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- [00:00]
Tim O'Brien
Foreign.
- [00:11]
Charlie Six
Welcome to this episode of to the Contrary podcast. I'm Charlie Six. Just a normal Monday president of the United States is meeting with the world's coolest dictator, whatever that means. Apparently Donald Trump has also decided to tell the U.S. supreme Court to all the way off on the issue of dealing with the, the, the gentleman who was renditioned to El Salvador. We'll talk about that just a little bit later. And joining me right now, boy, talk about a timely guest, Tim O'Brien from Bloomberg Opinion. Tim, how are you?
- [00:45]
Tim O'Brien
Oh, Charlie, I'm marvy. You know, all is, all is well with the world. There's nothing that's unpredictable, there's nothing that's disconcerting. Everything's lined up and functioning. It's like a well oiled machine.
- [00:55]
Charlie Six
Nothing is gross. I'm just looking at a tweet here where Trump's on Air Force One basically saying, you know, that the Russians didn't commit, didn't, I'm sorry, Trump says the Russians didn't mean to commit that Palm Sunday massacre. I'm told they made a mistake. Just parroting Putin's line. And then he puts out a tweet this morning. I don't know whether you've seen it or whatever it's called now that I had nothing to do with this war all in capsule, but I'm working diligently to get the death and destruction to stop. You know, it just does strike me that one of the few people in the world who really seems to get Donald Trump is Vladimir Putin. Unpopular opinion. Everybody else is quailing and quivering and lining up to bend the knee. And Vladimir Putin knows this guy. He's a scared little man child who is easily flattered and influenced. And, and so while the rest of the world is kissing Trump's ass, Vladimir Putin's humiliating him. I mean, he's humiliating him two days after his special envoy meets with him. And Trump bleeds out or whatever it is, saying Russia's gotta get going on the peace deal. What does Vladimir Putin do? He rains death on Ukraine. And Trump just has to say, you know, thank you, sir, may I have another one? I mean, what?
- [02:13]
Tim O'Brien
Well, and he's sitting across the table. I think this is true in a different way of his relationship with xi in which, you know, both of his opponents are think long term, they're methodical, they understand his weaknesses. They understand that he wants to move very quickly so he can show that in the first four months or five months of his presidency he was able to solve the problems Joe Biden couldn't and that, you know, he could, he could get China to fully back off from trade abuses and that he could get Putin to fully back off from Ukraine and that all of the tensions in the Middle east would evaporate. And instead, I think you've seen an acceleration of chaos and unpredictability and national security issues. And in the Putin example, let's not forget that moment when Zelensky was in the oval office and J.D. vance and Trump jointly bullied him in front of an international audience, which I'm sure wasn't lost on Putin. And he now, I think, feels free reign, you know, to rain bombs down on two civilians in Ukraine. And the US should be deeply embarrassed by this. It's a complete forfeiture of our role as a defender of democracy, you know, in a world threatened by authoritarian regimes. And it's so despondently troubling.
- [03:42]
Charlie Six
You know, Tim, a few weeks ago, the last time we spoke that was at a time when all the smart people were telling me, no, no, Donald Trump is just bluffing on the tariffs. He's not going to go ahead with him. And you were quite confident he said, no, you think he was going to go ahead with them, which he did. So you were right. So let's just talk about this, the way that he's handled all of this. I mean, I'm str by a couple of things. Well, I hope we'll get to all of them. I mean, the, the, the sort of unplanned, unilateral nature of these, these tariffs, the off again, on again, I'm going to impose them, I'm going to suspend them, I'm going to provide exemptions from my buddies. Just give me your sense of where we're at as we begin the week on this tariff.
- [04:26]
Tim O'Brien
Well, you know, first, first and foremost, no one would run a large company or a large bureaucracy or their own family affairs this way. And again, that's not even a partisan or an ideological issue. It's just about like, how do you manage a process? Well, you don't manage it this way. You don't manage it by changing your position willy nilly. You don't manage it by surprising your allies and essentially punishing your friends. And you don't back it up with erratic, nonsensical messaging and in a trade formula that was created out of whole cloth and was bizarre and really wasn't a formula. It was just an excuse and a veneer. I think one of the things that's happening right now, you know, in Trump, 1.0. There were different things he did that troubled or outraged different sectors of society. Liberals were concerned by conservative packing of the Supreme Court. I think people from both camps were concerned about a rollback in civil rights or our posturing overseas with dictators. But the Wall street and the business community largely escaped Trump's predations in his first term. In fact, they got a massive tax cut, a lot of deregulation, the stuff Wall street and the business community has always wanted out of Washington administrations. And Trump campaigned, coming into Trump 2.0 as tax cut again, more deregulation, a rebirth of dealmaking and tariffs. And I think the business community, the financial community thought, okay, well we'll get those first three. But he really won't do tariffs because who would do tariffs? It's self destructive and damaging. You'd have to really want to just be somewhat fanatical if you're going to pursue something like that. Because we have a trade regime that has costs, it can hurt working Americans and we have to account for that and deal with it. But by and large, history has progressed along trade being something that binds nations together and creates economic growth. And Trump just turned around and blew that up. And Wall street now, and I think the business community getting a taste of how they can be directly harmed by his ignorance, his unpredictability and his poor management skills. I think right now, you know, he's now, you know, the bond market almost cracked last week. You know, the bond market was at.
- [06:59]
Charlie Six
And it got his attention, it got.
- [07:02]
Tim O'Brien
His attention because the corporations issue bonds to raise money, the federal government issues bonds to raise money. And when that market starts to go south, you have knock on effects across every sector of the economy and society. And so finally people got in his ear and you now have this 90 day kind of a moratorium. He jacked up rates, tariff rates on China, he lessened the most extreme rates on everyone else, but it's still around 10%. And I suspect over the next three months there's going to be quite a war going on to get him to back off of these entirely. And I think for him it will never come down to the math. It won't come down to the economy. It won't come down what's good to other people. It'll come down to his own sense of whether he'll be seen as someone who backed out and someone who didn't keep his word.
- [07:51]
Charlie Six
Well, he'll declare victory no matter what happens. Right? I mean, they did that last week.
- [07:56]
Tim O'Brien
Right in the middle of the crisis.
- [07:57]
Charlie Six
They did it, yeah, while he was, while he was blinking, he blinks and declares it. You know, the art of the deal, right?
- [08:04]
Tim O'Brien
We've talked about this before. On his epitaph, on his tombstone, we'll say, I won. You know, he'll go to his grave with Sandy, man. I think.
- [08:13]
Charlie Six
Okay, well, before we get into some of this stuff, I am so like the markets completely confused about where we're at right now. You know, they're on again, they're off again, there are exemptions. Over the weekend we found out that he did a sweetheart deal for, you know, computers and smartphones. Then one of the real men of genius of the administration, Howard Lutnick, goes on television yesterday and says, yeah, but even that's temporary. So I'm really confused because it was like five minutes ago that Howard Lutnick was telling us that we're going to have millions of, of American jobs screwing in these iPhones. And then like two days later Trump apparently says, no, no, no, we're not gonna apply it to iPhones. So where are we at on there? What's on, what's off? How can anyone in business make any sort of a decision given the fact that right now the state is Donald Trump's ID?
- [09:05]
Tim O'Brien
So that's what, you know, the state is his ID. Absolutely, Charlie. You know, he's Mr. ID and he's visiting it on every sector of society. Now, Howard Lutnick is an interesting case study. Donald Trump has always had people who are not regarded as first tier financiers. You know, he's a self made man. Cantor played an important role his firm in brokering deals in the bond market. It's what it was built on. He is, you know, he, he is, he is not a Goldman Sachs investment banker though. And he's not somebody who I think is a policy thinker. He's a, he's a retail broker on Wall street, which is a very rough and tumble world. And those are the people that have historically been attracted to Trump and who. He's attracted to people who, who are unconventional and people who, who find different cracks in markets to inhabit that other people may not want to go into. And you know, he's a salesman, right?
- [10:08]
Charlie Six
I mean, he's basically a salesman like Trump is basically a salesman, right?
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Tim O'Brien
Yeah, yeah, yes. And it's why neither one of them actually Sales making is a good, is a good skill to have on the campaign trail. It's not a great skill to have when you have to talk about why you're pursuing a policy. And Lutnick two weeks ago, I think or less was on CNN and said, mark my word, by the fourth quarter this year you will have rapid expansion of, you know, of the economy and a booming gdp. So he's already planted a flag for his own administration, be judged by later this year. And I have a hard time given the way, believing, given the way the cards are on the table right now that you're going to see super strong economic growth in the US in the fourth quarter. I hope we do. You know, I'm an optimist. I think a growing economy is good for everybody. But I have a hard time seeing how we get there. And I have a hard time understanding most of what Howard Lutnick says when he goes on television to explain the administration's policies because it is a mash of promises and conjecture. And a lot of the sentences don't link up in a way.
- [11:13]
Charlie Six
Well, they're self contradictory, discernible.
- [11:15]
Tim O'Brien
Yes.
- [11:15]
Charlie Six
Yeah. I mean they're completely, you'll hear people make defenses that are, you know, I'm sorry, you know, A is not B, you can't count on the revenue and then also say that you're moving toward a zero tariff. You can't say it's non negotiable. I mean, let's just talk about these exemptions though because one of the things as a free market classical liberal I've always objected to about tariffs is and this, this phrase by the way, is Grover Cleveland, who I think we ought to quote more, is the only other president to serve non consecutive terms. He was very anti tariff and he called it the communism of pelf, which is basically called the communism of grift, the potential for corruption. And you wrote about this last week where Donald Trump sits back. I mean as I wrote yesterday, I said, you know, he may sit on a throne of bullshit, but he's still sitting on the throne. And he can dispense fear and favor. He can say I'm going to exempt you, I'm not going to exempt you. If I like you, I'm going to cut you a break. If I don't like you, I'm going to hit you with this business ending tax. So let's just talk about that a little bit. The way in which Donald Trump and I sense that he probably luxuriates in that kind of power. I mean, the markets may be turning to shit, but Donald Trump right now knows that he's got the world economy, the markets and the future of a lot of these businesses in his hands. And it is unchecked Power?
- [12:40]
Tim O'Brien
Well, you know, he's specifically been attracted to the areas of the presidency where the President can exercise unilateral decision making and control. He's doing it on national security, he's doing it around different parts of immigration, federal funding, of all sorts of institutions and endeavors, and of course, on tariffs and the economy. And the classic argument for a strong executive in the United States is that quick decision making gets bogged down by the federal bureaucracy and it makes us less competitive and strong. But if you're going to believe in the efficacy of independent executive decision making, the executive has to be a sophisticated, generous, mature and rational actor. And those aren't things you tick off around with Donald Trump. And if you give him the power to basically do carve outs on tariffs, it opens the door not just to flattery, but to bribery and to a real helter skelter approach to who gets tariffs and who gets tariffs and who doesn't. And that's again, not a way to run an economy. And the reason the stock market has been bouncing around like a yo yo is, you know, in the long term, the stock market's a measure of corporate profitability. Ultimately, in the short term, it's a measure of emotion and competence. And clearly what the markets have been saying is that Trump's lost the narrative. You know, he's opened this Pandora's box. I don't think here's administration thought that they'd see a market meltdown that signified like we might not only have a recession, we might have a depression. And we may not only have prices on goods escalating, it may be that you can't even buy some of those goods in the United States. Audi, it's best selling. Ev, it's not going to sell it. It said it cannot sell it in the US Anymore because the tariffs make it too expensive to sell. And that's a high end purchase. But basics like food and clothing that people rely on, they're going to see store shelves not carrying some of the products, much less making them more expensive. And I don't think, I don't think this administration really braced for the kinds of impact and criticism.
- [15:03]
Charlie Six
Well, this is, this is the question. Maggie Haberman last week said in a different context that Donald Trump basically doesn't care about the optics anymore, that he's all out of fucks to give. Basically he's not running for reelection. I'm a little skeptical about that because this is a man who's built his entire life and his entire career on optics. Right. On being a performer on putting on a show. So you think he was taken by spite? Is he rattled by this? Is he. I mean, how do you think he's processing this right now? Well, other than that, he wants to be a winner rather than a loser.
- [15:36]
Tim O'Brien
Yeah. I mean, I do think the velocity of the response took them off guard because the response, their own responses to that were so incoherent and unuseful and it just fed the flames. So I do think they were caught off balance. I do think that Donald Trump in this term is a different president than Donald Trump in the first term in that. I do think he doesn't. I think he authentically, at a very deep level, doesn't care about the impact of his actions. And I think that Maggie is right in that regard. I think you see him in these Cabinet meetings and in the Oval Office. He looks world weary. He looks bored as long as the people around him are bending the knee. Yeah. Like, you know, these just weird, embarrassing Cabinet meetings where they go around the table and everyone says you're the best president in the history of America and the best leader since the dawn of civilization. And he's like, well, yeah, of course. Yeah, yeah. But he's sort of slumping over on his hand and looking a little bit bored. And I think that, you know, we've talked about this before, but he has always been so insulated from the consequences of his own actions, from his childhood to adulthood, businessman, the presidency, wealth, celebrity, and then the powers of the presidency have insulated him from the consequences of his own actions. And he just doesn't care about what happens when you burn the house down. And I do think that that's an added danger here because I think in three months from now, if Wall street and the business community haven't sort of pulled him off the ledge on where he was with tariffs, it will be because. Solely because he wants to prove that he doesn't back down and that he was right from the start, even when he was wrong from the start and should back down. And that's, you know, that's going to come into play on national security issues, by the way, and other arenas in which we don't want a president who's built that way.
- [17:35]
Charlie Six
Well, I want to get to China in just a moment, but I want to go back to a moment. And I know you commented on this last week. It really, really, really struck me, though, he had imposed on Liberation Day these massive, massive new tariffs. Then you had the markets crash. He blinks, but not officially before he puts out on Social media, good day to buy stocks. And there was a lot of speculation that, you know, this was a, you know, here you have the President United States handing out stock tips that, that if there was whispering out there that he was about to make an announcement, people could make hundreds of millions of dollars, if not billions of dollars. The fact that he has the power to move the markets with a single social media post, I mean, I think it was, you've said something along the lines of, you know, I mean, just a few years ago, the notion of the President United States, you know, handing out stock tips from the Oval Office would have been absolutely unthinkable. And yet it's in broad daylight. The kind of potential for insider trading, the kind of just, you know, naked grift and he makes these announcements on Truth Social, not before the White House announces it. I mean, just the corrupt. Talk to me about the corruption and the potential for corruption and the way the business community is reacting to that.
- [18:54]
Tim O'Brien
Well, you know, and it's not only about stock tips. You know, he and his family are invested in a crypto trading platform and have, you know, and they buy and sell crypto and you know, and you know, Trump coins and all this other stuff and, and meanwhile he's pushing policies that will make crypto an asset held by the Treasury Department. And he's constantly feathering his nest out in the open now. And the problem that's presented by all of this, whether it's the President giving stock tips or the President baldly investing in assets that the federal government is putting its good faith behind, is that there's no one around to investigate it. Whatever we suspect around what's on toward here is he also controls the federal apparatus that investigates financial malfeasance at the federal level. The FBI, the sec, you know, and all of the various financial regulatory agencies, he controls them. They're populated by people who are beholden to him.
- [20:00]
Charlie Six
Right.
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Tim O'Brien
And he and Musk have been gutting many of these agencies abilities to do their job.
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Charlie Six
So this, I think was the key. Yeah, this is the key point here that you're making is that he's engaging in this corruption in broad daylight. But you look around and go, and who's going to hold him accountable for it? Who's going to investigate it? And you realize that right now, Donald Trump, we know all this talk about rule of law and being above the law. Donald Trump knows that we have spent decades building this massive infrastructure of watching this kind of insider trading and misconduct and self dealing. And he doesn't need to worry about any of that anymore, does he?
- [20:40]
Tim O'Brien
No, not at all. And he's also rewriting some of the legal architecture that governs the definition of fraud and whether or not certain frauds can be prosecuted. It is so detrimental to the rule of law and a well functioning financial ecosystem to have this kind of thing going on. And you know, there are a lot of times where the federal bureaucracy overreaches. There are a lot of times where the private sector overreaches. The US has found one of the reasons we get more capital invested in this country than any other country in the world is that we've got an awesome machinery for taking in investments, finding profitable destinations for them, making sure that people aren't getting cheated by other people along the way, and hopefully getting a good result that creates a positive outcome for everyone involved. And he's just pulling the rug out from underneath that to feather his own financial nest. And his party is not calling it into question. I'm sure there aren't referrals in place to the SEC about the nature of some of his posts to Truth Social as there would normally be. And so the American public's just going to be left in the dark. And I think that's only going to encourage Trump and members of his family to be more aggressive.
- [22:02]
Charlie Six
Okay, so the other tipping point last week it felt like, and maybe we've already passed this tipping point, whether you're talking about law firms or businesses that a lot of them have made a obviously they've decided that it is a rational business decision to bend the knee to Donald Trump to go along with him. Because right now, given his power, given how it is unchecked, given how nobody's going to protect them, they that it's easier to simply go along. I mean, Bloomberg reported that the Retail Industry Leaders association, which hates the tariffs, decided not to bring a lawsuit over the tariffs, even though the group's research indicated a legal case had a good chance of succeeding on the merits. But they decided not to bring it because of the potential challenge of finding law firms willing to bring suits over tariffs in light of Trump's attacks. I mean, so you have business going. Yeah, why even object? Talk to me a little bit. You know, I'm a little bit obsessed about this. These gigantic law firms, these billion dollar law firms have now created this massive $600 million slush fund for pro bono work. Now I think they're probably telling themselves we'll still be able to do a lot of good. We won't be representing the proud boys or anything. But it's like, have you met Donald Trump? I mean, do you know how this is going to play out? So talk to me about these gigantic law firms that have made the decision to cut these deals with Donald Trump. I mean, speaking of corruption, using the threat of the cudgel of government to get yourself a private political benefit. It's almost the definition. But again, why are they.
- [23:39]
Tim O'Brien
And the cudgel. Cudgel you're using is. Is I will gut the finances of your law firm. Yeah, I will. I will. I will intercede and make it impossible for you to do business with your most profitable clients in order to get you to. To kiss the ring. And the other thing we should look at is how are they defining some of the pro bono work that they do for Trump? In the case of at least one law firm, they said that they're going to help him figure out how to start a sovereign wealth fund for the federal government, which is another one of these proposals Trump has put in place that he is likely to benefit from financially and again, gives him financial leverage over the investment community. So, you know, pro bono work has never been, I think, defined as doing free work that helps someone further feather their financial mess after they've threatened to cut off your own finances. It is. It is. That is so troubling on its own in terms of the kind of deals some of them are making. But I think the other thing that you put your finger on is who do people go to for representation when the people in the legal community who are supposed to represent them won't because they're intimidated by Washington, the White House, and Donald Trump? And we're in the early stages of this now because he now knows it works, and he now knows he can shake law firms down to get them to basically do his bidding.
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Charlie Six
And the price is going up. Right?
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Tim O'Brien
And the price is going up. You know, the legal community has had people move in and out of public service and law firms for a very long time. Some people regard it as a revolving door that's corrupt because it's both sides stroking one another. But the reality is there are also people who come out of law firms and do incredible public service for the country and bring a level of sophistication to legal advocacy that we wouldn't have if they didn't do that otherwise. You and I know some of those folks. And he's put targets on the back of those kinds of people's backs, because every lawyer now is going to have to say, is this worth it? If I'm going to be seen as someone who's disloyal to the federal government and therefore a detriment to my firm's financial health. And that's bad, again, for legal advocacy and for just a healthy legal ecosystem.
- [26:15]
Charlie Six
Well, and the thing that's most frustrating is that they would have won these legal challenges. I mean, the whole notion that the government is going to threaten retaliation if you sue the government or if you, you know, represents somebody who is a political critic of the president, I mean, it strikes me as ludicrous. I think people in the legal profession, including the judges, understand how fundamental this is. So. And also that, you know, the partners at Kirkland and Ellis, who are, by the way, how much do partners at Kirkland Ellis make? Do they make $10 million a year?
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Tim O'Brien
Oh, I mean, I think at the big firms you're talking, you know, can say $20 million annually. It's vast amounts of money and in many cases larger. But I think it's safe to say anywhere from 10 to 30 million dollars annually.
- [27:06]
Charlie Six
So all of these castrati barristers sitting around in their offices looking at what Donald Trump is doing to the rule of law, looking what he is doing, his campaign of intimidation, and deciding that this is the moment basically to get into bed with him. I guess I'm slightly surprised, although I think you've just answered the question why more lawyers have not quit in protest. But there's a lot on the line for them, right? They have a good deal, a lot of money, and frankly, it comes down to that. Okay, so let's just talk. I want to stick on the trade.
- [27:42]
Tim O'Brien
War, by the way, Char Kelly, that's the soft point. He touches on so many institutions. You know, he's going at the universities, he gutting their funding. I think there's Republicans on the Hill who look at the amount of Trump's campaign funding, the pile of money he's sitting on top of, and they could get primaried and get outspent by him. That explains part of their lack of courage in opposing him. The common thread in all of these institutions is he's hitting people in their.
- [28:15]
Charlie Six
Wallets and can do so effectively. I mean, that's, it is not sometimes the bluff. It's not always a bluff. And sometimes I think that you have both businesses and the law firms who say, we could probably win this, but is it worth the struggle? Are we worth, you know, standing up for this, this particular principle? And businesses are in the business of business here. So, but let's go back to the, the, the, the, the the trade war. Clearly you have this game of chicken with China, and unlike other countries, China, at least right now, doesn't look like it's going to blink. A lot of interesting debate back and forth saying, you know, that China has the advantage or that there's no way that China can win a trade war. What do you think? What is the peculiar, specific dynamic of a trade war with China at this moment?
- [29:12]
Tim O'Brien
It's, this is such a good segue from what we just talked about, because the only way to deal with someone who's bullying you financially or legally is, is to push back because ultimately they'll keep bullying you otherwise. And we haven't seen that in enough sectors of US Society. Interestingly, this trade war, the one country that is built right now to be able to push back against bullying trade tactics is China.
- [29:46]
Charlie Six
Really, you know, why do you, why do you say that? Because they, they, they export so much, they depend on selling exports so much.
- [29:54]
Tim O'Brien
But they, you know, they brace themselves for catastrophe. I'm not saying they won't get hurt, but they think in thousand year blocks. And there was this great meme going around on the web last week. It was a bit of AI, but it showed Trump and Xi sitting next to each other and Trump is reading the Art of the Deal and Xi is reading the Art of War. And Xi was literally, during the Cultural Revolution, raised in a cave. And he has taken young Chinese to task for being too soft in this new era of wealth in China. And that they have to remember you have to sacrifice and work hard to get ahead. Which are good American virtues, by the way. There are so many similarities actually between China and the US in terms of just the entrepreneurialism and the risk taking. Very different governments, obviously. But there are these very interesting cultural similarities. And I think the Chinese, you know, they basically dissed Trump at the end of last week when he jacked up tariffs on China for the third time. They said something like, this is just silly. We are not even going to respond to this. We're not going to give you the dignity of a response because this means nothing to us now. And yes, they're going to, their economy is going to get deeply damaged because they rely on the US to export to. China is going to have, I think, an existential moment because they've never built an authentic consumer class in their own country because once you create consumers, they, you lose control of them. And, and you know, free market societies have people who are speaking their own mind and exercising their own financial preferences. And China, I think, probably doesn't really want that fully blown. But if they're going to get past this moment, they're going to have to be able to replace export demand with domestic consumer demand. And I think you'll see that happen. But in the interim, Trump has also scared the entire region surrounding China. You know, Southeast Asia as a whole. Asia as a whole. And he's, he's not demonstrated the United States is willing to be a friend to them. At the top of his tariffs hit list were these tiny countries like Cambodia and Thailand. So China has an opening here actually to be the global statesman in a time of unpredictability in the US and to say we will do the right thing financially, we will forge new trading relations with you. That, that won't change willy nilly and we will be your ally in this time of uncertainty now.
- [32:40]
Charlie Six
So there's a vacuum that created as he withdraws the soft power, maybe the hard power, as he is no longer reliable economic partner. China is going to step forward, can step forward.
- [32:53]
Tim O'Brien
Yeah. And the other lesson the Western European countries are going to draw from this is they now have a 30, a 90 day window to, they don't really have to respond to Trump. I mean, I think they'll make gestures about liberating some of their own tariff regimes so they are less onerous. United States, that is not, that is a real issue. Trump has his finger on something that is a real issue. He's just responding to it in this ham handed, destructive way. And he had a lot of momentum on his side going into this recent round when he backed down and that's what he did. Donald Trump backed down. They saw that. So they've now seen that when push comes to shove, if the financial markets are reeling, Donald Trump will back down. And I think it's going to cause a lot of them to push back countries that may not have pushed back in the past. And that's going to be an interesting dynamic to watch.
- [33:54]
Charlie Six
Well, as a student of history, one of the things that scares me the most is the dangers of miscalculation. The number of wars that have been created because people have miscalculated, the risk, the willingness of others. You think about what the world was like in 1914. Nobody in the world thought that we were going to go into a world war. Everybody thought that, that everybody was going to be a rational actor. And especially with China, miscalculations can be, can be economically damaging, but they also can be deadly.
- [34:28]
Tim O'Brien
Where does the Cuban Missile Crisis.
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Charlie Six
The Cuban Missile Crisis talk about? You know, right up until the wire, you know, what could have happened? What could have happened there? So how does Taiwan play into all this? Because I think before this began, it was increasingly obvious that there was no way that Donald Trump was going to come to the defense of Taiwan. He was going to let Taiwan go. But the dynamic seems to be changing very rapidly. What do you think? Do you have any thoughts?
- [34:55]
Tim O'Brien
Well, I think, you know, Taiwan, Taiwan's defense minister. I was in Asia about three weeks ago, and one of the things that drew a lot of attention in the region was Taiwan's defense minister saying on the record in an interview that what we're learning now is that we can't rely on the United States to defend us and we'll have to develop our own defense systems. And I think a lot of company.
- [35:20]
Charlie Six
Countries, including nuclear weapons.
- [35:23]
Tim O'Brien
He didn't specify nuclear weapons. He just said, we'll have to be responsible for our own defense. But Poland has specifically said, yeah, we're going to have to build up our own nuclear stockpiles. So the other thing that Donald Trump has unleashed in this unsophisticated view of the virtues of the US's global security umbrella is he has just seen it as US spending money and not getting anything for it and people free riding, when in fact, it was a, it was a, an incredible safety guarantee that allowed people to form alliances with us, trade with us, and, and, and there hasn't been a major global war Since World War II because of it, and he's just defenestrating all of that. And so I think for countries that don't want to ally with another major power, be it China, there aren't many others. It's the United States and China right now, for the most part, are deciding they have to go it on their own. And that's what's happening in Europe. The EU is bulking up all of its defenses. Who would have thought we'd be in a world in which people were encouraging Japan and Germany to rearm, aggressively rearm. But here we are, because of this misguided policy.
- [36:35]
Charlie Six
This was a global nightmare. All right, let's switch subjects for a moment because. But this all ties together. It is the arrogance of this administration, the respect for the rule of law. Talk to me about what's happening now with a case of Kilmar Abreu Garcia. The Supreme Court ruled nine to nothing, which is not insignificant, that the Trump administration had to facilitate. I'm making the air quotes here. His return from the El Salvador prison. The government has admitted that he was snatched and deported without due process, that he wasn't the wrong, he wasn't the right guy. As of Sunday night, it looks like the Trump administration is telling the, the federal courts to off that they don't think that they have any. And, and again, it's, you know, this is a binary thing. We're going to find out Supreme Court rules nine nothing. You have to help return the guy. We're going to find out how far Trump is going to go in defying them. Either Mr. Garcia is returned or he's not returned. And right now it looks like they're dragging their feet. So this seems as close to a constitutional crisis as you can get.
- [37:47]
Tim O'Brien
And meanwhile, the President of El Salvador, I think is visiting today. Yes.
- [37:51]
Charlie Six
In the Oval Office.
- [37:53]
Tim O'Brien
He's in the Oval Office. So if Trump was serious about getting this unlawfully detained individual back to the United States, he simply could tell the President that he thinks it's just like that to do just like that, just like that. But he, by all appearances, he hasn't done that. And his own lawyers will game the definition of what is facilitating his return. Does that mean he just gets left out on the streets of San Salvador to his own devices with no one to look after him? And they've been around all of the deportations that they've done without due process, including the alleged members of the Venezuelan crime gang. They have found these ways to basically buck the rule of law and still do what they want to do. In that case they said, well, by the time we heard from the judge that we had to turn around, we were already gone from US airspace, therefore we no longer were bound by US Laws. And you know, in this case they, they are, they are giving every appearance of ignoring a Supreme Court ruling. And this is where we really, this.
- [39:09]
Charlie Six
Is where a nine nothing Supreme Court ruling.
- [39:12]
Tim O'Brien
Right. Populated by people he pushed hard to have appointed there very rock ribbed conservatives. And when you have a president ignoring judges orders, either at the local level, the state level or the federal level, we are in a place that is no longer the United States. It's no longer governed by law. It's an imperial presidency that is so authoritarian that it believes it has the power and the mandate to ignore the law. And that's a constitutional crisis.
- [39:52]
Charlie Six
That is a legal crisis. Yeah. Now by the way, for listeners, very close listeners of this podcast or viewers on YouTube, that is not me snoring while you're talking, tim, it's my 140 pound dog underneath the desk. Eli has decided this is a good moment to Take a nap. And he's enjoying himself. So if you're hearing noises, please do not think that it's me.
- [40:16]
Tim O'Brien
Okay, so Charlie, Charlie, Charlie. Eli is all of us. Because what other escape is there right now from the chaos in the world than to do what our great friends the doggos do? Which is. You know what? I'm just gonna take a nap.
- [40:28]
Charlie Six
I am envious of him. Okay, one last question. Wither Elon Musk. We've gone this entire podcast without talking about the world's richest man. It sounds like he's moving out. And more and more openly criticizing and breaking with the administration. I mean, he's part of the administration, but he feels no constraint not to criticize the tariff, not to go after Peter Navarro. And by the way, he was right about Peter. Peter Navarro. But where do you think the Trump Musk bromance is going now?
- [41:01]
Tim O'Brien
Well, I always thought it was a marriage of convenience, not a marriage of true loyalty and devotion to one another. I didn't think he'd last very long in the Trump administration, so I was wrong about that. I really thought the second that he started getting a Time magazine cover featuring him sitting at the Resolute, that's in the Oval Office, ala Steve Bannon on the COVID of time and Trump 1.0, that when that kind of happens and other people are getting the spotlight, they have a short half life in Trump world. But he stayed on. And I think the reason he stayed on is Trump wanted someone to dig into the federal bureaucracy and turn it upside down on a daily basis that he didn't have. Trump never likes details. He never likes doing the hard work of carrying plans out. He likes making grand statements and then going, having it, you know, so he.
- [41:54]
Charlie Six
Could be kind of a heat shield. He could be a heat shield who is disposable if it became too nasty.
- [42:00]
Tim O'Brien
Yeah. And now they've discovered that actually you don't. You don't affect federal spending by, by, by canning a huge portion of the workforce that only accounts for about 6% of federal spending annually. That if you're really going to take it on, you have to look at entitlement programs, Medicare, Medicaid, Social Security, defense spending, the payment on the debt, health care for veterans, those sorts of things. And, and Musk wasn't taking on any of that and meanwhile generating bad headlines about people not getting the services they needed. And so I think, I think Trump sees him as a liability. The last Cabinet meeting was very different from the prior Cabinet meeting when it was publicized, you know, where Musk General essentially led that prior cabinet meeting, this meeting. He was just one of many who said, yes, yes, dear sir, you're an amazing president and I love you. So I think the clock is ticking. I don't know when it will be. You know, he's got a, as a, as a, he's got a contract with the federal government. He's not a government employee. Those are, I think those tend to be four month contracts or such. I forget the exact timing of them, but I think his contract runs out at the end of next month, I believe so. We'll have to see that. It doesn't seem like he's long for Trump world.
- [43:18]
Charlie Six
Well, you know, there's so much else going on, but I mean, it's kind of an extraordinary story, this spending story with all of the headlines and all the slashing and the burning, all the chainsawing that in fact, you know, federal government spending keeps going up. And it's also rather extraordinary that the Republicans in the United States Senator, passing a budget and it looks like, I mean, they're going to, they're going to pass a budget at some point which will explode the deficit and the national debt beyond the dreams of, I mean, just on the wildest dreams. And that while we're cutting all of these, these, these programs that Donald Trump is planning to spend, what, $92 million on a military parade on his birthday. But again, the spending numbers just don't add up in any, any rational universe and nobody seems to care. I mean, all these Republicans.
- [44:04]
Tim O'Brien
And when you, when you break them down, when you break them down, you know, the tax cut that they're envisioning is going to have another $5 trillion to $36 trillion in the federal debt. They're talking about gutting Medicaid to address some of this. But even if they, even if they just took Medicaid out of the equation, I think that's around $900 billion, it still wouldn't come close to addressing the, just the, you know, the accounting for all of this. And it's irresponsible and they're not being honest with the American public about what the numbers actually look like.
- [44:40]
Charlie Six
Yeah, I mean, you know, I have friends who say, well, you know, the federal government is bloated. I mean, it's, you know, why, why not downsize the federal government number, say, fine, you know, first of all, you would do it with a scalpel rather than a chainsaw. But also, could you look at the numbers that they're not actually cutting all of this pain and all of this blood. And at the end of this process, we're going to end up deeper in debt with bigger deficits than we came in and, you know, try to square that circle. But maybe we're in this sort of.
- [45:11]
Tim O'Brien
And then some of the things bloat, you know, some of the things they're labeling as bloat are services no one would want to give up. No, Americans going to say, no, I don't want my Social Security, Social Security payments. No, I don't want a strong defense. I don't need some help with my health care payments. Again, I agree with you. Like, there are surgical ways to make it more efficient and less wasteful. But we haven't had the existential conversation about what is the real right size of government and what do you want to give up to get there. And that's not a conversation they're having with the American public. They're just Musk and Trump are performance artists, you know, and that image of him running around the chainsaw will be an image for the ages because of that, I think.
- [45:56]
Charlie Six
I think so. Tim O'Brien, thank you so much. You can read Tim's work.
- [45:59]
Tim O'Brien
Thank you, Charlie.
- [46:00]
Charlie Six
The Bloomberg Opinion. Tim, it is always great to talk with you. One of my favorite guests.
- [46:06]
Tim O'Brien
Thank you for having me.
- [46:08]
Charlie Six
And thank you all for listening to this episode of to the Contrary podcast. We do do this because now more than ever. And by the way, when I say now, I mean this week, today more than ever, it's important to remind ourselves that we are not crazy. Thanks.