Lots More on the Coming 20-Year Storm with Viktor Shvets

Tracy Alloway (0:02)

Bloomberg Audio Studios. Podcasts, radio, news. Joe, it's started.

Joe Weisenthal (0:09)

It started.

Tracy Alloway (0:09)

It's what, like two, three weeks later?

Joe Weisenthal (0:12)

Yeah, so we had, yeah, three weeks basically since the election and the trade war, at least to some extent, maybe a trade skirmish. We don't really know what's gonna happen. It's kind of begun, it started last night.

Tracy Alloway (0:23)

Yeah, so Trump, he didn't tweet. He said on Truth Social, is that what it's called?

Joe Weisenthal (0:29)

And by the way, I respect that he still uses Truth Social.

Tracy Alloway (0:32)

Yeah, kind of a slap in the face to Elon Musk, I guess.

Joe Weisenthal (0:37)

I did a deadlift. One, two, three.

Tracy Alloway (0:39)

Hegemony. Okay, go. Hegemony, barges.

Joe Weisenthal (0:44)

This is an after school special, except.

Tracy Alloway (0:46)

I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Joe Weisenthal (0:52)

Where's the best squid ink pasta?

Tracy Alloway (0:54)

These are the important questions. Is it robots taking over the world?

Joe Weisenthal (0:57)

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. And people are saying, I don't really need to listen to Joe and Tracy anymore. We do have.

Tracy Alloway (1:09)

Cha-ching. The perfect guest.

Joe Weisenthal (1:12)

Welcome to Lots More, where we catch up with friends about what's going on right now.

Tracy Alloway (1:16)

Because even when Odd Lots is over, there's always lots more.

Joe Weisenthal (1:20)

And we really do have the perfect guest.

Tracy Alloway (1:25)

But he said he's thinking about, or he's going to impose 10% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada for some reason.

Joe Weisenthal (1:39)

By the way, we're recording this November 26th, Tuesday. And he specifically tied those tariff threats to Mexico and Canada, to which various conditions that theoretically can be met related to immigration crackdowns and the flow of drugs across the border.

Tracy Alloway (1:57)

Yeah, so this is the thing that's being debated in markets right now. To what extent is this a negotiating tactic? You come in with a big threat and you start from there and you sort of whittle it down, or again, how serious is Trump actually about this?

Viktor Shvets (2:11)

Well, I think it's both domestic and international in a sense that if you think what drives it and why the likes of Bernie Sanders and the likes of Donald Trump read the mood of American people much more than institutionalized people like Biden or Harris is really to do what I describe, actually, Danny Roderick of Harvard University described as a political trilemn of global economy. You cannot have globalization and economic integration, nation states and democracy all at the same time. You can pick up two out of the three, but you can't have all three and you can't have all at the same time. So if you think of domestic and international pressures, I think Trump is reflecting both of them. If you go back in time, it's really Paul Walker deregulating global financial system, followed by Bill Clinton in 1994 NAFTA, followed by China entering WTO in 2001, have created an environment where people feel justifiably or not, but they feel that their jobs, their livelihoods somehow were stalled by other people. And so this is a response to that, to say to people, I am looking after you. I am trying to protect it. But at the same time, there is also inflationary element that I think Trump fully understand, or he must fully understand, that the principal reason why Biden lost was inflation. And so the question is, when you start imposing those tariffs, you have to remember that up to half of all US imports are intermediate goods. So if you actually impose tariffs, you're taxing your own manufacturers and your own exporters. So there is an element of domestic and international.

Tracy Alloway (4:00)

We are here with Viktor Shvets. He is, of course, a global strategist and author of the new book, The Twilight Before the Storm, How to Avoid a World on Fire. World on Fire sounds kind of ominous. Yeah. Well, since you mentioned the tensions in the neoliberal order or what remains of it, what do you see on the horizon? Like what political system are we actually on course for?

Viktor Shvets (4:27)

Well, that's a great question. One of the things my new book explores is that the last time we had the same degree of disequilibrium or polarization was really in 1930s. And back then, there were three systems on the menu. You could choose communism, you could choose fascism, or you could choose constrained democracy. It wasn't a choice between freedom or liberty. It was just a question, how much freedom do we need to sacrifice in order to lower the tensions and defang the extremes? So today, in a very similar position, the world as a whole does not agree on what is the right social policies, political system, economic systems, business systems. And if we don't agree what is the right thing to do, alternatives proliferate. So today, there are various alternatives competing against each other, whether it's China, Russia, Iran, US trying to redefine what it is, Europe is trying to redefine what it is. And we're in this period, which might last up to a decade, where ultimately, we will find a compromise. Ultimately, there will be a consensus that will be established. And the only question the book asks, do we need to go through the world of fire of 1940s? Or can we just go straight into the 1950s and forget the 1940s?