The Age of Empire Strikes Back: Stephen Kotkin on Trump, Wrestling, and the Use of American Power

In this episode of Goodfellows, host Bill Whalen and guests Sir Neil Ferguson, John Cochran, and Dr. Stephen Kotkin discuss the current state of American power and governance under Donald Trump's presidency. They explore the sustainability of American dominance, considering factors like military expenditure, economic power, and political polarization. The conversation touches on Trump's executive actions, the potential decline of American influence, and the challenges posed by geopolitical rivals like China. The panelists also debate the effectiveness of Trump's policies, including tariffs and deregulation, while contemplating the broader implications for America's future as a republic or an empire.

• America has maintained approximately 25% of global GDP since 1880, with only 5% of the global population, showcasing its economic dominance.
• The U.S. military accounts for roughly 50% of global military power, highlighting its significant defense capabilities.
• America's soft power and attractiveness to other nations contribute to its global influence, as evidenced by the high demand for immigration and international collaboration.
• Innovation ecosystems, particularly in technology hubs like Silicon Valley, further enhance U.S. power.

"There's never been a power like America in recorded history. There's never been a country this powerful across as many dimensions as America is."

• This quote emphasizes the unparalleled status of the United States in terms of economic, military, and cultural influence globally.

• Ferguson's Law suggests that a great power spending more on debt interest than defense is unsustainable.
• The U.S. recently began spending more on interest payments than on defense, raising concerns about long-term sustainability.
• Historical comparisons are made with the British Empire, which faced decline due to similar fiscal constraints and geopolitical challenges.

"It only just happened last year that for the first time the U.S. was spending more on interest payments than on defense."

• This quote highlights a critical economic turning point for the U.S., suggesting potential vulnerabilities similar to those faced by declining empires.

• The U.S. debt burden exceeds 100% of GDP, a level not seen since post-World War II, raising alarms about fiscal health.
• Military spending is currently around 3% of GDP, which some argue is sustainable given current global threats.
• The real fiscal challenge lies in social spending rather than military expenditures, with social programs consuming a larger portion of GDP.

"Our fiscal problem is social spending, not military right now. Military is cheap at current levels of threat."

• This quote underscores the argument that the U.S.'s fiscal issues are primarily driven by social welfare programs rather than defense spending.

• The U.S. is a demographic superpower with a large, educated, and entrepreneurial population, contributing to its global competitiveness.
• Energy resources in the U.S. are abundant and relatively inexpensive, providing a strategic advantage over many global competitors.
• The U.S. government system, despite its flaws, is viewed as superior due to its checks and balances and market-driven corrective mechanisms.

"America is a demographic superpower. We have a huge population, a highly educated population, and a talented population."

• This quote highlights the demographic strengths of the U.S., which contribute to its sustained global influence and economic vitality.

• The U.S. has demonstrated resilience in the past, notably recovering from the economic and geopolitical challenges of the 1970s.
• There is optimism about the U.S.'s ability to innovate and reform its institutions to maintain its global leadership.
• The absence of a comparable rival on the horizon suggests that the U.S. can continue to leverage its strengths despite internal challenges.

"Coming out of the 70s and seeing what we did after that... and seeing nothing on the horizon that's a superior alternative."

• This quote reflects a belief in the U.S.'s capacity for renewal and adaptation, drawing on historical examples of overcoming adversity.

• Despite criticisms, there is a high demand for American leadership and intervention in global affairs, particularly in Europe.
• The U.S. is seen as a necessary force for stability and security, with allies often seeking increased American involvement.

"The demand for American power is off the charts... every single conversation is about we need more American power than we have."

• This quote illustrates the paradox of global criticism of the U.S. juxtaposed with a reliance on its power to address international issues.

• The U.S. faces significant fiscal challenges primarily driven by entitlement programs established in the 1930s and 1960s.
• The aging population and low fertility rates are deteriorating demographics, increasing reliance on immigration.
• Political consensus makes it difficult to reform Social Security, Medicare, and Medicaid, leaving discretionary spending, including the military, vulnerable to cuts.

"The United States has a huge fiscal problem that it can't easily solve because as John rightley says the drivers are entitlement programs that date back the 1930s and the 1960s."

• This quote highlights the entrenched nature of entitlement programs as a major driver of the U.S.'s fiscal issues, dating back decades.

"Therefore you're left with discretionary spending about half of that is the military so there are inexorable forces at work here on one side the rising debt and the costs of servicing that debt on the other the difficulty of maintaining your defense budget at a level sufficient to deter your enemies."

• The quote emphasizes the tension between rising debt costs and the need to maintain a sufficient defense budget, given the constraints on discretionary spending.

• The U.S. has struggled with effective deterrence, as seen in recent geopolitical events with Russia, Hamas, Hezbollah, and potentially China over Taiwan.
• There is a non-trivial probability of a showdown over Taiwan, and the U.S. is not currently prepared for such a confrontation.

"The United States has not been doing a good job of deterrence in the last four years didn't deter the Russians from invading Ukraine didn't deter Hamas and Hezbollah from attacking Israel."

• This quote underscores past failures in deterrence, indicating a pattern of geopolitical challenges where U.S. deterrence was ineffective.

"There's a non-trivial probability of a showdown over Taiwan at some point in the relatively near future and we all know certainly everybody in the Department of Defense knows that the United States is not ready for that Showdown."

• The quote highlights the urgency and seriousness of the potential conflict over Taiwan, emphasizing U.S. military unpreparedness.

• Attempts to reform the U.S. government resemble efforts to streamline operations like a private company, but face significant challenges due to entrenched spending priorities.
• USAID is criticized for inefficiencies and political motivations rather than fiscal prudence, reflecting broader issues in government spending and reform.

"What we're seeing at the moment is a rather frantic attempt to re-engineer the federal government as if it were Twitter."

• This quote illustrates the chaotic and perhaps superficial nature of current attempts to reform government operations.

"This is about politics, what we learned with USAID is that yes some money eventually goes to good purposes but that the way USAID runs is it sends money to nonprofits who send money to NOS who send money to foundations everybody takes a 50% cut off the top."

• The quote critiques USAID's inefficiency and the political nature of its operations, suggesting a need for deeper reform.

• Historical examples, such as post-World War II UK, are used to illustrate the impact of economic policies on national decline.
• The U.S. faces challenges in maintaining its power and influence, with debates over the will versus capability in dealing with global powers like China.

"UK decline... I don't think it was debt I think it was socialism at the end of World War II UK put in highly planning focused socialized policies."

• The quote draws parallels between the UK's historical economic policies and current U.S. challenges, suggesting policy choices impact national trajectory.

"The US's power needs ability and will so far not running up against China and Taiwan the question has been the will not the ability."

• This quote reflects the ongoing debate about whether the U.S. lacks the will or the capability to effectively confront global challenges.

• Recent policy changes, particularly under Trump, have sought to balance economic growth with environmental considerations, resisting European-style climate policies.
• These policy shifts are seen as examples of potential economic vitality and reform.

"In two executive orders he said we are not going to kill our economy on an altar of European climate policies that don't do anything to save any carbon by the way."

• The quote highlights a policy stance prioritizing economic growth over stringent climate policies, illustrating a broader strategy for economic reform.

• Trump's leadership style is compared to WWE, focusing on spectacle and attention rather than substantive governance.
• There are concerns about the lack of a coherent budgetary process and effective governance under this administration.

"World Wrestling Entertainment is known as WWE and it's this amazing show that has a tremendous following in the United States... that's what kind of policy we have now."

• The quote uses WWE as a metaphor for Trump's leadership style, emphasizing spectacle over substance.

"We need a government that means we need a functioning Congress we need a budgetary process."

• This quote underscores the need for effective governance and the establishment of a functional budgetary process.

• The U.S.'s global strategy is questioned, with concerns about its ability to handle major geopolitical challenges, particularly regarding Taiwan and China.
• The potential for conflict with China over Taiwan is seen as a critical test of U.S. power and strategy.

"If China blockades or quarantines Taiwan doesn't need to invade it it throws down a gauntlet to the United States which seems to me very very hard for the United States not to pick up."

• The quote highlights the strategic dilemma the U.S. faces with China over Taiwan, emphasizing the potential for significant geopolitical conflict.

"The choice will be between World War II or capitulation there won't be much in between."

• This quote starkly outlines the potential consequences of a conflict with China, framing it as a choice between major war or significant concession.

• The discussion opens with the concept of hybrid warfare, highlighting China's involvement in global telecommunications, data exfiltration, and market dominance in drone manufacturing and batteries.
• Despite these advancements, the Chinese government faces significant internal challenges, including a lack of confidence and fear of its own populace.
• Political liberalization poses a threat to communist regimes, which historically cannot survive without a monopoly on power.

"They have infiltrated our telecommunications Network, they exfiltrated tens of millions Personnel files, they cornered the market on drone manufacturing and batteries that were dependent on all the things that you know and write about and yet there's a lack of confidence there that runs really, really deep."

• This quote underscores China's strategic advancements in critical sectors while highlighting the internal vulnerabilities and lack of confidence within its political system.

• The ongoing Israeli-Palestinian conflict remains unresolved, with traditional approaches proving ineffective.
• The Marag Gaza proposal is mentioned as a potential disruptor, aiming to challenge the status quo and offer new solutions.
• The proposal suggests allowing Palestinians who wish to leave to do so, potentially leading to a reformed situation in Gaza.

"You may not like maraza but nobody else has anything to offer other than another 50 years of terrorism for the Israelis and suffering for the Palestinians."

• This quote reflects the frustration with the lack of progress in resolving the Israeli-Palestinian conflict and the need for innovative approaches like Marag Gaza.

• The discussion shifts to the U.S. economic strategy, particularly the use of tariffs as a geopolitical tool.
• Tariffs are traditionally seen as economically detrimental, yet they may serve as an alternative to sanctions in certain geopolitical contexts.
• The potential risks of tariffs include creating trade uncertainty and affecting the bond market, but they are not seen as a major threat to economic stability.

"Tariffs are always an answer in search of a question and if the question is improve the US economy sorry that's not the answer."

• This quote highlights the skepticism surrounding tariffs as an economic strategy, suggesting they may not effectively address economic challenges.

• The conversation touches on the potential economic risks facing the U.S., including a bond market accident and equity market corrections.
• Comparisons are made to historical economic downturns, suggesting that the current administration may face similar challenges.
• Despite optimistic beginnings, there are concerns about the administration's ability to navigate economic headwinds.

"There's a real risk here of a bond market accident that's clearly a major preoccupation of the treasury secretary with good reason."

• This quote emphasizes the concern about potential financial shocks and the need for careful economic management.

• The resilience of American power is discussed, noting its ability to withstand internal and external challenges.
• The importance of government competence is stressed, with a call for effective governance rather than simply reducing government size.
• The current political landscape is characterized by division and a lack of clear mandates for revolutionary changes.

"American power is very hard to wreck because we try all the time and it's still there."

• This quote underscores the enduring strength of American power despite ongoing challenges and attempts to undermine it.

• Discussion on the limited political capital and the potential consequences of government actions.
• Reference to historical attempts to improve government efficiency, such as the Clinton-era National Performance Review.
• Concerns about the current state of democracy and governance, with references to editorials on democracy being under siege.

"If you break and it turns out that you get bird flu in your egg supply and your kids in Trump country are dying from a disease that the government can't seem to fix..."

• This quote highlights the potential dire consequences of government inefficiency and the importance of effective governance to handle crises.

"Thirty years ago we had a conversation in this country about better government... the Clinton's National Performance Review..."

• Reflects on past efforts to improve government efficiency and how those efforts are perceived in the current context.

• Comparison of current American political culture to sectarian divides, with hardened party lines.
• Historical perspective on the longevity of republican institutions and the risks of partisanship.
• Concerns about the implications of increasing political polarization and its impact on governance.

"American party affiliation is hardened into something sectarian..."

• Describes the deepening divide in American politics, likening it to sectarian conflicts.

"Republican institutions tend not to last very long historically..."

• Warns of the historical challenges faced by republics, emphasizing the potential risks of current political polarization.

• Examination of the role of governance in national success and the challenges of innovation in government.
• Discussion on the balance of power between Congress and the executive branch.
• Concerns about the expansion of executive power and its potential consequences.

"Ultimately it's governance that makes possible successful performance across the board for the longer term..."

• Emphasizes the critical role of governance in ensuring long-term national success.

"Students of History will tell you that limits on executive power are really important..."

• Highlights the historical importance of maintaining checks on executive power to prevent potential abuses.

• Analysis of the Trump Administration's goals, including shrinking the federal government and restoring the imperial presidency.
• Discussion on the administration's foreign policy strategies and their internal competition.
• Consideration of the limited time available to achieve these goals and the potential impact on future governance.

"The goal here as we come out of a boom is to shrink the federal government..."

• Describes the Trump Administration's objective to reduce the size of the federal government.

"There are four or five different strategies... the foreign policies plural are in competition with one another..."

• Highlights the complexity and internal competition within the Trump Administration's foreign policy strategies.

• Concerns about the health of democracy and the ability to lose elections peacefully.
• Discussion on the implications of legal battles (lawfare) in politics and governance.
• Reflection on the stakes of elections and the potential consequences of losing.

"The key of keeping our democracy a republic going is you must be able to lose an election..."

• Emphasizes the importance of accepting electoral outcomes to maintain a healthy democracy.

"The stakes are so high you can't afford to lose an election..."

• Warns of the dangerous implications of high-stakes politics where losing is not an option.

• Discussion on the potential for significant political and governance changes.
• Reflection on historical shifts and the possibility of a "vibe shift" in global politics.
• Optimism about the potential for positive change despite current challenges.

"This could be a moment when... we are, I think, at that kind of moment..."

• Expresses hope for a significant political shift akin to historical transformations.

"Trump is a reflection he's an embodiment of a mood that is coming..."

• Suggests that Trump represents a broader global mood and potential for change rather than being the sole driver.