The Exchanges

Q Which is, you have massive youth unemployment in China and waning growth, and so the simplest and most reductive way for China to basically grow and to appease, you know, 25% of young people, mostly men, from not uprising, is to essentially create demand, and the best way to create demand is to essentially create, you know, a war machine. And that is why they go to war. Is that?

A I would say, ah, ah, I appreciate that option. I've worked very hard on the 12 scenarios for getting to war. If there's a war between the U.S. and China in the next year, or four years, or decade, how is it gonna happen, in my view, the most likely? Not this way. It's gonna happen the same way the last war happened. Now, if I were to take a quiz here, since I know we live In the United States of Amnesia, ok. But, ah, when was the last war between the US and China? I'm not going to give you a quiz, but I'll tell you the answer was, 1950. What? Ok, and what happened? In 1950, ah, North Korea attacked South Korea. Ah, almost pushed them off the whole peninsula. The U.S. had just won World War II. That's five years after the end of World War II. MacArthur and American troops were in Japan. They came to the rescue of South Korea. They pushed the North Koreans right back up the peninsula. And the 38th parallel, which had been the starting point, they pushed right across without even thinking, and were pushing right towards the Chinese border, the Yalu. So you're now one year, this is 1951 year after Mao has just won the Chinese Civil War. He hasn't even consolidated his position. The U.S. is Superman. We've just dropped two bombs next door in Japan in World War II, monopoly of nuclear power. The likely, the possibility that China would attack the U.S. It was unimaginable, certainly t…

AI assessment note: “how is it gonna happen, in my view, the most likely? Not this way.”

Q Do you agree with that, Graham? From both sides. From the inside.

A I, yeah, I, I, I mean, again, I live on the other side, I live on both sides of this curtain, and I would say inside, there's much more debate, and there was much more debate than we take credit for. George Bush made a terrible, terrible, terrible mistake in invading Iraq in in 2003. Who, who, who said that to him? His father's closest advisor, Brent Scowcroft, who was joined at the hip with the father, said to him, this is a terrible, dumb mistake. He even went so far as to write an op-ed about it, after he had, now, he did not write an op-ed without talking to Bush's father. Would George H.W. Bush have done this? No. If Gore, if the, if the count had gone right in Florida, and Gore had been president, would we have gone into Iraq? No. So, electing the right president, and having the right, so if it had been the Bush 41 team, rather than the Bush 43 team, we wouldn't have made that mistake, so.

AI assessment note: “I would say inside, there's much more debate, and there was much more debate”

Q embolden China to accelerate a Taiwan takeover. The CIA, it has been reported in media, warned Tim Cook of Apple and other tech companies about a possible invasion as soon as next year. You've separately met publicly with Chinese officials. What's your view on the likelihood and the timeline of a China attempted takeover of Taiwan? And what are these kind of motivating factors that might make that happen sooner?

A So, uh, let me clarify. I, I'm not sure, or I may have been misinterpreted, but obviously the Chinese watch very carefully. They study wars, and they will learn lessons from what's going on here, but I don't think that is, I don't think the Venezuelan operation, other than making them feel envious about the capabilities, will impact their likelihood of attacking Taiwan. So Taiwan, number one. I think the likelihood of an attack on Taiwan this year or next year or even into 28, but let me just do 26 and 27, absent some major provocation by Taiwan or some other third incident is very low. I'd put it at about where the, where the prediction markets are, five percent or something low. So I'm not counting on that. Secondly.

AI assessment note: “likelihood of an attack on Taiwan this year or next year... is very low”

Q Some people say it was a trade-off for China's support for the Iraq war. Who knows? But the point is, it happened. But I'm sure you guys were sitting in the engine room scenario planning what happens if this happens. And it's fair to say that from that context, we didn't necessarily get it right. So what did you get wrong?

A Well, again, it's good to go back to 2000 and just to remember, in 2000, China was somewhere between five and 10% of U.S.'s GDP. The people in 2000, 80% of the people in China were trying to live on two dollars a day. So the place is a miserable, struggling mess. The U.S. has been in the business ever since World War II of trying to encourage economic development in countries. So Clinton and Bush together, Clinton said about the WTO, it's a win-win-win situation. It's going to be a win for everybody. China's going to be lifted up. That's what we would like to do because people's lives will be better and actually There's been an anti-poverty miracle in China that as human beings we have to admire. People that used to get a few calories now get enough calories to eat. That's a, that's gotta be a good thing. The idea that this might work so successfully that China could become, could come to have an economy as large as ours, Didn't occur to anybody at the time. You could see a few, few people as outliers, but that was just kind of not in the imagination, and then secondly, this was in a period of great hubris in the US. We had won the Cold War, We were living in this, ah, bubble, which, ah, you know, the famous, the most famous thesis of the period was Frank Fukuyama's End of History. So everybody has become democracies and market economies, and if they have McDonald's, they can't…

AI assessment note: “The idea that this might work so successfully... Didn't occur to anybody at the time.”

Q The reason it didn't happen is because dictatorships have a hard time in the long term versus democracies?

A Well, there's about 10 reasons why there's weaknesses in an autocracy, and you're now seeing a lot of evidence of it in the Chinese system, particularly after Xi became even more autocratic in guaranteeing his lease on life with the recent coronation. Where he's got his third term unprecedented, but without a term limit. So basically, If I'm the autocrat, and especially if I come to think as they, as he does, he's got the thought of Xi Jinping, they write this into the Constitution. So this contains all wisdom. So one of the problems the guys are having with their AI machines is you can't ask a question that doesn't, that has an answer inconsistent with the thought of Xi Jinping that declares what's true about this and that. So he doesn't opine much about mathematics or science, so you can ask those questions. Tencent's AI machine is a pretty good competitor for GPT-IV in the science or math, but if you ask a question about, you know, uh, how do freedom-centered societies perform, it can't answer that question, because the thought of Xi Jinping says this.

AI assessment note: “there's about 10 reasons why there's weaknesses in an autocracy”

Q a democracy, and you actually had a democracy with ninety three million citizens in the Middle East, what impact would that have on the region? We've seen the Gulf monarchies Evolve human rights, but they're still monarchies. You have one other, I guess, democracy in the region in Israel, but this could be extraordinary if it was a democracy, but what would that mean to the, to the global chessboard?

A Well, it's a good question. I mean, if this could occur, it would be spectacular. Even, I think, but I would say this is way, way, way too ambitious. There's a hundred things that would be wonderful outcomes, better than what's likely, that would be short of that. I remember, ah, in Iraq, after Bush failed to find nuclear weapons, which was the initial, I would say, somewhat cucked up rationale for our going into Iraq, Gandhi Rice, who was the secretary, Gave a speech about, well, how wonderful it'll be when Iraq is a democracy and market economy, quote, radiating stability through the Middle East. So we're pretty good at doing I have a dream, you know, in that version. I think that's a way, way, way stretch. I would be very happy with a regime there that simply was not about, um, building nuclear weapons, was not about building missiles that threaten the US and our Friends and allies in the region, and not about supporting proxies. And if it's a pretty cruel regime, unfortunately, that's unfortunate for the Iranian people. The Persian people, ah, well, I'm a student of history. I love Persia. You know, I remember, ah, Cyrus, and I remember, ah, the Peloponnesian War. I remember, you know, this is a fantastic culture and history. They've been hijacked by a terrible, terrible group of people. And if those people can be somehow ousted, you know, wonderful for Iranian people and w…

AI assessment note: “if this could occur, it would be spectacular... this is way, way, way too ambitious.”

Q look and act like true deep socialists and want to enact socialist policies. What is the risk to the United States if this continues to go the way it's going, and what is the Risk to the United States. Do you think in 2028, if we have a Democrat controlled House and Senate and a very populous Democrat candidate that looks like a DSA member, where does this take us?

A Well, again, good for you all for thinking of uncomfortable or radical questions, but real. So if you look at the numbers, I, I, I've been looking at them lately. They're hard to believe in terms of the split between wealthy and poor or rich and poor. If you look at the who's benefited for the last generation in terms of the, uh, point oh, one percent, the one percent, the 10%, the 20%, well, that's us and all the people that we know virtually. And therefore, when we say the market is, you know, third year in, uh, In a bull market, and my goodness, here it's up 15 or 16%, or this 80 or 70% of people, this is not part of their lives. And when I look at the numbers about both what I think the facts are, and then even more people's perception, uh, uh, it's just not stable in a democracy. If everybody gets a vote, And if, uh, the top 10 or 20% are taking 80% or 70% of the pie, that's not Stable and sustainable, I think. And it's a political invitation for a populist and demagogic, demagogic, uh, just, I mean, you don't even have to be a demagogue to say that's not fair. That's not reasonable. Uh, so I think that it's not, I mean, this is beyond my, I mean, I, I can hardly deal with the problems I, I focus on. This one is one that I look over my shoulder and think, gee, wait a minute. This, First, this can't be true, but then whenever I've been looking into the numbers lately, they …

AI assessment note: “it's just not stable in a democracy... not Stable and sustainable”

Q I think it's an incredible framing because you have an autocracy in China, a democracy here, and then somewhat democratic is how we're, I think, describing India right now. Is India the most important relationship for America to get right at this moment in time? Is that the relationship we really need to be focusing on since that seems like it's the linchpin or the fulcrum?

A Well, I would say that's a good question, and I'm not sure. I've, I, I, And probably unduly skeptical about Israel. I mean, sorry, about India because my impressions are overly shaped by, ah, Lee Kuan Yew. Lee Kuan Yew was the founder and builder of Singapore, and he, his great hope was for India. But ultimately, he became to be despairing of its internal complexities. Modi seems to be a different character. If you looked at the way he ran the province that he'd run before, the state, he was very effective. He's very ambitious for India, so I'm hopeful about India. If India emerges, it has the potential, alongside, I don't think only India, Japan, South Korea, Australia, and even maybe the Europeans, again, depending on what happens here. So you could have a group of allied and aligned, not all agreeing on everything, but agreeing on enough that says we're, we're trying to make, we're trying the complex problem of governing a society, we believe has to start with the freedom and liberty of people. That's what we think is, And, and we think that's essential for the dynamism of innovation and invention, and lo and behold, there's a lot of evidence for that, and if we're the freest and most open society, lo and behold, a bunch of people come from other countries where they're not so free, and they do their thing here. I'd say thank God for that, ok? Ah, so, Under those circumstanc…

AI assessment note: “Well, I would say that's a good question, and I'm not sure.”