GM92: Politics in an Age of Hard Borders and Rising Hegemons ft. Gary Gerstle

Summary

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Top Traders Unplugged – GM92: Politics in an Age of Hard Borders and Rising Hegemons

Guest: Gary Gerstle
Host: Niels Kaastrup-Larsen (with Alan Dunn co-hosting)
Date: December 17, 2025

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Episode Overview

This episode delves into the global political and economic transformations marking the post-neoliberal era, with historian Gary Gerstle returning to discuss "Politics in an Age of Hard Borders and Rising Hegemons." The conversation centers on the erosion of liberal norms, the ascendancy of authoritarian and nationalist tendencies, the realignment of U.S. economic policy under Trump’s second term (Trump 2.0), and the broader implications for global order and markets. With an eye both to current American politics and international trends, Gerstle offers insights into the rise of protectionism, the fracturing of political parties, and the challenges democracies face worldwide.

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Key Discussion Points & Insights

1. The End of the Neoliberal Order

[04:00–08:17]

• Gerstle argues the neoliberal era—characterized by free movement of people, capital, and globalized markets—is over:
  • "We can say with confidence now … we are no longer living in a neoliberal order." (Gary Gerstle, 04:00)
• Key indicators include:
  • Rising borders and hostility to immigration: "The freedom of movement that was characteristic of the neoliberal era is under assault just about everywhere." (Alan Dunn, 04:39)
  • Shift from free trade to protectionism and a new, robust tariff regime in the US.
  • Government now actively shaping markets, not just left politics: "If a left of center government were doing this, there would be cries of socialism everywhere." (Gary Gerstle, 06:03)

2. Authoritarian Trends and Democratic Apathy

[08:17–13:41]

• Democracy is perceived as increasingly at risk, with authoritarian impulses on the rise globally and a lack of sufficient resistance or pushback:
  • "The authoritarian impulse is very powerful in the world. And I think the democratic ethos ... are somewhat on the defensive." (Gary Gerstle, 07:32)
• Trump’s re-election and his open claims to executive power shocked democratic opponents:
  • "He said on countless occasions, I am your retribution." (Gary Gerstle, 09:32)
• Trump 2.0 is far more disciplined and effective than his first term:
  • "No one was prepared for the disciplined and forceful nature of this attack ..." (Gary Gerstle, 10:51)

3. The Trump 2.0 Agenda: Breadth and Economic Policy

[13:41–22:25]

• Trump’s second term features broad, coordinated action across the economy, universities, science, culture, and immigration.
• Economic focus: large-scale tariffs intended to reshore manufacturing and shift emphasis from Wall Street to Main Street.
• Obstacles to reshoring manufacturing:
  • Automation means fewer jobs, even if industries return.
  • Reshoring is a 10–20 year project, not a fix in a single term.
  • Tensions within the GOP between MAGA populists who want industrial revival, and traditionalists favoring tax cuts and deregulation.
• Deregulation concentrated especially in tech and AI after industry alignment with Trump:
  • "If you want to look for a way in which deregulation has really flourished since the Trump administration has come into office, then this is the place to look." (Gary Gerstle, 24:26)

4. Affordability Crisis and Political Fallout

[26:35–37:13]

• The affordability crisis—persistently high prices for housing, healthcare, food, and electricity—remains intractable:
  • "The hardships regarding affordability, except in the fossil fuel sector, has been increasing." (Gary Gerstle, 28:14)
• Trump campaigned on rapid inflation fixes but had no real plan beyond energy deregulation.
• Rising inequality is highlighted by the K-shaped economy: surging asset prices for some, deepening struggles for lower-income Americans.
• Political ramifications:
  • Potential for Democratic resurgence in 2026 if they address affordability head-on and adopt successful tactics (e.g., Mamdani's social media–driven, affordability-focused grassroots campaigns in NYC).

5. Institutional Erosion: The Fed and Bureaucracy

[43:05–51:12]

• Concerns about the politicization of the Federal Reserve and economic data institutions:
  • "It's... not out of the question... that Wall Street will become concerned about the adequacy of numbers and statistics... and worries might deepen that the Trump administration is hiding the real information..." (Gary Gerstle, 49:52)
• Supreme Court has enabled expansion of executive power, with caveats possibly protecting Fed independence.

6. Outlook for Trump and the 2028 Election

[51:44–57:44]

• Despite speculation, Gerstle doubts Trump will seek a third term due to age and energy, but warns against underestimating his stamina.
• Expectation that remaining years will focus on solidifying MAGA influence in agencies ("deep state"), curbing immigration, and making reversal by Democrats difficult.

7. Global Implications: Rise of Nationalist Hegemons

[58:00–67:38]

• The US now seeks to be the unchallenged hegemon across the Western hemisphere, paralleling Russia in Eurasia and China in East Asia.
• Trump’s National Security Strategy indicates a world order managed by powerful, ethno-nationalist regional blocks, sidelining universal human rights and global institutions:
  • "A plan for world order that is based on powerful regional and ethno nationalist hegemons ... rather than through a commitment to universal human rights." (Gary Gerstle, 67:38)
• Severe critique of the EU for its "civilizational weakness" and advocacy for Europe to reassert white Christian civilization.

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Notable Quotes & Memorable Moments

• On the new world order:
  "It's no longer a world governed by international law. It's a world governed by powerful regional hegemons who agree to respect each other's sphere of influence."
  —Gary Gerstle [64:19]

• On resistance to authoritarianism:
  "But the final chapter on resistance has not been written ... You can see the resistance beginning to stir."
  —Gary Gerstle [13:01]

• On the return of protectionism:
  "Protectionism that the US is issuing is the order of the day."
  —Gary Gerstle [04:46]

• On government intervention under Trump:
  "The degree to which government is now willing to shape the private economy for what it takes to be public purpose or national security interest, we've also seen quite a change."
  —Gary Gerstle [06:09]

• On hope for US democracy:
  "If the US is Trumpified, which block in the world is going to be able to carry the principles of universal human rights into the future? It's got to be the EU."
  —Gary Gerstle [68:31]

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Timestamps of Key Segments

• [04:00] – The end of the neoliberal order: evidence, principles, transitions
• [08:17] – Authoritarianism, democratic backsliding and apathy
• [13:41] – The breadth and discipline of Trump 2.0
• [16:11] – Manufacturing, tariffs, and MAGA vs. traditional GOP
• [24:25] – Tech sector deregulation and government-technology alliances
• [26:35] – The affordability crisis and electoral consequences
• [34:47] – The Democratic playbook: focus on affordability, grassroots, and social media
• [43:05] – Politicization of the Fed and other institutions
• [46:47] – AI, markets, and potential economic corrections
• [51:44] – Trump’s longevity, third term speculation, and MAGA institutionalization
• [58:00] – Global shift: nationalist hegemons supplanting liberal order
• [67:38] – New world order vision: regional power blocs, threat to universal values

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Episode Tone & Language

The discussion balances rigorous analysis with a tone of warning and sober reflection. Gerstle is unsentimental and candid, at times sharply critical, particularly when describing shifts towards authoritarianism and the dismantling of liberal norms. The hosts seek practical insights for investors, repeatedly tying political trends to market consequences and economic risk, rooted in clear-eyed, direct language.

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Conclusion

Gary Gerstle’s analysis paints a vivid picture of the current global order’s instability and the erosion of prior liberal democratic norms, with broad implications for markets and investors. The warning is clear: the new era is one in which power politics, economic nationalism, and volatility are set to dominate, challenging the future of democracy and the established postwar international system.

Transcript

[Gary Gerstel]

Foreign.

[Alan Dunn]

This is a pretty scary vision of the world and that is the vision embodied in this national security strategy.

[Gary Gerstel]

So whether that world is going to come to be is up in the air. But what this document reveals, it reveals a plan for world order that is based on powerful regional and ethno nationalist hegemons who got to run the world.

[Alan Dunn]

Through their power rather than through a commitment to universal human rights. And it's profoundly threatening.

[Podcast Announcer]

Imagine spending an hour with the world's greatest traders. Imagine learning from their experiences, their successes and their failures. Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund fund managers in the world so you can take your manager, due diligence or investment career to the next level. Before we begin today's conversation, remember to keep two things in mind. All the discussion we'll have about investment performance is about the past, and past performance does not guarantee or even infer anything about future performance. Also, understand that there's a significant risk of financial loss with all investment strategies and you need to request and understand the specific risks from the investment manager about their product before you make investment decisions. Here's your host, veteran hedge fund manager Niels Kostrup Larson.

[Alan Dunn]

Welcome or welcome back to another conversation in our series of episodes that focuses on markets and investing from a global macro perspective. This is a series that I not only find incredibly interesting, as well as intellectually challenging, but also very important given where we are in the global economy and the geopolitical cycle. We want to dig deep into the minds of some of the most prominent experts to help us better understand what this new global macro driven world may look like. We want to explore their perspectives on a host of game changing issues and hopefully dig out nuances in their work through meaningful conversations. Please enjoy today's episode hosted by Alan Dunn.

[Niels Kostrup Larson]

Thanks for the introduction, Niels. Today I'm joined by Gary Gerstel. Gary is Paul Mellon professor of American History Emeritus at University of Cambridge. He's the author of a number of books, notably the Rise and Fall of the Neoliberal Order. He is currently Joy Foundation Fellow at the Harvard Radcliffe Institute at Harvard University where he's working on a new book, Politics in Our Time Authoritarian Democratic hope in the 21st century. Gary, great to have you back. How are you doing?

[Gary Gerstel]

Good. Wonderful to be back in cold Boston and Cambridge.

[Alan Dunn]

It's like Boston and Cambridge used to be. I guess Trump must be right. There is no climate crisis facing us.

[Niels Kostrup Larson]

Exactly.

[Gary Gerstel]

Interesting.

[Alan Dunn]

These are interesting political times certainly are.

[Niels Kostrup Larson]

Yes, we're coming up to the end of the year. So it's a good time to take Stock on year one of Trump 2.00. We are welcoming you back. You were on, I think it was about 18 months ago, so if anybody wants to go back and hear that episode which was very much focused on your last book, the Rise and Fall of the Neoliberal Order, in the context of what we were seeing at the time, which was, I guess the end of four years of biodynamics. So we had transitioned into a different, I suppose, regime. But we've since had the first tier of Trump 2.0. Before we get on to that, I mean, you know, we've, we've had the end of the neoliberal era. What do you think we've got to replace it so far?

[Gary Gerstel]

Well, that's a million dollar question. I think we, we can say with, with confidence now that even though there are elements of neoliberalism still present in economic practice, we are no longer living.

[Alan Dunn]

In a neoliberal order. If we think of some of the principles that structured that order, they are, they have either been abandoned or, or severely weakened.

[Gary Gerstel]

One can think of free movement of people, the raising of borders, of, of walls, hostility toward, toward immigrants.

[Alan Dunn]

The freedom of movement that was characteristic of the neoliberal era is, is under assault just about everywhere.

[Gary Gerstel]

We no longer live in a world that valorizes free trade and globalization above all else. Protectionism that the US Is issuing is, is the order of a day.

[Alan Dunn]

Used to be that protectionism was a dirty word and if you uttered it in politics, you were marginalized in politics and you had no political future. And now the US has put in place a, a very powerful tariff regime which is at odds with any conception of neoliberalism.

[Gary Gerstel]

The neoliberal order also valorized the free movement of capital, and that's still, I think, quite alive in the world. But we've seen a pretty profound alteration.

[Alan Dunn]

In how people think about the relationship of states to markets. And the Trump administration has been quite interesting in this, this regard, although that.

[Gary Gerstel]

This is a Republican Party that has long sanctified free markets.

[Alan Dunn]

Trump now doesn't hesitate to use government.

[Gary Gerstel]

Power to shape markets for purposes of.

[Alan Dunn]

National security, for, for reshoring manufacturing.

[Gary Gerstel]

We don't even have a full list.

[Alan Dunn]

Of all the companies that the government is investing in of.

[Gary Gerstel]

If a left of center government were.

[Alan Dunn]

Doing this, there would be cries of socialism everywhere.

[Gary Gerstel]

But I think the degree to which government is now willing to shape the private economy for what it takes to.

[Alan Dunn]

Be public purpose or national security interest.

[Gary Gerstel]

We've also seen quite a change, sea.

[Alan Dunn]

Change from the era of the neoliberal order.

[Gary Gerstel]

So we are moving into an era where governments are going to structure the economy, the movement of people, the free flow of information, much more than had.

[Alan Dunn]

Had had been the case. I think the open question is, are.

[Gary Gerstel]

We moving into what some people consider a post liberal future, meaning one that does not hold the principles of liberal.

[Alan Dunn]

Democracy, hi, elections, rule of law.

[Gary Gerstel]

Are we moving into an era which values power, civilization, community, more than a.

[Alan Dunn]

Set of human standards and values that the whole world is expected to adhere to?

[Gary Gerstel]

Or is this future going to be a future in which democracy revives itself.

[Alan Dunn]

In which the principles of liberal universalism revive themselves?

[Gary Gerstel]

I can't tell you where we're going.

[Alan Dunn]

To be in five to 10 years.

[Gary Gerstel]

Except to say that the authoritarian impulse.

[Alan Dunn]

Is very powerful in the world. And I think the democratic ethos and the democratic forces are somewhat on the defensive.

[Gary Gerstel]

It's still a very fluid situation.

[Alan Dunn]

So I don't, I can't tell you in five or ten years whether we're going to be living in a post liberal authoritarian world or whether democratic values and hopes will revive themselves and lead to a kind of democratic renaissance.

[Gary Gerstel]

I think that is now one of.

[Alan Dunn]

The, the million dollar question or the million, the million pound, the million euro question that we will be grappling with.

[Gary Gerstel]

But I think the, the outlines of.

[Alan Dunn]

A post neoliberal economy have become quite clear.

[Niels Kostrup Larson]

Yeah. When you were last on, which was about 18 months ago, you did make this point that democracy is under threat, that there are authoritarian impulses are on the rise around the world. And certainly that's become even more apparent in the last 18 months, as you say. But also there seems to be an apathy. There's not an enormous pushback against that. You might have expected more pushback. I mean, viewing the US from, from a European perspective, or have you been surprised by that?

[Gary Gerstel]

I think Trump's second election was a.

[Alan Dunn]

Devastating blow to anti Trump forces in the United States. And Kamala Harris made the defense of democracy one of her, her principal.

[Gary Gerstel]

Campaigning points.

[Alan Dunn]

And she made a, also made a point. I think her final appearance before the election was at the site where on the Capitol, where Trump effectively authorized an assault on the Capitol and a, and a coup by the president against his, his, his own government.

[Gary Gerstel]

And one thing one has to credit Trump for is hiding nothing during the campaign.

[Alan Dunn]

His desire to be an autocrat, to be a dictator, to accumulate enormous executive power. He said on countless occasions, I am your retribution. The Cruelty with which America has been uprooting immigrants and, and, and deporting them from, from American society. None of that was hidden during the campaign. And, and so I think the, the.

[Gary Gerstel]

Shock that Trump, despite all that, was.

[Alan Dunn]

Reelected by a majority of the American people by a greater margin than happened in 2016.

[Gary Gerstel]

Really through the resistance to.

[Alan Dunn]

Trump for, for a loss.

[Gary Gerstel]

And then came an extraordinarily well coordinated.

[Alan Dunn]

First hundred days of the Trump administration.

[Gary Gerstel]

Shock and awe, like the Iraq war and at least one executive order a day, sometimes two, three or four, attract attacking Trump opponents across an incredibly broad front. The imposition of tariffs, the, the pursuit of the desire to deport immigrants, the.

[Alan Dunn]

The attack on science, the attack on, on universities.

[Gary Gerstel]

I think no one was prepared for.

[Alan Dunn]

The, the disciplined and forceful nature of.

[Gary Gerstel]

This attack, which further threw the forces.

[Alan Dunn]

Of resistance against Trump into disarray. Trump's first term had been characterized by.

[Gary Gerstel]

Similar political impulses, but enormous degree of chaos and incompetence. And Suddenly this Trump 2.0 was disciplined. They had a clear plan.

[Alan Dunn]

They had administrators in, in place.

[Gary Gerstel]

I don't know how many chiefs of.

[Alan Dunn]

Staff Trump had fired sacked during his first term. During his, his first year in, in.

[Gary Gerstel]

Office, he still got the same one he started with. Do you ever hear her name in the news? Susie Wiles.

[Niels Kostrup Larson]

Okay.

[Gary Gerstel]

The fact that she's never in the news, the fact that she's still in place is, is a measure of how.

[Alan Dunn]

Much more disciplined this Trump offensive has, has, has been.

[Gary Gerstel]

And so I think the combination of.

[Alan Dunn]

The shock of the victory and how ready the Trump forces were to execute their plan through the opponents of Trump into deep disarray and explains what from.

[Gary Gerstel]

Europe and other places seems to be.

[Alan Dunn]

An extraordinarily weak response.

[Gary Gerstel]

But the final chapter on resistance has not been written. There have been several no Kings protests.

[Alan Dunn]

And the last one, which was this.

[Gary Gerstel]

Summer, I think may have drawn more people, millions out in the streets demonstrating.

[Alan Dunn]

Than any previous demonstration in American history.

[Gary Gerstel]

And also in the last month or.

[Alan Dunn]

Two, the Trump administration has had some serious setbacks across a broad front. And more, more may be coming.

[Gary Gerstel]

So you can see the resistance beginning to stir. And for Europeans and, and people in.

[Alan Dunn]

Ireland who are wondering whether there is a resistance, there is.

[Gary Gerstel]

And I expect it to mobilize quite.

[Alan Dunn]

Considerably over the next few months, especially as we go into another election year.

[Gary Gerstel]

And the victories of Democrats and special elections and in the New York mayoral.

[Alan Dunn]

Election and last night, Miami elected its first Democratic mayor in 30 years. Thirty years, there are signs of awakening. And I think the Trump administration is in some trouble. And we already, the balance of forces have shifted, which is going to make the next year really interesting and worth paying a lot of close attention to.

[Niels Kostrup Larson]

Very good. I mean you talked about the discipline of the administration this time, the success, I guess with the executive orders and getting their agenda out. I mean, at times from a market perspective, there's been differing views as to what the objective. Was there a grand plan or was it being made up on the hoof? And some suggestion that there was this plan of shifting the economy more in favor of Main street away from Wall street, but different interpretations of whether policies such as the Big beautiful bill really were motivated by that. How would you characterize the agenda from 2.0 from that perspective?

[Gary Gerstel]

Well, first let me say that the.

[Alan Dunn]

Breadth of 2.0 is extraordinary.

[Gary Gerstel]

It's the economy, it's universities, it's science, it's immigration, it's culture built into the.

[Alan Dunn]

Attack on wokeness in American life. It's attempt to restore great moments in American history to their, to their rightful place.

[Gary Gerstel]

So want our listeners to keep in.

[Alan Dunn]

Mind that the, the breadth of this campaign has just been staggering. Probably the, the, the broadest campaign in the first few months of a presidential administration since Franklin Delano Roosevelt's famous 100 days or first year in office and 1933. So it's been very impressive that way.

[Gary Gerstel]

If we focus on the economy.

[Alan Dunn]

Quite interesting. And.

[Gary Gerstel]

The.

[Alan Dunn]

Trump campaigned on putting in place a.

[Gary Gerstel]

A broad tariff regime that would fundamentally end the global character of the free trade world.

[Alan Dunn]

Characteristic of, of neoliberalism.

[Gary Gerstel]

And the ostensible reason.

[Alan Dunn]

And the, and the publicized reason for.

[Gary Gerstel]

That was a long term campaign to.

[Alan Dunn]

Reshore manufacturing and shift the, as you suggested, the emphasis on the economy from Wall street to Main Street. A sense that Wall street had been accumulating too much power, too much wealth. Main street had suffered.

[Gary Gerstel]

And Trump, you know, for 10 years now has put himself forward as the.

[Alan Dunn]

Tribune of working class America and the forgotten America, which is not all of America.

[Gary Gerstel]

It's not multiracial workingclass America, although he.

[Alan Dunn]

Did attract a lot of Latino support in the last election. It's, it's white working class America in towns devastated by deindustrialization that has been going on for 30 or 40 years.

[Gary Gerstel]

And, and those places have been forgotten.

[Alan Dunn]

And the, and the neglect and the suffering and the unemployment and the opioid epidemic has ravaged these communities. And you know, Trump has, this is his core MAGA constituency and his promise is to put tariffs in place that would reshore manufacturing and bring back the Good jobs that had fled and they would be located in the areas that had suffered the greatest industrial, economic and capital flight.

[Gary Gerstel]

There are a couple problems with that, several problems with that ambition, although I should say that it's a broadly shared.

[Alan Dunn]

Ambition, not just by the Trump administration.

[Gary Gerstel]

This was the goal of the Biden administration. So we can see an interesting continuity there. The first point to be made is that even if manufacturing is brought back.

[Alan Dunn]

In a big way, it's not going to bring back the jobs that characterized manufacturing during the 20th century heyday. The autumn automation has advanced so far. The use of robots has advanced so.

[Gary Gerstel]

Far that this can re employ no.

[Alan Dunn]

More than a small fraction of those people and communities thrown out of work.

[Gary Gerstel]

And there can be no broad economic.

[Alan Dunn]

Recovery without deep investment in the service economy. So that's the first point to be made.

[Gary Gerstel]

The second point to be made is that, and this is something that I.

[Alan Dunn]

Think the Trump administration, like the Biden administration, has severely underestimated.

[Gary Gerstel]

What's the length of time required to reshore manufacturing? What, what are we looking here? What, what are we looking at exactly? Well, you can't do it in two years, you can't do it in four years. If Biden had gotten a second term, you would have seen results after eight years. It's a 10, 15, 20 year project.

[Alan Dunn]

All right.

[Gary Gerstel]

Well, it's good that American politicians are thinking in the longer term because they're famous or infamous for thinking in two year election cycles. Well, what do you do in the interim? And this became a problem of the Biden administration. It's becoming a problem of the Trump.

[Alan Dunn]

Administration.

[Gary Gerstel]

What have you done for me lately? And the neglect of rising prices that is now hurting the Trump administration is.

[Alan Dunn]

The same neglect of rising prices that hurt the Biden administration severely.

[Gary Gerstel]

And then what about the constituency of Republicans who don't really want to reshore manufacturing, they just want lower taxes. And this is what they were sold in terms of the, of what tariffs would do they because they're not committed. There's a big portion of the Republican.

[Alan Dunn]

Party that is still traditional, that doesn't.

[Gary Gerstel]

Want high tariffs, that just wants the.

[Alan Dunn]

Market to be free and taxes to be low.

[Gary Gerstel]

And this was the selling point for.

[Alan Dunn]

These people, that tariffs would raise so much revenue that internal tax rates on the wealthy could be lowered.

[Gary Gerstel]

And this was embodied in the big.

[Alan Dunn]

Beautiful bill that is so far the signature legislative achievement of the Trump administration and Trump. The Trump administration made a big point in terms of arguing it was shifting from internal revenue to external revenue.

[Gary Gerstel]

And the promise was that the receipts.

[Alan Dunn]

From external revenue on tariffs would be so great that this more traditional business oriented part of the Republican Party would be rewarded with lower taxes domestically which would allow them to invest and use the money as AC as they saw fit without having to worry about government interference.

[Gary Gerstel]

So this brought a wing of the Republican Party that historically has been hostile.

[Alan Dunn]

To tariffs on board because it was, it was paired with the tax cut.

[Gary Gerstel]

And that has worked in the short term. But, but it's important to keep in mind that these, there are two very.

[Alan Dunn]

Different factions in the Republican Party.

[Gary Gerstel]

One is a genuine MAGA faction that wants to reshore manufacturing for the benefit of Main Street.

[Alan Dunn]

And then there is the more traditional Republican group that simply wants lower taxes, free use of capital domestically to engage in the ventures that they want to engage in.

[Gary Gerstel]

And if the economy falters, which it.

[Alan Dunn]

Has not yet done really in a major way, you're going to see the splits between these two groups become far.

[Gary Gerstel]

More pronounced because then there's going to.

[Alan Dunn]

Be an awareness of trade offs and.

[Gary Gerstel]

Who'S whose vision of trade offs is.

[Alan Dunn]

Going to win out in that set of circumstances.

[Niels Kostrup Larson]

Yeah, you touched on a few of the pillars, I guess of the, the Trump platform, you know, tariffs, migration, tax cuts. I mean the other one that was mentioned, you know, quite a, a lot earlier in the year when people were saying don't just view the tariffs, look at the full package was deregulation and the supply side, which as you say is kind of very much traditional Republican philosophy. I haven't seen as much of that coming through practically. That's still a key part of the agenda. Do you think we'll see more evidence of that coming through as the administration goes on?

[Gary Gerstel]

Well, the biggest area of deregulation has been in relationship to the tech industry.

[Alan Dunn]

And to, and to AI. This is a real break from the Biden administration and the, and silica part.

[Gary Gerstel]

Of what happened in 2024 is that.

[Alan Dunn]

Silicon Valley, which has historically been with the Democrats, converted in a very major way to support Trump. And if you remember Trump's inauguration, if.

[Gary Gerstel]

You were watching it, five or six.

[Alan Dunn]

Titans of the American tech industry were given very prominent seating places and that was a reward for, for their coming on board.

[Gary Gerstel]

The Biden administration had at one of.

[Alan Dunn]

Its goals to subject the tech industry in, to a, a more serious form of regulation that it, than it had ever been subjected to before, really an EU style of regulation that these, the, the, the, the principle being that these.

[Gary Gerstel]

Industries are so large and so powerful and so crucial that they simply can't be left in the hands of an.

[Alan Dunn]

Elon Musk or even a more responsible group of private capitalists that they. There has to be some kind of serious regulation. And so the Biden administration set out to regulate crypto, to regulate AI, to.

[Gary Gerstel]

Look into breaking up some of these enormous behemoths.

[Alan Dunn]

Microsoft, not Microsoft, because that had already been subjected to antitrust regulation. But Google was in the crosshairs, Facebook was. Was in the crosshairs. So the threats to this industry is, were.

[Gary Gerstel]

Were real. And this, uh, prompted a flight from.

[Alan Dunn]

The Democratic to the Republican Party and certainly had a influence on Trump's electoral victory, especially Elon Musk's use of Twitter to support Trump and his contribution of, I think, 250 to $300 million spent on supporting Trump and, and, and his campaign.

[Gary Gerstel]

So they have been amply rewarded by.

[Alan Dunn]

The freeing of AI, the, the freeing of crypto, the scuttling of antitrust moves on the part of the government to break up these big institutions.

[Gary Gerstel]

And so if you want to look.

[Alan Dunn]

For a way in which deregulation has really flourished since the Trump administration has come into office, then this is the place to look. And there I think you can see deregulation really, really being in the driver's seat.

[Gary Gerstel]

At the same time there, the Trump.

[Alan Dunn]

Administration has made for proponents of deregulation, some interesting moves. And in return for allowing NIDIA to.

[Gary Gerstel]

Sell more chips to China.

[Alan Dunn]

They have to pay a substantial portion of their revenues to the U.S. government. I think intel, for the sake of being allowed to do what it wanted to do, I think had to sell 10% of its corporation, or not sell it, but essentially give 10% of its corporation to the government.

[Gary Gerstel]

So at the same time that the.

[Alan Dunn]

Manifest policy is one of deregulation, the latent policy has been the encroachment by the US Government on the freedom of action of some of these firms.

[Gary Gerstel]

And that is something that's, by and.

[Alan Dunn]

Large been flying under the radar. And it's worth watching to see how that's going to develop and mutate over the second and third and fourth years of the Trump administration.

[Niels Kostrup Larson]

Yeah, we had Morris Upsfeld, who was previously at the imf, on, and I asked him that question, why are these policies typically not prescribed? And he said, well, for the very reason they're typically not good for economic productivity or growth or fairness or efficiency or incentives. But, yeah, so that's very much flies in the face of the deregulation, I suppose, philosophy. I mean, you touched on the challenge facing Trump as he heads into next year with prices and as you say, affordability is now the buzzword all of a sudden. I mean, I guess. Were people naive to think that he could actually solve this in the first place?

[Gary Gerstel]

Do I think that they were naive to think that Trump was going to.

[Alan Dunn]

Bend every effort when he got into office to roll back prices? Yes, the answer to that, they were. They were naive to think that, again.

[Gary Gerstel]

Trump hid nothing.

[Alan Dunn]

Yeah, he, he, he's, you know, he's, he said he was going to take care of Biden inflation in a flash.

[Gary Gerstel]

But if you listen to the whole.

[Alan Dunn]

Suite of things he was proposing.

[Gary Gerstel]

He never made clear, other than unleashing energy.

[Alan Dunn]

Productivity and exploration and fossil fuels.

[Gary Gerstel]

He.

[Alan Dunn]

Had no scheme for, for rolling, for rolling back prices. And so, yes, I think people were naive to think this, although I understand.

[Gary Gerstel]

That people, everyone, myself included.

[Alan Dunn]

Well, I try and break out of my media bubble, since I'm trying to understand the entirety of what's going on in America. But everyone across the political spectrum lives in their media bubbles, and that constrains the news that is, that is coming to them.

[Gary Gerstel]

And I think what we have to understand is the degree to which people.

[Alan Dunn]

Were angry about the high inflation of the Biden years. And, and even though it had been brought under control by the end of the Biden administration, people were living with vastly higher prices without a corresponding increase in, in their wages. And the anger is brewing now and is expressing itself in these elections.

[Gary Gerstel]

And the hardship regarding affordability, except in the fossil fuel sector, has been increasing.

[Alan Dunn]

Across a broad front. Housing is as expensive and unaffordable as it's ever been. And Trump has no program for bringing down housing costs. There's been no effort to reign in food prices, which are continuing to increase. And this is something that I see on a daily basis. I do most of the shopping for my family in terms of food, and the expenses are quite extraordinary.

[Gary Gerstel]

And then there are two additional sources.

[Alan Dunn]

Of, of expense that Trump has no solution for.

[Gary Gerstel]

One is the, the, the freedom given.

[Alan Dunn]

To AI is leading to the construction of these enormous data centers, which require enormous amounts of electricity.

[Gary Gerstel]

So electricity rates are now beginning to.

[Alan Dunn]

Go through the roof because there's simply not enough capacity on the grid to generate enough energy for these AI data centers, as well as customary things.

[Gary Gerstel]

And so that's going up. And then there's going to be another whammy that hits in January because of.

[Alan Dunn]

The Republican refusal to extend credits for.

[Gary Gerstel]

People living on a Affordable Care Act.

[Alan Dunn]

Obamacare for health insurance. Those ranks vastly expanded during COVID because of subsidies that the government was offering that were allowing people to buy better insurance and the higher rates. And, and the, the GOP Republican Party has refused to continue those subsidies. So in January, which is now around the corner basically tomorrow, health care insurance has got to rise for millions of Americans in, in a very steep way. So housing, electricity, health insurance.

[Gary Gerstel]

These costs are all rising.

[Alan Dunn]

And Trump has no, has no plan for reducing these costs and except getting the Federal Reserve to reduce interest rates, which they may well do in December, but that's not going to be enough. And if they're reduced too much, they're simply going to have the effect of intensifying inflation.

[Niels Kostrup Larson]

Yeah, well, I mean the picture you paint with obviously the affordability crisis, rising costs, the challenges for people, particularly at the lower income, obviously very clear. At the same time, we've got the rising stock market, people holding assets are doing well. And this is part of the narrative of the K shaped economy. I mean, from a political perspective, you touched on this fracture within the Republican Party ideologically. How do you think that plays out going into next year? The obvious trajectory would be a resurgence maybe for the Democrats in the midterms and the cycle just repeats itself. Is that how you see it or how do you think it plays out?

[Gary Gerstel]

Well, I think democratic victory in 2026 is imperative for America and the future of the Repub.

[Alan Dunn]

For liberal Democratic reasons.

[Gary Gerstel]

For Trump, elections remain important, but they.

[Alan Dunn]

Must be elections that he wins.

[Gary Gerstel]

It used to be, it used to be that autocrats once, once they came into power, beginning with Hitler and continuing with Latin American dictators and so on and so forth, once they, they came into power, they got rid of elections. You know, they didn't want to go through them anymore. But that has changed. Autocrats in the world now want elections as, as a way of affirming the.

[Alan Dunn]

Legitimacy of their rule. But they must be elections that they win. And so they do everything they can to curate the election, to intimidate the opposition, or in, in the worst case scenario just to declare a result that goes against them is invalid, as Maduro and Venezuela did.

[Gary Gerstel]

It's very ironic that Trump wants to.

[Alan Dunn]

Invade Venezuela to get rid of Maduro for being a dictator, when in fact.

[Gary Gerstel]

His own techniques for ensuring his the.

[Alan Dunn]

Continuation of himself or Maga in office are modeled very closely on what Maduro act actually did.

[Gary Gerstel]

So, and I think one of my worries is that the use of National Guard troops, the sending of the military into all these cities, ostensibly to stop crime and to arrest immigrants, is really.

[Alan Dunn]

Meant to legitimate the presence of these forces in northern blue Democratic voting Cities for the 2026 election so that he can use these forces to intimidate people.

[Gary Gerstel]

Who are likely to vote against him to either make them wait in long lines, to pull them out of lines.

[Alan Dunn]

To make them show their IDs, maybe.

[Gary Gerstel]

You arrest a few and deport them.

[Alan Dunn]

On the sp, not to scare all.

[Gary Gerstel]

Other immigrants from showing up. So this is a, this is a very real threat. And that is why it is imperative that the Democrats do everything in their power to make sure that this is.

[Alan Dunn]

A fair and free election and that it has integrity.

[Gary Gerstel]

And I have felt for some time that if that's the case, the Democrats were going to win, do very well in Congress. It's typical that off your elections allow.

[Alan Dunn]

The opposition party to, to, to gain votes.

[Gary Gerstel]

And then there are indications now that the Republican Party is in real trouble.

[Alan Dunn]

The, the elect, the elections that have.

[Gary Gerstel]

Been happening, the off year elections that have been happening have all gone against Trump. The swing in votes from Republicans to Democratic Party seems to be somewhere between.

[Alan Dunn]

13 and 15% so that even districts that at heavy Trump majorities are now in trouble.

[Gary Gerstel]

So I think from the perspective of today, things are looking very good for the Democrats in 2026. And Mamdani by in New York City, his win is significant because he's the one who has squarely put the issue of affordability on the map. He is a socialist. What sells in Brooklyn and Queens is.

[Alan Dunn]

Not going to sell in most of America. So there's no prospect of a socialist wave sweeping over America in 2026.

[Gary Gerstel]

But he has shown a couple other things. One, a resolute focus on the affordability question. And embedded in that is a downplaying.

[Alan Dunn]

Of the cultural issues that are important to the Democratic Party having to do.

[Gary Gerstel]

With gender, sexuality.

[Alan Dunn]

Feminism, diversity.

[Gary Gerstel]

Those are all things that Mamdani believed in.

[Alan Dunn]

But in his campaign he pushed them into the background. And by resolutely focusing on affordability, he.

[Gary Gerstel]

Has shown Democrats across the country the.

[Alan Dunn]

Way to conduct a campaign that they have to conduct if they want to win. He's also got a, a brilliant social media profile which can compete with what Trump has used so successfully.

[Gary Gerstel]

And he also has a political machine. It's fitting that he's rediscovered the power of political machine in New York City which had been the innovator of the original and best political machine that politics.

[Alan Dunn]

Has ever seen in America.

[Gary Gerstel]

That is a so called Tammany, mostly Irish Catholic machine of New York City, which reliably delivered New York City for the Democrats for the better part of 100 years, he has discovered how to, rediscovered how to do this not through Tammany's auspices, because if it had gone through Tammany's vestigial auspices, Andrew Cuomo would.

[Alan Dunn]

Have won that election.

[Gary Gerstel]

But he has assembled an army of.

[Alan Dunn]

Grassroots operatives going door to door and.

[Gary Gerstel]

The importance of grassroots in person, door to door campaigning. So his resolute focus on affordability, his appreciation for social media, his understanding of the importance of people to people contact and relationships, and developing an army of.

[Alan Dunn]

Operatives, he's given the Democrats a playbook for 2026. And if they follow this playbook, not.

[Gary Gerstel]

The socialist part, but the other part, then there's hope for the Democrats actually.

[Alan Dunn]

Bringing home significant victories in 2026.

[Gary Gerstel]

Now we also have to ask, well, will the Republican Party understand the peril.

[Alan Dunn]

That it's in and will they adjust?

[Gary Gerstel]

Trump has survived for 10 years and flourished because he's been a great counter.

[Alan Dunn]

Puncher and quite flexible and able to adjust to the moment in terms of what's required.

[Gary Gerstel]

There are a lot of premature declarations that he's demented, that he's losing his energy.

[Alan Dunn]

I don't see that there have been predictions of this for 10 years now.

[Gary Gerstel]

Let's, let's get over it. For a man who's 79 years old.

[Alan Dunn]

It'S remarkable for the energy and drive and the mental acuity that, that he has.

[Gary Gerstel]

But there is a way in which he is becoming a second term president, tiring of all the domestic stress, wanting.

[Alan Dunn]

To make his mark in foreign policy, where presidents traditionally have a greater freedom of action.

[Gary Gerstel]

And it there are signs that he.

[Alan Dunn]

Doesn'T quite have the zest for the kind of combat that has made him famous, notorious and so successful. So I think the question is, will.

[Gary Gerstel]

His people, his advisors, be able to.

[Alan Dunn]

Make the kinds of adjustments that are necessary to recover some of what the Republican Party has lost, the early indications. He gave a pretty sorry speech about the affordability crisis yesterday in the United States. If that's all he's got to come up with, he's got to deepen the crisis of the Democratic, of the Republican Party.

[Gary Gerstel]

But there's a lot of time left.

[Alan Dunn]

And a lot of time to adjust.

[Niels Kostrup Larson]

I mean, you talked about Mamdani, his tactics, strength in that sense, but not the socialism. I mean, the one. Well, one of the things that both Biden and Trump shared were large deficits. So, I mean, what do you think the path forward from an economic policy is for the Democrats next year and beyond, you know, around the world, the response to the affordability Crisis has been more fiscal response, fiscal supports, but we've already got deficits of 7 or 8% GDP in the U.S. are there reasonable, meaningful policy levers that, you know, that the Democrats can point to as an alternative to solve affordability without boosting the deficit?

[Gary Gerstel]

Well, I think this is. No one's talking about that right now.

[Alan Dunn]

Because the Democrats are so far removed from national power at the moment that it, the, the urgent, the urgent question is to, to get back into power. And I think the, you know, how to address the affordability crisis without enlarging the deficit is going to be an urgent question that the Democrats are going to have to face.

[Gary Gerstel]

The US has more flexibility on those.

[Alan Dunn]

Grounds than, say, Britain does. You know, I look at Britain and I see the kind of extraordinary constraints under which it's operating and in the US because of the size of the economy, its diversity, its dynamism, and also the dollar as a currency of last resort and the still barely diminished ability of the US to sell its Treasuries to a hungry global market. I think it has more, has more flexibility there. But I think the, the Democrats of.

[Gary Gerstel]

The future are going to have to take a very serious look at the.

[Alan Dunn]

Biden administration and their desire to, on.

[Gary Gerstel]

The one hand.

[Alan Dunn]

Vastly increase investment not just in physical infrastructure, but in social infrastructure, which would include affordability of, of housing and, and health care, without triggering the kind of inflationary surge that occurred under the Biden administration. Now, I think the Democrats are still inclined to blame the inflationary surge on the extraordinary circumstances of COVID and certainly that's, that's part of the story.

[Gary Gerstel]

But I think they're going to have.

[Alan Dunn]

To have a, have to have a more serious reckoning.

[Gary Gerstel]

At the same time, they're going to have to avoid the trap that the Republicans have successfully landed them in in multiple occasions, which is that the Republicans are the party that ends up so irresponsible in fiscal matters. Usual, sorry, the combination of spending increases.

[Alan Dunn]

And tax cuts worsening the fiscal situation in the United States.

[Gary Gerstel]

So it falls to Democrats. This is true of Clinton, it's true.

[Alan Dunn]

Of Obama, to come in and put the fiscal house in order.

[Gary Gerstel]

It's a dirty trick that the Republicans have foisted on the Democrats again and again, and they're gonna have to find.

[Alan Dunn]

A way to escape that trap the third time around.

[Gary Gerstel]

So the plants we're doing that are not yet in place.

[Alan Dunn]

And the Democrats or, and the, the people in the Biden administration who I.

[Gary Gerstel]

Know and talk to are not talking.

[Alan Dunn]

About that at the moment, but they're going to have to face that issue if and when they come back into presidential power.

[Niels Kostrup Larson]

You mentioned some of the kind of policies in terms of the diminishing certain institutions and reduce power, et cetera. And obviously from a markets perspective, everybody's focused on the Fed and the ongoing attacks on Jay Powell and the pressure to lower rates and now the pressure on Lisa Cook to resign and then putting on Steve Moran on the board as well to try and influence policy. What's your perspective on that in terms of the Fed in particular, but other institutions? How bad can things get, do you think, in this administration in terms of the centralization of power, I guess, and the subordinating of these institutions.

[Gary Gerstel]

Define bad for me.

[Alan Dunn]

When you say bad, what do you have in mind?

[Gary Gerstel]

And then I'll respond more specifically, I worry maybe.

[Niels Kostrup Larson]

How worrying? From a markets perspective, credibility is obviously a key factor. I mean, I guess on the one hand they want more influence, but at the same time you're talking about the central role of the dollar. There is obviously a need to attract foreign investors into treasuries, et cetera, so they have to balance those kind of mutual objectives. But obviously putting in a very dovish Fed chair would significantly undermine credibility in the institution and arguably in the dollar as well.

[Gary Gerstel]

Right. I think we haven't talked about the.

[Alan Dunn]

Supreme Court yet and the Supreme Court's.

[Gary Gerstel]

Willingness to enormously expand the power of the executive to hire and fire anyone.

[Alan Dunn]

Working in the executive branch of government to a far greater degree than has been the case for almost the last hundred years. And the Supreme Court seems willing to countenance the trumpet what the Trump administration wants to do in that regard. And that is extremely worrying. The Supreme Court, however, has also given an indication, an early indication, that it will not apply that standard to the Federal Reserve, which means that Trump's ability to fire a Fed head of the Fed during his or her term, to fire Fed governors during their terms, may be much more limited than he would like.

[Gary Gerstel]

On the other hand, he's clearly going to get a, a Fed chair to his liking because Pal's term is up.

[Alan Dunn]

In half year and there's no chance of. I can't imagine a scenario in which Pal is reappointed and maybe Moran is the new Fed chair at at Hass.

[Niels Kostrup Larson]

Is the current favorite or Hasset the.

[Alan Dunn]

Current, the current favorite.

[Gary Gerstel]

And so he's got to get someone much more to his liking. But Trump cannot command the laws of.

[Alan Dunn]

Supply and demand in the economy as, as, as simply by from what he.

[Gary Gerstel]

Wills or desires and, and one check that has always been in place with.

[Alan Dunn]

Trump has been the stock market, which.

[Gary Gerstel]

He sees as a key indicator of.

[Alan Dunn]

Economic health, or lack thereof.

[Gary Gerstel]

It was interesting in the early.

[Alan Dunn]

Months.

[Gary Gerstel]

Of his administration, especially when the first.

[Alan Dunn]

Imposition of tariffs, the, or the infamous liberation day in early April, and that sent shutters down Wall street and there was.

[Gary Gerstel]

You know, considerable run on the.

[Alan Dunn]

Market for a few days before it stabilized.

[Gary Gerstel]

And Trump said something interesting then, which I never heard him say before, saying that the market is so high that.

[Alan Dunn]

A meaningful correction in the short term is not going to harm the pocketbooks of investors or those with assets in the stock market.

[Gary Gerstel]

I never heard him say that before.

[Alan Dunn]

And I thought, oh, okay, he may have some longer term ambitions in mind here.

[Gary Gerstel]

But since that time, the, the concerns.

[Alan Dunn]

About the economy and its well being have increased significantly.

[Gary Gerstel]

There are indications of much greater nervousness.

[Alan Dunn]

On Wall street than have been the case.

[Gary Gerstel]

How AI plays into this is crucial because part of what predicted, what was.

[Alan Dunn]

Predicted for the Trump's imposition of tariffs was a severe downturn in the US economy that has not yet occurred. And the question is why? It may be that simply businesses are able to absorb the costs of tariffs for six months or a year. So in another half year they're not going to be able to do that and we're going to see further rises.

[Gary Gerstel]

But it's also clear that the excitement.

[Alan Dunn]

About AI, and not just AI, but about robotics and all the advances being.

[Gary Gerstel]

Made there has given the stock market.

[Alan Dunn]

And investors a confidence and a surge that was unexpected even as recently as half to three quarters of a year ago.

[Gary Gerstel]

And now we're seeing concerns about the AI bubble and conflicting signals. Is it really a bubble? Is it not a bubble? I expect to see some shaking out of that and we look like we were going to get something of that.

[Alan Dunn]

Sort a week or two ago.

[Gary Gerstel]

Now the market has bounced back again. But I think we're in some hot, some hotter water with regard to AI. And it would not surprise me at.

[Alan Dunn]

All if there was a 10% correction in the market sometime over the next six months.

[Gary Gerstel]

And then the question is, what is.

[Alan Dunn]

Trump's tolerance for correction?

[Gary Gerstel]

There are other sign, there are other troubling indicators as well. The most notably Trump's firing of the.

[Alan Dunn]

Director of the Bureau of Labor Statistics because that bureau issued a jobs report not to his liking. And so reflexively, he simply fired that.

[Gary Gerstel]

Person and put into play someone who.

[Alan Dunn]

Does not have nearly the incom, the competence.

[Gary Gerstel]

And then there was a month in.

[Alan Dunn]

Which figures didn't get reported because of the government shutdown.

[Gary Gerstel]

So far, I think Wall street is.

[Alan Dunn]

Confident that they have enough reliable information so that they can make the decisions they need to make about investment, that they are getting reliable information about where the economy is going and where it's not going.

[Gary Gerstel]

It's, it's not out of the question.

[Alan Dunn]

However, that Wall street will become concerned about the adequacy of numbers and statistics that are coming out of the Trump administration. And worries might deepen that the Trump administration is hiding the real information that they need. And if that, if, if, if that perception seeps into Wall street, it's got to also seep into all the international buyers of U.S. treasuries.

[Gary Gerstel]

And that is something that the Trump.

[Alan Dunn]

Administration will be very worried about because that is something that can trigger a serious run on the stock market and on Treasuries and put the US Economy into a condition of fragility that is going to worry Trump a great deal.

[Gary Gerstel]

So how much he thinks about this versus simply getting someone at the Fed who's going to lower rates, I don't know. But Bessant has to be thinking about this.

[Alan Dunn]

You know, he's got a lot of connections on Wall street and at a certain point, that kind of worry is going to concern members of the Trump administration.

[Niels Kostrup Larson]

You mentioned maybe Trump's energy levels coming down marginally. I mean, gone back a while. There was a suggestion he may alter things for a third term or in some shape or form. I mean, where do you think that is now? Do you see him moving aside at the end of this term? Or is that still a risk that we have some kind of change to normal proceedings?

[Gary Gerstel]

Well, we may have a change to normal proceedings, but I don't think it's.

[Alan Dunn]

Going to be in the form of a third term for him.

[Gary Gerstel]

I should say. I have no special access to Trump's brain. So this is entirely in the realm of speculation. And in the first few months, the.

[Alan Dunn]

Wondrous months of his second administration, he.

[Gary Gerstel]

Was dropping hints about a third term.

[Alan Dunn]

I've not heard those in the last couple months.

[Gary Gerstel]

I think that, and given that this.

[Alan Dunn]

Is three years off, he's got to be 81, 82.

[Gary Gerstel]

I don't think he's going to have.

[Alan Dunn]

The zest to camp.

[Gary Gerstel]

If you think of the extraordinary campaigning.

[Alan Dunn]

He did in the last month, the 2024 election, this is really remarkable for a 78 year old man to keep up that pace.

[Gary Gerstel]

And you saw the toll it was.

[Alan Dunn]

Taking on him on a rare occasion.

[Gary Gerstel]

But those occasions were quite rare.

[Alan Dunn]

And he kept it up until the very end.

[Gary Gerstel]

I don't think he's got the zest.

[Alan Dunn]

For that a third time around.

[Gary Gerstel]

So I'm less worried about him insisting.

[Alan Dunn]

That he's a, that he is, he deserves a third term and is president for life.

[Gary Gerstel]

The only way in which that can happen is if he simply says there will be no election in 2028, that there's no need because the, the American people want Trump. So if he declares elections to be.

[Alan Dunn]

Finished, I can see him staying on.

[Gary Gerstel]

Bert, right now, I think that's not in the cards and I don't see.

[Alan Dunn]

Him having the energy to run for, for a third term.

[Gary Gerstel]

But those people who are thinking that his days are numbered as president, that he's no longer capable of, of pursuing.

[Alan Dunn]

His goals, of, of having the kind of energy required, I think that's a kind of foolishness and a, and a wishful kind of thinking that.

[Gary Gerstel]

Does not.

[Alan Dunn]

Help us understand the power that he still retains.

[Gary Gerstel]

His flying to Israel over what, a.

[Alan Dunn]

24, 36 hour period. The degree to which he's traveled abroad to, to other places.

[Gary Gerstel]

His hosting the Kennedy center gala event.

[Alan Dunn]

A few nights ago where he was the emcee and spoke for 37 minutes.

[Gary Gerstel]

And did a whole lot of other things. You know, he's still in, he's still very capable, resourceful man in terms of his energy and pursuing the goals that.

[Alan Dunn]

He wants to pursue.

[Gary Gerstel]

So short term, I don't think we're going to see him withdraw and the.

[Alan Dunn]

White House being operated by others. But I don't worry right now about him demanding a third term. I think his, his energy for that is not going to be what it needs to be.

[Niels Kostrup Larson]

Yeah. And I mean, in terms of the next three years, obviously, as you get towards the latter part of a presidency, typically it's a lame book presidency. And particularly if there was a swing in the midterms, would you see the intensity of the policy agenda weakening over time? Or if the Democrats won, is there some kind of backlash from Trump in terms of trying to tilt the balance back towards Republicans?

[Gary Gerstel]

Well, he's got to do everything he.

[Alan Dunn]

Can while he's in office to frustrate and defeat the, the Democrats and preserve what he's built in the gop, which is really a different political party than the one existed before he entered politics in 2016.

[Gary Gerstel]

So it's hard to, it's hard to predict what's going to happen that it wouldn't be, it wouldn't surprise me if there's no more legislation for the Next three years. Other than appropriations, which have to happen. In his first term, he, he passed.

[Alan Dunn]

Almost no legislation other than the tax cut.

[Gary Gerstel]

He hates legislation. Congress has been supine. Allow him to roll over. His penchant for exec executive orders reveals that he thinks Congress is an atavism from another era that no longer has any purpose. So he's already not consulting with Congress on a whole series of issues, not.

[Alan Dunn]

Even with his Republican majority.

[Gary Gerstel]

So I don't see, I don't anticipate.

[Alan Dunn]

Him having a big legislative agenda and.

[Gary Gerstel]

He won't be able to jam it.

[Alan Dunn]

Through anyway if, if, if the Democrats control at least one house of Congress.

[Gary Gerstel]

I, I think there are people in his administration, the real zealots of maga, who are going to do everything in their power to complete the work they, they feel needs to be complete before.

[Alan Dunn]

They lose power, the presidency and, and 2028. And that's going to be ridding America.

[Gary Gerstel]

Of millions of immigrants. It's going to be staff radically diminishing.

[Alan Dunn]

The size of the federal government. It's going to mean the staffing the.

[Gary Gerstel]

Federal government that remains with layers and.

[Alan Dunn]

Layers of MAGA appointees.

[Gary Gerstel]

So there's going to be a rush to, to accelerate the takeover of the.

[Alan Dunn]

The, of the deep state, to dismantle the, the parts that they don't like and to make the parts that they do like the property of a MAGA elite bureaucratic core. That's going to be very hard for the Democrats to dislodge.

[Gary Gerstel]

So they are going to do whatever they can to institutionalize their achievements in the federal government, to make the task of the Democrats and their agenda that.

[Alan Dunn]

Much more difficult to achieve.

[Gary Gerstel]

And they have a very shrewd sense.

[Alan Dunn]

Of power, how to exercise power, how to control the bureaucracy.

[Gary Gerstel]

And so I expect the zealots in.

[Alan Dunn]

The ranks of the Trump administration, led by J.D. vance, probably, and Stephen Miller and Russell Vaught, the head of the Office of Management and Budget, to pursue those aims with zeal in the expectation that 2028 is going to be a moment of reversal for the Republican Party.

[Niels Kostrup Larson]

Okay. I mean, taking a more global perspective, I mean, some of the themes that we've talked about are evident around the world. I mean, you've mentioned the uk, the challenges there in terms of the policy levers. But the affordability crisis is the same here in Ireland, in the uk, rising debt levels around the world. And equally, what we've seen at elections is generally whoever is in power has shown an inability to tackle these problems and has been thrown out. We saw that obviously conservatives in the UK and now labor immediately under pressure in Germany, the previous government out, and now they've thrown at the debt break. So generally there's been a shift towards more economic nationalism. The rise of the right. Is that the global. That's the characterization globally of the new order that's replacing the neoliberalism?

[Gary Gerstel]

Yes. I think we have to understand the surge toward authoritarianism, toward ethnonationalism, toward reasserting.

[Alan Dunn]

The priority of nations over multilateral and multinational organizations. We have to understand these as part of a global trend and a reaction against what many people in different parts of the world feel has been an overinvestment in global institutions. The channeling of the benefits of globalization to a relatively small elite and the part of the. The societies that benefits most directly from this kind of globalization.

[Gary Gerstel]

The hostility toward immigrants is one of.

[Alan Dunn]

The most urgent issues facing Europe, as is the case in the United States. And it's not an issue that's going away. And progressives in the left, if they want to come back into power, have to find a way to address that issue in ways that have, until this moment, escaped them.

[Gary Gerstel]

I think we also have to pay attention to the different conception of world order that has taken root in the.

[Alan Dunn]

Trump administration and that is present in other countries like China and, and Russia. I've just read, I don't know if you have yet, the National Security Strategy of the United States of America, this manifesto issued by the Trump administration to guide its national security strategy going forward.

[Gary Gerstel]

And there. There are two elements of that report.

[Alan Dunn]

That jump out at. At me.

[Gary Gerstel]

The first part is the first thing.

[Alan Dunn]

That jumps out at me is that.

[Gary Gerstel]

The Western Hemisphere gets more attention than.

[Alan Dunn]

Any other part of the world. And it's the first region of the world that this national security strategy addresses. If we flash back to the Cold War, the idea that the first foreign policy issued, identified by the United States would, would be the Western Hemisphere, as opposed to the Soviet Union and China and the worldwide spread of communism.

[Gary Gerstel]

This is inconceivable. In, in that moment, what does the focus on the Western Hemisphere reveal? It reveals first that the US Once again wants to turn the entirety of.

[Alan Dunn]

The Western Hemisphere into its own lake.

[Gary Gerstel]

And private province, as was the case.

[Alan Dunn]

In the late 19th and early 20th century. And that Western Hemisphere stretches from Greenland.

[Gary Gerstel]

In the north, not quite to Argentina.

[Alan Dunn]

Although there's a lot of sympathy for the current ruler of Argentina and the Trump ranks, but certainly from Greenland in the north to northern South America and the south, Venezuela. A desire to assert US Primacy through throughout this region.

[Gary Gerstel]

So we can expect very aggressive policies.

[Alan Dunn]

Throughout the Western Hemisphere on America's part, as currently is being demonstrated through the.

[Gary Gerstel]

Blowing up of alleged narco terrorist boats.

[Alan Dunn]

In the Caribbean and in the Pacific, which has received an enormous amount of national and international attention.

[Gary Gerstel]

But it also reveals something else, that we should now conceive of the world as a series of power blocks, and each of each of them controlled by a regional hegemon. And the regional hegemon in the Western hemisphere, in the U.S. and by implication, who are the other regional regional hegemons? One is Russia under Putin, and the.

[Alan Dunn]

Other is China under Xi and the Communist Party.

[Gary Gerstel]

And the focus on the US early on on the Western Hemisphere is also a tacit admission that the US Is going to have, have to extend similar privileges to hegemons in other parts of the world. And that helps us to understand the privilege that Trump is extending to Putin.

[Alan Dunn]

In terms of setting the terms of peace with Ukraine.

[Gary Gerstel]

There is more in this document about protecting Taiwan than there is on protecting Ukraine. But it also asserts the right of Xi to exert regional control in his.

[Alan Dunn]

Part of the world.

[Gary Gerstel]

So it's no longer a world governed by international law. It's a world governed by powerful regional hegemons who agree to respect each other's sphere of influence. That sphere of influence extending not just to the borders of the hegemon, but beyond to a region that they will.

[Alan Dunn]

Be allowed to dominate.

[Gary Gerstel]

And the harshest, harshest criticism by far.

[Alan Dunn]

In this document is directed at Western Europe. Trump hates the EU as a transnational.

[Gary Gerstel]

Entity, and he also indicts Europe for. And this document indicts Europe for two things. One, its civilizational weakness, which I think means its inability to control the immigration of Muslims into Europe, which for the Trump people, is another indication of a. Is of an Islamic invasion of Europe that occurred in the 800s and in the 1400s and was repelled at great cost. And they want to see a similar reassertion of Europe, European civilization, which means.

[Alan Dunn]

White Christian civilization in this moment.

[Gary Gerstel]

And I think there's also a critique of Europe for not having its own defense capacity. There's no value or praise given to NATO or the Western alliance. It's a declaration that Europe has come.

[Alan Dunn]

Up short, because you can't take Europe seriously in the world unless it's bent on becoming its own regional hegemon. And if it's going to do that, it has to be responsible for its own defense and expend the kind of money on defense that it has been unwilling to.

[Gary Gerstel]

And then the third critique of Europe is the, is that it has interfered with freedom of speech, a basic liberty. There's no criticism of freedom of speech in Russia, there's no criticism of freedom of speech in China. There's criticism of freedom of speech in Europe.

[Alan Dunn]

What's the, what is, you know, and.

[Gary Gerstel]

The, the criticisms of Europe's lack of regard for democracy are really projections of Trump's own lack of regard for democracy in the United States. Why is this going on? It's meant to empower the right in Europe and to turn, to make Europe not simply its own hegemon, but to make it a right wing hegemon allied.

[Alan Dunn]

With Putin to the east and that Trump's America to the West. This is a pretty scary vision of, of the world and that is the vision embodied in this national security strategy.

[Gary Gerstel]

So whether that world is going to come to be is up in the air. But what this document reveals reveals.

[Alan Dunn]

A.

[Gary Gerstel]

Plan for world order that is based.

[Alan Dunn]

On powerful regional and ethno nationalist hegemons.

[Gary Gerstel]

Who are going to run the, who are going to run the world through.

[Alan Dunn]

Their power rather than through a commitment to universal human rights. And it's profoundly threatening to what the EU represents.

[Gary Gerstel]

And it is a call to arms in Europe.

[Alan Dunn]

I think this the call and on.

[Gary Gerstel]

The one hand to develop an independent.

[Alan Dunn]

Military capacity, but more than that, to.

[Gary Gerstel]

Stand up for the EU values that are most important. Because if the US is Trumpified, which.

[Alan Dunn]

Block in the world is going to be able to be to carry the principles of universal human rights into the future?

[Gary Gerstel]

It's got to be the eu.

[Niels Kostrup Larson]

Yes, well, very sobering on that. Very thought provoking and sobering note. We'll have to leave it, but very much appreciate you coming back on Gary. Always fascinating to hear your insights. When is your book due out?

[Gary Gerstel]

Well, I'm writing it now. I hope to finish it by the.

[Alan Dunn]

Beginning of not 2026, but the beginning of 27. So hopefully it will appear in the latter stages of 2027. That's my hope.

[Niels Kostrup Larson]

Very good. Well, people should keep an eye out on that. But yeah, very much appreciate you coming on to speak to us again and I'm sure we'll have you on at some point again in the future and see how all of these themes evolve. But from all of us here on Top Traders Unplugged, thanks for tuning in and we'll be back again with more content soon.

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