历史学家弗格森认为西方面临的四大威胁
2023年10月12日
https://www.marketwatch.com/podcasts/at-barrons/the-4-biggest-threats-to-the-west-according-to-historian-ferguson/5a3f2ca3-f9a2-41bc-9c63-b060d2f4a525
“我不相信‘软着陆’的故事，”历史学家兼作家尼尔·弗格森在 2023 年 9 月 12 日的一次谈话中说道。
这份文字记录是由转录服务机构准备的。 该版本可能不是最终版本，并且可能会更新。
Andy Serwer：大家好，欢迎来到《巴伦周刊》。 我是安迪·塞尔维尔，欢迎我们的嘉宾尼尔·弗格森，他是历史学家、作家，有时也是预言家。 很公平？
尼尔·弗格森：是的，这很公平。 安迪有罪。
安迪·塞尔维尔：很高兴见到你。 那么，我们为什么不直接介入呢，尼尔，我想问你，你认为西方社会目前面临的最大风险是什么，以及这些风险在过去一年左右的时间里发生了怎样的变化？
尼尔·弗格森：好问题。 我认为存在对经济自满的风险。 我不相信软着陆的故事，因为我认为我们已经看到实际利率大幅上涨，这将会产生后果。 我想说明年经济衰退的可能性远高于市场共识。 所以就是这样。 其次，我认为一个重大的政治风险即将到来，那就是美国大选。 我认为这种风险仍然被那些还没有完全消化的人低估了，民主党正在派出一位非常年长的候选人，而他的竞选伙伴却很弱，来对抗唐纳德·特朗普，而在许多其他国家，这位候选人将无法参加选举 鉴于他在 2021 年 1 月 6 日的行为。因此，考虑到特朗普目前面临的所有起诉，这是一场令人惊讶的潜在宪法危机。 第三个风险，我认为美国存在一些看不见、摸不着的重大社会问题。 但无论是精神健康流行病还是阿片类药物流行病，美国都存在一系列非常深刻的社会问题，我对此非常担心。 最后，让我来谈谈地缘政治问题。 美国和中国正处于第二次冷战。 我不认为每个人都完全理解了这意味着什么，但在冷战初期，存在很大的热战风险，这可能是目前被低估的最大风险。
Andy Serwer：那里有很多风险。 想要深入研究其中的每一个。 也许我们会从政治开始。 如果乔·拜登再次当选会发生什么？
尼尔·弗格森：嗯，我认为这不是我现在的基本情况。 我的基本情况是，如果出现经济衰退（我认为经济衰退的可能性比华尔街认为的更大），那么如果他是候选人，他就会失败。 我不确定他最终会成为候选人，因为我认为随着初选的临近，许多民主党人将会非常担心乔·拜登在民意调查中对可能的共和党候选人唐纳德·特朗普的支持率有多差。 因此，我不排除另一位候选人实际上成为 2024 年民主党提名人。如果没有经济衰退，我就错了，拜登再次当选，那么他将继承他本人或他的政府造成的所有问题。 特别是这个国家正处于非同寻常的财政危机。国会预算办公室刚刚进行了计算，并决定今年的赤字实际上将比几个月前预期的要大得多。 所以我们关注的是国内生产总值的 8%。 对于一个充分就业的经济体来说，这是一个巨大的赤字。 我认为很多人并没有完全意识到，这种火热的经济之所以火热，是因为大规模的财政扩张仍在继续。 这种情况不可能无限期地持续下去，因为随着利率上升——因为美联储提高了利率，由于通货膨胀而不得不提高利率——政府借贷成本远远高于几年前。 所以我们正在考虑一个真正的财政问题。 无论谁担任 2025 年总统都将面临一些非常严峻的现实。 让我举一个例子。 在其历史的大部分时间里，美国的国防支出一直高于偿债支出。 但事实已不再如此。 到今年年底，它肯定会支付比国防更多的偿债或略多的偿债。 对于一个与中国存在重大地缘政治竞争的国家来说，这是一个问题。
安迪·塞尔维尔：好吧，我确实还有一些关于经济的问题，但我认为我们将转向唐纳德·特朗普获胜后会发生什么。
尼尔·弗格森：如果唐纳德·特朗普获胜，情况将与 2017 年大不相同。很多人回首过去，都会记得当时特朗普政府有些混乱的品质。 他们并没有真正指望会获胜。 事实上他们还没有准备好接管政府。 这是即兴创作。
如果你回头看的话，那是相当混乱的。 而且还有相当多的连续性，因为他并没有在所有不同的部门和机构中真正拥有稳定的人员，这些连续性以我的胡佛同事、吉姆·马蒂斯和 人力资源麦克马斯特。 如果特朗普连任，特朗普第二届政府将会大不相同。 首先，他们正在规划电力。 我所说的他们，是指美国第一智库中的特朗普支持者，他们有一个计划，我认为该计划将与我们在 2017 年看到的计划非常非常不同。其次，该计划不包括建制派人士。 因此，不会出现特朗普第一个任期特有的那些限制性影响。 因此，如果有第二个任期，它就不会像第一个任期那样。 我预计人员会非常不同。 我认为他们的优先事项会让很多人感到震惊。 第一，我认为他将回归保护主义。 我认为他仍然是关税的坚定支持者。 我们渐渐远离了这些，但它们并没有消失。 我最近询问了他的贸易代表罗伯特·莱特希泽（Robert Lighthizer）。 他刚刚出版了一本传记。 如果特朗普在 2020 年获胜，他认为他会做什么？ 他的回答是：“提高关税。” 所以我认为保护主义战略将会回归。 另一件事，我认为首要任务将是清洗司法部，清洗官僚机构，清除特朗普总统和他的顾问们认为在他的第一任总统期间每一次都阻碍他的所有反特朗普分子的沼泽。 学期。 因此，如果特朗普连任，2025 年与 2017 年将是一个非常非常不同的情况。
安迪·塞尔维尔：如果尼尔·弗格森是一个赌徒，他会赌什么？
尼尔·弗格森：嗯，我认为关键问题是，是否存在经济衰退？ 我认为如果出现经济衰退，无论谁是共和党提名人，都有很大的机会获胜，因为一百年来没有人在经济衰退后连任。 卡尔文·柯立芝 (Calvin Coolidge) 是最后一位做到这一点的人，时间是 1924 年。其他所有在经济衰退紧随其后试图连任的人都失败了。 如果你看看乔·拜登现在的民意调查，就会发现杰拉尔德·福特在他的总统任期内处于什么阶段。 这是关于乔治·H·W·布什在其总统任期的现阶段的情况。 因此，如果出现经济衰退（我确实认为经济衰退的可能性比共识更大），那么我认为乔·拜登很难连任。 事实上，我认为共和党候选人似乎很可能是唐纳德·特朗普，但获胜的可能性可能接近 60%。 我认为很多人还没有处理过这些赔率。
安迪·塞尔维尔：你谈到了拜登政府政策带来的一些经济问题，但这些问题主要不是因为美联储在淹没市场或量化宽松方面的政策，我应该说，A和B，削减 利率，第一。 第二，你说高预算赤字是一个问题。 人们不是总是这么说吗，尼尔？
尼尔·弗格森：嗯，我想如果你回到 2021 年初，一小部分人，尤其是拉里·萨默斯，认为通货膨胀事故正在发生。 我当时的看法也是如此。 这是我为彭博社写的。 如果你读过《华盛顿邮报》上发表的拉里·萨默斯的原创文章，你会发现它全都是关于财政政策的。 他几乎没有提及货币政策。 我认为正确的分析是，财政出现了巨大的超调，因为他们一直在实施刺激措施。 即使经济即将复苏。 我们有疫苗。 大流行尚未结束，但很明显，一旦拥有高效疫苗，结束就在眼前。 美联储也适应了这一点。 事实上，它容纳了财政部在 21 年、22 年发行的新债务中的很大一部分。 它一直持续下去。 请记住，直到 2022 年，货币立场才真正发生变化，尽管事实上出现了通胀冲击的红灯。 因此，我认为去年年中通胀率达到 9% 是财政和货币政策错误共同作用的结果。 当然，自那时以来，通胀有所下降，但这只是因为货币政策确实大幅收紧。 如果你只看一下利率上升的方式并根据通货膨胀进行调整，就会发现这是自保罗·沃尔克时代以来实际借贷成本的最大增幅。 所以你必须回到 40 年前——事实上，稍微超过 40 年前——才会看到这样的货币紧缩。 这种想法认为，这对杠杆率相当高的经济根本没有任何影响，比保罗·沃尔克时代的杠杆率要高得多。 我简直不敢相信。 所以我认为美国当前经济实力的氛围有一定的虚幻性。
安迪·塞尔维尔：不过，情况确实如此，人们一个季度又一个季度地呼吁经济衰退，而且他们一直在不断推动。 我不知道你是否也遇到过这种情况，但为什么还没有发生呢？
尼尔·弗格森：嗯，我确信我们在经济学课程中都曾学过的一句老话是，货币政策的作用具有长期且可变的滞后性。 这种变化是这里的关键。 如果从紧缩到放缓的平均时间是九个月，那就是平均值。 问题是，它实际上可能比这更长吗？ 答案是肯定的，在这种情况下确实可以。 因此，我认为，对于临时团队来说，宣布胜利并说通货膨胀只是暂时的异常现象，与摆脱大流行有关，还为时过早。 我认为，随着企业和家庭必须再融资，他们可能会受到可怕的冲击。 如果你看看再融资何时发生，比如说未来 12 个月，你就可以看到这一系列事件是如何发生的。 这是很重要的一点。 针对你刚才所说的话，我想指出的另一个重要观点是，正如人们几个月来一直在警告经济衰退一样，他们当然也多年来甚至几十年来一直在警告赤字。 但这里的问题是数量级很重要。 充分就业时的赤字竟然高达GDP的8%，这令人难以置信、令人震惊。 民主党人杰森·弗曼（Jason Furman）曾是奥巴马政府的经济学家，他指出，国会预算办公室的这些数字令人深感震惊。 他们确实是这样，他们告诉我们有些事情出了严重的问题。 其中一部分原因是借贷成本的增加也会影响政府。 所以债务存量已经相当高了。 如果你看看国会预算办公室对未来几十年而不是几年的预测，它可能会变得非常非常高、非常快，除非出现某种生产力奇迹，或者除非国会做了它长期以来没有做过的事情，而这实际上是 改革税收制度并控制福利，我认为这是极不可能的。
Andy Serwer：Niall，你这几天回到了英国。 此时世界其他国家对美国有何看法？这种情况发生了怎样的变化？
尼尔·弗格森：这是一个很好的问题。 我从胡佛回到英国休假一年，这很有趣，因为据我所知，那里的人们比这里的人们更担心美国政治。 一般来说，欧洲也是如此。 上周末我刚刚在基辅，那里非常担心如果唐纳德·特朗普再次当选，他将终止对乌克兰的制裁。 这让所有欧洲人都感到担忧。 欧洲人确实增加了对乌克兰针对俄罗斯的战争努力的承诺，但他们知道，如果没有美国，欧洲将很难独自维持这场战争努力。 因此，人们对明年美国大选的情况非常不安。 另一方面还有一种嫉妒，这种嫉妒是针对美国的经济增长、美国经济的活力。 他们都羡慕人工智能，因为欧洲基本上没有人工智能，英国也几乎没有。 所以这是一个奇怪的分歧。 人们真的很担心美国的政治，也有点羡慕美国的经济。
安迪·塞尔维尔：全球主义和自由民主是否正在永久衰落，或者这只是我们正在经历的一个小问题、一种失常？
尼尔·弗格森：嗯，最近经常有人宣布全球化已经死亡。 事实上，当你观察国际贸易和资本流动的弹性时，它并没有那么死。 自 2007 年全球金融危机爆发前的高点以来，该数字已有所回落。 但我们并没有看到 1929 年后那种全球化的巨大倒退。当人们谈论美国和中国之间的脱钩时，我会说，这是否意味着苹果公司 80% 的硬件是在中国生产的，而不是在中国生产的。 只是百分之一百吗？ 因为80%仍然是一个相当大的数字。 美国对华贸易逆差依然巨大。 美国与中国的贸易规模仍然巨大。 因此，真正发生的事情是，全球化的形态正在发生变化，而且它的变化是为了应对各种各样的事情，其中一些是有意识的。 就像美国政府有意识地试图减少对中国的敞口一样，供应链也在有意识地远离中国。 但无论如何，还有其他事情会发生。 事实上，中国的劳动力成本不再特别有吸引力，墨西哥现在已经超过了中国及其与美国的贸易； 这是有原因的。 很接近，而且实际上很有竞争力。 因此，这是政策和结构转变的结合，无论如何都会发生，但我认为人们不应该夸大这种转变的程度。
但我认为人们不应该夸大这种转变的程度。 如果美国公司在越南或墨西哥而不是在中国制造，这仍然是全球化。 我们可以以某种方式将其全部带回国内，我们可以以某种方式将所有制造业带回美国的想法不太合理，因为在美国制造微芯片的成本要高得多。
Andy Serwer：这是转向中国的一个很好的选择。 我们与中国的关系有多糟糕？习近平是一个多么坏或好的领导人？
尼尔·弗格森：好吧，让我一一分析。 关系状态并不好。 尽管拜登总统不久前还谈到了全面的广岛核事故。 他的政府成员对中国的访问实际上进展得不太顺利，并没有取得多大成就，并没有改变北京的情绪，即美国正在有意识地奉行一项技术和技术政策。 经济遏制的目的是让中国牢牢占据印太地区的第二位。 所以我认为关系不好，而且根据我们从习近平和中共高层人物那里听到的情况来判断，我认为这种关系并没有因为我们所看到的这些不同的访问而得到改善。 我认为习近平本人对中国不利有两个原因。 第一，明确以战略为目标……嗯，与美国平等或对等，我认为明确地说你要做的事情是一件愚蠢的事情。 这就像发出警告一样。 这是自邓小平以来历届中国领导人一直避免做的事情。 他们有点把自己的光芒放在斗式之下。 我认为更具破坏性的第二件事是他对中国经济所做的事情。 习近平在很多方面都是马克思列宁主义的信徒，他重申了中国共产党对经济、社会、甚至学术界的权力。 这是一个与我十二年前经常访问的中国截然不同的中国。 由于大型科技公司受到了控制，言论自由度大大降低，经济活力也减弱。马云基本上被习近平压垮了。 而占中国经济 29% 或 30% 的庞大房地产行业正处于危机状态。 因此，我认为，无论是作为政治领导人还是经济领导人，习近平都将中国带入了非常危险的境地。
安迪·塞尔维尔：我们应该对弗拉基米尔·普京有多关心？ 有人说这对美国来说没什么大不了的。 也有人说是死敌。
尼尔·弗格森：嗯，从乌克兰人的角度来看，他是一个不共戴天的敌人，每个月都会杀害大量乌克兰士兵和平民。 我刚从基辅回来。 我去那里之前和之后都发生过空袭，从前线那里服役的士兵那里收到的报告非常严峻。 这是一场非常血腥的战争，我认为任何希望俄罗斯军队在普里戈任叛变时崩溃的人都已经失望了。 他们被挖了，他们成功地布下了雷区。 他们在乌克兰南部的领土上建立了几乎坚不可摧的防御。 事实是，乌克兰今年夏天的攻势并没有达到泽连斯基总统所希望的效果。 这对美国重要吗？ 嗯，在某种程度上，不。 距离很远，而且战斗的不是美国士兵。 问题是我们支持乌克兰。 不仅在经济上，不仅在武器方面，而且我们在公开和道义上支持乌克兰。 我们说，正如国务卿布林肯大约一周前在基辅所说，我们将在那里待多久，但这可能会很长一段时间。 周末在基辅的一位德国将军表示，德国的规划期限要到 2032 年。这是一场比美国任何人认为他们卷入的战争要长得多的战争。所以我认为短期问题 我们陷入了一场看不到明显结束的战争，这意味着资源将被吸收，来自军事库存的财政资源和硬件购买这场战争的时间我认为比乔·拜登预期的要长。 但还有一个更广泛的问题，那就是普京与习近平关系密切。 对于中国领导人来说，这是极其重要的伙伴关系。 中国不会让俄罗斯输掉这场战争。 因此，我们不能孤立地看待乌克兰战争。 这是更广泛的地缘政治斗争的一部分，其中美国、欧洲和其他盟友支持乌克兰，中国和伊朗支持俄罗斯。 这实际上是一个相当令人震惊的情况。 你可以把它想象成，与其说是一场欧洲或东欧战争，不如说是第二次冷战的第一次热战。 从这个意义上说，我认为普京是更广泛威胁的一部分，
中国、俄罗斯和伊朗轴心国的威胁将对美国构成挑战，不仅在东欧，而且在中东，甚至可能在远东，就台湾而言。
Andy Serwer：最后一个问题，Niall，鉴于我们正在进行的一些对话，我希望您对这个话题有话要说。 世界上有什么事情是可以顺利进行的呢？
尼尔·弗格森：好吧，如果俄罗斯军队突然瓦解、倒下并阵亡，而乌克兰赢得了战争，那就太好了。 那会很棒，但感觉比一年前俄罗斯人从哈尔科夫然后从赫尔松逃跑时的可能性要小。 那太好了，但我不会屏住呼吸。 如果中国的经济困境转化为某种政治危机，那就太好了。 因为我认为习近平试图重申一党专政，党的独裁不仅对中国而且对世界都是危险的。 所以你可以期待改变。 我对冷战持乐观态度。 我没有经历过很多这样的事情，但如果从最后的事情来看的话，相信自由和民主的社会往往比相信相反的社会更有活力。 所以我认为最终会发生的是，一党政府的问题和病态将会显现出来，中国的增长速度将会放缓，其威胁将会减弱，也许它的领导层将会发生变化。 还有什么可以顺利进行呢？ 嗯，目前技术领域发生的所有事情，特别是人工智能的突破，可能会对美国经济产生真正的好处。 当我们都开始使用 ChatGPT 准备面试或其他任何事情时，也许会出现巨大的生产力冲击。 接下来你就会知道，美国经济的增长速度超出了任何人的预期，而我之前担心的所有事情都被证明只是幻影。 因此，存在乐观的看涨情况。 在纽约这座小镇上，总会有人持乐观态度。 但这将是我的看涨情景。
安迪·塞尔沃：好的。 关于这些笔记，尼尔·弗格森，非常感谢您抽出宝贵的时间。
尼尔·弗格森：谢谢安迪。
安迪·塞尔维尔：这是在《巴伦周刊》。 我是安迪·塞尔维尔。 下次我们会抓住你的。 《巴伦周刊》的制作团队包括 Elia Malidu、Rebecca Bisdale、Kinga Royjack、Joe Lusby 和 Laura Salibury。 执行制片人是克里斯汀·贝尔斯特罗姆和梅丽莎·哈格蒂。 下周我们将带着新剧集回来。
xxxx
The 4 Biggest Threats to the West, According to Historian Ferguson
10/12/2023
https://www.marketwatch.com/podcasts/at-barrons/the-4-biggest-threats-to-the-west-according-to-historian-ferguson/5a3f2ca3-f9a2-41bc-9c63-b060d2f4a525
"I don't believe in the 'soft landing' story," said historian and author Niall Ferguson in a conversation on Sept. 12, 2023.
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Andy Serwer: Hello everyone and welcome to At Barron's. I'm Andy Serwer and welcome to our guest Niall Ferguson, historian, author, and sometimes prognosticator. Fair enough?
Niall Ferguson: Yeah, that's fair enough. Andy Guilty.
Andy Serwer: Good to see you. So why don't we just jump right in, Niall, and I'd like to ask you what you think the greatest risks are to Western society right now, and how have those risks changed over the past year or so?
Niall Ferguson: Great question. I think there's the risk of complacency about the economy. I don't believe in the soft landing story, because I think we've seen a tremendous hike in real interest rates and that is going to have its consequences. I would say the probability of a recession next year is much higher than market consensus. So there's that. Secondly, I think there's a major political risk coming and that is the US election. That risk is I think still being underestimated by people who haven't fully digested that the Democrats are fielding a very elderly candidate with a weak running mate against Donald Trump, a candidate who in many another country, would not be able to run for election given his conduct on January 6th of 2021. So this is an amazing potential constitutional crisis, given all the indictments that Trump currently faces. Third risk, I think there are major social problems in the United States that are kind of out of sight, out of mind. But whether it's the mental health epidemic or the opioid epidemic, the United States has a whole range of very profound social problems that I worry about a good deal. And then finally, let me give you the geopolitical problem. That the US and China are in Cold War II. I don't think everybody has fully digested what that implies, but in the early Cold War, there is a significant risk of hot war, and that's probably the biggest risk that is underpriced right now.
Andy Serwer: A lot of risks there. Want to drill down into each and every one of them. Maybe we'll start with politics. What happens if Joe Biden is reelected?
Niall Ferguson: Well, I think that's not my base case right now. My base case is that if there's a recession, which I think is more likely than the street thinks, he will lose if he is the candidate. I'm not sure he will ultimately be the candidate because I think as we get closer to the primaries, many Democrats are going to get quite seriously worried about how poorly Joe Biden is polling against the likely Republican nominee Donald Trump. So I would not rule out another candidate actually being the Democratic nominee in 2024. If there's no recession, I'm just wrong and Biden gets reelected, then he inherits all the problems that he himself or his administration created. In particular, the extraordinary fiscal crisis that this country is in. The congressional budget office just did its math and decided that actually the deficit is going to be far larger this year than it previously thought just a few months ago. So we're looking at 8% of gross domestic product. That's kind of a huge deficit for an economy that took full employment barreling along. And I don't think many people fully appreciate that this hot economy is hot because of a massive fiscal expansion that just keeps on going. And that can't be continued indefinitely, because with rates having gone up - because the Fed raised them, had to raise them because of inflation - the cost of government borrowing is far higher than it was just a couple of years ago. And so we're looking at a real fiscal problem. Whoever is president in 2025 is going to be contending with some very harsh realities. Let me give you an example. For most of its history, the United States has comfortably spent more on defense than on debt service. That is no longer true. By the end of this year, it will certainly be paying much more debt service or somewhat more debt service than defense. And that's a problem for a country that is in a major geopolitical rivalry with China.
Andy Serwer: All right, I do have some more questions on the economy, but I think we'll switch over to what happens if Donald Trump wins.
Niall Ferguson: So if Donald Trump wins, it'll be very different from 2017. A lot of people will look back and remember the somewhat chaotic quality of Trump's administration then. They hadn't really expected to win. They were not ready in fact to take over the government. It was improvisation. It was quite chaotic, if you look back. And there was also quite a lot of continuity, because he didn't really have a stable of people tap put in all the different departments and agencies, and those continuities were most obvious in the form of generals like my Hoover colleagues, Jim Mattis and HR McMaster. If Trump is reelected, the second Trump Administration will be very different. Firstly, they are planning for power. By they, I mean the Trump supporters in the America first think tank, they have a plan which I think will be very, very different from what we saw in 2017. And secondly, that plan does not include establishment people. So there won't be those restraining influences that were such a characteristic feature of Trump's first term. So if there is a second term, it won't be at all like the first term. And I would expect the personnel to be really very different. And their priorities will, I think come as a shock to many people. Number one, I think he will be back on protectionism. I think he remains a committed believer in tariffs. We kind of drifted away from those, but they haven't gone away. I recently asked Robert Lighthizer, who was his trade representative. He just published a biography. What did he think Trump would've done if he'd won in 2020? And his answer was, "Raise those tariffs." So I think there'll be a return to a protectionist strategy. And the other thing, which I think will be number one priority will be purge the Department of Justice, purge the bureaucracy, purge the swamp of all the anti-Trump elements that President Trump and his advisors feel thwarted him at every turn during his first term. So it will be a very, very different scenario, 2025 from 2017 if Trump is reelected.
Andy Serwer: And if Niall Ferguson was a betting man, what would he bet?
Niall Ferguson: Well, I think the key question is, is there a recession or not? I think if there's a recession, whoever is the Republican nominee will have a good chance of winning, because nobody has got reelected after a recession in a hundred years. Calvin Coolidge was the last person who did it back in 1924. Everybody else who tried to get reelected with a recession just behind them failed. And if you look at where Joe Biden's polling right now, it's about where Gerald Ford was at the stage in his presidency. It's about where George HW Bush was at this stage in his presidency. So if there's a recession, which I do think is more likely than the consensus, then I think it'd be really hard for Joe Biden to get reelected. I'd actually put the Republican nominee and it seems likely to be Donald Trump, but maybe close to 60% probability of winning. I don't think many people have processed those odds yet.
Andy Serwer: You talked about some of the economic problems stemming from policies of the Biden Administration, but weren't they mostly because of Federal Reserve policies in terms of flooding the markets, or quantitative easing, I should say, A and B, cutting rates, number one. And number two, you're saying that the high budget deficits are a problem. Aren't people always saying that, Niall?
Niall Ferguson: Well, I think if you go back to early 2021, a small number of people, notably Larry Summers, argued that an inflationary accident was happening. That was also my view at the time. I wrote that for Bloomberg. And if you read Larry Summers's original piece, which came out in the Washington Post, it's all about fiscal policy. He barely mentions monetary policy. And I think a correct analysis would be that there was a huge fiscal overshoot, because they kept doing stimulus. Even after the economy was going to heal. We had vaccines. The pandemic was not over, but it was clear that the end was in sight once you had highly efficacious vaccines. And the Fed accommodated this. It in fact accommodated a very large proportion of the new debt issued by the treasury in '21, '22. And it kept going. Remember, there wasn't really a change of monetary stance until into 2022, despite the fact that there were flashing red lights signaling an inflation shock. So I think it was a combination of fiscal and monetary policy error that got us to 9% inflation in the middle of last year. Of course, inflation has come down since then, but only because of a really significant tightening of monetary policy. And if you just look at the way rates have gone up and adjust for inflation, this is the biggest increase in real borrowing costs since the time of Paul Volcker. So you have to go back 40 years to see - in fact, slightly more than 40 years - to see a monetary tightening like this. The idea that this would just have no effect at all on what is a pretty leveraged economy, much more leveraged than it was in Paul Volker's day. I just can't believe. So I think there's a certain illusory quality to the current atmosphere of economic strength in the United States.
Andy Serwer: It is the case, though, that people have been calling for this recession for quarter after quarter after quarter, and they keep pushing and pushing. I don't know if that's been the case with you, but why hasn't it occurred yet?
Niall Ferguson: Well, the old phrase that I'm sure we were all taught at some point in economics classes is that monetary policy acts with long and variable lags. That variation is the key here. If the average is sort of nine months from tightening to the slowdown, that's the average. The question is, could it in fact be quite a bit longer than that? And the answer is yeah, it could actually under the circumstances. So I think it is way too early for the transitory team to declare victory and say that inflation was just this temporary aberration that had to do with coming out of the pandemic. I think it's plausible that as corporations and households have to refinance, they're going to get a terrible shock. And you can see how that sequence of events plays out if you look at when refinancing is going to happen in, let's say the coming 12 months. So that's one important point. The other important point I want to make in response to something you said a moment ago is, just as people have been warning about recession for many months, they have of course been warning about deficits for many years, if not decades. But the thing here is that the orders of magnitude matter. It's incredible, astonishing that the deficit at full employment should be as large as 8% of GDP. Jason Furman, who's a Democrat, who was an economist in the Obama Administration, noted that these CBO numbers are deeply shocking. And they really are, and they tell us that something is going quite badly wrong. And part of that something is the increased borrow costs affect the government, too. So the debt stock is already pretty high. If you look at the CBO forecasts out decades, not just years, it could get really very high, very fast, unless there's some kind of productivity miracle or unless Congress does what it hasn't done for a long time, and that is actually to reform the tax system and bring entitlements under control, which I think is highly unlikely.
Andy Serwer: Niall, you're back in the UK these days. What does the rest of the world think about America at this point and how has that changed?
Niall Ferguson: That's a great question. I'm on leave from Hoover back in the UK for a year, and it's fascinating because people there are more worried about American politics than people here as far, as I can see. And that is true in Europe, generally. I was just in Kyiv last weekend and there's great concern there that if Donald Trump gets reelected, he'll pull the plug on Ukraine. This worries all the Europeans. The Europeans have really increased their commitment to Ukraine's war effort against Russia, but they know that without the United States, it would be extremely hard for Europe alone to sustain that war effort. So there's a good deal of disquiet about what is going to happen next year in the US election. On the other hand, there's a kind of envy, and the envy is directed at US economic growth, the dynamism of the US economy. They all have AI envy because there basically is no AI in Europe and scarcely any in the UK. So it's a strange bifurcation. People are really worried about American politics and kind of envious of the American economy.
Andy Serwer: Is globalism and liberal democracy in permanent decline or is this just a hiccup, an aberration that we're experiencing?
Niall Ferguson: Well, globalization has been pronounced dead rather often recently. It's not that dead, actually, when you look at the resilience of international trade and capital flows. It's dialed back a bit since the high point, which was 2007 before the global financial crisis. But we're not looking at a huge retreat from globalization of the sort that we saw after 1929. When people talk about decoupling between the United States and China, I say, does that mean Apple produces 80% of its hardware in China rather than just a hundred percent? Because 80% is still a rather large number. The US trade deficit with China is still huge. US trade with China is still huge. So what's really going on is that globalization's shape is shifting and it's shifting in response to a variety of things, some of which are conscious. Like the US government is consciously trying to reduce its exposure to China, supply chains are consciously be moved away from China. But there are other things that would be happening anyway. The fact that Chinese labor costs are no longer particularly attractive, Mexico's now overtaken China and its trade with the US; there's a reason for that. It's close and it's actually pretty competitive. So it's a combination of policy and structural shifts that would've happened anyway, but I think one shouldn't exaggerate the extent of the shift. It's still globalization if American companies are manufacturing in Vietnam or in Mexico as opposed to in China. The idea that we can somehow bring it all back home, we can somehow bring all manufacturing back to the United States isn't very plausible, because it's just much more expensive to make microchips in the US.
Andy Serwer: It's a good segue to China. How bad is our relationship with China and how bad a leader or good a leader is Xi Jinping?
Niall Ferguson: Well, let me take those one by one. The relationship is not in a good state. Despite President Biden's talk of a full Hiroshima not so long ago. The visits that have been made by members of his administration to China have really not gone terribly well, haven't really achieved terribly much, haven't changed the sentiment in Beijing, which is that the US is pursuing a conscious policy of technological and economic containment that is designed to keep China firmly in second place in the Indo-Pacific. So I think relations are not good, and I don't think that they've been improved by these various visits that we've seen, to judge by what we hear from Xi Jinping and senior figures in the CCP. Xi himself, I think has not been good for China for two reasons. One, explicitly aiming at strategic... Well, equality or parity with the United States, which I think was a silly thing to explicitly say you're going to do. That was like sending a warning. Something that previous Chinese leaders had avoided doing since Deng Xiaoping. They had sort of kept their light under a bushel. The second thing, which has been more damaging, I think, has been what he's done to the Chinese economy. Xi is in many ways a Marxist-Leninist believer who has reasserted the power of the Chinese Communist Party, the CCP, over the economy, over society, even over academia. It's a very different China from the China I used to visit 12 years ago, regularly. Much, much less free in expression and less dynamic economically, because the big tech companies had been reigned in. Jack Ma was essentially brought low by Xi Jinping. And that huge real estate sector, which was really about 29% or 30% of the Chinese economy is in a state of crisis. So I think both as a political leader and as an economic leader, Xi has steered China into very treacherous waters.
Andy Serwer: How concerned should we be over Vladimir Putin? Some people say it's just not that big a deal for the United States. Other people say it's a mortal enemy.
Niall Ferguson: Well, from the points of view of Ukrainians, he is a mortal enemy who is killing significant numbers of Ukrainian soldiers and civilians every month. I just came back from Kyiv. There were air raids before and after my time there, and the reports that one received from the front line by soldiers who had been serving there, pretty grim. This is a very bloody war, and anybody who was hoping that the Russian army would fall apart at the time of the Prigozhin mutiny, I think, has been disappointed. They are dug in, they have managed to lay minefields. They have made an almost impregnable defense of the territory that they hold in southern Ukraine. And the truth is that the Ukrainian offensive of this summer has not achieved anything like what President Zelensky hoped for. Does that matter to the United States? Well, on one level, no. It's a long way away and it's not American soldiers who are doing the fighting. The problem is that we've backed Ukraine. Not only financially, not only in terms of weaponry, but we've publicly, morally backed Ukraine. And we say, as Secretary of State Blinken said in Kyiv just about a week ago, that we'll be there for as long as it takes, but that could be a long time. A German general who was in Kyiv at the weekend said that the German planning horizon was out until 2032. That is a much longer war than anybody in the United States thinks they've got involved in. So I think the problem in the short run is that we are stuck in a war that doesn't have an obvious end in sight, and that means that resources are going to be absorbed, financial resources, hardware from military stocks buy this war for I think longer than Joe Biden expected. But there's a broader problem, and that is that Putin is closely allied with Xi Jinping. This is a partnership of extreme importance to the Chinese leader. China isn't about to let Russia lose this war. So we can't just see the war in Ukraine in isolation. It is part of a broader geopolitical struggle in which the US and the Europeans and other allies support Ukraine, and China and Iran support Russia. That is actually quite an alarming state of affairs. You can think of it, not so much as a European or an East European war, but as the first hot war of Cold War II. And in that sense, I think Putin is part of a broader threat, a threat of a kind of axis of China, Russia, and Iran, that will pose challenges to the United States, not only in Eastern Europe, but in the Middle East and potentially in the Far East, in the case of Taiwan.
Andy Serwer: Final question, Niall, and I hope you've got something to say on this topic, given some of the conversation we've been having. What could go right in the world?
Niall Ferguson: Well, it would be great if the Russian army suddenly unraveled, lay down and died, and Ukraine won the war. That would be terrific, but it feels less likely than a year ago when the Russians were in flight from Kharkiv and then from Kherson. That would be great, but I'm not holding my breath. It'd be great if China's economic troubles translated into some kind of political crisis there. Because I think Xi Jinping's attempt to reassert one party rule, the dictatorship of the party is dangerous not only for China, but for the world. So you could hope for change. And I'm an optimist about Cold Wars. I haven't had a lot of them, but if the last ones anything to go by, the society that believes in freedom and democracy tends to be more dynamic than the society that believes in the opposite. So I think what ultimately will happen is that the problems and pathologies of one party government will manifest themselves and China's growth rate will slow and its threat will diminish and perhaps its leadership will change. And what else could go right? Well, all the things that are currently going on in the realm of technology, particularly the breakthroughs in artificial intelligence, might turn out to be really good for the US economy. Maybe there's a huge productivity shock coming as we all start using ChatGPT to prepare our interviews or whatever it is. And the next thing you know, the US economy achieves higher growth than anybody expected, and all those things that I was worrying about earlier turn out to have been mere phantoms. So there is an optimistic bullish case. There always is, in this town of New York, there'll always be somebody who's bullish. But that would be my bullish scenario.
Andy Serwer: All right. On those notes, Niall Ferguson, thank you so much for your time.
Niall Ferguson: Thanks Andy.
Andy Serwer: This is At Barron's. I'm Andy Serwer. We'll catch you next time. The production team for At Barron's is Elia Malidu, Rebecca Bisdale, Kinga Royjack, Joe Lusby, and Laura Salibury. The executive producers are Kristen Belstrom and Melissa Haggerty. We'll be back with a new episode next week.
