Ian Bremmer on the Risks America Poses to the World

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0:59There are two dominant stories in American foreign policy. One, of course, is the war with Iran. The other is the much-anticipated summit between President Trump and Xi Jinping of China. And I think if you look closely at both of these stories, you see that our foreign policies entered into a period of absolute and complete incoherence. Donald Trump said that the point of the war with Iran was to end the threat of the Iranian regime and to forever end their capability to get nuclear weapons.

1:31They will never have a nuclear weapon. This regime will soon learn that no one should challenge the strength and might of the United States Armed Forces. Now, if you look at what is being considered, it appears that neither policy is going to be achieved. So what are we doing there? What are we trying to achieve there now? And if you look at President Trump's entire time in politics, he's been committed to nothing so much as changing America's relationship with China. We can't continue to allow China to rape our country.

2:06And that's what they're doing. It's the greatest theft in the history of the world. Containing China. Making sure we have power in that relationship or we begin to detach from it. But if you look at our policy now towards China and you look at that summit with China, are either of those things happening or are we in fact moving in the opposite direction? The American and Chinese people share much in common. We value hard work. We value courage and achievement. We love our families and we love our countries.

2:36Together, we have the chance to draw on these values to create a future of greater prosperity, cooperation and happiness. There is much I disagree with in Donald Trump's foreign policy. But at the moment, there's just reality that it's not clear what it is. It's not clear what he is trying to achieve or what he is simply settling for or reacting to. So I wanted to do an episode looking at China, Iran, but also just trying to assess Donald Trump as a geopolitical force and as a force that is remaking what America means and what its role is in the world.

3:12Ian Bremmer is the president and founder of The Erasure Group and GZERO Media. He's also the author of, among other books, Every Nation for Itself, What Happens When No One Leads the World. As always, my email, Ezra Klein Show at NYTimes.com.

3:34Ian Bremmer, welcome to the show. Ezra, good to join you. So, I was going to do like a direct into the news question on Iran, but I was reading your Global Risks report from the beginning of the year. And it made me want to ask a bigger question first, which is, what to you is the meaning of Donald Trump? What does he historically and geopolitically represent? I would say he's first and foremost a symptom, not a cause, of trends that have been coming in the United States for a long time.

4:10American people that believe that for various reasons that the political system does not represent them adequately, that something about it is broken and so they need someone who's going to shake it up, who isn't going to be an establishment figure. I think that you see that reflected in a whole bunch of structural policies like a lack of U.S. support for free trade and instead moving towards industrial policy and nearshoring and inshoring.

4:41You see it in a move away from more open borders, both in terms of response against illegal migrants, but also restrictions on legal migration. You see it in an unwillingness of the United States to get as involved in foreign wars and a demand for much greater burden sharing and other countries paying for their own defense. Those are structural things that Obama had to deal with and Biden had to deal with and Trump is benefiting from.

5:13But then you have a separate group of things that have to do with Trump the individual where he puts himself above the country. I mean, I was in Davos in January and wasted three days of my life, I will never get back, on Greenland, right? That was not a thing for U.S. national interest or foreign policy. That was purely vaingloriousness on the part of the U.S. president to be able to put his name and plant his flag on a territory

5:45that has some of the strongest alliances around it that the United States could possibly rely on, but which don't matter to Trump because he's not getting what he personally wants. And there are many examples of the latter, which are not as important for where geopolitics are heading over 5, 10, 20 years. But they're really important for some of the conflicts that the U.S. happens to be in and how they're addressing them right now. And of course, they also play an inordinate role in driving the headlines and the conversations that you and I frequently end up having.

6:19So I take that point that Trump is symptom, not cause, but then he becomes cause. One of the ways you have described Trump, which I've not really heard many people say, is as the generator of a political revolution, a kind of upending of the American state and the way it works and the expectations one should have of it on the level of FDR. So talk me through that comparison. Why FDR and what then is Trump's political revolution?

6:50Well, FDR was the last time you had a president in the United States that was truly interested in upending the checks and balances that existed on the executive and in transforming the nature of U.S. power as manifested by the government. And there were some things that he tried to do that he failed at, like packing the Supreme Court to 15 members or like throwing out, purging a number of the members of his own Democratic Party who had been democratically elected.

7:22But there were a number of things that he succeeded at, like creating a professionalized administrative state to actually do the business of the government that was independent, that was technocratic, that did not exist before. Like the New Deal, the infrastructure of the country that was built that allowed a middle class and a working class to emerge in a stable way over several generations coming out of the Gilded Age and the Great Depression. Now, a political revolution does not have to succeed, and a political revolution does not have to be for goals that you or I happen to agree with.

8:02But the structural condition of a people that are demanding a political revolution, that is something that will persist if it is not satisfied, if it is not satiated. And so what I see right now is President Trump driving a political revolution. He is attempting every day to end the checks and balances on the U.S. executive. And you and I can come up with many examples of that. Many of them he is failing at. And it is very clear to me, I have a lot of confidence, that he will not succeed in the political revolution that he will drive.

8:38But it's also pretty clear to me that the American people are going to continue to demand some very significant revolutionary responses to a system that they believe is not responding adequately to them. And where that comes from, is it the left, is it the right, is it the new party, what it happens to address, and does it have to be a president who is maximally incompetent from a policy perspective or authoritarian in impulse or is personally kleptocratic?

9:10Those are three descriptors of Trump that I think apply to a more extreme version with him than with any president in American history. I'm less concerned about the revolution. It is a natural response to a system that's not seen as performing. But there are lots of reasons to be concerned about what President Trump is doing. So one of the reasons I thought the FDR framing was interesting is that what I think gets right is that FDR exerted tremendous power,

9:41sometimes in ways that followed American norms, sometimes in ways, as you know, that didn't, to build professionalized structures. Yes. This is what is always very interesting about FDR. He's somebody who could have become a dictator. And what he creates is a highly professionalized administrative state. He could have become or really asserted America as a global hegemon in the old style, but instead invests in things like the U.N. And that is not to wipe away all the ways in which we did use power, but out of him come the state as we know it and the global order as we know it.

10:17And those are the two things that not just Trump, but Trumpism, Project 2025, the foreign policy thinking of the people around him have really come to target. The administrative state to them is a deep state, a tool of weaponized liberal control. The global order is a way that America is, instead of being the power that acts upon the world, is being restrained from using that power and taken advantage of.

10:51And so there has been an extended now concerted effort to do something to both of those orders, right? To do something to the state, to do something to the global order. So how would you describe the aim of Trump's political revolution? If FDR wanted to construct, does Trump just want to destruct? Does he want to own? Does he want to transact? What is he trying to achieve? Well, it's why I focused on the narcissism, that he is above the law.

11:21It should not apply to him. It shouldn't apply to people around him. He can have his own former personal attorney as the attorney general, acting attorney general of the United States, and he will weaponize the legal and the judicial system in ways that he perceives it was weaponized against him. But the reality is what he's doing is far, far beyond what we've seen before, just as we've had corruption in the country and it still persists across the political spectrum. And yet what Trump is personally driving is unprecedented in American history. So I do think a lot of what he's trying to do is specific to his personal character.

11:59But I also think a number of the policies that he has been driving are policies that are broader in terms of the more revolutionary aspect of what the American people want. So, for example, we come out of Iraq and Afghanistan. Trump was the one that basically cut the deal with the Taliban to get the Americans out of Afghanistan. Now, a lot of people will say, well, that was a bad deal and you gave away the store to them. But most Americans would say ending 20 years of a failed war with trillions spent and hundreds of thousands of American lives disrupted

12:35to say nothing of what happened to the civilians in Afghanistan, ending that was a positive thing. Trump got that done. Biden finally, you know, sort of got the troops out. Well, they didn't like it when Biden actually finished that job. Well, a lot of people, I think, were very happy to have it over. So, again, that might be right, but it was when that's when Biden's approval rating dropped under 50 and never recovered. I always found that interesting because everybody says people hated the war, but they didn't like the they did not like what it looked like. They don't like the when America began to withdraw the planes and the people hanging off of it and all of the rest.

13:07They wanted it to be cleaner. Let's say it looked like an America's leaving Saigon and the embassy moment. And so I understand that. But the broader point I'm trying to respond to here is that there are an awful lot of Americans that like the idea of the U.S. should stop with all of these foreign wars that are thousands of miles away and have very little to do with American interests. And so if Trump goes to China and says, yeah, I'm not going to why do I care about giving military support to Taiwan, which is 9,600 miles away, most Americans, not the establishment, not the Republican establishment, not the Democratic establishment.

13:44But most Americans would say, yeah, why are we doing that? When Trump kicks Zelensky out of the White House and says, you don't have the cards, turns out he's wrong. But I think most Americans think we've done too much for those folks. Taxpayers shouldn't be paying for that when you're not paying for me. Where Trump then goes wrong, of course, is he had so much of the message at the beginning. He said, drain the swamp. And yet it's much swampier now than it was before. He said, end the wars. And now the United States is driving what could be a global recession directly because of him.

14:20I was just in the Dominican Republic yesterday and I had a meeting with all the CEOs and the president was there. And in front of me and during the Trump or the president of the. No, no, no. President Abhin Adair. Yeah. And he was a very he's the opposite of Trump. He actually really cares about extending democracy and increasing checks and balances and limits on leaders across Latin America. That is the that is what he wants to see happen. And I said to all of those, all of the leaders in the room, I mean, basically 98 percent of their economy.

14:52I said, I know you're all upset about the inflation that you're seeing right now. His approval ratings are down to about 55 on the back of that. They were at 70. I said, do not blame your government for that. You can blame my government for that. Don't blame your government. Like literally Trump is looking for anyone to blame for this war that is exactly the opposite of how he was elected. And yet he has personally decided he was going to do.

15:22And now we can't extricate himself from and he can't blame anybody for. And so I do think that there was a lot of what Trump's initial agenda was about, some of which he has stuck with, like actually securing the border with Mexico, much of which he has completely jettisoned that that reflects the sensibilities of what a political revolution would be in service of in the United States. And they all kind of have to do with with not that democracy doesn't work as a system, but rather that the American democracy has somehow gotten completely subverted by special interests.

16:00It's coin operated. It's controlled by money. There's a two tier system. It doesn't apply to me. It applies to other people. I can't get what I want for my kids. And by the way, I'm super sensitive to this because my mom was just like that when I grew up as a kid and she wasn't she didn't finish high school. She had a feral intelligence that was very supportive of her two kids, but it wasn't book smart. She read The Inquirer every weekend and she a lot of the way she felt about her family.

16:31I will steal. I will cheat. I will do whatever is necessary to support them because I know the system is rigged. But I think that there's an enormous amount of that that exists across the country today in 2026. So here's the question about this, because I largely agree with that diagnosis. And I also agree that American politics is tremendously corrupted by money. And that sense that the country, the system is not working for Americans. Are Americans right about that?

17:02And here's how I want to maybe steel man the other side of this. A couple years ago, there was this big covering The Economist. The base said, if you look at the American economy, it is crushing the economies of the rest of the world. You wouldn't want to be Europe rather than us. You wouldn't want to be China where the medium disposable income is at $6,000. You want to be Russia trapped in this morass of a war with Ukraine. There's no one you would want to be rather than America. But in this period, the vibe, so to speak, they just get worse and worse and worse.

17:38This has been confusing for economists. If you look at most measures, we're not doing that bad. Inflation is not that high anymore. I mean, the price level didn't go back down, but we're back to pretty normal levels of inflation. You have had income growth in the bottom half of the country. You have people acting in a way that does not reveal financial stress. They are spending. They are taking on debt. They are not defaulting on that debt. GDP growth is fine. We're the world leaders in AI. And then if you look at consumer sentiment, consumer sentiment about the country is worse than at the depths of the Great Recession.

18:10There is something here about how bad everybody thinks this is. So how do you understand this sort of divergence between the ways that people would have looked at the outputs of a system before? What is this system supposed to be creating? American prosperity and American power. And we were getting a lot of both. And also people hate it and they feel like it is failing them as never before. So I'm really glad, Ezra, you framed the question that way.

18:40Because I think there's a lot of truth to what you're saying. I also think that there are really good reasons that are legitimate for why Americans feel increasingly hard done by. But let's start with the big picture, the macro. The macro is that, so Xi Jinping recently met with Trump. And he said we're in a Thucydides trap and want to avoid that because that usually leads to war. Thucydides trap, so that everybody listening here knows what it's all about, it's that historically when you have a lead power in a system that's in decline

19:13and a rising power that's challenging it frequently, I mean the lead power is trying to hold on to power, hold on to its system, hold on to its advantages for too long. And the rising power is deeply unhappy about that and challenging, challenging, challenging. And most of the time historically it leads to war, right? That was the Chinese narrative. And my counter to that, first of all, is that Xi Jinping should not want to be perceived in the United States as the person that is saying that the U.S. is in decline.

19:43Because if he comes to Washington in September and does that, he's going to get hammered. It's going to be very different than the coverage he gets when he says it in Beijing. It's going to be 100 times every focus. This is what he's saying to Americans is that we're in decline. Screw that guy, right? So number one, he shouldn't want to do that. But also it is manifestly untrue that over the past 20, 30 years, the big structural changes in the world in terms of power is China's rising, the United States is not in decline, but American allies are declining.

20:14And they are declining because their productivity is down, their growth is down, their demographics are contracting, they're not investing in defense, they're not investing in technology. Now, there has been a stat that's been bandied around recently that shows that even Mississippi has higher per capita income than every European country. And that is true, but you would not necessarily be happier or better taken care of as a citizen in Mississippi than you would be in lots of European states.

20:47Why? Because the social contract in Europe actually takes care of a lot more people. And you see this in terms of health care, and you see this in terms of policing, you see it in terms of the educational system, maternity leave, paternity leave, all of these things. So let's recognize that the safety net in the United States has a lot more holes, is a lot more frayed, just does not act as effectively as it does in a lot of other countries. In Canada, for example, in Japan, in South Korea, for example, those things are important.

21:21Also, you have a system in the United States where Americans rightly perceive that if you have access to funds and network, your kids are treated completely differently. They have different opportunities. The American dream is not for everybody, no matter how hard you work. I remember Operation Varsity Blues, and this was this, I mean, we barely is a blip in today's,

21:52it's like O.J. Simpson, like, oh, I remember when. You had all of these parents that weren't wealthy enough to get their names on university buildings, so they couldn't buy their way in officially. So they had to buy their way in unofficially by like, you know, sort of giving a bunch of money so that the kids could get to be on the lacrosse team to make sure they were in a final place. But it's like, of course it works that way. And we see that in terms of absolute inequality numbers in the economy. We see it in terms of the ability of class mobility, which, I mean, Americans are far less

22:24class mobile today than the Europeans are, than the Canadians are. That's shocking. I mean, like back in the 70s and 80s, the United States had some of the greatest class mobility in the OECD. And in just 40 years, that turned completely on its head. And then you have a couple of other things, which is which is not about the economy, but it's really important, which is the grievance based nature of the U.S. political system, where you increasingly are electing leaders that are saying how much that they are that

22:58you are being taken advantage of by X. And obviously, Trump is the genius, the master at this. But when I saw Zoran Mamdani go outside Ken Griffin's apartment, and I mean, this isn't some Arab billionaire that doesn't spend any time in New York and doesn't spend any money in New York. This is one of the guys that actually has spent the most in developing jobs and his company in this city. And he stands in front of this guy's building and points to the apartment and says, this is

23:28the problem. That's not who America is. America as a country is supposed to be everybody builds up. Everyone has an opportunity. When you don't feel that way, you start demonizing these people. And another part of the problem is that if I look at the absolute top billionaires in the country right now, I look at Elon and I look at Jeff Bezos and I see, I look at Mark Zuckerberg and I see the absolute percentage of money that they spend on charity, on public policy

24:01related things. I look at their interest in acting as stewards for humanity as it is today, as opposed to making, you know, Mars safe for humanity in some undefined future. Like that, that lack of stewardship, that lack of belief in your fellow American, not to mention your fellow human on the planet, is something that I think is driving a lot more anxiety and in some cases hate. And that's not to disagree with your initial question of, well, isn't America doing great?

24:36Sure it is at the macro level. I'm strong manning a view. I have my own views on how America is doing and I don't think we're doing great, just to be clear. But no, but I understand that that's the way you put that out there. From a macro perspective, the U.S. is doing great. The other obvious explanation here is inflation. And let me put the two versions of this to you to see what you think. So one answer to why the economic vibes in particular are bad is just we've been in a period of inflation, right? That's what turned people on the Biden economy after the pandemic. And then particularly with the war in Iran and the tariffs, Trump is kept in a very salient,

25:14you see it on the gas station board, you see it in the news way, just driving up prices of basic things. And so maybe all this is just inflation. People hate prices going up. They hate it. The hard part about this, which an economist will tell you, is we've had much longer periods of much more inflation before that. Yes, we had pandemic inflation. But aside from that, you know, two year period, I mean, inflation in the 70s, in the 80s, it was just much, much, much higher and people are much happier with the economy.

25:45So how do you see the prices story? Does that explain enough of this or not? I think it matters in the sense that there's recency bias, like you mentioned in the 70s and most people don't remember when they couldn't afford a mortgage for their house because, you know, the rates were like, you know, a 10 percent. And so now when they were often higher, so when they were basically nothing, right, and then suddenly they hit five, six, seven, that feels bad. And the fact that this is the broad affordability thing after Americans have been taught that you

26:17don't need to worry about inflation for decades, I think it's relevant. I think it is a point. I think the fact that Trump began his State of the Union by pointing out that there was a gas station in Iowa that had gas for under $2 a gallon and people go and they gas up their SUVs and they do it every week and they know what that costs. It's a very specific price point. And then suddenly it's $4 a gallon. That feels very, very different to them. So I think it is a real data point, but the broader point that you're making, which is

26:49there's something much bigger, much more structural going on than purely what you can tease from these economic data points is essential. Let me take host progress. I'm going to give, because I've been thinking about this question lately and I have my own answer to it because I think some of these answers don't work. And here's why. So the vibes have been bad and getting worse. And when I say the vibes here, I mean a measurable set of things about how people feel about the direction of the country, how they feel about the economy, how they feel about the future. And a lot of we can people tend to look at that and move backwards to things that they

27:22have every right to be upset about and maybe have been for a long time. But the social contract, so to speak, the safety net in the U.S., prior at least to the giant Medicaid cuts and Affordable Care Act increases that are coming into play this year, it has been better here than it has been in the past. So we have gotten closer to where Europe is, not further away. There are more states where you get, you know, pre-K, more states where you get subsidized child care. And people like Obamacare. People like Obamacare. But the vibes are worse.

27:55They were worse in 2014, worse in 2016, worse in 2018. I think that first, you cannot separate this from attentional platforms. I think that algorithmic media is negatively biased. It is towards outrage, towards anger. But if you just go on X, which you talked about, is Elon Musk a steward? I think the thing he thinks he did that was important for the country was to buy Twitter

28:26and make it a zone of what he would call free speech so he could tell everybody all day about the conspiracies that are obsessing him and about a declining fertility rate. And he could let the neo-Nazis back onto the platform. And so you have, like, one of these central spaces of political information and sentiment construction has gone from toxic to unbelievably toxic. And that was the big social investment of the richest person in the world to do that to us.

28:56But I think this is true across a bunch of them. And you and I, I think, would both agree that this was not an actual social investment for the betterment of the people of the country. I don't believe, yes. I am not a huge fan of the way Elon Musk is trying to shape American and global politics. But I think that he believes he is, you know, trying to save us from the woke mind virus and collapsing fertility. And, but I think that sentiment is a complex system. And what has happened is that there are enough things that have tipped badly that we've entered into a negative feedback loop. And it's very, very hard to get out of a negative feedback loop because there's no one thing.

29:29If wages go up, it's actually not enough, right? People's view, for instance, of crime. Crime is really low in America right now. Compared to where it was in the 90s, for example. Yeah. Or frankly, I posted on that just the other day and people are surprised. Like, that's got to be fake news. People still feel very upset about it, right? And one reason is that- Murder rates, particularly, yeah. And, and so I think what you have is a situation where there's no one thing, but basically lots of negative sentiment get, like, slingshotted forward on algorithmic media. This is AI.

29:59This is everything else. And there's just a generalized sense that things are bad. I mean, Donald Trump is scary to a lot of the country, but even to the people who like him, he's not doing a great job. He's not doing what he said he would do for you, right? And it's chaotic and it's crazy. And he is making you afraid of the other side. Again, it's grievance-based. It's grievance-based. Yeah. But not just grievance, right? It's conspiratorial. It's scary. It's people trying to destroy the country if you don't like them. And in some cases, right, the stakes are very high. Like, I do think Donald Trump is destroying significant parts of at least what the country has been.

30:30And so I think there's always this effort to create an underlying material reality to sentiment. And it's always true that sentiment has some underlying material reality, and there's a lot wrong with the material reality and the way American politics works. But I think sentiment has become a little bit free-floating now. And one reason it is not responsive to the economy getting better, one reason it is not responsive to things changing, one reason it has diverged so much from the macro data, particularly since the pandemic, my wife, Annie Lowry, just wrote a great piece on this in

31:00The Atlantic, is that there is something happening in the system of attention. Like, I think now a system that has just moved into its grammar is angry. So, look, I think that we do need, there's an interplay between the independent and independent variable here to get really wonky, right? In other words, you have underlying issues that come from free trade, robotics, innovation that hollows out a whole bunch of the middle class in the United States and in Europe to

31:33the advantage of emerging middle classes in China and India and the so-called Global South, the former emerging market. But I just want to stop on that, what does it mean to have hollowed out the middle class if the middle class's purchasing power, et cetera, is higher than it's been in the past? This is where you have something tricky happening. Yeah, yeah. I could give you my explanation, but I want to hear yours of what you mean when you say that. Well, what I mean when I say that is you have large numbers of communities that no longer have the same industrial base, the same civic connection, the same institutions around them, the Robert Putnam bowling alone.

32:04So this, I think, is much more specific, and I wish people would talk in this language. We didn't hollow out the middle class. We hollowed out places. Places. Yes, places. But places that have community and civic engagement and citizens. But this is important. It's super important. And we don't talk about it correctly. Those are the, that's a fair point. But those are the precedents, those are the antecedent conditions that then lead to a population that is mostly male, that's doing pretty well economically, but, and they're not all

32:34white. Some of them are Hispanic. Some of them are black. They're living in poor urban areas and rural areas that are doing, you know, again, really feel very differently and are going down compared to where they were. And they're the ones that are voting for Trump, not once, but twice. And the idea that this can be driven by something that is vibe-based as opposed to real antecedent conditions, I reject that. But once you have that, there is a flywheel. Once you have that, suddenly those other, the algorithmic conditions really matter.

33:05And here I want to really get into the macro structural for a second, which is that I had this, the first big book that I wrote back in 2006 was called The J-Curve. And I doubt you even remember it, right? It was a long time ago. Who doesn't remember The J-Curve? Yeah, exactly. It was a small thing. At the time it was big for me. And it was about how countries did and didn't fall apart. The J is the relationship between openness and stability. And that you have some countries that are stable because they're open, some that are stable

33:37because they're closed. Stable because they're open, the United States, Japan, the Nordics. Stable because they're closed, China, North Korea, Saudi Arabia. Countries that are stable because they're closed want to stay closed because if they open up a little bit, the country can suddenly fall apart. Countries that are stable because they're open are more stable than countries that are stable because they're closed. And the reason I bring it up is because it was not only something that was really, really like kind of promoted at the time as, wow, this is a breakthrough. It's also completely wrong today.

34:09It no longer applies because the world has changed. And the thing about the world that has changed is what you just got at. It's technology. Technology back in 2006 was actually advantageous to more open societies. It was the communications revolution. It was bottom up. It's what got us the Arab Spring. It's what got you the colored revolutions in Eastern Europe and the former Soviet Union. People that suddenly were interconnected that could learn more about their fellow citizens and what they were doing and organize, learn more about their governments and their predation

34:39and their corruption, even though the government didn't want them to necessarily know about that. It undermined authoritarian systems and it strengthened liberal societies, open societies, right? Then you move from that system to one where technology is top down. It's a surveillance based system. It's a data-based system. It's algorithmic nudging of people by other people and even by bots.

35:09It's attention-based. It's addictive. And it benefits closed societies and it undermines open societies. And it's creating a level of stress. It's creating a level of anger. And it's a level of outrage. But it also has a political gravity to it. And it's weakening the United States. And it's much worse in the U.S. than it is in a place like Japan or even than it is in Europe, though it's coming in Europe, too. But the Chinese don't have this problem at all because they're able to actually control and nudge what patriotic behavior is.

35:41Let me try something here because I think this is – I want to build on this in a very certain way and get at a difference between China and America. But let me take what you just said in a different direction. I think one of the fundamental problems in the country is that we have broken the relationship between technology and places. And so we just said a second ago that the problem is not just that we've hollowed out this abstract concept of the middle class because I can show you like the disposable income of the middle class on a graph. And it does not look hollowed out compared to 1980.

36:12Got it. Like, they're richer. But these communities did get hollowed out. And you sometimes hear, you know, self-satisfied Democrats, right? This was Hillary Clinton after the 2016 election, say, well, the places that voted for me represent whatever it was in, two-thirds or something of the GDP growth in this country, right? So, OK, so there is a redistribution of opportunity to these cities. Superstar cities like New York, NSF, and Los Angeles, and Boston. And they've gotten richer and richer and richer and richer and richer. In the past, what that would have done is create a new engine of opportunity.

36:46You move to San Francisco, and you're a firefighter. You cut hair. You do, you know, you work in some job, and then your kids are there, and they get richer and so on, right? This is what is happening in China. In China, the cities are getting richer. Absolutely. And there is this huge movement into them. In America, those cities made it impossible to build housing. And Silicon Valley, I was just driving around the other day, where the part of Silicon Valley, Santa Clara area, where you have Meta and NVIDIA.

37:18And it is so crazy to me that you do not have places for people to live. It's just, it's strip malls and it's single-family homes. We've not built huge towers next to them, right? Like, you look at what Shenzhen looks like. And here, where we've invented AI, it looks like an office park. And this, I mean, this is a major part of abundance, obviously, but this is the destruction, the literal destruction of when we talk about social mobility, how did social mobility actually

37:49work? What it actually did was places got rich and people moved to them. But we have really, really good evidence now that that doesn't happen. And in fact, what's happening is richer people move to richer places and poor people move out of them because, and this is why there's energy in stepping in front of, you know, Ken Griffin's God knows how expensive apartment in New York, is that the thing is, you can't afford to live in New York anymore and raise a family. And so Ken Griffin, sure, he's here and they've spent a lot of money here.

38:20And I'm not saying New York's housing problems are Ken Griffin's fault. I don't think they are. But the feeling that it has not benefited you, it's actually true. We know this is true. We know that what used to happen is that it used to be that people would move from the poor areas to the richer areas. And now they move out of the richer areas and into the poor areas because they can then afford a home. And it's not just gentrification, it is just, they cannot afford to live there. And I just want to harp on this for a minute because I do think it's really important and the thing we miss, we hollowed out a huge number of communities in this country.

38:52And then we gated, we gated the places where the opportunity had moved to. And so that has killed mobility. It's not some like nature of the technology. It's not what they've done in China. China and we've done it because like the way you used to do this is you built where there were, where there's money and opportunity. And instead they've made it very, very, very hard to build where there's money. Let's not lionize China for a second, because you know, the only way you get into a city in China is a hukou system where the state actually gives you the right to actually move

39:23there. They've overbuilt in some places and the real estate crisis is massive, all of those things. And you remember, that's not just about cities. It's also about experiences. Again, I mean, the Disney piece that was done in the New York Times a few months ago. Do you want to describe this? Where they followed this woman who was working class and she had saved up an enormous amount to be able to get to Disney with her kids. And she did. And it followed how expensive it was and how difficult her experience was and how Disney,

39:54which used to be the great equalizer that everyone would go, everyone would be a part of it. And her experience compared to someone that just flies in and pays for the skip the line experience and everything else. And so even a place like Disney, which is the magical vacation that all Americans get to come and have the same experience, has become completely stratified. And so much of corporate America is stratifying every experience you have, not just place, literally every experience, every ball game you go to, every airline you fly on, every experience

40:28Americans have. If you can make money out of stratification, you will do that and you will do much less to commodify. And of course, the danger and the concern is that when that happens with AI, and so the people that don't pay for AI are the ones that get the ads and have substandard AI that's the four you feed and the wealthy people can actually be super empowered and become more than human because they have AI that's giving them real information that's actively curated for them, then can help them to accomplish things that will improve their lives.

41:01That almost every dystopia, near dystopia novel and movie in the United States right now is about some form of that shifting of America into haves and have nots where there is no mobility between the two. And again, it's the lack of mobility that comes down. You can't have an American dream if you can't make it. I grew up in the projects and I feel like I was the American dream, but I know how close I was to not actually making it and how kids I grew up with that were smarter than me in

41:32high school and in grammar school didn't make it. And most of the people, and I still, I'm Facebook friends with a lot of them and I go back to Chelsea every once in a while. Well, the kids that I know in those neighborhoods now will not make it to the same degree. That lack of ability to achieve mobility in a super stratified society, technologically enabled, capitalistically enabled, that I think is what subverts the American dream more than anything else that we've done. And this is where I think a lot of our measures of inequality do not capture the modern experience

42:06of inequality. You just mentioned how real world experience is stratified. Digital experience is stratified. You turn on TikTok, you turn on Instagram, and it is feeding you people living better lives than you. All the time. You are watching the billionaires. You are watching the influencers. You are watching all these people succeeding in a way you're not. Or you're seeing people who are like drafting off of the anger that creates, right? Those are both there. You're watching people who are better looking than you. I mean, it is the kind of comparison it has not just engendered.

42:37Well, I'm going to speak for yourself on that one, Esther, but I mean, you know. Maybe better looking than me. I take that. The constancy of comparison and the size of the world you're comparing yourself to, and also the falsity of it, the way you're comparing yourself to fake versions of other people's lives, right? Not their real life with the diapers they have to change and the fights with their partner, but like the fake curated life. So there's that, right? I think that's a contributor to all this too. But there's also just like the wealth you see that you are not part of.

43:09And then I agree with you on AI. There's also why I think that people need to think a little bit differently about the data center moratorium questions, because it sounds like a good idea if you're not confident in AI, if you're worried about what's about to happen, to try to just slow down or shut down the data centers. But what you're going to do is make compute much more expensive. We already do not have enough compute for how much people want it. I think a lot of people on the left who have sort of told themselves a story that AI is not powerful. It's not a real technology.

43:40It's overhyped. It's bullshit. So then it doesn't really matter if people don't have access to it, because why would you want access to the hallucination machine? But actually, at its upper levels, it's a very powerful technology now. And if it's something that the rich can afford, and as you're saying, we get a new digital divide where the rich get these amazing AI agents that are giving them incredible information and doing all this on their behalf and making sure they get the best deals on everything and they're out there sorting the internet for them. And then what everybody else can afford is manipulative, crappy, hallucinating.

44:14And you would never even meet those people, right? I mean, like, in other words, they won't even be part of your experience because algorithmically, they'll be sorted out. So you would never date one, right? I mean, again, 50 years ago, 30 years ago, a lot of people would meet people from different classes in their community, in their schools, in different institutions. And you got intermingling that way. That's already not happening because of the gated community issue, not already not happening because of corporate stratification. AI will end that if it goes in the present direction. AI as agents for the rich and erotica and the simulacrum of companionship and entertainment

44:54for the poor is a very, very dystopian world. And I think people underrate its possibility. Yeah, I completely agree. And yet, again, the Chinese are doing this completely differently. How are they doing it? They don't believe that AI is going to be such a huge advantage for the population as a whole. They really don't like the TikTok model, which is one of the reasons why when Trump was so interested in having it, they let him have it without doing other big parts of the negotiations to make that occur. Their focus, and they also are deeply concerned about what it means to have people in China

45:28hallucinate on the back of AI models. Like, if you're going to hallucinate, it better be pro-CCP stuff. It can't be GPT, right? And yet, the Chinese are all in on using AI for defense purposes, all in on using it for industrial purposes, all in in innovating and inventing, making sure that all their strategic sectors are at and their government is as fully integrated with the most advanced technologies as humanly possible, because that's how they project power. That's how they get growth.

45:59So in the United States, it's exactly the opposite. The United States is we're going to build these massive LLMs, and they're going to create the singularity and artificial general intelligence. We're going to treat intelligence as a utility. And human capital will become supplanted by token capital. That's what you're really going to need. But who's going to have token capital? It's not going to be most Americans. And so, again, the J-curve used to be this idea that more open societies became more stable because they were open, but that is facilitated by technology that makes that system work well.

46:33Suddenly, when you have AI driving more stability for a closed system like China, at the very least, you would say the J today is a U, that there are no longer structural advantages to the stability of a country by being open if you're technologically empowered. And if this trend continues, there would be structural advantages to closed systems as opposed to open systems. It's the opposite of what you want to see.

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48:52I want to talk about the China-U.S. relationship here, because one of the things that, as Donald Trump rose in 2016 and then in 2024, that he was the most insistent on was the threat to America was China. And the way in which American policy had to change was we had to contain China. We had to stop faffing around in the Middle East. And we had to be focused on getting over free trade and recognizing that all of this system had been used for China to rise and to allow America to begin to fall.

49:23And he was going to change that. We just saw the Trump-Xi Jinping summit. What did we see at that summit? And how does where we are now reflect this sort of argument he's been making for years? Well, no faffing around the Middle East. There's now lots of faffing. And China's the big threat to now. China's the leader that he treats with the greatest respect. He talks about a G2 with China. It was a strongly positive summit from China's perspective.

49:53They consider it historic. They consider it a big win. It helps to solidify their prestige on the global stage, acting as equals with the United States, which is much bigger, much more powerful. Um, Trump failed, uh, on, on April 2nd, Liberation Day. Uh, he was, the, the intention of the second term was very much a continuation of the first, that the Chinese were the big threat. And he was going to put heavy tariffs on the Chinese whose economy was not performing particularly well. And that was going to force them to capitulate, force them to bend the knee.

50:27He was wrong. He failed. And when they hit back, they hit back hard, not just on reciprocal tariffs, but also then took critical minerals and rare earths, put a gun on the table and said, we will literally shut down your industrial, um, production. Describe what that was and why were they were able to do that? So for some 30 years now, the Chinese have been investing in, um, exploitation of critical minerals and rare earths around the world that are essential for a lot of military and industrial

50:58purposes, uh, energy purposes, other, uh, infrastructure that we all rely on. Um, and the Americans were not investing in it thinking, well, it's cheaper coming from these Chinese sources. So great. We'll just buy it from them. Kind of like the way the Europeans decided to get a lot of their cheaper energy from Russia, kind of the way all of us decided to get our semiconductors from a hundred miles off of the Chinese coast. All of which is true. If politics don't matter, if politics matter and you don't trust those countries and maybe

51:29they might act to make vulnerable, you're just in time supply chain. Suddenly you have a problem. And the lock that China had globally from 30 years of these investments, including in the processing of these critical minerals inside China themselves. Suddenly they said, if you want to get them, you need a license. You need to apply for a license to China. If you're not considered on the right side of the law with us, we're not going to provide you with those critical minerals. And you had suddenly CEOs of big companies going to Mar-a-Lago telling Trump, you better cut a deal with these Chinese because otherwise, like literally our factory floor is going to

52:02shut down. And so the Americans had to buckle, had to suddenly say, okay, we got to do a deal with these guys. We can't afford a trade boycott. We got to sit down and figure out, like, you know, they give us some on fentanyl and we give them some on tariffs and let's talk about Taiwan and the rest. And that was a complete climb down, turnaround of the sort that we've more recently seen with Trump's war goals in Iran. Once the Iranians broke glass, pull emergency lever and shut down the Strait of Hormuz, which he thought they wouldn't do.

52:33In both cases, Trump's eyes were bigger than his stomach. He has a big punch, but also a glass jaw, can't take one hard from the other, from another side. And the Chinese are now in a position of much greater leverage. So the summit that you just had was two leaders sitting together and saying, we must find a way to work together constructively. You may not like us, you may not trust us, it's vice versa, but we will ensure that we work together constructively so we don't get into a fight that does a lot of damage that

53:05you don't want us to be done. And that was what happened. So how would you rate this as a substantive outcome? Because you could say either Donald Trump was right about the danger posed by China. And so this is a problem as he's moving into this more conciliatory climb down posture. Or you could say, you know, many of Trump's critics on this, you're being too belligerent. These countries need to work together. And maybe he fumbled himself into a reasonable outcome, which is constructive dialogue, a

53:41relationship between the two leaders and the recognition in a world of global challenges like AI and climate change and pandemics. It actually is important that we have good relationships. And so, you know, you wouldn't count this as a win from Trump's rhetoric, but should we be happy with where this has ended up? Well, we should be happy that it turns out that Trump does not have the ability to commit suicide on the global stage. If he had persisted with his intended policy, which was we will force these Chinese to capitulate

54:18to us, the Americans would have been in a massive recession. And so would the world. He backed out. So is that a win? Of course, it's not a win. There are big wins under Trump. They're foreign policy wins. I mean, for example, in his first term, USMCA, which at the time he said was the best deal ever. Now he says it's a horrible deal. But I don't care what he says. The reality was USMCA was a significant improvement over NAFTA. The reality is the Abraham Accords were a big win in creating more stability in the Middle

54:50East and the Gulf. Yeah, boy, does that look like a stable region of the world to me now? It does not. But at the time, it was something that no one thought could be doable. And it was a stable, it was a much more stable region until Trump decided to go in and actually blow up the Iranians with Israel. So again, I can point to plenty of places, Venezuela on balance, a win. And perceived as a win by most populations across Latin America, because Venezuela had been exporting a lot of instability, and now it looks a lot more stable with a government

55:21that is a lot more tractable and focusing on long-term economic development. Those are all wins. China is not a win. China's a loss. China's a loss because Trump's intended policy, which is we need to beat these guys, and here's how we're going to do it, completely failed. And at the same time, he was pursuing policies to support himself individually. Again, TikTok. He got TikTok. That doesn't help the country. That helps him. It's advantageous in the same way that Elon owning X is politically advantageous for Trump.

55:54It doesn't help the country. You and I agree on that. So what you have is a more stable environment with a China that rightly feels like they have more leverage over this guy and this government. So one of the dimensions of competition here, and one that you all emphasized in that early 2026 paper on risks, is energy. Yeah, definitely. And the way you put it is that America's become the largest petrostate in a way I think a lot

56:26of Americans have not tracked. It's really a quite remarkable story from fracking to where we've ended up as a huge exporter of energy. We produce so much more oil than any country in the world. Yeah, we produce more than Saudi Arabia. So much more. We used to talk about energy independence. We got it. Yeah. But we got independence on the old structure of energy and that China is becoming the largest electrostate. You have a tremendous chart. I say tremendous in the sense that I found it really shocking to see that China's exports

56:56of green energy technology are much larger now than our exports of oil and gas. That they're sort of exporting the infrastructure of the 21st century while we're exporting the energy of the 20th century. And theirs is becoming so much cheaper at scale. So tell me about that competition because the energetic foundations of countries are important. Like Trump has really doubled down on America's petrostate. Tell me about that competition. I have no problem with Trump doubling down on America's petrostate.

57:28I think that the United States has the ability to be more effective on efficient regulations, on expanding production to have cheap energy for Americans and to export around the world. The resources are in the United States. It makes sense. Mark Carney in Canada leaves Justin Trudeau in the dust and he's running the Liberal Party and he's actively trying to ensure that Canada can be more effective as an oil producer

58:01and transiting and exporting nations. Smart for them. But what Trump is also doing is saying, I don't want the new energy. I don't actually want wind. I'll shut it down. I don't want solar, which is insane. I don't want electric vehicles, which is crazy. I mean, so, you know, again, go to Iran for a second because it's important. One of the biggest long-term implications of Iran, the war in Iran, is that OPEC is over. The UAE left OPEC in the middle of the Iran war when they aren't actually able to produce

58:35or export much of anything, a little bit. Why did they do that? Because they understand that they're going to have stranded resources long-term because there's not going to be as much of a market for their oil. So they want to get as much oil out as humanly possible as soon as the war is over, as soon as the blockade is done and the strait is open, so that they can then get on with being a modern, technologically empowered city-state. They're doing, at a small level, and we should be very happy that OPEC is gone because it

59:06is a cartel monopoly over oil. That's not good for the United States. It's not good for anyone globally to have a cartel except the people that control the cartel. So they're doing, at a small level, what the Chinese are doing at scale, which is they want to be dominating the investments in energy that will power compute, that will power AI at scale and cheap. And they want to do it for their own country, and they want to export it. Now, Texas understands this, right? Red State, Texas, at least for now.

59:36Let's see where Tallarico goes, right? Paxson, whatever. Point is, they are driving more renewable energy production than any other state in the United States. They're also driving more petro production than any other state in the United States. That is the appropriate response for the world's most powerful country, is we should be able to do both of those things. But I want to clarify one thing here, because we're talking here about the production of energy. China's control, the thing they're exporting, is not sunshine. Right. The thing they're exporting, which we are way behind on, and that's true for Texas, too,

1:00:10is what you use, the physical machinery that turns sunshine into energy. And so that thing, right, which the Biden administration is very concerned about. This was a big part of their plan to try to reshore some of the supply chain. But what China has is the infrastructure of how any country becomes an electrostate. You buy that infrastructure from them. And so what is the power of that? Not just of the energy the two states are producing or the kinds of it, but we are driving

1:00:42in on energy production, but they're driving in on energy electrostate infrastructure. Yeah. So in the same way that the critical minerals gives you that influence, because if you don't have them, you can't allow your economy to grow. And if you don't have the infrastructure that allows your energy to be built at scale and cheaply from China, then your economy won't grow. And you can't have AI if you don't have the ability to drive energy for compute at scale. So China wants to be at the commanding heights of where the global economy is going.

1:01:17Now, I mentioned before, we are very short term in the way we've thought about these investments. That's why the Europeans got into trouble on gas. That's why we're all in trouble on semiconductors in Taiwan. You can fix these things. We're doing it with critical minerals right now, late. But the Americans are now saying, OK, well, now we need to start investing. The Pentagon needs to invest in these companies. We'll do it in the US. We'll do it in Chile, in Brazil, anywhere around the world that we can find the critical minerals we're going to go in.

1:01:48And by the way, the fact that the Chinese have put that loaded gun on the table, once you do that, you can't do it twice. So now we've seen, oh, they've got this leverage. That's dangerous. We'll invest. And within five to 10 years, they will no longer have that key chokehold over the United States in all of these minerals that we need. And we need, by the way, for our defense capabilities. So the Chinese, if they were ever to get into a fight with us, the first thing they would do is shut that down because it would strangle our ability to continue to build the military

1:02:19industrial complex. You're not going to fight a war effectively. People worry about Taiwan. If there were a fight like that, you'd be very vulnerable given all of that. The same thing will happen on energy, but the longer we wait for it to happen, the greater the Chinese lead. And right now we're digging a hole for ourselves by investing as much as we can in the energy technologies that are not getting cheaper at scale and politically saying that we oppose the technologies of the future that will be essential for growth of our populations and

1:02:54essential, most importantly, for AI compute. America's a lead in AI. It's not a huge lead, but lead of, you know, let's call it six months, something like that. We have the best chips. The Biden administration put export controls down on that. Trump has sort of unwound those. And Trump personally has done that because his administration mostly opposed it. Well, let me ask you what you think of that decision, because I have found myself a little bit more conflicted on this than many people in the public discourse. The argument for keeping them back is that if China doesn't have the best chips, we will maintain a lead in AI.

1:03:26The counter argument is that if we deprive them of the chips, they will accelerate and be able to accelerate their chips industry. And we have all these dependencies on China and China being dependent on NVIDIA chips would create a dependency on us. And so the idea that you're going to, you're not going to stop their AI because they have so much energy. They have the infrastructure we don't have, right? There's a lot they can do to sort of supercharge. But this lead we imagine ourselves having a couple months, is that really so worth making

1:03:56Huawei chips eventually as good as NVIDIA? Well, that argument, the second argument you just made, was a reasonable argument before the Biden administration starts putting all the export controls on. Once you've done that and you've shown the Chinese, you've got to invest in your own semiconductors because we will crush you. Then they do it. It's just like when the Chinese say, we're going to force you to have licenses for rare arts. At that point, the Americans say, OK, that's unacceptable. Now we're going to invest.

1:04:27So the idea that holding back H200 chips from NVIDIA is going to make the Chinese unsee what we have already done to them. That's a spurious argument, right? So once you're involved, once you've declared a cold war on semiconductors, then you should be consistent with that policy. Then all you're doing with the H200s is letting them catch up when they're spending. They are moving as fast as humanly possible in the constraints of their economy to catch up with the Americans on semiconductors.

1:04:58It also matters a little bit less in the sense that if they have really cheap energy, you can run the same AI with more semiconductors just is more energy to actually make it work. So it's not like you get better AI with better semiconductors. It's just less efficient. Same AI.