David Stockman was a key architect of the Reagan administration in the late 1980s and early 1990s. He served as the budget director for President Reagan s administration, and was one of the key architects of his plan to reduce taxes, cut spending, and shrink the role of government. David Stockman is the author of three bestselling books: The Triumph of Politics, Why the Reagan Revolution Failed, The Great Deformation, The Corruption of Capitalism in America in 1985, and How to Bring It Back: A Nation on the Brink of Ruin, 2016, and The Undrainable Swamp in the Fantasy of MAGA, 2019. He is currently the publisher of Contra Corner, a place where the mainstream delusions and can't about the warfare state, the bailout state, and the beltway banditry are ripped, refuted and rebuked. He is also the editor-in-chief of the Contra Corner blog, and a regular contributor to the New York Times, The New Republic, The Weekly Standard, The Daily Beast, and other publications. He was a member of the anti-war movement in the 1960s and 70s, and served as an early supporter of John Kennedy s campaign in the presidential campaign in 1968 and later in the campaign of John F. Kennedy s 1968 presidential campaign. David Stockton was a Harvard Divinity School, a Harvard Law School graduate, and an early advocate of anti-Vietnam War and anti-colonialism in the Vietnam War movement. and was a founding partner at the Blackstone Group. in the 1970s and 1980s, when he was elected to the House of the Democratic National Committee. . and later served as a House of Representatives in the Reagan's campaign for President Ronald Reagan in the 1980s. The Reagan White House in the 1984 election campaign in 1984. He was the first black man to run for president in 1984, and later became a leading voice against the Democratic Party in the 1988 primary campaign in a primary challenge to John McCain in the primary against John Kennedy in 1988, which John McCain was running for re-election in the Democratic primary in 1988 and in 1992. What s more, he served as John McCain s running for President in the second place in 1988. against John McCain John Stockton s campaign a man who was an antiwar hero in the 1968 Democratic primary in 1968, and in the early days of Watergate, in the mid-term election, in 1968.
00:00:00.000Hey everybody, I'm really looking forward to today's podcast.
00:00:03.000My guest is really a titan, somebody who I spent a lot of my youth regarding as the kind of Darth Vader of cutting social programs and Environmental programs for the Reagan White House, but I now regard him, the more and more that I see him recently, it's very strange.
00:00:24.000I remember reading, I think it was C.S. Lewis, who talked about people of one generation who are great enemies actually find themselves very aligned in the face of subsequent generations.
00:00:36.000I feel that we have reached this kind of weird alignment where every time I hear David Stockman I'm a voice on TV or read an article about him.
00:00:46.000I find myself nodding my head and he's talking about the same kind of things I'm talking about.
00:00:51.000This outrageous debt that is destroying the middle class, that is threatening American democracy, the decline of America into a warfare state abroad, an imperium abroad, a surveillance state at home.
00:01:04.000These huge gaps in wealth between the middle class and the rich that I think Democracy makes democracy unsustainable.
00:01:14.000By every kind of political science that's been done in history, you cannot have a democracy when there are these huge aggregations of wealth above and then widespread poverty below.
00:01:26.000I really am looking forward to this talk.
00:01:32.000As a Michigan congressman in 1976 and joined the Reagan White House in 1981, serving as budget director.
00:01:39.000He was one of the key architects of the Reagan Revolution plan to reduce taxes, cut spending, and shrink the role of government.
00:01:45.000He joined Solomon Brothers in 1985 and later became one of the early partners of the Blackstone Group.
00:01:51.000During nearly two decades at Blackstone and at a firm he founded Heartland Industrial Partners, Stockman was a private equity investor.
00:02:00.000He is the author of three bestselling books, The Triumph of Politics, Why the Reagan Revolution Failed.
00:02:06.000And that's 1986, The Great Deformation, The Corruption of Capitalism in America in 2013.
00:02:13.000Trump, A Nation on the Brink of Ruin and How to Bring It Back, 2016.
00:02:19.000And Pete Trump, the undrainable swamp in the fantasy of MAGA, 2019.
00:02:23.000He is currently the publisher of a daily blog, Contra Corner, the place where the mainstream delusions and can't about the warfare state, the bailout state, the bubble finance and the beltway banditry are ripped, refuted and rebuked.
00:02:38.000Born in Fort Hood, Texas, graduated from Michigan State University and attended the Harvard Divinity School and then went on to Washington as a congressional aide in 1970.
00:02:51.000David, I can't tell you how happy I am to have this conversation.
00:02:56.000Let me begin by just asking you about the Harvard Divinity School.
00:03:00.000What was your career track trajectory at that point?
00:03:03.000I'm glad you asked that question because it goes right to your observations.
00:04:05.000And the first campaign, that's why this discussion is so interesting.
00:04:10.000The first campaign I ever worked in, the doorbells I ever rang, were for your father when he declared his candidacy in 1968 because the war had to stop.
00:04:21.000And as a matter of fact, Despite all the tragedy that followed, the war did stop.
00:04:45.000And, you know, we have been off to the races as a global hegemon with these forever wars, decade after decade, And we have accomplished nothing except to alienate a good part of the world.
00:05:01.000Unfortunately, kill and name hundreds of thousands, if not millions of people.
00:05:33.000I've made the point that if you add up everything that we spend on defense, and that's the defense budget proper, International Affairs and all of the AID and State Department National Endowment for Democracy and all of the broadcasting operations.
00:05:52.000And you also add to that the cost of veterans, the VA, because that's a deferred cost of war.
00:05:58.000We have millions of men in America that were injured, maimed, disabled for life that we have to support.
00:06:06.000They shouldn't have been in any of those wars, obviously, but that's More than $300 billion just for veterans.
00:06:14.000So when you add all that up, it's $1.3 trillion going into this vast war machine.
00:06:21.000And we really have to stop it because if we don't get...
00:06:25.000I just want to make it clear that's an annual cost.
00:06:54.000And so we now have a bipartisan consensus in favor of every kind of really unbelievable mayhem that comes along as a result of the Washington deep state, if you want to call it that, finding another crusade, as John Quincy Adams said, Another monster to destroy abroad.
00:07:33.000It's far worse than red state, blue state between the Russian-speaking provinces in the east and south and the nationalists in the west and center.
00:07:42.000So the solution would be a peace conference, partition the country, and move along and stop the mayhem.
00:07:53.000The neocons have so demonized Putin that they can't see straight.
00:07:58.000And so now we have a government in Washington that should be attending to our domestic affairs, that should be a little concerned about $32 trillion of debt, that should be concerned about this massive disproportion of wealth that has been created as a result of all this money printing.
00:08:19.000And borrowing that's occurred in the last two or three decades.
00:08:22.000And yet, the big thing they like to do, you know, is get in the planes and go on their junkets And pretend, you know, that there's some kind of latter-day tribunes taking care of the empire around the globe.
00:08:40.000Until we break the lock of the warfare state, all these other things that we might actually even disagree about will never be addressed in any productive or proper way.
00:08:52.000I want to point out a couple of things before I move on to the next question, which is that the people of Donbass, who are predominantly ethnic Russians, actually voted to join Russia prior to the war.
00:09:05.000And the Russians said, no, we don't want you.
00:09:08.000We want Ukraine to maintain its integrity as a nation and just, you know, let's make that part of the Donbass region an autonomous region so they can maintain their language so they won't be murdered, killed by government policies.
00:09:33.000This was an agreement that was worked out by France, by Germany.
00:09:37.000And actually, when Zelensky ran in 2019, he ran on a peace platform and he got 70% of the vote.
00:09:46.000And his promise was that he would ratify, sign and ratify the Minsk Accords.
00:09:50.000And something happened when he got in there.
00:09:54.000He got surrounded by White House neocons and ultranationalists within Ukraine, and something made him change his mind.
00:10:03.000Yes, I think on that, it's a very important point, and I think you can go right to the heart of it.
00:10:08.000It was the Azov Battalion, the sort of neo-Nazi forces that became part of the government in 2014, and they basically said to Zelensky, Who was born and lived in the Russian-speaking part of Ukraine, the Donbass.
00:10:40.000But he was told by the ultra-nationalists, the hardcore, that if you even think about making peace with Russia, you won't live to tell about it.
00:11:03.000The whole territory has been the borderland of Russia for centuries and centuries.
00:11:09.000Much of it was part of the Russian Empire or it was a vassal state.
00:11:14.000What we're fighting for today, allegedly, according to Washington, is to protect borders that actually didn't exist until 1922 when they were created by Lenin.
00:11:27.000Out of administrative convenience from the parts and pieces of Tsarist Russia that he had taken control of.
00:11:35.000And a little more was added by Stalin during World War II from Poland and Romania.
00:11:41.000And then finally, in 1954, when Khrushchev won the struggle for succession, he gave Crimea to the Ukrainians.
00:11:51.000It had been purchased by Catherine the Great in 1783, it was purely Russian, but as a reward to his colleagues for helping, you know, his Ukrainian colleagues for helping succeed Stalin, it was a bloody struggle he gave them Ukraine.
00:12:07.000So we're today fighting a war, a devastating war with the other major Nuclear-armed power in the world.
00:12:19.000We're slaughtering a population so that we can ratify the work of bloody tyrants, Lenin, Stalin, and Khrushchev, that made the current borders of Ukraine, but they have nothing to do With the real history of population.
00:12:38.000So if we could just see through that, and as you say, go back to 2014.
00:12:44.000The coup in Kiev was funded by the United States Department of State, the National Endowment for Democracy.
00:12:52.000The CIA, we overthrew the duly and appropriately elected government.
00:12:58.000We didn't like the president because he was Russian friendly.
00:13:03.000Well, it wasn't our business to decide who and how the Ukraine is going to be governed on the border By the way, let me just add to what you're saying.
00:13:18.000We put $5 billion through the National Endowment for Democracy and through USAID and all these other CIA front groups into those overthrowing Yanukova.
00:13:31.000So in 2014, it was, as you say, it was the democratically elected government.
00:13:37.000We, you know, were supposed to represent democracy, actually paid to overthrow that government in 2014.
00:13:45.000Yes, and you know, I think this goes to a really important point why this is such a tragedy and such a crime, really.
00:13:54.000And that is, if you look at the last election, which Yakunovic was elected, you look at that electoral map and you would be astounded.
00:14:05.000The East and South voted 90 to 10, For the Russian-speaking, pro-Russian-speaking candidate.
00:14:14.000The center and west, you know, historic Ukraine, Voted 90 to 10 for the nationalist candidate.
00:14:23.000The country was divided right down the middle in ways that you rarely see, and it wasn't an aberration.
00:14:30.000The same thing happened in several earlier elections.
00:14:33.000So what I say is the Ukrainian people have already voted for partition.
00:14:39.000They have said time and time again, we don't necessarily all want to be part of the same state, of the same nation.
00:14:48.000And why in the world we can't see that and stop the fighting, stop the slaughter, and begin a peace process that could resolve this very quickly is really very hard to understand, except to realize that Washington is so populated with people who think that we need to be running every square inch of the earth And if it doesn't,
00:15:14.000you know, if it's not run according to Washington specifications, then we need to intervene.
00:15:23.000It is really the opposite of that famous statement that I just quoted from John Quincy Adams that we mean to have peace with all nations.
00:15:34.000And not to travel the earth seeking monsters to destroy.
00:15:39.000And unfortunately, that's what our foreign policy has become in modern times.
00:15:45.000Well, you know, one of the ironies, and I'm taking just from what you said, is that when we were fighting the Kosovo War, we were actually on the side of partitioning.
00:15:58.000Two populations that had been kind of artificially loaded into one country through arbitrary drawn borderlines who couldn't get along with each other, who were having trouble getting along.
00:16:10.000And at that point, we took the position and we were militarily involved.
00:16:15.000Actually, we bombed Serbia for, I think, 82 straight days.
00:16:21.000It's part of a campaign to sever Kosovo from the Serbian Republic.
00:16:27.000But the bigger issue is there have been a lot of partitions in the world, both in older times and more recent times, that proved beneficial to the populations involved.
00:16:38.000It turned out that Czechoslovakia was an artificial state created by Wilson They eventually parted ways.
00:17:13.000If there is good and substantial reason and historic basis for it, there clearly is here.
00:17:20.000The war was started by Kiev in 2014 when it decided that the breakaway republics in the east that didn't want to be part of the new government Part of the CIA-sponsored coup had to be punished for their attempts to break away.
00:18:07.000Because to him, putting NATO in the Ukraine and U.S. missile bases within minutes of Moscow was really not much different than what your uncle faced in 1962 when Khrushchev put missiles in Cuba 90 miles away.
00:18:35.000And why we expanded NATO to all these former Warsaw Pact nations when we had promised Gorbachev at the time of things breaking up and 1991, that we wouldn't move an inch to the east in return for his acquiescence and the unification of Germany.
00:18:54.000All of these things are so well known, and yet you have a population of elected officials and permanent government apparatchiks, as I call them in Washington, who are so committed to the global hegemony,
00:19:10.000to these forever wars, to The neocon creed that here we are with this sheer madness that you have a democratic president and a democratic majority.
00:19:26.000That insists must be carried out to the last Ukrainian, which is so ironic, because when I started back in 1968, the Democratic Party was the Peastic Party.
00:19:38.000You know, that's where all the doves were that we looked to in the battle, the fight on Vietnam.
00:19:45.000And somehow, over the last five decades, over the last half century, it's turned upside down and switched.
00:19:52.000And frankly, I think there are more doves in the Republican Party today, not many, but, you know, Rand Paul types.
00:20:00.000There are more today than in the Democrat Party.
00:20:03.000And that's really part of what has to change and change in a big way.
00:20:10.000I think particularly in the rank and file Republicans and the independents, that kind of populist wing is very, very anti-war, the same way that, you know, we were in the 1960s.
00:20:22.000But, you know, the rest of the population has succumbed to this kind of comic book narrative that the neocons are so adept at generalizing.
00:20:35.000We've got to go in there and fix it, like they did in Iraq.
00:20:40.000They hypnotize people with it, and nobody is looking at the facts.
00:20:47.000As you mentioned, my uncle, his most important speech as president, the 60th anniversary is coming up on June 10th of the American University speech, which was the speech where he turned our nation around on the nuclear test ban treaty and had the first atmospheric test You know, the nuclear age.
00:21:07.000What he did in that speech is the exact thing that you're doing right now is it was a talk to the American people asking them to put themselves in the shoes of the Russians.
00:21:18.000And he said, you cannot have peace if you're not able to put yourself in the shoes of your adversary.
00:21:25.000And he reminded people of something that we never heard.
00:21:28.000You know, I grew up watching Vic Morrow on combat and, you know, how Americans, we Americans didn't realize that the war was really won by the Russians.
00:21:41.000And that the Russians made this incredible sacrifice to beat Hitler, including 23 million, you know, you hear numbers up to 70 million Russians were killed, but 23 million people kind of agree on.
00:21:54.000But it's one out of every seven Russians, 13% of their population died.
00:22:00.000A third of the country was reduced to rubble.
00:22:02.000And this is when my uncle said, you have to put yourself in their position and see how they view the world.
00:22:07.000He said, it's like if all of our country was reduced to rubble from the East Coast to Chicago.
00:22:14.000And how would we feel about hostile forces lining up on our border then?
00:22:23.000It developed this great friendship with Khrushchev and they We're corresponding with each other secretly through a Soviet spy, a KGB, GRU spy called Georgi Bolsheko, who used to come to our house and he would hand letters to try to unrun the CIA, unrun the State Department.
00:22:40.00026 letters of my uncle and Khrushchev.
00:22:43.000And they found themselves that they were both in the same position.
00:22:48.000They were both men who had fought in World War II. Khrushchev had seen this incredible brutality at Stalingrad, probably the worst battle, arguably the worst battle in history.
00:22:58.000And my uncle had been lost and declared dead and seen the brutality of war.
00:23:03.000And both of them had an abhorrence for war.
00:23:05.000But they were surrounded by intelligence apparatus and military brass who saw the war not only as inevitable, but, you know, desirable.
00:23:17.000They knew they had to talk to each other or the whole place was going to be burned down the whole world.
00:23:23.000And that's why my uncle and Grushchev privately agreed to install the hotlines because they didn't trust their own people because they were surrounded.
00:23:31.000And one of the things I want to ask you about, because you had a front row of this, because a lot of those neocons and a lot of the philosophy came out of the Reagan White House.
00:23:41.000And then, you know, they really blew up during George W. Bush's administration.
00:23:46.000But there was that kind of Zbigniew Brzezinski and the Carter White House was probably the granddaddy of the neocons, arguably.
00:23:54.000And he actually says in his book, Our strategy should be to draw the Russians into wars in Afghanistan and other places where we can get other people to fight the war and we'll supply them, and that's how we'll bring down Russia.
00:24:10.000That's been their blueprint from the beginning, and they just rolled it out, the same people.
00:24:19.000I'm glad you brought this up, and I want to go back to where you started, because I truly think That John Kennedy's American University speech is one of the greatest speeches, most inspiring speeches by any president at any time, and that people can easily find it on the internet today.
00:24:39.000They should Click on and listen to it because it was powerful and it was moving and potent.
00:24:47.000Now, what's interesting about that is that the other great speech given right before that was by Eisenhower, his farewell address.
00:24:57.000And just as John Kennedy tried to open the door to negotiations and reducing the tensions of the Cold War in the arms race, Eisenhower had also made enormous strides in befriending Khrushchev, and they had several summits which were productive.
00:25:18.000And as you know, the last summit in the spring of 1960 was going to be the breakthrough.
00:25:24.000It really would have ended the arms race And on the eve of that summit, Alan Dulles and the CIA sent the U-2 spy planes right over Russia, Gary Powers.
00:26:29.000Our defense budget in the same purchasing power dollars today is $800 billion going on $900 billion.
00:26:36.000In 1961, when Eisenhower said our defenses are adequate, the triad nuclear deterrent that we had You know, we were up against Russia at the peak of its industrial might.
00:27:10.000The Soviet Union has disappeared from the pages of history.
00:27:14.000There is no big industrial power that's even threatening our homeland security.
00:27:20.000And safety, and certainly it's not China, because China is one great big Ponzi scheme that couldn't survive without the export markets, you know, without the 4000 Walmarts in America.
00:27:33.000The Chinese Communists would be in a hard way to stay in power as well.
00:27:38.000So why do we have double the defense budget today that Eisenhower said was adequate when we had a real enemy and when he was in the middle of trying to open the door?
00:27:50.000Now, the last point on your question, what was going on in 1980, is really also highly relevant to where we are today.
00:27:58.000The case that the neocons were making in 1980, and you probably remember it, is that we were in danger of the Soviet Union developing a nuclear first strike capability, and that it would only be a matter of time, and they would say, you know, game over, surrender.
00:28:28.000They were able to use that fear to take the defense budget that we got handed to us from Jimmy Carter at $140 billion and to take it to $350 billion over a four or five year period.
00:28:42.000And in today's dollars, it's a lot more than that.
00:29:01.000What they did was create a vast Armada of conventional forces, the 600-ship Navy, thousands of new main battle tanks, thousands of new aircraft, fixed rotary, all kinds of sea lift, airlift capacity, all kinds of missile capability, cruise missile capability.
00:29:26.000It was used for wars of invasion and occupation.
00:29:31.000In the Middle East it's being used in the Ukraine today.
00:29:34.000In other words, you know, these forever wars We're an accidental outcome of a massive conventional buildup that was unnecessary that happened during the 1980s.
00:29:48.000Because I'm pretty sure of this, that had not that huge buildup happened under the false guise, threat of a Soviet first strike capacity, it would have been very hard to have the first Gulf War, the second Gulf War, to take...
00:30:07.000Take the battle to Libya and to Yemen and to all the other places in the world.
00:30:12.000If presidents had to go to the Congress and ask for huge appropriations, To buy the military capability.
00:30:21.000This is another important part of history that I think is important to lay out because it's why we're in the mess we are today.
00:30:30.000If we didn't have all these stockpiles of weapons that really came out of that conventional force buildup, we wouldn't be running a genocide, which is really what it is in the Ukraine today.
00:30:44.000I think it's a key part of understanding what has to change in a very big way.
00:30:49.000We don't need that conventional force.
00:30:52.000We need a triad deterrent, nuclear deterrent.
00:31:16.000And yet, the military-industrial intelligence complex, the neocons, and all of the...
00:31:24.000I don't want to belabor this, but there's so much loose change in this massive $900 billion defense budget that it's basically like what I call a self-licking ice cream cone.
00:31:38.000There is so much money that goes to all these think tanks, all of these NGOs, all of these operations that spend their life coming up with reasons why we should be in the Ukraine or Why liberating Libya was a good idea or why Yemen makes a difference, when none of this is true, but it all comes out of this massive budget.
00:32:02.000The most dangerous thing in the world is the $900 billion defense budget, to tell you the truth, because there's so much money, so many arms contracts built into that, that it's almost self-perpetuating, very difficult to stop.
00:32:18.000And you have the media involvement, too.
00:32:20.000And, you know, you go on CNN and the people you're seeing who are urging us to, you know, increase our commitment to Ukraine are all retired generals who they don't tell you, but they're working for those Lockheed and the military contractors and those think tanks.
00:32:37.000And their whole function is to try to keep us at this constant state of war.
00:32:41.000And, you know, you talked about the expenditures.
00:32:46.00040% of the world's budget, the entire global budget for military is coming from the United States.
00:32:54.000We spend more than the next 10 top nations, including Russia and China combined, Right.
00:33:32.000I talk often about Paul Kennedy, who's a Yale professor, who wrote this book, this analysis of the last 500 years of how empires rise and fall.
00:33:44.000And every single empire in that book, every single empire in the last 500 years of history, half a millennium, the death knell has come from overextending its military abroad, and we've just followed that formula.
00:33:58.000I remember at the end of the Cold War, disentangling, Right.
00:34:03.000That we were promised a peace dividend.
00:34:28.000And we wouldn't need all this Homeland Security if we weren't stirring up trouble in the world.
00:34:33.000The reason we have to go through x-ray machines at the airport is because, you know, the military is not protecting us.
00:34:40.000It's actually making it more dangerous to live in this country.
00:34:44.000I would just add that they almost had a peace dividend for a few years.
00:34:49.000And then, unfortunately, the Clinton administration got taken in by this Republican drum beating about being soft on defense.
00:34:59.000And they came up with this stupid idea, really bad, and this is important to get into the mix here, of expanding NATO to include the former Warsaw Pact nations and then even some of the republics.
00:35:14.000That spun out of the Soviet Union itself.
00:35:17.000And at the time, and this was quite clearly, even then, there was a public debate in the New York Times.
00:35:25.000George Kennan, the father of the containment doctrine, the intellectual, really, who helped create the whole Cold War containment doctrine, and that led to NATO, and that led to the Marshall Plan and all the others.
00:36:26.000But after that kind of history, they have a different mentality.
00:36:30.000And when we said we're bringing NATO to their doorstep, Okay, to Lithuania, to Poland, that we were going to put missiles in NATO in the Ukraine and in Georgia, which is a former republic of the Soviet Union.
00:37:05.000And finally, there was a negotiation in December 2021.
00:37:10.000One, it could have led to a breakthrough and an agreement to keep NATO out of Ukraine and some kind of autonomy under Minsk for the eastern and southern provinces.
00:37:21.000But it was all vetoed, shot down and totally kicked away by the neocons.
00:37:28.000This happened in a Democrat administration.
00:37:35.000It shouldn't have happened in any administration, but certainly it shouldn't have happened in the former Peace Party that is part of the War Party now.
00:38:26.000You know, but can I just throw something in there if I could, because I've sort of studied this too, and it's very interesting that we're into it.
00:38:32.000When he was suddenly confronted with this crisis, And then was told that Khrushchev was making the point, you got Jupiter missiles in Turkey.
00:38:42.000They weren't even supposed to be there.
00:38:47.000He famously said, there's always some bastard that doesn't get the word.
00:38:52.000And the point was, time and time again, at all these inflection points in history, when people were trying to do the right thing, President Kennedy, President Eisenhower, Jimmy Carter with the arms control agreements.
00:39:08.000Time after time, you know, they're undermined.
00:39:11.000I mean, I have no great beef for Donald Trump, but he was actually trying to roll back the empire a little bit, and he tried to get out of Syria.
00:39:21.000He tried to, you know, defuse the tensions in Korea and his own people shot him down.
00:39:28.000So we're up against something that's pretty insidious, pretty powerful, pretty deeply entrenched.
00:39:34.000That's why the deep state isn't a bad metaphor, even if it's exaggerated.
00:39:40.000And somehow its lock on the two political parties has to be broken if we're ever going to move into a Yeah, and let me just finish that thought about, you know, putting yourself in the adversary's shoes.
00:39:57.000In exchange for moving, for reunifying Germany and moving out 400,000 German troops, I mean, Russian troops who were there and moving in NATO, imagine that, you know, what a blow to the pride and to the national security of the Soviets.
00:40:14.000They got us the promise we would move one inch to the east.
00:40:17.000We then moved a thousand miles to the east.
00:41:02.000We put Aegis missile systems in Poland and in Romania, and those missiles can carry Tomahawk missiles, which are nuclear, and Ukraine is 400 miles from Moscow.
00:41:17.000We have a rule in our hemisphere called the Monroe Doctrine that says nobody can put anything anywhere near us.
00:41:41.000What do I, you know, and I want to close as many as I can to the 800 bases abroad.
00:41:48.000Bring people home and start unraveling the warfare state.
00:41:53.000You know, what happens to our economy in this country?
00:41:55.000Because those are a lot of jobs that are lost.
00:41:58.000Those are people now who don't have jobs.
00:42:00.000They're people who are armed, maybe, you know, who could be prone to violence or whatever.
00:42:05.000And this is always the worry when you dismantle the military.
00:42:09.000And then there's a, you know, you have a huge cohort of people who are deeply resentful because they want this to continue, the gravy train to continue.
00:42:17.000And then how do you employ those people and what does it do to our economy?
00:42:22.000I mean, is there, how do we spend that piece of it and just start reducing debt and start You know, rebuilding our industrial infrastructure at home.
00:42:32.000Well, I think that's an important point, but we can exaggerate how crucial it is to the economy, because even though we have this monster defense budget of $900 billion, it's actually only about 4% of GDP today.
00:42:46.000It's not nearly as a share of the economy, not nearly the 7% or 10%.
00:42:51.000That we had during the 60s and 70s during the peak of the Cold War.
00:42:56.000The second thing is we've had successful demobilizations after major wartime spending three or four times in the last century, and we made the adjustment quite rapidly When there was no reason to keep it going.
00:43:12.000You know, there was a massive number of men under arms and the whole country was mobilized for war in 1917 and 18.
00:44:21.000We just get an arsenal, most of which we don't need.
00:44:25.000And when you stop spending money on waste, on things that we don't need, either for defense and certainly for civilian life, the economy itself has great powers.
00:44:48.000I think you have to basically say we're going to change the predicate.
00:44:54.000We're going to have first an international push for new treaties, for arms control and arms reduction treaties.
00:45:04.000We've mentioned that our $1.2 trillion defense budget is a high share of the world.
00:45:10.000But there's $4 trillion being spent in the world today on arms that doesn't need to be spent.
00:45:18.000And at least in 1920, our leaders tried to, you know, there was the famous naval agreement in 1922 that Attempted to reverse the naval arms race.
00:45:31.000We tried to have agreements obviously in the 60s and 70s and did.
00:45:39.000So what we need to do is basically let the American people know that we're in the process of making peace with the world and negotiating with the world, reducing the massive expenditures on both sides on arms.
00:45:55.000And I think a lot of the rest of it will take care of itself if we can just change the fundamental direction.
00:46:03.000Let me add to this, switching subjects.
00:46:06.000We're going to reduce expenditures for the military, and that deals with some of this hugest momentous trillion-dollar budget deficits that we have.
00:46:17.000$32 trillion is so massive compared to GDP. Between rich and poor, can that be remedied?
00:46:52.000That has all happened within one lifetime, you know, in four decades.
00:46:57.000So that's what we're up against and it has to change.
00:47:00.000The second reason that we need to focus on is it happened because the Federal Reserve became perverted in its function and started to monetize all of this debt that was being created to fund both a burgeoning welfare state And a big bloated warfare state at the same time.
00:47:24.000We didn't have enough money or taxpayer willingness to fund both.
00:47:29.000And so we borrowed like crazy $30 trillion of new debt in a lifetime.
00:47:34.000So what we need to do is basically recognize that Two trillion annual deaths are built in.
00:47:44.000If we continue with the warfare state that we have today and all the domestic programs we have, and that if we can at least bring this defense budget down dramatically, we can begin to chip away at that and get back to some level of fiscal sanity.
00:48:03.000But none of it can happen until we bring the Fed back under control.
00:48:23.000This has all been, as I said in a thing I wrote recently, it wasn't like President John Kennedy said when he You know, introduced his new economics and he said the rising tide lifts all boats.
00:49:59.000And the top 1% is 38 million, rough ratio 700 to 1, double what it was as recently as 1990.
00:50:12.000So this is not the natural evolutionary outcome of market capitalism, even though some You know, leftists want to say that.
00:50:21.000This is because we've had a central bank, both here and around the world, that has put so much liquidity into the markets, and that liquidity has never left the canyons of Wall Street.
00:50:35.000You know, it didn't cause an acceleration of investment or job growth or living standards.
00:51:05.000What has happened is that these bad money printing policies of the central banks Have created this massive windfall of financial prosperity to the top 1%, even as the real growth rate and investment rate of the economy has slowed to a crawl, which has left the middle class or main street, as we might want to call it, high and dry.
00:51:31.000That's another whole part of this syndrome that we really need to correct in a big way.
00:51:38.000You know, what happens when you try to fix that?
00:51:41.000I mean, it's, you know, because if they just stop renting the money the way they're doing it, there's a bubble at that point, right?
00:52:06.000Well, you know, what I would say is the president should stop trying to take credit for an artificial fantasy land economy that can't be sustained and instead come into office telling the people that this is a fantasy.
00:53:10.000Get prepared because we have got to get back to reality, into something that's sustainable and fair, and having our capital go into productive investment, not financial engineering.
00:53:25.000That's where it's been going, into financial engineering.
00:53:28.000We've had $25 trillion, a staggering number, of financial engineering, stock buybacks, big M&A deals.
00:53:37.000Accomplished nothing over the last two decades instead of that money going in.
00:53:43.000Real investment has been flat for two decades.
00:53:46.000Real investment after you take the needs for a depreciation out of the equation.
00:53:53.000And that just tells you this isn't working.
00:53:56.000And I think someone has to tell the public it's not working.