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- [00:00]
A
In Francis Fukuyama's book the End of History, people often think of that as a kind of incorrect book, that he kind of said that everything was over and people wouldn't argue. He doesn't say that really.
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B
He says that it's the most misinterpreted book in recent history. I'll just go there.
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A
It is. It is. It is.
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B
Welcome to the Mona Charon Show. So glad you could join me today. Before we jump into our topic and I introduce our guest, I just wanted to say a word about the next Bulwark Book Club that I'm so looking forward to. My colleague Bill Kristol and I are going to be discussing Mark Twain's wonderful book, Pudd' Nhead Wilson, which I have read and which I have to tell you, is great. I mean, it's, it's a fun read. It's a quick read and it's full of really interesting both storytelling techniques and, and historical interest. So we would love to get feedback from the audience. And this one is going to be a live taping. And so we would love to hear from you, get your questions, comments. Please feel free to send some in ahead of time. There's a link in the show notes and there will be more online. So that will be coming up on August 12th at 1:30pm Eastern. So that's August 12th, 1:30pm Eastern. Join us for Mark Twain, Pudd' Nhead Wilson. And now I would like to introduce my guest. He is staff writer at the Atlantic, Idris Kalun. And Idris is one of the most interesting and stimulating writers over at the Atlantic, which is saying something because they have quite the crew. And so he has two pieces that I want to dig into today. So, so, Idris, first of all, thanks again for returning to the Mona Charon Show.
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A
Yeah, I appreciate it.
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B
And so I want to start with your piece about Donald Trump's policies and whether they are actually undermining American greatness, if you don't mind my paraphrasing your thesis. So you start with a quotation from him from July 4th saying we will always be on top. We will never let our country fall. And I think it's fair to say that his followers believe him to be enhancing American stature, wealth, power and so forth. And so tell me your thesis of what you think is going on instead.
- [02:44]
A
Well, I think that there is a difference between short term and long term. And I think that what Trump has always argued and his supporters have always said is if he's so bad, why is the economy doing as well as it has. Why did the economy do as well as it did in this first term and why is it not really suffering anything in this term now? And the point that I make in the piece is that a lot of the actions that he is taking aren't manifesting in kind of short term decline, both because they've coincided with an AI boom that has been very helpful to him. But what they are doing is undermining the determinants of long run growth. So the way that we are going to reduce immigration, even for high skilled migrants, that affects the pace at which you can generate ideas. The attacks on universities, they don't want to immediately register in terms of, you know, American GDP, but in terms of who produces breakthroughs in 20 or 25 years from now, that will show up. And I think that if you see
- [03:37]
B
this framework, could I just underline that? Let's pause on that for a second because you make the argument, and I'd like to hear more about it, that ideas are what propel growth in our time. It isn't, you know, having a lot of oil and gas under your real estate. It's not things like that. It's really all about ideas. And what he is doing is inhibiting our capacity to bring in the best minds. Right?
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A
Yeah. I think increasingly materials matter. It's good that America sits on fossil fuels like it does, and that's helpful. But the pace at which you generate ideas is what determines growth. Productivity is only boosted by having more ideas. And the institutions that you have that allow people to profit, to have stable expectations, that if they do innovate, they will keep the returns, that the marketplace is fair, that if they win fairly, that the state won't interfere either because they have a kind of regulatory agenda or because they are out of political favoritism. This is one problem with lots of countries that have gone down the route of corruption. They see very anemic growth because the marketplace becomes unfair. Right. It is a very unhelpful kind of development. And what we see again with Trump's actions and the kind of open profiting off of cryptocurrency, the way that it seems like you can commit financial crimes and donate the right amount and therefore get a pardon, all of that undermines people's perceptions of the fairness of the market. And that's why you see kind of business leaders in the way that they talk about Trump with this kind of timidity that is a bit unusual. And again, this doesn't mean that in the short term everything falls apart. But what it does mean is that little by little, the American kind of marketplace that is the ultimate generating force for prosperity and we have a lot of it that starts to be diminished. And I think a lot of his actions, if you look at them on this dimension, are kind of borrowing from America's future greatness.
- [05:41]
B
So the sources of American greatness are the stability of our society, the fact that people can trust in our institutions, that we won't, for example, confiscate any investment that foreigners choose to make or anybody chooses to make. The government won't confiscate your wealth. That happens in other countries. That's a problem. We don't have that we have very reliable rule of law, or we did. We had a very open immigration policy and we had a great research and development infrastructure. And also that was linked to our openness to immigration. By now I, as viewers of this program know I'm sort of a across the board pro immigrant person. But it's particularly important, and you made this point in the piece which I also have written about, which is that if you look at the American dominance in Nobel Prizes over the last 50 years, 35% of the American winners of the Nobel Prize in chemistry, medicine, economics and physics, 35% were immigrants. I was just listening to the radio this morning and they were talking about applications to PhD programs in this country are way down. And part of that is because really smart students from other places are not applying here. I mean, they're getting the message loud and clear. And one of the things you say is that the administration has talked about putting, what is it, a four year cap on student visas. Talk about that if you would. And the link to economic growth.
- [07:32]
A
Yeah, exactly. So, you know, most PhDs take longer than four years. So if you're a prospective PhD student and you see that there's this regulatory change that the administration is talking about that means that you might get kicked out or have to leave the country before your PhD is finished. Why would you come? And it is quite the benefit to America that we have one person. It was actually Nicholas Christakis at Yale told me this and it's always stuck in my head. But he said that America's superpower is that we brain drain the rest of the world. And that's very, very true. A lot of our kind of cutting edge professors, a lot of our AI prominence and preeminence is due to imported talent in the sense that people come here, they want to live here. It's a great place to live, to raise kids and they stay. I'm perfectly willing to understand the argument that America could be more selective about the kinds of migrants that it takes in. But what this administration is doing is it's saying all migrants, no matter what, are not. We don't want any of them. And that includes high skilled, low skilled. And the effect of that will again be manifest in 20, 25 years. It'll manifest in fewer breakthroughs. It'll manifest in fewer ideas, fewer successful companies, of which immigrants of this caliber tend to produce a lot of as well. So that is one thing where, again, you're not going to see in the immediate future any change, because we already have a lot of people who are here who are produc ideas and innovations and patents and companies and all sorts of other things. So you won't see an immediate decline, but if these policies continue, you will see a difference. And I guess I would add, just while we're talking about it, some other stability that other kinds of stability that people take into account are the monetary stability, independence of the Federal Reserve, which is also something that the President is very eager to undermine, and also the stability of the dollar and the American debt. And the fact that this isn't a unique Trump phenomenon, but the fact that debt is exploding over his period means that at some point there will have to be some kind of fiscal reckoning that America has to deal with. And all of that. Again, Donald Trump will be long gone by the time that arrives. But when it does arrive, it will be hard for America to go through.
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B
So imagine that you're speaking to a Doge loving MAGA supporter who says, what do you mean Trump is responsible for an explosion of the debt? That's not true. They went in there, Elon Musk with their, you know, with their chainsaw, and they cut government spending. So we're taking care of that problem.
- [10:28]
A
I would just say, like, look at the statistics, the debt. You can look at the debt clock. Everyone kind of believes that that is true. And I mean, I don't have the numbers to hand, but I think it's gone up several times.
- [10:39]
B
So what happened in the big beautiful bill?
- [10:42]
A
The big beautiful bill extended the tax cuts from 2017, which are unfunded. Right. There isn't a mechanism to make up for them. There is an attempt to make up for the cuts by imposing Medicaid work requirements and cuts on food stamps and other things. And that does reduce the overall cost, but enough to compensate for it. So that will add trillions to the deficit or deficits over time. And what we know about the effect of tax cuts on growth is that they're not compensated. Right. So they're not made up. That was true of the 2017 tax cut, which saw deficits increase dramatically. No one can say that Democrats have done much better. I mean, Biden exploded the deficit in his own way. But what we see is this trajectory of increased spending and no real attempt at reducing that. America's above 100% of GDP in debt, and there's no sign that it's going to decline anytime soon.
- [11:40]
B
How does this compare with Great Britain? You made this comparison in your piece.
- [11:48]
A
Well, one thing that was interesting to me, I wrote a long piece about what went wrong with Britain a few weeks ago. And there it's interesting. They've been stuck in the kind of economy that Americans sometimes imagine they're in. There has been no wage increase over 18 years. Very, very little productivity growth. Energy is extremely expensive. And that has really sapped the country of a lot of vitality, of a lot of trust in the political system. I think it's accelerated their political dysfunction, which we see now, now that they're on their seventh prime minister. But in this piece, I guess Britain was on my mind. But one thing I point out is that Rudyard Kipling was asked to write a poem about, you know, dedicated to the country at the time of Queen Victoria's Diamond Jubilee. And that was kind of 1890s, Britain was at the height of its empire. And he turned in this kind of somber meditation on what might happen if Britain were to decline. This kind of memory of, you know, Britain's navies being useless and cast aside. And it's quite humble at a time of kind of.
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B
Maybe not what they were expecting from Rudyard Kipling, huh?
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A
No, no. He had actually started working on White Man's Burden around the same time, which is this kind of infamous poem. And he could have turned that in, but something, something caused him to try to write in a different register and it was quite effective. And the contrast for me between Trump's kind of chest thumping speech on July 4th and the tenor of that poem, I thought was quite interesting.