Invest Like the Best with Patrick O'Shaughnessy
01:02:28 · Patrick O'Shaughnessy, S3
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01:03:55 · Walter Russell Mead
[01:03:55] S2: A lot of things obviously going on in The Middle East. One background to a lot of stuff is just the sort of collapse of Arab nationalism and a kind of Arab identity as an organizing force in The Middle East. In the 1950s, Nasser and Egypt were the great pillars of Arab identity and pan Arabism. After the 'sixty seven war, they took a hit, but you would still have countries like Syria, Iraq, even for a while under Qaddafi, Libya aspiring to that mantle. If we look at what happened, Iraq collapsed, certainly America had a lot to do with that. Syria collapsed without America having a lot to do with it. So Iran as a non Sunni, non Arab power had created what people call that Shia crescent from Lebanon, Syria, Iraq into Iran. While that, thanks to sort of Israel primarily since October 7, that's broken up. But what hasn't broken up is the underlying weakness of the Arab world is still there. And you have the Gulf states that are very effective in many ways and are using their oil and their money very effectively, but they still can't defend themselves from Iran. They still, without outside help, they cannot stand and that leads to the Strait Of Hormuz in that region, which remains incredibly important for the economic stability and health of the world, that is in chaos. If The United States or some other power doesn't hold Iran back in some way, it has a hegemony over the oil resources in The Middle East in a way that allows them to blackmail a lot of people economically and provides them with the kinds of resources that would not certainly be used to our benefit. Israel, I think, may have hoped that it could kind of bear the weight of being a counter hegemon to Iran. Israel is too small and too alien to the rest of the Middle East to really play that role effectively, I think. Since Obama, The United States has been fundamentally unwilling to do that itself and we want to kick the can down the road, we want to find some other way other than us putting down a red line that we enforce with Iran. History doesn't give us a choice, we stop Iran ourselves or Iran asserts and maintains hegemony over the oil resources in the Middle East.
01:06:37 · S3
[01:06:37] S3: Why have we been ineffective? Obviously, we have vastly superior military capability or whatever. This is a specific question about Iran in the Strait Of 4 Movies, but also people used to call Afghanistan the graveyard of empires. Why do world powers seem to have such a difficult time being effective at all in the Middle East?
01:06:53 · Walter Russell Mead
[01:06:53] S2: Well, think some of it is, which we've also seen with Russia, is the erosion of deterrence. What you don't want to do is help Ukraine win a war with Russia. What you want is for Russia to feel that if they attack Ukraine, the consequences would be so terrible that it's just not worth doing it. Anything other than deterrence involves long, difficult, expensive, divisive wars with uncertain outcomes and enormous costs. The decline of deterrence becomes a massive geopolitical problem overseas and a massive political problem at home. For example, right now, one of the real facts in the strait is it's not even as important that Iran can hit a tanker with a drone, as it is that Iran could put some drones on some desalinization plants and make the cities of The Gulf essentially uninhabitable. As long as that's the case, I'm not going to make big investments in The Gulf if I'm a foreign country. Really, really scary. And that means that these whole sort of economic development plans that those countries have for their future political stability go up in smoke because it doesn't work. The only way to preserve that is in some ways what we were doing in the Cold War in Europe, just saying to Russia, you cross that line, you invade West Berlin and holy hell breaks out. But I think as a country we're not at the point where a president of The United States can say it, and mean it, and have the public back him up. For that we need presidents who can explain to people, okay, this is how the world works. What Harry Truman did after World War II, for that matter what Franklin Roosevelt did in the fireside chats. Take the American people into your confidence, have a clear vision of what you're doing, why you're doing it, be enough of a communicator to be able to put it across. We haven't really had anybody do that in a very long time.
01:09:02 · S3
[01:09:02] S3: What do you hope we do? What do you hope America's role is in the next twenty years?
01:09:07 · Walter Russell Mead
[01:09:07] S2: I hope we, first of all, figure out how to keep our balance as we enter the information revolution. That we figure out how to use the wealth and the resources the information revolution creates to deal with the stresses and problems that it inevitably causes and also draw from it the abundance that will keep the American people feeling like America's working, it's working for them, the way things are going is basically a good thing. You have that going, then people will back an American president, American foreign policy in a serious way and I think if you don't have that, and if we don't do that, we lose ground in the information revolution to China in the deck race, we get challenged overseas and at home we're just rabid ferrets fighting with each other in a cage and that's just not pretty and not fun. And if we can get that going, then I think we act purposefully, we say, we don't want any great power dominating Europe, we don't want any great power dominating Asia, and we don't want any power able to interrupt the flow of oil in and out of The Middle East on commercial terms and we build the alliances and the relationships that do it. I don't think that is an unsustainable ask. Germany and Japan in particular have a lot of resources and a lot of ability, but also our problem in Asia is not that China is so big, know, which the rest of Asia has fallen behind. In 1980, India's GDP was something like 60%, 65% of China's, Today it's about 17% of China's. That gap in a sense is the imbalance of power that sort of tempts China into thinking hegemony in Asia is really possible And also ensures that without us putting a really heavy weight on the balance scale, it can't be stopped. If we can create a world that there's room for others to prosper, that not only India but Indonesia and Vietnam are growing, I think what we're going to see is China will kind of reach this point of understanding that Asia is too big for China to eat, nobody can eat it, and so we need to learn to live with folks, which Germany has done in Europe, it's possible. And in the same way, if Russia is stopped in Ukraine, and Ukraine goes like Poland and becomes a prosperous country and all of this, that door is closed without American soldiers fighting and dying to keep it closed.