PREVIEW： Brokenomics ｜ Geopolitical Flashpoints with Firas Modad
Episode Stats
Summary
Faraz Moudad returns to the show to talk about the Trump administration and the state of the US Supreme Court. He also talks about the challenges facing the judiciary and how to deal with them, and why we should be worried about them.
Transcript
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Hello, and welcome to Bureconomics. Now, about a month ago, I had a fascinating chat with
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Faraz Moudad, who I'm glad to say is back. Faraz, thank you for coming back.
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Thanks for inviting me. Thanks for inviting me back.
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We got to skim over a lot of topics last time, but we didn't get to dive in. And I felt it
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really justified a follow-up to dig deeper in some of these stuff. Again, there's so
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many places that we could start, but we are coming up to about 100 days of Trump's second
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term, his third election win. What's his scorecard looking like so far?
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Better on the domestic front than on the international front. So in terms of showing judges and others
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that nobody is above the law and that immigration laws are going to be enforced, he's doing well.
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The arrest of two judges for basically harboring illegal migrants sent the right kind of message,
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I would suspect, but it also is leading to a big backlash. On the DEI stuff, he's hammering away
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at that issue. People are claiming that it's a question of academic freedom and it's a question
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of this, that, and the other, but really it's just racism. Racism directed against the Europeans.
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And he has the backing of the Supreme Court on this as well.
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And he has the backing of the Supreme Court on this. There's a major crisis with the courts in general
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because the judiciary in America and arguably in Britain and in Europe has accumulated a huge
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amount of power and the ability to check the actions of the executive based on what some might
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construe as a misreading of the constitution or as judicial overreach. This is still being debated
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and litigated, but there is certainly a constitutional crisis that's brewing over how much freedom does
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the executive have. Well, my understanding of the American system is supposed to be three
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three co-equal branches. And in order for one of the branches to be effectively shut down or told
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to behave, it takes the other two working in unison. Whereas from my perspective, what we're seeing
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is a judiciary which feels that it can act unitarily to block one of the other branches.
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Very much. Very much so. Especially the executive branch. Especially the executive branch.
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And if you looked at the Biden and Obama terms, the quality of judges who were appointed was
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absolutely ridiculous. You had judges who had absolutely no business being involved. Far-left
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extremists being given federal appointments, federal judicial appointments, that allow them
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to be activists from the bench and that allow them to put spokes in the wheels for the executive.
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And what's emerging is the need to recapture institutions. I mean, we've ended up in a situation
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in America where even economic data gets rigged regularly for political reasons to help Joe Biden.
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Oh, I very much noticed there was a regular flow of, how should we put it, corrections under Joe Biden.
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Where basically it would turn out the numbers they scored on that were published in the media were
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Then they get revised six to nine months later. And actually when he left, there was a massive revision
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across a whole bunch of statistics that basically said, yeah, we've been rigging the numbers the entire time.
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And interestingly, of course, we have the same phenomena under Trump's last term, although mysteriously,
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the errors always went in the opposite direction.
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So there's, what's emerging is the extent to which there are no neutral institutions.
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And what's emerging is that the idea of institutional neutrality is itself a bit mythical.
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Institutions of this size must have a dogma, must have some organizing principle, must have values
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that are informing decision makers at every node of the ladder, because these institutions are in theory
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technical, but in human affairs, nothing is purely technical. There's always a human element.
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Well, with your geopolitical hat on then, doesn't that place the US and the Western system as a whole
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at a significant disadvantage? Because the geopolitical rivals, Russia, China, India, perhaps India,
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whatever, they're not held back to the same extent by the entire system fighting itself continuously.
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This is why I've written about the possibility of an American civil war,
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and about riots in Europe, and about major problems across the West. Because right now,
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there is an alternative religion that has taken over Western establishments, and that believes
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that everything that it does is right and liberal and democratic and true, and everything that its
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enemies do is crass, undemocratic, authoritarian, and false.
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Yes. And by the way, when you say enemies, you're not talking about Russia and China.
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You're talking about the people who sit opposite you in the Senate.
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Yes. Yes, yes, yes, yes, yes. Absolutely. Absolutely. So the level of polarization
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in Western polities across the board is very severe. And the existing establishment is deeply committed
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to a set of values that is firstly, untrue. Secondly, deeply destructive. And they show absolutely
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no sign of willingness to correct except in minor issues that help their electoral prospects.
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So now you will see Keir Starmer saying that people who are convicted of sex crimes cannot be given
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refugee status. Why not burglary? Why not murder?
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Well, why not parking tickets? In fact, anybody coming here on asylum should be clean as a whistle
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because we're giving them the privilege of asylum.
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So I'm willing to forgive parking tickets. If this was my country, I'd be willing to forgive
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parking tickets. But obviously, murder, burglary, assault, shoplifting, these are issues of equal
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importance to the stability of society. So you see them conceding on some minor issues.
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But you see them fully committed to the principle, which is, for lack of better terminology,
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They just want to turn everything into a massive blob indistinguishable from anything else.
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But this surely throws up a significant geopolitical risk in that, okay, let's say I'm a rival,
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I'm China, and I'm thinking, okay, I want to defeat the US over the next 30 years.
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I can do it with aircraft carriers and planes and tanks. Very expensive, very risky.
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Or I can take a fraction of that money and pour it into exacerbating these exact differences
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that you're talking about, and they will start fighting themselves.
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My theory is that if you're China, you're funding the net zero cultists.
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You're funding the BLMs and pro-Palestine and all of these assorted kinds of groups.
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You're funding the feminists. You're funding the transgender lobby.
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You're funding the LGBT lobby in general, with the intent of destabilizing Western societies.
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This is something that the Soviets had spoken about.
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The use of subversion to demoralize a society and to bring about its collapse.
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Exactly, exactly, exactly. And if you're China, you have no reason to abandon this playbook.
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And you have every interest in funding these extremists, these very nasty, very committed extremists.
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And the irony is that they were being funded by USAID as well.
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Yes, yes, that as well. But I mean, they've just got a big boost in
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in Canada, haven't they, with the Liberals winning. And China immediately came out with a statement,
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words to the effect of, we look forward to further strengthening our deep relationships
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with the Canadian power elite, something like that.
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Because Carney sees China as a lesser threat than America, which from a very narrow standpoint,
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if he doesn't care about his people at all, and if he cares about only his own power base, then he's right.
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If he gives a damn about Canadians being primarily British and French and people who've been integrated
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into North American British and North American French cultures, then no, he's wrong.
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But we know that the likes of Carney are only interested in their own well-being and don't
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even recognize their people as people or as a nation.
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So explain to me what the Chinese strategy is for getting the hooks in. Because we've witnessed
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them do it in Africa through basically buying stuff and building stuff. We're witnessing them doing
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it in Australia with, I mean, they're building out mines and ports and their own road networks,
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their own whale networks and stuff. Is it something similar to that to get their hooks into
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There are people who know a lot more about this than I do. So I don't pretend to know the
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details of the Chinese influence in Canada. But you can see it in some of the mining companies that are
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listed on the Toronto Stock Exchange. You can see it in the sheer extent of money laundering in Vancouver
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that happens in relationship with the Chinese. You can see it with the way that they're buying up
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properties and buying up assets up and down Canada. And you could see it in the fact that the Canadian
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intelligence tried to cover up the extent of Chinese penetration of Canadian intelligence,
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which would suggest that there is a deep compromising of the whole system in Canada.
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But there are people who are more qualified to talk about this than I am.
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But I guess what that brings me to is we've recently had the whole discussion around tariffs.
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Now, my perspective on that was that this was something that they, so it was presented as a
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trade thing. It was presented as a jobs thing. My thoughts was that this had to be driven primarily
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as a national security thing and it was primarily an anti-China thing. What was your perspective on it?
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That they were trying to do a lot of things at the same time with some blunt instruments.
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This isn't to accept the argument that there can be a surgical approach to tariffs. That's just not true,
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given the size of trade. So there had been attempts over the last 30 years to do the surgical thing.
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It just doesn't work. So some things do require a blunt instrument. If you're hammering things with
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a sword, that's pretty stupid. So blunt instruments do have a place in our lives and in politics.
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That said, what Trump, I think what the ideal outcome for somebody like Trump,
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given the different intersections of political allegiances that are around him and given his own
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beliefs, is that you've got to make these countries pay for their own defense and not subsidize them for
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defense and partner with them in that way. And you've got to get them to trade with you
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fairly, if not freely. So if they're not going to give your agricultural producers access, you should
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reciprocate. So this is the this is the animating principle, as far as I can tell.
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Trade, by its very nature, works best between countries, works best for the average citizen,
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between countries that have similar levels of income. If you have a massive gap in income
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between one country and another that are trading together, then the low income country,
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once this massive richer market is open to it, stands to benefit a lot more than the high income country.
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So the extension of that would be that what Trump would want to do
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is to get into a free trade arrangement with culturally compatible countries that have similar levels of income,
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which would point to Europe, Japan, maybe South Korea,
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and obviously Canada and Britain, as being the countries that are the most natural fit
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because there is an overlap of interests and there is an overlap of security needs
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and an overlap of perceived threats and an overlap of culture,
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The issue is that European leaders don't see it that way
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because they're mainly interested in their own parochial interests.
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And that's fair because all politics is parochial, but that comes with a cost because you have China,
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which is a behemoth in manufacturing and in population terms, that's eating all of your lunches.
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Does Europe show any signs to you of thinking long-term strategically about the interplay with China?
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Germany is willing to pretty much sell everything to the Chinese
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just to get through the next quarter with absolutely no long-term thinking whatsoever.
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I mean, they were doing that with the Russians until very recently
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when the chip in the back of their NPC brain got changed and all of a sudden they kind of cut their own legs off.
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The problem that Europe has is that these aren't serious people leading it.
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of Europeans becoming so distant from who they are and their identity,
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translating into just a collapse across the board from the family to local politics to national politics.
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And these are linked, and these are tied together by faith and by ethnic identity.
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And Westerners don't seem to recognize how the world works.
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And the state has come in and replaced the family.
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I prefer to call it cradle-to-grave atomization.
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Everywhere else in the world relies on the multi-generation family.
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You have, therefore, no incentive to have children.
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And you have no incentive to maintain relationships with your children.
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But fundamentally, the role of the state is not to provide charity.
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The role of the state is to repel invaders and hang criminals.
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But we're debating how much money should people get in welfare.
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And how much welfare should we give to foreigners?
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I once did a pyramid of the functions of government.
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And, you know, the bottom layer is that it's basically national security is the bottom layer.
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Then it's property rights, because that then allows a market economy to emerge.
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Then maybe it's infrastructure and you go up and at the top of the pyramid, it's stuff like, you know, working out who goes in what bathroom.
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And the entire pyramid has been flipped upside down, where they spend all of their energy at the narrow end of the pyramid and very little of any attention to the base of the pyramid.
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Can you imagine how humiliating it is that the issue of whether or not men are men had to go to the Supreme Court?
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Isn't it insulting that this issue needs to even be debated?
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But flipping this back to the geopolitics, so this is something, okay, so Europe is not aware of this.
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The US itself was not under the last presidency.
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What are you seeing in this administration that has quickly and immediately grasped that they are in a civilizational struggle with China and they've got to do something about it?
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And perhaps a follow on from that is, you know, what actually is China's strategy here?
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Because from as far as I can tell, it's to basically wait for the US to destroy itself or maybe hasten that progress, that process.
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So in terms of this administration being aware of the challenges, you saw them go after these particular issues immediately on day one.
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And you saw that, I don't want to say backfiring, but you saw the opposition using that in order to dominate the media and focus the narrative on these insane issues,
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on these cultish issues of diversity, illegal migration, climate, etc.
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You're seeing this administration saying we've got to grow the economy very quickly.
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We've got to rebalance trade because you can't keep on having an endlessly negative trade balance without this coming at a price.
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And the price being the loss of the dollar's value.
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And you're seeing them focusing, okay, how are we going to build up our military and separate supply chains from China?
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On a fundamental level, the US should be able to fire a missile at China without that missile having its supply chain based on the Chinese.
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So they need, they know that they need to address this and they seem to be working to address this.
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China's strategy seems to be to take advantage of the chaos in the West and not just work with countries in its own near abroad,
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that is Southeast Asia, Pakistan, etc., but to also work with the Canadians and the Europeans
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and even extend an offer to the British so that they could isolate America from its natural allies,
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so that they could break up the West politically rather than take on the West as a whole.
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I'd be shocked if China could peel Britain away because we are deeply embedded in the American structure.
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Do you think they've got a decent chance of peeling away other allies like Canada and the EU and Australia?
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Look, Canada can be solved militarily, but there is no appetite for that within the existing Pentagon leadership and the existing cabinet.
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If it were up to Trump, I think he hinted at the possibility of, OK, just let's do this and go and invade them.
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Let's just drill down on that point a little bit.
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What would be the lead up to something like that becoming a pressing issue?
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Because, you know, I already mentioned that in Australia, China has huge mining operations
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and it's built its own ports and railway infrastructure and roads and so on.
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If the Chinese start building their own ports, railway systems and other basically quasi-military setups...
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The other alternative is that they try to use the tariff issue endlessly to instigate an economic crisis in Canada.
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Because most Canadian trade is with the United States, so keep on placing pressure on that until there is an economic crisis
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and until the liberal experiment in Canada fails.
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I think I saw yesterday somebody claiming that nearly 5% of Canadians are immigrants with disabilities.
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I didn't verify it, but I remember it caught my eye.
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There's an incredible number of foreign students who are living in Canada.
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One in 40 Canadians, people living in Canada, is a foreign student.
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So there are these deep instabilities within Canada that if you pair them with economic pressure
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and try to make everything worse for Canada, this rallying around the flag effect will begin to crumble
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as a result of internal conflicts within Canada herself.
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Well, that's almost suggesting that short-term it was a loss that the Libs retook Canada.
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But actually, it might be a better forcing function longer term because it's going to make the Libs own their mistakes.
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A, and you can't have the level of demographic change that the Canadians are having without it coming at a price.
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This idea that you can just bring in more Indians, more Pakistanis, more Chinese, and it's all going to be absolutely fine is crazy.
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But the corollary of it is that given the citizenship laws in Canada, this is changing the demographics of who's voting.
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So you end up in a situation where you can instigate a crisis of such an extent that the actual Canadians,
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who are descendants of the British and the French, say, just, we've had it.
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If you come here and do vast deportations, we'll help you.
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And by the way, we're the ones in charge of the military anyway.
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Because Indian migrants don't volunteer into the Canadian Armed Forces.
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Well, actually, even in India, it's predominated by the Sikhs rather than...
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So the Indian martial tradition is not something to brag about.
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And the fact that the Pakistani has lost to the Indians all three wars is also something that is...
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The Chinese strategy is essentially a try to get America to spend all of its efforts disciplining its own allies,
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They don't have a clear counter to the American idea of separating Russia and China by making peace in Ukraine.
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And they don't have a clear counter to the possibility of an Iranian-American deal, which would also be a problem for China.
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And these cards are mainly the result of the extremism of Western leaders, who are willing to say,
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Plus, if they end up with a spheres of influence arrangement, where they dominate, you know, Southeast Asia and have a very strong position against India,
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What they're also trying to do is see how they can build up their own economic autonomy
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and reduce their reliance on trade with the United States.
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Trade with the US, I think it's something like 1% of GDP for the Chinese.
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So important, very important, but not the end of the world.
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The problem that China has is that it also has to import a lot.
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And its imports include a lot of food and a lot of energy.
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And that vulnerability to these imports is a problem, because if you tariff your own food and energy imports, you have a domestic issue.
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Well, this is why I've always said if the Eurasian bloc can be pulled off, it's an absolute powerhouse,
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because you get the power from Russia and you get the workforce and the agriculture from India in the south.
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Which is why it's so important to make sure that the Ukraine issue dies down.
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Which is why Trump is so focused in his rage on Zelensky, because this guy is getting in the way of something that is much bigger than him and much more important than his country.
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And the Ukrainian nationalists cannot see it that way.
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But for anybody who's got any understanding of how the world works, a Russian-Chinese alliance cannot be allowed.
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And it doesn't matter what price Zelensky has to pay or what price Ukrainian nationalists have to pay.
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Well, for the longest time, British foreign policy was one thing above all else.
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And it would seem the US version of that is do not let China, although that is exactly what Joe Biden was doing.
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So you mentioned something to me before we came on air about, because I asked, because you mentioned before in our previous discussion that there has to be this strategy for the US to try and peel off Russia from China.
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And I said, I've not seen anything from the administration that says that they're doing that.
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Steve Witkoff had an interview with Tucker Carlson.
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Steve Witkoff is the special American envoy, Trump's personal envoy, to deal with Russia, Ukraine, and to deal with the Iran negotiations, and to deal with Israel and Gaza.
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So Witkoff is essentially a foreign secretary of state sitting almost above Marco Rubio, with Marco Rubio managing the bureaucracy of the State Department, but Witkoff being a presidential ambassador at large, managing the most important conflicts.
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And so this is typical Trump, in that he appoints personal loyalists to these kinds of positions.
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He has zero experience in this, and went from real estate developer to these negotiations.
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So his deal-making skills should be pretty sharp.
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It is appealing, given the rot in the bureaucracy, to say, get an outsider to do it.
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But you must understand at least some of the principles of the bureaucracy and why the bureaucracy is operating in this way.
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But institutional rot in the United States is so severe that you can't rely on the existing bureaucracy.
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Rubio needs at least two years to clean up the State Department, if not more.
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