TRIGGERnometry - Triggernometry - Ep. 4 Pippa Malmgren

Episode Date: May 13, 2018

Triggernometry - Ep. 4 Pippa Malmgren by TRIGGERnometry Podcast Learn more about your ad choices. Visit megaphone.fm/adchoices

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SelectQuote.com. That's selectquote.com. Select Quote. We shop. You save. Full details on example policies at selectquote.com slash commercials. People Magrim, welcome to Trigonometry. Well, thank you for having me. Hello and welcome to Trigonometry. I'm Francis Foster. I'm Constantine Kisson.

And this is a show for you. If you're bored of people talking on the internet about subjects, they know nothing about. At Trigonometry, we don't pretend to be the experts. We ask the experts. We're here in our makeshift studio, the world-famous Angel Comedy Club, and our amazing expert guest this week is a fantastic Piper Malmgram,

who's a former senior economic advisor to President George W. Bush, a renowned author and the founder of H-Robotics. Pippa Magram, welcome to Trigonometry. Well, thank you for having me. Pippa, so tell us a little bit about your journey and how you actually ended up doing what you did, being who you want, how are you here? Well, being an economist,

I kind of think I've sort of snuck in and nobody noticed. I mean, really, one of the greatest compliments I ever get is people would go, you don't look like an economist, and I'm like, thank you. Anyway, you know, I was lucky. My dad was the chief trade negotiator for the United States under Kennedy, Johnson, Nixon, and Ford. Wow.

You work for both sides, never left. So I grew up in a household with my dad explaining, you know, when your shoes are made, The upper part will be made in one country and the lower part in another country and then put together in a third country. I thought it was fascinating. So I just was always interested in what was going on in the world economy and studied it and somehow ended up working in the White House being president's advisor on economic policy. That's when we had Enron, WorldCom, seven of the nine largest bankruptcies in American history in one year. And then we had 9-11, so that was a very eventful period in my life.

and in everybody's life. And I don't know, my thing is really just, I'm fascinated by the world economy and the human aspect. All the other economists, they just love to number crunch and do models in these huge mathematical formula. And I'm like, yeah, but how are they feeling? You know, I'm more interested in, and how does the society respond to what's happening in the economy?

This is going to sound like a really trite question, but what is it like working in the world? White House, just going in every day. I mean, that must be a huge thrill. You know, it is, and I'll tell you what, it's interesting. My mom studied with J.R.R. Tolkien, right? She studied medieval English with him. And I was so struck when I first went to the White House, and I realized, when you walk

into the Oval Office, your ego expands. So suddenly, you're like, holy, I'm here, and the president is asking me my advice. And you realize, Ghalem lives above the door of the Oval Office. And when you walk in there, he jumps on your shoulder, and your ego just goes crazy. And it tells you, don't tell him what you think. Tell him what he wants to hear. And in that moment, I kind of realized, oh, my God, I'm a hobbit, right? I want to tell the president what he needs to hear, not what I think, you know, not what he would like to hear, but what I think he needs to hear.

And actually a lot of people who work in that environment, they don't really operate that way. They'll tell him what they think he wants to hear. So it must be fascinating over a period of time. You must see people's personalities completely change. Totally. I had one chief executive who came into my office. He goes, the president's policies are terrible, and he should fire the Secretary of Treasury, and it's all a disaster.

And he's like, great, let's go over and tell him. And as we're walking, he's just bombarding me with how bad it is. We arrive at the Oval Office as he crosses the door. He turns in this totally obsequious, Mr. President, I am so delighted to me. What happened in you? Slow, slow. Come back to me. Come back.

Go look at the light. And he never set a word. Because why? He suddenly has visions that he is going to be the American ambassador to name the country. I love best. That he's going to be invited on Air Force One. And this is one of the biggest problems, I think, for all leaders. But heads of state, literally.

You know, people get obsessed by the power and the paraphernalia and my precious. And it's a huge danger for all leaders. And they have to pick people to be around them who aren't affected by all that stuff. Well, talking about obsession with power, the question that you probably get more than any, what do you make of Donald Trump at the moment and what's been happening? The economy seems to be booming under Donald Trump. At the moment, is it gone too far? I mean, what is happening?

Well, okay, so first of all, presidents don't make the economy do stuff. But their policy stance does matter. It sends a signal. But a lot of the things are happening right now kind of started well before Donald Trump. So like, for example, wages went up in China like five times in the last three or four years. So the Chinese manufacturing picture is not very competitive anymore.

And in fact, the U.S. is very competitive in comparison. So the job started moving back to the U.S. Now, he says, you know, I did this. And you're like, well, actually, it kind of was already in motion. and you're a bit lucky with that. On the other hand, it's also true that his policies are helpful for that outcome. So drawing a line between what a president gets to take credit for,

I mean, basically all presidents are entitled to their luck, and they all claim credit for stuff that they didn't necessarily actually cause. The other awkward thing, I mean, awkward is putting it mildly. What he represents, what he represents, in my view he represents a desire by those who supported him not just to be a change in Washington but literally to burn the whole thing to the ground to be a total destroyer is that of the system drain the swamp drain the swamp burn it down and as he does this the honest truth is well there's some element of truth it had

become hugely overgrown it had become almost inoperable like My first job, and I know it's really awkward and weird to say, my very first job was working for President Reagan. Oh, wow. As a White House intern, I was 12 a time. But anyway. Yeah, I delivered papers from my job. So how many degrees did you have at this point, Biffon? Anyway.

But, of course, now I've lost my time at that. No, I'm just kidding. So one of the things you realize from being around that environment is it matters how it's structured. So at that time, National Security Council had like literally 50 people. Today, after President Obama was in power, it was 450 people. Now, there's not enough time in the day for 450 people

on one area, national security, that doesn't include the National Economic Council that I was on, or the Domestic Policy Council, or Homeland Defense, to all brief the president. So, you know, I'm kind of with, that sounds so terrible, but I'm gonna with Trump on the, you have to make it smaller because it doesn't work, but it still needs to work somewhat.

And he's like, well, I don't really care whether it works or not, I just want it out of the way. The other thing is, you know, the way he talks is so toxic. And I think there are a lot of people who might be aligned with him philosophically, make government smaller, have lower taxes, more freedom for businesses. But do we have to insult every possible member of the community? the community that doesn't look exactly

like a middle-aged white male. Yeah. So you're troubled by this? Well, yeah, absolutely. It's unnecessary... Isn't that how he won, though? It is? Well, and I would say his negotiating style also reflects this, right? So, you know,

he announces stuff like the steel tariffs, or he announces, you know, we're going to use the entire nuclear arsenal on North Korea. And everybody goes, bah, you know, Yeah, but then what happens? The North Koreans agree to come to the negotiating table.

I suspect what we'll find on the threat of trade wars is everybody comes to the table. So he's like the bully at school who comes up to you on the playground, and first he just wax you, you know, just a punch to the chin. And when you're lying on the ground, you're like totally off balance, then he goes, okay, let's talk. It's literally a style. a style. Sorry, your example has given me flashbacks.

I'm kidding. And so, anyway, highly disruptive. And this is the way to think about it. He's literally like an Uber phenomenon in politics. He is disintermediating the traditional power structures for better and for worse. Depends on your angle.

Do you think that, I mean this is quite a loaded question. Do you think that he is... I look for you. Because he said certain things that can be construed as racist, for instance, some Mexicans are racist, a rapist. Yeah, but do you think that is a tactic of his, or do you think he genuinely believes those sentiments? I don't know him. I've been lucky. I've been, I've met a number of presents and years. I thought you were going to say, I've been lucky I haven't

met him. A number of years and presents. I don't know him. I know some people who've worked for him. my suspicion is that he has this kind of banter that's deliberately designed to be totally provocative. It's back to the negotiating style. But that probably, if you really sat down with him, he is not, you know, thinking I want to specifically exclude these minorities from having a future. But how do you disentangle it? This is the question. How do you disentangle it? Here's an awkward point here.

When we look at the numbers voters who supported Trump in the election, the numbers of women and minorities, both African Americans and Hispanics that supported him was higher than any of the pollsters anticipated. Well, higher than Mitt Romney and John McCain, actually, wasn't it? And so the question is, why? And my theory is this. in the establishment world, there's often not a place for women.

I mean, I left invest in banking because I felt I could create my own thing and have more freedom and say what I felt about the world and not be constrained. So as a woman, I left the establishment and created my own company. A lot of African-Americans do the same. A lot of Hispanics do the same because their opportunity for promotion is not huge, right? which is something we have to fix. But in the meantime, what do you do? You become an entrepreneur.

Now, the moment you're an entrepreneur, you're the breadwinner, you've got to pay the bills, and you look at Trump and you go, I don't like what he says. But if he stands for lower taxes, smaller government, less regulation, I'm going to vote with my breadwinner hat first. And then we can talk about the position I occupy in the society, which doesn't in any way forgive this whole business of being, as you say, racist and almost separatist.

Like everyone is in a separate group with him. It doesn't forgive that, but it may be explained some of these voting dynamics. I find it incredibly fascinating because my mother is Latin American. She's from Venezuela. And she's a fan of Trump. And because the reason is she saw Obama as being a soft touch. And she likes the fact that there's a president who has come in, who is hardline, who says what he believes in inverted commas,

and it's something that she can, you know, whether you like him or whether you don't, you know what Trump stands for. And in a lot of the time with a lot of politicians, especially in the UK, you look at it and you go, I don't know what you represent. Well, I hear you, and I think it's very interesting

that international observers are more afraid of Trump than they've been afraid of previous presidents. And it's a stark contrast with President Obama, for example, when I talked to the Chinese and the Russian leadership, their view was they could pretty much do anything and get no reaction from President Obama. You know, the South China Sea issue, right? Where the Chinese are building, you know, all these sort of military facilities in the middle of the South Pacific. And they interviewed the general who was in charge. And he said, well, you know, we put a huge building crane on the island and we waited for President Obama to react.

no reaction. So then we started using it and then no reaction. We started building a runway. No reaction. Next thing we're like landing our military jets there. No reaction. That caused them to think, okay, well, we can do a whole bunch of things and basically there's no consequences. Then Trump comes in and he basically threatens to use everything and suddenly everybody's walking on eggshells. And so it's a strange turnaround. And interestingly, the Chinese in particular viewed Trump as a one-off in history in that he is our first president who is literally prepared to give away territory. So while he's supposedly tough, he's a negotiator. So he means basically a property guy or he's trying to get a deal done.

So for example, with North Korea, I suspect that part of the way he's managed to get everybody to the negotiating table is he's basically said to the Chinese, if you can diminish this North Korea nuclear problem, just keep North Korea. Just soft annex that thing. And that is the message he gave the Russians on Ukraine, right? He said, well, we're not interested. We don't have a national strategic interest. If you want it, you can have it. It's the same thing he said about Syria and the Russians.

You know, you want it. That's a problem. We don't want it. And the Chinese are like, oh, my God, he's giving away territory. What can we get? And from a Chinese point of view, to get a global problem. greater degree of influence over North Korea, it's a huge benefit to that. So I'm just saying it's very interesting that we have a president who has said,

I'm not into foreign policy, and yet he seems to be presiding over more movement in foreign policy than we've seen in many years. It's all very paradoxical. Look, I spend a lot of time telling you what's wrong with the world, so let me tell you about something that's actually right. Sleep, specifically getting more of it, better calls. The kind where you wake up and feel like a human being, rather than someone who's been thrown down a staircase. Most mattresses are just layers of synthetic foam and crossed fingers. You're spending a third of your life on the thing, and most people have no idea what's actually in it. Avocado green mattress is different.

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Avocado green mattress.com slash trigger. Talked about Trump. Let's keep it light. Let's move on to Brexit. Essentially, what is Brexit? And if you could just explain. Does it make it racist if you vote for Brexit? So, okay, I think what it's really about is centralization versus decentralization of power. And all over the world, people have been damaged by the huge debt burden that's bearing down. I kind of think it's the debt burden that's like the huge silent wrecking ball that bears down on the society, and it literally breaks the promises that hold the society together.

So suddenly you realize that government used to say you could retire at, you know, 65, and now the message is it's going to be like 93, right? Because you don't have any money, right? And, you know, things that you used to get your trash picked up, I don't know, twice a week, and now it's like once a month. And you don't have to pay for it if you want more. All these little things cause people to start getting angry and upset. And they're like, hey, what has happened here? And then it got worse when we had the financial crisis. And suddenly everybody who was rich and powerful, got a blank check for having messed up. Right. And everybody else had to pay for it. So the first question that comes up is, how has this happened? And then the next question is, why are you in charge? Now, the moment you ask them, why are you in charge, this is the origin of Brexit, but frankly, Trump, populism in general. It's also the question behind the move to the right that we're seeing across the European Union.

China has had its version as well of people challenging the government. It's like, why are you in charge? What are you delivering? Yeah, definitely. That's fascinating. It doesn't get as much airtime, but it's been a very big issue, and partly why we've seen a tightening of the control of power by Xi Jinping. So that's actually a response, as opposed to him just coming in and going, I want to do the Russian-style lifetime present.

In my view, it's absolutely responding to the same set of forces, so they're all global in nature. So I don't actually think that it was a racist impetus behind it. It's more that if the finances don't add up and you can't, and the government can't look after me, then what are we going to do with all these other people coming in? And it's a kind of demand and request for decision-making to not be made so far away, but to come back to people that I've elected, people that I have a connection with. And I think that's at the core of it, to be honest.

And it won't end until we get the finances sorted. So as long as the debt problem is there, we can expect populism to persist. And what I find is people keep thinking that if we elect one politician like President Macron of France, that he can somehow like wish it all away and make it better. But until you sort the finances problem, then the problem is economies can't grow. fast enough to deliver on people's aspirations for the future. And that makes them frustrated with politicians. And they go, okay, if you can't fix this, I chuck you out until we bring in somebody who

can and you get ever more radical results. Absolutely. Do you think the conservative policy of austerity indirectly led to Brexit or do you think that was not really connected? You know what? I think across the board we're experiencing, now this is a very technical economic term that I'm about to use. Oh, God.

electile dysfunction I'm really serious I've never suffered from that electile dysfunction and electile dysfunction is it arises when you know people really well it's when they feel

and I'm serious about this they feel castration now castration castration cash dration now that is when you look at your bank count and you realize that more than 50% of your income is needed to cover your rent

or your mortgage, and that is before your groceries and anything else. And at that point, you just are so upset and you are like, well, I want something to change. And I think this is, again, if you really want to know what's behind populism, it's not any specific policy decision. It's the inability to get the public past their castration feeling. What about the cultural side of it, people? Because I'm an immigrant here in the UK as a U. I'm like, God, Adam.

I talk about being Russian too much. I'm an immigrant here. Right, that's my point. I'm American, you know. Everyone involved in this podcast and in this show is an immigrant. I was born in this country. All right, man, all right. I've got a passport as well.

But my question is, this narrative in the run-up to Brexit and since Brexit has been the British people of these monstrous, racist xenophobes, which I really haven't found to be my personal experience as an immigrant in this country. So my curiosity about that is do you think the narrative in the run-up, in the last 15 years, there has been this narrative in politics, this idea that if you bring up the issue of immigration, if you're concerned about large numbers of people coming to this country from Poland and for other countries,

particularly when under Blair's government, there was no, what do you call it, the period where the adjustment period when the countries joined, all the other countries put restrictions on immigration in the European Union, but Britain didn't. So that kind of forced everybody who wanted to leave their country, Poland or others, to come to Britain, right? There was a period of a large inflow. And at that time, there was this notion that anyone who brings up the issue of immigration must be racist. Do you think that is something that pushed a lot of people into the arms of UKIP, into the arms of the Brexiteers? I also haven't really come across this racist element.

At the time that Brexit was unfolding, I had my book out, my book out. signals and I was up in the north and talking to people about how they felt and what they kept saying was I have no problem with immigrants I've had immigrants in my community all my life my parents life ever since empire my problem is immigrants getting a check for a new car and I live here and I don't get a check for a new car in other words they were they were aggravated about what the British call queuing that somehow the outsiders were jumping the line and getting an advantage I think that was more issue but I actually think this whole discussion about immigration is a bit of a red herring it's a much bigger issue what it is is a breakdown of trust in institutions across the board

right so we've had you know the media and trust in the media has broken down the church trust in the church has broken down yeah trust in literally every institution of society and and as that trust breaks then people become more closed in in their thought process immigration immigration is a, becomes an element of that. In other words, I don't know that it's a cause. I think it's a response. The other thing too is we talk about inequality and everybody thinks that this is a really huge problem.

I think actually there's a slightly different problem that's much more serious and I say what it is is the elevators are broken. And by that, what I mean is you can handle inequality in a society if the elevators work. That is to say if people who are up at the top, if they screw up, they should come down. But what we do now is we write a big check and bail them out. So they get to stay. They get to continue to own all the assets, even though they messed up. And the people at the bottom,

the immigrants who don't have the connections, the education, the doors of opportunity are closed to them. And this is a serious problem because the inequality, people could live with that if they knew they had a fluid ability that you could make it if you worked really hard, if you were bright, if you put your elbow grease in, and that there would be consequences if you messed up. But all that is frozen now. So I talk to a lot of cheap executives and they complain about populism and I'm always like, okay, so when is the last time you hired someone who didn't have a university degree or who came from a displaced background in some way? And they're like, oh, well, I don't hire any of those people. And I'm like, well, you hold the doors of opportunity.

And if you hold them shut to those people, you can't be surprised that populism results. And by the way, the public is going to push you out of the way if you don't open the doors of opportunity. So that's why I think the immigration question, we can focus on it, but it's part of a much bigger problem. And let's face it, in Western Europe, you've got aging demographics, you know, all innovation benefits from diversity of thought, from new energy, younger people. So, you know, immigration absolutely is working in our favor. The question is, how do you manage the movement of people? And I think that's another thing is to expect immigrants to show up in an entirely new society, entirely new culture, and that they should just fit in right away and go get a job.

Yeah, this takes some education on the part of the locals. How do you integrate? I mean, heck, and our militaries, we're not integrating the former military. military guys into society, right? We have a lot of vets who are not employed. This is insane, right? That we can't even integrate people who've come from our society and gone off and fought our war. So I think there's something about how do we create structures that are more inclusive, more generally. And so that's why, I don't know. I just don't think immigration by itself is either the question or the answer. That's absolutely fascinating. Thank you, Pippa.

I was going to say, do you envisage Brexit becoming a success, or do you think it is going to be this financial disaster as it's painted in some of the more left-wing press? I think it's painted disaster in all the press. I think there's anybody... I think I'm the only one who is saying, actually, the country's going to be fine. You know, my personal view is Britain would have been fine either way.

It's just easier to have the economy grow more strongly, out, and I'll explain why, but it's not like it's a binary win-lose. And also, it's not a case that it's either Britain's successful or the European Union. Both of them can be successful. I mean, the world economy is full of many economies. They're all successful in their own different ways. So what really bugs me is this idea that the British economy is going to slide into the North Sea and just sink. I'm like, this is not what happens to the fifth largest economy in the world. So here's how I think about it. The decision's been made.

So, money is a lot like water. It literally flows to wherever it faces the least resistance. So unless the British are going to raise their taxes and their regulatory red tape to be at or above the EU levels, which personally I think is an impossible task, the British couldn't do it, even if they want to do, this is not going to happen. And also if they were to abandon the traditional British rule of law and be comfortable moving to the Napoleonic, code environment that dominates the continent. Then maybe, but the fact is that's not where the British are. And so I think actually the economy is turning out to be just fine.

And we can see the data is all better, right? Employment is higher, unemployment is lower, growth has gone up. Well, we haven't left yet. Well, I know, but you know what? Markets discount all that in advance. So this idea that somehow we just haven't hit that wall yet doesn't really work for me. And I'm working with the world's biggest investors, right? I'm talking to the biggest institutional investors, sovereign wealth funds,

or pension, but here's what they say. They say, I may not like the uncertainty of Brexit, but I still can't make any money in Italy, in France, in Germany, because the economies are too slow. They're not growing fast enough. They're not dynamic enough. You don't have enough innovation going on. You still have, you know, in Italy, nearly 40% unemployment of people, age 25 and under,

which is why they're all in the UK, because there's nothing for them to do at home. So all that innovation came here. So they're all saying, you know, I'm going to continue to deploy foreign direct investment into the UK, even though Brexit has happened. So my hope is that what happens in the EU is they move more in the British direction,

which is to free up and to have less regulatory red tape, less sort of top-down state control, but I fear they're moving in the other direction. And that's something people haven't talked about yet is, you know, the new EU without Britain may be much more centralizing, much more centralizing power than before. And I think this is partly why we're seeing the voters say no. And so you see the rise of the right voters, the right wing voters in Italy, in Germany, in Denmark, in Sweden, in Austria. Well, is this coming from the blue? No, it's coming because the more the EU-tube.

try to tighten and centralize and top-down control, the more the public says, well, actually, I'd rather have the decisions made at the level of my government where I know. So in a sense, they're having their own Brexit phenomenon. It may not end in anybody leaving, but it's the same set of questions. It's the exact same set of questions. But I find that fascinating because my father voted for Brexit. And my dad's not racist. He married an immigrant. And I remember talking to him about why he voted, he went, because Europe wants a federal republic of Europe, and I don't want that. You know, I love

going to Europe, I love being, but I'm not, I don't want that. Well, I think this is the key thing. I love Europe. I lived in France for many years. I have great admiration for everything, all the European ideals, etc. I think there's a question about the philosophical

direction that the leadership of the commission has taken. And they are moving in much more, as you say, a federalist, you know, the first speeches after Brexit were in a one European army, one European, you know, policy stance. And, you know, countries like Ireland, they're like, wait, does that mean we have to raise our tax rates to be the same as the rest of Europe? And the answer is, yes, that's what they want to have happened. And so if you believe there should be competition between these nations to see who can be most competitive, then you're not really comfortable with where the European Union is going.

but that doesn't mean you don't love Europe or you don't admire the ideals of a unified Europe the question is what is the right direction and the voters in Europe are going to express themselves and we're seeing that so that's totally their call where they want to go with that because it's fascinating how I mean because working in comedy in the comedy industry

it's incredibly left wing and a number of people I mean I voted Remain but a lot of people were saying well we should have another referendum and that to me is undemocratic. Do you agree with that? Or do you think we should absolutely stand by the referendum? Yeah, I find it, you know, hard to imagine going to another referendum. I don't see how it would make things better and I could see how it would make things worse.

My big question is why they threw it out on the table to begin with, you know? And I don't think enough people kind of go back and ask David Cameron, what were you thinking? What was that about exactly? And it's a good example of politicians who assumed. They just assumed. And actually the public's in a different place from what they assumed. And this is part of the problem. You think he thought he was going to win 100%.

Oh, for sure. And everybody working in the cabinet office was like, we were completely shocked. Totally shocked. I'm like, have you been outside of London at all? You know, all you have to do is get outside of London and you hear it right away. You know, it's a question of perspective. I think that's one of the problems. I'm just finishing a book on leadership, leadership in the 21st century.

And one of the things that's interesting is we move so fluidly, right? We get on a plane. We go to China. We're in the United States. So we go, oh, I know what's happening. But just because you go somewhere doesn't mean you know what is happening. And I think that's one thing we've all got to be better at is to not just go and assume, but to go and listen.

And you'll hear people tell you things that won't be. consistent with what you thought. Well, it's fascinating, and we'll make this a final point on Brexit. It's fascinating to me because the reason we're doing the show is that for us, I think, Brexit and Trump, there were massive wake-up calls. I can certainly speak for myself. It was like I knew what was the truth, and then suddenly the next day it wasn't true anymore. And I realized in how much of an eco-chamber we've been living.

And that's why we really want to talk to different people who have different ideas and different input on these issues because I feel like if you just go online for your news like we have been doing, you are really not getting a full picture at all. No, not at all. So this is a reason I started to write my book Signals because I feel like what happens is it's literally like everybody's going through life blind in one eye because they'll only look through a mathematical lens at data and models, this deep, almost religious belief that all the answers are things that can be quantified.

And all of the models missed what has happened. And I'm like, okay, so why don't we open the other eye that just looks at all the common sense things right in front of you and begins to detect how much pain are people feeling? I mean, show me a metric that measures the amount of pain people are feeling. But if your rent is going up and your job security is going down, you're going to feel pain. So I'm very big on reintroducing into the study of economics, the discussion of economics, the qualitative factors, which should weigh just as much and count for just as much as the quantitative factors. But it's a really hard argument because everybody in economics is like these quant math guys and they want to all argue about the numbers and it's 0.04 and you're like, but the person is crying. They're clearly in pain about their situation.

How do you put that in the model? So Russia's been in the news. As you know, I'm from Russia. And obviously, by the time this podcast goes out, we could be in the state of World War III, we could all be dead. Who knows, right? But Russia has been in the news. And just looking at the broad picture of what's been happening vis-à-vis Russia and the West,

what is going on? So the first thing is there's such a disparity in the way Russia is viewed. So, for example, the Russians, said in recent years that they want to establish a permanent naval presence in the Mediterranean. Right. And that's connected to their presence in Syria. And the view you get from the Americans, you know, the Pentagon guys is, well, do you think their ships will sink on the way or on the way back?

Like, actually, they're totally dismissive because their view is Russia is this tiny, rinky dinky little country that happens to have nuclear weapons. And Russia's view is we are superpower. and the fact their economy is not functioning very well is by the by. We are a nuclear superpower. So it creates this disparity in perception gap. Sorry, I appreciate you not doing a Russian accent there, by the way. Yeah, I wasn't even going to do it.

Are you kidding? No. We are super power. Thank you, Francis. I can always trust you to lower the tone, my friend. But the other thing is there's this tendency to view Russia as a small player, not really very significant. I think also means that we miss some materially important events. Like we're seeing something that the deputy head of NATO called the Ark of Steel,

which is the Russians are building physical military bases through the Arctic. They're becoming much more confrontational and aggressive in the Baltics. Lithuania and Sweden have reintroduced conscription. They're so nervous about what's happening. And all the way through down to the Mediterranean, we see the first Russian military exercises in Libya, in Egypt, in Egypt, places that we don't normally think of the Russians being present. So there's definitely something up, right?

Geopolitics is definitely back on the landscape. The peace dividend has diminished. Right. And there's no question. We're still in a nuclear world. And one of the things I find interesting is younger people who have no memory of the Cold War and mutual assured destruction. They don't take this very seriously.

They're like, don't be ridiculous. Nobody's actually going to use these things. And I'm like, you know, I remember because my dad was in charge of the missile trajectories during the Cuban missile crisis. And at one point, we were down to about four hours. And that was the window. And they literally started preparing on both sides to evacuate for a direct nuclear hit. And interestingly, that's the moment when it all stopped because everybody in government went, can I take my, at that time, wife and children, right, because it was all guys in charge.

and they all went, well, I'm not going if I can't take my family. And as soon as they reach that point, they all went, okay, let's get this thing to stand down, which I think itself is fascinating. But today what do we have? We have hypersonic weapons. I mean, you won't have four hours, right? This is a totally different world with much faster speed. And so I think it is important.

We need to take these nuclear issues seriously. And I think that this is partly what makes the discussion so difficult because from a Russian point of view, everything is about them as a nuclear power. And for the American side, everything is about Russia being a rinky-dinky, tiny little nothing of an economy. And this is an impasse that they cannot get past. And the Russians try to demonstrate their power in other ways. We've seen some of that lately. And I think they will continue to. And interestingly, in this new book I'm writing on leadership, I wanted to use the phrase the new Cold War.

And my editor said, well, we're really kind of uncomfortable with that. And you're like, well, what do we call it? And you realize we don't really have a word or a phrase for this new phase that we're in. And it's partly collaborative. It's partly confrontational. It's not just between the West and Russia. It's also between the U.S. and China. we're having actual military incidents.

I mean, under Obama, we had this unbelievable moment where Obama and Xi Jinping actually signed a memorandum of understanding that prohibits the military pilots on both sides from making obscene hand gestures to add each other while flying. And I'm like, wait, how close do you have to be to the other fighter jet to see the other guy's obscene hand gesture? And the answer is like two coats of paint. And that's how close we are.

flying next to each other, give each other the finger. It's Top Gun. It's the Top Gun. This is not made up. This is for real. So we're in a very, very important time in geopolitics, and I don't think we have enough people really focused on it because it was not a topic for the last, well, since the Berlin Wall fell.

It went away as a subject. So, I mean, how at risk are we of war at the moment? So I don't think we're at risk of war. However, I would say we, used to talk about the European theater of war and the Pacific Theater, right, in World War II, these euphemisms. Today, the theater has moved off stage. Where are the confrontations occurring? They're typically occurring in places the public and the media can't see. So the race for high altitude military satellites and who can knock out the other guy's military satellites at high

altitude. It's occurring in places like the South China Sea that are out of the visibility of the extra territorial locations. It's occurring in the form of a technology race, right? President Putin recently said artificial intelligence is the new space race, and he's right about that. So this race that actually the public doesn't really understand is occurring. And it's huge. The Chinese have just announced they're building, it's incredible. This four million square foot facility in unhoi it will have when they're done it'll be the world's largest quantum computer which is what you need for artificial intelligence and it will literally have 100 million times no I'm wrong see that's why I don't like numbers sorry well one million times the computational capability of the entire planet today when it's finished in three years so when you say are we are we in world yeah so I'm like a hundred million no it's not You were like that guy from Austin Powers there. It's like one video.

That's so true. I just stay away for the numbers. Anyway, but here's the key thing. Are we in a war? We have to change what is our definition of war because I don't think we're going to be in a world where it's the kind of boots on the ground that we've been accustomed to.

But it can be equally important what is occurring now in the high-tech arena. Well, you work and your business is in this area, isn't it? And one of the things that is scary as hell about all this stuff is there's technology now that they can basically switch off the brakes in your car. Of course, absolutely. There's stuff that can just give you a heart attack and no one can tell why you had one. Definitely. Well, let's face it.

We have innovation happening on every possible front. And we're more and more entering what I would call a new dimension of reality. Okay, now you're going to think she's lost her marvels completely. But think about it this way. We have ubiquitous sensors, cameras, the signature on your cell phone, the RFID chips in the seams of your clothes. I mean, everything. There's chips in the seams of the clothes? Yeah, and they're literally one-third of the size of the dimple of a golf ball.

So even if you wanted to rip them all out, you'll never find them off. I'm officially triggered. Okay. And what's happening is all this data goes up into the cloud, which nobody understands the cloud and how that works, right? and artificial intelligence triangulates and it connects the dots and it creates almost like a holographic data spear so that you can see reality with far more precision than if you are looking at reality with your own eyes. Do you know something, Pippa?

There is one guy watching this on the internet who smokes a lot of people. I fucking knew it! I do it! No, but seriously, it's like, well, you have, you. used to talk about black boxes, you know, data-driven black box. Yeah, this is literally like almost a crystal ball because it has so much information. So, for example, imagine that you guys have no fitness apps. Of course, you do have fitness apps on your phones, but it's imagine for a moment that you don't have any fitness apps. Your phone is still tracking the gate

of your walk, the way you walk. And apparently Apple can literally tell who is about to have a heart attack because the way you walk changes. Now, that information, you, you know, that information is going up. Here's another one. There's a guy who's scaring. I'm telling you how this I'm just giving you as it is. Some guy literally burned his house down, right? He

poured the gasoline petrol all over the place and then he said I wasn't there I was at this other location. What he totally forgot is that he has a pacemaker that's broadcasting not only his physical location but the fact that his heart rate has gone through the roof while he's pouring the petrol around.

See, we have to forget. All of us are being And we're broadcasting all the time, even when we don't realize it. And this will happen more and more with technological innovation. Now, on the one hand, it brings good things because you can answer questions and you can solve cancer. You can fix problems. You can make traffic in urban areas more fluid and free. But it also brings this problem of societal control. And it's a two-edged short.

And I think this is the big economic issue that we're all walking into that we need to think out. We're running out of time and we've got one more issue that we want to cover, but this has rapidly become the most depressing podcast. I've ever listened to Jesus. No, but just so we might solve cancer this way. How can that be depressing? So just to go back, so there is literally trackers in our clothes, you were saying? Yeah, yeah, more and more and more. Absolutely. And just every type of clothes, so you go to Nike, there'll be trackers, you'll go to. Absolutely. And you're in your sneakers and in your wallet. And literally every eye, and your glasses, there's a company now that's putting trackers in eyeglasses.

Yeah, I was talking to the head of a clothing company recently, and he's like, I know which of my customers goes to synagogue on Sunday. I know who goes to church on, sorry, synagogue on Saturday, church on Sunday. I know who likes which bar, because you can see where they go. They put on their best clothes. So, yeah, this idea that we're constantly being tracked and broadcast, this is a real phenomenon. We're way beyond privacy. But let me finish one on an upbeat now. Look at my life, because I know.

It's amazing that people haven't. really clock this. It's the whole point of all these sensors that are going in everywhere. Hotel rooms, right? Now they're putting the sensors in the floor so they can actually see how you use the hotel room space. And I'm like, this must be hilarious when I go to hotel room, because the first thing I do is I want to plug my computer in. And where do they put the plug? They put it like under the desk. So the first thing I do is I get down on my hands and knees on the floor. That's just got to get the wrong impression when they go to look at the What are the censors saying about what she's doing?

But everything, literally, the walls, everything, a lot of office buildings now. They've got cameras in the walls that are tracking how you use the space during the day. So, anyway, listen, let me get to the good part. All right. Okay. Go on. There's a good part? Yeah, totally.

So the good part is we really are in an extraordinary industrial revolution. The magnitude of innovation that's occurring as truly epic. It's so much people can't even comprehend. And I'm very optimistic about this and the betterment of society. I actually think also that the stock markets and asset prices are not going to crash. Every economist is like it's imminent, doom gloom, it's tomorrow. I think quite the opposite. Whatever the old all-time high was, it's now much higher.

And for two reasons. One, because this incredible innovation and the cost savings, and I know, you know, I have a robotic company, we make commercial drones. So I can see just that alone, the cost savings and the better management of environmental issues, all that's good stuff. But in addition, you know, everybody remembers this awkward phrase quantitative easing, right? What that was is we threw $20 trillion at the world economy, and governments have not taken it back, right? They've said, oh, we'll do a couple of rate hikes, but it's like taking a cup of water out of the Atlantic Ocean, right? They're not taking $20 trillion off the table, so it's still there.

And that means it's got to go somewhere. And now we're getting a tiny bit of inflation, which everybody is feeling, right, because the cost of the beer, you know, down the pub's going up, right? So you're like, oh, that means I've got to get out of cash because you get killed if you're holding cash with inflation. So what does everybody do? They start to buy equities. They start to invest in the economy.

They buy property. So I actually think the risk is that we're going to have what they call melt up, not a meltdown. Everybody's waiting for this huge meltdown disaster on a scale of what the 2008 crisis was like. I think the bigger risk is that we're all going, oh my God, it's going to crash. It's a disaster. And in fact, what's in front of us is an amazing landscape. And this pessimism is wrongly placed. Well, there's one other issue that we want to talk about.

And actually, I mean, the stuff you were just talking about there, if you ever happy enough to come back, I think we could talk about robotics and that for a whole hour. I'd love to. That would be incredible. All you'd hear is a sound of my brain exploding. There's been a lot in the media, also with the Me Too movement as well, about the gender pay gap.

For instance, so if you could clarify for us what the gender pay gap is, and does it exist? And if it does exist, why does it exist? Well, gender pay gap is basically you pay someone because they're female, typically, less than you pay someone who's male. I think it extends actually beyond gender. You might be paying people of minority backgrounds less than you're paying some guy who's been doing it. So I think it's part of, again, this bigger issue of distrust in authority and questioning, why are the rules like this? How come this works this way? I mean, a couple of years ago, I do a lot

of public speaking. And literally two or three years ago, I had a public speaking agency say to me, we can't get you the same price as your male peers, even though you're getting higher scores with audiences, and it's because you're female. And I'm like, well, then you and I cannot work together anymore, so you're not representing me anymore. Because anybody who thinks this is crazy. Now, on the other hand, did I have to change in order to get my fees up and to get paid what the guys get paid? Yes, I did. And that meant I had to be a lot tougher. And, something as a woman I might not have been so comfortable with. But, you know, if you really want to get to the top, it's a competitive space,

and you've got to punch your way there to a degree. So some of it, you know, it's hard to attribute what's the cause. What's the bottom line is very few people are willing to accept it anymore. And I think we're seeing good signs that it's going to go away. Like Blackstone, which is the world's largest asset manager, they came out and said, any company that doesn't have at least two women on the board, we're not going to invest in them. And suddenly everybody's like, oh, okay, well, then we better do this.

But one issue I have as well is, you know, as a person who gets recruited to be a non-executive director quite a lot, sometimes I feel like, you know, they really want, and this is going to be so controversial, I'll probably get killed for saying. But they're like, what they really want is a man in a dress. In other words, they want to say, see, we've got a woman. but do they really want you to bring all of the things that you might bring, which might be a focus on things that are not so, you know, P&L, right? As a woman, I might say, well, you know, empathy might be a corporate consideration.

Or I might say, okay, chief executives totally focused on the company being profitable, but our social media position is terrible, and we could lose the reputation of this company in an hour on social media. media if we don't pay attention to that, that might be seen by some people as a very feminine approach, you know, focusing on the soft stuff. My view is actually all people who are in leadership or who want to be, they need to play the whole keyboard. There are times when this more masculine way of thinking is appropriate, even for a woman, there are times when a more feminine way of thinking is more appropriate, even for a man. And what you want is to know how to fluidly move back and forth

and in the right moment in order to achieve the right outcome. But the old, the old fashion kind of binary, as long as we're profitable, everything is good. Yeah, that doesn't really work anymore. And adding women to your board, if that's your attitude, it doesn't change anything, so you don't benefit from any diversity. So I guess what I'm saying is it's what matters is the diversity of thinking. And that doesn't get fixed only by having women. It gets fixed by having people of totally different backgrounds, completely different angles, different life experiences, different genders, different races, different cultures. If you mix all that up, now we're talking.

So would you be in favor of positive discrimination? I'm not in favor. I don't think it works to forcefully mandate. So, for example, the difference between what the Norwegians have done where they say by law, every company has to have certain number of women on the board. I think in Iceland they've said it has to be more than 50%. I think it works better when Blackstone says we're not investing unless you have at least a couple. In other words, the market starts to take care of it itself.

And I have to say, I absolutely believe in meritocracy. So I think people should be put in place because they're meritorious. What's wrong is to take people who have merit and close the doors of opportunity to them. And that is happening still way too much. I mean, we still get crazy outcomes. I think this last year, somebody reviewed the intake of new graduates coming into Oxford University, and they discovered there wasn't a single British black kid admitted in the year. I mean, that's just crazy.

That doesn't make any sense. So I don't know how we resolve this, but what I am confident about is everybody gets it now. And so it won't go, it won't just fade away. It'll get addressed. Well, I think that's, we're coming to the end of the podcast, well, the show. I think it's been absolutely fascinating. Thank you so much. And before we let you go, is there anything that you think no one is talking about that we absolutely should be talking about?

You know, the thing that I feel is most important is this business about robotics and everybody fearing that a robot's going to replace me and my life and my job. We're fearing that now. No, no, no. And I don't see that at all. I mean, let's think about it this way. We've had 150 years of automation and more robotics being introduced. And what is the end result? Record level employment.

Record level employment. So what robotics and automation do is they augment human beings. And yes, they will replace some of the jobs. Frankly, the jobs are going to replace are the ones that are really repetitive, incredibly boring. So if you are an accountant doing repetitive work or a lawyer doing repetitive work, yes, you've got a problem. But these people are together enough.

They can figure out how to go reinvent themselves and find something new and interesting to do. What it'll do is force us all to become much more creative and build new businesses, new ideas, come up with entirely new sectors in the economy. And we do this all the time. I mean, if you'd ask anybody four years ago, they would never have thought of marijuana

as an entire sector of an economy. They would never have thought of blockchain as an entire sector. But here we are. It exists. You know, 20 years ago, who'd ever really heard of a coder? Nobody. So we always innovate. And so I'm very confident that actually we will continue to have fantastic levels of employment and innovation. And robotics will work with us to that end.

So I just think a little bit of optimism on that front. You know, again, why are we all preparing for a car crash when, in fact, we're about to have the best assistance we've ever had in history? Well, I think that's the most amazing way to end the show. Thank you for coming in, Pippa. Thank you for being here. Thank you for having me. No, it's been absolutely amazing. Pippa, is there anything before we go that you would like to tell you the audience about,

whether it's your Twitter handle or your books or whatever else? Sure, yeah. So Twitter handle is Dr. Pippa M. And that was deliberate because I wanted to put Pippa M because nobody can pronounce Malmgren. As you know, as you know, too many constants. But Pippa M, you get photographs of Pippa Middleton. rear end, which, although it's a good look to be associated with, it's not the one I was after, so I had to put the doctor in front.

Anyway, Dr. Pippa M. And I try to put stuff up all the time about what's going on in the world economy. And I have a book called Signals that's out. The paperback version is the most up-to-date. And that kind of explains populism and how we got here and how we're going to go forward with a very optimistic take. And I have a book on leadership coming out on September 4th. We'll be getting that. much for coming in, Pippa.

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