Open Book with Anthony Scaramucci - China, Russia, and America: Where Do We Go From Here?

Episode Date: June 12, 2024

This week, Anthony talks with Jack Devine and Jonathan Ward on two of today's most pressing topics, China and Russia. Where are we at right now with both powers relationship with the United States and our Western allies... Learn more about your ad choices. Visit podcastchoices.com/adchoices

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free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. Hello, I'm Anthony Scaramucci, and this is open for. book where I talk with some of the brightest minds out there about everything surrounding the written word from authors and historians to figures and entertainment, neuroscientists, political activists, and of course, Wall Street. Sorry, I can't resist. Before we get into today's episode, if you haven't already, please hit follow or subscribe wherever you get your podcast and leave us a review. We all love a review, even the bad ones. I want to hear the parts you're enjoying or how we can do better. You know,

I can roll with the punches, so let me know. Anyways, let's get to it. Russia and China, two authoritarian powers with a long, complicated history. There have been periods of cooperation and others of dispute. The times of cooperation have often been driven by their joint rivalry with us, the United States and our Western allies. My guests today, Jack Devine and Jonathan Ward are experts on U.S. Russia relations and U.S. China relations, respectively. And joining us now on Open Book is Jack Deveen and

Jonathan Ward. Jack is a former acting director of operations at the CIA. He's now president of the Arkin Group. Jonathan is a China scholar and founder and president of Atlas Organization, but both have recent books. And let me just give you these titles. Jack's book is Spymaster's Prism, the fight against Russian aggression. And Jonathan's book is the decisive decade, American Grand Strategy for Triumph over China. And so, boy, guys, those are two big adversaries of the United States. And yet, particularly with China, you know, we're sort of in a cotango with them where we have to cooperate with them economically on so many different planes.

So why don't we start there? You've done a lot of speaking together on China and Russia. why don't you guys start with some introductory thoughts on both? And then I've got some questions. You have to reading some of your work and your position papers and books and so forth. Yeah, you bet. Well, Anthony, look, so with regard to China, I mean, you've pointed out the elephant in the room in the sense that we have an economic entanglement with them. And in my view, and I'm also the author of China's Vision of Victory, which was one of the first books to lay out their global grand strategy in their own words and documents. And once you're dealing with the real PRC, you know, CCP, strategy, you realize that its main line of effort is economic. I mean, they're going through the biggest military buildup in modern history, essentially, or certainly in the post-Cold War world. And at the same time, they're bankrolling that through the economic integration and global trade that they've built in the global economy over the past 30 years, let's say. So our best shot at it, and this is what I've gone into in the decisive decade, is to, I think we still have a shot at real

containment through economic containment. I think the U.S. is going to or lose this contest based on economic power. You know, economic engagement with China, in my view, was not stabilizing. It's what empowered a very hostile government that, you know, I'm a historian of modern China that was always hostile towards the United States, that always had these long-term ambitions. And we just looked the other way on that for a long time and converted them into a military and technological superpower. And now we still have this very, very brief window in the 2020s, in which to change course and really effectively take out, you know, take out their grand strategy. And you do that because the only way that they ever get any further

along this trajectory is if they continue to have access to American and allied markets, capital, and technology. And if we're able to deny them that access, and that requires getting our act together in a lot of ways where we are very far behind. But if we're able to do that in the coming years, I think we change the game, you know, entirely. We put the CCP at a permanent disadvantage, and then we can go on to change course on what right now are failing geopolitics for the United States. I mean, we have to rebuild our economic advantages over China, make them permanent, convert that into peace through strength, and then look towards the 21st century. So let me put a footnote on it. So I think when I look at China today, I remember when Kissinger

opened up the doors to China, right, and we were going to invest. And the big strategy was, you know, if we brought up their economy, if we exposed them to the West, that they would become somehow more democratic and more forward-leaning as far as the relationships with the United States was concerned in a political arena. That didn't happen, right? We went in. We really did. American business went in. Now, I think they went in because of the financials, and I'll let you pick up on that. There was a real opportunity. But where are we today? That didn't work. Today, the Communist Party is stronger than ever. It's very solidified. She is probably the strongest leader since Mao. So where does that leave us? And, you know, you wanted to talk about Russia.

So let me segue a little bit, saying, I think the bigger issue that we're looking at today is Democratic forces on one side of the scale and anti-democratic forces on the other. It's not this similar than the Cold War, which you're looking at an original Cold War, and that is, communists on one side and the Democratic capitalist on the other. We have friends, they have friend. We have a near-equal balance of power, which is a dangerous situation. We have always felt we had peace if we had a little more on our side on the balance of power. And now this is why I want to talk just for a brief second on Russia. I've written a number of op-eds and a Wall Street Journal relating to Putin. My books about Putin and its focus on Ukraine. And we're looking at Ukraine. We're looking at Israel

today, but it's even bigger. It's this real, not that both of those are individually, force-changing elements. But, you know, my point back then was Putin has to go. I think he sowed the seeds of his demise. And I think that's true. No one's going to like to hear this. You know, she has to go and the Ayatollah. But that doesn't mean tomorrow. And it doesn't mean CIA going in and running, you know, operations or half-backed initiative. It's we need to have a focus strategically that recognize that this world is going to be an unstable world, as long as those three nations remain united and an anti-democratic posture opposed us. So that's my quick two sense on how we look at the geopolitical context in terms of Russian China. Okay, so I have so many questions for you guys, and I don't know

which one wants to take each first, and, you know, I can I can direct if you want me to, but let me just lay this out for you, sir, and this is really more a jack question because you mentioned Henry Kissinger. So did the Kissinger strategy fail with China? Because the lightheizers of the world, Bob believes that China bamboozled us, stole seven or $800 trillion of wealth from the United States, peg their currency with the permission of Dr. Kissinger and President Nixon to the U.S. dollar, which we had unclipped from gold, and a result of which was going to decline as we monetized our debt, and they were building an industrial economy. Their currency should have gone up, but it actually went down.

So we provided this massive subsidy. And then we let them into GATT and the World Trade Organization in a way where they came in as a developing nation. And then once they got our businesses over to China, they stole our technology. And then they said to our businesses, Asa LeVista, no more business necessary here in China. Now, is he wrong? And by the way, I'm a dove on China. I will point that out. We should be a dove on everything.

I'm pointing out the Lighthizer position. What's your response to that? Well, I would say, I think we all should be doves when it comes to the war, right? You should come to it slowly, all right? So let me just take the first part. Yes, the Kissinger part failed, but I don't see the conspiracy that is sort of put forth here in a sense that the Chinese had a game plan. They worked that they bamboozled us.

I think we did it with our eyes open in the sense that we really thought this was a workable strategy. And I think business sold as an opportunity. And we played into their hands, I think, is a better way. that I would frame it. Now, I'll turn it over to Jonathan with just one observation. They didn't miss the opportunity to exploit the opportunity of getting our technology and exploiting it, and they're very aggressive. This is not a secret, and Jonathan can go verse by verse on it. So I think you end up in sort of the same place. And, you know, we can spend a lot of time moaning about how we got here. But again,

I think let's look at the reality of today. They're a very powerful country. They're very aggressive in the region. They're working very vigorous against us in the cyber area. So, you know, those that are thinking, well, let's just go back to being nice to them and it's all going to work out. I think they're missing the boat. And I think it's pretty obvious. But Jonathan, why don't you, you have a lot of specific punch points, if you like. Sure. And we should also not forget that this is a state. And Xi Jinping has been telling us before the trade war, before there was really any counterpoint in the U.S. at all to their strategies in the last 10 or 15 years. They've been telling us that they're preparing to fight and win wars. They've been designing a military that's designed for combat with the United

States and the Pacific. I mean, these are all just facts. There's not really, you know, they've given us both the declaration of intent. You know, they intend to fight wars with us and with our allies. And they've also built the force structure to do it. A thousand Dong Feng 21D carrier killers don't lie. So that's all just the facts. As somebody who studied the CCP and its foreign policy from its inception from 1949 onwards. The other side is that way before Kissinger was involved, I mean, you had the founders of the People's Republic of China who envisioned themselves as bringing forth what they called the new China, which was a China that would never be humiliated again. They would regain its central position in the world. You know, they fought wars in their region,

including the Korean War against the United States. You know, they supplied the Vietnamese against the French, and then later against us, they fought the Indians, they fought the Russians, a pretty long list, all in the service of that objective called the New China. And today they call that the great rejuvenation of the Chinese nation. And by the time you get to Henry Kissinger, I mean, he was worried, or so he told my supervisor at Oxford at the time, who's one of the leading historians of modern China in the world, he told him on radio that they were worried about the Soviets installing a pro-Soviet regime in Beijing after the Amher River Valley clashes in 1969.

So you had this opening that Kissinger took in order to create a counterpoint to the U.S. USSR, and then we work together in a Cold War context for, I mean, you're only talking about 1971. So then you have 20 more years of the Cold War in which there is some reason, I think, to Kissinger's approach. And at the same time, he looked the other way on history's biggest mass murderer. I mean, Mao Zedong is who he was working with. You don't have anyone who ranks anywhere near that when it comes to body count and all the rest of it. And then I think by the time you get to the post-Cold War and by the time you get near the WTO, I mean, they have to. I mean, they have to absolutely did have a strategy for ensuring that they became part of the world economy. I think at that

point, Kissinger wasn't involved in foreign policy, but had become a central figure in U.S.-China engagement. And I think it took on a life of its own and was very, you know, nobody seemed to anticipate that we were dealing with the same regime that had executed its own students in Tiananmen Square. And there were all these junctures where we could have looked differently at this, but we didn't. And eventually, they build themselves into an economic superpower. and a military power that is now causing everybody to pay attention. So I think there was a great deal of intentionality throughout all of this. I think there was a great deal of American naivete. And the question is at what point do we get real about this? And at what point do we start taking action

to change course? And I think we're there. We're on the beginning of that path, but we're not yet decisively into it. Jack, go ahead. You wanted to say something good. I just wanted to say something that Jonathan touched on the middle of his commentary. And that is, we really should listen to what people say. The CIA in its early days had a group called FBIS. And all they did is collect what people, public figure said. And there was the experts in that field fed, if you just read, they were going to tell you they're doing it. And frankly, again, I'm not trying to spin off immediately off of China. But if you look at what Russia's doing, if you look what the Iranians are doing, and frankly, if we looked at what Hamas was doing, they were telling us what they were going.

to do, you know, but being part of human nature, I guess, is sometimes you let wishful thinking get in front of you and you rationalize, well, if we make them rich, they'll be nice. And if we give them order and provide health benefits to the people in Gaza that somehow they're going to change their character, but they're writing and telling you that they want to kill you. So I think this is a point that transcends, you know, these overarching issues. So I wanted to put that in and see whether we want to skip around other themes. Anthony, if I don't mind add in something to that. Well, look, as Jack says, I mean, listening to what they say, I mean, that takes a lot of work

and it takes a very different mindset than I think how many Americans approach these problems. I mean, for me, as a, you know, I did Russian and Chinese language at Columbia's undergrad. I learned all the languages, learned sort of how to look at what they're thinking before this was really available in English. And I think that's the sort of thing. I mean, all the time when I do speaking, when I do consulting, you know, you hear people say, look, if I were Xi Jinping, I do this. It's like, what are you talking about?

You're not Xi Jinping. Like, this is not, let's put ourselves into his shoes and play chess. I mean, this is a place that has a deep tradition of, you know, clear ideology, a deep set of strategic interests that they've made absolutely clear. And if one has tracked all that in the language, if once lived in the countries, traveled and all this, do this sort of thing, do these sorts of things that allow us to have insight into how places see things, then you get to the point where you understand what they're going to do and how they're going.

And that's something that we could be much, much better at in the United States. Right after Hamas went into Israel, I had an opet in the, Wall Street Journal. And the theme was, you know, the failure of intelligence, both U.S. and Israeli intelligence would have been touted for many years as being strong in that region. And I hit several key reasons, and we could tease that out at the degree that people are interested in intelligence. But the one point I addressed, it was very common for years when I would see an intelligence failure. I would go back and find out where was the analytical flaw. I know the operational flaws, right? But where was the analytical flaw? And almost all of the

those flaps that you see in history that CIA is associated with, is rooted in conventional wisdom. There's never been a coup. This has been a democracy. She is never going to do this. So you're relying on it. I don't have a good substitute for conventional wisdom other than it can be a trap. And the Israelis, I believe, talked themselves into conventional wisdom that Hamas had changed and that they were many. And this is where I come back to my lifelong endeavor. You need human spice. You need sources. And what was stunning to me was that there must have been 200 people that this is not castigating Israel. You know, I mean, this was an atrocious thing that was done, hard to imagine. But they're going to be hard on themselves when they go back and evaluate it's all good military people to go back and what went wrong.

And I think they're going to find they didn't have the human sources. It's out of fashion. Everybody gives it lip service. Oh, we need sources. They're so important spies. But if you look at the money, and I went into this in the article, how much we really see? spend on it. How many people are really engaged? And we can't answer key questions. Wasn't Iran involved? How hard is that question to answer if you have a human source? We over-rely, look, I'm a big fan of AI. Put all technology to its fullest. Do not hold back. I mean, I understand the social aspects of it. But in war fighting, you know, don't hold back. But if you rely on it, you'll die by because AI is the heaven of conventional wisdom.

Otherwise, its design is to create, pull everything together, and this will tell you what the best thinking and the best statements are on this issue. And it can be dead wrong unless you have a spy. I don't think like you, just like Jonathan said, you're not, you know, you're not she. You need to take a hard look. So these are some lessons that I think apply. And it's very much of the moment in terms of Israel. You know, again, it's a generic question, but it's on the minds of everybody. So I want to ask it. The Chinese and the Russians historically have had antagonism on their border. And there's a feeling in China that a good portion of Siberia actually belongs to them that was taken unfairly from them in the 1600s, the 17th century, if you will. And yet, they now seem conjoined against a common enemy, the United States. She and Putin,

have met 40 times in the last 10 years. So what say the two of you about the Russia-Chinese relationship and how should we worry or think about that, not just from the military point of view, but also from the point of view of our reserve currency and the integrity of the U.S. dollar? Let Jonathan, I want to take like the big part for me. I want to do a vignette at the beginning, though. So I was chief of the CIA Afghan task for the drive the Russians out of Afghanistan in the 80s. This thinger went in under my tenure. But part of my job is to negotiate weapons, buy weapons, lots of them, a billion dollars for it. And I bought, this is all in the public record, so you don't have to worry about counterintelligence people coming to your door,

Anthony and Yankee out and me at the same time. But I bought most of the weapons, the majority of the weapons in China. And I would go out and negotiate. And on the AK-47s, I don't remember the exact price, but let's say it was $165 a gun. We negotiated, you know, on it. And at the end, they said, are you done? I said, yes, I'm done. They said, okay, we're going to give it to you for 160. Now, that is not normal business tactics.

And the reason they said, well, you want to know why? You're fighting the Russians. So it's deep-seated. The animosity between those countries and that runs deep. But there's practicalities in life. Both Putin and she are pragmatic and pragmatist in the sense of my national interest. Remember, Hitler and Stalin made an agreement, too, on Polo. So right now it's valid, okay?

But I'm just saying it has feet of clay. And one of the reasons I would like to see that the Ukraine thing finished with Putin exiting is that it will undermine the temporary romance. So, Jonathan, you may want to take it wherever you want. But I take your point. It's a very good thing to discuss, Anthony, and I think what I'm saying is what you see is real, but it's based not on love. It's practicalities.

Love sometimes lasts longer than practicalities. Hatred does. Hatred lasts forever. Okay? Let me jump in on hatred. So hatred lasts for a long for generation. You want to answer that, Jonathan? Look, with regard to the Russia-China relationship, so my Ph.D. at Oxford was initially

supposed to be on nationalism, Russian and Chinese nationalism in the Sino-Soviet split. So had a good hard look at that. And I think people forget that even though that rift earlier in the 20th century happened, even though you had a Sino-Soviet alliance and then ultimately it's split, they do come together and they get pretty serious and pretty dangerous when they're working together. And there's even an earlier precedent, which is in the 1600s and 1700s, where Russia and China came together and basically agreed that as China expanded westward, Russia would expand eastward. And in the process, the Chinese wiped out a million step peoples, you know,

younger Mongols. So the fact that they had this Russia, China, and Taunt, you know, 400 years ago, because of a third party, you know, allowed them to carry out their imperial expansion that defines their borders today. So it's a much older relationship than people think about. And, you know, I think where we are today is that it's a much deeper relationship than people think about them. And yes, there are those antagonisms. I've heard it all on the trains in Siberia and what have you, just what jokes that people tell you when you're going along the Chinese border and stuff that I won't repeat here in Russia and stuff. But, you know, the bottom line is I think they do have this alignment that's against the United States and it's not new. I mean, it goes back to at the very least

2014 when Putin seized Crimea and even before that. I mean, they started to repair their relations in the early 2000s and signed sort of official, you know, restitution of Russia-China relations. And, you know, In 2014, when I was living in China for one of my PhD years, while Putin was in Crimea, I'm the Chinese television in Chinese language was recycling all of the Russian talking points that we hear today, basically about NATO snipers and that sort of thing happening. So I think they've had a much deeper ideological relationship, military relationship, and certainly strategic relationship than people anticipate. They call it the comprehensive partnership of strategic coordination for a new era.

And if one looks at the no limits partnership document from the. Olympics last year. It's actually pretty deep. It's about 40 pages. It explains that China supports Russia when it comes to opposing NATO expansion in Europe, and then that Russia believes that China, that Taiwan is an inalienable part of China. So I think what this fundamentally is, is it's a military relationship where both of them want to have another front as they push against the U.S. And then if you go back 10 years, it was Putin taking Crimea, invading Ukraine for the first time, and then China putting the oil rig in the Vietnamese EEZ and then going forth with the islands. So they've been aligned on that.

You know, Anthony, as you mentioned, meeting 40 times. That's a very important number. It's a lot of meetings. And they have annual military exercises. They've done joint bomber exercises during the, you know, multiple times during the invasion of Ukraine. I mean, it's pretty big. I think it can be broken, however. So, you know, in the 1980s, Reagan had a pretty interesting strategy.

He took a very hard line against Russia. A couple of their leaders died before he actually agreed to have a meeting with the Russians. He went with a zero missile option, zero Pershing missile option. He called them the evil empire. He said that they would end up on the ash heap of history. And we have been a direct adversary of theirs, I guess, since the Second World War ended. We maybe have had spasms of detent and spasms of. type of peace and cooperation. But if you were briefing, the average American, let's say the average

American became the president of the United States, and they invited you into the Oval Office, and they said to you, why is a primarily Christian, it's becoming more ethnic now, but primarily white nation in such adversarial relationship with us and other elements of the West, Western Europe, et cetera, you would say what? And I'm asking it that way, because I want you to explain it And it's not simplistically, because I don't want to make it simple, but in a way that the average American could understand it. Well, I always come back to the balance of power and what I would call realism. And Jonathan's talking about the realism that exists between the Russians and the Chinese. But I would say, you know, someone that was asking, we need to make sure we have a realistic policy that were hard nose.

And it's strategic. In other words, it's not just dealing with Ukraine at a single moment or supporting Israel. it's how does that all fit into a pattern? I believe it does. I believe supporting Israel and Ukraine are all part of the bigger struggle between the Russians and Chinese and Iranians and North Koreans who are working together and our allies. So it's not about white and Chinese. I mean, I don't think that's our issue as we, I mean, I've sat around, you've

sat around tables and minds. That's really never the issue. It also is surprising most of the economists go nuts when I say this. And that is, usually when you're getting down to the big issues, it's not about the economy. oh, we're going to invade that country to get oil or we're going to fix this so that. It really comes down to this geopolitical analysis of it. And what I'm saying, and what Reagan was saying is you represent a threat to the West. And, you know, we're going to push back.

Now, let me take you back to Afghanistan as a footnote. People don't realize this. But the Afghans were on their heels in 18, in 1985. Washington was saying, how long are we going to put up with this? When Reagan took the helm on this, he said, we're going to give it one more big push, and we're going to give it everything we have. And that turned out, and that meant stepping up to something like the Stinger, and we tripled the budget. So there were real concrete issues, but there's a slight, there's something, a footnote, I want to caution, so we don't get too bellicose. When Reagan did what you said, Anthony, we will remember we almost had a nuclear incident because fortunately we had a spy in London.

And what happened is the KGB, we started a routine plus exercise in Europe. The Russians actually believed because of the rhetoric that a nuclear attack was feasible, and they were moving towards that. This is all documented, by the way. It's called the Ryan Operation. Fortunately, Reagan, we were able to put that report on Reagan's table, and we were able to back off a notch, tone it down a notch. And then we started to head towards the gorse.

He felt if we got that close, I want to meet Gorbachev and where was it, Anchorage or whatever. So I think strong, well-defined, one of the things about Reagan, when you look at it, and I remember as a kid who was an actor, he communicated in very simple words, simple language. Everybody got it, but the message was straightforward. So it's important for leaders in our country, I think, to be crisp in their analysis of what they're doing. So the layman that walks in the office, you say, this is part of a, a real struggle today. We're on one side and the other. And this move or that move is explained

in that context. It's not, it is not driven by ethnic or pure economic greed or colonialism and imperialism. That's my reading of many years saying in those meetings. So Jonathan, I'll leave with you and Anthony to take it from there. But that's my take on it. Sure. And I mean, you're dealing with regimes that have very clear ideas of what they want to get. and that involves dismantling, you know, America's leadership and pushing in their own regions. But, you know, it really comes down to, in my opinion, this is about the free world. And the free world is actually a very deep, complex and diverse place. And I think Reagan understood that very well, you know, anti-communism.

As someone, you know, wisely said to me one point, it was really a human rights cause. And I think today, when one thinks about what we're really dealing with, I mean, on one hand, you have Ukrainians fighting against, you know, know, a vicious, you know, horrific invasion that's perpetrated essentially by a madman in my view. And then, you know, you have Taiwan, which is part of the free world. You have Japan, which is part of the free world. I mean, India has, you know, there are plenty that would take issue with that. But that's going to be one of our most important partners there is. It's the largest democracy. And we're the oldest, you know, Brazil's democracy. I mean, the entire OECD from Europe to Asia to us, to Canada. I mean, this is a very powerful body economically and militarily when we get everything together. And

And then there's the fact that within all of these regimes, there are so many people that stand against them. I mean, in different degrees. I mean, there are people in, you know, Chinese gulags who are, you know, I would say are members of the free world. You have Hong Kong, which was destroyed from the standpoint of rights and freedom. And that was a place where people, young people, younger than me, were waving American flags. And you have, you know, in the streets of Tehran in Iran, you have people who give their lives to fight that regime. So there's so much variation to this. I think Americans can understand that as much as we need to be realist and we need to back our values with hard power and economic superiority across all fronts in my view.

There's also something that we stand for that many, many others around the world stand for, too. And, you know, alliances are a very important expression of that. I mean, you know, we've always had allies whenever we've had to do anything hard that goes back to the American Revolution. It was France that, you know, saved us. And then, you know, we've saved France in the Second World War. And this is one big community that I think, you know, stands for something that exists over time and is more important than, you know, many of the instruments of power. But the instruments of power are things that we have to develop and we have to keep them strong in order to get through this moment.

It's going to be much harder than people expect. And at the same time, I think we can do it. I mean, we can win this new contest with Russia, China and their hangers on. But we're going to have to do it together. We're going to have to rebuild our economic advantages. and we're going to have to rebuild our military strength. And the communications field, the Cold War was pretty straightforward and simple to get. Capitalism, communism, right?

Isms. Today, I actually believe we're in the Cold War and all the dynamics of what's happening in the Wagner group in Africa, meddling in Latin America, working with the Iranians for the Russians and the Chinese. It looks just like it. It's bifurcated. It's the same type of fight. But what we have is, I said, our democracy.

and anti-democracy. It isn't an isn't. It isn't exactly an ideology. So when you tell people we're fighting for democracy and anti-democracy, it's just one step away from that ideological orientation. I think it's a little bit harder, and you're an expert in it. It's harder to package that concept, but I believe that's what we're in. We're in an isom war without the isms. Welcome to another round of boardroom or Miroboard. Today we talk retrospectives with Agile coach Maria. Let's go. First question. You've spent two hours in a team retro, but the only input you've heard is Dave's. Boardroom or Mirrorboard?

Boardroom. In Miro, Dave can't hog the space because everyone can add thoughts anonymously, online at the same time. Correct! Next, you need the team to act on feedback fast. So you turn all those retro notes into Jira tasks? Miro all the way. And I can assign those tasks to teammates. You're nailing this!

Now, you see hundreds of sticky notes from the retro. A real mess. But you organize them into five themes in just seconds. Miro, I basically get back an entire hour when I use its AI tools for clustering. And she's done it. For limited time, visit mero.com slash retro now for a free business plan trial to unlock advanced retro tools like private mode, voting, and two-way jirasyncing. That's MIRO.com slash retro now. I guess, you know, I'm, I guess what I'm worried about is when I listen to both of you talk, there's cohesion.

There seems like a long-term battle plan. We both know that the Chinese, all three of us know that the Chinese think in 25, 50, and 100-year increments. And the way the two of you are talking, in my opinion, and correct me if I'm wrong, is completely incongruous to our leadership, congressional or otherwise, our executive leadership. I don't think anybody, and I haven't heard it, and I go to these think tanks, counsel, foreign relations, I go to the different speeches, and business executives of the national security. I don't know anybody in the administration, current administration, past administration, or the Congress that has a well-thought-out plan. Now, if I'm wrong, please push back on me and tell me why I'm wrong, make me feel better. As a career bureaucrat, let me tell you what I think the secret to this is.

When I joined the agency, I thought, well, these are all bright people. I can't wait to get to the next level when we start thinking strategically, right? Everything was tactic. What are we doing today? Get the inbox fire. We got a war, get it done. I got the next level. I looked around again. It was, well, where's the strategic thinking? And then I got to the top of all this I said, I'm it. So my point is, when you describe it, you're absolutely right. But it doesn't come natural to people as much as you might think it does because you're a strategic thinking as a thinker. So at the top, right now, I'm not blaming. I understand what happens. Russia invades Ukraine. It's all about Ukraine. How do we get to the web? How do we get there? How do we do this? We've got to put this with. Get with the Chinese. Do this. No one, if you go to the meeting, say, listen, let's talk about the big picture. Oh, no, Jack, we'll get to that later. So the, it isn't that administrations and political forces are denying us to us. It's that it's a very hard commodity to sell in institutions. And frankly, you're in the private sector and have been a good part of your life.

Strategic thinking isn't as big as you think there either. You know, big companies have been around a long time. It's how am I going to make more cars? It's not, you know, what is it going to look over the horizon? That's the difference between managing your government and leadership is such a hard commodity. And there's a risk in it, as you know. If you're stepping out and saying this is where we're going to go, you know, you have you're taking chances. You have to be a risk taker.

So that's my take on it. I don't see it as if here's one last thing. I'm continually amazed at our founding fathers. How out of 7 million people did we find so many big thinkers that could put together the Federalist papers and the Constitution and balance of power? And out of 7 million, we have over 300 million. I mean, I'll settle for one, let alone the other. So I'm just saying I'm with you. it's just, it's a harder, it's a harder thing to get your hands around. That's why the pen,

and that's why communications in your field is so important. I mean, that's where, that's where the battle should be fought. That's why write once in a while. I think I want to say something. We talk about, and I'll flip this over the John, I think, we talk about our allies for a second. How do our allies feel about our stalwartness and our long-term commitments to things at this point? Well, Anthony, unfortunately, you know, and I do talk with, um, plenty of people from around the alliance system on a, you know, pretty regular basis. And I think there is a lot of concern about the U.S. I mean, I think people are most of all concerned about our volatility, our divisions at home, our staying power, our coherence on foreign policy,

basically where is America going? I don't think there's a clear indicator of that, or that's certainly what a lot of people reflect to me in my discussions. And at the same time, I think they also, you know, certainly if I'm talking to them, I think they're, they like to hear. And I think this is very true and very fundamental. The alliance system is incredibly important to the United States. I mean, that's something that I believe very strongly as someone who lived and traveled, you know, all over the world. I mean, it's just, this is a structure. And you do not want to have to rebuild this structure. I mean, we built in a structure after the Second World War, and it sustained us through the Cold War, and it sustained us through the post-cold War,

and you still have the elements of this that mean that the alliance system is really the majority of global GDP. It's the vast majority of global wealth. It is the bulk of global military power. But we're going to have to use it, I think, in a different way, where we're dealing with adversary regional strategies, pushing back on them, you know, making sure that they can't break out the way that they want to. And at the same time, coming together is more of an economic community where we can secure our supply chains, you know, achieve dominance in the key strategic industries and technologies, and also achieve dominance in global trade. Because At the end of the day, that's you asked about the US dollar earlier.

I mean, the only thing that I think doesn't threaten that today. But in the long run, certainly Russia, China, and others would like to create an alternative sanction-proof trading system. And in a weird way, we should let them and we should make sure it's very, very small. That's how we won the Cold War. So as long as the allies are growing, integrating building, securing supply chains, winning at global trade, pulling big emerging markets like India and Brazil over to our side, I think we can win this whole thing through economic power.

But, you know, the U.S. has to lead that. I mean, we are a $27 trillion economy. And the next biggest thing in the alliance system is Europe, which is about 15. So we're now like, you know, 60% larger almost. And nobody talks about that. I mean, it's still American leadership, but we have a global team. And I think we're going to have to start getting serious in terms of a global shared strategy. For instance, Europeans who are continuing to invest in the wrong industries in China. I mean, they've got to come to the same side as us. And, you know, that's true across the board. Jack, the interest on our debt is going to go from 10% to 30% by the end of the decade. So by 2030, as we roll our debt to higher interest rates, we're going to have 30% of our budget going to interest, which obviously will have to eat up some of the entitlements, some of the military spending, some of the other things. What do you think about that? Are you worried about that? Or do you think that's not a big deal for the United States? Or what's your thought there? Well, for a while I taught high school and I taught economics one year and I'm ashamed to say I probably haven't grown much since then.

That's a tough call. I mean, the reality is what you've defined, right? What are we going to do about it? Sometimes we wait until the last minute and then we find out, hey, it's a lot harder. I'm not proposing this. But one thing that happens sometimes is you have inflation and inflation reduces your debt. I'm not proposing it. I'm just saying that at some point when the rubber hits the.

wrote, it's not sustainable, therefore it won't be sustained, that old sort of quote. So I don't have an economic answer for it. We should tighten our budget. We should have balanced budgets. You said something very refreshing and very honest. You're saying that we'll monetize it. We'll create enough inflation where the debt will be manageable. That's what we've been doing since the end of the Second World War. But we had really dynamic growth in the economy. So the middle and lower middle class did better. But the monetizing that's happened, recently is really having a big impact on the middle and lower income people. And they're getting upset and they want to vote for people like Bernie Sanders or AOC or Donald J. Trump. They don't,

they don't like the system anymore. Listen, I'm with them. They feel like they've been jipped and left out of the system. I don't have a problem identifying with them. I have 15-5-2-9s. I worry about. But my point is, I'm not proposing that. I'm just saying eventually you end up there. right now what you hope is pain leads to action, right? You vote, you get, you push for change, but you have, you know, they have to balance out. You're going to have a military, not. You're going to support Ukraine or you're going to build a board. You start doing that.

It's going to get really messy. Look what happened, though. And again, I defer the, you on this economic side of it. We poured $3 trillion into the economy, and we fought two wars worth five to six trillion, right? That's a lot of debt, right? A lot of debt that we've generated. But look, we have a really strong economy. We're having trouble cooling it down because we put so much into it.

So, you know, maybe we need to be more fiscally conservative in how we put the money in. And then you get the priorities. Where are you going to put your money? And that's why we're in a democracy. Go to the ballot box and decide how you want your dollar spent. Used to be you voted with your pocketbook. Anthony, I also think a couple of, you know, larger macro issues here. you are going to have to reindustrialize the U.S. in many ways, we're going to need an expanded

defense industrial base. That's just a necessity. We're going to have to secure certain supply chains and pharma and semiconductors, microelectronics, all of that. I think you can do a lot more with USMCA and North America as a general industrial base. And as you see capital flows out of China, and ideally into the U.S. and into, you know, healthier, better, you know, geopolitically healthier places, you know, that should also give us some opportunity here. I mean, there's going to be a whole lot of sector level and technology level contest that will have to be one, which I think will certainly provide some growth. But you're right. I mean, if we're going to have to, you know, probably really figure out how to, you know, sustain a global foreign policy financially and

also continue to have U.S. growth. That's going to be the biggest, toughest challenge. I want to talk about our five eyes and get your reaction. The five eyes got together on 60 minutes. They were out in Silicon Valley. These are New Zealand, Australia, Great Britain. I guess it's France and the U.S., correct if I'm wrong. They got together and they said that there's a huge threat from China. And they put this on national television on 60 minutes. They were interviewed by Scott Pelly. What was your reaction? Did you see the interview? And if so, what was your reaction of that interview? I didn't see it, but I did see the right-up bottom line. But here's my cautionary statement. Who isn't saying that? And isn't that conventional wisdom that we're listening to? I'm not, I'm not, they're reading all the same stuff. All the information is coming in. And we're working ourselves, you know, we are like a pack of wolves.

Maybe that's the wrong one. But we're following a stream of thought. And is that the right thought? I would like to, I would like to think more about not that there is a threat. I mean, it clearly is. So what are you going to do about it? And this goes back to your point, where's the strategy? What is it going to be?

And you have different interests. You think the businessman that's invested there once I have a hard time? The person who wants to invest is going to walk away. So there's a lot of countervailing forces, but I'm saying that was not a stark statement from my point of view. That wasn't bald. And remember, they were working with classified stuff, so they're only telling you, you mean, it's a, China is a threat.

It's just one more voice saying the same thing. If you went into AI, is China a threat to the United States? I'm on the bed. It comes back. Yes, it is. In that sense, exactly. It's the sort of thing that we, it's important to hear from very authoritative voices on how serious this is. I mean, there are plenty of people out there, myself included, who've been explaining how serious this is for a long time. And, you know, there was a time where all of that was dismissed or at least certainly taken with a skeptical mind. But it's really clear what's going on. And it's important to hear those sorts of voices weighing in.

FBI director raised statement about this is the greatest threat we've faced in a generation. There's nothing else like this. I mean, these are very good verbatim statements for those of us that have been trying to communicate it. And at a certain point, we have to recognize that we're in this contest. We're not going to get out of it. We're not going to wish it away. We have to win it. And the strategy to do that, I mean, I wrote one in the decisive decade. I don't think we see a real grand strategy from U.S. government yet. But we can do grand strategy. We have done it. We won the Cold War through a grand strategy developed by Kennan, passed all the way along for 50 years, essentially. You know, we won the Second World War through a military grand strategy.

America does this well, but we have to agree that there is an issue. And the longer that we play sort of, you know, can't see this, don't know what it is, the longer we're going to go down the wrong path. And I think it's also important for the business community to hear that, because at the end of the day, if we have any shot of winning an economic contest, it's going to be Wall Street, CEOs, and boards that play a bigger role in this contest than any. since the Second World War. Let me just say, we shouldn't talk ourselves into something, right?

All sitting around saying the same thing. I remember reading a paper a few months ago was an old historic one, 1940. And if you took the word Japan out and put China in, you could see the same language. I think we just have to look at it hard nose. And I think when you're hearing here is kind of hard nose, these are the facts. What's your strategy? But let's not talk ourselves into something here. That's my concern that we're all saying the same thing.

and I think Jonathan's teasing out pieces and so on. I think we need a hard, realistic look and not conventional wisdom. That's my parting words. Be careful with conventional wisdom. So I'm at the point in the podcast where I ask our authors and our thought leaders. I come up with five words with my production team, and then I ask you guys to react to those words. And it could be a sentence.

It could be a word. When I say the U.S. military, let's start with you, Jack. What do you think of? What comes to mind when I say U.S. military? The best in the world. Nobody can touch it. I mean, both the skill and they've been fighting for years. You don't want to mess with them. And Jonathan? Keep it that way. Make sure we remain the best military superiority over Russia and China

is going to be vital to keeping the peace. Okay. Let's go to cyber. I say the word cyber, Jack. What do you say? We're underestimating the threat internally. I think the adversary is, much deeper into our system than we are prepared to recognize, and that includes in the national defense arena. Jonathan? Something I'm learning more and more about all the time. I think every time I learn more, it's more worrisome, but especially private sector. I mean, people are going to need a geopolitical

strategy that takes these threats seriously, and that absolutely includes the cyber domain. As FBI has said, there's two companies, ones that admit they've been hacked and the others that just don't say they have. Everyone's been hacked. Right. I say the word economic or the global economy or the U.S. economy. What do you think of, Jack? Uncertainty. No one knows what's happening. The old models aren't working.

Not every piece of it, but we're in uncharted territory. And again, I think the best minds have to get on it. And I'll leave it at that. What say you, Jonathan? This is the part that I'm excited about. the bulk of the decisive decade is about the economic arena. I mean, I think we can win the geopolitical contests by winning in the economic arena. You know, decoupling is important. There's going to be reality to that, but more importantly, is restructuring. I mean, restructuring the world economy.

So the U.S. remains the center of gravity, and everyone depends a whole lot less on China. That's how we win. Okay. Let's go to the word industrial. Start with you, Jack. Jonathan mentioned earlier, I think we need to rebuild our industrial base. I think we made, when we made the push to go to China. And I'm surprised how we absorbed that without demonstrations and unions and strikes. I think we need to industrialize ourselves because I think after the during the pandemic and the supply chain, people began to realize you better have a capability to provide the necessities of all industry, industrially key items.

Jonathan, anything you want to add? That's certainly how we won World War II. And the problem is we've given those advantages away to China. So we have to take them back. And we've got to reindustrialize. It's going to be one of the biggest jobs we've got. And how long you think it would take, guys? Five to ten years, get it moving in that time frame.

Yeah, I was going to say a generation. It doesn't mean you can't make big inputs early. I mean, it took us, what, 40 years to de-smble it. Let's say it'll take us 15 to resemble. But it's more complicated. But I'm optimistic. When American decides it wants to do something historically, It gets it done.

The last word, guys, diplomacy. A vital tool. I'm going to elaborate. So one of the things I learned in the private sector is when I was in the government, we were always trying to work. Let's find a solution. We'll keep working. We'll keep working this solution.

And eventually find some compromise. And that's diplomacy. And it's so valuable. But in the private sector, what I learned was, everyone survived, I said, listen, I'm leaving the room. I'm done. I'm out of here. And so I'm just saying sometimes diplomacy is great, but also putting meaningful stakes in the ground where you mean and you walk out, you'll be surprised how many times people

call you back. Yeah, I think it's, diplomacy is most important with our allies and with key sort of neutral or emerging market nations that we want to get on our side that are going to be very important to us in the long run. I don't think we're going to accomplish a whole lot with our adversaries in diplomacy. I mean, it makes sense to do summiting and meeting, but at the end of the day, we're not going to change their strategy. We're not going to change their objectives by having a discussion. You know, Xi Jinping isn't Gorbachev. He's Stalin. I think he's told us that over the last five or ten years. Guys, it's been a terrific conversation. I want to thank you both for joining me on Open Book. And I look forward to reading more of your thought pieces. And hopefully

you'll tune in again with us if I can invite you back on. Great questions. It was a pleasure to be on dealing with them. Yeah, thank you for having us. I appreciate it, sir. Thank you. My closing thoughts today on Open Book is how should the U.S. and its allies handle Russia and then China.

And what about the China-Russia alliance? So there's so much to think about here. But let's just start with the Russian situation. The great tragedy of our lifetimes is that we have not been able to get it together with the Russians. And unfortunately, the Russians do not want to accept, and this is a brutal thing to say, and of course, if I was a diplomat or a politician, I could never say it. But truth be told, the Russians do not want to accept their current place in global history. Yes, a tremendously prideful country, a country rich in history covering 11 time zones, the largest landmass, covering most of

Eurasia, and it dates back to preventing Rome, preventing the Huns and others from conquesting Russia. They just want to stay in sort of that imperialistic flex relative to their neighbors. And so a situation like in Georgia or the Ukraine or Moldova, you pick the place, they want those powers to be in complete and total control of the Russian government, even though the former Soviet Union was disbanded over 30 years ago. Now, one of the mistakes that Barack Obama made was calling the country a regional power, but the truth be told, it actually is a regional power, and it has the GDP of approximately the size of Italy. So why can a country like that wreak so much havoc on the rest of us? Well, all you have to do is cursory read Russian literature to understand

that these are some of the toughest people in the world, and that government, which is an autocratic government, is not going to relent in places like the Ukraine unless we overwhelm them with strength and force them to the negotiating table. So unfortunately for the U.S. and the Allies, there's only one way to handle Russia. What Ronald Reagan once said, it's peace through strength. And they should have never invaded Ukraine in the first place. But now that they've done that, unfortunately, the only way the West can handle this is by beating them back.

Moving on to China. China is a different relationship, way more complicated than Russia. I think the United States has to make a decision about what the imperialistic impulses are for China. Remember, there are 5.7 billion people in the world that are living under some form of tyranny at the present time. And it's incumbent upon the United States to be that beacon of liberty and leadership and to provide helpful support to our allies that repel autocracy and authoritarianism. And so to me, I think they've declared war on us, whether we like it or not. It's an economic war. It's a hard cold war, if you will, or lukewarm war.

It's economic, but it's also strategic, AI-related, social media-related. And I think I guess what's at issue for us and what we have to understand as a group of people is where we're going to be in five or ten years. And I think if we don't continue with the sanctions that we have on the Chinese, unless they change their view towards the West, we have no choice but to continue to put pressure on them. In no time soon, however, will they attack Taiwan? That's the opinion of this program,

just based on what it would take to attack Taiwan. So this is difficult stuff for this current president and any future president. No, but you're on my podcast, Ma. You're listening? You ready to be on the show? All right, Ma. So we're fighting with the Chinese, right?

Right. And we're fighting with the Russians. Right. So you think we should be doing that? Or how do we make peace with these people, Ma? What would you do? Any peace. Okay.

And so there's no peace to make with him. He's got a little bit of an inferiority complex, and he's trying to flex on everybody, right? Yeah, for sure. All right, so then you agree with Biden then in funding the Ukrainians then, yeah? Yes. Okay. Yeah, I feel terrible because of it won't stop.

I believe that, too. Why would he stop? once he feels the weakness, it'll strengthen him politically to continue. Right. So you have to beat him now. Otherwise, we're going to have a bigger problem, right? And the Chinese, I feel. Go ahead, Mom.

I probably have to edit it if you say something ridiculous, but go ahead. I feel in being in China. Okay, so there's lots of, yeah. So there's a lot of human rights violations that are well known and well documented in China. They do have a large population, but the problem is they don't have enough young people to sustain the older people. So they're sort of upside down in terms of the demographic of the population. But so we don't want you in there. Okay, here we go again with me.

But our country is fixable. You're right about that. And also the relationships that we have with our allies can be strengthened. But you're worried about China or you're not really worried about China? All right, what out you want to talk about, Ma's your show, okay? You're the star of the show, so what else you want to talk about? Anything else? I love you very much, that's for sure.

All right, I love you too, Ma. All right, I'll call you later. All right, okay, honey, bye. I am Anthony Scaramucci, and that was Open Book. Thank you for listening. If you like what you hear, tell your friends, and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a round.

rating or review. If you want to connect with me or chat more about the discussions, it's at Scaramucci on Twitter or Instagram. I'd love to hear from you. I'll see you back here next week.