Eric Bethel is a former U.S. Director of the World Bank and Partner at the Mara Libram Fund, a venture capital fund that focuses on investing in maritime and maritime technology. He s also been a strong voice on taking on China.
00:06:21.000Hey guys, welcome to another huge episode of Triggers.
00:06:25.000Today we're welcoming a first-time guest, Eric Bethel.
00:06:29.000He's gotten some attention for a couple of great interviews that he's done recently, so we decided to have it on and do a deep dive on all things China and military technology.
00:06:38.000Eric actually represented the U.S. at the World Bank during my father's first term, and he's now on the front lines of investing in maritime security, securing the Western Hemisphere and standing up to the CCP.
00:06:50.000His family story actually starts in Cuba.
00:06:53.000And Eric grew up in Miami before attending the United States Naval Academy and then on to the Wharton School at Penn, my alma mater.
00:06:59.000So there's going to be a lot to cover.
00:07:02.000This interview is going to really open your eyes to the threats that we face, land, sea, and basically everywhere in between.
00:07:08.000So, guys, remember to like, to share, to subscribe so you never miss one of these major episodes.
00:07:28.000For all the top headlines that we'll cover here on the show, go to Apple.
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00:09:38.000fund, and we invest at the intersection of where technology meets maritime strategy meets national security.
00:09:45.000And a lot of our focus is on national defense technologies that directly strengthen our security in the Indo Pacific, certainly, but elsewhere.
00:09:56.000So we've invested in companies like Saronic that makes unmanned surface vessels, Windward, which is a maritime AI company, Regent, which is a sea glider technology, Epirus, they make counter drones.
00:10:17.000And so I kind of came back to my naval roots.
00:10:21.000I'm a Naval Academy graduate and I serve on the board of the Naval War College Foundation.
00:10:29.000Also, I have an MBA from Wharton, by the way.
00:10:39.000But before this, as you mentioned, I did serve as the US director at the World Bank, confirmed 102 to 0 by the Senate.
00:10:49.000And so I kind of got a front row on how China is infiltrating my country.
00:10:54.000Multilateral organizations, World Bank, UN, etc.
00:11:00.000And we can we can double click on that if you like.
00:11:02.000Yeah, we'll definitely we'll definitely circle back to that because that's that's kind of fascinating and a big part of what we gotta really be focused on.
00:11:07.000I think we've been asleep at the wheel for far too long on the issue.
00:12:08.000I imagine they would agree with that if it didn't work in Cuba, it won't work in the United States now?
00:12:16.000Or Venezuela, or, you know, pick your socialist state.
00:12:20.000Yeah, that's always the one that shocks me, is the people that are always advocating for the communism, socialist dictatorships, et cetera, around the world.
00:12:27.000They never seem to be people who actually lived under those ideologies.
00:12:31.000They only talk about it in glorified terms from an academic standpoint.
00:12:37.000And you've you may have noticed that in the recent presidential election, the Latin community, especially in Miami, many of whom have fled repressive repression.
00:12:48.000repressive regimes overwhelmingly voted Republican and for your dad.
00:13:24.000To give you a thoughtful answer, I think that the clearest reason for My desire to go was a sense of purpose.
00:13:34.000It's not like you're just getting a college degree like you can get anywhere, but rather you're doing something noble, helping your country.
00:13:44.000And it was especially important for me, the son of a Cuban immigrant, but for the United States, I could have been born in Havana or somewhere else.
00:13:54.000And it was really out of just being grateful to my country that and the sense of mission that the Naval Academy had, which is what made it so poignant for me.
00:14:07.000As far as the lessons learned and things I got out of it.
00:14:12.000Well, apart from that overarching sense of purpose, discipline, hardship, dealing with adversity, I think were things that you may get at some colleges, but it's not universal.
00:14:29.000And so, ultimately, you're taught to be a leader and your decisions may affect the lives or deaths of the sailors working for you.
00:15:17.000Our military is explicitly, it exists to fight and win wars.
00:15:24.000And so you need to train people at the academies to do just that.
00:15:30.000And you need to have, of course, you need to have diversity, but diversity implies diversity of thought, diversity of political leanings, including in the faculty, to ultimately be able to think through asymmetrically how you combat an enemy.
00:15:45.000So if we get back to first principles, I think we're doing just fine.
00:15:49.000And I think we're on the right track to do that.
00:15:52.000So, I guess, talking about sort of enemies, I guess you were the US director at the World Bank during my father's first administration.
00:16:00.000You've said that China quite literally infiltrated it.
00:16:32.000But I think, look, I think it's an institution with a noble goal, right?
00:16:36.000Ostensibly, the stated mission of the World Bank is to end extreme poverty and promote shared prosperity.
00:16:44.000I mean, there are hundreds of millions of people that are living on, you know, $2.15 a day.
00:16:51.000I think that's the international poverty line.
00:16:56.000Now, when it comes to China, and so the mission is good and there are noble people working to advance that mission.
00:17:03.000When it comes to China, though, in and around, I've got to refresh my memory, but in and around 2016, China's income level was high enough that it was formally considered.
00:17:20.000So the way it works is if you're a very, very poor country, you get free money in the form of grants.
00:17:26.000You cross a threshold and then you get into the loan program and they're super cheap loans.
00:17:31.000These are like the cheapest loans you'll ever get.
00:17:37.000And in 2016, China's GDP per capita was high enough where they could probably graduate.
00:17:42.000But instead of being cut off, the World Bank put them on what's known as a transitional lending path, meaning its borrowing is going to get reduced over time.
00:17:52.000But as of, I think, June of last year.
00:17:56.000Last year, China's loans from the World Bank were averaging like 950 million dollars per year.
00:18:04.000And what is that going towards or do we even know?
00:18:10.000One of the things that I worked on to at least uncover was a loan that was made in the sort of the 2016, 2017 time frame, which was a Xinjiang project.
00:18:25.000Xinjiang is a province in western China where you have a lot of ethnic minorities.
00:18:33.000And the loan was to support five vocational colleges to update the vocational criteria and curriculum and improve opportunities for minority students.
00:18:48.000But we found out, and there were some great investigative journalists, I think Foreign Policy and Axios uncovered, that a lot of the schools got money and that money was used for surveillance equipment, camouflage, barbed wire, stab resistant armor.
00:19:16.000So it was absolutely crazy and it was swept under the rug.
00:19:21.000The World Bank made a few trips to China to investigate, but China stonewalled and many, many months later, everything was scrubbed, kind of like the Wuhan wet market, like nothing existed after a few months.
00:19:35.000How dare you say it came from the lab that studies the exact virus in question at the exact place of ground zero?
00:19:51.000Yeah, I mean, it obviously came from Wuhan.
00:19:54.000Whether or not it was leaked intentionally, I don't know.
00:19:57.000But what China did do was they did allow outbound flights.
00:20:04.000And what's super interesting is that there was a huge spike in deaths in Northern Italy of all places.
00:20:12.000And wouldn't you know that there are like seven thousand or something, you can probably google it, thousands of textile companies owned in Northern Italy, like places like Prato, by Wuhan businessmen.
00:20:26.000So China was deliberately allowing outbound flights.
00:20:29.000They were like, hey, we're not going to be the only people suffering from this virus?
00:20:33.000No, that part was, you know, I'm with you.
00:20:34.000I mean, I don't know how to prove the leak.
00:20:38.000If they did it, it'd seem like, hey, this is a way to destabilize the world, put Trump in an awkward spot prior to an election, these kinds of things.
00:20:44.000So, you know, I'm not saying I can prove it.
00:21:02.000But they were fine letting it out to the rest of the world because if China has to suffer, the rest of the world's going to have to suffer.
00:21:07.000Well, what's worse also is that they had this information.
00:21:11.000operation saying that it actually came from Fort Dietrich in the United States and that we were responsible for it.
00:21:30.000Where they were, you know, telling countries to use their vaccines and not ours, holding vaccines from countries like Honduras that still at the time recognized Taiwan and not China.
00:21:59.000They'll treat us great when we go over there.
00:22:01.000But are they actually accomplishing the purpose?
00:22:04.000I mean, it doesn't feel like, especially with China, you know, that they'd be deserving of things that certain other countries would as it relates to education.
00:22:10.000I imagine their education systems probably far better certainly than our public education system and otherwise.
00:22:17.000When you get a World Bank loan, you're classified as a developing country.
00:22:23.000If you're a developing country, you get favorable treatment at all of these.
00:22:27.000international organizations like the WTO And so forth.
00:22:32.000So it's in their best interest to keep getting loans from the World Bank.
00:22:36.000And if you think that money is fungible, and it is, you get super, super cheap loans from the World Bank, like 900 million dollars, a billion dollars a year.
00:22:45.000And then you can then take those loans and lend them to, say, Kenya or Uganda at, you know, so far plus 700 basis points.
00:22:53.000And if the Ugandans can't pay you back, well, you own them, right?
00:22:57.000You take their telecom, you know, operations or whatnot.
00:23:02.000But the other thing I noticed was procurement contracts.
00:23:10.000works with a country to rebuild a road or a bridge or a hospital, right?
00:23:15.000The procurement business, which is in the tens of billions of dollars a year, at the time, China was winning close to, you know, 40 percent of all contracts, and the US was winning like one percent.
00:23:31.000China's down to 30 percent, but 30 percent of the contracts, while getting money, while getting favorable trade treatment at the UN, I mean, it's ridiculous.
00:23:42.000Yeah, how do we actually compete if they get that status and they get those loans for, you know, pennies on the dollar dollar and we're paying six percent, whatever it may be.
00:23:55.000Yeah, I guess that's the worst part is that, I mean, World Bank, how much of that funding is coming from the US as a percentage, almost all of it?
00:24:03.000Well, so we own a certain percentage and we're on the hook for a certain percentage of it.
00:24:07.000And we're still the largest shareholder of the World Bank.
00:24:10.000But the way the loan program works is the World Bank issues bonds globally.
00:24:17.000And those bonds are like the cheapest bonds you'll ever buy.
00:24:24.000And you say to yourself, well, how can you be an AAA rated credit when your loan portfolio goes to, you know, Tajikistan and, you know, and because it's fully backstoped by the US government.
00:24:34.000Well, at the end of the day, we're the backstop.
00:24:37.000I suspect that if, you know, the poop ever hit the fan, I don't know that, you know, other countries would step in for their share.
00:24:47.000So at the end of the day, it's really the faith and credit of the US Treasury that balances the check book.
00:24:53.000And, you know, the irony of that is watching some of the moves that China's making to make the yuan sort of the world's, you know, currency.
00:24:59.000You see the stuff going on as it relates to the attack on the petrodollar and all these things.
00:25:03.000So again, it's just one of those it just seems like we keep being our own worst enemy and acting in the interest of others and just not actually ever calling out these practices when they're manipulated against us.
00:25:16.000And by the time I left, I think there was a growing awareness both inside of the US government and also with our partners and allies at the World Bank that this was a problem.
00:25:31.000Perhaps that was reversed in the four years of the Biden administration.
00:25:36.000But China remained a square, a square, a square you know part of what I was trying to do interesting so you know you then moved on you're now a partner at a fund as we mentioned in the intro you know focused on maritime technology and national security so I guess the phrase Mara Libra means the free sea it sounds like we're moving into an era where that idea is actually under threat and you certainly see that again in parts of Asia South China Sea you know what's the biggest naval or
00:26:04.000maritime tech gap you know that we have right now you see that you know the Russians testing hypersonic missiles you know it seems like everyone's progressed uh pretty well in that and I don't know that we've necessarily caught up you know what what's that trajectory look like moving forward?
00:26:21.000We're seeing the single largest military buildup since World War II.
00:26:29.000But because of, you know, China, look, as of today, the PLA Navy has something like 400 capital ships and then another, say, 350 support vessels.
00:27:24.000Hypersonics are an issue, but also consider asymmetric forms of adversarial action, whether it's hacking into the US electricity system, building islands in the South China Sea, influence operations through TikTok.
00:27:42.000I mean, I could we could probably spend the rest of the afternoon talking about this.
00:27:47.000Well, what are some of the biggest ones, you know, in that that you see specifically as it relates to sort of the maritime issues?
00:27:53.000You know, I know we don't have the capabilities to build ships anymore.
00:27:57.000I think we're trying to change some of that.
00:27:59.000I mean, that's controlled largely by China.
00:28:01.000Certainly South Korea has a pretty significant operation in that department, at least their allies.
00:28:07.000But it's, again, one of those places where we don't seem to control any aspects of our supply chain, which creates pretty serious problems, as we saw during COVID and otherwise.
00:28:15.000Well, I mean, you have like 900 pounds of rare earth elements in every F-35 fighter, to give you an illustration, and China has basically curtailed rare earth elements except through like a licensing agreement.
00:28:54.000Through Belt and Road, China has secured long term leases in places like Sri Lanka, in Greece, through Piraeus, and even in Djibouti.
00:29:04.000And if you look at the combined data of the ports owned and operated by Hong Kong and China, you know, Hutchinson itself owns 52 ports, China Merchants owns around 38, Costco owns around another 34, 38.
00:29:25.000So all in, you're talking about close to 100 ports that are around the world that are controlled by China.
00:29:32.000The Chinese also have a technology, a software called Login, sometimes called Login.
00:29:39.000It's port software, and you've got scores of ports around the world using it.
00:30:22.000And even if we did, uh, Don, consider that an aircraft carrier's range is like, let's say it's 700 nautical miles, like the planes can fly in any direction, but they need to get refueled.
00:31:26.000Or you can use it for information and collection, harvesting information.
00:31:32.000Or Regent that makes a sea glider that flies below radar and above sonar, and it's essentially invisible.
00:31:43.000So these new types of technologies are really what's going to drive, and these innovations are what's going to drive the future of warfighting.
00:31:51.000It's very clear from Ukraine that the days of soldiers jumping out of helicopters with machine guns getting.
00:31:59.000It seems like, you know, a $300 drone now can take out a $15 million tank in about three seconds.
00:32:05.000And by the way, the same goes with planes.
00:32:07.000You know, friends that are, you know, F-35 pilots that are like, hey, we'd last about 15 seconds in Ukrainian airspace if they turned on all the stuff.
00:32:15.000And so, you know, it's just the changes there, but you've never really thought about it as much on the ocean, right?
00:32:20.000I mean, a drone, a plane drone eventually will be able to handle far more Gs or whatever maneuver much better than a pilot human body could ever handle, even the best of the best.
00:32:31.000And so, you know, why not change on the ocean side as well?
00:32:35.000And it seems like you could do that in a much more cost-effective than you know i don't know how much a nuclear uh aircraft carrier costs but imagine it's rather significant probably not as much as a drone boat, just saying.
00:32:51.000You can build tens of millions of drone boats for the cost of an aircraft carrier, yes.
00:32:57.000So how is that being adapted by the U.S. government?
00:33:01.000Because again, one of the things I saw, again, as part of even the transition period for my father's administration, you meet with someone from the Air Force and they were a fighter pilot.
00:33:14.000It's sort of hard to sometimes step back and be a fighter pilot and say, no, we actually got to focus on stuff that's not planes because it's actually more cost effective.
00:33:57.000The problem is to get to a program of record.
00:33:59.000Sometimes it takes years and years and years.
00:34:02.000And then it's testing and then it's retesting and does it fit the need and is there a champion in the department?
00:34:10.000And so because it takes so long, a lot of these Silicon Valley startups, you know, can't rely on the vicissitudes of the government procurement cycle and they don't make it.
00:34:25.000So I think DIU, the Defense Innovation Unit and others are doing a lot of work to keep these companies, give them a lifeline so that they can ultimately get to a program of record.
00:35:15.000If you work as a civilian in the Pentagon, you've been there for., you know, half a dozen years.
00:35:22.000Switching to a new platform and taking a bet and using some creativity doesn't necessarily win you any brownie points.
00:35:30.000But sticking to the same old, same old does.
00:35:32.000So there's like a lot of momentum and inertia.
00:35:34.000And they're like, well, we've always done things this way, we may as well continue.
00:35:38.000So, you know, maybe to change topics a little bit, let's talk about Latin America.
00:35:42.000Your family had mentioned is rooted in Cuba.
00:35:45.000It seems like the Biden administration had basically abandoned the region, but there are signs that some of that's changing a lot in the second Trump administration.
00:35:54.000How critical is our influence in Latin America, whether it be, you know, just respect for American sovereignty, narcoterrorism or just even economic investment?
00:36:04.000Well, as we speak, we've got warships off the coast of Venezuela.
00:36:13.000And I was reading Twitter today, which let me see if I can find it.
00:36:20.000Maduro, while speaking at the first pedagogical conference of Bolivian teach, Bolivarian teachers, whatever that means, Maduro paused to present his new cell phone, which he said was a gift from China's leader Xi Jinping.
00:36:47.000Well, that historically hasn't worked out.
00:36:50.000By the way, I think that's something I see when I travel all over the world, even just for my hobbies, whether it's hunting or fishing, you end up in sort of these, you know, middle of nowhere awesome countries, but like out of the cities.
00:37:01.000all the attempts that China made where it's like, we're going to bring jobs and they're going to do this and create infrastructure and the jobs they bring are for Chinese nationals that they then send to those countries.
00:37:34.000I think what we're doing in Venezuela and putting a price on Maduro's head for being a narco trafficker is great.
00:37:42.000And it signals to the other hard left-inclining countries in the region, Cuba, you know, to some degree Colombia and Bolivia and others, hey, the US means to business.
00:39:35.000And what's worse is it's being done deliberately.
00:39:39.000The narco traffickers in Mexico are part of the issue.
00:39:44.000Our porous border historically was part of the issue.
00:39:48.000And then of course you've got the malignant actors like Venezuela, which is at the end of the day a quasi narco state led by Cuba and others at this point.
00:40:04.000I guess one of the other things that you kind of talked about if we go back to banking and maybe a little bit of crypto, you've warned about China's central bank and their CBDC, their central bank digital currency.
00:40:17.000You've called China sort of a geopolitical weapon.
00:40:21.000How is that aspect being used to bypass our financial system?
00:40:24.000So if we put sanctions on, they're not effective because they're.
00:40:27.000basically enroading, you know, whichever systems we have in place, and where can America really lead the way in forming, you know, reforming our financial institutions for the better?
00:40:39.000Yeah, I think I'll speak to the second part and then I'll address the first.
00:40:44.000We don't win by trying to out China China.
00:40:47.000In other words, China has a central bank digital currency, which basically monitors everything you do, all the purchases you make, and it's linked to your so-called social credit score.
00:40:59.000So if you buy, you know, diapers, you're a good parent, your social credit score goes up, and so forth.
00:41:09.000I mean, my father said he was never going to do that.
00:41:11.000It was, you know, as we were talking about crypto and have gotten into it heavily in the last few years, mostly because we were debanked and we saw all the things that could be done from TradFi as well as sort of, you know, again, if there was a CBDC they just shut you off because they don't like your political views if and when someone's in power.
00:41:29.000So I could see China totally manipulating that.
00:41:32.000And I imagine they have to get around whether it's SWIFT system or all of these other things.
00:42:12.000So, I mean, if you think about it, what stablecoins do is they export the dollar in places where banks are either weak or sanctions limit access.
00:42:24.000So, like if you're in Nigeria or, you know, even Venezuela, people use stablecoins as a functional dollar substitute.
00:42:34.000Especially in those inflationary countries where, you know, you get your paycheck and by the time you cash it, it's worth half.
00:43:16.000I mean, I could see a lot of the stablecoins I know we're working on when with USD one right now, and it backed 100% by US Treasuries, they're going to actually be the backstop to fill the gaps of these countries who are traditional buyers of US Treasuries that allowed us to borrow and do all these things, some good, some bad.
00:43:32.000Oftentimes borrowed money that was then wasted.
00:43:37.000But these are the things that are actually going to preserve dollar hegemony.
00:43:40.000Because I imagine any rational actor is going to look to a US Treasury backed stablecoin far more affectionately than they would something that China would likely manipulate for whatever ends and could disappear in seconds.
00:45:30.000You know, there's this hodal culture of people that see it as financial freedom away from all government, sort of libertarian leaning folks.
00:45:53.000And, you know, we never really had a problem.
00:45:56.000And then all of a sudden, things got political and we got, you know, letters from, you know, 150 banks and we'd lost, you know, thousands of accounts overnight and all this stuff.
00:46:17.000off that traditional conventional banking system so quickly, that was pretty scary.
00:46:21.000And what we came to realize, and perhaps we should have known it, but I guess when you're sort of the beneficiary of the upper tier of the Ponzi scheme that is traditional finance these days, It's just easy.
00:46:33.000You pick up the call, the phone, you call the banker, you get a loan.
00:46:40.000I think a lot of that will be handled by blockchain technology when you get rid of title insurance and these kinds of things because it's all on the chain.
00:47:11.000Once we realized that, wow, if they can do it to us, they can do it to anyone.
00:47:17.000And more importantly, if they will do it to us, they will do it to anyone.
00:47:20.000And so we just said, how do we shake this up a little bit?
00:47:22.000And obviously, crypto was an answer to that.
00:47:25.000So we've spent the last really two years developing basically an alternative to the conventional financing systems to make it fair for everyone.
00:47:34.000Well, you may recall two or three years ago, PayPal issued a statement saying that for those that they deem to be spreading misinformation.
00:47:50.000What if in a future dystopian society, for the benefit of the climate, you can only pump gas using your digital dollar token twice a month or in the interest of equity, you're eating too much steak.
00:48:13.000And I imagine, you know, they did that.
00:48:15.000I mean, I was talking to Palmer Lucky, who, you know, founded Oculus and at 18 sold it to like, you know, Meta, then Facebook for like, you know, billions of dollars.
00:48:25.000And he's doing, you know, a bunch of stuff in the drone space with Andrew and everything like that.
00:48:32.000And this is like 2015, 2016 when I got to know him.
00:48:35.000And he was talking about sort of the dangers of AI.
00:48:39.000and how that would be adapted to your point to sort of a social credit scoring system.
00:48:43.000Whereas any other time in history, if you were dissatisfied with your leadership, you know, people got together in a room and they started talking and you could create sort of a revolution but with ai uh cameras on every corner you know the second there's even a spark of unrest we're just gonna take that guy we're gonna pull him off the chessboard it's no longer an issue you can never actually achieve the critical mass now uh to to achieve that revolution uh which is really kind of scary and i imagine that's probably what's going on in china with with
00:49:13.000their systems and you know the advents of ai and uh you know the weaponization against it against their people yeah i'm very concerned aboutned that they've open sourced DeepSeq.
00:49:32.000And just like they've done, there's a proxy for what they've done in every single industry and what they've done in AI.
00:49:39.000So in almost every industry, let's take, think of any metal in the world.
00:49:45.000What they do is they subsidize or electric vehicles, they subsidize and lower the price to such a degree that normal companies can't compete.
00:50:57.000And then they take something, you know, a stupid 15-year-old said or did online and weaponize it against them, say when they run for Congress in 25 years.
00:51:06.000I mean, this threat makes, you know, the notion of that seem like nothing.
00:51:13.000I mean, you know, having access to literally everything in your life, every thought you've ever had.
00:51:17.000I mean, what better way to manipulate someone to your liking?
00:51:22.000And I guess that's the big threat of AI is like we may not not even realize we're getting manipulated.
00:51:26.000When you turn on CNN and then you go to the supermarket, you say, oh, inflation's great under Joe Biden.
00:51:31.000You see the prices, you're like, okay, that's nonsense.
00:51:34.000You know, a technical model that knows how you think and is able to manipulate that, I mean, they could manipulate you, you'd never even know it.
00:51:40.000You know, it's funny, but the AI requires training on vast amounts of data.
00:51:50.000Almost all the language models have trained up to this point on something known as common crawl.
00:51:58.000And what it does is it scrapes the internet of everything, right?
00:52:02.000And it just it sits in petabytes and petabytes of data unstructured is sitting in these servers.
00:52:10.000Now, a broad concern from an intelligence and from a national security perspective is that China, for example, floods the zone with new websites that populate common crawl.
00:52:23.000And then if maybe in the future, if you type will, will, will China take over Taiwan, it'll spit something out like, Oh, China is a peaceful nation.
00:52:31.000It's it's only seeks to take back what it, you know, and whatever.
00:52:55.000But it doesn't matter because that's one of the, you know, maybe that in Google is the two biggest manipulators of, of.
00:53:02.000I guess they get to be the arbiters of truth.
00:53:04.000And maybe, you know, I'm sure you can find the real truth on Google, but you're not going to scroll down to page 4,763 to be able to see that article.
00:53:13.000And so that whole notion in and of itself is scary.
00:53:15.000Where are they getting the information from?
00:53:17.000How is it weighted to your point about flooding the zone.
00:53:23.000And I think I have to ask myself, what is truth today?
00:53:28.000And as we've seen from what Tulsi Gabbard is uncovering, I think five, six years ago, people believed that there was actual Russian collusion in the administration.
00:53:45.000I had to do fifty hours of congressional testimony on that one.
00:53:48.000So yes, I took that one rather personally.
00:53:52.000And now people are saying, hey, wait a second, maybe this isn't true.
00:53:57.000I'm not talking about well-informed people who read the news.
00:54:01.000But even they were manipulated because they read the Wall Street Journal and they read the New York Times and they were like, oh, there's got to be.
00:54:07.000By the way, I was guilty of it myself and I was a target.
00:54:10.000You read, It was like, well, the FBI says it.
00:54:21.000I literally wanted to give the people that were trying to take down myself, my father, my family.
00:54:28.000democracy, I wanted to give them the benefit of the doubt.
00:54:30.000And now I realize like that was actually totally ill-founded.
00:54:33.000Like they didn't deserve even that notion.
00:54:35.000But it's hard to unprogram yourself from thinking like, hey hey, these institutions are functioning for Americans and they're doing the right thing when, you know, reality is they've been very corrupted for a very long time.
00:54:46.000Yeah, I think many Americans had no idea.
00:54:50.000And, you know, where we are today is that we face a trust deficit and, you know, one of the things that I, that I can say that's magnificent about the current and past Trump administrations is transparency in the sense that he's giving a press release like every thirty minutes or a press statement or a press release or, you know, giving speeches.
00:55:28.000My father will never get credit for that one, but you're 100% right.
00:55:31.000At least he's willing to have those conversations and people can make up their own minds.
00:55:35.000Yeah, including with Nancy Pelosi and Chuck Schumer in the first administration and opening the kimono up to the American people.
00:55:44.000So, Eric, you mentioned earlier about sort of the Chinese, I don't want to say spy cranes, but the potential for them to shut down our ports and infrastructure, gather our data, whatever it be through even our port system.
00:55:57.000What are the other examples of potential Chinese sort of espionage inside our own borders?
00:56:03.000For example, my father said that he's cracking down on shell companies and LLCs tied to China, buying up real estate and farmland, especially around military bases.
00:56:12.000How much of our economic agenda is also really a national security agenda at this point?
00:56:20.000Well, I mean, you touched on one of the points, which is buying farmland next to US military bases.
00:56:29.000Yeah, well, especially when you watch, you know, a Ukrainian truck inside of Russia with, you know, hundreds of drones in it pop up near a Russian base and take out, you know, a third of their air force in about an hour.
00:56:51.000Look, if Chinese individuals were buying luxury apartments in Manhattan, I would be less concerned.
00:56:58.000But when you're buying tens of thousands of farmland conveniently located next to US military bases, well, there's probably a reason for that.
00:57:06.000I would add to that list running influence operations on US campus and recruiting scientists.
00:57:17.000We have 300,000 Chinese students studying in the United States every year.
00:57:22.000And according to the Chinese own national security law, they are obliged to share any information that the Chinese government wants them to with the CCP.
00:57:45.000But if they're in a sensitive area, if they're studying some unique aspect of hypersonic missiles at MIT, well, maybe they get a call from a United Front, a Chinese spy network saying, hey, we need this.
00:58:00.000Otherwise, there will be consequences for your family or you.
00:58:05.000And so they're put, even if they don't want to be, they're put in a very compromising position.
00:58:14.000I would say, TikTok, using TikTok and social media to harvest data and amplify division in our country, that's a huge issue.
00:58:26.000And don't think that TikTok's algorithms aren't Sophisticated enough to even look at your pupil dilation or facial movements to send videos that elicit the same response when you swipe.
00:58:40.000And so after months of using it, they have like an imprint of who you are as a person.
00:58:46.000And they're harvesting all that in Beijing.
00:58:49.000If it were, can you solve some of that with what they're talking about now, you know, having, you know, a US company control the servers and, you know, at least theoretically control the backdoors to make sure that doesn't happen?
00:59:01.000Because that that does seem like a solution, right?
00:59:34.000But somehow we think it's okay because China's more like, benign.
00:59:38.000But I would argue that they're more dangerous than North Korea is.
00:59:42.000But to answer your question, I don't know enough.
00:59:46.000enough on the technical side to be able to answer if that's enough.
00:59:51.000But I think what we would like to see is whoever owns TikTok in the US should also have access to the algorithm that understands how they're doing the harvesting.
01:00:04.000And we also need to get And I think that's something, you know, again, just from my time in the transition, you know, when they were talking about the ban and stuff like that, I think that's some of the stuff that they were working on doing just to protect that because you do have to protect your kids from themselves.
01:00:16.000I mean, I I I don't know how old you are, but at my age, I sort of thank God every morning that we didn't have cell phones in our pockets when we were, when I was, in my late teenage and early twenty because that would have really worked poorly for me.
01:00:31.000I've got, you know, three teenagers and my wife and I instituted a policy where you can only use your cell phone from, you know, an hour a day and it's within sight of the family.
01:00:46.000So it's a, it's a I think every parent in America that has kids is dealing with this.
01:00:54.000I have, I have five young kids and not only are they more adept on these systems than me, you know, they definitely spent a lot more time than I would have ever imagined on there, as much as I want to try to limit that.
01:01:07.000Eric, you know, as we wrap up, just maybe reflect on sort of this intersection that you've had between military diplomacy and finance, because I mean, it seems like so many of the people in this world that are making the decisions on these don't have that same sort of, And so the military guy makes a decision purely based on military, but may not know anything about finance or diplomacy, and vice versa.
01:01:34.000What's your level of optimism for the future on whether it's my father's mission for an American revival or in general?
01:01:44.000I am very long on the American ideal and the American dream.
01:01:52.000We are a country that attracts the best people in the world.
01:02:00.000And we've given them the freedom, the capital through the VC community and the opportunities to be able to do it.
01:02:09.000I think a lot of the mistakes we've made in the past are self inflicted.
01:02:14.000If you look, look, he's not my brand of politics, but Larry Summers, the former Treasury Secretary, said that when China goes to a country, they get a road, and when America shows up, they get a lecture.
01:03:12.000I don't have a, I don't have an X handle, although I've been told I should get one.
01:03:17.000Hey, you know, by the way, if you haven't started now, maybe you're actually probably much better off because the amount of time I spend on this stuff, you know, just basically talking shit the whole time is, uh, you know, I don't know.