← What Really Matters with Walter Russell Mead
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- [00:00]
A
Foreign. Welcome back, everybody, to what really Matters. I'm Jeremy Stern with you in Los Angeles. I'm here as always with Walter Russell Mead of tablet, the Wall Street Journal, Hudson Institute and the Hamilton center at the University of Florida. Let's start with this week's news. First story of the week. When President Trump announced sweeping tariffs in April, economists predicted surging inflation and raised the odds of a recession. And companies and consumers stockpiled to get ahead of price rises. Those worries now seem overblown. According to the Wall Street Journal, inflation, while too high, is lower than forecast. And the economy continues to grow despite the steepest tariffs in almost a century. At the same time, the promised benefits of tariffs also largely haven't come to pass. Revenues from Trump's levies have been far lower than the Treasury Department predicted, and there are few signs of a domestic manufacturing boom. The US treasury is on track to collect $34 billion in tariff revenue in October. If that pace continues, the US would be on track for 400 billion over a full year, short of Scott Besant's August prediction of between 500 billion and a trillion dollars a year. Walter, is this all news or fo news?
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B
Well, it's news about fo news in the sense that if you think about all the screaming in the world is ending on one side last spring around Liberation Day and then all of the exultation, ha, this is, this will fix everything. Trump is drawing the sword from the stone and is going to change the world with this. It was all tempest in teapot, more or less. Now I do think that over time tariffs have some deleterious consequences. It is a little bit like putting sprinkling sand in the gearbox because it's friction. It's friction. On the other hand, markets are actually better than people think at managing problems. So in a sense that's the, that's the, the wonder of, of markets generally. And there are some benefits, though not perhaps as as many as the President optimistically forecast. I think where we really get to a piece of news here is it is, it just reminds us how many of the sort of so called educated people in this country or, you know, commentators even, are kind of slaves to dogma. They spent too much time in school, they, they believe their textbooks too much. So there's an assumption that if there's a, you know, if something works on the blackboard, it's going to work exactly the same way in real life and very often doesn't. And the essence of policy wisdom is often realizing just what a big gap there is between some beautiful theoretical model and its predictions and what actually is going to happen in the messy real world. So, in a sense, the news behind the news here is that nerds who've spent the first 30 years of their lives or more in school and, and have naively swallowed all the beautiful rules that they were taught in their textbook are not the best guides to life, generally speaking.
- [03:26]
A
There was one other story I saw that basically reported to everyone's surprise, that investors keep piling into US Government debt, despite about a year of predictions now that everyone would start basically selling America due to the tariffs and budget deficits and attacks on the Fed from the White House, et cetera. But the Treasury's market appears to be doing fine, maybe even quite well.
- [03:47]
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Is.
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Is all this because Trump's economic policies are actually better than people thought, or is it because the American trade and economic system is just. Is so large and robust and resilient and complicated that even a president who some may consider to be, you know, economically illiterate just can't do that much damage to it with his tariffs and his mean tweets and all that.
- [04:10]
B
Maybe it's not either or, but both. And, you know, the Germans have that saying, even the devil is not as black as he's painted. And I couldn't say it in German, but that's what I'm told it is anyway. And that at the same time, yeah, the U.S. economy is a really big beast. But it, you know, it's also the case with, you know, the dollar. It's not just sort of in this abstract thing where you think, how's the American economy doing? How's the dollar? What else can I do with the money? You know, do I want to put it in the euro? Gee, I don't know. There seem to be some funny things going on there. Do I want to put it in China? You know, a lot of the Chinese seem to be trying to get their money out. So where do you put it and what do you put it in? And if nothing else, the treasury market has the sort of. Has a liquidity. You can, you know, if you decide you want to get your money out of US Treasuries, you can get your money out of US Treasuries very quick and very cheaply at a market clear price. There are not that many asset classes like that around.
- [05:20]
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All right, our second story. Donald Trump and Chinese leader Xi Jinping emerged from their first face to face meeting in six years last week with a temporary truce in the bruising trade fight between the Two superpowers. Their agreement lowers immediate tensions between the US And China, which have been locked for months in a bitter struggle over trade and technology that has hurt both their economies. The agreement includes a reduction in stiff US Tariffs on Chinese goods in exchange for a pledge by China to crack down on the trade in the chemicals used to produce fentanyl. China also promised to ease the exports of rare earth minerals, which Western manufacturers rely on to make a range of goods. And last but not least, Beijing promised to buy, quote, tremendous amounts of American soybeans, according to Donald Trump. Walter, was this summit news or FO news?
- [06:06]
B
Well, it surprised a lot of people, but I can't quite understand why everyone is so surprised. Going into it, it was fairly clear, I think I even wrote this somewhere, maybe even on my column in the Wall Street Journal, that Xi Jinping isn't Gorbachev, whose empire is collapsing and he's sort of organizing the capitulation. But also Trump isn't the head of a declining power which has no assets left and is begging for mercy from its rising master. These are two countries whose interests are quite different, both of whom have a lot of strength and resilience and both of whom have some weak spots and exposures. So the two leaders meet and amazingly, sort of try to find them areas where they can mutually benefit. Now, China isn't going to stop trying to use its economic power on rare earths and other things to gradually. It's not going to try. It's not going to stop trying to build up its own system. But neither is Trump going to stop having a differential differentiation between Chinese tariffs of 47% and just about everyone else's, which are much lower. Nor is he going to be, look, you know, giving up his efforts to manage, you know, to, in other ways, sort of improve his position vis a vis China. I mean, what else did people expect from this meeting? It's not a settlement. It's not the peace treaty, the forever agreement between the US And China. Nor can it be. Now all of Trump's enemies want to tell us, oh, he's given away the store. But the things they said before the meeting, he was going to give away Taiwan and the top chips he hasn't given away, as far as I can see. So people are projecting onto a fairly predictable summit all of their kind of inner opinions. The Trump people say, oh, he wiped the floor with Xi Jinping. Nobody but Trump. It's just all spent. The reality is the US And China have a lot of opposed interests, a lot of interest in common and are sort of trying to work their way to some kind of combination of coexistence and competition.
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A
All right, final story of the week. Bill Gates, who has spent billions of his own money to raise the alarm about the dangers of climate change, is now pushing back against what he calls a, quote, doomsday outlook and appears to have shifted his stance on the risks posed by a warming planet. In a lengthy memo released last Tuesday, Gates sought to tamp down the alarmism he said many people used to describe the effects of rising temperatures. Instead, he called for redirecting efforts toward improving lives in the developing world. Although climate change will have serious consequences, particularly for people in the poorest countries, it will not lead to humanity's demise. People will be able to live and thrive in most places on Earth for the foreseeable future. Coming just four years after he published a book titled how to Avoid a Climate Disaster, Tuesday's memo appears to amount to a major reframing of how Gates is thinking about climate change. The memo arrived a week before world leaders gather in Brazil for the United nations annual climate summit. Walter, is this news or fo news?
- [09:36]
B
Well, it's, you know, Bill Gates has enough power in this world so that when he changes his mind, that's news. And there's certainly going to be a lot of NGOs and, and activist groups that are going to very much feel the consequences of this change in his approach. It's not, I mean, it's, this, I think, is just one of many signs that the Green panic is ebbing, that, that we've, we, we have reached, kind of reached and passed peak climate change policy or let's say peak transition policy before we reach peak oil. This was not what any of the climate campaigners wanted or hoped for, but in some ways it's the inevitable result of their bad policy recommendations. Proclivity for panic driven, hyping the prediction, hyping the problem, and a general lack of, of understanding of how complex political and economic transitions work in, in our very complicated world. Oddly, again, this is, you know, the, the essence, the origin of the green movement is this supposed appreciation for the complexities of, of organic systems which you idiotic fools in the rest of the world don't understand as profoundly as we, because we are alive and the complexities and interrelationships. But it turns out what they never understood at all were the complexities and interrelations of human politics and human society and human choices. And so as a result, we, they and we have wasted hundreds of billions of dollars, decades of Some people's lives have gone into an effort that is falling apart under its own weight. I won't say that there have been no benign outcomes from all of this climate activism, because some good things are happening. It's hard to find. It's an ill wind that blows nobody good. But in some of its major presuppositions and strategies, the climate change movement just got it badly wrong. And they're paying the inevitable price for being wrong, which is a loss of influence and power and control over the future. None of this means that climate change isn't real or isn't a problem, but it does mean that the climate movement is failing. And I think we're going to see more and more indications of that failure as we go forward.
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All right, that does it for the news this week. Let's have the big conversation. Okay, so Walter, I want to ask you to comment on what people have been calling the griperization of the GOP over the last week, because you are the expert on what these waves, these periodic waves of anti Semitism and their role in American culture and politics means or doesn't mean, and maybe especially where it comes from. But before you do, let me quickly recount what's actually happened, because for any of our listeners who aren't chronically online, it is perhaps a bit opaque. All right, so first, Tucker Carlson, who has the number one podcast in the country by listenership, last week interviewed Nick Fuentes, a 27 year old podcaster from Chicago who's probably the overt white nationalist and kind of professional racist and sexist and anti Semite with the largest following in America. Fuentes show is banned on most platforms, but has many millions of watchers and listeners who call themselves groipers. So Carlson's interview of Fuentes, which who previously been kind of firewalled even by people like Carlson, was a bit of a watershed and was chock full of explicit anti Semitic content, not just the regular dog whistles. And it sparked a debate within the Republican Party over whether Carlson's decision here to normalize Fuentes should be tolerated or condemned. In the podcast, for example, Fuentes praised Hitler or Stalin and claimed that, quote, the big challenge to unifying the country is organized Jewry, while Carlson responded that Republican Israel supporters suffer from a, quote, brain virus and he's expressed his hatred, his word for Christian Zionists. So then the day after that, Vice President J.D. vance, who's apparently close friends with Carlson, whose deputy press secretary is Carlson's son, was questioned by one of Fuentes supporters at an event at Ole Miss about why America has to support Israel if America is supposed to be a Christian country, to which Vance appeared to offer a somewhat half hearted defense of Trump's Israel policy and seemed to at least not rebuke the premise of the student's question. And then finally, the day after that, the president of the Heritage foundation, which has a long standing professional tie to Carlson, issued a statement defending Carlson's interview at 4 and attacked the, quote, venomous coalition attempting to cancel Tucker. So this is the chain of events that has consumed the GOP over the last week and which has now drawn in public statements from several senior Republican officials, meaning the debate is not at this point confined any longer to Twitter or to the podcast or influencer universe. So, Walter, that's a lot, or perhaps it's not very much at all, but tell us what you make of all of this.
- [15:05]
B
Okay, well, first of all, Jeremy, what's wrong with asking questions? Look, there's a, there's a lot going on here. I think at least my reading of the events is slightly less catastrophist than the narrative you just presented in the sense that the blowback has actually been quite fierce. So inside the Heritage foundation, there was apparently an effort by some on the board to get fire Roberts, I think his chief aide has actually resigned. And this sort of noise inside the building doesn't seem at all to have been subsiding as a result of these steps. So it's not clear to me that what happened was the collapse of a firewall between ill natured and ill and poorly informed agitators and the bulk of, you know, the American right. I think if, you know, this is a, is a confrontation that's been coming for quite a while and it, you know, it can't, can't not happen in this, you know, there, there, there clearly are enough people who have been intrigued or convinced by, by this worldview that it has to be either confronted or assented to. And so far at least I would say that, that I've been more surprised by the vigor of the reaction than I am. You know, certainly anybody who has been following Tucker Carlson at all can't have been all of that surprised by his openness, the kinds of things that Nick Fuentes was saying. So again, the surprise is that Heritage exploded when its leader didn't do what seems to me his clear and obvious duty, which is to draw a line. I think we'll have to wait and see. I think, you know, how Vice President Vance ultimately handles this. It's easy to Put too much weight on one answer to one question by one student at a, at an event that wasn't kind of intended to, to, you know, this wasn't Vance choosing this moment to yield his mature, considered thoughts on a very complex topic with a lot of political ramifications. So I think we have to, I, I at least am waiting to hear how he moves. There, There is some, I suppose, reasonable way to say that, that when you have a substantial body of opinion. Well, let's put it this way. You have, in, in every society, you have the nut jobs and the fruitcakes on the extremes. And then you have people who are of varying distances from the wild frontier, ranging from edge lords who play transgressively with the boundary but never get caught off base in the end, to, you know, very conventional thinkers who want nothing to do with any of that crap. And in a healthy democratic society, or let's say a democratic society in a stable state, the center right does a good job at policing the crazies on its side and the center left does a good job of policing the crazies on its side. The crazies exist, it's a free society. People have the right to their opinions and so on, but, but in a stable society, they just don't get that much purchase. Okay? We are not in that kind of a moment as a society. And you know, the establishment, the center has lost prestige and legitimacy on the left and on the right and in the center. I mean, you know, Biden was a terrible president. Things didn't really get better in the Obama years. But the Bush years were, George W. Bush years were not a triumph of American foreign or domestic policy, you know, nor were some of the centrist politicians doing such a great job. Many of the central ideas, you know, hey, open. Allowing China in the World Trade Organization is going to make China democratic and Americans rich. Right? So some of the core policies and ideas that have guided the centrist establishment for 30 years have turned out to be really, really wrong. And so you had people now sort of overton windows explosively widening and people sort of realizing, hey, you know, the. I, I can remember this because as a member of the baby boom generation, we actually went through a similar thing of sort of realizing that on things like the Vietnam War or many others, our elders really just did not, you know, they were just raw. The people that we were sort of habituated to respect and expected to respect were making terrible mistakes that would like kill us literally. And you know, 18 to 21 year olds in that whole who have lost faith in the older generation don't immediately leap to a position of reason, moderation and depth informed by great wisdom. Right. They go off in all kinds of bizarre directions. So I think we can't look at the current state of America without understanding whether it's, you know, Mondami supporter fringe types in New York or some of the graper types out there in other places. We gotta understand that this is in part a reflection of a social crisis that affects the whole country and is bigger than these. That is not to say that either the far left or the far right are, are good guides to anything, but that to sort of get on our high establishment horses and just, you know, sort of lecture dismissively and finger point is not the wisest, is assuming a kind of a, a legitimacy that, that we don't have. So, you know, and I, and I suspect to the extent I, and I don't, and I would say this of people on the left as well as Kevin Roberts and others, I can sympathize with their desire to hate the sin, but love the sinner. To project openness to the people who are passing through this hopefully transitional stage in their personal development or political development and not to want to sort of, in a sense, repeat the kinds of angry, dismissive behavior that sort of created, helped to create and widen and deepen this gap of alienation. And so you'll find people both on the left and the right trying to find a language that allows them to stay in the game with some of these younger people and hopefully again, bring them on board. All right, now to me, that's background to all of this. And it makes me, I don't think that either Vance or Roberts so far has gotten it right. I would say Vance is far less in the weeds here than Roberts is. And there are cases where leaders of movements or of currents of opinion get to a place where you have to take a stand and you have to draw some clear, bright lines, but you have to know how to do it. And it's a lot easier said than done. Decades after, generations after Hitler shot himself in the ruins of his capital city, you know, his name still, and his legacy still reverberates in all kinds of ways. So, you know, you invoke Hitler in a situation and the intensity rises. So there's a lot of that going on in terms of. As the right tries to deal with the self policing. Interestingly, neither communism nor sort of Islamism has quite the same currency of horror. And that actually allows the left a little bit more Space to deal with its own very dangerous and very bad crazies. And so I think we should probably try to avoid falling into that trap and understand a sense of, like, unfairness on the right about this whole thing that extends beyond the. The confines of the lunatic asylum. Right. None of this is meant to be a kind of a definitive defense of. Of the way these folks are currently handling these problems. And it is also a. But. But it is, I think, context that. That we need for it. Now we get to the other problem, which is why are the groipers. All right, let's just say why is there so much energy on both ends of the horseshoe, you know, and. And in particular, Jew hatred? Why do you have so much of it on the far left? Why do you have so much of it on the far right? And why both on the left and the right has there been so much squeamishness and hesitation about drawing the line here, slamming the Overton window shut, or however you might want to phrase it. To me, that's the question that we should be asking. And here there are a lot of things going on. On. You know, anti Semitism has a long and ugly history in the United States. When I was researching all of this for Ark of a Covenant, what came out over and over again is not that the United States has gotten a free pass from the anti Semitism that one sees so much of in the world. It's just that in general, it's never reached the same intensity here or had the same power here that it's had in some other places. But it's been around, and it's been on the left, it's been on the right. It's appeared in forms ranging from a very ideological form of, you know, the Jews are the great conspiracy to just, you know, sort of a generalized thing of, like, I don't like having Jews in my country club. You know, there's this sort of enormous range of it here as in other countries. And in general, in America, it's been. We. We've gravitated more toward the lower levels of intensity and also to the sort of lower levels of idea of ideation concerned, you know, here concerning antisemitism. But in times like this, you know, there. There seem to me to be sort of two factors that historically drive the waves of antisemitism that we see in America. One of them is high levels of immigration. It doesn't have to, you know, it doesn't have to be Jewish immigration, by the way, just immigration. And, you know, people say, well, what, what can. I mean, I mean, America's a nation of immigrants. You know, we've always, you know, and only bad people. Well, it's a little, the story's a little more complicated, which is that when immigration rises dramatically or when you start getting different kinds of immigrants than you've had in the past, you do begin to see and, and, and actually rapidly intensifies a reaction. So you get the Irish Catholic immigrants around the time of the potato famine, just coming over in large numbers, very desperate people who are, I clutch my pearls here, Roman Catholic. And this was for America at that time, like mind bending. And you start getting anti immigrant sentiment. You get the same. Around the same time with the 1848 revolutions, you get a lot of German migration, some of which is just. And you get a wave of anti Semitism associated with that. It's like fear of the other, the great replacement, whatever it might be. Then that wave of immigration somewhat subsides partly because we had some bad economic times and there was this little whole Civil War thing. You actually saw a significant reduction in levels of antisemitism. And by the 1880s, when the next great wave of antisemitism comes, a lot of the German Jews who had come in the 18 for 40s felt they'd found their place and they were like, oh, these new Jews, it's like they're threatening us as the Eastern European Jews. So we have the great wave of migration from what I call the great wave about 1880-1923, biggest wave in American history, both in terms of population and in terms of cultural difference from the people who already lived in the US and during this time you saw a continual increase, slow at first, but then rising as the numbers grow in anti immigrant sentiment of various kinds. You get the movement to block immigration across the Pacific. You get desires to ensure that immigrants pass literacy tests or are tested for health and so on. You want to register all the immigrants, so you have ships have to stop in Ellis island and you check them all out. And ultimately this rises to such a fever pitch in the 1920s, becomes a central issue in American politics. The Klan, which basically died out or was crushed in the 1870s, reappears not as a Southern, but as a national organization and not exclusively anti black, but anti Catholic and anti immigrant and in many cases anti Semitic. So you get Henry Ford with, you know, writing, you know, in the Dearborn Independent, just asking questions. I mean, Tucker Carlson could go back and like, read these essays and get some great ideas, just asking questions, you know, and Father Coughlin, the radio priest, blah, blah, blah, blah, blah. And really the 30s were kind of peak times going into the early 40s of antisemitism in America. We're nowhere near those levels now, by the way, but ugly things are happening. The other factor is economic trouble. You know, when people become. So we have immigration and we have economic distress often caused by massive technological change, industrial revolution that, you know, drives people into the cities, breaks up old rural ways of life, changes the balance of American politics from being mostly a farming society to being mostly an urban society. You get anti Semitism flaring in that mix. Well, obviously today we have record numbers of immigrants from places that. Where the cultural distance with the, you know, with sort of the people who are here already tends to be quite large. And you have all of this economic uncertainty associated with the information revolution. All of this is right out of the. The conditions that in the past led to waves of anti Semitism. So on the one hand, that makes me feel that, yeah, this is bad and it'll probably get worse before it gets better. But on the other hand, I'm not yet convinced that America's relative immunity has been lost. So again, the fact that in spite of everything, American Christians are not, as a group, anti Semitic and actually resist, as a group, antisemitism, See it not because they have some religious, necessarily affinity for Jews. Some do, most don't. But because their own sense of what it means to be a Christian involves tolerance and especially of Jews. So it's here. It's bad. But other things are also here that historically, even in the bad times, have had a significant ability to dampen the worst. That's not telling people, you should be smug. You should just relax. Oh, just. Fine, fine. All right. We have some problems, but I think it also says the problem problem, and this is that that anti Semitism is the result of deep problems in society, not the cause of them necessarily. Though anti Semitism can be a symptom, that itself makes life a lot worse, and not just for Jews. But even so, all of us need to be thinking holistically and universally how to make life experience of America better. How do we get control of immigration? I think we're going to have to limit. We probably are going to have to have a smaller net influx of people going forward than we've had in the last 20, 25 years. In the 1920s, we shut it down completely. I don't think that's really practical today or desirable, but that's part of it. The other part of it is to Deal constructively and effectively as far as we can, with the consequences of the information revolution, which are frankly about to become a lot more upsetting and tumultuous than they've been in the past.
- [35:18]
A
All right, that does it for the big conversation. I'm sure we'll be coming back to this topic in the coming weeks, but let's end this one on the tip of the week. A listener request this week, Walter, this one from Benny in Austin, Texas. Who wants to know your favorite airline?
- [35:41]
B
That's interesting. After a big conversation about how terrible everything is getting, the question of the week is, what's your favorite airline? How to get me out of here? What's my fastest route to some sense of twice. And that's interesting, you know, different, I have to say, since I, I've flown far too much in my life. There's more than one airline where I've, I have well over a million lifetime miles. So this is a subject I have thought about. First thing I say is pick an airline, any airline in a sense, and stick to it. You want to, you know, put all your, try to put, you know, you're flying in one airline, so they get to, they start thinking of you as one of their valued customers. I found out about this always way back in the 90s and I was flying back as a hurricane was coming to the US And I needed to. Wanted to get home before the hurricane got. Well, I didn't make it. I was stuck in the Atlanta as the hurricane was rampaging and the, you know, airlines, airports were closed all, all over the south and it was total chaos in the airport. And I, but I, I'd accumulated a fair number of miles on, on this airline. I stand a long line to get to the, you know, clerk, overworked clerk and I said, I know my flight's canceled. Is there any chance you could get me a hotel? And they sort of looked at me incredulously and laughed. I said, no, wait, look at my record. And they did. And they said, Ah, yes, Mr. Me, there is something we can do for you. Would you step over here? Right. And I was able to hole up in a comfy hotel until the, until the chaos was. Was over. So that's when I said, okay, really does matter. You want that airline and the people who work at that airline to think that your satisfaction actually matters to them. So, so what, you know, where you. Depending on where you live, you're gonna, you know, there'll be several airlines that service it. If you're lucky, there's more than one and pick one that you think really works for you, just in terms of destinations and convenience. So just at that level, that's what we should all be doing. I think then when you talk about long flights, international flights, going places that may be your home domestic airline, I've never had an unhappy experience on Emirates. It's not a bad place to be. Singapore Air is also very nice. Remember, I was once very long flight and for obscure reasons, I'd gotten into first class on Singapore. And after a long flight from Singapore to Beijing, there was so much fog that the Beijing airport was closed. And so we were circling around and I thought, we don't really need to land. There's no rush. Can I have some more of those? That delicious satay. There is a difference between airlines. They're not all created equal. The other thing these days, a lot of airlines will now send you little emails about where your bags are, whether they're on the plane with you, what's happening. Those are better airlines than the airlines that don't have the this service because, you know, it means they just keep better first. It means you, you're not going to have unpleasant surprises at the far end of your trip. But it also means they've just got a system in place that keeps really good tabs on where bags are, which means the chances that it's going to go astray are significantly less. And also, obviously, if the worst does happen, it's going to be a lot easier to kind of get it all fixed. So those are basically my tips for airlines.
- [40:00]
A
All right, there you have it. Thanks to our producer Josh Cross, thanks to Alex Vatanov at Hudson and my co host, Walter Russell Mead. I'm Jeremy Stern. We'll see you next week. And until then, please go rate and review us. This helps other people find the show.
- [40:12]
B
All right.
- [40:18]
A
Ultimate statements from several senior Russian. Sorry, let me resay that.