00:00One of your thesis is that foreign policy begins at home. American power is not just nuclear weapons
00:05or aircraft carriers. It rests on the economic, political and social strength of the U.S. itself.
00:11So my question to you, Richard, is how strong are these foundations of American power in September
00:162026? Short answer, Scarlett, is they're not as strong as they were. And the short answer is
00:21they're not as strong as they need to be. People don't have the same confidence as us. They don't
00:27see us the same way politically, whether it's January 6th or other sorts of polarization.
00:34Economically, they look at the scale of our debt and basically say, are you Americans
00:39willing and able to deal with your obligations, your responsibilities? Because you're not just
00:44any other country. We are dependent upon you. They look at frictions in our society. So yeah,
00:50I think there's unfortunately real reason to be concerned about, if you will, the state of the
00:54country. And it gives a crazy permission structure for other countries to do something similar for
00:59other actors to kind of follow in our footsteps. Well, we're certainly not setting an example. A
01:04lot of them would want to emulate. That was the whole idea of soft power, that people would see
01:07the vibrancy of our of our economic system, our political system, our society. And they'd say they'd
01:12say, hey, we want to be more like them. I don't think a whole lot of other countries are doing
01:16that. Plus, we're not leaning on them in the same way. I mean, we're not going to we're not going
01:21to push
01:21them, shall we say. To the contrary, you had these elections in Germany the other day,
01:25instead of expressing concern about our right wing pro Russia and sympathetic to the Nazi past party,
01:32you have the president and Elon Musk congratulating them. So yeah, we're in a very different place.
01:37So the president has pulled the US out of all kinds of multilateral organizations and agreements.
01:41You've made the argument that this kind of retreat would ultimately make Americans feel less secure and
01:46less prosperous. And we see this reflected in lots of consumer sentiment surveys. Explain the connection
01:52here. Why should an American who is struggling with housing, with health care, with retirement
01:57care whether Washington continues to underwrite global order? Because what happens there doesn't
02:03stay there. Here we are today, 25 years after 9 11. What was one of the great lessons of 9
02:0811?
02:09That stuff happening in places like Afghanistan could travel here. You had Saudis getting trained by
02:16terrorists in Afghanistan, coming over here, killing nearly 3000 people in a single day. What does that
02:23tell us? The idea of a border, we have to rethink it. Well, more recently, COVID, what began whether it
02:29was in a market or a laboratory in Wuhan, China, again, came here and killed so many Americans. Look at
02:36trade, all the Americans who lost their jobs because of trade or new technology, or in some cases have
02:41gotten jobs because of the ability to export to others. So the idea of foreign policy being foreign,
02:47we really need a new template for that. We have to understand that what happens here, your first
02:51question affects what goes on elsewhere, but also the other way that we're not just, you know, these two
02:56oceans, the Atlantic and the Pacific, whatever else they are, they're not moats. We are affected by what
03:01goes on elsewhere. Let's talk about fiscal policy because today, you know, collectively, we're seeing the
03:06bond market and economists sending warning signals about the national debt, more than 40 trillion
03:11dollars. How high does that 40 trillion dollars of national public debt rank as a national security
03:17issue? It is a national security issue because the rest of the world loses confidence in our ability to
03:22manage our economy. They'll move away from the dollar, they'll stop financing the debt. We will then have to
03:28take all sorts of economic measures, for example, raising rates, not to cool an overheated economy,
03:34but simply to attract the financing that we that we want and need. And then we're not going to have
03:40that money available for other things, whether it's to build better schools or build bridges or be nice
03:45to have some high speed rail in this country. And we go down the list. There's a million things we
03:50won't be able to do. We've already kind of gotten close to that point. The service on the debt,
03:54essentially paying the interest on our debt, is now greater than what we spend on defense.
03:59That is crazy. This is money going down the drain. We want to spend money,
04:04the budget, on productive things. We want to invest in ourselves and our future. We don't
04:09want to simply pay off our past profligacy. And that is what we're doing.
04:12Well, it brings to mind this erosion of trust. And it's not just foreign countries trust in America.
04:20It's also our own trust in ourselves. There's a new poll from APNORC that shows more Americans have
04:25stopped believing in the government. Public trust in federal government information about
04:29inflation and cost of living is now 18 percent from 26 percent in 2024. Trust in information
04:35about the labor market down to 15 percent. Trust in elections and politics down to 13 percent.
04:41Can government or our institutions rebuild or repair that trust, Richard?
04:45First of all, it's really depressing to hear statistics like that. That's kind of what you get
04:50when politicians continually tear down the government, raise questions about the legitimacy
04:57of our elections. When we've looked at it, take the 2020 elections, we looked at it at 60 court cases,
05:01there was nothing there. When you have people talking about the deep state as though the government,
05:06the tens of millions of Americans who work for the government are somehow something else. No,
05:11they're us. They're our wives, our husbands, our children, our neighbors. And we want the best and
05:16brightest to go into government. We need to trust our country, our government, because we're so
05:21affected by its decisions, what it does and doesn't do. Look, it's going to take a few things. It's going
05:26to take leadership that stops tearing us down. That would help from the top, but also from the bottom.
05:32We need to, for example, have civics taught in our schools. You should not be able to get
05:36a high school or college degree, I would argue, without understanding the basics of democracy,
05:41the relationships between this country and its individual citizens, your rights,
05:45but also your obligations. What do you owe this country? We want more people to do public service,
05:50whether it's military or civilian, international or domestic. We have to rebuild the bonds that made
05:55this country so special. So when de Tocqueville came over here, what, 200, 150 years ago, he looked at
06:01America and he said, wow, this is a country that works together, that's unified. Again, here we are,
06:069-11. What happened after 9-11? Unity. We came together. What did President Bush do? He went to the
06:12mosque
06:12in Washington and said, we are all Americans. Whatever our religion, however we dress,
06:17we have to be there for one another. We need to hear a little bit more of that.
06:21What's your personal strategy for investing, for saving?
06:24Look, I'm not smart enough to do market timing, so I tend to invest for the long term. I'm also
06:29heavily
06:30diversified. I'm uneasy right now. I'm a pessimist by nature, as you know from having had me on various
06:36shows. And there are times in life, I think, to make money. And there's also times in life not to
06:41lose money. So I would think I'm increasingly in the latter camp. So I'm still pretty invested. I'm
06:45also not a kid anymore. Because of where you are in your investing career or because of where we are
06:50geopolitically? The idea that we're going to get through the next couple of years without some
06:53type of a crisis. We haven't had a recession in a decade and a half. We talked about the 40
06:57trillion
06:58dollar debt. You have to be a real optimist to think that something's not going to happen. Energy
07:03infrastructure has not, for the most part, been destroyed in this war. What happens if that were
07:07to change? And then you would have $200 a barrel oil. So, you know, when you get older, you've got
07:13to have a more conservative investing posture. So I've dialed down gradually. Not flipped the switch,
07:18but dialed down. All right. Before I let you go, I've always wanted to ask you about your connection
07:21to the big Lebowski. Because the dude quoted President George H.W. Bush and his comment on how this
07:28will not stand, this aggression, in the context of a rug dispute. You played a key role in
07:33shaping H.W. Bush's policy response that led to that famous line, didn't you?
07:39Well, this is taking an interesting turn. Yeah. I met the president on the South Lawn that day.
07:45This was, I think, it was the Sunday of the war. He was coming back from Camp David. I handed
07:49him
07:50a message. But it was his line. It was not for me. And he basically said, what have we heard
07:55from all
07:55of our allies? What happened? Has Saddam made any moves out? And he got really angry when I told him
08:00what
08:00was happening and what was not happening. And then that was, that was him. That was from his heart.
08:05You know, this aggression against Kuwait will not stand. And it really is and was the signature line
08:10of his presidency. I remember Colin Powell, who was then the chairman of the Joint Chief Step,
08:14got really furious with me saying, you put the president up to saying that. We haven't made this
08:19decision yet. I said, take it to the boss.
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