Transcription
Hello and welcome to Sore Financially, a channel where we discuss the macro to understand the micro. My name is Kai Hoffman. I'm the Edj Mining guy over on X and of course your host of this channel. And I'm looking forward to bringing back Neil How. He's the managing director of demography over at Hedgei. And he's the author of course of The Fourth Turning together with his partner Bill Strauss. He wrote this book, republished it recently as well. And uh we we got to talk geopolitics. We got to discuss what's going on in the world. What are the global affairs? Let's see if we can get them in order. And uh we're speaking during a historic week pretty much 80 years ago to the day World War II or Europe surrendered. Germany surrendered dur in World War II. Really really historic moment in time. We we got to discuss 80 years later and uh it really fits well because according to Neil the fourth turning every 80 to 100 years. So we're right now in that window and we'll have to figure out where are we headed. Lots to discuss. But before I switch over to my guest, hit that like and subscribe button. It helps us out tremendously bringing phenomenal guests like Neil on to the program. Thank you so much. And by the way, it's free to do that. So, thank you, Neil. It's good to see you again. Thank you so much for joining us, Kai. It's great, great to be on your show. Yeah, lots of catch up. We just had the chance to speak for like 15 minutes before in the record button. Uh, I wish we, you know, we had even more time to just chat and just casually shoot the poop, you know.
Um, but we're speaking during historic week. 80 years um since Germany surrendered in World War II, May 8th, the historic date here. And right now, we're going through a reshuffleling of the new of a world order. Um seeming like Neil maybe help us make sense and summarize for us like what are we seeing right now? What is happening? What is being reshuffled?
Well obviously what we're seeing is you know these memories coming back. Al although here's what's interesting almost no one who was an adult back then is still alive. Right Kai? Um, so what that means is is as it always is with generational turnings is that the turning we're entering is the turning that no one can any longer remember. Right? And that actually is part of what pushes history forward. Um, right where we're about to go is what the people who remember it uh can no longer, you know, are no longer around. Right? So you think of the the GI generation, what in America we call the World War II veteran generation, the the greatest generation as Americans like to call it Kai. Uh they are they are no longer with us, right? Their number is diminishing by about 50% every year. I mean we're down to just a couple hundred thousand left, right? So they will be gone shortly. Uh and these are the people who remember this period, right? And so we have all of the generations facing today no longer remember that. And that's the cunning of history you could say, right? And in in our cycle, we're looking at 80 or 90 years. So actually uh what you're looking at with uh the countdown to uh you know vic day, which is victory over Europe, at least that's the way we talk about it in America. Kai ve day in April and then coming in the August we'll be talking about VJ day but that was really the the the the uh uh the resolution right I mean that was the end I mean really in in in my terminology the next year 1946 was really the end of the crisis um and and uh I think that in in an 80 or 90year cycle which is what we're really looking at it could be that that peak is still 10 years away. Right? You see where I'm going with this guy? So, we are not at that peak yet, but we are definitely accelerating in that direction. Just look around the world. You see the rise of these um uh ethnosentric autocrats everywhere around the world. You see it in Europe, you see it in South America, you see it in South Asia, you see it in East Asia. I mean from from from the Philippines to uh to to China to India. Um look around the world. Um and as I often remind Americans with the rise of Donald Trump, it's this phenomenon is not not only is it not just in America, it's not even primarily in America, right? It's around the world because increasingly the entire world is on the same generational cycle. Most of the world that that is certainly economically relevant today, Kai participated in the last fourth turning. That was the Great Depression, World War II, all of Europe including Russia participated in that. Uh obviously Japan, China, India, uh either war or revolution, right? India obviously had its liberation bloody as it was in 1947. Ultimately, uh, China had its revolution and they all had the a terrific war in the in the Western Pacific. But you see where I'm going with this? The entire world participated in that period. So, the entire world is in the same generational cycle. All of these countries that I just mentioned are being ruled by people who were born after that crisis was over. Right? These are basically, if you want to say in the words America would use, these are baby boom leaders, right? These are boomer leaders who were born in that decade and a half after World War II. Uh who are who are stewarding these countries you know from Narendra Modi to Xiinping and um and then the entire world went through an awakening. This is in in our rubric called the second turning. Uh and that was during the late 60s 70s early 80s. We had this in in uh in Europe. We had uh you know Paris in ' 68. We had and you remember you either remember this Kai or you've read about it, right? There's the Euroterrorism, the B Minehof gang, the red brigade, the uh the the years of lead, you know, an Palumbo, the the years of lead in Italy. Uh but you had terrific amount of of of youthled violence against um uh elder bit you know establishments built by the veterans of the last war. Um and you had uh you you had riots you know studentled riots in in in Tokyo. You had them in in in Buenos are you had them in Mexico City where they basically mowed down the students um you know in in you know by the hundreds. But but this was a period of of tremendous upheaval and violence. But it left behind a much less solid world order, a much more individualistic world order. You could say ultimately a world an order of globalization, right? Freedom to move and trade and um a world where as Francis Fukayyama once said by the 1990s, the end of history. a world where institutions, big big institutions like government and authority figures would just all fade away and individuals would just trade and do deals with each other, right? We wouldn't need any of these dictators anymore. Um, and as Ronald Reagan used to say and as Bill Clinton used to say, even Barack Obama used to say, the microchip will liberate the world and free us from authoritarians and dictators forever. Well, I'm telling you, Kai, that right now every dictator around the world is embracing the microchip because computers today and the internet and AI enables these strong men to control their populations to mobilize, right, social media violence on Q to be able to turn off the internet like Narendra Modi can turn off the internet in Kashmir whenever he wants, right? He just flips a button. Boom. No one can communicate. So these leaders today love the new technology. So here's a lesson in history. Technology doesn't change history. Technology just echoes the cycle. Technology gives people what they want when they want it. And back in the 90s, we wanted liberation from institutions. Today, we want strong institutions to protect us and to make our countries great again, right? And so, everyone wants to be great again. Romania, I heard the other day, wants to be great again. Make Romania great again. Well, God does. I never even knew when Romania was great, but there was that little period, you know, during World War I. They probably chose the wrong side. But all of these countries have a particular history. Hungary wants to be great again. Iran wants to be great again. Um, have I, you know, I I could go down the list, right? Israel wants to be great again. Um, and and India and and Burma and China and you get the picture, right? So, we are in for a stormy period where uh the the the tide is rolling out very quickly on globalism. Kai uh and Trump is just simply accelerating that tide. And I think for America, it's going to lead to a situation where America is heading anyway, an America which is going to have to rapidly expand its net exports and rapidly increase its savings rate. In this case, what Trump doesn't realize is that shutting down trade is going to shut down capital imports and exports into the United States. And what that's going to cause is particularly if he pushes up the deficit, which he's likely to do in this big reconciliation bill that he's going to pass this fall, is that's going to lead to capital shortages. It's going to lead to huge hikes in interest rates. Um, and the this is going to actually force Congress to do something about the budget. See what I mean? In other words, it's going to be very painful, but it's going to be more than just, you know, Christmas with only two dolls, which is what he's saying now. He can only have two dolls for Christmas. You know, this is, you know, Donnie two dolls. You know, I don't know. Think think of a new word for Trump. Tonnie Donnie two dolls. But it's going to lead to more than that. It's going to lead to an America which has to face up to the real problem, which we are a country that no longer saves. In fact, we disave at a a truly uh uh epic scale. That's the problem that has to be corrected. And in my opinion, if Trump thinks that we need to go through a period of pain to get to gain on the other side instead of try the tariff route, why doesn't he just try the deficit tightening route? It's going to get them to the same destination, but it will be going much more directly at the problem, at the root of it all. If you want to know why America is running a trade deficit with everyone, it's because we're running a a capital importation with everyone, right? And and this is somehow a fundamental lesson of economics, which um I I think is probably is uh you know, council of economic adviserss and so on and an academic level understand, but it's uh it's not influencing policy yet.
No. No. Neil Neil, you touched on a lot of important points that we need to follow up on, but before we get into the nitty-gritty on some of the geopolitics here, um you you said the role of technology. I think that's an interesting one because I wrote down a question for you. It's like the impact of new media. Is that, you know, or new technology to a degree? Is that pushing out the cycles potentially as well? Because we're seemingly more educated. There are more sources to get our information from, seemingly independent, not all of it of course, but there's ways to get in information outside of the the the regular news networks. Um, is that prolonging the cycle perhaps a little bit or what is your take?
It's interesting. Most people who talk to me about technology say, "Isn't technology accelerating the cycle?" You know, as a technology makes everything happen faster. But um when I look at generations historically and and obviously one thing we don't realize is psychology has always been there as a huge actor in history right uh and and we've always been through very rapid shifts in technology it's not just today in fact Kai I I often uh argue that uh technology if anything is um you know maybe slowing down today in in sense of the pace of change. Uh you think about it uh what kind of technological changes have you seen in your life? How what kind of technological change has seen in my life? And they basically all boil down to this, you know, the iPhone, right? It's all this digital stuff, but I'm still driving the same internal combustion engine machine that my parents drove. I mean, I haven't seen any change in that. I look around in the in the infrastructure of America. It's all the it's all literally the same. It's not just the same type. It hasn't been touched. No one has changed it since the greatest generation built it. And it's just simply sitting there getting rusty and slowly breaking down. Right? So when I look at the physical world around me, I see actually uh a technology that has been remarkably u static. Um, and we always pay attention to what's changing and we always take for granted what doesn't change. If you want an example of a generation that lived through a lot of technology change, Kai, I would argue that the generation of Dwight Eisenhower, think of someone like Dwight Eisenhower. Think of the lost generation, right? They were born, I think Dwight Eisenhower was born in 1886, 87, something like that. He was born in a child at a time when Europe was still ruled by kings and queens. You had four empires still ruling Europe. There were no planes. There was no internet. There were no hardly any phones. Uh and horses still did all the transportation. And I'm thinking about Eisenhower by the time he was his second term as president flying in, you know, US1, which is a 707 jetliner, right? And he was in his plane in this jet plane going from Ken Coast to the other of America. He was writing memos about the uh US moonlanding program which obviously would be taken up by the president coming after him, John Kennedy, right? And I'm thinking now that's a generation that saw a lot of change in technology. And I'm not sure that I've seen as much as that. Right.
Yeah. No, it's interesting like with AI like as you said the phone like I remember my grandma having a rotary phone like a dial phone like even just the the the pick up of speed in the internet it itself during our time right like my my point is like we can be more selective about the news that we pick and the information we receive so back in the let's say 1930s there were like three newspapers that were government controlled and there was two radio station there were two radio stations for example that were used by gerbles to sort of manip played the the crowds, right? There weren't a lot of alternative media. It was difficult to get anything outside of Germany or it's not like I could go just use a VPN and check out what's going on in China, for example. I'm just making, you know, an example here, right? So, that's what I'm trying to figure out. Like, it's not accelerating, but it's slowing down like the move towards the end because we we have more information. We have more time to get to the end where we'll eventually end up, I guess.
Yeah. Well, it it there's a little bit of acceleration when you think about how we sync up with each other faster. So, you can reflect or sense and reflect the mood in China immediately, right? You don't have to wait for a delay, right? And I and I do think that that certainly media has done a lot more to sync up generational trends around the world, right? you think about, you know, when you're you're talking about generation, you know, my method is a is a generational way of looking at history and and one question is often raised is, well, how big is a generation over over what, you know, over what geographic extent do you measure a generation? If you look at the United States, do you talk about different generations in in Idaho versus California, right? Well, no, because you think uh there's a lot of communication here, right? We're all kind of very much intertwined in in how we communicate. But what determines that? Well, what determines that is partly communication. Now, this is what has made generations much more in sync, right, over the past, you know, century and a half, two centuries is the fact that we are in touch with each other much more. So, um, you know, moods kind of like clocks. You know that old experiment with sympathetic resonance Kai in a room. You bring clocks closer and closer together and pretty soon they're all ticking at the same sympathetic frequency, right? Uh well, that's just that's because they saved energy that way. That's kind of a low energy potential point. So they're all ticking the same way. Well, humans are the same way. We sort of get on the same cycle, and that's kind of where we are now. But I I I am amazed to see how much, for instance, the alt-right, which uh in many ways, you know, look back in the Breitbart years, right, that been during the Trump one administration, but how much all of that is now an international movement, right? I mean, you see these people meeting internationally and communicating internationally. It's it's it's sort of, you know, from from from Europe to uh to South Asia to Brazil to New York, right?
Would you say that governments that were in in charge at the time like five 10 years ago just made too many blatant errors uh that people just lost complete trust and faith in them um as well?
Yeah. just talking about co like it's as it is unraveling of course and people are starting to wake up now I don't want to jump down the conspiracy hole but there are too many as opposed to today Kai when they make no mistakes at all right of course not of course not of course you know so we're in a completely different I I agree with you Kai we've eliminated mistakes I mean but it seems it seems like like maybe the old right is more radicalized now so sorry for talking over you by the way
Well no no that's quite Right. All right. I'm I'm I'm I'm open to be talked over. Um I think there's a I think we actually discover in the chaos of today. Uh actually there's a great uh New York Times Sienna poll which among many interesting questions they asked, you know, what was your biggest impression? What's your biggest impression about the Trump presidency? And they say, you know, agree or disagree, uh you know, Trump makes me excited. You know, I don't know, maybe 46%. Um uh you know Trump Trump is um you know Trump makes makes me feel afraid. You know maybe that's 55%. But the biggest response guy Kai was Trump makes me feel we live in chaos. Okay. And I think this is the issue. We begin to realize why we once had official points of view, right? To at least feel make everyone feel as though we're all on the same wavelength, right? And when you feel as though we're on a billion different wavelengths, then rather than actually result in transparency, it leads to numbness and confusion, right? Uh because you don't know who to believe, right?
Absolutely. No, it's a it's an interesting, you know, what do you call it? Like not dogma is the wrong word, but it's an interesting it's interesting. Let's leave it at that. I'm missing a word here, but um you know, like back after World War II, we we got a new world order. You know, we had Breton Woods agreement. We had a reshuffleling of cards in Europe. You know, Britain, France, the US, Russia sort of split up, Germany for themselves. It seems like we're seeing a bit of a reshuffleling of the cards and maybe the global order today as well. NATO, you know, moving, you know, moving around maybe not as stable as it used to be. The European Union can't really agree if it should expand into the Ukraine or not. Um there lots of new things happening in that regard. The US pulling back militarily uh as as well. Like how do you see that develop? Like if you were to draw a map in 2030, what what would that look like?
I I'll I'll tell you what gave the distinctive mood to the post-war era when we suddenly set up all those new institutions, right? I mean, the United Nations and Bretton Wood and the IMF and the the World Bank and you just go down, right? I mean, all of these huge institutions set up the stability of the post-war world. And we had the United States and the USSR and they quarreled but they learned to go at each other through reasonably controlled proxy wars and and you had a very strong sense of community right in all of these post-war nations uh spending a lot of time focusing on building up their post-war social democratic states right um and providing nothing but a message of security, order and and frankly conformity, right, to everyone. I mean, this these were the conformist decades, right? I mean, I think Europeans today look back, if they recall them, they many of the younger ones of course don't recall them, but they look back at that as a period of stasis and conformity certainly socially, culturally. Um, why did that occur? Why did you have this instinct for stability and security? Because of what the world went through, the incredible scale of violence and conflict, right? And one of the points that I talk about a lot in the fourth turning is the consensus of almost all social scientists and this goes back to Durkheim and Vber and Tunis and you know uh we had William Graham Sum. We had we had we had some in America too. And one of their fundamental conclusions in looking at the source of community and and for these early social scientists they were all worried about community. This was back when cities were getting larger and people were worried about community. But one of their rules of history is that nothing strengthens community more than conflict. Right? organized conflict because people who win organized conflict are the ones who have the tightest community. I mean, that's the first rule you learn. And if you come of age in an era of conflict, and I'm talking about real conflict, the first rule you learn is you got to be loyal to your team. And so, you come out of an order like that, that's hardwired into you. And the next generation of children is traumatized, right? And so they are not going to break the rules. And this is why you have those periods, those periods like the American high. In America, we talk about this as the American high. These are the presidencies of Truman and and Eisenhower and John Kennedy, right? That period of incredible kind of cultural social stasis. But America as a unit uh was had very few ideological fissures that really prevented it from making huge collective decisions to invest enormously in defense or pay for the Marshall Plan or fight wars in distant continents like Korea and Vietnam, right? Uh spend on guns and butter, do do all these incredible things that we remember government doing back then partly because the the people were very united. But that sense of community is does not occur by accident. It comes after this period of crisis and conflict.
What we have not had in our current fourth turning is the conflict, right? And um and that that is something I anticipate we will see. Um and the question is where it will occur. But when I'm looking at, you know, we just talked about a world full of ethnosentric autocrats. What could go wrong? You know, what what could go wrong in a world like that, right? Uh but but we're looking now at uh you know, Kashmir is in the news. Uh Iran is in the news. I mean, Trump has given Iran two-month limit, right? I think that'll be up later this month. Um uh Trump has determined that there will be no nukes whatsoever in Iran, right? I don't know how he's going to guarantee that except by having US teams actually, you know, go into Iran and and and, you know, look into every cave. I'm not sure how Iran is ever going to, you know, will is ever going to agree to this. So, I I I don't know quite how this is going to resolve itself. And we obviously have other flash points around the world. I'm also concerned, frankly, with the situation of the US domestically, right? because you have a president who's now running government through executive orders um with questionable constitutionality for most of what he does because most of what he does is supposed to be done through Congress, right? Only Congress is completely polarized and gridlocked. So Trump either has to defy and break the filibuster rule in the Senate, which he may be able to do because there are various ways he's doing. He's doing that through reconciliation. He's doing that through the Congressional Review Act when it comes to regulation. I believe that there's a choice domestically for the United States that that the Republican party, I should say the MAGA party, which is now in power in the White House, either finds a way to break the filibuster or it's going to have a huge confrontation with the judicial system of the Supreme Court. Uh, is one or the other, Kai? I I just don't you know in other words either they have to start putting some of these executive orders into actual congressional legislation which would pass muster with the John Roberts Supreme Court which strongly believes in congressional participation. These are all conservative federalist society members. I'm not talking about the progressives on the Supreme Court. I'm talking about the conservatives on the Supreme Court that absolutely believe that anything the United States does in terms of policy requires Congress to give its voice on major on major issues. Kind of, you know, the the major questions doctrine we call it in the United States. So, this is where Trump stands. He's got to either get stuff through Congress, find a way to batter down. I think they're going to come to that realization. You've either got to get stuff through Congress or you're going to have this epic confrontation with the Supreme Court. And if they do defy the Supreme Court, I don't know how the Democrats will respond. I think that there's a good chance you could find a number of Democrats who will refuse even to show up in Congress. Why should I show up? You're obviously doing you're shortcircuiting our institution. You're defying the other branch of government. Why should I be complicit? Now, when that happens and when you find that the Democrats are actually meeting up in Lake Placid in New York State or something, right, where they have a nice, you know, a state with a pretty strong National Guard up there, maybe. Um, then you're looking in really new territory guy, right?
Yeah. I I just Googled what type of wars exist and uh it's an interesting because I'm wondering like what sort of will trigger everything cuz like religious wars, ethnic wars, regional or territorial wars, civil wars like you just sort of mentioned. I think that's sort of where you know it's come up in the past um as well. Revolutionary wars, I think we can rule that one out for now, at least in in the Western Hemisphere. Um ideological wars, we've seen Cold War, Spanish Civil War, things like that. Um you know, proxy wars. So these these words often overlap. Uh you know the the the French the French Revolution actually gave rise to a period of French expansion. So French Revolution actually became French aggression against the rest of Europe. Um you know sort of a combination of revolution aggression you know together. Uh you know the Boleviks were famous for doing that. You know wherever wherever the the Soviets went they they invaded but they brought revolution with them. Um and I think civil war and and external war go together too. uh you know very famously in an earlier forth turning in America um the the America had a had the revolution against Britain which to some extent was an external war right I mean there was the colonies versus Britain the parliament and king George III but on the other hand most of the actual fighting was loyalists against patriots in the United States right so that was an internal war in fact most of the deaths were Americans killing other Americans, particularly in the south where it really was a civil war, right? I mean, you know, these were battles in which patriots and Tories, you know, the patriots um mainly from the from the from the from the coast and the plantations were were killing Tories who were sort of, you know, upland and in the interior. Horrible. But these things overlap. So rather than saying, "Oh, it's this kind of war versus that kind of war." um I think it's safe to say it's not going to be a religious war.
Well, like what we're seeing in India and Pakistan right now is religious. What we're seeing in the Middle East is religious. That's that's an interesting thought. I I haven't thought about the Kashmir side, but that's certainly very much a religious war. It's it's transmuted into nationalism obviously, but the roots are clearly religious, right? Um uh so I take that back. You can overlap them all if you want.
Yeah. Let's just hope it doesn't end in total war. Let's be honest, you know. Um that's my one hope that it doesn't escalate to that kind of level. Nobody wants to see that. Um how does Trump interpret as his role? I was thinking in preparation of this conversation, it sounds a little far-fetched perhaps, but I'm thinking he interprets it a little bit, and that's my my two cents. I don't want to put words in your mouth, Neil, at all, but uh I I'm I was reminded of President Xi out of China that uh when I thought about Trump and how how he interprets his role, the executive orders getting stuff trying to get stuff done, trying to build fast. And the the reason why I get to that, I saw photos, satellite imagery of uh Huawei factories being erected in China and how just how fast everything can happen um o over there while it's very slow over here, Europe, in the US. So that sort of was the thought process behind my question here, Neil.
Yeah, this is the this is always considered to be the advantage of these dictatorial socialist societies, right? They can build things really fast, right? Uh the question is whether it actually serve a purpose. Uh yeah, like I think we can have that argument with the US though. Like if you bring manufacturing home, we reerect some steel plants, what purpose does it serve? Like I think we can ask that question as well.
Yeah. I I think that the reason why Trump has started out his administration in such a flurry of frenetic activity and this is a you know this this is accordance by the way with the famous plan you know plan 2025 which Trump before the election denied that he was following but I would say is his administration is following it very actually very carefully. Um his idea was that the reason we failed in the first Trump administration was that uh we had too many old establishment people who weren't willing to go all the way and were not loyal to Trump and we're not completely committed to the MAGA movement. Right? So right now he has a group which is committed loyalty matters more to him than competence uh if you have to choose and that actually is I think part of the problem. Now, now first of all, let's talk about the benefits of that, Kai. What it means is is that things get done really fast, right? Everyone's on board. Uh so you get these u how many uh over 200 executive orders um uh during his first 100 days. That's twice as many executive orders as Franklin Delano Roosevelt during his famous 100 days. Right? So you get an idea of the scale of this um and this tremendous sense of frenetic activity. And what that does is it first of all it galvanizes your own side and it demoralizes the other side. Kai, you would agree that the Democrats in the United States today are completely demoralized and disorganized because they're constantly on the defensive. Every time they take their breath, Trump is doing something new, right? And and this is this like a it's like the it's like Robert E. Lee or Napoleon. I mean what was their what did they breathe in every day? The idea is he always had to be on the initiative. Always make the other guy think about what you're going to do. Never have to think about what the other guy's going to do. Right. So Trump has been very successful at this. And um and and in some areas he's he's gotten results. I mean, he wanted to tighten up the immigration border. Well, that's happening. Uh, and he's, uh, he's uh, you know, breaking rules and and cutting corners to do that. And a lot of Americans say, well, you know, if that's what it takes, you got to do it. We got Gen Xers now in power, Kai. So, their attitude is if if you have to break if you have to break the rules to get it done, no rules, just right. I think that was actually an advertising motto back in the 1990s. But I think this is kind of, you know, summarizes kind of how these Gen Xers and you see that right in the signal chats, you know, that's awesome. You know, these would be like these senior negotiators, you know, Europe is so pathetic and these are the but this is Gen X. This is unfiltered and we finally got this generation actually in power. You wanted transparency of inner feelings. Well, you're getting it from these excers. You may not like it, but you're actually seeing it right from this group. But but seriously, um uh so this energy actually is is working for them in some ways. Um uh they I think they are changing the culture. Uh certainly universities and companies are changing their you know DEI rules and all that. I mean, I I think the culture is actually kind of is is trending that direction anyway. So, I don't think that's, you know, entirely Trump. Uh, but on other areas, I think the lack of confidence is uh is hugely undermining his effort. For instance, when it comes to cutting federal spending, it's laughable. you know, the um the thing that Elon Musk set up, the Doge. I mean, he goes in and thinks about Social Security and all he can do is is fire some of the administrators. I mean, I I study social security, Kai, and I can tell you that Social Security is one of the most efficiently run organizations of of entitlements in the world. They they spend about less than 0.5% of their budget on the entire administration, right? There is no insurance company. There is no pension company which is even, you know, onetenth as efficient as social security. And all they can do is fire administrators. So no, you can't get anyone on the phone if you don't have your check. Uh, and it results in no savings, right, for the system. Everyone knows to cut spending, you need to actually go in and understand the programs. What's the first thing that um that Elon Musk did when he went in there? He fired all the inspector generals. There are 18 of them and they each of them managed a different, you know, there's an inspector general for Medicare, for Medicaid, for, you know, SSI, for all these different programs. These inspector generals, Kai are dedicated to protecting the taxpayer. Their entire job is to identify waste, fraud and mismanagement with their intimate familiarity with the institution for which they are inspector general. That is their purpose and their complaint is that Congress doesn't listen to them and all their ideas on how you could cut costs to save money. Right? But the first thing that that Elon Musk does is he fires all these P, you know, he might have actually actually sat down with them for maybe an hour and just say, "What are your ideas?" You know, but here's, you know, sometimes when you have a new soccer player, you have a soccer player like on my team right now like Julian Brunt from Dortmund, great player, but he doesn't get his horses on the road. like he's like a Ferrari that doesn't you know with constant wheel spin if that makes sense right so sometimes it's just a change of atmosphere meaning like move him to another club so he can shine again like sometimes you just need you need a new scenery, you know, you need somebody else and maybe tell you what is going on like I'm not saying Elon Musk is the right person I'm just making but here here's the thing is that Elon Musk went in there and he looked at all these databases he had no idea what he was looking at he looked at so I worked with social security and I know they have tens of thousands of Excel sheets. Well, Els found one Excel sheet with all these beneficiaries, many of whom, you know, they had no death dates. I mean, it was just, you know, social security somewhere keeps a record of all their beneficiaries who never died. They just, you know, keep it. He says there's fraud going on. Look at there all these beneficiaries 170 years old. And he went on and Trump actually presented that to the nation as an example of fraud. It's a complete lie, of course. I mean there there there's you know a couple of percent of social security recipients are above age 100 about reflecting their share of the elderly. You know what I mean? I mean this this is nonsense. But this is my point a little knowledge is a dangerous thing and the problem with Alon Musk is is that you know just thinking that you can familiarize yourself with the federal budget in three days. It has been said that a little knowledge is a dangerous thing. And this is the problem with Elon Musk. He thinks he can get up to speed on something as complex as the federal budget in 72 hours. My advice to Elon Musk is, you know, cut back on the ketamine, get some sleep and actually find someone who actually has spent some time understanding the budget and then actually you'd be in a much better position to make some really wise choices. Look, I believe that the federal budget should be cut. I mean, I'm I'm I think there are programs, particularly the entitlement programs, which have to be shrunk to somewhat for for us to be make federal government affordable in an aging society. So, I'm I'm a huge proponent of this as a goal. It's just this is not the way you go about it.
No, absolutely. It's kind of tough. Like I I understand like what we're seeing here in Europe of course like personally from a pragmatic standpoint I see a lot of the right things being started and tried but I think the messaging is the problem and that's what I'm seeing over here and the way it's communicated and the way it's perceived globally I think is is a big problem like tariffs for example like when you start tariff putting tariffs on an island that's inhabited by penguins um you know you're starting to lose credibility in the global eye and I'm not trying to belittle anybody but it's just little let's let's all messaging errors. Okay. Um I think the idea I get the idea I get where everything's coming from but the messaging there they're problems as you said.
Exactly. Which brings me the ability the ability to tap into competence I think is something that's really important. Right. Um and and to prevent you from doing stupid stuff. Um again I'm I'm I think a lot of Americans are huge supportive of a lot of Trump's goals. Uh, and some of them, you know, he's doing effectively. I mean, immigration control would be one. It's probably one that you can just name right off the bat. A lot of these others are more difficult. You know, ending wars around the world in in 24 hours. That's a little bit more difficult. In my opinion, he's basically he's had enough with Ukraine. I think he's had enough with Putin and and and Zolinski. And I think his attitude is, okay, I got a minerals deal. I can check a W. you know, I can say I won because now we own a little part of something in Ukraine. So now I can send in my new Patriot missile batteries and I I'm okay now with defending Ukraine and I'm going to move on. Um I I think that's where he is. He also realized, I think, that his position on Ukraine, uh, namely really hating on Zalinski for actually starting the war is um, he was totally out of sync with the American public. And, and you know, I can just show you the opinion polls there. There was one great one that the economist did where they actually asked the American public, you know, do you sympathize with in in the war, do you sympathize with the Ukrainians and the Russians? and 3% said the Russians and something like 54% said the Ukrainians and then they asked Americans who do you think Trump sympathizes with and 40% of them said the Russians and 8% said the Ukrainians and and I think at some point Trump is saying ah to hell with this you know the American public doesn't like me anyway on this I'm going to move on keep in mind this about Trump and this is actually something disarming I think about Trump and this comes from his original book back in the 1980s the art of the deal. And Trump said, "You know what? I like to have a lot of balls in the air at the same time." And a lot of them aren't going to work. That's fine. I just go and I start put in other words, he's just going to bang on a lot of doors. He's going to try a lot of stuff. A lot of stuff isn't going to work. He goes on to the next door. Um, and it's difficult to watch because you often wondering the the thing that's always unclear about Trump is what is his ultimate objective? You you don't really know. Um, and I think a lot of it is just you bang on a lot of doors and see where history allows you to go. I I don't know if that's quite a right way to say it, Ky, but you know what I mean. It's kind of like I don't know. We'll see where where it goes from here, right?
about a PowerPoint or so a game plan like somebody must have run like walked through the White House like here's five slides. This is what we're going to do the next four years. He's not an X's and O's guy. He's not like you know the tight end is going to take care of that guy and you know we're going to run. No, no, no. It's just going to be we're going to wing it. You know, we're going to just see where we can run. Right.
Neil, we got about two minutes left. Um if we were to speak in about three to six months, let's say six months, what are we going to talk about?
Uh, we're going to talk about possibly Iran. Uh, we are going to talk about uh the uh well, we're going to talk about the X date on the debt ceiling uh because that's going to come up uh I would say you know possibly as early as August probably more like September and we're going to also be talking about the reconciliation bill this big beautiful bill right where Trump's going to stuff a lot of things into this thing because that can be passed with a 50 you know 50 uh votes in the in the Senate Right. And um and we're going to be talking about that. And my fear is is that um you know, my hope is is we're going to see some genuine cost cutting um on the spending side and we're going to see some moderation on the tax cut side. So, we can actually see some deficit. My fear is we're not going to see much in the area of serious spending cuts. uh we're gonna we're gonna have Christmas in September when it comes to tax cuts, you know what I mean? All over the place. And instead of running 6% of GDP deficits at the peak of the economic cycle, we'll be between seven and 8% of GDP at the peak of the economic cycle. And don't even tell me what that's going to be if we go into recession, right? I mean, that's going to be double digits. This is my fear, Kai. That's that's where I think we are economically.
Fantastic, Neil. Sadly, we have to end this right right about now. Like, we'll have to get you back in the next 3 months. Like, we can't wait another year uh to have to continue our conversation. There's so much going on. Uh we haven't even drilled down into all the geop geopolitical hotspots. Um you know, I was going to ask you about Taiwan's FX reserves and the leverage they have over the US potentially. I want and I I'd like next time we talk more about Europe, I I want to talk about France. Uh I want to talk about there are a number of countries that we could we could talk about.
Absolutely. France would be interesting and Macron's uh you know what he's planning for France and the new superpower there. So we could talk about Neil love the conversation where can we send our audience like how can they follow your work?
Yeah, they can they can I do a a weekly podcast uh you know voice podcast on demography unplugged. So send them just have them Google demography unplugged.
Fantastic. We'll definitely do Neil. What a wonderful conversation. Thank you so much for coming on. Tremendously appreciate. Everybody else, go check out Neil's book, The Fourth Turning, is here. So much great content in here. Like, you'll really understand what is happening. And uh say again, the the the original version, the 1997 version. Actually, there is a German translation out there. So, Oh, perfect. Even better. We'll definitely link to those. Um I'll I'll let my editor know to link to the German and the English version. So, go check it out. It's worth it. And subscribe to our channel. Thank you so much. We'll be back with lots more. Take care, guys. Bye.
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