a piece of work. Um, and they call him Trump's brain, which I'm inclined to believe. Um, and he's absolutely out and out thoroughly vulgar. And he says niceties in this world like international law. What counts is power. Okay. This is a kind of drunkenness of power, and we have it right now. It's in Silicon Valley. It's in the White House. It's in Pete Hegseth coming from Fox News to run the Pentagon, and they're having their wars and they're bombing countries and so forth. So, there's a bit of a drunkenness of power right now. And that does not go well. And these days, I often make an analogy to one of the most famous episodes of history of the West, which was the Peloponnesian Wars. A lot of people have referred to that in recent years for many analogies. But one of them is that in 416 BC, in the Peloponnesian Wars, the Athenians told this little island state of Melos in the Aegean that "You side with us, or we kill you." And the Athenian general made a famous expression, which is repeated throughout Western history, that "The strong do what they can, and the weak suffer what they must."
And. This is how Stephen Miller talks right now. Exactly. This is what Trump believes.
And what's interesting is that was in 416, and in 404, the Athenian state was defeated. So, it was arrogance. It was incredible arrogance. Where did the arrogance lead? It led to defeat.
Correct. So, when I watch this bravado, this blustering, these threats, the commerce secretary saying, "Mr. Modi should have called our president. Doesn't he show respect?" This is completely self-defeating arrogance.
But is it also the fact that this version of power, and his definition of power, is the reason I feel that Trump seems to have a lot of respect for Russia and China, in spite of all the differences? There seems to be a certain sense of respect. And is he trying to just divide the world up as, "I'm the biggest guy in my side of the world. Europe, you take care of." Let Russia manage Europe. I just want my border with Russia taken care of. So, I'm going to take care of Greenland. I'm going to invade and own Greenland. And China, do what you want with Asia. Is he thinking of the world like that?
It's very interesting that there are glimmers of that. That we'll take the Americas, and you take your part. And but it's not quite like that. First, it really is, "We'll take our part. Canada's ours. Greenland is ours. Panama is ours. Of course, Venezuela is ours. Colombia will be ours and so forth." So, the Americas are ours. But just a footnote, the Middle East is also ours, because we have Israel, and everything around Israel has to be friendly to Israel because we're Israel's protector. So, that all goes all the way to Iran. That includes all the Gulf countries because we have military bases all through the Arabian Peninsula. We have to control Yemen. We're going to control, of course, the Red Sea and so forth. So, we extend there as well. The Caucasus, you might think that was in Russia's neighborhood, but the Trump highway is going to cut through there because really Turkey is part of NATO. And so Azerbaijan is ours. And we need that corridor because that has to make sure that Iran is there. So, and then Southeast Asia can't be too careful. Yes, it's in China's area, but these are our allies, and this is our alliance. And ultimately, ultimately, we're going to have that showdown with China. This is the big issue. So, it's not really like it might seem right now with his good buddy Xi Jinping. It is really still lurking in the American mind. Yes, global hegemony. It's a little harder than we thought, but it's not over yet.
I see. That's interesting. And Russia and China having a lot to do in Venezuela, just kind of being expansionists themselves. Russia expanding into Ukraine, China in the islands around the Philippines, Chinese presence in Venezuela. You know, is that something which needed to be checked from a.
If China or Russia had a military base in Venezuela, I would say that would be a problem. Trading oil after the US has completely sanctioned the hell out of Venezuela, no, I don't see that as a problem.
Why do the markets jump 100%?
Because the US has crushed the Venezuelan economy, and then they think that the US is going to stop crushing the Venezuelan economy. It's very important to understand from 2015 onward, but especially from 2017 onward, the US has deliberately destroyed the Venezuelan economy. Their only export of value was oil. So it was surgically possible to destroy the whole economy by destroying the oil sector. In 2017, they said PDVSA is now under sanction. Nobody can do business with PDVSA. We confiscate the reserves. They don't have financial rights in the dollar world. And oil production in Venezuela fell 75% in physical terms between 2016 and 2020. And that put the economy into total disaster. If you look at the official IMF data, GDP per capita in purchasing power terms fell 62% between 2016 and 2020. They crushed the economy. What people say now is, "Oh, Trump's going to end that isolation." Stock market jumps because there could be survival again. So the US can put on the pressure. It can take off the pressure. The US drives this. This is what's happening.
The opportunity to win a Nobel Prize.
Well, that was part of the game.
Was it, was it a pleasant coincidence, or was it, do you think engineered to give that person legitimacy when?
It was a deeply unpleasant connivance. I call it the Nobel War Prize, not the Nobel Peace Prize.
So that's how far the deep state can go.
The deep state absolutely penetrates wherever there are military bases. Wow. And that includes Norway, certainly. Wow. Because that is, you're an occupied country if you have a US military base. If you have a US military base, you have a CIA post there as well. If you have a CIA post there, it means your media, it means your civil society organizations are all penetrated. Also, if you want to do the checklist, check whether the National Endowment for Democracy is democratizing your country as well, because this is what the US is doing in the deep state part. This isn't Trump's invention. This goes back decades.
Is America involved with in Iran right now?
In Iran, of course.
Bangladesh.
Probably. Probably Bangladesh. I don't know as many of the facts on the ground. I did know a lot more about Pakistan and Imran Khan. And there, I think it's as clear as can be. That's as clear as can be that there's no question. But Bangladesh, also, we believe that that I think in Bangladesh, it's quite likely, just given how things went down. This is how it happens. Okay. In Iran, there's no doubt. Even look, the former CIA director Mike Pompeo, in his New Year's tweet, sent his regards or made some statement about all the Mossad agents running in the streets of Tehran with the demonstrators.
Yeah. That I'm not saying that's Israel, but I'm saying in American involvement in that.
Mossad means America. Come on. This is.
What, what makes Israel's relationship with America so bipartisan? I mean, whatever happens, America is there for Israel. How, like, whatever, I mean, you know, and I was there actually, I was in, I covered Netanyahu when he was in LA.
What is it about Israel and America that's so unshakable?
I have to tell you, it's a bit of a mystery. Of course, there's the money, there's the lobbying, and all the rest, but still, it's even more than one could imagine.
See, like superglue, no matter who comes and goes.
Exactly. There's there have been a lot of stories in the last year which are quite remarkable that I didn't really know the details. But in 1962, '63, when Israel was developing the bomb, Kennedy was trying desperately to stop Israel.
from developing a bomb. He really believed in non-proliferation. And it turns out, and now it's so thoroughly documented, it was the CIA that was undoing Kennedy's efforts. And it was especially led by James Angleton, who was the head of counterintelligence, who was facilitating Israel getting the bomb within the US government itself. And contrary to Kennedy, of course, James Angleton is the same one that when his safe was opened after his death, there were the papers showing that he had been running Lee Harvey Oswald. So there's a lot that we don't really understand.
The larger objective, the bipartisan objective of all of this is that there must be some war happening somewhere in the world so we can sell ammunition. Is that as simple as it gets?
It's not so simple as that, though. There's a business side definitely. I don't think it's only business. I think it is domination. Uh, there are a lot of motivations. But basically, the United States, like any would-be uh grand empire, wants to have its way. It wants to control the politics. It doesn't want noise. It wants to be able to impose sanctions. It wants other prime ministers to call them, not for them to call other prime ministers. And so this is a mindset that is quite deep. Again, learn from the English, learn from the British Empire. Um, and uh, to this day now with a Trumpian version of it uh in operation.
If Iran regime change happens and an American-friendly regime comes, will that lead at least to peace finally then?
No. So it's in their interest to keep a conflict going.
It's not to keep the conflict going. It is the hubris that uh has led to a hundred or so regime change operations that um where the US seems to believe it will run things afterwards. I don't think it was to keep violence in Afghanistan that they invaded Afghanistan in 2001. I thought they felt they'd get it in order. I think they felt that they'd get Iraq in order. I think that they felt that Bashar al-Assad in Syria would fall within a year or two when Obama tasked the CIA to overthrow um the Syrian government. I think that they believed that Libya would fall into their lap with all the gas uh in 2011 when they pushed out Gaddafi. I think uh that when they broke Sudan into, they felt that South Sudan, which would now inherit all the oil, would fall into the Western lap. So my feeling is not that they are out for ongoing violence. My feeling is that they're out for control. Of course, if you have control, then they buy your military equipment also. So you have a readymade market. Okay. But I don't think that the idea is constant war. I think the idea is full control.
Okay. Uh, Europe-American relationship. Uh, would you reverse that? Can you fix that now?
I would end NATO.
You would end NATO?
Yes.
I Okay.
NATO is uh a dagger aimed at Russia.
Uh, that became its purpose after 1991.
Mhm.
NATO was established in order to uh prevent a Soviet invasion of Western Europe.
Okay.
Um, when Gorbachev disbanded the Warsaw Pact, >> the United States should have ended NATO.
Okay.
In February 1990, the United States and Germany promised Gorbachev that in the context of German reunification, NATO would not move one inch eastward. That promise was immediately revoked uh with the end of the Soviet Union and then denied afterwards in our constant narrative, but it's absolutely real. And why did NATO expand eastward? Because that was American control. And Zbigniew Brzezinski, our geostrategist uh in 1997, explained that if you control Ukraine, then Russia becomes a third-rate power. It's blocked in the Mediterranean. It's blocked in the Black Sea. And so Ukraine is a pivot uh and very important to control. And that's why NATO was to move to Ukraine. Russia wasn't dumb and said, "No, you won't move to Ukraine," and that's why we have the Ukraine war. So I think...
America lied, broke its promise.
And Germany, by the way, also, let me add, because Germany played a very bad role in this. And because the promise was made in the context of German reunification in 1990. So I would end NATO. Uh, I would not have a... I would not invade Denmark. I would not invade Greenland. I would not make these outrageous claims. I would uh encourage the European Union and Russia to have a collective security arrangement. I would uh extend uh France's nuclear arms to a nuclear security umbrella for the European Union. I wouldn't be naive in that, but it doesn't take much to have a nuclear deterrent, and there should be a nuclear deterrent. But beyond a nuclear deterrent, Russia is not going to invade Europe, except if there's an incredible ongoing war. Uh, and so this is what really needs to be done.
So, you're saying America, you will want America to be a global cop, but also have other global cops.
I would like America to be a responsible country, reflecting its power uh, but under the UN Charter. So I've said the following.
Nobody has faith in the UN anymore. Professor Sachs, one institution which everybody's kind of given up on. I don't know.
Yeah.
You keep going back to the UN, and I, but but I, but I just, whoever I talk to, just it's like a...
Right. Uh.
Considered a waste of time. I mean...
That is the feeling, and that may be correct, by the way. Um, but the alternative is, I believe, devastating. So it may be like one would have said about the League of Nations in the 1930s, "Well, it's a defunct organization."
That may be true.
Not satisfying. That's not an answer. I, I, I often say, one of my closest intellectual counterparts is John Mearsheimer, who's our leading realist thinker. I like him enormously. We have, we had him in our office last year.
We, we have a wonderful interchange, and we're friends, and I respect him enormously. But I always point out his great book is called "The Tragedy of Great Power Politics." And I'm saying all the time, we can't accept tragedy. So that can't be the last book on this subject.
Correct.
And that's why I say we should save the UN.
And in the, in a multipolar world, which is what you're kind of thinking about?
Yes.
Um...
Does there have to be one leader? I mean, this thing that there is one country which is the largest economy and has to, you know, it's...
No, this is a very good point, by the way. The, Europe has been a continent at war, basically, since uh, roughly 900 AD. Okay. But they had uh, some uh, moments of peace, and one of the moments of peace was after 1815, after the Napoleonic Wars.
And the way that they made the peace, which lasted...
Depending on exactly how you count, uh, 30 years, or by some count, 80 years, uh, and avoiding major war, was what was called the Concert of Europe. And the Concert of Europe was that several major governments in Europe, including Russia, including Britain, including France, including Prussia at the time, >> would have co-responsibility. It was a concert. It wasn't one hegemon.
And it worked. And they had norms, systematic norms. We will deal with each other with negotiation. We will uh, they were rather conservative. We won't allow unilateral regime change operations and the like.
It kept the peace for quite a long time. Uh, at the tail end of the 19th century, um, there was the war that created wars that created German uh unification, and there were the wars that created Italian unification, and there was the Crimean War, but there wasn't a European-wide war. And the uh, great diplomat at the end of the 19th century was the German uh, uh, Chancellor, Bismarck.
Mhm.
And Bismarck was a genius at maneuvering and at uh, but he wanted peace. He was fundamentally for peace through diplomacy. And he, of course, was chancellor at the behest of the Kaiser, Kaiser Wilhelm. And when Kaiser Wilhelm died and his son Wilhelm II took power, the son was a hothead. The son said, "Now it's time for Germany's place in the sun. We need our navy. We need to compete with uh, with the British Empire and so forth." And Bismarck said, "No, we don't need a navy. We don't need to compete. We need this Concert of Europe." And the son said to Bismarck, "Um, what will, what will you do if, if uh, the British arrive on our northern shore?" And Bismarck said, "Well, I'll have them arrested." And uh, and the Kaiser threw him out. And um, proceeded to try to build a navy uh against the British. And of course, eventually World War I came as a result of this German unification and so on. Interesting.
So many lessons from this, but one of the lessons was there was a, a group of countries that had mutual responsibility and behaved themselves for quite a long time. Second, it requires a lot of diplomacy. And third, it's an unstable system. It's, it, when power balances change, it can break. We don't have any kind of system right now like this. The rise of China is viewed as a threat, a direct threat to the United States because the US expected a unipolar US world. I always regarded that as both arrogant and economically naive because as an economist, I could look forward and say, "China's going to be a major power." You kidding? And I look the same way with India. India is a superpower. So to my mind, of course, we're in a multipolar world, and we need the major powers to be actually working together. So I've recommended three things. Uh, one is what I call spheres of security, which is that the great powers should stay out of each other's neighborhood. M. I don't want Russia or China building a military base in Venezuela or Mexico, and they have no right to do it. Similarly, the United States has no right to build a military base in Ukraine or in Georgia or to arm Taiwan. None of this. This is the neighborhood of a great power. Stay clear of that. That's number one. Number two, and and similarly, spheres of security. It's a little harder with India and and China abutting each other in the Himalayas, >> but respect uh respect buffer states like Bhutan, like Nepal, and so forth, and uh demilitarize the region at the border, for sure, on both sides. This is spheres of security. Second, good neighbor policy. We had two Roosevelts as president. One of them was an imperialist, straight out and out, Theodore Roosevelt. His sixth cousin, Franklin Roosevelt, was, in my mind, the greatest president of the United States. And when he came into office, he repudiated his distant cousin's imperialism in the Americas. >> He said, "We're going to have a good neighbor policy." And he said, "We're not going to send the Marines to the other countries." Now, Trump is the first Roosevelt 10 times over, blatantly saying, "We own the Americas." Even I want the great powers to go back to good neighbor policies in all of their respective domains. China has a big responsibility not to scare the wits out of its neighbors. India similarly, it's the hegemon of this region, but it shouldn't dominate the region militarily. The United States has no right to do what it's doing uh in uh in the Americas under Trump. So that's the good neighbor policy. And the third pillar of my uh foreign policy agenda is the United Nations. I refuse to believe it's over.
I see.
Until it's over. And uh, to really be over means that we have reverted to full-scale war. Until then, I want us to avoid that war. I like the UN Charter. I think the principles are right. I want the Security Council to work. For the Security Council to work, we need India to have a seat on the Security Council. And by the way, while there are many claimants to a Security Council seat, India is the only absolutely completely 100% indisputable claimant. Not Japan, not Brazil. Nobody else measures up on every criterion to India's size, scope, superpower status, and it needs to be there. And China needs to make that happen. But then the two will benefit from this. That's my point. And India's track record. I think that's the biggest qualifier. We have never invaded. We don't go around doing this kind of stuff which everybody else does. If you want to secure it, you need to do that.
Last question before I let you go. I think my opinion again here, America's most successful export has been the American dream. It is now the world's dream. You study, you take a loan, you do your, you do your education, you get great education, you work hard, you live a life of freedom, you get a house, you've got kids, you've got a soccer, you have a, you have a Volvo driving you to a soccer, the kids to a soccer match. That entire image and you retire well and peacefully and live happily. That entire image of the American dream. You have been talking about how, you know, it's, you've said lots of things very revelatory about what makes that look so good from the back. It's the military-industrial complex, the the deep state, that kind of keeping American economy as that uh big aspiration for the world. Has that dream been sold as a lie to the world? And when that dream is, is exposed in a sense as unviable for everybody to chase, is there another dream that takes its place?
The American dream was not a lie, but it was just a piece of the truth. And America has multiple characters to it and multiple faces and multiple tendencies. And uh, while you say that the American dream was the great export of America, the great import of America was people from all over the world. And as, as you know, and people here know, the group in America that is the top educated, most professional group are the Indian Americans living in the United States right now. It's our professional class. So this has been a wonderful success. And where did America's great scientific leadership of the last 75 years come from? Well, you could uh say it came from Hitler, because Hitler pushed uh a whole generation of scientists to the United States, and the United States at the time opened its arms to them. And I know I'm a direct beneficiary of that, because by the time I got to uh primary school several decades ago, we had a mathematics curriculum which was modern, which could educate me, be beyond basic arithmetic, and teach me something that would be technically valuable for my life. And that happened throughout the US economy. Now, America had another face, without question. It is a settler colonial country, settled by British colonies >> who then fought violently across North America for conquering a continent. >> And it was racist, exclusionary, slave-owning, and genocidal. I mean, this is true. >> The, the disease, they would fight with disease rather than >> just kind of taking over. They would actually kill people to >> Yeah. Throwing rugs with smallpox and so forth into the Native American reser uh areas. So, that's a real side of America, too. America had deep racism. Uh, it had a, a pluralism and a racism competing against each other, and this remains true until today. I believe we have Trump because we had Obama, and by that I mean we had an African-American president, and that triggered also a racist counterpoint. Uh, so I think that at a sociological level, uh, at just the level of the field, without Obama, there was no Trump. What's happening in America is that diversity is still in its ascendancy, without question. Demographically, the US used to be 85% white European, basically. Uh, and now it's uh, something like 55% we say white non-Hispanic, because strangely, Hispanic white by skin color is not the American dominant group. By 2042 or so, according to the US Census, America will be a minority of white non-Hispanic. Wonderful. I, I live in New York City. I love the fact that once in a while I hear English, but that's on a rare occasion. We have people from everywhere in New York. And it works. It's a, of course, it's got its inequalities, its divisions. We have a fantastic new mayor. So, we're very excited about that.
But that is America at its finest, in my view. Trump is America at bringing out some of the white backlash. It's not the only thing. There's also economic disgruntlement. There's a lot of unhappiness because we're divided in so many ways right now. No one talks to each other. Everyone yells at each other. The wealth inequality is uh is extraordinary. Uh, the uh, deep state role is uh despicable and extraordinary. The racism is not pervasive in society, but it is a big part of Trump's base. And so [laughter] all of this, to my mind, uh explains our turmoil right now. If we can get through this without disaster, if we can avoid world confrontation, uh, if we can keep alive uh international law, if uh India continues its dynamic growth, if Africa joins finally this economic takeoff, which I think is possible as well, we'll have a multipolar world, and we'll have a United States which actually then will have this wonderful strength that it has people from all over the world, and it will regain its composure and its sense. It will not run the world. Uh, it will not try to run the world. It will try to enjoy life, have prosperity, and get along with the rest of the world, but not run the world. We're not at that level of wisdom right now, unfortunately, of saying we don't want to run the world. We just want to have a quality of life.
You pointed out that that was in a sense what Trump was saying to MAGA. No, we're going to take care of ourselves.
Yes.
Of course, you see the deep state is so much more powerful, and Trump's megalomania is so unstable that we're not having that direction, but we could in the future.
One of the things I think comes comes in the way is this obsession for GDP. You know, who's the largest GDP and who's big, you know, that that competitiveness amongst nations, that there's a ranking, and you know, does it even make a difference what the GDP is like? How does it matter? I mean, we all know that China is going to one day be the largest country in GDP. That that metric is so important to the world. Why is that? I mean, why aren't we talking about per capita GDP, talking about >> happiness indexes and quality of life and things like, you know...
And why are we talking about who's number one, who's number two, rather than the quality of life, peace, cooperation, enjoying culture, using our new technologies? Of course, this is the enlightenment that I hope for.
The American dream, the reason I was saying it's broken and or why it was a lie is because you look at the underlying economy, it's the high, the high debt-to-GDP ratio, the growing deficit, all of that stuff is what powered that American dream in some way. Now, will the world look at another model? One of the things the RSS chief has told me and has, I mean, he said publicly as well, is the world needs a new model beyond American capitalism. So is that model going to be the Chinese model now? It will be more, more autocracy mixed with capitalism.
How does that American dream now evolve is is what I was trying to get at.
Countries all share in our technological revolution. So in some sense, there's a similarity going on anywhere in the world. If you walk down the street in Mumbai or Kolkata or any other place, everyone's on the phone, using the same apps, doing the same things. That's true in an African city. That's true in Moscow. That's true in Shenzhen. So in one sense, we're all part of the same global technological systems. That's undeniable. At the same time, if you're in India or in China or in Russia or in the United States, the culture, the nature of the discourse, the political systems are very distinct. And the characteristic feel of the economies are also distinct. There is something called culture. It's real. Political culture, I've learned over many decades, is real. To me, President Xi Jinping has an imperial feel of a Chinese emperor.
To me, President Putin has the feel of a Tsar.
But that's not terrible.
That's culture.
Modi...
And Prime Minister Modi, I, I think really reflects and helps to bring about a a new pride in India as a superpower, which it is. Uh, so um, but I feel the culture >> as really reflecting something that is uh persistent and ongoing and not to be feared >> but to reflect diversity.
And so I am rather impressed by Chinese statecraft in many, many ways. But I also know that it's been honed at least since uh uh 200 BC with the Han Dynasty. That centralized administrative bureaucratic system. You can see that all the way to the present. Fine. That's not going to be the system in some other places. And so I don't want us to have one hegemon. We all are going to live together with AI. We're going to live together with the climate crisis. We're going to live together with green technology, electric vehicles. Many things will be common for the world. But we're going to have our diversity. We're going to have our culture. We should respect that. We should understand that's not the threat. China's not going to take over India. Believe me, [laughter] India is not going to take over China. Uh, China's not going to invade the United States. Russia's not going to invade Europe. We should all calm down. Uh, put away our missile toys and other things and get on with the issues that are really important for well-being.
Brother, thanks. Thank you so much for your time. Oh, she so.