Understanding the New World (Dis)Order, with Stephen Kotkin

>> Bill Whalen: It's Monday, October 16, 2023, and welcome back to GoodFellows. A Hoover Institution Broadcast examining social, economic, political, and geopolitical concerns. I'm Bill Whalen. And I'm a Hoover distinguished policy fellow. Your moderator today. We are doing the show live from the Hoover Institution. And sitting next to me is the renowned historian Niall Ferguson.

Sitting two spots down from him is the renowned economist John Cochrane, who didn't get the sport coat memo. But this is a California look for your folks. And we are not joined today by Lieutenant General H.R McMaster, normally our third Goodfellow, but instead, in his place. You have asked for him, you have demanded him, you have pleaded for him, you've yelled and you've warned us down, by God.

Here he is, joining GoodFellows, a repeat visitor, I might add, the distinguished historian, Hoover Institution's senior fellow, Stephen Kotkin. Steve, welcome back.

>> Stephen Kotkin: Thank you for having me again.

>> Bill Whalen: Yes, okay, so I wanna begin the show by clearing up a mystery by Professor Kotkin. Did a little sleuthing on you on the Internet, my friend.

Here's what I found on YouTube. There is a wonderful interview of you with the Hoover Institutions on common knowledge. For those of you who don't subscribe, you'll find out on YouTube. It's a one hour conversation. Niall's done the show. John's done the show. This show in particular, Stephen, the title is a historian for the future.

Five more questions for Stephen Kotkin. And here's what caught my eye. Viewership, 2.2 million views. Now, in YouTube language, what does that mean? I don't know, So I did a little sleuthing. Springboks versus Scott's Rugby World Cup, 1.1 million views. Stephen Kotkin, you are twice as popular as rugby.

How do you explain this?

>> Stephen Kotkin: I don't. It doesn't make any sense to me, except the fact that I click really, really fast on YouTube to increase my numbers. I think if H.R were here, he would tell you, cuz he's a very intense guy. That rugby is much more important than I am.

And I would have to agree with that. But anyway-

>> Niall Ferguson: If Scotland had won, it would have had way, way more views.

>> Stephen Kotkin: What kinda nonsense is that? If Scotland had won.

>> Stephen Kotkin: What world do you live in?

>> Stephen Kotkin: Are you Scottish?

>> Niall Ferguson: I live in a fantasy world.

 

>> Stephen Kotkin: But seriously, if Scotland had won.

>> John Cochrane: I guess since I grew up in Chicago and rooted for the Cubs for many years, I can sympathize.

>> Stephen Kotkin: The same basic predicament, you're right.

>> Bill Whalen: So we're gonna give Kotkin a pass. This is all just about being a great world historian.

This is not about bot farms or a trained army of monkeys clicking away or anything like that.

>> Stephen Kotkin: It could be, but-

>> Niall Ferguson: I think it's just he's the Jordan Peterson of the historical profession. What can I say?

>> Stephen Kotkin: Okay.

>> Stephen Kotkin: We'll ruminate over that one for a while.

Poor Jordan Peterson, he's probably gonna feel insulted.

>> Niall Ferguson: Just don't try his diet, that's all.

>> Bill Whalen: Let's begin with the column that Niall wrote the other day. This is in the Times of London, which, by the way, if you really wanna hide something, stash it on the website of the Times of London.

Because you cannot get behind that firewall, my friend. But the column gets asked this question. Niall, I wanna read back a passage to you and get your thoughts. And you asked, what does the US do now by sending the two carrier groups they are seeking to deter Hezbollah, in other words, Iran, for opening a second front against Israel from Lebanon.

But it is not clear that American deterrence will succeed any more than it succeeded against Russia in February 22. Iran's proxies in Yemen and Iraq have already threatened to target American military bases in the Middle east if the United States intervenes. So what now?

>> Niall Ferguson: Well, Bill, I mean, I'm more concerned than I have been in a long time.

And I think the last time I was this bleak about the world was 1983. And the reason that I'm most concerned is that Israel's position seems extraordinarily vulnerable. It can find itself fighting in three different locations simultaneously, the West Bank, Gaza and the Lebanese border. Where Hezbollah has a vast arsenal of missiles pointing at Israeli targets.

We've just seen scenes of sadistic terrorism unlike anything that's happened to Jewish people since the Holocaust. Some of the video footage that came out just over a week ago brought to mind Babi Yar. It brought to mind scenes from the Holocaust to me. And not surprisingly, Israelis and many of their supporters around the world passionately want to see retaliation against Hamas and Palestinian in Islamic Jihad.

But the problem is that the Israeli defense forces are very stretched. And Iran has been able to supply its proxies with formidable firepower, as was made clear by the attacks from Gaza, much more than clearly the Israelis expected. And that means that they, the Israelis, are now counting on the US government with its two aircraft carrier groups to provide some backup.

What worries me is that it's not clear that the US really has a coherent strategy to deter Iran and its proxies from taking further aggressive action against Israel. The Biden administration is not very good at deterrence. We learned that in February of 2022, when they utterly failed to deter Russia from invading Ukraine or increasing its invasion of Ukraine.

And I worry that another failure of deterrence will put Israel in a more dangerous position than at almost any time in its history. Certainly, more dangerous than, say, in 1973.

>> Bill Whalen: Stephen, what say you?

>> Stephen Kotkin: Yes, so when Iran shot down the American surveillance vehicle, which was in international airspace over international waters in 2019.

The Trump administration did nothing. And when Iran bombed the Saudi oil fields with drones and missiles in October 2019, several months later. The Trump administration did nothing. And so nothing predates the Biden administration here. I think arguably, the withdrawal from Afghanistan compounded things much worse. So I'm in agreement with Niall there.

But we've had a lot of happy talk about the new Middle east for some time now. And here it is, the new Middle east. It's one that I remember not just from 1983, sadly, I was also alive then, and so I'm worried. But at the same time two carrier strike groups is non-trivial muscle to send into the region.

Nobody else has that capability. And we did it, and it was a good thing to do. And so, yeah, Israel is in a situation now that I wouldn't envy. Tel Aviv is vulnerable to the stuff that Hezbollah has in large quantities. And so this is a big moment.

But I'm very confident in the Israeli defense forces. And I'm very confident in the capabilities that we just sent to the Middle east. I think it's too early to be pessimistic about our ability to deter Iran.

>> Niall Ferguson: I don't doubt the ability, I somewhat doubt the willpower. Because, as you say, there has been a continuity of failing to deter Iran.

But it's got worse under this administration. At least the last administration had a strategy for the Middle east. Which was to isolate Iran, crush it economically, and pursue the Abraham accords as a strategy to bring Israel and the Arabs closer together. This administration decided to try and resuscitate the Iran nuclear deal, which was dead.

And in the process of trying to resuscitate it, I think, got too close, or at least elements of the administration got way too close to Tehran, in particular, Mister Mali, their envoy now under FBI investigation. So you can't, I think, claim that the Trump administration was as weak towards Iran as the Biden administration.

There are people arguing that the Biden administration was in some measure penetrated by an Iranian influence operation, which you certainly couldn't have say of Trump. So I think it's got worse. But I have a question for you, Steve, which-

>> Stephen Kotkin: Are you sure the Trump administration and Trump himself was not penetrated by foreign intelligence?

 

>> Niall Ferguson: Well, there was a lot of people who made the-

>> Stephen Kotkin: Are you sure about that?

>> Niall Ferguson: Argument that there had been-

>> Bill Whalen: Have you ever been to Mar-a-Lago?

>> Niall Ferguson: There had been collusion between the Trump administration and Russia. There now seems to be quite good evidence of collusion between elements of the Biden administration and Iran.

I don't read so much about that in the New York Times is all I'm saying.

>> Stephen Kotkin: Well, I don't read the New York Times, so you got me there. But, I mean, you're not going to get a defense of the Biden administration's deterrence capabilities from me.

>> Niall Ferguson: So what can I ask you?

 

>> Stephen Kotkin: I'm not doing that because that would be an impossible task. But I just want you to understand that this is not a partisan problem here that began with the Biden administration. Being able to deter Iran has been a multi decade problem for the United States because Iran is not really deterrable.

Some regimes don't yield to deterrence in the same way that other regimes do. Stalin did everything he could to deter Hitler. He let Hitler's Luftwaffe fly over the Soviet Union to see the mass troops that he had. He let them into his arms factories to see his T-34s.

He let them see the whole story. And it didn't register with the Nazi regime because Hitler was not deterrable. So if somebody is not deterrable, you have a different game that you're playing. I don't think Hamas is deterrable either.

>> Niall Ferguson: Well, the analogy with Hitler is one that comes to mind for many Israelis these days.

And the conclusion must therefore be the correct response to destroy Hamas, which is what the Israeli government is now committed to. The question is, does it also apply to Iran? Because the logic of what you've just said is that ultimately, we will have to destroy the regime in Iran if we ever want there to be peace in the Middle East.

 

>> Stephen Kotkin: Go for it.

>> John Cochrane: Well, this will be in the spirit of follow up and invite more questions. So, yes, we have carriers in New York and the Mediterranean. What exactly are they going to do? I think you guys have teed up the central question, will the US use those carriers?

And I would say, to do what now? I think people there, the Iranians, remember the red line in the sand. Remember Biden was in that administration that put a red line in Syria. They remember we won't even, God forbid, we would think about putting an American in danger in Ukraine, which is similarly, which is also invaded.

So really, will we have the will to do something? And then what would we actually do? So rockets start raining down from terrorist camps in southern Lebanon into Israel. What are you gonna do with two aircraft carriers full of F-16s? Are you going to start bombing Lebanese villages?

And Israel does that, are you going to start? You wanna deter Iran? So are we gonna fly over and start bombing things in Iran? I would be curious what the plan is other than just we're gonna parade around our beautiful aircraft carriers. I would add, too.

>> Stephen Kotkin: What would you do instead, John?

 

>> John Cochrane: Hold on, that was question number one. You guys went on, so I get three of them.

>> Niall Ferguson: That's a note pad.

>> John Cochrane: I have my notepad down.

>> Stephen Kotkin: I see that.

>> Niall Ferguson: There's nothing you can do, resistance is futile.

>> John Cochrane: You guys started with, yes. You guys started with how bad it is for Israel.

And I wanted to say it's not as bad as you're saying. This is not 1973 or 1967. They are certainly fighting a concerted and very dangerous wave of terror, but there are not armies ready to invade. This will not wipe out Israel. I don't think there is a case for that.

It's a very dangerous situation to have terrorist attacks like that, but it's not as bad and happy talk. You talked about happy talk, and I think that really underestimates where things were going and what has gotten blown up. Things were getting better. Ordinary Gazans were having more and more jobs in Israel.

Gazan businesses were exporting to Israel. The heart of the Abraham Accords was essentially, we're gonna let them get prosperous, things like that. But this was also what was happening before 2000, the last time the Palestinians blew everything up. And it's interesting that this is what Hamas, of course, chose to blow up, decent prosperity and life for ordinary Palestinians.

 

>> Stephen Kotkin: So they were preparing for this. So things were happening. The getting better part was happening relative to where things were. We don't wanna exaggerate-

>> John Cochrane: Right.

>> Stephen Kotkin: But the preparation to blow up the getting better part was happening simultaneously. So this is the thing about this kind of stuff.

Stuff happens, and then we think we're in a new epoch as opposed to we were simultaneously in two different realities, one of which was ours and one of which was theirs. The same thing happened with China policy. We were doing engagement, and we were doing globalization, and we were integrating, and they were doing something else at the same time with some of the same, let's say, shared resources.

And so, my point is this, now you have asymmetry, you don't need an army massed on your territory. You have rockets instead, which could destroy your civilian residences, your schools, your hospitals. It could strike terror into your population. There are lots of things you can do without a land army to invade because of asymmetrical capabilities and the willingness, as Neil was pointing out, to use those things in a kind of cynical genocidal not pursuing positive aims like, for example, the liberation of Palestine in achievable terms, but just murdering people because that's all you can do.

So that's just as big a problem in some ways. So Israel is secure as a state.

>> John Cochrane: Yes.

>> Stephen Kotkin: You're right about that. But their security as a secure state is now in significant trouble. That's where we are.

>> Niall Ferguson: So a couple of observations, one in response to John, and then I have a question for you, Steve.

The response to John is that there are certain options that I don't think are being considered by the Biden administration. And I would be very surprised if American ground forces were involved in this at any point. I think one can rule that out as a political option or very, very, if there are any boots on the ground, there will be very few.

The big question seems to me, what do you do with your planes and what are you actually gonna hit? Are you gonna try and hit Hezbollah, or are you gonna try and disrupt the supply lines through Syria, which supply Hezbollah? Or is anybody considering strikes against Iran's nuclear facilities?

Cuz after all, if the Iran deal is dead, which I think is pretty clearly the case, then there doesn't seem to be a better alternative than to try to degrade those facilities before they have a nuclear weapon. They could be three months away from nuclear capability for all we know.

So I don't know if that's the issue that's being discussed on the NSC right now. I kind of hope it is, cuz that would seem to me like something that might just deter the Iranian.

>> John Cochrane: That is the thing we can do, which I'm glad we have great air cover, great intelligence.

The Israelis need us. If they wanna go to Iran and start bombing nuclear facilities, we could do that.

>> Niall Ferguson: They definitely can't do that themselves at this point. And this brings me to my question for you, Steve, Russia. So these are not two separate conflicts going on, one in Ukraine and the other in and around Israel.

They're in some measure connected. And the connecting variable is Russia, because Russia has been a presence in the Middle East since the Obama administration invited it back in. Please help us with these chemical weapons that we don't really wanna deal with, you deal with them. And the next thing you know, Russia's calling shots in Syria and elsewhere, too.

So I'd love to get your take on it. Nobody's better placed to tell us what is Russia's role in the crisis in Israel?

>> Stephen Kotkin: Yeah, so I'm not as favorably disposed towards Henry Kissinger's outreach towards China, which I know you're writing about. I think in the fullness of time, the kowtowing to Mao has looked less impressive, the obsequiousness in the now released documents, but the forcing the Soviet Union out of the Middle East.

Kissinger, that other gigantic and less well known geopolitical move on the part of the Nixon Kissinger duo. I think that looks even better. It looked great in real time. I think it looks even better now. So there's something to be learned there, and we'll be hearing about that in due course from you.

I would look at it this way. Things are connected. We had an ethnic cleansing in Armenia before Hamas attack on October 7 by Azerbaijan, 120,000 Armenians were evicted from territory that was ancestral for them after a nine month siege, trying to force them out. And Russia was the supposed protector of the Armenians and in general, of the settlement that had been reached there.

The Azerbaijanis were supplied by Israel. They were Israeli weapons. Israeli weapons were involved in the biggest ethnic cleansing in some time. So, yeah, things are complex and interconnected. Israel, of course, Azerbaijan appeals to them. It's on the northern, the other side of Iran and could be extremely useful in a potential, God forbid, conflict that Israel might be drawn into against Iran.

And so Azerbaijan has tremendous value for them as a basing area for more than just logistics. So it's concerning to see how all of these things are connected. You have three big pieces on the planet that are vulnerable. Israel in the Middle East and Iran is dedicated to the eradication of Israel from the Middle East.

That's a problem that's not going away unless this regime in Iran goes away just like you guys said. Ukraine and Russia's desire to destroy, ruin Ukraine as a potential European state, member of the EU, member of the western alliance. Not necessarily to successfully conquer it and incorporate it and rebuild it, that might be beyond Putin's capabilities at this point at least, but certainly to wreck it.

So in this, I can't have it, nobody can have it idea. And then, of course, there's the Taiwan peace in China. So those are the three potential vulnerabilities. And we focus predominantly on Taiwan. And then the Ukraine thing sort of exploded in our face. And now the Hamas murder rampage.

It's hard to know what to call it. Words don't suffice. Also now exploded in our face. So our goal should be no world war coming out of these three vulnerable places for which we're partly on the hook for.

>> Niall Ferguson: But our goal should also be to avoid their being wiped off the face of the map.

 

>> Stephen Kotkin: Ye, so that's the line. That's the line that whatever administration you are, Democrat, Republican, or no gender, whichever you're on there, you want to make sure that you deter them from conquering these places or wrecking them, and that you avoid the third world war. So that's the line you walk.

And that line is not easy to walk. And so it's, once again, this is not a defense of the Biden administration. I don't think you're gonna get that from me. But it is a sense, at least a feeling of the complexity here. We haven't talked about the nuclear weapons use.

We've talked about the Iranians getting the bomb, but certainly with great power powers having nukes, this also has to be factored in. So here we are now, how do you both deter and not provoke into the third world? Remember, wrecking is a better goal, is an easier goal than defending, because the world order is ours and works for peace and prosperity for all those who wanna partake in it.

So for them, if they don't like the world order and they wreck it at the margins or at places that are central from the point of view of the people living there, like Israel, Ukraine, and Taiwan.

>> Bill Whalen: So, John, jump in. But then I want to shift after that, I want to shift to Ukraine and new axis of.

Go ahead.

>> John Cochrane: So I want to follow up on this, exactly this question. Last time you were here, we talked about Ukraine, and you kind of stunned us with the US should not really help Ukraine to win this war. We should let it kind of sit where it is because the danger of Russian nuclear escalation is too large.

And we kind of said, gulp. That really changes the rules from nuclear weapons are to defend your own territory versus nuclear weapons are something you rattle in order to invade. Soon, of course, and this is probably a when more than an if, Iran will have a nuclear weapon and will say, get out of Gaza, or else we pull the nuclear weapon, at some point, do we call their bluff, or is that the new order of affairs?

 

>> Niall Ferguson: Well, I think there's clearly an argument for preventing Iran becoming a nuclear armed state. Given what Russia has been able to do by rattling its nuclear weapons, there's a very strong argument for making sure that Iran can never do that, because Iran is bent on the annihilation.

But we have to stop that. Can we just be clear? It has to be a goal of policy, not only to avoid world war three, but to avoid Holocaust, too. And if Holocaust two is on the Iranian and Hamas agenda, we've got to stop that. That seems like the most obvious moral imperative for any American government, or for that matter, any European government.

 

>> Stephen Kotkin: It's about your definition of victory, right? That's what your issue is. We had no public conversation about the definition of victory in Ukraine, except for ceding to the Ukrainians their definition, which was complete regaining of all territory recognized under international law as Ukrainian. War crimes tribunals for those responsible for the war and reparations.

And my argument was that those were attainable if you took Moscow.

>> Stephen Kotkin: If you don't take Moscow, you need another definition of what victory might be. And my definition of what victory might be has not changed during these whole 19 months. It's Ukraine inside the EU, which is required to transform their domestic institutions.

And it's some sort of security guarantee, which is not likely to be NATO in the short-term, but could be bilateral plus and then a rebuilding of Ukraine, South Korea style, on the other side of the DMZ with an armistice. Our problem was we weren't getting to the armistice.

Neither side was incentivized to get to the armistice. But my point was that even if Ukraine had taken all their territory back, it still didn't make them secure or didn't end the war to enable them to rebuild and join Europe because Russia could continue the war. Add infinitum from Russian territory rather than Russian occupation.

 

>> John Cochrane: I think you've missed the important definition of victory here. It is so that everybody else looking at it says, these guys will fight. This isn't just one more promise. This isn't one more stern denunciation at the UN. They will do something about it. We had better not set off missiles in Lebanon towards Israel.

We had better not blockade Taiwan. These guys mean it in a way that they have not in the last ten times.

>> Stephen Kotkin: Restoration of deterrents, yes. And we had let it lapse, and it has been partially restored, and it needs to be further restored. And that message is a never ending generational message, right?

So you get happy about globalization and engagement and all, and the peace and prosperity agenda and the fact that markets are very powerful and produce that kind of prosperity. Thank you. And then you don't understand the world that you live in, because what's peace and prosperity to you is building up national capabilities to destroy you at some point by your partners.

And so here we are in that dilemma again, right? I'm good with peace and prosperity. In fact, I like peace as much as anybody likes peace.

>> John Cochrane: And most Palestinians like peace. Let us not treat other people as unified. Palestinians are Hamas.

>> Stephen Kotkin: That's the crime here, that Hamas is allowed to speak for these millions of people.

 

>> John Cochrane: Exactly.

>> Stephen Kotkin: And that Hamas is allowed to portray itself as a liberation emancipation organization when it is just a murder, rampage, and rape organization with no plan or ability to get the liberation or emancipation. And so that tragedy of conflating along with Hamas, their goals with the Palestinian people is what the protesters are doing now in support of Palestine.

They're saying that the Palestinians deserve better. And I think everyone on this panel, just as everyone in that viewing audience, believes that's true. But so how do you deconflate, right? How do you take away Hamas's ability to speak for these people? That's a political strategy, and we can talk about Israel's last 15 years in that political strategy, and it doesn't look impressive.

 

>> Bill Whalen: Stephen, before the Middle east erupted, President Biden said that he is going to give a major speech on Ukraine. And there are two things going on in Washington. One is the clock is ticking. Congress, if it ever gets its act together, needs to extend the budget beyond mid November.

This raises the question of the $13 billion that he wants in Ukrainian aid. But the other issue here, Steven, Niall, and John, is that the president's looking at public opinion polls. And one in particular is a rather disturbing Reuters Ipsos poll which shows erosion of support for Ukraine and the US a little bit among Democrats, a whole lot among Republicans, but erosion among the middle.

So the president wants to go on TV and explain why the need for Ukraine. So I'm in the presence of three rather eloquent writers. I'd like each of you to give me your elevator pitch for what the president should say. What's this message to the American people about why Ukraine deserves more money?

 

>> Stephen Kotkin: Do I have to go first?

>> Niall Ferguson: You've been speaking for the administration. You should carry on.

>> Stephen Kotkin: I have not been speaking for the administration, and you know that well. America has become a blockbuster country. We do one blockbuster at a time. The blockbuster will see it two times, three times, half a dozen times.

We'll stay with the blockbuster and then we'll get bored with the blockbuster, waiting for the next blockbuster to come along. And so it was Ukraine for a while because nothing else happened. And now there's a new blockbuster. And so what happens to the previous one? Does it go onto Netflix or some other place in the ether?

You'll recall that when I gave my first speech here at Hoover about the Ukraine war, that one of the points that I made was that I love economics. It's because the models are so powerful, they explain everything. Except there's this clause in the fine print, just like in your lease or just like in any, and it says, all other factors held constant, comma.

And then, bang, the models are really powerful. So in the real world, in geopolitics, all other factors cannot be held constant. And so something was gonna happen which was going to change the context for Russia's aggression against Ukraine. I had no clue what that was gonna be. And by the way, I was wrong.

I was wrong at the six months. I was wrong at the 12 month juncture. I was wrong at the 18 month juncture. I was wrong for 19 months about this point. But now here we are, and as I said, there's this new blockbuster that's changed the context. So something was predictable, but the exact something maybe was more difficult to predict.

But I'll leave it to other colleagues who might be better clairvoyance than I am.

>> Niall Ferguson: That is not gonna be a great speech, by the way, if that was Biden's speech-

>> Stephen Kotkin: And so here we are now, here we are. We have to attach Ukraine, the previous blockbuster, to the new blockbuster in order to get it across the line.

But this is for aid. This is for money aid. This is what Ukraine needs. It needs half a million 18 to 29 Euros. You gonna send those? It needs ten million rounds of munitions. You got those to send? You don't, because you don't have the military, industrial or defense production complex that you had years ago.

You got anti-aircraft missiles, more anti-aircraft batteries and especially anti-aircraft missiles. By the way, we went to Israel and shook them down for 300,000 artillery shells for Ukraine not that long ago. That tells you just how desperate we are on the supply chain side for the actual stuff that Ukraine needs.

We're not gonna send the people. I think that argument is beyond any president to make, let alone one that's not good at making public arguments. And Germans are not gonna send the people. The Poles are not gonna send the people, and the Ukrainians are running out of people.

We don't have the munitions to send. We'll send what we have, but we don't have sufficient numbers. And it'll be a while, 2025, before we have anything like numbers to send.

>> John Cochrane: The speech is getting more and more inspiring by the minute, by the way, please go ahead.

 

>> Stephen Kotkin: And without the anti-aircraft missiles, that means that Russia's air force, which is still intact, comes into play. Air force against anti-aircraft is useless, almost. But air force without anti-aircraft, you got the skies. And so we need an armistice. That's the conversation we've got to have. And how are you gonna get the armistice?

You gotta put pressure on the regime in Moscow to think that it could fall if it continues this war. It has to feel the regime change variable. It has to be afraid for its life. Its survival is the only variable that you get their attention. And theres no way to get their attention except if theres an alternative political regime on the horizon.

Defectors, groups of defectors, covert operations, all sorts of things. And then he's got to cut bait and run to preserve every time it's been the war or his regime, whether it was Pragosian or Sordin, he's chosen his regime over war assets and capabilities. So the speech has got to be a speech about defining victory and the importance of an armistice.

And guess what? If President Putin signs a piece of paper with President Zelensky? What's that worth, John? Nothing.

>> John Cochrane: Less than a piece of paper.

>> Stephen Kotkin: Well, what if he signs it in Beijing with Xi Jinping in the photograph? Can he then flip the bird.

>> Niall Ferguson: Measurable in Kopec?

 

>> Bill Whalen: Let me throw a historic parallel at Niall 1941, early 1941, Franklin Roosevelt has to sell the American people on the notion of lend lease. And if you look at-

>> Stephen Kotkin: Can you bring him back?

>> Bill Whalen: Yes, and if you look at actually the Ukraine spending, it's actually the Ukraine Lend Lease act of 2022.

 

>> Stephen Kotkin: Yes.

>> Bill Whalen: So Franklin Roosevelt goes on radio on December 29, 1940, to talk about why Lend lease is the right thing to do. And he coins a phrase, America is the arsenal of democracy. And here's the question, Naill, Biden gives a prime time speech, we assume, on this.

How much of this is about the war in Ukraine? And getting back to what you said about America's role in the Middle east, and which is essentially a moral issue as well. How much of that speech would he devote to explaining America's role in the world?

>> Niall Ferguson: Well, I think the important thing about this speech is that it has to capture that the seriousness of the situation begins to approach that of the mid 20th century.

Now, I have been very reluctant, and I've said this many times to invoke the historical analogy with World War II. But I think we've now approached the point when it's legitimate to say that for the United States, the three theaters of conflict, the three targets that, Let's call them the Axis of Ill Will, currently threaten, I think that's better than Axis of Evil.

I think there is ill will that unites China and Russia and Iran, and one might add, North Korea. This Axis of Ill Will poses, as we've said, existential threats to Ukraine, to Israel and to Taiwan. And from the vantage point of the United States and its allies, for any one of those to be wiped from the map would signal the advent of a new dark age in which the might of the arsenal of autocracy, because that is what China now has.

An arsenal of autocracy could be deployed anywhere, and whatever was left of the rules based international order would be swept aside. So I think a speech of the sort that you have in mind needs to call on Franklin Roosevelt's memory, needs to invoke that spirit and make Americans understand that isolationism is no more an option in 2023 than it was back in the 1930s.

And, in fact, it's the great delusion of American history to imagine that the world's number one superpower can just opt out of one, two, or ultimately even three different regional conflicts. That's what the speech has to say. Now, the problem is that the 1930s analogy has been overused to the point that it's a bit like crying wolf when you bring it up.

You know, if everybody you don't like is like Hitler and every regime is the Nazis, then the American public has a right, I think, to shrug its shoulders and say, we've heard that one before. Didn't you say that about Saddam Hussein? And look where that led. So that's why the speech writer has a huge challenge conveying to people, as I tried to do in the Sunday Times article, that the situation is very bad.

1930s bad is hard because people have heard it all before. But the critical point I want to emphasize here is the level of collusion between China, Russia, Iran, and North Korea. They are working together. When we talked about an Axis of Evil after 9/11 was David Frum's phrase.

It was made up. It was just a line for a speech, for a state of the Union address. This is a real axis. And guess what? In economic terms, it's more powerful than the original axis. It's got more resources, and they have the arsenal now we don't. So any speech, and this is, I think, the kind of paradox at the heart of what Steve said, any speech has to simultaneously threaten regime change in Tehran and in Moscow.

While at the same time not over committing the United States public to a level of military engagement that is not politically viable at the moment. And that's the needle the speechwriter has the threat you gotta somehow threaten regime change in Moscow to get the armistice. That is a tough one.

 

>> Stephen Kotkin: I don't know, you think he's gonna give the speech? And if he gives the speech, you think it's gonna be broadcast? You think anybody's gonna hear it? You think, I mean Roosevelt was in the radio era, pre Internet, pre Netflix, pre grumpy economist. I mean, there was nothing to pay attention to except Roosevelt.

 

>> John Cochrane: Speeches go viral if you say something interesting enough and nobody pays attention.

>> Stephen Kotkin: That's obviously why I don't.

>> Niall Ferguson: It is a conceited American politician something is suspicious.

>> John Cochrane: Starts slow and moves to a punchline. So I might start-

>> Stephen Kotkin: Go for it.

>> John Cochrane: Start with and I won't try to give the speech.

But let's start with the growing ennui. We have forgotten where Afghanistan is. It's one year into Ukraine. We had beautiful statements on Ukraine, and now we're sort of giving up. And ennui has set in warning to Israel, how long is America gonna last? Especially as it gets on.

 

>> Niall Ferguson: This is gonna be known as the ennui speech, the way Jimmy Carter's was the Malay speech?

>> John Cochrane: But then we're gonna move, yeah, and of course every speech has to make fun of economists somewhere along the way.

>> Stephen Kotkin: I didn't make fun. I said your models were powerful.

 

>> John Cochrane: Except.

>> Niall Ferguson: Except parables.

>> John Cochrane: Except for that one little problem, Mister Lincoln.

>> Niall Ferguson: Let's say it in Latin.

>> John Cochrane: Then I think we need to, I am much more hawkish than you are. We need to not wake up in a world where first of all, people can invade other countries and get away with it.

You are right that not only is an axis emerging, but the undecideds are looking around to see who has the will to win. The India, the Arabs, Saudi Arabia is now not proceeding diplomatically with Israel and reportedly starting to talk. Hey, maybe we better learn to get along with the Iranians here and certainly get along with the Chinese.

So the undecideds are like in world War II, trying to decide who's gonna win here. I want to be on that side soon. So we need to make clear that's us. And so I think we need to make clear we're deadly serious. Yes, we've been slow to respond.

We will let Ukraine win. We will help Ukraine to win. We will do what it takes. We will do what it takes to defend Israel. And one of the things it takes is getting serious about economics. We need to build up our military capabilities. We don't just say, we don't have a defense capability.

Well, we're gonna build one stuff. Starting yesterday, we seem to be pretty good at throwing trillions of dollars of federal money around at industrial policy. How about throwing some money around an industrial policy that rebuilds our military?

>> Niall Ferguson: Please, sir, our debt is 110% of GDP, our deficit is 7% of full employment.

How are we gonna do that?

>> John Cochrane: We're gonna do that, let's start by getting serious. We're spending a trillion dollars on battery powered electric cars, so long as they're made in America by union labor with appropriate other social safeguards. Well, maybe that's a trillion dollars that needs to be spent on other things because military is cheap.

We're spending 3% of GDP a year, in the Korean war we were spending 10% in world War two, what's the number? Deal like 40, 50% of GDP. These are not huge numbers even now, I mean, a trillion dollars would go a long way, and we could easily save a trillion dollars on the silly things we're doing.

 

>> Niall Ferguson: But this is not just other things remain equal. This is things completely change in the american political system morphs into a rational policy making.

>> John Cochrane: You asked me for an inspiring speech about what do we need to do? Because, and here I wish I had HR. In World War two, we were completely unprepared, but we had two years to rebuild.

They didn't win, it's not clear we're gonna get two years to rebuild this time around, this may be a war where you.

>> Stephen Kotkin: As long as you don't capitulate, you get as much time as you want to rebuild. That's the story of all wars, right? In other words, if your will is destroyed, you don't rebuild, but if your will is not destroyed and you have capabilities, capacities, resources, national unit.

 

>> John Cochrane: So this speech needs to be a speech of will, we have the will, and we're gonna take the actions that we are not gonna lose these wars. We're not gonna sit there and let it happen.

>> Stephen Kotkin: The we is my problem with your analysis. It's the way, I don't know is.

 

>> John Cochrane: Come on, this is a speech, we, America, are gonna come together and unite, speaker of the house. So this is the thing. It's a call to unity.

>> Stephen Kotkin: You're not more hawkish than I am. I'm more hawkish than you are. But my problem is I live in the constrained world of the political system that we have the incentive structure that we have for politicians.

Moreover, authoritarian regimes, this is history, they undermine themselves. Look at the campus politics,right? They are taking videos of themselves, just like Hamas took videos of themselves showing how morally bankrupt they are. They're doing the work against themselves. And so your job with authoritarian regimes, is not to have the world go up and smoke in the meantime, while they're doing the work.

China, Xi Jinping has a gun to China's head, and he's got a gun to China's head for a while now. And the hawks, what do they want to do? They want to rush in and help him pull the trigger. And the doves known as treasury, what do they want to do?

They want to run in and take that gun away, because God forbid we would decouple. What do I want to do? I want to say, you got a gun to your head. I'm gonna watch what you do with that gun, as long as you don't point that gun at me.

 

>> John Cochrane: Exactly.

>> Stephen Kotkin: So you keep that gun to your head, I gotta get my act together and I gotta make sure that you don't turn that gun around.

>> Niall Ferguson: Problem is, he has two guns, and there's another gun that's pointed at Taiwan and the question is, which trigger gets pulled first?

With a bit of luck, he pulls the gun against his head's trigger first. And the Chinese economy can't, in fact, sustain the legitimacy of the CCP, much less an aggressive foreign policy. The worry I have is here, our colleague Matthew Pottinger has made the same argument. One sees a kind of an increasing pressure on Xi Jinping precisely from the failing economy to take strategic risk.

And I wonder, Steve, if you agree with the view that there's a danger that the more we apply pressure on the Chinese economy, with for example, the Commerce Department sanctions, cutting China off from semiconductors. There's a tendency, I think, to underestimate how much pressure that creates and the extent to which that increases the likelihood of a strategic gamble on Taiwan.

I go back and forth on this because I don't think, it's a great analogy to say we're doing this the same to China, that we did to Japan in the late thirties. But I think it's at least worth discussing what the probability is, that Xi Jinping says, you know what, I'm now ready to take the risk in Taiwan, because the Americans are bogged down with Ukraine, bogged down now with Middle East.

This is my moment and as the economy kind of sucks and the growth rate is going to low single digits, I don't have time, I don't have long, I can't wait until even 2027. What do you think the chances are that he goes for it, say, January, this coming January, around the time of the Taiwanese election.

I worry about that a lot.

>> Stephen Kotkin: You're not gonna believe this, but I have no idea what Xi Jinping is thinking. I mean, I know that sounds ridiculous, I can know all dictators. So the Japanese made a mistake in 1941. That gamble destroyed them and so that's an important piece of history.

Not just that we didn't have a plan, if the Japanese, under pressure, decided to do a suicidal gamble, right? That's where Roosevelt fell short. He put the pressure on, but assumed that the Japanese would just capitulate under the pressure, there was no preparation for the other assumption.

>> Niall Ferguson: And there is a Pearl harbor scenario imaginable.

 

>> Stephen Kotkin: The Chinese could make a mistake, recall that going up against American power has not been a good bet.

>> Niall Ferguson: But if anybody has a shot, it's China today.

>> Stephen Kotkin: Not in Germany, Imperial Japan, Soviet Union.

>> Niall Ferguson: Just in terms of GDP.

>> John Cochrane: Vietnam, Afghaistan.

>> Stephen Kotkin: First of all, we lost that war and we won the peace in Vietnam.

It is one of the most pro American countries in the world, you can win a war and lose the peace, that's what we've been doing, Iraq, Afghanistan. But you can lose a war and win the peace, as happened in the fullness of time in Vietnam. So you have certain strengths, and those strengths have to be gardened, husbanded, strengthened over time, right?

You have to care, take your strengths, and you have to deter your adversaries from taking suicidal gambles, because you pay a cost even when they lose.

>> Niall Ferguson: I mean, I think it's worth adding Steve, can I just interject?

>> Stephen Kotkin: Of course you can interject, it's your show.

>> Niall Ferguson: But if I may, the point is that China, of all the regimes that have challenged the United States, China has the most firepower economically, and now increasingly in military terms.

Japan was obviously attempting national kamikaze, when it launched Pearl harbor, and they kind of knew it. But the odds were so low.

>> Stephen Kotkin: The Soviet Union had a much bigger land army, much bigger nuclear weapons force.

>> Niall Ferguson: Close 41% of US GDP tops.

>> Stephen Kotkin: China, it's not GDP, it's will and capabilities.

 

>> Niall Ferguson: But I think China has both of those.

>> John Cochrane: Way more than Russia or Iran right now. I mean, it's just order of magnitude.

>> Niall Ferguson: And its manufacturing volume added is two x that of the United States. That is a startling number.

>> Stephen Kotkin: You guys are too much economists.

They don't care how much GDP they have or don't have. It's about their capabilities. The Soviet Union had incredible capabilities across the board. With an economy that was one third the size of the US, they reached military parity. And so this is a big story that we have to keep in mind, we have to be careful.

Of course, I would like to have a larger economy than a smaller economy. Get that, I would like to have tech sectors rather than not have the tech sectors. I'd like to have manufacturing capacity. I'd like to have a lot of the things that the Chinese have built up, including their logistics capabilities, which are superior to anybody else's on the planet.

But they don't have the ability to take on the United States and win unless we capitulate. That's it.

>> Niall Ferguson: Right.

>> Stephen Kotkin: That's the bottom line.

>> John Cochrane: They're not gonna invade San Francisco, but are we gonna fight for Taiwan?

>> Niall Ferguson: A nightmare scenario, let me just.

>> Stephen Kotkin: If we capitulate, but you gotta be careful with the domino theory, right?

The domino theory Vietnam. Somebody here, a very famous economist, evoked Vietnam on behalf of the show. The domino theory was disproven it was wrong, right? That if Vietnam falls, all of Asia is gonna fall. We were telling, McNamara told the Germans in Berlin that if Vietnam fell, the communists would be in Berlin on the other side of the wall right after that.

And it was wrong. And so, we have to defend these places, and we have to communicate that we're gonna defend these places. And I'm no less hawkish than you are in that.

>> Niall Ferguson: Nightmare scenario very last analogy. I know we've got one more time, but one more analogy.

 

>> Stephen Kotkin: You go for it.

>> Niall Ferguson: In Cold War II, what if we are the Soviets? What if we end up having to send a naval expedition force across, this time, the Pacific, because an island gets blockaded by the other side? That's 1962 the island then was Cuba. The island this time is Taiwan.

And that's the scenario where I think we could fold.

>> Bill Whalen: Because-

>> Stephen Kotkin: I have a strike in Hollywood. You can't be a screenwriter. You're crossing the picket line.

>> John Cochrane: Taiwan is not Hawaii, not US territory.

>> Stephen Kotkin: Correct.

>> John Cochrane: It's a long way away. And by the way, it's not obvious to me Japan was committing suicide.

If you look at the US the day of February 6, 1941, it's not obvious that we were gonna go completely nuts and decide that we have to invade and completely crush Japan over. They threw some bombs at a military base.

>> Niall Ferguson: I don't know, day of infamy is one of those phrases that doesn't give you.

 

>> John Cochrane: No, it is the thing to remember. Americans can retreat and give up and give in and isolationist. And then something goes boom, and they change their minds, and they get serious and watch out. But it was a change of mind, and it was partly because of Roosevelt, but it was an easy bet that America would have said, well, we'll negotiate, blah, blah.

 

>> Niall Ferguson: I think we're closer to a 1962 than a 1942, where the US talks to talk about all these places, Ukraine and then Israel and then Taiwan. But when it comes to the crunch, when the ships are sailing and the submarines are sailing across the Pacific Ocean, the stock market's off 30%, the polling looks disastrous.

I think it's a Khrushchev moment, and we don't follow through. The war doesn't happen. But at that moment, when we are the Soviets, that is a turning point in the history of the second cold War, because everybody, including the Japanese, will conclude it's game over for American primacy.

That's the scenario I worry about much more than world War III. I just worry about Cuban missile crisis, too, only we're the Soviets.

>> Bill Whalen: Okay, final question here, let's do it quickly. When the president of the United States, assuming he gives this great speech about Ukraine, the need.

And perhaps he talks about this as a crusade, whatever analogy he used to evoke it, when it comes to saying we, is he speaking for the world? In other words, if Biden gives a speech, Niall, Gentlemen. And he talks about the moral necessity for doing the things the United States will do, does the world stand with the US right now?

 

>> Niall Ferguson: Well, the we has come to mean the democracies that showed up on the side of Ukraine. And if you look at Biden's recent speeches, he loves to invoke the idea that there's this kind of coalition of democracy loving nations. And that is, I think, the kind of pattern in his rhetoric.

The problem is that this coalition gets smaller by the day. There are certain number of people who will show up, reliably show up for Ukraine, and that is like Europe, more or less. Few hesitations, but they're basically there, now look at how they react to the crisis in Israel.

And, it's weasel world cities like an American campus, the things that are coming out from some European leaders. And when we get to Taiwan, it'll be good luck with running the blockade we'll let you know how things are going in Ukraine. Do you agree?

>> Stephen Kotkin: Leadership is the key variable in all of this.

Leadership can create the way, or leadership can fail to create the way. In a crazy peacetime, prosperous environment, you can afford anything. You can afford Trump as president, you can afford Biden as president. There's nothing you can't afford. When stuff is happening and you need to rally domestic population, you need to rally the will of your allies.

You need to communicate to your adversaries. It's gotta be real leadership. It can't be fake leadership. It can't be television leadership. It's got to be Roosevelt-level leadership or, fill in the blank, Reagan-level leadership, right?

>> Niall Ferguson: I always mention Churchill once on every show, so can I just.

>> Stephen Kotkin: Well, Churchill, okay, because it was real leadership.

He got the biggest thing correct in his life. And so right now, there's no such leadership on the horizon. But you would be a fool to misjudge America just like Hamas has misjudged Israel. You'd be a fool to think that because Netanyahu had done what he did to divide his country, to pursue his agenda domestically, solely to avoid a being convicted because of the indictment he was under.

You would have been a fool to judge Israeli society as not ready to rise to the challenge when they were protesting by the hundreds of thousands. He called them traitors and he called them scum. And now those people have answered the call to the colors, and they now have to risk their lives on behalf of that country and on behalf of his blundering, criminal leadership.

And they're doing so. They're getting on those planes. They're paying out of their own pockets. They're going there, and they're gonna get this done. They're gonna do this as they should. And so are we capable of that in a crisis when it affects us directly, not when it's, for example, territories that Americans can't pronounce or can't locate on a map or whatever it might be.

But when it affects us, I'm much more worried not just about the leadership variable, but I'm also worried about whether we have economic resilience. Because you keep talking the 1930s, that was not the happiest decade in economic terms, as I recall.

>> Niall Ferguson: That was a great time to do rearmament, though.

Nothing like a depression to open up the options for rearmament. That's what we don't-

>> Bill Whalen: John, you get the last word.

>> John Cochrane: We have to start at home. And the characteristics of the great speeches you've talked about is that we sense a threat to an external threat, and I would say a big internal threat.

If the next election is Trump versus Biden and things go the way they're going, we're headed straight for a constitutional crisis. And so that the prime ways these speeches go is we is internal. So that means unity. There's a threat to America of this emerging axis abroad. There's a threat to America from the emerging crises internally.

So one thing you don't do in a speech like this is talk about evil MAGA Republicans and how they're trying to undermine things. You have to achieve unity and you have to say, we're gonna give up some of this. We're not necessarily gonna spend $400 billion handing checks to bailouts, student loans and a trillion dollars on electric vehicle subsidies.

We're gonna get serious about not throwing money down rattles we expect the other side to get serious because we need a national purpose and get together. Is this yet isn't 1941. It was very clear that this was a moment of unity. It's clear in Israel this is a moment of unity.

This is a national unity government. But those are the kind of rallying speeches you're looking for. And you can start by just evoking a national purpose and nothing constantly snipping in little insults to your opposition.

>> Bill Whalen: The answer is the president will say whatever John Meacham writes for him.

There is that sobering thought. Gentlemen, very enjoyable conversation. You have places to go, things to do, so we're not gonna do late ran today. Stephen Kotkin, thank you very much. And I fully expect this to get 2.2 million views as well.

>> John Cochrane: We brought him on to increase our clicks.

 

>> Stephen Kotkin: I'll be clicking myself as much as I can, but thank you for the return invitation. I don't know how I did today in HR's place. He's irreplaceable. But if there ever is a third invitation, I'll be grateful.

>> Bill Whalen: You'll get it. You'll moderate if you want to.

 

>> Stephen Kotkin: Thanks, Bill.

>> Bill Whalen: Okay, thank you, Gentlemen. That's it for this episode of GoodFellows. We'll be back soon with a new edition until then, we want you to stay safe, take care. On behalf of my colleagues Naill Ferguson, Doctor Stephen Kotkin and John Cochrane, the absent HR McMaster.

Thanks again for watching. We will see you soon.

>> Speaker 5: If you enjoyed this show and are interested in watching more content featuring HR McMaster, watch Battlegrounds also available at hoover.org.