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00:00Tonight, the world on edge. The president marks one year of the second term with new threats to
00:05take Greenland as the region prepares for a possible U.S. military invasion. Then markets
00:11tumble with the fear of a tariff war with Europe. But this time, investors are getting worried. Plus,
00:17tensions rise in Minnesota after the Justice Department issues subpoenas against the state's
00:23Democratic officials as the 11th hour gets underway on this Tuesday night.
00:31Good evening. Once again, I am Stephanie Ruhle, and we are now 286 days away from the midterms.
00:37I'm taking a breath on this one. Today marks one year, one long, long year into Donald Trump's
00:44second term. It has been a year full of Trump finding new ways, both at home and abroad,
00:50to expand the boundaries of presidential powers and to remake the country and the world in his
00:55image. And on that topic, well, it is top of mind with the president. He is traveling to Davos,
01:01Switzerland tonight. And moments ago, the White House said that the trip was delayed because of
01:06a minor electrical issue after takeoff. Out of abundance of caution, Air Force One is returning
01:11to Joint Base Andrews, and the president and team will board a different aircraft and continue on to
01:17Switzerland. Now, this is supposed to be a major, the major economic forum with the biggest CEOs and
01:23world leaders. And tomorrow, the president is expected to talk about affordable housing.
01:28But this year's event is starting to feel much more like an emergency summit reacting to his
01:33threats to take over Greenland. Overnight, Trump posted this fake image of himself planting an
01:39American flag on the territory. He also posted an altered picture that included a map showing an
01:45American flag covering Greenland, Canada, and Venezuela. Today, the president spoke to the
01:51media for a very long time. And I want to share specifically what he said about Greenland.
01:58How far are you willing to go to acquire Greenland? You'll find out.
02:04Meanwhile, in Greenland, the prime minister told residents that they need to start preparing for a
02:09possible military invasion. He said it is not likely, but it cannot be ruled out. And Wall Street
02:15saw a major sell-off. Investors are clearly spooked by the Greenland situation and the new tariffs
02:21Trump has now threatened. We're going to go deeper into that during Money Power Politics later in the
02:26show. But for now, let's get smarter with the help of our lead-off panel this evening. Peter Baker is
02:31here, chief White House correspondent for The New York Times. Leanne Caldwell, chief correspondent for
02:35Puck. And Tim O'Brien, Bloomberg Opinions senior executive editor. But you've known him for years as the
02:41Trump biographer. Peter, I turn to you first. The president says we'll find out just how far he's
02:50going to get. He'll go to get Greenland. How do you interpret that? Well, I mean, it's a veiled threat,
02:57right? And it's not that veiled. I mean, look, the president's people and allies would say, look,
03:02he's not really going to do what you worry he's going to do. Not the most extreme version. He's not
03:06really going to invade. He's just trying to stir things up and get people scared. So they come to
03:12the table, make a deal, et cetera, et cetera, et cetera. Well, maybe. But I mean, the truth of
03:16the matter is, I think what we've learned in this last year, the 365 days since he took office in
03:21second term, is a lot of the things he says he might do or indicates he might do or hints
03:26that he
03:26might do, he's willing to do this time around. And he doesn't have people around him who are willing
03:31to or interested in telling him maybe that's not a good idea. So when was the last time,
03:36Steph, you and I can remember a NATO ally telling their people they needed to prepare for a possible
03:42invasion by the United States, right? It's just it's amazing and stunning that this is what we're
03:47talking about, even if it doesn't seem likely. The idea that that's even out there tells us how far
03:52the world has changed in just one year. Or a non-NATO ally saying, get ready,
03:57there could be a possible U.S. invasion. Leanne, we keep wondering when and if Republicans in
04:02Congress could stand up to the president. Any shot this will be the time?
04:07Steph, I have been I spent all day asking Republicans that exact question. And it's
04:14really interesting. So as Peter said, most Republicans tell me that, look, Donald Trump is
04:21not going to invade. There are going to be no military troops in Greenland. This is all bluster.
04:27This is all a negotiating tactic. You know, maybe this is wish casting from Republicans.
04:33We're not sure. But I will say that I have not found a Republican who is comfortable with the fact
04:41that Donald Trump is perhaps going would invade, use military troops in Greenland. And they say,
04:51many of them say that this would actually be a red line for them. Now, of course, this is private,
04:56this is on background. This is no one who wants to put their name to that statement.
05:02But there is a lot of skittishness on Capitol Hill, if that were the answer. Now, they are trying to
05:08explain away and justify the fact that this is not actually going to happen to try to remove themselves
05:15from the situation. But there is nervousness. What they're going to do about it and say about it
05:21publicly outside of the outliers of the people who aren't running for reelection, like Tom Tillis or
05:27Senator Lisa Murkowski, who is able to withstand Trump in her own reelection, regardless of what he says,
05:35those are very few. But, you know, we're just going to have to watch how this develops.
05:41And it was really hard pressed to find a Republican on Capitol Hill who wants to blow up NATO
05:48for the sake of Greenland.
05:50We're going to get back to Greenland in a moment. But the president spoke for a very long time today
05:55to reporters. I mean, there's a lot to pick through. But I just want to show you, Tim,
05:59just a brief sampling of some of those moments.
06:04The Somalians, you know what they're good at? That's about the only thing they're good at is
06:08they're good at pirating ships at sea, big ships. So what ICE does, and Border Patrol is incredible,
06:17too. I mean, Paul Perez and that group is incredible. Mostly Hispanic, by the way. They're
06:24like 60 percent Hispanic. You know, they talk about Hispanic. They're mostly Hispanic, right?
06:30And they're unbelievable people. And then they say, oh, we discriminate against. I love Hispanic.
06:35To me, a town, it looks better when you have military people. These are big, strong guys,
06:41bad guys. Look at them, and they say, we're not going to mess around. Here's the book on
06:48accomplishments. And this is something. Oh, I'm glad my finger wasn't in that.
06:51So I could have done some damage. But you know what? I wouldn't have shown the pain.
06:55You should have gotten the Nobel Prize for each war. But I don't say that. I say millions and
07:01millions of people. And don't let anyone tell you that Norway doesn't control the shots, OK?
07:07It's in Norway. Norway controls the shots.
07:10You told Norway's prime minister that... Are you from Norway?
07:14No.
07:15You look like you would be from Norway. But you look like she's from Norway.
07:18I said, why? Why is it the Gulf of Mexico? It should be the Gulf of America.
07:22I was going to call it the Gulf of Trump. But I thought that I would be killed if I
07:27did that.
07:27I wanted to do it. I wanted to. Look how beautiful.
07:31D.C. is now. You can walk right from here to a restaurant, right through the center of town.
07:36You can be with your child, with your loved one, with your lover.
07:41Your lover's not going to be killed anymore. So you can act like a real lover.
07:49You can act like a real lover. I will say, in the president's defense, I once put one of those
07:54binder clips on my ear, and it still hurts. And that was at least 20 years ago that I did
07:58it.
07:58Yeah, but that was only about three seconds of that tape he just rolled. And it was this carnival
08:03of free association and self-indulgence. And two things... I watched that whole presser.
08:08I think it was around an hour and 45 minutes. You watched the whole thing.
08:13I watched the whole thing. What was going through your mind?
08:16You know Donald Trump personally. You've written a book on this man.
08:20Well, I don't... You know, I think Donald Trump has always loved to be on stages. And he has always
08:26not been conservative with other people's time once he's there. He revels in just talking about
08:32whatever happens to be on his mind. And that's gone on for about the last 50 years of his life.
08:36I think the things... The first thing that stuck out to me today is how visibly diminished he is.
08:43He looks tired. He's more mush-mouthed. He almost seems bored with the process, which is why he goes
08:50off script. And even comparing him to 2016, and that was a low bar to begin with, because he had
08:57the
08:57same things in 2016. And he actually had the same things in 2010 and 2000 and 1995. He has always
09:03been
09:03this way. But what's happening now is, along with, I think, a physical deterioration,
09:11is he's the president of the United States. He's not just a New York real estate developer.
09:16And he's not just a reality TV star.
09:18Or a crazy uncle grandpa.
09:19Or, you know, someone wandering out of the back of the house late at night into the woods that
09:23you've got to draw back in. And so with that office comes awesome responsibilities and awesome
09:29consequences for his actions. So all of this would simply be funny if he doesn't... If he didn't hold
09:36the office he holds. And it's tragic comic at best. And in reality, it's very dangerous because
09:45his meandering around policy, his lack of dedication to facts, his complete disinterest in answering questions
09:54in a linear, coherent, and sophisticated way, is dangerous. And people's lives are on the brink.
10:02Our relationships with longtime allies are fraying. The economy is up in the air. And he doesn't care
10:10because he's been insulated his whole life from the consequences of his own actions. And life has
10:15taught him not to care. And now he gets to avoid caring on a global stage and instead
10:23turn his audience and all of us into his, into his therapists.
10:26Then let's talk about how serious this is, Peter, because the president would not commit
10:32to staying in NATO at the press conference. And now the Washington Post is reporting that the Pentagon
10:37is going to end its participation in several different NATO advisory groups. Could this actually
10:43be the beginning of the end of the alliance? Well, I think you can make the argument that
10:48the alliance was over the day he was reelected in 2024. Because the truth is, he said repeatedly,
10:55and during the 2024 campaign, that he doesn't believe in Article 5, which is the mutual defense
11:00part of the NATO treaty. He doesn't believe that an attack on one is an attack on all. He said
11:04during
11:05the campaign, Russia, if they haven't paid up their dues, you can do whatever the hell you want with
11:09them. Well, if he doesn't believe in Article 5, then NATO is kind of a dead letter anyway. What is
11:14NATO about if Article 5 isn't inviolate, if Article 5 is just flexible, if Article 5 is whether a
11:20president feels like defending another country or not, if Article 5 means you have the right to take
11:26over a territory of a NATO ally, then NATO doesn't really mean anything, at least in the way that it
11:31did for the first 75, 80 years of its existence. And so, yes, it's still there on paper. But I
11:36think you
11:37can make the argument that it's not the alliance that it once was. Now, can it be revived under a
11:42new president, a Republican or a Democrat who's committed to it again? Maybe. But for the moment,
11:46if you don't have an Article 5 commitment, what is NATO? Leanne, today we actually saw Speaker
11:52Johnson try to calm things down in a speech he gave when he was speaking to British Parliament,
11:57where he said America first does not mean America alone. Why would anyone in Europe take him seriously,
12:05given what Trump is doing?
12:08Yeah, I don't think they do. I mean, Speaker Johnson has not necessarily been the moral high
12:14ground of this administration. He is not split from the president in any way. In fact, he is actually
12:22doing quite a good job of handing over powers of Congress to the president in order to stay in the
12:32president's good graces. And so with Speaker Johnson delivering the speech to Parliament,
12:39it was quite fascinating that it was supposed to be the 250th anniversary to celebrate the United States
12:47and the American experiment and that the United States is going to continue to be a friend to Europe
12:52and to Britain. But everything that the president is doing and saying is undermining everything that
13:01Speaker Johnson is trying to justify. So, you know, I think that Speaker Johnson's speech was pretty
13:07insignificant. I think that maybe they might try to see some sort of silver linings in his speech.
13:17But if anyone is going to say anything to walk the president back from anything, it's not going to
13:25be Speaker Johnson, who has been extremely pliable and done exactly as the president has wanted.
13:35Steph. All right. I want to talk about somebody else who spoke at Davos, Treasury Secretary Scott
13:41Besant. OK, and I said this last night, a source said to me when Besant took the job,
13:47at least people in the finance world thought he was going to be like a linebacker playing defense.
13:53Instead, he has become the biggest cheerleader in this administration. And I want to share just one
13:58of his comments from when he was speaking on stage. Watch this. Maybe your parents for their retirement
14:05have bought five, 10, 12 homes. So we don't want to push the mom and pops out. We just want
14:10to push
14:11everyone else out. So maybe your parents in their retirement have bought five, 10 or 12 homes.
14:21Who is this administration speaking to? Right. We've got senior citizens that are working older and
14:27older and older struggling. I mean, like for real. Well, I mean, I think they're speaking to no one.
14:34I think the data is, I think, 63 percent of Americans own one home. You know, many that own 12.
14:40Two percent, I think, have a second home. So the, you know, the population of people that own five,
14:4610 or 12 is vanishing small, vanishingly small to almost nonexistent. You know, remember when George
14:53Bush got raked for not knowing what a grocery scanner was when he was in a supermarket?
14:59Yes. Yes.
14:59Um, you know, that is, that is just table stakes compared to this, um, because Scott
15:06Besant should know better. And, and he's a representative of administration that's been
15:11throwing Hail Mary, Hail Mary policy passes around affordability issues because they know that the
15:18electorate can't pay its grocery bills. It's dealing with escalating healthcare costs. It's
15:24dealing with escalating utility costs. And you have one of the flag carriers, standard bearers,
15:31for the Trump administration's economic policy showing how completely and wildly out of touch they
15:37are with what average Americans have to contend with. Is he not out of touch or have lack of
15:42understanding of Europe's power? He was also openly mocking Europe saying their most forceful weapon
15:49was the dreaded European working group. And we'll get into it later in the show, but that's their
15:55most for, I mean, like, what about when every sovereign wealth fund, what about when every European
15:59investor says, oh yeah, we're going to sell all of our treasury positions tomorrow. And you saw how the
16:05debt markets reacted to that. And you saw the equity markets reacted to that. They sold off.
16:09And meanwhile, Europe is sitting there isolated. It has Russia on its eastern flanks. It has the
16:16United States completely pulling back from decades long alliances through NATO that have stood both
16:23the United States and Europe well. And meanwhile, you have China opportunistically trying to gobble up
16:30everything else it can. Do you know what's so funny? Do you remember back in the day, Davos used to
16:34be
16:34filled with Russian oligarchs, their parties? Davos then pushed them out. Now, whether or not Russians
16:40are in Davos, my goodness, this agenda is certainly working for them. Peter,
16:45we are one year into the second term. You wrote that Trump has put America on a road to conquest.
16:52Just how different could the world and our country's place in it look two years from now,
16:57three years from now, 10 years from now? Well, that's the thing, right? This is what's
17:01happened in the first year. He's got three years to go. If this is where he is now, what could
17:05he
17:05escalate in the next three years, especially as he feels like the political world begins to
17:11move on, start thinking about his successor after the midterms and so on, whether he thinks that
17:15Republicans might begin to drift away at some point, although I agree with Leon, that's not having
17:20any time necessarily soon. He demands attention. He demands people listen to him. He seems willing to
17:30say things and do things and threaten things that no other president in our lifetime would do.
17:36This idea of Greenland, it's been America's position in the 20th century, since World War I,
17:42that we go to defend countries whose territory is coveted by other countries like the Soviet Union,
17:48like Hitler's Germany, like Saddam Hussein's Iraq. Yes, our government also violates sovereignty at
17:54times, topple governments and temporarily occupied other countries that it thought were hostile,
17:59but it didn't go after its allies, first of all. And second of all, it didn't claim territory and
18:03keep it for itself, right? The United States didn't go abroad looking to steal other people's territory
18:08and make their citizens part of the United States over their wishes, against their wishes. But that's
18:13what we're talking about now. Greenlanders don't want to be part of the United States. They've
18:16made that very clear. Donald Trump hasn't given any explicit understanding of what the legal
18:21doctrine is that he is basing this on, other than he wants to do it. And he said that to
18:25my
18:25colleagues in the New York Times, the only restraint he feels in global affairs is my own morality,
18:30my own mind. Well, if he feels there are no restraints in global affairs, other than his own
18:35morality, his own mind, the next three years could be as unpredictable as the last 10 have been.
18:42I'll predict this. He'll continue to make a whole lot of money. Peter, Leanne, thank you, Tim. Always
18:47great to see you. Coming up later in the show, how the president's latest tariff threats on Europe
18:52could put $100 billion worth of goods at risk. But first, right after the break,
18:57the president's Department of Justice is issuing new subpoenas against Minnesota's top Democratic leaders
19:04after that deadly ice shooting of Renee Good. The 11th hour just getting underway on a very busy
19:10global news night.
19:17This story matters. The New York Times reports the Justice Department is expanding their probe
19:22of Democratic officials in Minnesota after ICE killed Renee Good just two weeks ago. According to
19:28the Times, the investigation was initially said to have focused on Minneapolis Mayor Jacob Fry and
19:33Governor Tim Walz, who have both criticized Trump's immigration crackdown. But now it appears that
19:39prosecutors will also look at other public officials, including State Attorney General Keith Ellison
19:44and the Hennepin County attorney. Both are weighing whether to open their inquiry,
19:49their own inquiries into the shooting. All of these officials have reportedly received subpoenas
19:54for documents. And the Times adds, quote, while the subpoenas did not cite a specific criminal
19:59statute, the inquiry as a whole was said to center on whether elected officials in Minnesota conspired
20:06to impede federal immigration agents. With this for more, Barrett Berger, former federal prosecutor
20:11and lecturer at Columbia Law School. This is sort of an extraordinary development that many people
20:17never in a million years saw coming. What exactly are these subpoenas looking for if they don't cite any
20:25sort of criminal statute? Can they do that? Well, the subpoenas would need to reference some sort of
20:32criminal statute. You have to have something that you're investigating in order to serve a grand jury subpoena.
20:37You have to have some basis for why you want documents. So what are they looking for? They're probably looking
20:43for something other than the public statements that we've heard that would show that this group of
20:49people have had some sort of a conspiracy, which just means an agreement to, you know, get in the way
20:55of these ICE acts and to try to, you know, talk about ways that they could get the protesters to
21:02be organized
21:03or trying to find documents that would in some ways suggest that they were in favor of violence or
21:09disruptions. But at this point, you know, just based on what we've heard these individuals say
21:15publicly, this seems like it is driving right into very classic First Amendment territory here.
21:22How does it change things if the administration is targeting the attorney general and Henneman County
21:28attorney, the exact people who would be investigating the shooting?
21:33Yeah, I mean, it's so interesting, right? On one hand, you have an administration that has really
21:39refused to cooperate with state officials trying to do an investigation. The federal officials have
21:44all but said that they are not going to investigate the shooting and instead have focused on, you know,
21:51investigating Ms. Good and her widow and now investigating these political officials. So on one hand,
21:58you have them not cooperating with the state officials and now opening their own investigation. I mean,
22:03to say this is unheard of isn't really a strong enough statement. Again, just to put the cherry on
22:10the top of this, you know, when I say this is classic First Amendment territory, I mean, what we have
22:16heard from these public officials, and again, this is only what's been reported publicly, but all we have
22:22heard is them saying, you know, you should protest peacefully. This is your right. You should go out there,
22:28but, you know, do this peacefully, come together. We have heard these officials, you know, time after
22:33time encouraging people, yes, to protest, but to do it within the bounds of the law. So to now have
22:41federal criminal investigation open based on who knows what, perhaps just based on animus from
22:47the Department of Justice is pretty appalling. I do want to get your reaction to Border Patrol
22:53commander Greg Bovino's defense of the entire operation. Our operations are lawful. They're
23:02targeted and they're focused on individuals who pose a serious threat to this community. They are not
23:09random and they are not political. They are about removing criminals who are actively harming Minneapolis
23:18neighborhoods rather than confront that reality of which I've just spoken. Leaders like Tim Waltz or
23:25Mayor Frye have relied on heated rhetoric and accusations that distract that distract from the facts.
23:36You have seen the videos. Is that what it looks like to you?
23:41I mean, from what I have seen, this does not appear to be any of those things. This doesn't appear
23:46to be
23:46targeted and they certainly do not appear to only be going after hardened criminals. Have they arrested
23:53hardened criminals who have criminal records? I'm sure they have. I'm sure you could point to examples
23:58where there are people with long criminal records who have been swept up and that is probably a very
24:04good thing. However, that is from what we have seen publicly reported, that is not the vast majority
24:10of the people that have been swept up in this. If anything, we have seen sort of the casualties of
24:17this, people who never should have been swept up by ICE, people who are American citizens being targeted.
24:23So to hear him saying that this is all being done with a certain type of precision and it is,
24:29you know,
24:29these Democratic officials that are the ones getting in the way of this, it really doesn't match what
24:34people are seeing with their own eyes. Barrett, thank you so much for joining us tonight. We
24:38always use your expertise. When we return Money Power Politics, the president claims his tariffs are
24:45for the American consumer, but his latest tariff threat could prove the absolute opposite. Money Power
24:52Politics coming up next. It is time now for Money Power Politics and boy, was it a rough day for
25:04the
25:04markets. The president's growing feud with Europe over the fate of Greenland plunged stocks deep into
25:10the red. So let's just level set whether or not you're invested. That doesn't matter. I just want to
25:15level set with exactly what is going on here. Over the last year, Trump has made tariffs his signature
25:21economic policy. He claims we need them to restore America's manufacturing dominance. But since
25:27Liberation Day, manufacturing has not come roaring back. In fact, we lost 68,000 manufacturing jobs in
25:34this last year and inflation while improving has not gone away either. But that has not stopped the
25:40president from now threatening new to eight European nations with 10% tariffs if they do not agree to hand
25:48over Greenland or from threatening France with 200% tariffs on wine if they refuse to join Trump's
25:55Board of Peace. And this tells us something really important about how Trump uses tariffs, not as a tool
26:02to improve the lives of the American business, worker, people, but as a weapon against his adversaries.
26:09It is true that there is growing optimism that our economy will do well this year. But that is in
26:14spite
26:15of tariffs. I promise you, not because of them. And hope for growth could just fly out the window
26:21if Trump actually goes through with these tariff threats. And Europe maybe possibly fights back,
26:28actually bites back, which they could do this time. I just want you to go back to Liberation Day.
26:33Why did Trump back off those giant tariffs? It was not over concerns for the American people or calls he
26:39got
26:39from world leaders or business leaders. No, it was the bond market. Treasury bonds were on the verge of
26:45spiking borrowing rates, which would have put a lid on economic growth. And we are not reaching those
26:50levels yet. But bond yields are rising and it is starting to feel like deja vu all over again
26:56with these new trade war threats. And while Trump is calculating that our NATO allies could not hold a
27:02candle to our military might, they have no leverage. If investors in all those countries stopped buying
27:09and dumped their holdings of U.S. Treasuries, it would be a brutal blow.
27:17Ron Insana, veteran financial journalist and publisher of The Message of the Markets on
27:21Substack is here. And Bharat Ramamurti, former National Economic Council Deputy Director and author
27:27of the Bully Pulpit on Substack. Okay, Bharat, the president has slopped a lot of tariffs on a lot
27:34of countries. Why might this one be different? Well, I'm not sure it's going to be different.
27:40It's going to be the same outcome that we've been seeing this whole time, where costs for American
27:45consumers go up on things like French wine, if you enjoy some Pinot Noir in the evening.
27:51And you're also seeing the possibility, the very real possibility of retaliatory tariffs from Europe this
27:56time around, which could mean that everything from Harley-Davidson motorcycles to Boeing aircraft
28:02to Kentucky bourbon are all going to be slapped with tariffs. And that could have a direct impact on
28:08workers in those industries. So you keep coming back to the question, what is this all for?
28:14I think Americans are willing to live with some temporary pain if they see a clear goal at the end
28:19of
28:20all of this. And the goal right now appears to be trying to take over Greenland, something that 87%
28:26of the American public opposes and only 4% of the public supports. So you're imposing pain on the
28:31American people for an end that nobody in the American public actually supports. And in the same
28:36time, alienating a lot of our allies. And we might get to this later, but I think the most remarkable
28:41thing that we've seen over the last couple of days has been Mark Carney, Prime Minister of Canada,
28:46a speech at Davos where he basically said, we can't count on the United States anymore. It's
28:50time for us to look elsewhere, including to China. Today, legendary investor Ray Dalio warned
28:56that this tariff war could turn into something many of us have never heard of, a capital war,
29:02right? I mentioned it at the top with these European countries dumping US assets, right? Within hours,
29:08we saw a Danish pension fund announced that they were going to sell $100 million worth of US
29:14treasuries. What was the reasoning? Poor government and finances, okay? Could we see more of this?
29:20Because this is a huge, you know, like, Pete Hegseth wants to say, like, nobody's got military like we do,
29:25but they hit the sell button, that hurts. Yeah. And I think, Steph, it would be a three-step process.
29:29The Europe has warned that they could put tariffs on $108 billion worth of American-made goods.
29:35They could then go through what they call their trade bazooka, which is effectively a trade embargo
29:40on a wide variety of US products that go to Europe. Then there is the nuclear option. Europe,
29:45on a combined basis, owns over $3.5 trillion worth of our treasury bonds, which is roughly 10% of
29:52our
29:52national debt. If they were to sell that in unison, and that is, by the way, not a prediction,
29:57but it is a risk. It would not just send interest rates soaring, it would send the dollar spiraling
30:02lower, it would crash the stock market, and it would lead to a recession in the economy. If you were
30:07to
30:07follow the typical economic logic that goes along with a maneuver like that. And so,
30:11that nuclear option would be the scariest of the three. Even the bazooka, if they were to pull it
30:16out and create an embargo, would effectively set the stage for potentially a global recession.
30:23Barat, what do you think about that?
30:26I think it's realistic, and I should say, you talked about this. We're already starting to see some
30:31action in the bond market. The 10-year rate is up over the last 24 hours. Maybe part of that
30:37is
30:37what's going on in Japan. But I think a lot of it is uncertainty, geopolitical uncertainty caused by
30:42the Trump administration. And people sitting at home may say, why do I care? I'm not investing in
30:46the bond market. The 10-year rate is really the key rate when it comes to mortgage rates in the
30:51United
30:52States. And so, over the past two weeks, you've seen the Trump administration throwing everything at
30:55the wall when it comes to housing affordability, a ban on institutional investors, talking about a
31:0150-year mortgage before that. But at the same time, all of their actions are pushing up the 10-year
31:06rate,
31:07which is actually pushing upward on mortgage prices. So, it's all an anti-affordability agenda
31:13for people in the United States. All of these actions are pushing up prices for American consumers,
31:18again, for no particular end.
31:20Then isn't he just hurting his own affordability push? Like, tomorrow in Davos, he's supposed to talk
31:27about housing, affordable housing in the United States of America. But on top of that is this
31:32Greenland situation that's causing mortgage rates to go up.
31:37Yeah. And as was alluded, there's some strange things going on in the Japanese bond market where
31:41interest rates are spiking. That's having an effect on global bond markets driving our yields up,
31:46as well as some of this other turmoil that we're seeing. Davos is a very strange place
31:50to have a domestic affordability conversation if you've ever been.
31:53Of all the things to talk about, the fact that he's doing that there is amazing to me.
31:57Yeah. And I don't think that there isn't a single policy right now that for the long run would promote
32:03affordability in the housing market. They've not talked about increasing supply of available housing.
32:09They've not talked about doing anything else that would allow people to access residential real
32:18estate in a meaningful way. Some of these things are really at the margin. They're not the types of
32:22things that are drivers of home affordability. Home prices are up almost 50 percent from the
32:27pre-pandemic levels. A lot of this is a structural problem that the administration and, quite frankly,
32:33U.S. states individually and localities have failed to address.
32:36All right, Bharat, new topic. Jerome Powell is expected to attend Supreme Court arguments
32:42over Trump's effort to fire Fed Governor Lisa Cook. What are you expecting?
32:49Well, I think that he's going to have a hard time in court. Everything that we've seen from
32:53the Supreme Court so far suggests that they're pretty skeptical of Trump's ability to fire
32:57Fed board members without cause. And I think that's in part because of the structure of the Fed.
33:03But I also think, to be honest, the Supreme Court is concerned about the economic implications of
33:09allowing the president to have direct control over the Fed, which is what they would have if they
33:13could fire a board member, including the chair, whenever they wanted. We've seen lots of good
33:17historical research, lots of research from other countries showing that when politicians can directly
33:22control interest rates, it tends to lead to much higher inflation over time. And that's not an outcome that
33:28anybody wants, particularly in the United States. Yeah, I'm not a constitutional scholar, but I doubt
33:33that enters into their considerations. I think it's really going to be very specifically whether or not
33:38the president has the power to remove anyone from a body that's like the Fed can consider, pardon me,
33:47to be a quasi-independent entity over which the president does not have that particular authority.
33:53Whether or not they consider the economic implications I think might be a reach for them.
33:57And that would also then affect Jay Powell's tenure and whether or not he could be removed
34:02prematurely before May of this year. And that would put the Supreme Court in an entirely different
34:08place. They would be granting the president the right to set interest rate policy implicitly,
34:14if not explicitly. You're going to so regret spending that much time talking interest rate
34:19policy. Do you know why? Why? Because that means I won't have time to ask you what you think
34:24about the president making $1.4 billion in his first year as president. There's no time. You'll
34:32just have to curse about it to me during commercial. I actually think he did too.
34:36Yeah. Bharat, thank you so much. When we return, the first year of Trump 2.0 is officially on the
34:42books.
34:42We're going to talk about how much has changed in the last 12 months and what direction America is
34:47headed in. And you know who we're going to do it with. The best of the best. Historian John Neacham
34:52joins us next.
34:58It has been one year since Trump's second inauguration,
35:01and I need to take you back to something Trump promised in his speech on that very day.
35:08The golden age of America begins right now.
35:16From this day forward, our country will flourish and be respected again all over the world.
35:22During every single day of the Trump administration, I will very simply put America first.
35:31America first means something very, very different this time around. As my colleagues at MSNOW write,
35:37quote, Trump has threatened to use force against allies and adversaries alike and launched a global
35:42tariff war that has rattled markets and raised consumer prices. Historian and dear friend of
35:48this show, John Neacham is here to give us his thoughts. His new book comes out next month. It is
35:52called
35:52American Struggle, Democracy, Dissent and the Pursuit of a More Perfect Union, an anthology. All right,
35:59Mr. Meacham, here we are one year in. It's just before midnight and you and I are the last ones
36:04at this
36:05in this bar looking back on this year. What does America first mean this time around?
36:12I wish it were last call, don't you? So it's become America first began life in the 20th century as
36:23the title of the isolationist movement to keep America out of the European war of the mid 20th
36:30century. It was Charles Lindbergh. A lot of respectable Americans were members of America first. It began to
36:38collapse after Pearl Harbor. But it was, in fact, an attempt to build walls to try to make America as
36:51much as
36:51possible, in another phrase of the era, a fortress. And the fortress was to be defended against outside influence.
37:00Where are we now? We have a president who, as you were just talking about, is rattling markets,
37:10who's playing a very dangerous game with the engines of prosperity by a kind of neo-imperialism
37:20that, to me, strikes me as very much in character, from what one can tell about President Trump from
37:28afar. The isolationist impulse never made a lot of sense to me. As people have said, this is a real
37:38estate presidency now. And the essential thing, I think, a year in, and the question that you and I
37:47have talked about for a long time, is will the Republican Party, we know where the Democratic Party
37:54stands, will the Republican Party stand up against their president and say, no, we don't want to so warp the
38:06Constitution, to so warp our norms, which is a dorky word, but it's really code for a character-driven
38:14sense of behavior, because you can't write a law.
38:18That's not dorky. A character-driven sense of behavior, that's not dorky. That is also dorky,
38:23John. Well, it's too. It's dorky. Also dorky. All right. Well, Foreign Affairs Magazine
38:30called this Trump's Year of Anarchy. And I wanted to share with you what former Ambassador Michael
38:36McFaul said to us last night about Trump's push for Greenland. Watch this.
38:42I think it's the worst idea in the 250-year history of our country. There is no strategic
38:49rationale for this. This is a vanity project for Mr. Trump, not President Trump. And all Europeans,
38:57I hope, will resist this, because instead of debating Ukraine, which is a real threat that
39:03Russia is posing in Davos, they're going to all be talking about this. And I hope that will then
39:08embolden rational Republicans and Democrats in our Congress, in our society, to say,
39:14this is ridiculous. Do you think this is going to define his legacy?
39:21Lord, let's not even attempt to try to pick one thing, because if we decide that this five minutes,
39:29he'll think of something else. So let's at least focus on this one. I think what we have here is
39:35the latest example of this remarkable grip, which is virtually unprecedented in American life.
39:44And as you know, when I say something that is unprecedented, that's against my business model.
39:51It's a remarkable hold on the base of voters and the primary voters on whom the lawmakers depend.
40:01If you want to know how the resistance is going to work, the way to tell that is show show
40:08us the
40:09primary polling in a given state or district. It's that wrong. And I used to think, you know, that
40:18every day that goes by the president's interests and the interests of Republicans who are going to
40:24be on a ballot again, be on a ballot again, begin to part slowly but surely. But that only happens
40:32if those Republican voters signal unmistakably to the people that they're sending to power that they
40:43want to check this monomaniacal administration. And I think that's the lesson of this year,
40:51right, is that foreign affairs said anarchy. It's a monomaniacal enterprise. It's whatever passes
41:02through the president's mind. He expresses it. And because of where he is and because of the way
41:07executive power has developed in this country, the only true check on a president, President Trump said
41:15this the other day, I totally agree with him. Really, one of the few checks is his mind and morality.
41:22That's true. And that's why character is destiny. It's why elections matter. And so this is not
41:32surprising. You know, a lot of people warned about this. That doesn't mean you give up, obviously.
41:40But this is again, this is kind of not a Democratic Party problem right now. This is a insofar as
41:47there
41:47are six moderate Republicans left in the country. They need to get together and they won't need a
41:52big room. Right. They need to get together for more than just a bottle of brown liquor and to lament
41:58over the fact that the president's only check is his mind and morality. Let that be the last thought
42:05in your mind before you put your head on your pillow tonight. John, always good to see you.
42:09We're going to be right back.
42:12That does it for us this evening. But before we go tomorrow, my partner Ali Velshi and I are back
42:18for another YouTube special, a live stream of It's Happening with Velshi and Rule. We're there to
42:23answer all of your questions. So send in your video questions to VelshiRule at MSNOW. You can do it
42:28tonight. You can do it tomorrow. We will do our very best to answer the ones that come in first.
42:33Just scan the QR code on your screen to watch us on YouTube. It starts at 3 p.m. Eastern.
42:39But for now,
42:39I am signing off for all of us here at MSNOW. Thank you so much for staying up so late
42:44with me.
42:45I'll see you at the end of tomorrow.
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