Davos, World War III, Essential Books, And No Swearing

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Letters. We get letters. We get stacks and stacks of letters.

>> Bill Whalen: It's Wednesday, January 24, 2024, and welcome back to Goodfellows, a Hoover Institution broadcast examining social, economic, political, and political concerns. I'm Bill Whelan, I'm a Hoover distinguished policy fellow. I'll be your moderator today. But enough about me, you're not here to watch me.

You're tuning in to watch the stars of our show, our three colleagues of mine who we call the Goodfellows. That would include the historian Neil Ferguson, economist John Cochran, geostrategist and former presidential national security advisor, lieutenant general HR McMaster. They are Hoover Institution senior fellows, all. So, guys, at the end of the last show, we told our viewers that we wanted questions from them and make this a mailbag show, and so indeed, that's what we're doing today.

I'd like to thank everybody who bothered to write in. If we don't get your question in this show, please don't take it personally. We received over 100 questions, simply not enough time to get all of them today. But I would like to ask a favor, and that's to keep sending us questions, because we want to include questions in our lightning round in future shows.

And just send it to the same address as before, Hoover.org/AskGoodFellows. And I'll make the pitch at the end of the show, too. So, gentlemen, if you're ready, on with the show and let's do a few group questions. The first one from Edward in New Jersey, who writes, are the forces of tradition, if not of conservatism, starting to rally?

As seen in Pennsylvania governor Shapiro's opposition to efforts to remove William Penn's statue from Phillies Welcome Park, Australian PM Albanese's postponement of his promised referendum on the monarchy? Not an organized resistance, but at least a shift in mood from berating to appreciating what our western heritage has to offer.

If so, what are the implications for the teaching of and the use of our western socio political and cultural inheritance in the near term? Neil, is the pendulum swinging?

>> Naill Fergyson: I think the first signs of a change are there, but I don't think it's a pendulum. Certainly from the vantage point of academia.

It's felt more like a ski slope recently, but even the steepest ski slope finally levels out. I do sense that in the great backlash we've seen against wokeism in the academy since October 7th, there's something healthy going on. Of course, the problem for conservatives is that in an election year when the choice is essentially a very partisan one, and it's not clear that conservatism has a real home, at least in certain sections of the Republican party, it's not an easy time to consolidate this change in mood.

But I think it's good to ask the question not just about the US, but about the anglosphere as a whole, cuz I do think there is a shift happening. The trouble is translating it into politics. In Britain, it's almost certain there'll be a labour government soon. That is not going to be good for conservatism, because for sure, Labour is more woke than the Conservatives.

 

>> Bill Whalen: John?

>> John H. Cochrane: Yeah, it's more a battle that's turning rather than a pendulum. These things are hard. I would not put it as a turn to conservatism in western heritage and so forth as much as just the outbreak of common sense. The emperor has no clothes. There's a basic core of America that has some basic common sense and the slight ability now to speak out.

The problem is when you said, the emperor is naked in the past, you immediately get shamed and you can actually start to say it and fight it. So it's the beginning. There's a light at the end of the tunnel, but nothing as advanced and optimistic as our questioner had in mind.

 

>> Bill Whalen: Hr, you're a Philadelphia guy, were you shocked to see that Billy Penn was being taken away? No.

>> H.R.McMaster: I mean, somebody who really sparked a whole movement for religious freedom. And so I just think, okay, John said it. The emperor does have no clothes. I was thinking the same thing.

But I do want to say, Bill, we do tune in to see you, too. You're my daughter's favorite on Goodfellows. They keep saying, that guy Bill is so nice. And you really are a nice guy, Bill, thank you and do a great job on the show. I think it's the beginning.

Neil and John, we all talked about, gosh, maybe a couple of years ago now about how people were afraid to call out ESG or DEI because immediately get labeled, okay, you're a racist. I think now enough people have pointed out from the sidelines of the parade, hey, the emperor's naked.

And I think that that's gonna have a cascading effect. The real test, Bill, I think, is gonna be okay, how does the younger generation react to this? And they've been fed this doctrine in the academy and maybe in the secondary school as well. And I hope that more and more young people are questioning this kind of warped orthodoxy.

 

>> Bill Whalen: Okay, we have a question from Michael in Plymouth, Massachusetts, who writes, I am a high school history teacher. Please recommend both contemporary series, publications that connect contemporary issues with historical antecedents that are accessible to the average reader at a high school level. Also, any primary source documents from American/Modern World history that would be considered fundamental.

 

>> Naill Fergyson: Well, that's a straightforward one, which I'll take. The applied history movement is still in its infancy, and by that I mean the effort by a new generation of historians to apply lessons of history to contemporary problems. And that's deeply out of fashion in most history departments, so you have to look elsewhere for that material.

And I recommend the Hoover History Working group, which I chair, which has been publishing its working papers in applied history, as well as holding seminars. And at the Belfer center at Harvard, there's an applied history group, too, and they do a good job on their website of bringing together articles that are applied history articles, and often those are relatively short and therefore very accessible.

So those are your two centers for applied history. As for a document, one of the things about being an immigrant is you have to study up a bit in order to pass the citizenship test. And there's nothing quite like the Declaration of Independence and the Constitution to focus the mind on what distinguishes the American Republic for other experiments in democratic governance.

So start there. And once you've done that, and of course, everybody should have by now, but if they haven't, they should, then I really recommend an outstanding book by the British historian Jonathan Clarke, JCD Clarke called the Language of Liberty. Which highlights all kinds of far less well known documents about the origins of the United States.

 

>> Bill Whalen: HR, you're a historian, what do you think?

>> H.R.McMaster: Hey, well, the writing of Battlegrounds was, for me, a continuation of my self education. And so on the back of that book, there's an extended reading list for each of the sections of the book. So I would just ask, if you have time, please look at that recommended reading list for each of those topics.

But on primary sources, I think, well, it's a great teacher who wrote that question. Because I think whenever you teach a lesson, you should have maybe some secondary source essays that are opposed to one another in terms of their interpretation of history, but then also have primary source documents.

There are companion volumes for, I think, the most important experiences and events in history that you can find Find quite readily. You can always consult an archivist. I mean, I think the archivists at the National Archives are phenomenal people and they will help you for specific documents. But also there's the series the foreign relations of the United States, the FRUS series, which has great primary documents in it as well.

And if you're teaching the Civil War, there's two volumes of just primary documents from the Civil War, for example. But anyway, I think that the teacher who wrote that is a great teacher. And if you're teaching about China, for example, go to Frank Decoder's five volumes and look at the primary source material that he quotes at length as well.

 

>> John H. Cochrane: I just want to also cheer the primary source thing. My father was a historian and taught an undergraduate class entirely out of primary source. Now, you can't always do it, you have to read history. And good history, like Niall's and HRS is always worth reading. But the habit of go check the actual source is one that we have lost in a lot of public debate.

And I thought it was very great. Now, as long as you're in Plymouth, Massachusetts, I got some recommendations of course, William Bradford's History of the Plymouth plantation is a primary source and worth reading. And I forget the author, but the King Phillips war history I read recently, I thought was just smashing.

And I'll put in a plug. Niall works for help put together a website reclaiming history. What is it in the UK on? And it's in bits. So you get little bits of history here and there, but they'll go to art museums and deconstruct the new crazy posters that you see next to every piece of art.

What's the right website, Niall? History reclaimed, is that it?

>> Naill Fergyson: That's right. That's the name of it. And this is an attempt by British historians like my good friend at Cambridge, David Aboulafia, to push back against woke pseudo history, which is a plague in museums and other historical sites and not only in the UK.

Hey, just one quick plug for the Hoover archive, which is phenomenal, by the way. And so if you're in the neighborhood, stop by the Hoover Tower, look at the rotating display through the Hoover archives. And if you're a professor instructor, when you have time, come visit, meet our amazing archivists and maybe develop your next syllabus.

As you go through some of the primary materials here.

>> Bill Whalen: We'll make sure to include links to history reclaimed in these other sites we're mentioning. Gentlemen, a question from Hugo and the Hague. He writes, hey, there good fellows in the war of the world. Niall argues that before 1914, many people believe that a war between European powers would come at too great a cost, and therefore it would never actually happen.

In the first episode of 2024, Niall says that World War III with China wouldn't happen because the consequences would be too great. Are we at a point now where that rationale is what leads us to World War III, because all sides don't believe it will actually happen Niall?

 

>> Naill Fergyson: Well, I'm reminded of Henry Kissinger's analysis of World War I and World War II having very different antecedents. The one, in a sense, the result of a colossal series of miscalculations, and the other somehow visible from many years before, with a certain inevitability to it, ultimately the result of a failure of deterrence.

And I think when I argue that there is a kind of financial version of mutually assured destruction today, I take some heart from that notice. We discussed it before, but the taiwanese election did not produce a Taiwan crisis, even although the candidate that Beijing did not like won.

And the reason for that, I think, has to be the incredible mess that the chinese economy is in right now. And if you don't believe me, take a look at the chinese stock market, which is now in such dire straits that the government is having to devise methods to prop it up.

So economics there, even before a crisis, has acted as a constraint on Xi Jinping. That's the good news. The bad news is that Norman angel thought that would constrain the great powers before 1914. That's the central theme of the book the great illusion, which was published just a few years before the war broke out.

So even although both sides have strong economic reasons not to end up in a conflict, it could still happen. And I think the issue that I'm preoccupied with is deterrence and why we've forgotten its key rules. I think this administration has been extraordinarily bad at deterrence. It certainly didn't deter Vladimir Putin in 2022.

I don't think it's deterring Iran right now. It can't even deter the Houthis, who appear able to defy the might of the United States and entirely disrupt world trade by hitting shipping in the Red Sea. This lack of deterrence is, I think, a real concern, because at some point, not this year, perhaps, but at some point this decade, one feels sure that a confrontation over Taiwan will happen.

And maybe because the Chinese economy is in such a mess, Xi Jinping wouldn't be the first leader who, looking at an economic crisis at home decided that the best source of legitimacy would be a foreign war.

>> Bill Whalen: HR.

>> H.R.McMaster: I would just agree with Niall on that analysis.

I think that what happens next in the Middle east. What happens in connection with continued support for Ukraine, will have big implications on whether or not Xi Jinping makes a decision to act on his threats toward Taiwan. Or to become more aggressive in the South China Sea and precipitate maybe a war, another theater of war in these connected wars that we're experiencing today.

 

>> John H. Cochrane: I would add then, so this idea that we won't go to war because it'll implode our economy, well, in both first and second world wars, both sides underestimated just how bad it would be. Everyone thought wars would be over soon. Hitler also missed, there was a miscalculation there.

He didn't think we would fight back, he thought, which we eventually did. So you are deterred from war or other because you think the other side will fight back or because you think your own economy will crater. And I think both sides are a little bit under illusions about how robust their economies would be in a war.

I think China impossibly doesn't care, as Niall pointed out, same way North Korea doesn't care if its economy goes down. And the US, I don't think is clear about how dependent we are on China. You see all the desire to bring everything back. I ran into an interesting number.

US produces 0.2% of the world's shipping. China produces 50%. We don't know how to build stuff anymore in the US. And so I think we are not at all clear on how disastrous a war which would stop all of global trade really in the east, would be for the US economy.

So you can clearly see we're not being deterred by that fear. And I don't think China is either. You need the means to fight, and the will to fight, Niall was pointing out, doesn't look like we have the will to deter. And it doesn't look like the fear of economic implosion is going to slow this one down any more than it did the last couple.

 

>> Bill Whalen: Let's stay with China and this question from Orvin in Ottawa, Canada, who writes. If China's economic and population growth slow in the coming decades, is it possible that India's growth will strengthen the West's efforts to contain China? Or will India have to pick a side between the west and the new axis of evil?

 

>> John H. Cochrane: Well, of course we have to pick sides. I'll take the first part. Economic population growth. India still has population, but India needs to choose to grow economically. India is still a ridiculously poor country, and I say ridiculously because modest reforms should lead India to have the kind of GDP per capita China has at least and start growing and be a serious.

Serious country, that's the issue, really. Not so much the number of people you have, but how productive each of those people can be. Do you have to pick a side? Well, that depends on whether over decades, we're still having the new axis of evil or whether something else has come about it, who knows?

 

>> Bill Whalen: Neil, Hr, anything you'd like to add?

>> Naill Fergyson: I was just at the World Economic Forum, where India is in and China is out. Way more attention being paid to India and Indian representation all over the show, both at the national and the provincial level. Look, one of the most astonishing things to happen in the last two decades has been that India's broken out of what seemed like a trap.

Its infrastructure seemed to be mired in the 19th century, and it seemed an unfixable problem, and it has become fixable. In fact, enormous amounts of investment in infrastructure are unlocking the kind of productivity that John was talking about. Of course, India's still a long way behind, but I reminded some Indian journalists that it was back in round about 2008 that I gave a talk in India saying that I thought it was like Aesop's race between the tortoise and the hare.

And although it looked like the tortoise was India and their hare was China, actually, the tortoise would win the race, and not just because of demographics. Also because India has fundamentally something more like the rule of law and something a lot more like democracy than China has. Right.

And this greater level of freedom means that entrepreneurship in India is much easier to unleash. You just had to break through this infrastructure logjam and replace dirt tracks with elephants with highways. So I'm an optimist about India, but I was an optimist about India before it was fashionable at Davos.

 

>> Bill Whalen: Hr?

>> H.R.McMaster: India has been described as being schizophrenic in terms of its approach to foreign policy, schizophrenic between fear of abandonment and also fear of being entangled into conflicts that are not in India's interest. And I think you've seen that at play. And we reinforced the fear of abandonment when we left Afghanistan the way that we did in a way that was despicable.

And when India looked over its shoulder, who's got our back here in South Asia? Well, it wasn't us, and the only power they could hedge with was Russia. So I think, though, that if there's an anti psychotic to the schizophrenia, it's China and China's aggression. And I think India realizes that his long term interests align with ours.

You've seen indian ships, for example, cooperating with our naval forces in the Bab el Mandeb and in the Persian Gulf. So I think that the trends in the right direction. India has huge problems still, despite the gains that Neil has discussed. And I think it's in the whole world's interest that India succeed.

And I think that oughta be a major project of the US, the EU, the UK and Japan to continue investments in India to help make sure India succeeds. But India has to do its part, too, and it's one of the most protectionist nations in the world. It has to make it easier to do business in India, and it has to reduce the barriers to trade and investment in the country.

 

>> John H. Cochrane: Let me add what you guys have been highlighting in other places. India lives in a dangerous part of the world. Look at the map. They got China to their north, nibbling away. They got Pakistan up there, who's not great friends. They're right near Iran, Afghanistan, unpleasant part of the world to live in.

And if the US is gonna give up on Ukraine, and the US is gonna basically give up on Israel, and if China gets to swallow the South China Sea, and then if China gets to swallow Taiwan, India has gotta cut a deal. They have to live there. And this is part of the danger of we're right at the moment, how many wars can you lose?

And do people give up on America and cut a deal with very unpleasant characters?

>> Bill Whalen: Okay, we received lots of individual questions for you guys, and so I'll ask a question to each of you and just have each of you answer it rather than do the group, so we can-

 

>> John H. Cochrane: Wait a minute, that's against the rules there, Bill.

>> Bill Whalen: Let's begin with you, Hr. We had a question from Nicholas of Virginia, who writes, which branch of the US military will be the most critical over the next several years?

>> H.R.McMaster: Well, it's always the army. I know it's predictable.

 

>> Bill Whalen: Bitter heart.

>> H.R.McMaster: I've just gotta tell you, wars happen on land because that's where people live. And the threats that you experience in the other fluid domains of the maritime and the aerospace and cyberspace and space domains originate where, like on land. And so it's immensely important, though, to have a whole range of joint capabilities, right?

No service is capable on its own. It's how you combine them to affect your outcomes on land, where people live. So I would have to say the army, I'm in the debates between Corbett and Mahan. I'm on the Corbett side, who said that the Navy is important because of what the Navy allows the army to do on land.

 

>> Bill Whalen: Okay, HR, we also have a question from Matt in Quantico, Virginia, who writes, I'm a marine officer who served in the evacuation of Kabul in August 2021. I've appreciated HR's perspective on the war in Afghanistan more than any leader I've heard discuss the conflict. My question, do we need to update America's national security structure?

Our current structure often leads to operational tactical success, but seems to fail to deliver strategic success.

>> H.R.McMaster: Gosh, well, first of all, thanks for your extraordinary service under the most difficult conditions. And I don't think we need a change in structure as much as we need a change in mentality and a determination to win and a recognition that winning again requires consolidating military gains to get the sustainable political outcomes that bring you into the fight to begin with.

And this is, of course, what we're seeing play out again in Ukraine, is what we see playing out in Gaza. And so I just think we need a change in mentality and we maybe need a change in education. We need to bring back diplomatic history and military history.

Too many people who make these decisions on policy and strategy involving war have been educated in social science theories. And as a result, I think when they get in the job, they try to fit the real world into their theoretical construct. So I think it's mentality and education even more than organizational structure.

 

>> John H. Cochrane: Let me ask a question on this one, because the questioner asked whether we need to change the national security structure. But it seems like the failures of strategic success are failures of politics, failures to win the peace. You guys won the war in Iraq beautifully, but then the peace was mishandled.

And that's not really part of the national security structure, is it? That's part of our rather disastrous foreign policy. I must admit. I think it's hilarious that our secretary of state Blinken, is out saying, the Israelis need to find good palestinian partners to hold elections. Yeah, great, how'd you guys do in Afghanistan and Iraq on that one, buddy?

 

>> H.R.McMaster: Right, yeah, exactly, it's not just a flawed process, right? It's the people involved in the process and the assumptions they carry in with them. I mean, this is, in large part, measure a result of taking a short term approach to long term problems in places like Afghanistan and in Iraq.

And remember, it was that short war mentality that we were all about in 2001 in Afghanistan and 2003 in Iraq. But again, this consolidation of gains has never been an optional phase in war, right? This is what Nadia Schadlow, one of our colleagues here, at Hoover calls American denial syndrome in her book war in the Art of Governance.

And I think that we're about to repeat it, right? I mean, again, We're flushing all the lessons of Iraq and Afghanistan right now as deciding we're just never gonna do that again, hey, we saw that before, after Vietnam, right? That was part of the Vietnam syndrome, we're never going to fight a war like that again, and then Desert Storm confirmed it, right?.

For us, we had an overwhelming victory, but we forgot that we had a very narrowly circumscribed objective. Hey, give Kuwait back to the Kuwaitis, which is far less ambitious, then replace Saddam Hussein or replace the Taliban in Afghanistan.

>> Bill Whalen: John, two questions for you first, Jeff in Houston, Texas writes, Doctor Cochran, you said that you believe that 4% annual economic growth in the US is possible.

Would you please elaborate on what changes you think would need to be implemented to achieve that?

>> John H. Cochrane: This is the lightning round, right?

>> Bill Whalen: 30 seconds or less.

>> John H. Cochrane: Let's just import the Javier Millet plan for Argentina to the US, just get the heck out of the way.

 

>> Bill Whalen: Okay, which leads nicely in the next question, which is from Roc or rock and Slovenia, I apologize for getting if I butchered your name, sir, a question for Doctor Cochran. When can we expect the policies of architean President Millay to take effect? If his policies do make a substantial impact for better, can we expect other countries to implement pro-market shock therapy?

Incredible show, keeps you elevated above the noise level, John.

>> John H. Cochrane: Well, now you're asking me to speculate about Argentinian politics, which is, you know, the guy is elected president, but he's got a congress that's, he doesn't have a majority in the Congress, he has a judicial system. The forces against him are only beginning to marshal, so good luck to, I can't tell when it's worse.

I can tell you from an economic point of view, things like this work when people believe they're going to stick. And the problem, of course, is it gonna stick. So it doesn't work until it believes it's gonna stick, and it doesn't stick until people believe it's gonna work.

And that's the difficult political part of putting in these kinds of economic. I have great hope because I think Argentinian see, back to the old way of doing things is just going to go back to the old way of doing things, but good luck to them.

>> Bill Whalen: Neil, would you like to add anything, especially Millais appearance at the world economic reform?

 

>> Naill Fergyson: Well, I was present for that speech, which was magnificent in its way, but of course, as he well knew, was calculated to affront a great many participants, particularly representatives of what might be called woke capitalism. This was an extraordinary speech worth listening to, or reading in that Millay lumped together with socialists, Keynesians, even neoclassical economists, feminists, the list went on.

And implicitly, of course, globalists, the kind of people who go to Davos. So he certainly wasn't looking for a standing ovation, it was a kind of calculated provocation. I think the key question, and this is based on our good friend Tom Sargent's work, is, can you bring about a regime change in almost every domain of policy deregulation, fiscal and ultimately monetary, and retain the support of the people through what will undoubtedly be very tough times?

Just the fiscal contraction that's going to happen this year is going to have all kinds of knock on effects. There was a general strike, told it wasn't such a big disruption as the unions had hoped, but of course, there will be more opposition. So I think the answer to the question is that there won't be very clear benefits until probably more than a year from now, and in the short run, there'll be quite a lot of pain.

And the key question is, can he keep a grip on social order in a place like Argentina, through the pain to get to the other side and the higher growth that I'm sure would come about if he's just given a chance to let these policies succeed?

>> John H. Cochrane: But let me make a plea for shock therapy, because the conventional wisdom, certainly among policy workers like us, and Adavo, says, you have to sequence things carefully and do this, that and the other thing.

Anything you put off is something you're renegotiating when you do everything at once that says is not renegotiable. So, yes, in principle, it'd be nice to have a. Yes, a sequence, we'll do this, we'll open up this, and then a year later we'll open up that. But anything you've put off that says this is renegotiable, what you want is everybody in, you're going to use yours, you're going to lose yours, you're going to lose yours.

But I want you, as allies to make sure everybody else loses their special benefit, and we all do well together, as opposed to going after them one at a time, when each of them has the incentive to fight, so I'm for shock therapy for that?

>> Naill Fergyson: Yeah, and I wanna be clear, so am I, and in these circumstances, with inflation sort of up towards 200%, you really actually have to do drastic things.

And the mistake that a previous president, Mauricio Macri, made was to go too slowly. Youve really got 100 days to do the painful stuff, more or less, and so hes right to try and do that and I think the bonfire of regulations is a really good part of this because its a supply side solution as well as of course the fiscal contraction which is bound to be painful so I dont want to overestimate his chances.

Its Argentina after all its political economy is highly resistant to reform but this is the right approach and the reason I mentioned Tom Sargent is that his great paper from the early eighties the ends of four big inflations says exactly what John just said. You have to do it all at once in what Sergeant Calder regime change that's what Malay is doing and I think the Goodfellas wish him luck.

 

>> John H. Cochrane: It has to be durable to work but there's good signs it's already working so removing rent controls in Buenos Aires has led to a 20% decline in rents already why? Because removing rent controls has led people to flood the market with apartments that were taken off the market so you know already something's working.

 

>> Bill Whalen: I have three questions for Doctor Ferguson Neil the first comes from Christopher in Chico, California. He writes Neil in the pity of war your thesis is that Britain ought to have stayed out in 1914, what scenario worries you the most? Should the US do the opposite, staying out when it should be involved?

 

>> Naill Fergyson: Well I think the United States was right not to directly intervene in Ukraine though there were some who argued that it should. I think that wasn't necessary but I think it would be very wrong for the United States to cease its support for Ukraine which it has and that's an indefensible thing which has only really arisen because of the antics of representatives in the House.

I think if there were to be a move against Taiwan suppose China did impose a blockade and try to assert its authority over Taiwan then it would be a great mistake for the United States to do nothing. The problem is that doing something and the obvious something would be to send a naval expeditionary force to break the blockade would be extremely risky and there would be lots of talk of world war three in the press.

One of the things that's striking about President Biden is that he doesn't like to escalate. This is a favorite word of the administration. Well a Ukrainian, a senior Ukrainian official said to me at Davos nothing has done us more harm than this reluctance to escalate a President Biden so in some ways I think the United States is intervening a little in certain conflicts in Ukraine and in the Middle East not enough to make a decisive difference and that can be the worst possible combination.

 

>> Bill Whalen: John mentioned Pakistan a minute ago in our conversation about India, and indeed, Neil, we have a question from Badr, who's in Islamabad, Pakistan. He writes, hi, Neil. I wanted to get your thoughts on how the deteriorating situation of Pakistan, both politically and economically, can impact not only South Asia, but the neighboring Middle east.

Will this be a. Topic of discussion in the US presidential election.

>> Naill Fergyson: Bader, it will not be a topic of discussion in the US presidential election. Indeed, you won't really hear much about any foreign country in the coming months, except, I suppose, occasionally when Republican candidates, or should I say candidate, singular disparage the Biden administration's foreign policy.

I think the situation in Pakistan is extremely fraught and one has to wonder, at what point does this boil over and put Pakistan back on the front pages? Right now, it seems to me we're in a situation in which Iran is the center of attention and Iranian proxies are now so emboldened that in fact there are even attacks on Pakistani territory.

Extraordinary state of affairs. So the sideshow at the moment is really Pakistan. The real show is in Iran. And as long as Iran doesn't feel deterred, its proxies will wreak havoc in all directions.

>> Bill Whalen: Doctor Ferguson, one last question for you. It comes from Matt in Denver, Colorado, who writes, Naill, I once had the pleasure of meeting you in person on a discovery that you are the single most artful user of cuss words of anyone I know.

Would you be willing to cuss more on podcasts?

>> Naill Fergyson: Well, certainly not. My mother would almost certainly never speak to me again if I were to swear on GoodFellows or in any public place. And there's a really important rule that I have here. When in bars, having a few drinks with congenial company, I may lapse into profanity.

After all, I did grow up in Glasgow. And the more Glaswegian you are, the more you swear. It's kind of one of those distinguishing features of our species. But that's bars. When you're on air or speaking in public, you really shouldn't swear. And that's because we don't want to pollute and drag down the standards of public discourse.

In our family I explain this to all my children, that there's a clear rule. If you are hammering a nail into a wall and you hammer your thumb by mistake, you are allowed to cuss. But it should not be a routine part of your conversation.

>> John H. Cochrane: If you do, Naill, we want it in a good thick Scottish accent.

 

>> Naill Fergyson: You'll just have to use your imagination, John, or buy me a couple of drinks.

>> John H. Cochrane: Looking forward to that.

>> Bill Whalen: John, are economist a pretty profane lot? No, there's no swearing in the military, right, HR?

>> H.R.McMaster: Yeah, of course, not. No, I've known some people who have really elevated it to a form of art actually.

 

>> Speaker 5: No bastard ever won war by dying for his country. He won it by making the other poor dumb bastard die for his country.

>> H.R.McMaster: But I do agree that you should use it sparingly.

>> Naill Fergyson: The Scottish squaddie, the Scottish grunt, to use the American term, I think, has the greatest skill in deployment of profanity.

And I've heard extraordinary soliloquies in which almost every second word was a cuss word. And it has a certain poetry to it. But I don't think it's suitable for a family show like GoodFellows. After all, we're GoodFellows.

>> John H. Cochrane: And yes, in military and drinking context, yes. But in general, I think we should all elevate the quality of the discourse.

I'm not just the profanity. I had to tune off the Republican debates because I can't stand watching adults interrupt and talk over each other. Come, come, come now. Lincoln and Douglas didn't do this. Be serious when you're in public.

>> Bill Whalen: Okay, guys, let's go back to group questions.

Here's one from Thomas at St Andrew, Scotland. Naill, he writes, do the GoodFellows believe the argument that the defense of Taiwan runs through Ukraine? Does continued US support for Ukraine undermine Taiwan's defense as American military stockpiles are redirected to Kiev instead of Taipei? HR, why don't you take that?

 

>> H.R.McMaster: No, it doesn't, actually. In fact, the items that are on backorder essentially, the $19 billion of backlogged sales to Taiwan are not the same items, not the same weapons and munitions that Ukraine really needs desperately at the moment. So it doesn't. But also, I think the war in Ukraine has been beneficial in terms of long-term readiness and maybe restoring deterrence.

That Naill said, quite rightly, I think, has dissipated because it has awakened us to the need for additional industrial capacity. You just saw in this week that the NATO secretary general announced the $1.1 billion long-term contract for procuring artillery shells, for example. And that's what we really need to get our industrial base back.

What John talked about is a lack of industrial base and shipbuilding, but that applies to everything, really. Our long-term predictable contracts, because none of our defense firms are charities or philanthropic organizations. What they need is a really sustained long-term demand signal so we can build back the industrial capacity that we've lost.

 

>> John H. Cochrane: Continuing resolutions in the budget doesn't let you buy weapons on a five year schedule, which is what they need to be. But just to crystallize the difference, you need the capacity and the will to use it. And the idea that we're using up weapons in Kyiv instead of Taipei is a capacity issue.

But the question in the Chinese mind is the will to use an issue. And if we won't send even Ukrainians the stuff they need because we're worried about escalating. Goodness gracious, we're not going to us fight near Taiwan when they'd be shooting at us out of fear of de-escalation.

So the question is not the capacity, the question is the will.

>> Bill Whalen: Naill, anything you'd like to quickly add?

>> Naill Fergyson: Well, this conversation, this topic came up in Switzerland last week, and it's extremely important, obviously, from the Ukrainian perspective, that aid be restored, which it needs to be urgently.

And of course, that it not be discontinued if Donald Trump is re-elected president. One of the key points that was made to me by a senior Ukrainian official was that people in the US have to understand that these are not entirely discrete conflicts. That what is happening in Ukraine, what is happening in the Middle East, and what is happening in the Far East are intertwined.

Because as we've discussed on GoodFellows many times, China, Russia, Iran and now North Korea are acting increasingly in concert. The only reason Russia is now able to exceed Ukraine in firepower is the vast amounts of dual use equipment coming to Russia from China. And so it's very important to understand that a Russian victory over Ukraine would be a victory for China as well as, of course, being a defeat for the West.

 

>> John H. Cochrane: We have to take a little breather and make fun of Naill for going to Davos. I hope you went on a private jet, because, of course, to go to Davos and worry about inequality and climate change, you have to fly in on a private jet and worry about exactly which badge you have to show.

 

>> Naill Fergyson: Actually, I went by train, John, just to be.

>> John H. Cochrane: Good for you.

>> Naill Fergyson: I'm a man of the people. And if Javier and Milei can go to Davos to tell the global elite what's what, then so can I.

>> Bill Whalen: Naill, did everybody light a candle when John Kerry gave his farewell speech?

 

>> Naill Fergyson: I'm afraid I wasn't able to attend that for some reason.

>> Bill Whalen: No.

>> H.R.McMaster: A friend of mine was there for both Kerry and Al Gore's talks and said that the atmosphere in the room was one of just astonishment at how disconnected they are from reality. And especially in the area of energy security, where they seem to be content to shut down US natural gas exports, LNG exports, as Iran, for example, is building more LNG export terminals.

It's just ludicrous.

>> Bill Whalen: Right, so John Kerry is stepping down as climate czar, and he's going to campaign for the Biden reelect. We received a lot of questions about the presidential election. Let me pose two to you guys. First, we have a question from Jeff in Melbourne, Australia, who writes, if Trump is elected president for a second term.

Then his apparent driving objective to date would seem to have been achieved. His second term will surely be driven by different objectives from the first given term limits, what do GoodFellows think will be his objectives? And if you guys don't wanna try to read Donald Trump's mind, maybe you can edit that by saying, what should be his objectives?

 

>> Naill Fergyson: Well, we know a bit about this because there's a think tank, there are a couple of think tanks, America first and heritage, that are working on it and publishing at least some of what it is they have in mind. And so this is not non public information.

Clearly, a major priority is going to be to, I hesitate to use the word, but let's use it, purge the federal bureaucracy of elements that they regard as hostile to President Trump. And that won't leave terribly much of the Department of Justice left if they do it rigorously, I think that will be a priority.

Donald Trump is a score settling type, and he has a lot of scores to settle. So this will be very, very different if it happens from 2017. In 2017, the Trump people hadn't really expected to win. They had to improvise a government. And in fact, it was, in many ways, a government made up of Republican establishment figures.

And people from the military with great credibility, such as our good friend and colleague here, General McMaster. It won't be like that this time around. If there is a second Trump administration, you won't see a general. I guess Michael Flynn might be the one exception. And what you will see is a great focus on the federal bureaucracy.

Now, some might say, perhaps I'm one of them, that the federal bureaucracy could do with downsizing. And it could also do with depoliticization, because there's no question that in almost every department of the federal government there's a huge bias towards the Democrats. So it's gonna be hard to argue against that, even if Trump's motives are primarily score settling.

So that's, I think the first thing I would say, the second thing is that the foreign policy implications are not as obvious as people think. As I said, the Ukrainians don't necessarily fear a Trump return because in many ways, Biden has not been great for them. And it's not obvious to me that Trump would necessarily throw Zelenskyy under a bus.

Secondly, I think the Middle East will welcome Trump's return because the Gulf states, and of course the Israelis have nothing greatly benefited from the Biden administration. And a return to the Middle East policies of the Trump administration would be welcome everywhere but in Tehran. As for the other members of the axis of ill will, they'll just not be sure what to expect because Trump has been so unpredictable in the past with respect to both Taiwan, China and North Korea.

On the Taiwan issue, he gave an interview with Maria Bartiromo the other day in which he complained that Taiwan had stolen our semiconductor business.

>> Donald Trump: Taiwan took smart, brilliant, they took our business away. We should have stopped them. We should have taxed them, we should have tariffed them.

 

>> Naill Fergyson: That can't be very reassuring for Taipei.

>> Bill Whalen: John.

>> John H. Cochrane: I would add a second what Neil said about the bureaucracies, which is one of the central issues. Why are people supporting Trump? We'll get to this question, I think, in some deeper issue, but the sense that the arms of the federal government have been taken over by democratic partisans as part of it.

But when you think about what's gonna happen after the next election, the conventional, well, what is Trump's three point policy plan for strengthening NATO alliances? And what's Trump's five point energy plan for reinvigorating natural gas? Just put that aside. The day after the election, I'm getting out of town.

If Trump wins this election there, 2020 protests are gonna be nothing. There are gonna be riots in the streets. If Trump tries to fire half of the FBI, bing, everyone's in court instantly. There's gonna be be a legal nightmare the entire time. So Trump's, I think the theme of the next Trump election is gonna be near civil war.

Not at the point of war, but riots in the streets and then a legal battle. Unending legal battles. Unending pitched legal battles. His opposition is already saying he's illegitimate. And of course, if Biden wins, Trump's line is gonna be he's illegitimate. And exactly the kind of battles that you do when both sides have said the end of democracy is at hand.

The usurper is illegitimate, and look what he's trying to do. Firing all the good people at the Department of Justice. It's going to be judicial chaos. So he may have intentions about what he wants to do. And I salute people who are trying to give him some sort of coherent policy.

I don't think raising tariffs 10% everywhere is a good one, but I think the thing to look forward to is events, my dear boy, as Neil used to remind us, and those events are going to be pitched battle.

>> Bill Whalen: HR, you've been there, you've done that, and you're writing a book about it.

What do you think 2025 would look like if he got reelected?

>> H.R.McMaster: Well, as we're talking about, there's a lot in Washington that needs to be disrupted. But the sad part of this story is that Trump's reelected. He's so disruptive that he disrupts himself, and he's so inconsistent in his views.

What he wants to achieve overall, oftentimes is really the right thing, right? How about reciprocity in market access and trade broadly? Yeah, sure, how about burn sharing? Yes, right, these are all good objectives, but the way he goes about it, he actually undercuts what he's trying to achieve overall.

So the question is, will there be people around him who will help him clarify his agenda? Not put words in his mouth or try to change behavior, but help him clarify his agenda. And then propose the three point plans that John's talking about so he can accomplish objectives for the American people.

And I just don't know who's gonna wanna serve because he's just so difficult to serve. I want any president to succeed, but, man, he just can't get out of his own way. That's what I'm concerned about is the ineffectiveness because of the dissonance that he has on these, on the most important issues and what he wants to achieve.

And then also, as John said, what do we do to ourselves because of how polarizing a figure he is? So, of course, my preference would be somebody who can get to the politics of addition and bring Americans together around a clear agenda we can all agree on. Or at least the majority of us can agree on.

 

>> Bill Whalen: I have a lot more questions.

>> John H. Cochrane: Sorry, HR, is that your statement for the no labels campaign?

>> H.R.McMaster: Again, I'm trying not to explicitly endorse people because of the military thing and everything else, but man, I do love Nikki Haley. She was great to work with and she's a great leader.

She's a rational human being and she's effective. I mean, and she has, she has a broader appeal, right? She has a broader appeal. So anyway, somebody. How about somebody like that?

>> Bill Whalen: I have a lot more presidential related questions, but you know what? We're going to have about nine and a half months, I think, to discuss this election, given what happened New Hampshire last night.

So let's move on to the lightning round.

>> Lightning round.

>> Bill Whalen: We have two questions for you today, the first comes from Andrew in San Rafael, California. He writes, secretary of State Anthony Blinken plays a pretty mean guitar and sings. I've seen various instruments in the show background and wondered if there was any chance of a Goodfellows blues band gracing us anytime soon Neil?

 

>> Naill Fergyson: Happy to get my double bass out. Blues is an easy thing to play badly, hard to play well. Don't know about the other guys. What you got?

>> John H. Cochrane: I'll get my acoustic guitar out, but I'm afraid there's a slight difference in musical taste. We've already had the Beatles versus Rolling Stones fight, and when I start doing my James Taylor numbers, I think that two of you guys are just going to rich.

 

>> Bill Whalen: HR McMaster are you musically inclined?

>> H.R.McMaster: Man I'm a music enthusiast and just completely lacking in talent. So I guess that leaves me with the tambourine.

>> John H. Cochrane: You'll fit right in.

>> Naill Fergyson: Lead singer.

>> Bill Whalen: I think the answer is we ought to think of it like the Partridge family and go into your extended families and see what wives, what sons, what daughters, what relatives, musical taste.

Maybe get a psychedelic bus and hit the road.

>> Naill Fergyson: Question is, Bill, what will you play?

>> Bill Whalen: What will I play? HR took the tambourine, that was a problem so.

>> Naill Fergyson: Triangle.

>> John H. Cochrane: Cowbell, more cowbell.

>> Bill Whalen: I'll drum. I basically have to be a drummer on their show.

As a timekeeper, I'll drum. How's that? One last slightly round question, gentlemen. Thomas from New Hampshire, he writes, what are you reading? What books should be essential reads for the next generation coming through school, asking as a teacher, Neil, what are you reading and what should be essential?

 

>> Naill Fergyson: Tolstoy. I'm reading Tolstoy short stories and many early ones that I hadn't read, including HR. Some extraordinary military stories.

>> H.R.McMaster: Hey, I love them, I took those with me to Desert Storm and read all of those in the desert before we attacked into Iraq. Absolutely phenomenal. They're so great.

 

>> Naill Fergyson: So if you're not quite ready for war and peace, which I admit is a challenge, though I love that book. The Tolstoy short stories. War in the Caucasus, the crimean Sebastopol.

>> H.R.McMaster: Is the tree felling or the wood felling? Is that one of them? And then Sebastopol sketches, I mean, they're phenomenal.

 

>> Naill Fergyson: Sebastopol sketches is absolutely an unforgettable account. And so, yeah, that's my recommendation.

>> Bill Whalen: Quickly, Neil, one essential read. One essential read?

>> Naill Fergyson: Well, War and peace is the essential read. I don't think anybody who hasn't read war and peace is truly educated.

>> Bill Whalen: John, what are you reading these days?

 

>> John H. Cochrane: Well, things that I would definitely not recommend to our readers. Mathematical models of price dynamics in new keynesian economics.

>> Bill Whalen: Wait for the movie works.

>> John H. Cochrane: Don't read that. But, given the tragedy of our schools, I don't know exactly which titles, but just sort of basics of western history that you used to have to learn to get through school is something that's kind of shockingly absent.

So I guess I'll defer on the titles to Neil. But those are the essential reads that have always been the essential reads. Who are you? Where do you come from?

>> Bill Whalen: And HR, what are you reading other than galleys of your NFC book?

>> H.R.McMaster: I'll tell you, it's all right here, man.

I mean, here it is. If everyone wants a sneak preview, here are some of the latest edits. But hey, I just got to say I'm reading a lot about presidential leadership because really I want the book to be able to place president Trump in a broader context. So I'm reading, like Alexander George, who was a phenomenal professor here at Stanford.

He passed about a decade ago, and just a wonderful human being, but his work on presidential character and others, Fred Greenstein, for example. So I'm reading about the modern presidents and what is presidential character and trying to distill that down to three or four different qualities that I think are important for any president to have.

And so that's what I'm reading at the moment.

>> Bill Whalen: And one essential reed.

>> H.R.McMaster: Gosh, I'll think because we are so affected by the polarization our society, I think Eddie works on the founding or the revolution. And I'd like to put in a plug for Don Higginbotham's war of American independence, the best one volume history of the revolution.

And again, talk about a phenomenal human being. That guy was just a wonderful historian and a wonderful person.

>> Bill Whalen: Well, gentlemen, thank you very much for answering questions. And thank you very much, our loyal viewers, for sending in the questions. Please doing it because we're going to continue in future lightning rounds to put viewer questions in.

And again, send your questions to Hoover.org/AskGoodFellows and we'll get to them. On behalf of my colleagues, the GoodFellows, Neal Ferguson, John Cochran, HR McMaster, all of us here at the Hoover Institution. Hope you enjoyed today's show. We'll be back in a couple weeks. Until then, take care. And again, thanks for watching.

 

>> Brothers and sisters are natural enemies.

>> Speaker 8: Like Englishmen and Scots, or Welshmen and Scots, or Japanese and Scots, or Scots and other Scots jam Scots. They ruin Scotland. You Scots sure are a contentious people. Just made an enemy for life