Bloomberg Audio Studios, Podcasts, radio News.
I think Biden's in trouble on the Middle East. Biden who has increasingly publicly broken with the Israeli Prime Minister, not with Israel, but with the Prime Minister, and has told him in very strong terms, you're not allowing in humanitarian aid. That's unacceptable. You're not accepting a two state solution, that's unacceptable. And the Israeli Prime Minister and more broadly, the Israeli war cabinet is telling the vastly more powerful
United States, telling them to go screw themselves. That is a horrible look for Biden.
Welcome to the City of London, the City of the City of the City of London.
He's mind the gap between the tree and the financial hearts of the country, the city, the city.
Welcome to in the city.
Stand clear of the doors. Welcome everyone to another episode of the Bloomberg podcast that dissects the stories captivating policymakers and power brokers the world over.
I'm Francinaqua and I'm alegra Stratton. So for those of you who don't have a kind of encyclopedia memory of all of the Inner City editions, we spoke to Ian Bremer Eurasia As President and founder, who you just heard from at the top of the show at the beginning of the year, to get his insights into the predictions he is making for the twenty twenty four So we're obviously now slap bang in the middle of the year, and we thought we would go back to him.
Basically in January he comes out with his top ten risks and at the time, you know, he was talking about the three wars that will dominate of world affairs, Russia versus Ukraine is Rahamas and then his number one risk in January was the United States versus itself because
of the US election. It's quite lucky actually that we speak to Ian Bremmer just after the former US president, Donald Trump is now also convicted felon and we try and figure out what that means for the US elections in November.
And actually I found this conversation less depressing than I found much season incredibly learned and well connected and informed gentlemen. I did find it a very bleak conversation in January. But brand you think that I'm just desensitized, I do think.
That you No, I mean, you're not naive at all, well, but he you know, he makes a point actually that we're desensitized because there's so much things that have gone wrong that we're kind of normalizing even trials wars that three years ago would have been unthinkable. Okay, let's get to our conversation with Ian Bremer. You raise a group president and founder, Ian Bremmer, thank you so much for joining us. So a lot of you said has come
to fruition. But then Donald Trump just getting I mean, this is for the first time someone who's trying to become president, who's a felon. How will it play out in the voting Well.
I mean, unprecedented things are happening in US politics on a weekly basis, and Americans are normalizing those things. You're just getting used to it. It's not a sign of a stable democracy. And of course there are no Trump supporters in the United States that believe that this was a legitimate trial. It's a horrible time for an election. The likelihood of political violence I think has gone up as a consequence of the verdict that we just saw, And on balance, maybe Biden is a little more likely
to win. But Trump can absolutely still win this election, and he will win it. If he does, as a convicted felon with political enemies that he intends to go after, that means that a new McCarthyism. It's not the US becoming a dictatorship. It's not China, it's not Russia. But perhaps it's more like Hungary or Poland or Turkey. And that's one thing when we talk about small peripheral European countries.
It's another one. You're talking about the most powerful country in the world, the most powerful defense in the world, military, the reserve currency. It's a very very dangerous place to be and of course that's why it was our top risk for twenty twenty four.
Well, Donald Trump go to prison, and does that make a difference. He can still campaign from prison.
I don't think it makes a difference. If he does get a prison charge, I suspect it will be nominal, and he finds he gets will also be nominal compared to his net worth. He will almost certainly appeal, And I suspect that whatever sentence, if a sentence is handed down, is likely to be suspended while the appeal is playing out. And I also think that none of this is going to have much impact, especially since the election is six months out.
I mean, presumably it does have some kind of chilling effect on waivering voters.
I think that the independents are more likely to vote against Trump or not vote at all as a consequence of this conviction. For right now, I have a hard
time seeing that persist for six months now. I also think if Nicki Hayley and you know, there are a lot of people out there are Centrists, Independence as well as you know, sort of undecided Republican voters that have been turning out for Nicki, And if Nicki had decided that she actually wanted to persist with her stated beliefs that Trump is unfit for office, then I think it
could have made a significant difference. She could have been out there telling those voters that are still coming out twenty twenty five percent, even though she's not running anymore for the nomination right her name and saying, no, you know, you can't vote for Trump. You know, just don't vote at all or write in somebody, but you can't vote for Trump in this environment. He's a danger democracy. She is not doing that. Her political ambition comes first. She
wants to be Secretary of State. She has a very good shot of getting that a vote for Trump is now a vote for Haley, and I think that we cannot underestimate how important it is that the personal ambitions and the venality of the overwhelming majority of Republican leaders, Republican donors, Republican journalists that are continuing to support this man irrespective of what he does, has done, and represents, is one of the major reasons why US democracy is in crisis today.
Wall Street billionaires are also financial elites, are throwing their weight behind Trump. Why are they still sticking with Trump?
Again? This is revealed preference. If most people I know that are billion not all, but most, especially billionaires that made that money through their own efforts as opposed to through a marriage or through their parents or whatever. They are people who have spent most of their time working incredibly hard because they value money, right, I mean, that is their goal, That is their reveal preference. And Trump
is better for their money than Biden. So I mean, if that is the most important thing to you, not the state of democracy, not abortion, not the border, not US foreign policy, not climate, the most important thing to you is money, then of course you shouldn't be surprised they're putting their money behind the guy that's going to be, you know, regulatory rollback captured by special interests in the cabinet, lower taxes, good for the financial services.
And that's the economy as seen and felt and experienced by billionaires. But what about the economy seen and felt and experienced by humble every day Joe's.
Overall, this inflation environment hurts the average American and that has driven them to believe that Trump is better for them on the economy than Biden. Now having said that, it is also in a polarized environment, in an algorithmically driven environment where people believe that their political orientation determines a lot of not only how they feel about conviction, but also how they feel about the economy. So if you support Trump, you think the economy is doing badly.
If supports Biden, you think it's doing well. And you felt exactly the opposite just before Biden became president. So there is a lot of nonsense and noise that obscures the fact that a lot of Americans are not doing so well in this economy.
Ian, how is the war between Israel and Hamas actually impacting the US election? And does it somehow undermine I guess what Joe Biden has tried to do, which is temper. What Benjamin is Now's force in gozen Rafa particularly has been.
Well. He hasn't tried very hard, and he hasn't tried the very early, and that has hurt him with his own base. Maybe I should say, first more broadly, that this is not an election being determined by economics. I think this is an election being determined much more by national security broadly defined. Number one being the border, Number two being Gaza, Number three being the state of US democracy.
And if you put those three things together, you actually have a pretty significant component of why people are going to vote one way or the other.
That's very unusual.
It's not unprecedented, but certainly since Vietnam days, we haven't seen an election like that. So I think that it's just worth keeping that in the back of your head as we talk about this. I think Biden's in trouble on the Middle East. This election is going badly. Biden is seeing on again by the left. Biden is seen as supporting a genocide. He is seen as promoting the interests of a bully in the Middle East against an underdog.
With the war continuing on and on, and on. Most Democrats are more sympathetic to the Palestinian cause, not to Hamas, but to the Palestinian cause than they are to the Israelis. That having been said, Biden, who has increasingly publicly broken with the Israeli Prime Minister, not with Israel, but with the Prime Minister, and has told him in very strong terms, you're not allowing in humanitarian aid. That's unacceptable. You are
not accepting a two state solution. That's unacceptable. You have to allow all of these people to get out safely before you go into Rafa. It's unacceptable. And the Israeli Prime Minister and more broadly, the Israeli war cabinet is telling the vastly more powerful United States, on the back of providing billions and billions of dollars of defense aid, telling them to go screw themselves. That is a horrible look for Biden. It is a horrible look for Biden.
He looks weak. And of course the Republicans are saying he's too soft on Iran, that's why this whole thing started. They're also saying that smart he's not actually strong enough in support of Israel. How can you undermine your ally after the horrors of the terrorist attacks on October seventh.
This is a no win situation, and I will certainly tell you that inside the Biden administration they're increasingly very uncomfortable with where he is, with where they are, and you're now starting to see high level resignations for members of the Biden team. Again, these are full time bureaucrats, administrators, diplomats, that kind of thing, because they oppose on principle Biden's
support for Israel in this environment. Remember, the United States is pretty much by itself right now in the degree to which they are supporting this Israeli war in Gaza. I do think that the war is going to continue for the coming at least months, seven months, no idea,
but it's not one month. And you know, a lot of the paramilitary, the terrorists that have been fighting in Rafa, you know, I've gotten a briefing recently that at least half of them are believed to have left Rafa and are now popped back up in other parts of Gaza. So increasingly, where the Israelis go, Hamas then disperses. And it is a problem because if you are Israel and you have to telegraph this is where we're going to attack, and we've got to send leaflets and we try to
you know, reduce civilian casualties ineffectively. To be sure, it also means that Hamas has the ability with a symmetric warfare to continue to take advantage of that. And now we're seeing you know, more rocket strikes from other parts of Gaza that the Israelis were supposed to have already cleaned up in terms of Hamas' capability. So as long as your goal is we're going to destroy this organization, their military capabilities, their leadership, it is going to take a lot longer.
In in January, when we last spoke to you, you said that Europe was a bright spot and you didn't think that the elections which are now very soon, you didn't think that they that they were going to cause much trouble at all. In that time, we have seen, for instance, in Germany, we have seen some of the polling for the for the yeah, exactly going down fall a part in your words, Okay, do you think that will end up being You'll be proven right on.
That, yeah, I do. Again, it's messy because of course in France, but Le Penn and her supporters are doing better than they have been. And of course there has been an effort to form an alliance between Maloney, which if you will, is the kind of reconstructed far right, as opposed to Lapen, who is the unreconstructed far right.
I don't think that's going to work, so even though on balance overall the far right will do better in these parliament elections in Germany, the biggest economy, most powerful country is the big exception here. Nonetheless, I think that the outcome for the EU will be strong support for the EU. In other words, I don't see irredentist decentralization
trends in governance in the EU. In fact, I see greater panic because of what's happening in the US, making the Europeans recognize they need to do more on collective defense. They need the EU more, they need NATO more. There needs to be a European pillar, that's what they talk about, a European pillar from NATO. That's very different from strategic autonomy from NATO, which is what Macron had been discussing before the war started. Now, also, of course you have
the UK. Labor should win very easily. That election is just a matter of a few weeks because the UK is much more sensible about how short their election cycle is than the Americans, and that will also create stabilization in their EU relationships. So on balance, yeah, I think the Europeans, under pressure from every corner of the world, is becoming more coherent and more strong as a union.
In what will change, so it's defense, but it's also the Green transition. Depending on who gets to power in the EU, then we could have a whole abandonment of the Green New Deal.
I think that, for example, the willingness of the Europeans to align completely with the US on China is limited. Yes, there's going to be tariffs on Chinese cvs, but they're not going to be one hundred percent this Then there's going to be partnerships. And I look at what the Spaniards are doing right now on transition and it's very impressive.
And I look at how fast the Germans were able to get away from right gas and a lot of that, of course was coal and extending nuclear for a short period of time, but a lot of it was efficiency. Instead of taking a look at what today's policy is versus tomorrow's, but instead the state of the play and the trajectory that the Europeans are on. I still see them as leading an effort to go post carbon and the world is failing at this. We're not going to hit one point five, we're not going to hit two.
But we're still more upbeat about where we are going long term than people were ten twenty thirty years ago. I think that's still true.
Has anything happened in this half of the year that you didn't see coming?
Oil prices are a little bit lower than I would have expected, you know, given all of the concerns in the Middle East, given the fact that the Huthis are disrupting traffic in the Red Sea, given the fact that the Ukrainians are targeting Russian refining capability. You know, even with the economy being a little less robust on the demain inside, I would have expected oil to be a little higher.
We're at the low eighties right now, and I mean, I still think that the risks for oil there are significant tail risks for them to be much higher depending on what happens in the Middle East.
But it's coming at an environment where the Chinese have a lot of spare refining capacity, and also where there are millions of barrels that are offline for opek, and the US is producing with in historically unprecedented fashion. A
little surprised on that. I will also say another thing I'm not surprised about, but I could end up being wrong on is we had as a red herring that the US China relationship would be well managed and a lot more stable than it has been now for the first half of this year, we've been absolutely right, and people were surprised about that. At the beginning of the year, they thought the Taiwan election was going to be a big problem. We said, no, live is going to win,
will be well managed. But the pressure on the US election definitely means that there is a lot more willingness in the US to hit the Chinese than Biden would like. And we've seen that with the TikTok and we've seen that with the additional tariffs, including a one hundred percent tarif on Chinese evs. That is not the direction of travel that Biden thought he would be on back in January.
So if you asked me to project to the end of this year, I think that there is I think we're still right, but I think that there's a possibility that US China will get more confrontational because of that, so we should watch.
That space And thank you so much for joining us today.
Yeah, great to talk to you guys.
Thanks for listening to this week's In the City from Bloomberg. This episode was hosted by me fran Saint Lacla and Allegra Stranton. It was produced by Summersati Show Open Design, and additional editing by Moses and Them. Brendan Francis Newman is our executive producer, Sah Bauman, Head of Podcasts, and special thanks to Ian Bremmer. Please subscribe, rate, and review wherever you listen to podcasts.