Vibe Shifts: Enter Trump, Exit Biden, the Politics of Fires, “Silly Walking and Flying Eagles”

>> Reporter: Do you owe citizens an apology for being absent while their homes were burning? Do you regret cutting the fire department budget by millions of dollars, Madam Mayor, have you nothing to say today? Have you absolutely nothing to say to the citizens today?

>> Bill Whalen: It's Wednesday, January 15, 2025.

And welcome back to Goodfellows, a Hoover Institution broadcast examining social, economic, political, and geopolitical concerns. I'm Bill Whalen, I'm a Hoover distinguished policy fellow. I'll be your moderator today, and I come with both good news and bad news. The good news is that two-thirds of our happy triumphant has rejoined us for this show.

So please welcome back the historian, Sir Niall Ferguson, and former presidential national security advisor, Lieutenant General HR McMaster. Gentlemen, good to see you. All right, gentlemen, let's get right to it. Let's talk about the change of power about to occur in Washington DC. The 46th President of the United States, Joe Biden, soon to give way to the 47th President, United States, Donald Trump.

It's not the first time that an American president will begin a second term. But what is unique about this is that Trump is beginning a second non-consecutive term for the only second time a president has done this. Niall, I turn to you with the big question for the show and it's a two-part question.

Number one, what is the difference for Trump between a first term versus a second first term? And building upon that, do we honestly believe that a 78-year-old leopard can change his spots? In other words, do we think that Trump is going to pursue the second term with more discipline and a little more efficiency, and a little more effectiveness?

>> H.R. McMaster: Well, there's some really fundamentally different dynamics from 2017 and this year. And there's some things will be the same, right? So what has changed? Well, the world's a much more dangerous place, and Niall and I have been talking about this for quite some time. It's a dangerous place, I think largely or most importantly because of the coalescing of this axis of aggressors.

These are the two revanchist revisionist powers on the Eurasian landmass of Russia and China who have pulled into the fold the Iranians, the theocratic dictatorship in Tehran. And the only hereditary communist dictatorship in the world in North Korea, so it's a dangerous place. And it's dangerous because what we've talked about on this show quite a bit, mainly because the axes of aggressors perceive weakness in the United States and across the free world.

So the world's changed, it's more dangerous. There are a number of challenges, but, hey, there are a lot of opportunities. Niall's written about this recently, and think Donald Trump could make us tired of winning. He really could this time because of, I think, some profound weaknesses.

>> Bill Whalen: But has Trump really changed?

Niall, you've been to Mar-A-Lago, and you've seen him in that environment, what is different this time?

>> H.R. McMaster: Well, I mean, this is what I was getting to is that the team is different because Trump knows this team much better. When I went in there quite unexpectedly in February of 2017, Trump didn't really know me.

He didn't really know Jim Mattis, who was the Secretary of Defense. He didn't know Rex Tillerson as his Secretary of State. And so what that did is it made it quite easy for those who were coming into the administration to sort of develop and widen rifts between the president and members of his key team.

And there were really three groups of people in that administration in 2017. There were those who were there to serve the elected president. There were those who came in, I'm thinking of people like Steve Bannon, for example, who weren't there to serve Donald Trump, they were there to advance their own agenda.

And then you had a group of people who saw Donald Trump as an emergency that had to be contained, right? This time there are gonna be far fewer people in the third group, but there's still quite a lot of people in that second group. And I think there are people coming into the administration who reflect to a great extent what Donald Trump is consistent about, right?

I mean, border security, burden sharing, reciprocity and trade, energy dominance, right? We know what you're gonna get in those areas. But there are also people who come in who reflect the dissonance Donald Trump has, the opposing ideas he carries in his head. Peace through strength versus budget hawks.

You have people who understand the importance of burden sharing through alliances and through and through for positioning of able US forces and those who see retrenchment as an unmitigated good. So you're gonna see, I think the at war with ourselves dimension. It's still gonna be there, so it won't be boring.

Niall, what are your thoughts on this?

>> Niall Ferguson: I agree with a lot of what you've said, HR, if one just kinda compares the two administrations eight years ago or now. This feels like it will be more cohesive, he has done the job before, and that does make a difference.

A central problem of Trump one was the instability of the chief of staff role, Susie Wiles is gonna be in that role. She's come through the campaign with him and clearly has his confidence. And you can tell that there's already a tighter ship by the lack of leaking to the press.

It's actually anybody's guess what's gonna be in the inaugural address at this point. The discipline is much greater. I think if one looks down the list of names, and here the media doesn't really help because they focus only on the controversial picks. So we'll read way, way more about Pete Hegseth or RFK than we'll hear about Marco Rubio, about Scott Besant, about Doug Burgum, I could go on.

I look-

>> H.R. McMaster: Mike Waltz, who's fantastic.

>> Niall Ferguson: Mike Waltz, let's talk about the national security team because HR raises the very deep foreign policy problems that the new administration confronts. A very different world from the world of 2017 because this is a world where the axis is formed and there are live wars going on in Eastern Europe and the Middle East and a non trivial risk of another one over Taiwan.

But if you look at that combination of Rubio as Secretary of State, you've got Mike Waltz at the National Security Council, I think it's an impressive lineup. Keith Kellogg has been sent as special envoy for Ukraine and Russia. He's played a very important role in the interregnum, can we call it that, between the two Trump terms at the America First Think Tank.

So when I look at the rut, the whole thing, I look at all the people who've currently been nominated, I think it's actually a very different beast from Trump. One which is HR says was a weird coalition between people who got him elected, who hadn't really expected to win, then the Republican Party establishment, who were deeply wary of what they were getting into.

And then there were certain people who, as you say, saw themselves as there to kind of save the republic from this demagogue who got elected. This is gonna be a very different story eight years on. There'll be trouble along the way because there always is. And it will be a second term, even if there has been a four-year hiatus and the second term has certain dynamics.

It's very hard to have a better second term than your first term. Think only of Ronald Reagan's difficulties in his second term. Still, with all of that said, I'm feeling a little more comfortable about where we're headed. And I'm a hundred times more comfortable than I would be if, by some weird quirk of the electoral system, Kamala Harris had just been sworn in as president.

>> Bill Whalen: I hate to spring breaking news on you, but Donald Trump literally seconds ago just posted on social media that a hostage deal has been reached and they will soon be released. HR if there is indeed a hostage deal, if indeed all of the hostages are released, and that's one of the keys to be determining, or if it's just a partial release or an entire release.

Does that open the door for Joe Biden to do something on the way out with regards to Iran, to strike their nuclear program, strike the oil production? Would you advise him to do so?

>> H.R. McMaster: Well, no, I think it has to be an option on Iran's nuclear program, and I think, it's inevitable that the Israelis will act if we don't act.

I think what's really notable about this hostage deal which, I think, has been the top priority for the incoming Trump team as well as for the Biden administration. What's notable about it is in a period of time when we see this kind of vitriolic, partisan discourse, the outgoing Biden administration work very closely with the incoming Trump administration.

The other dynamic associated with this deal that, I think, people might miss is that it's really Trump's assurance to the Israelis. The fact that the Israelis have no doubt that Trump has their back, that probably allowed the Israelis to make the kinds of concessions that they've had to make for this deal to happen.

In terms of the release of Hamas terrorists that are probably gonna be part of this deal. Because they know that if they have to track and hunt them down later, that the United States will support the Israelis in that effort. So, I think, that's one of the dynamics associated with this, as well as the Iranians knowing, hey, Trump understands the return address for all this.

He knows it goes back to Tehran. And so, to the degree to which the Iranians influence this process as well as the Gutteres, who know that Trump would like to have a good relationship with Gutter. But also he's quite skeptical of the duplicity of the gutteres on a number of occasions and in a number of areas.

So, I think, all these dynamics about Trump's experience from poor has played into this in a very positive way.

>> Niall Ferguson: I think, it's very important to understand that Trump's goal is indeed peace through strength. He wants the wars to end in the Middle east and in Eastern Europe and to avoid a conflict, a hot war with China, and he's got to work even before he is sworn in.

It's clear that his envoy to the Middle east has been actively negotiating, I mean, no doubt the Biden administration will try to claim credit for this. But I don't think that they could have done it on their own because they've been trying for how many months to achieve this?

And I don't think it's accidental that Steve Witkoff turns up and suddenly there's a deal. I also think we'll see something similar in the case of Ukraine. And notice since the election, Trump has spent much more time talking to, and even being with Volodymyr Zelenskyy than talking to Vladimir Putin.

So what's interesting is that this presidency has started even before the official launch, the inauguration. And there already are signs that there will be significant changes in the world in 2025. I've drawn the analogy in the recent foreign affairs piece with the beginning of the Reagan presidency. And you'll both remember that within minutes of Ronald Reagan finishing his inaugural address, the hostages in Tehran were released.

So there's a similar vibe shift going on here where you realize that the kind of unsuccessful one term president is on the way out, a new sheriff's in town. And that new president has greater credibility even before he's sworn in the geopolitical shift is happening. And, of course, that has to be good news, I, of course, don't wanna overstate the case.

As I understand it, a significant number of terrorists will be released by the Israelis on their side. That is my understanding of the nature of this deal, and that's not great. On the other hand, if it takes the situation in Gaza closer towards a resolution, then we will have to accept that that is a step worth taking.

And clearly Prime Minister Netanyahu, as HR said, is willing to take that step and make that concession. Now that Trump is on his way to the White House and previously he just wasn't.

>> H.R. McMaster: The other dynamic associated with this, Niall and Bill is as these hostages are released, I fear that some of them probably have already been killed by the terrorists.

The world's gonna have to confront the brutality, the inhumanity, the barbarism of Hamas. And, I think, that this will shift, I think, the narrative once again in favor of Israel and against these terrorists who really are the enemies of all humanity. And, I think, what that's going to do is inject new life into the Abraham Accords to resurrect the Abraham Accords.

And, I think, for Trump to really kinda stack up the number of diplomatic wins in the Middle east quite quickly. Especially as Niall noted, his special envoy is quite capable person. I don't know him personally, but I know he's working extremely well with the broader Trump foreign policy and national security team.

So, I think, what you're gonna see is, I said it's kinda a little bit jokingly, but I think, I mean, in the second term, Donald Trump really might make us tired of winning. In a number of areas, which has a lot to do with as you mentioned at the outset, he did learn, I think, from his first time.

He's put a good team in place that, I think, will be more cohesive, at least for a little while until they get each other's throats on some of these issues. But also that, I think, this axis of aggressors, which I mentioned at the outset, is profoundly weak at this moment.

And President Biden tried to take credit for that bizarrely, earlier this week. When, in fact, I think, that this axis is weak kind of despite some of the feckless policies of the Biden administration, not because of them.

>> Bill Whalen: Let's talk about a few members of Sheriff Trump's posse.

Since we've been talking about the Middle East and diplomacy, ultimately, my question to you gentlemen. If I demote you from Hoover Senior Fellows to United States senators and further punish you by moving you to Washington, DC and make you have to sit through confirmation hearings. Question, you're sitting on the Foreign Relations Committee, and Marco Rubio is before you.

What is your question to Marco Rubio about being a secretary of state? What's the one thing you wanna find out for him, HR?

>> H.R. McMaster: Well, I would like to ask him because he was kind of a one of the first people in government to raise the alarm bells about the intentions of the Chinese Communist Party.

And to question what had been the flawed assumption about that underpins US Policy toward China. Which China having been welcomed into the international community, would play by the rules. And as China prospered, it would liberalize its economy and liberalize its form of governance, senator Rubio never bought that.

But what I would do is, I would ask him what his assessment is in connection with our ability to compete effectively with the Chinese Communist Party. That is determined to establish exclusionary areas of primacy across the Inter Pacific region and to create new spheres of influence internationally. Such that they can rewrite the rules of international discourse in favor of their status, mercantilist economic model, and their authoritarian form of government.

What is your plan, future secretary of State, to compete more effectively? I think, that would be the question to ask, because he's gonna have great ideas in this area. And, of course, these are ideas that will require support by the Senate. In the congress broadly, and I think you are based on the work that the China select committee did in the house, there's a great opportunity, I think, to up our game in terms of the competition with the CCP.

>> Niall Ferguson: Well, I would ask about the most dangerous place in the world, which is Taiwan. And I'd ask to understand how he thinks about the threat posed by the people of the Republic of China to Taiwan's de facto autonomy and democracy. I would also ask about its importance to our economy given that we now are at a point where 99% of the sophisticated semiconductors used in artificial intelligence come from Taiwan.

We are trying to beef up our deterrence, at least, that's the strong impression we get from the military side, from Indo Pacific Command. But are we willing the means to deter China, that would be my question. My sense is that the great problem with the Biden administration's Taiwan policy was that they talked a lot of talk.

But they weren't really successful in enhancing Taiwan's capability or our capability to deter China. And I think it's important to understand what incoming Secretary of State thinks about that issue, cuz in my view it's the most dangerous threat to global peace that the world now faces. And it probably will take the Trump administration some time to re-establish deterrence in the far east.

>> Bill Whalen: All right, now let's shift you to another committee Senate Armed Services and Heg you been part of yesterday's confirmation hearing for Defense Secretary designate Pete Hegseth. I found this just to be a travesty of a hearing in this regard. Instead of a conversation about America's military preparedness, the fiscal crunch facing the Pentagon which Niall has talked about in terms of the ability to pay for a military versus paying off debt.

We were just saddled with a lot of talk about this nominee's sex life, his drinking habits and so forth. HR if you were sitting on that committee, what question would you oppose Pete Hegseth? Cuz I'm fascinated by this, cuz I don't think there's been a more complicated time in the history of our country to be a defense secretary.

>> H.R. McMaster: Yeah, I mean, it's kinda of an easy one to come up with is what are your top three priorities? To improve the combat effectiveness, combat readiness, the overall capacity in our department of defense and the joint force, what would your top three priorities be? And I'd be looking to hear something like, you are addressing the bow wave of deferred modernization and doing so with an eye toward reforming, how we buy stuff in the department of defense and defense procurement.

And he talked about this considerably would be on how to preserve the warrior ethos, and to ensure that our force has the mentality that's necessary, the kind of cohesion, and the ethos necessary to fight and win in war. And I would like to hear more about what his thoughts are on the capacity of the force, right?

And what the assumptions are that should underpin kinda the force sizing the force structure. Other issues to talk about might be his vision of future warfare, and whether or not he believes the US military is prepared to fight and win, given the way that we see the character of warfare kind of evolving.

You wanna hear those kinda substantive questions, because they're critical to the senate's role of advice, and consent to make sure that we have the best qualified people in these critical positions.

>> Bill Whalen: Now, one point HR he was cornered by Kirsten Gillibrand, the Senator from New York about the issue of women in the infantry and what Gillibrand asked him was whether or not there was a quota on women in that.

>> Kirsten Gillibrand: He needs generalized statements.

>> Pete Hegseth: Meet quotas to have a certain number of female infantry officers or infantry enlisted, and that disparages those women.

>> Kirsten Gillibrand: Commanders do not have to be quotas for the infantry.

>> Bill Whalen: Is there a quota in the military, are you sure?

>> H.R. McMaster: Well, I don't know, I'm not connected with the day to day but there are standards, and those standards have to be enforced.

I was the commander of 4 Moore, Georgia, what used to be, before Benning, Georgia, during the period of time in which women were being integrated into combat arms. Now, one of the things I just would like to clarify is there have been some statements about disagreeing with women being in combat.

 

Hey, women have been in combat for a long, long time. And when I was a commander of an air cavalry squadron, guess who the forward most cavalry scouts were? Kiowa Warrior Scout pilots, right, who were in front of everybody, and you could argue in the most dangerous position on the battlefield.

Who's in the most dangerous position? Is it an infantry soldier in the squad or a tank crewman, or is it a truck driver sitting in front of 2,500 gallons of JPA fuel on a contested highway outside of Baghdad? So when we lost Corporal Jeffrey Williams, a fantastic soldier who was the medic on our little platoon that formed my security detail, I asked for volunteers on who would replace him.

The first hand that went up from our headquarters medical troop was a female soldier who carried her aid bag, carried her ammunition, her weapon in body armor in 120-degree heat in urban combat, right? So I think it's really important to clarify women are in combat. There is a question of standards, right?

What are the standards for close combat formations and units that have a very considerable physical burden associated with duty in those units? And these are typically the formations whose mission it is to close with and destroy the enemy in close combat. Those standards should be non-negotiable cuz they're based on what you really have to do in battle where you have to carry on your back, how you have to perform as part of a unit.

So yeah, I mean that should have been the discussion, what should the standards be in close combat units? How are you going to assess the degree to which those standards are being enforced? And I don't know if they're being enforced, I'm not leading army units the way like I used to.

>> Bill Whalen: Okay, Niall, I want your thoughts on somebody who will not face a confirmation hearing, and that is Elon Musk. You of the three of us have the best read on Elon, two questions for you my friend. First of all, do you think he can swim in his lane?

Can he stay focused on DOGE suitably, or is Elon too distracted? And then that leads to my question, what is he doing mucking around a British politics?

>> Niall Ferguson: Well, it's certainly the case that Elon can multitask like no one on this planet. After all, think of all the different companies that he is somehow managing to run at the same time. So I don't think we should just apply normal standards here and assume that he's using X to attack Keir Starmer, he's not thinking about DOGE. The Department of Government Efficiency that he's supposed to be setting up. I would say that Elon's interest in British politics is part of what I call the global vibe shift.

And it's a signal to the world that this administration is watching. It's watching to see whether their allies as well as adversaries are sincere in tackling some of the problems that we all collectively face. And I think it's pretty clear that what went on in Britain, and I'm speaking from that country tonight over not just years, but decades.

Was an indefensible covering up or hushing up of attracted succession of hideous crimes that are not accurately described with the phrase grooming gangs. What was actually going on were gang rapes of minors. So pedophile rape gangs would be a better description. And the fact that some unknown proportion of these crimes were carried out by people of Pakistani heritage in multiple cities is one of the truly outrageous stories of contemporary British history.

If it takes Elon Musk to force a public discussion and perhaps also a public inquiry into that scandal, then that's a sad reflection on the state of health of the British media and the British political class. Does this mean that Elon's not simultaneously running SpaceX and Tesla and the Department of Government Efficiency?

No, the man is all but superhuman, and I don't think for a minute that DOGE is going to be a dog, I think DOGE is gonna be a very important part of 2025. Remember, it's a two-year enterprise to try to make a meaningful impact on waste in the government.

Which is a big part of the problem of our deficit and our debt and our chronically inefficient federal bureaucracy with its who knows how many agencies. I tried to find out today how many federal agencies there are? The answer is around 430, nobody's quite sure exactly. Tells you all you need to know, doesn't it?

So-

>> H.R. McMaster: It reminds me of one of my favorite Monty Python skits was the Ministry of Silly Walks. Do you remember?

>> Bill Whalen: That probably is a Federal Bureau of Silly Walks somewhere in the outskirts of Washington DC.

>> Reporter: I think-

>> H.R. McMaster: People are applying for grants, actually only one of your legs is silly, well, that's why need the grant?

>> Bill Whalen: What would you do with the federal government? I was dropping off a letter at the post office the other day and I looked over at the post office, thought to myself, why do we still have a United States Postal Service in this day and age? It's doing the US Mail is kind of like walking around the Sony Walkman.

>> H.R. McMaster: I disagree with that though, Bill. I mean, you have these great Hoover stationery that we use, I like sending notes to people. You like get to you like Eddie Bell, don't you, Bill? I mean.

>> Niall Ferguson: I wrote a letter only today, but it's true to say that the relative importance of US postal services is declining in our extraordinarily technologically transformed world.

Now, here's the thing that Elon and Vivek Ramaswamy, who, of course will also be on the DOGE portfolio, understand very well. Namely that the last part of our economy to be transformed by information technology will be the government. And it's gotta happen, and until it does happen, we're going to have this chronic fiscal imbalance because the government is an analog entity.

It is running, at best, with legacy software, in some cases not even with software. And if they can make a start on bringing the New Age, the 21st century to the federal government, it will translate, I believe, into meaning savings. It's, by the way, fashionable to say, this is all impossible, they won't be able to achieve anything.

It's been tried before, that's how Washington talks, right? HR it's like we've seen this.

>> H.R. McMaster: Niall, I know in contact with some of the members of this team as are coming together. You might suggest to them that they take a look at what Japan has been doing for quite a number of years.

They have a department that's focused on government efficiency, digitization, and I think this is an era where we can learn a lot from what Japan has tried and what succeeded, what's failed, and I think there's an opportunity there.

>> Niall Ferguson: And Estonia and Taiwan.

>> H.R. McMaster: Yeah, the digital state thing, digital citizenship in Estonia. Absolutely, yeah.

>> Niall Ferguson: And they're like decades ahead of the US government. So, I think this is a really important assignment that Elon's given himself and Vivek, and I think we should be rooting for them. And I think, let's just remember, what is Peter Thiel's first law, never bet against Elon.

>> Bill Whalen: Well put, okay, I'm gonna go see what Estonia and Japan do on their mail service. And for the record, I'm not anti-mail, it's just a question of is the government doing something that private sector could do better and quicker?

>> H.R. McMaster: I'm gonna write you a note today, Bill, to tell you how much I appreciate you, man.

>> Bill Whalen: Thank you.

>> H.R. McMaster: And when you get that in the mail, you're gonna feel good, you're gonna get a warm feeling, Ton.

>> Bill Whalen: So years ago, this journalist, Salena Zito, said something incredibly trenchant, I think, about the Trump experience. And she said words, the effect that when looking at Donald Trump, you have to understand the following, that his followers take him seriously but not literally, whereas his detractors take him literally but not seriously.

And this takes me to MAGA, as I call it, which is Make a Greenland Acquisition. Trump has talked a lot about the world beyond America's shores since he was elected. He has talked about America picking up Greenland, he has talked about Canada becoming a 51st state. He has talked about taking back the Panama Canal, he's talked about the Gulf of Mexico becoming the Gulf of America.

So, gentlemen, the Salena Zito question, do we take him seriously, do we take him literally?

>> H.R. McMaster: Hey, I think to take him seriously and he thinks out loud. I write about a lot about this in the book, I tell the story one day he said, he goes, General why don't we just bomb them?

I'm like, well, who should we bomb, Mr. President, who would have in mind? He said the labs, the labs of Mexico. And after the meeting, we huddled outside of the Oval Office, and some of the people in there had only rarely interacted with the President. I think there may be a couple people who were there for the first time interacting with the president, and they were kind of apoplectic of like, my gosh, we're to bomb Mexico.

I'm like, no, guy, I mean, what he's saying to us is that 90,000 people die every year. 90,000 of our fellow Americans die every year from fentanyl poisoning, and what we're doing isn't working. So what he's telling us to do is to bring him options.

>> Bill Whalen: Right.

>> H.R. McMaster: On Greenland.

Greenland, Arctic security is a big deal, right? Maybe we're not doing enough on Arctic security, that's what he's saying, you know or maybe is Panama giving us a good deal on the canal? I don't know, I mean, but it is a concern of growing Chinese influence, not only in Panama on both sides of the canal, where Chinese companies own a lot of the infrastructure, but in the Western hemisphere, broadly.

So let's do something about it, so that's what he's saying in a lot of these ideas or he's a conversational learner he thinks out loud, right? And so if you're around him multiple times a day, I mean, you kind of understand that. But I think people who are only exposed to him sporadically which is really not that many people anymore, right?

As he comes into his second term, I think they should take him seriously, but not always literally, cuz he does think out loud. He says that what many people, maybe most people, would regard as outlandish things, but those outlandish things that he says are typically conversation starters about a significant issue.

>> Bill Whalen: Well, Niall, this ties with something you like to talk about, which is Empire versus Republic.

>> Niall Ferguson: Well, that was last year's leitmotif. I always like to start the year with some kind of organizing idea. And this time last year, I remember saying it on this show the choice we face is between Empire and Republic.

I was being semi serious because at that time, you may have forgotten this, but back then, part of the Biden campaign was going to be that Donald Trump was this terrible threat to democracy, and that was why you should vote for Joe Biden. Well, here we are, that didn't play out the way they intended.

I think the question can be focused now, because President Trump revealed during the campaign that he owes some debt to William McKinley, late 19th century president, whom he associates with tariffs. McKinley certainly was a tariff man, but McKinley was also an Empire kinda guy, because out of the Spanish American War, the McKinley presidency acquired quite a lot of real estate.

It acquired Guam, it acquired the Philippines temporarily, it had Puerto Rico and an option on Cuba. That president also picked up Hawaii along the way. So when President Trump says, hey, how about Canada as a 51st state? Or let's rename the Gulf of Mexico Mexico, and hey, Greenland, let's have that.

He's just being McKinley. And that's why the whole idea that Donald Trump was an isolationist was always so wide of the mark that it was in the opposite direction of the target. So the McKinley element to Trump is interesting to me that you got to know when you're trying to decide, am I taking him literally or seriously?

You gotta know when Trump is joking, cuz sometimes Trump isn't intending to be taken seriously. And I think Canada is that the whole thing with Justin Trudeau was a massive trolling operation that Trudeau walked right into, and it ended Trudeau's premiership. But I think it was all just a joke.

Trump was obviously making fun of Trudeau when he said, hey, you should be the 51st state and you can be governor, that's a Trump joke. Even if it does have consequences for Trudeau, who should probably not have rushed to Mar a Lago the way he did. Greenland, is Trump being serious?

Because there's a serious issue as HR has rightly said, we're actually lucky to have amongst our fellowship. Eyck Freymann, who's one of the world's leading experts on this subject, wrote his doctorate on Greenland. And I can remember when he suggested that as a doctoral thesis, scratching my head a little, but of course he was onto something.

It's a long standing problem of North Atlantic security Greenland. And the status quo is no longer stable if the inhabitants are considering either independence or leaning to China. And so Trump is absolutely right that we have to address this issue, because we certainly can't have Greenland becoming part of the Belt Road initiative or whatever it is that the Chinese might have in mind.

So we gottta know, when is he being serious?

>> H.R. McMaster: The Senate's introducing a bill, Niall, to authorize the president negotiate on Greenland. And we should mention there are 58,000 residents in Greenland. So in terms of scale, right? It could be feasible there, right? In terms of a deal, right?

You make the deal look pretty attractive to 58,000 Greenlanders, I think.

>> Niall Ferguson: So I think this is a case where one needs to take him both literally and seriously. And understand that what was determined after World War II and the relationship between Denmark and Greenland that exists today is not set in stone.

It's not something that was preordained at the creation. And it would be surprising rising in a world where the tectonic plates are shifting a lot if the United States simply sat passively and let others move the plates.

>> Bill Whalen: All right, a son of the times is that we've spent a lot of time on this podcast talking about Donald Trump, and we haven't talked about Joe Biden, who, by the way, is on TV tonight giving a national address.

His timing is excellent, he gets to brag now about the hostage release. I assume it'll be in that speech. I'll leave it to your fellow historians to discuss the Biden legacy. Let's do one question on Biden, and that's this. Where did it go wrong? I could point you to the disastrous debate.

I could point to the disastrous withdrawal from Afghanistan. I could point you to the meeting of historians who came into the White House and said, you can be the next FDR, LBJ if you wanna be. But, you guys, where do you think Biden went off track?

>> Niall Ferguson: It went off track right at the start when they told him, you can be a transformative president.

And the way you can be a transformative president is with a whole bunch of big spending legislation. Think Roosevelt, think LBJ. And he went straight into that at a time when, in fact, the federal government should have been reining in spending cuz the pandemic was clearly gonna come to an end.

And the vaccines worked, they made a huge mistake in throwing money around in 2021. And that led to the inflation the following year that saw consumer price inflation up at 9%. That's why they lost the election more than any other thing. The second reason you already mentioned, Bill, they bungled Afghanistan.

They bungled the withdrawal from Afghanistan, alienating allies, but worst of all, leaving the people of Afghanistan at the mercy of the Taliban. And that set a signal to all the authoritarians, this is a weak presidency, we can have some fun here. So I think it all went wrong in year one and I'm proud of the fact that I pointed that out at the time when after 100 days I was asked how should we think about the Biden presidency?

I said, forget transformative, this is gonna be a lot like the Karter presidency. It'll be a one term presidency and it's going to be notable for inflation and for geopolitical weakness.

>> Bill Whalen: Yeah, HR if you look at Biden's polling over the four years you get to Afghanistan and once Afghanistan occurs, his polls go south and they never come back.

>> H.R. McMaster: Yeah, I think I agree with everything Niall said. I think also you could add to that the administration kinda resurrected the philosophy of the Obama administration in that it was a performative administration rather than a formative one. And everything about them is messaging, they message everything. And it's all about the story that they can tell about whatever the issue is rather than the results they can, that they can deliver.

Or how they can compete effectively with aggressors and rivals and so forth, how to manage the relationship, how to tell a good story about the relationship. And I think that that has really underpinned so much of their foreign policy and they just didn't take seriously that there are hostile states who have aspirations that go far beyond anything that's in reaction to us.

And this is how you get kinda the mantra of management of these relationships and sort of the escalation management or the effort to always deescalate rather than to compete effectively. And that was read as weakness by our aggressors. And I think as Niall said, that led directly to the disaster in Afghanistan.

Then it left a trail from Afghanistan to the massive reinvasion of Ukraine in February of 2022 to the horrific Hamas attacks on Israel and the activation of Iran's Ring of Fire against Israel. And I think it also led to a more aggressive stance by the Chinese Communist Party.

So I think one of the reason why we have North Korean troops fighting on European soil, right? I think this is all based on this perception of weakness and an administration that was focused on its performance. What it said from various podiums, rather than what it did to advance American security and American prosperity.

>> Bill Whalen: Very quick, that's a question, Donald Trump takes office at noon on January 20th, East coast time. Tell me the one thing that you two are looking for in terms of a measure of Trump being successful.

>> Niall Ferguson: I think the economy is the thing that's hardest for this incoming administration because they're inheriting an economy that they overheated with fiscal stimulus.

They're inheriting an inflation landing that hasn't really yet fully happened. The bond market is looking at the numbers deficit, 6% of GDP, debt is way above 100% of GDP and it's getting nervous. If the bond market continues to be jittery and the 10 year yield continues to be where it is, then I think the stock market's gonna be vulnerable unless just insanely good news keeps on coming in from the AI Bros.

So I think their biggest challenge is actually on the economic side. And that of course, was true of Ronald Reagan too, because '81, '82 saw one of the nastiest of post war recessions. Didn't have a whole lot to do with Reagan, it had a lot to do with Paul Volcker trying to end the inflation of the 1970s.

In the same way, if the economy turns ugly in the next year, it won't really have much, I think, to do with Trump. But he'll be blamed and people will say, you talked about tariffs and you did this and you did that and you spooked the markets. I think in truth, they're really gonna have a tough time writing this economy because of the way it's been run by their predecessors.

That's what I'm gonna be watching not what's in the New York Times or the BBC or any of the legacy media. I know what they're gonna be writing about. They're gonna be saying, deportations, terrible. That's gonna be their narrative, but I'm gonna be looking very closely at really how the markets respond to all the tough things that this administration is going to have to do, HR.

>> H.R. McMaster: Hey, I think I'll be just, of course, paying attention to the tone. Remember the first inaugural speech, the tagline became American carnage, and what I'm hoping to see is, kind of a positive vision, for the future of the country. I think that we do have kind of a crisis of confidence in our country.

I hope that President Trump helps us get over that and restores our confidence in our common identity as Americans. And I hope that he sort of sets off on a path that allows him to do a better job than he did in his first term. And certainly a better job than Joe Biden did at getting to the politics of addition to bring Americans together around a positive agenda.

For restoring confidence, in who we are, but also confidence in our democratic principles and institutions and processes. And as you said, confidence in our free market economic system, right. And confidence among, maybe younger generations that they're gonna have even a better life, than their parents and grandparents. So, tone is gonna be a big part of it, I think. And I hope it's positive, and I hope it sets him off on a course toward getting to this kind of politics of addition.

>> Bill Whalen: And I'm watching his chief of staff, Susie Wiles, who is saying all the right things in the transition, how she is going to limit access to the Oval Office.

He's not gonna let independent operators, their own agendas try to cloud up the President's thinking. If you're not familiar with Washington, a chief of staff is usually important to a president in terms of being both a traffic cop but also keeping the President on a steady beat, so let's see if Susie's successful. And with that-

>> H.R. McMaster: Good luck. I mean, I'll tell you, I think that's great, but the president, he likes to talk to a broad range of people. You can't limit that, right?

>> Bill Whalen: Right.

>> H.R. McMaster: But I think what you can do is you can limit the degree to which people can try to manipulate him.

So whenever certain people went into the Oval Office, I made sure I went in with them. Because I knew they were bringing with them an element of kind of a foreign policy agenda or they wanted the President to do a solid for them, internationally. And there's nothing good for the President in that kind of stuff.

So I think, it's really important for the chief of staff, the national Security advisor, to recognize, as you're alluding to, Bill. I mean, these are two people in the White House who have the President really as, as their main client, right. And National Security advisor really the only client, and it's really important to make sure that, the President is not sort of manipulated.

And of course, this happens with every president. And they'll try the people who push his buttons, they do it with flattery. They do it with, hey, this will make you look weak, this will alienate your base, your most loyal supporters, they're not gonna like you anymore if you do this.

I think what you really need to do is, as a chief of staff, is make sure the President gets best advice and hears from a broad range of people. But always gets multiple options because the President deserves multiple options. The President's the person who got elected. So don't try to shine one course of action up and get everybody to try to get Donald Trump to approve it.

Give him a range of actions, help him understand how this fits into his overall agenda. And I think when that happens with Donald Trump, he makes good decisions. If you try to just give him that one option or if you try to manipulate him into certain decisions, it's gonna backfire.

>> Bill Whalen: Okay, onto the lightning round.

>> Bill Whalen: So four years ago, our friend Niall Ferguson published a book called Doom, the Politics and Catastrophe. And if you look at that book and you look at the photo on the jacket of that book, it looks like, Niall, you're playing golf in Los Angeles right now.

Not to diminish what the good people at that city are going through. If you haven't seen the book, read the book yet by means do get it, and look at that photo. It shows a fire about to consume a golf course, making for the trickiest of par fours, we would agree.

Niall, as you watch what's going on in Los Angeles, it strikes me as really something straight out of your book in that Ellie's problems are one part nature. You can't control 100 mile an hour Santa Ana winds, but it's also one part man in terms of bad government policy. So, could you put LA's plight in the doom narrative?

>> Niall Ferguson: Well, it fits right in because the central argument of that book was there's no such thing as a purely natural catastrophe. Or in almost every case, and you can go all the way back to ancient volcanic eruptions, there's some element of human agency involved.

After all, nobody made you build a city at the foot of a volcano, Vesuvius, for example. And I think that the case of the fires of Los Angeles, truly terrible events that have destroyed the homes of many thousands of people and cost lives, dozens of lives, need to be understood in this way.

The debate that's going on right now, as far as I can see, is between those who say, it's a purely natural event, how can anybody possibly blame the local authorities or the state authorities. And those on the other side who say, it's entirely the fault of misguided climate policies.

And the reality is, as with nearly all disasters, all great fires, great floods, all the great disasters that my book describes, it's this point at which nature intersects with bad decisions. There have been a lot of bad decisions taken in California over some decades since California became a one party state, and environmental preoccupations took over.

From, say, policies of controlled burning in areas vulnerable to fire when we stopped investing in our water infrastructure. These problems are so well established that I remember writing a column about wildfires in California as a political problem at least four years ago. When we had a space of fires in Northern California.

So you can't exonerate the state government or the city government by simply saying, gee, the wind was really strong and fires happened here. There has been a pattern of misgovernment in California and in the major cities of California. And I can only hope that this calamity in the state's biggest city finally persuades people that there's something rotten at the heart of the California Democratic Party.

And there needs to be real opposition to it within the state if the state is to be properly managed again. And it has not been properly managed, I'm sorry to say, for decades.

>> Bill Whalen: Right, So, HR Essentially, the podcaster columnist Hugh Hewitt has called this California's Chernobyl in this regard.

1980s Chernobyl occurs in the Soviet Union, and the government cannot cover up the fact that this is a garden. The people suddenly realize, my God, this is Soviet style management. And Hugh contends that the fires have exposed this in California. But what you see going on in California right now, HR is a leadership crisis, plain and simple.

The governor does not have control of the situation, there's no confidence in the mayor at any chance they will throw somebody else under the bus and not say something as simple as, this is my fault, I screwed up. Does this speak to a larger leadership crisis in this country?

>> H.R. McMaster: I think you're exactly right, it's a crisis of leadership. And I'd like to just ask you the question, I mean, you're an expert on California politics. I recommend our readers go to your column, they listen to your podcast, it's fantastic. And everything I know about California politics, I kinda learned from you, Bill.

So I'm gonna ask you, is this a moment of reckoning? Are people finally gonna elect people like Rick Caruso, for example, in LA instead of more of the same, the next Karen Bassett that comes along? I don't know, I mean, I hope so, I really hope so. I mean, my whole family's here, my children, my grandchildren are all in California.

And it's a beautiful place, it's a wonderful place to live. And as you've exposed so many times in so many different ways, it's so poorly led. So, Bill, what are the prospects, is it gonna get better?

>> Bill Whalen: The doors wide open to someone like Rick Caruso to run in a recall election?

Caruso, for those not aware, is a developer extraordinaire in Los Angeles. He ran for mayor in 2022, and he lost to Karen Bass, the current mayor. He could run into recall, he could probably win in a recall. But here's what I've been thinking about this. It's not going to bring Ronald Reagan in overnight, the state is still 2 to 1 democratic in terms of party registration.

But I think what we're seeing here is now the door is wide open to an ideas conversation in California without boring you the nuances of our politics here. We had a ballot initiative, last of all Proposition 36. And this was undoing a previous ballot initiative which had watered down punishment for shoplifting in California.

If you got caught with less than $900 of goods, misdemeanor penalty, the cops don't really want to prosecute you. You get turn on the street, revolving door to justice leads to stores getting constantly looted. Stores eventually shut down. And Niall, that's why you get San Francisco in a doom loop to use Doom once again, we're gonna sell that book today as best we can.

>> Niall Ferguson: Thank you, I appreciate it.

>> Bill Whalen: What the point I'm making here is that Prop 36 not only passed last fall an anti-crime measure. It got almost 70% of the statewide vote, that is incredibly rarefied era for a California ballot initiative. It passed in every county in California, including Marin county, which hates these sorts of measures because California is fed up.

If you look north to San Francisco, which was somewhat gloating while Los Angeles is suffering because why blue skies, no earthquakes, one there is a reminder that no part of California is safe. San Francisco actually had an earthquake last Friday, it was in the same spot as a 1906 earthquake.

That would make me nervous if I lived there. But San Francisco swart inaugurated new mayor last week. His name is Daniel Lurie, he's an heir to Levi Strauss fortune. And what's notable about Mr. Lurie is that he is not a product of San Francisco politics. This is the first time they've chosen a a non-political mayor since the Harry Truman Dwight Eisenhower era.

So voters in San Francisco are fed up and they're looking for something different. So I would argue that if you really wanna affect change in California, I would not spend $20 million trying to elect a Republican because he has the wrong letter at the end of his name.

I would get involved in the initiative process and start pushing ideas and forcing those status quo in California to defend them. But let me send this back to you guys. Well, Niall's a former California, recovering Californian I guess we would call it. HR is still a Californian. My question to the two of you is, would you advise somebody to move to California?

This is a beautiful land, nature is spectacular. There is opportunity if you are very intelligent and very innovative. On the other hand, housing is impossibly expensive. Good luck getting gasoline at a cheap price. If I took you guys to my favorite diner in Palo Alto, I treat you to a $23 omelette.

Why would anybody wanna live here?

>> H.R. McMaster: How about the scenery, the climate. I mean, I look outside my window right now, Bill. I mean, looking at the Santa Cruz Mountains, or looking down the South Bay. I think it is a great place to be and it is a really creative place.

I didn't really even understand it how this innovation ecosystem worked until I came back to California after having been a National Security Affairs Fellow here at Hoover from 2002 to 2003. And you have the universities who are connected to so much of the capital that's available here and the venture firms who are connected to the engineers that these universities produce, right?

And the ideas that are generated here. So it's an exciting place to be and I think it is a real hub for innovation across the country and a real strength of the United States. I think there has been, and Michael Anton who's going back into the Trump administration, is a great guy and was, he was our communications director and National Security Council staff.

He wrote a really acerbic but extraordinarily witty essay about the history of Silicon Valley. And about the turn it took away from its roots which was really the defense industry in the post-World War II period in particular, and World War II period. And so I think that it's coming back.

What I see here and people would tell me, man, you're out there in California, isn't that an environment of self-loathing? No, I mean, there are so many patriotic people here who believe in our country, who understand that we're in consequential competitions internationally. So I think because of the wholesale politics here and what you described as the Democratic Party's exclusive grip on power and a certain ideology that has been prevalent here for a long time.

There's kind of a misunderstanding of the many Californias that exist and so many of the people here who are determined to help advance our interests and humanity's interests against what we see is, I think, threats to our way of life. Manifested by the Chinese Communist Party, for example, or what we see with Russia and the war in Ukraine or terrorist organizations and their sponsors like Iran.

Anyway, I think this California that I know is not what people perceive it to be from my old hometown like in Philadelphia where they're a lot of my cousins are like, man, I can't believe you're in California. What is that like? I'm like, yeah, it's great, it's great.

>> Niall Ferguson: It is great and I want to stress to Good Fellows fans that I have not left California for the conventional political or economic reasons. I'm back here for family reasons and flying to California tomorrow and looking forward to it very much. I think HR's right, I think things are finally turning because the progressive wing of the Democratic party has just made such a huge mess of the two major cities.

And after a certain point, even the most liberally inclined, conservative hating Californian says, something's got to change. So, I think it is gonna change. I think there's also been a big shift in sentiment in Silicon Valley. And let's not forget, maybe this is a good note on which to end, that this election might have turned out very differently if the tech bros, the red pill, tech bros.

Elon Musk, but also my friend Marc Andreessen, Joe Lonsdale, a bunch of people from the tech sector, had not decisively shifted their political orientation and backed Donald Trump. That was a very big difference between 2024 and 2016. And a lot of that impetus which lies behind ideas like DOGE, originates in Silicon Valley.

So, I think Silicon Valley has really shifted. And as Silicon Valley goes, so I think ultimately California goes, it's coming back. And the vibe shift cannot be escaped anywhere in the world, including in Los Angeles, in San Francisco, and let's hope finally in Sacramento.

>> H.R. McMaster: Hey, and I'll tell you, I love California, but I don't love California enough to be rooting for the Rams this weekend. Just to make that clear.

>> Bill Whalen: Hey, Niall, since you mentioned Silicon Valley, I wanna split one more thing before we go, and that is Meta. It's now ditched its fact checking program, the other day announced it's now doing away with its DEI programs, meaning hiring, training, and suppliers. 

Niall, what the Zuck is going on?

>> Niall Ferguson: Well, if you think back, I think it was to 2019, he gave a pretty strong defense of free speech in a lecture that he gave in Washington at that point. And then he was kind of just swamped by the trends that we saw in all the big tech companies.

They emanated in some ways from the universities where they hire their young people, from the HR department. And I think Mark Zuckerberg, like other tech leaders who might have been personally libertarian inclined, they were just overwhelmed. I don't think it speaks very well of Mark Zuckerberg that he folded, as he clearly did in 2020, 2021.

But I'm glad to see that the vibe shift has enabled him to throw off that mask and revert to his 2019 position. I think that's a healthy thing. It does right slightly remind me of an old Rothschild joke, which is, what are my principles today with regard to pork bellies?

I mean, what are your principles today, is a good question to ask the next tech bro you meet.

>> Bill Whalen: Good, HR, you have the last word.

>> H.R. McMaster: Hey, I just think sometimes you have to take people you have to believe what they say, and I think his message, it seemed to be sincere.

Hey, we tried to do this, it didn't work out. We were wrong, and he reversed his position. And so, I think that, as Niall said, is positive. I think it does reflect what Niall began to talk about at the beginning of our discussion today, which is the shift in the vibe overall, which I think is in a positive direction.

And so, all reasons to be optimistic. And I hope that our incoming president is optimistic in his speech coming up here at the inauguration.

>> Bill Whalen: Okay, guys, good conversation, very efficient conversation. DOGE, Department of Goodfellows Efficiency, how's that? On behalf of the Good Fellows, Sir Niall Ferguson, and HR McMaster, our missing Good Fellow, the recovering economist, John Cochrane, get better, John, soon, we miss you.

We hope you enjoyed today's show, we'll be back in later this month with a very good guest. I'm not gonna tell you who it is you're gonna have to tune to watch, but you're gonna like it, trust me.

>> H.R. McMaster: I've got one more DOGE, the morbid of Go Eagles.

>> Bill Whalen: You're gonna have to teach Niall the Fly, Eagles, Fly song at some point. Anyway, folks, thanks again for watching, a very belated happy 2025 and we will see you soon, take care. Thanks for watching.

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