Mark Blyth, political economist at Brown University's Watson Institute for International and Public Affairs, and Carrie Nordlund, political scientist and Assistant Dean for Undergraduate Programs at Brown University, share their take on the news.

On this episode:

• Trump potentially gets removed from the GOP primary ballot in Colorado, and the risks of involving the courts in a presidential election
• How the politics of immigration will affect the 2024 race in the US
• Elise Stefanik grills University presidents on Capitol Hill, highlighting the thorny politics of Israel, Gaza, and free speech on college campuses
• The political economy of Argentina’s new president Javier Milei
• The Fed decides to hold interest rates steady, and the market reacts with…enthusiasm
• China’s economic slowdown, and the limits of growth in authoritarian societies
• Where the Israeli-Gaza conflict goes from here, and how it might affect US politics going forward
• Google’s loss in court to Epic Games, and American’s very mixed record regulating monopolies. 

Learn more about the Watson Institute's other podcasts

[MUSIC PLAYING] CARRIE NORDLUND: Well, hi there. How are you?

MARK BLYTH: I'm fine. And Merry Christmas, you [? crumbly ?] things, because it's the Mark and Carrie Christmas Special.

CARRIE NORDLUND: Yeah, end of the year. I heard you had a bit of a morning.

MARK BLYTH: So we had a big storm up here in the northeast. I believe it was another of these bomb cyclones where you get ridiculous amounts of water. And we've got some big trees lying around the house. Literally lying around the house. So I spent the morning chopping bits up because being a good tight Scotsman, I'd dry this all out and turn it into firewood.

And then I noticed there was an electrical conduit that was open.

CARRIE NORDLUND: Oh, that's so-- sorry.

MARK BLYTH: That had been blown open. And it had a nest in it. So I had to get a big ladder and go up, and do all that. So anyway, that was the morning. So-- and it's freezing cold. So it wasn't ideal. But anyway now we're here--

CARRIE NORDLUND: But you're alive, you didn't electrocute yourself.

MARK BLYTH: Didn't electrocute myself, didn't fall off a ladder, we're all good.

CARRIE NORDLUND: OK. Well, there's so-- there's new year stuff to talk about, but of course, the Colorado Supreme Court saying that former President Trump will not be on the primary ballot. That should be printed, or will be printed January 5. But the contingency is, if it's in the pipe somewhere with the Supreme Court, then they will not-- they will-- then his name, will-- I believe this is accurate-- will remain on the ballot printing.

So this is the January 5 deadline is the number or the date that you keep hearing about, and that's because that's when Colorado would have to print their primary ballots. So it's just an interesting way to kick an election to the Supreme Court.

MARK BLYTH: Do you think that if Colorado has done this, then this sort of re-energizes attempts at other states to do this? Because there have been prior attempts in the field, right?

CARRIE NORDLUND: Yeah, no. There's still-- Michigan has one. I think Minnesota. So there are other cases waiting in the wings. It just seems so dangerous to bring in the judicial branch to make this sort of decision and to not-- I mean, it just plays into so many of the talking points, right, the deep state has decided all of this. Like, the people don't get to decide. You can hear all the--

MARK BLYTH: Right. You can. But at the same time, it's like, if you're an insurrectionist, right, that's something for the judicial branch to decide.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So if they decide you're an insurrectionist, then the 14th Amendment applies, and therefore you don't get to do it. It seems relatively straightforward. So isn't-- forget the deep state. Isn't that what states are meant to do?

CARRIE NORDLUND: Well, I think yes. That's true. But what is-- now we're like what is the truth? Is he an insurrectionist? Did he do anything?

MARK BLYTH: Well, right. Because he's never actually been tried for that.

CARRIE NORDLUND: Right.

MARK BLYTH: Right.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Now, is he going to be tried for that? Is it not the Georgia case?

CARRIE NORDLUND: There's some-- I mean, not specifically on the insurrectionist title, or tag, there's January 6 stuff. But it's not that specific at-- in relation to the 14th Amendment. So it's-- I mean, the court--

MARK BLYTH: I mean you invited a whole bunch of your friends to come to DC and then basically break into a public building and bring zip ties. I mean, I'm not a constitutional lawyer by any means, right, but that insurrection might be one of the words used. How come nobody's [? one ?] for that?

CARRIE NORDLUND: Because I think it's hard to prove that. And to prove what role he actually had. I think the people around him, like what was he doing for-- I think, there was like, the Nixon tapes, there's like 80-plus minutes of you don't know what he's doing, and it still hasn't been accounted for. But no one actually knows what he was doing after the January 6 Commission too.

So I'm not sure that anyone wants to put that particular label on him. But one thing I'll just-- to sort of bring this all together, the court is hearing today is whether or not he has presidential immunity. And so, whether one of the cases can be tried, the case that's supposed to be heard in March, and the court will hear that today and presumably make a decision on that pretty fast. Because that does start in just a couple of months.

So if the court rules in Trump's favor, it really is the president is above the law.

MARK BLYTH: Right.

CARRIE NORDLUND: So, I mean, there's-- so the court is really-- the Supreme Court is really having to make some real decisions here.

MARK BLYTH: I mean, if they do that the precedent going forward is really important. Because Trump won't always be there. And whoever comes in at some future point, right, you're literally saying that if you get this job, you have immunity from everything.

CARRIE NORDLUND: Yeah, no, it's not--

MARK BLYTH: It's not going to attract the best, is it?

CARRIE NORDLUND: The presidency is all about precedents. Right? I mean, because there isn't-- I mean, just executive power shall be vested in the President of the United States. That's it.

MARK BLYTH: Doesn't say anything, right.

CARRIE NORDLUND: Right. And--

MARK BLYTH: Fill in the blanks.

CARRIE NORDLUND: Yeah. It's all about [INAUDIBLE].

MARK BLYTH: But then if the court starts filling in the blanks with-- and that means you're almost like a god.

CARRIE NORDLUND: Yes.

MARK BLYTH: Not too healthy for a democracy, is it?

CARRIE NORDLUND: Right. Well, and I mean the court isn't it's not as clear as liberal and conservative when it comes to presidential power. I mean, Elena Kagan, a liberal justice, but has not at all clapped back at presidential power. So it'll be interesting how the court decides.

MARK BLYTH: Well, you see the liberals are kind of stuck on this one in the sense that liberals believe in the power of the state.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And the way that you get things done is not through Congress. You spend through Congress. But you do it through presidential initiatives, at least one way you do it. So you want to have a strong presidency because you believe in the power of the state. So you don't want to necessarily pull this back because if you do, that can be used against you the next time you're president and then you want to do something, they're like, no, no, no, no. You said we couldn't get to do this stuff.

CARRIE NORDLUND: Yeah. No, that's exactly right and that Congress has really taken a back seat and said the president knows better than they do. I mean-- and it doesn't matter who walks through the door-- Hillary Clinton fill in the blank, Democrat or Republican, it's not like they say, oh Congress should now have all this power that I have. Yeah.

MARK BLYTH: So anyway, he's probably not going to get prosecuted and none of this [INAUDIBLE]. And then he's still ahead in all the polls. And he's going to walk through all of the Republican nominations. And his-- when he started off, remember he shocked people with his speech about Mexicans being rapists and murderers? Right? And everybody goes, oh my god, it's terrible, right? Well I don't know if you caught the one from last week, which was basically that, or on steroids, essentially. Sort of like, everyone foreign, I'm going to get rid of them all, that one sort of stuff. And it's like, you know, as a landed immigrant and citizen of the United States, should I be worried? I don't know. This seems to be much more hard core this time. And if he's just-- he's got no-- there's no safety rails on this one, right?

When he comes in, it's a total demolition job.

CARRIE NORDLUND: Yeah.

MARK BLYTH: I mean, I hope that the people that really want this guy to win are thinking this through. I just don't think they are.

CARRIE NORDLUND: Well, I think, especially on the immigration point, it's-- I mean, it's such a losing policy issue for Democrats because there's no-- how do you win the border? No one-- the Democrats haven't figured that out. And it's clearly something that his hardcore base really love.

MARK BLYTH: Yeah.

CARRIE NORDLUND: And--

MARK BLYTH: And it's a real-- no, and it's a real issue, and it's a real issue that's only going to get worse with time, right? So do-- what you need to have is some kind of comprehensive immigration reform that would actually, like, you know, OK, you people go stand over there, you get it done in five years. You people, unfortunately, are not getting it done at all, et cetera.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And then you know what the state of [? play ?] is. But instead of, which is just sort of like, we're just going to spend an enormous amount of money building a wall.

CARRIE NORDLUND: I know.

MARK BLYTH: Which--

CARRIE NORDLUND: Well, and in some ways, Greg Abbott and DeSantis have been-- I mean, played their hand quite well by the busing of migrants to northern cities because you hear the mayor of New York--

MARK BLYTH: Yeah, absolutely.

CARRIE NORDLUND: Right? All of our-- we have no more money to help with housing.

MARK BLYTH: No more shelters, all the rest of it. So long as they're coming over their border into the southern border, like northern Democrats don't have to care.

CARRIE NORDLUND: Exactly right.

MARK BLYTH: What started off as a series of stunts, remember the plane going to Martha's Vineyard and that sort of stuff? Really has just ramped up and it's like, OK then. And you see this funny because this is just like what happens in the EU.

CARRIE NORDLUND: Yeah.

MARK BLYTH: All right. So remember the migrant crisis in Twenty Fifteen? And there's two million at the border, and Germany takes a million, and you know, undermines Merkel and launches the AFD. There's still exactly the same issues and the southern border there is essentially Greece and Italy. And to a certain extent, Spain. And they are the ones where everyone arrives.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And it's meant to be a burden-sharing exercise. And there is, and it's gotten much better. But what that means is, small countries like Ireland, Latvia, are taking in people and those are becoming very visible minorities and creating a politics there of anti-immigration, which never existed before.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So this is-- immigration is not one of those things that liberals can wish away. It's a real set of issues.

CARRIE NORDLUND: Well, I feel like the EU actually had some real policy around it, versus the US, where we just like throw our hands up-- and you know, our hair's on fire every single-- and it's always just this cyclical issue, too. It's not one that's like, oh, actually this is something maybe we should talk more about all the time. Yeah.

MARK BLYTH: Well, if you set it up so that you're only going to pass 15 bills, or whatever it is.

CARRIE NORDLUND: That's right.

MARK BLYTH: I mean, you're not set up to legislate. You're just set up to be on Twitter and stream.

CARRIE NORDLUND: Just to talk, yeah. I have some good news for you though, Blyth.

MARK BLYTH: What's up?

CARRIE NORDLUND: There's only 1,488 days until the January Twenty Twenty-Eight Iowa caucuses. So I mean, you think you're like, done with the Twenty Twenty-Four Iowa caucuses, and there's only 1,500 days until Twenty Twenty-Eight. So, it just-- it hits [INAUDIBLE].

MARK BLYTH: It just keeps coming.

CARRIE NORDLUND: [CHUCKLES]

MARK BLYTH: It just keeps coming.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Let's jump back a couple of weeks. We're sitting here at Brown University and our president wasn't hauled up in front of Congress. But three others were.

CARRIE NORDLUND: Yeah.

MARK BLYTH: What did you think of that whole thing?

CARRIE NORDLUND: It was such a political stunt by the Republicans in Congress. . Elise Stefanik, who was-- got a lot-- got a lot of airtime with her questioning. And it was just something that you couldn't-- as-- watching it unfold, that the president couldn't not walk into that trap.

MARK BLYTH: Yeah.

CARRIE NORDLUND: I mean, it was just set up in such a way that-- and they're trying to do something that's much more nuanced. But the questioning didn't allow for that particular nuance to happen. Because it's actually a complex issue for First Amendment rights, actually pretty complex.

And so I just-- so I had a lot of empathy for the presidents just because it was such a stunt. And Elise Stefanik, who's just deplorable, just set it up and just--

MARK BLYTH: You used the Hillary word. Why is she deplorable?

CARRIE NORDLUND: Ugh. I mean, she was fairly-- I mean, she was-- back in the day, she was fairly moderate. And then just drank the Kool-Aid and went hardcore Trump mega land. And since then just has bonkers stuff.

MARK BLYTH: Right. But the bonkers stuff she got attention for seemed to be a pretty non-bonkers claim, which was, is it the case that students can basically create kind of verbal, violent assembly on campus and make claims which amount to the claim that, you people, you Jewish people, not only should have no land, you have no real right to exist. Should that be allowed on campus? Is that something that would concern you?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Now, yes, there are complex issues around free speech. But no, that shouldn't concern you. Right? Basically, when you're getting to that level of actually saying that people shouldn't exist, then it's pretty clear-cut, that's bollocks and you shouldn't be doing it.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So, in a sense, they were handed-- they knew the pitch was coming.

CARRIE NORDLUND: Yeah.

MARK BLYTH: The fact that they weren't better able to actually deal with it, that was the bit that surprised me. Those folks are briefed up the wazoo. They are media trained and they looked like they got caught in the headlights.

CARRIE NORDLUND: But don't you think the fine line was, free speech, and you say what you like, and then there's the part that bumps up against harassment or violence, and that's what they were trying to draw the line between and it just wasn't--

MARK BLYTH: Right. But we have campus climate surveys here at Brown and everywhere else. And like, 50% of people who work here think that they open-- they will say in a survey that they don't think that they can say what they actually think.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? So the freedom of speech thing resonates-- [INAUDIBLE] this is not some-- just a stunt. This is actually resonating deeply with many people in their working lives who feel that there's certain forms of speech that we and our elites will privilege and protect, and other forms of speech, which we don't allow.

The other thing that I found fascinating about this, and of course, the president of University of Pennsylvania, who is now the ex-president was the first person to suffer this, but the outside effect of donors.

CARRIE NORDLUND: Huge.

MARK BLYTH: Absolutely huge. Now, to me, this isn't a surprise at all because if you look at the Ivies, what the Ivies done over the past 25 to 30 years? They've developed a pretty much-- even Brown has done this now-- we have a pretty large endowment. And that endowment is professionally managed. In the case of the really big Ivies, they're basically hedge funds that run the university for tax purposes.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So your big donors, who themselves are hedgies, tend to think about the world this way. I'm putting $1 billion into a fund. I expect a certain level of performance. If I don't get it, I withdraw my funds. If I withdraw my funds, the fund closes. So you will dance when I say dance.

CARRIE NORDLUND: Yes. And it sounded like she was-- the president of Penn had been in trouble through the fall as well. But exactly for the reasons that you just said.

MARK BLYTH: But you know, let's remember on the other side of this, the free speech absolutists that you find in the Republican Party. They're absolutely for that until it's something they don't like.

CARRIE NORDLUND: Yes.

MARK BLYTH: And the minute it's something they don't like, then this has to be closed down. And it's like, hang on aren't you the folks that are constantly saying you shouldn't close things down?

CARRIE NORDLUND: Yes.

MARK BLYTH: And again, I was super surprised that-- at least in the bits that I saw or read-- none of the presidents actually challenged them on this.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And said, come on. What are you talking about? This is mansplaining 101. Right? You're telling me that free speech is important. Now you're telling me I should police this free speech? Like, you can't have it both way, lads. So we're doing a lot of American politics. Let's go somewhere else. What else is going on in the world?

CARRIE NORDLUND: Yeah. I mean, so I know this from reading the front page of the paper. So I'm going to toss this one to you and that's the Argentinean election.

MARK BLYTH: Oh yeah.

CARRIE NORDLUND: And the far--

MARK BLYTH: Far right guy.

CARRIE NORDLUND: But has decided to take-- to dismantle the administrative state. Is that and that's part of it?

MARK BLYTH: Yeah. This seems to be the play now, that activists conservatives have figured out what you need to do is if you can't get rid of individual programs, you just need to undermine the capacity of the state to administer anything. So essentially, we've got 21st century problems and the idea is, let's have a 19th century state.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So we'll see if this works, right? Now, the way that Milei in Argentina is doing this is-- and he doesn't really have a political party, but he got way more votes than anybody expected. He is the president in a presidential system. He has to work with Congress. He can't abolish the central bank. He can't really just go straight for dollarization, all the stuff that he talked about. But he does want to basically crush the administrative state because if you do that, the ability of the Peronist state to keep paying off its constituencies collapses.

CARRIE NORDLUND: Oh jeez. OK.

MARK BLYTH: Right? Now there's an analogy for this. There's a great paper-- I don't know if it's out yet, but it's by a young woman scholar in the London School of Economics who-- forgive me, the name escapes me. But it's coming out in the APSR, American Political Science Review, and it's precisely about how we did this after reconstruction. So southern elites reckoned that with reconstruction and the value of their slaves and everything being taken away from them, they're going to be penniless. And of course, the way that they were going to reconstruct was to tax the south.

So if you can fight individual taxes, that time-consuming. The other thing you can do is just massively underfund the state. So what they did was they gutted the administrative state. The [? heart ?] of a high-functioning capacity state, if you want to put it that way. They could do a lot of stuff. And they basically just underfunded all the jobs and closed them down and consolidated whatever. And that's why the south now has a crap state, because it's by design.

CARRIE NORDLUND: Huh.

MARK BLYTH: Right? Now, just take that forward and this becomes the playbook for basically getting all the things that you want that you can't get through a Congress.

CARRIE NORDLUND: Oh, this is so true. I mean, just-- OK, back to the United States for one second. In that there's a case before the court about-- essentially like starting to take-- dismantle the administrative state in the US a little bit, at least. They heard it in the fall. So this is just so interesting in thinking about taking this, and expanding it across the country.

MARK BLYTH: So you know, and if you think about why people would want this because one of the arguments that the Peronists, the establishment left, if you want to put it-- who've been in charge for a while-- just can't get their heads around, is the fact that so many poor people voted for this guy. Because they live on the programs and on the transfers.

CARRIE NORDLUND: Right.

MARK BLYTH: That, like, you know, he is going to absolutely cut. This is going to be austerity on steroids, right? And usually these things just don't end well. So in a sense, be careful what you wish for. But I'm not sure I buy that. I think that basically you get to a point where when 40% of the population are now below the Argentine-- never mind, our poverty line, the Argentine poverty line, and they just look at people who are still OK, they're like, things can't get any crapper for me. But I'm going to make sure they're going to get crapper for you.

CARRIE NORDLUND: Yeah. How does that-- I mean inflation is triple digits, right? But so how-- is that just a political ploy-- because it doesn't actually fix inflation.

MARK BLYTH: Well, I mean, what you can-- so what's the inflation problem for Argentina? I mean, part of it is just good old monetization. They basically have a lot of liabilities. They print particular bonds, they sell the bonds. There's a lot of monetary inflation. If you want to put it that way. The other one is it comes through the import channel, right? So you're not exporting enough to pay for your imports, so your current account gets out of balance.

Your currency falls in value. You've got a ton of dollar denominated debt. Your ability to pay your foreign debts gets impaired. So your ability to finance your imports gets impaired, but you have critical imports so they cost more, so that's going to be higher prices, right? So all of that's going on. The way this is usually dealt with in Argentina is they have a big harvest. They've had a couple of crappy harvests, particularly for soy, but basically, the Peronists are like, look, you know, if we get two good harvests in a row and we open up this big gas field, in a sense the current [? account ?] constraint goes away and inflation will come down, right?

CARRIE NORDLUND: Jeez. OK.

MARK BLYTH: But for the people who have been stuck living in this basically for a decade, they were like no, we just want a different model. We're not doing this anymore. And if we have to walk through hell to get it, we're going to do it.

CARRIE NORDLUND: Right. Wow. I mean, that's just so-- just think of the frame of mind, again, of like, getting pinched even more to, like, for-- yeah, for the hope.

MARK BLYTH: Well, I mean, it's about like the United States. You got lefty economists that I know and I like talking all the time about why people don't understand the economy. Because they're looking around, they're like, unemployment is at an all time low and growth is high, and all this sort of stuff. And it's like, yeah, but you know, real wages, adjusted for inflation, they're saying it's the median real wage has finally got back to where it was in Twenty Nineteen.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Now, you might not say that's not terrible, right? We've been through a tough time. There's been inflation, all things considered. Yeah, but it's not-- nobody's going to be running around the block going, this is the best ever.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? So you know, people understand their local economic conditions and like, if you keep turning down talking about is Biden does good union jobs, and like, less than 1 in 10 people are in unions. Right? So there's no resonance.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And the economy is doing great. I mean this has just got the Clinton campaign, the Twenty Sixteen written all over it, right? We're celebrating how great everything is and people are like, really? Have you been to my town?

CARRIE NORDLUND: Right. It's so-- I think about this and you all the time because-- right, the-- we avoid a recession, like everything's so great. How come people don't understand this but no one ever talks about like wage stagnation as part of like-- well, maybe stuff costs more because you're getting paid the same.

MARK BLYTH: And now, here, there is a paradox in this because actually, the latest figures have shown that for the first time in 30 years, the bottom sort of 25% have made serious wage gains, like serious wage gains. Right? But this actually goes back almost to Twenty Seventeen when they started. Remember the whole thing that Trump had about-- that little Twitter spat with the Fed about running the economy hot?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Well guess what? They did run the economy hot and wages started to rise at the bottom.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And then they got walloped in the pandemic, but then they've come back strongly. Now actually, what's happened is growth at the top has fallen and growth at the bottom is up. So there is a positive story. Right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: It just-- there is a partisan effect. I'm not saying that there isn't, right? If you just survey Republicans, things are, like, you would think that we're eating our own children and living in hell at this point in time. But, the picture is positive but nonetheless, you don't get any credit for it. You don't get credit for it, because you know, it's been a long time coming.

CARRIE NORDLUND: I noticed that the Federal Reserve made an announcement last week that they were not going to increase rates.

MARK BLYTH: And the market lost its collective kittens and went on a tear because what-- here, say that to me, right? Say you're the Fed, say to me what you just said.

CARRIE NORDLUND: OK, Mr. Market, we're going to leave interest rates where they are.

MARK BLYTH: There's going to be [? six ?] cuts. It's going to be amazing. It's going to be the best time ever! It's like talking to a 12-year-old.

CARRIE NORDLUND: Yeah.

MARK BLYTH: It's like, what you say to them and what they hear are two different things. So yeah, the markets have become very energized by this. There's been on a bit of a tear. It's called the Santa rally.

CARRIE NORDLUND: [CHUCKLES]

MARK BLYTH: Yeah, right. Literally.

CARRIE NORDLUND: Santa--

MARK BLYTH: The Santa rally. Right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: And yeah, they're just banking on sort of like, oh it's all going to go back to normal. What interesting little wrinkle on this, and I think this is not interesting in and of itself, but it's interesting of the type of thing that we're going to have to think about going forward is the whole situation in the Red Sea with the Houthi rebels.

CARRIE NORDLUND: Yes.

MARK BLYTH: Right? So if you're basically taking your oil tankers and another seven days because you have to go all the way around South Africa and come up, you can do this. Right? It's a question of supply constraints, et cetera. Remember those supply constraints of the pandemic?

CARRIE NORDLUND: Yes, right.

MARK BLYTH: This might have an inflationary effect. Maybe a mild one, right? So if it does though and you see those numbers going up, then the Fed are definitely not going to cut. Now this is more important than we think because as geopolitics becomes more complex, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Things like this are going to happen more.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And as climate becomes more fragile, things like this are going to happen more. So they're kind of like mean reversion in the markets want to see is sort of like, back to like, 2% interest rates and 3% growth, and then we'll just carry on and everybody makes a ton of money. That's going to become more complex going forward. I just don't think you're ever going to shake it out to the-- like, let's go back to the way it was and when was it perfect? The great moderation in Two Thousand Five.

CARRIE NORDLUND: Right.

MARK BLYTH: It's never going to happen again.

CARRIE NORDLUND: Right. And your point about the political risk too, I mean that is not-- I mean, that this isn't some, like, rare occurrence that's going to happen.

MARK BLYTH: Absolutely.

CARRIE NORDLUND: Or that's happening right now.

MARK BLYTH: And, you know, in China, the whole China thing is very interesting in this one as well because they are in a slump. That was never meant to happen, right? It was just going to open up and go gangbusters.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And it turns out that when you have a massively oppressive Communist Party apparatus, sucking the soul out of entrepreneurship and fun--

CARRIE NORDLUND: Yeah.

MARK BLYTH: It does have a dampening effect.

CARRIE NORDLUND: No, there's all these news stories of talking to the man on the street sort of interviews, and the Chinese dream is dead, and they're like, why did I bother? Why did I-- I went to University and I can't--

MARK BLYTH: Yeah, exactly.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Yeah, no. So, it's funny because on the hysterical side of this, you get people like screaming that China is now, you know, dead and defunct and all, on like a year of data, we'll see, right? But it's interesting that they keep talking about China's youth unemployment rate is now close to 20% and this is outrageous. That's the European norm.

CARRIE NORDLUND: Is it?

MARK BLYTH: Yeah. Let's put it in perspective.

CARRIE NORDLUND: This is interesting though because I'm curious whether this shakes Xi Jinping's-- the support within the party. Or if it's something they just kind of shrug off.

MARK BLYTH: The weird thing about parties, though, I mean, sort of one-party regimes is that they understand-- I mean the most extreme example of this is North Korea-- is everyone associated with the regime understands that you rise and fall with regime.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? So if he goes down, there's a very good chance you're going down too.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So no matter how bad it gets, you're kind of like double your bet with the leader.

CARRIE NORDLUND: Right, because I'm tied to you.

MARK BLYTH: Yeah, exactly.

CARRIE NORDLUND: That's right. Yeah. So we were talking about this beforehand. And I was interested to hear your point of view on what just happened with Google and the verdict-- or the decision with Epic Games that-- you know, they had-- Google pushes all the payments for-- if you buy stuff on Fortnite through their pay system. And it was a jury trial. Jury said no, you can't do this. And so, you know, everyone's-- those who know, the tech side of things are excited. This is a signal, , end of monopolistic behavior, like, $630 million, like, blah, blah-- on and on and on. And you kind of--

MARK BLYTH: Yeah, I'm like, blah. I just went blah. So the reason I'd go blah is, go look at Google's market cap--

CARRIE NORDLUND: Yeah.

MARK BLYTH: And divide 630 million into it. Isn't even a rounding error, right?

CARRIE NORDLUND: Yeah, that's-- yeah--

MARK BLYTH: So there's that, right? Second thing is, and I think we've spoken about this before on a previous episode, if you go back to the idea of trust busting, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: So you had standard oil and they controlled all the oil, right? You'd standard railroads and [? control. ?] So you'd break them up into smaller things and make them compete with each other, right? And you can kind of do that. Imagine even sort of with telecoms in the nineteen-eighties, you invented the "Baby Bells"--

CARRIE NORDLUND: Right.

MARK BLYTH: You could get a better long distance deal from this one, from this one, right? And then what happens is, when you just let markets do their thing, everyone just merges and buys up the opposition. And then you end up with three or four firms, and this is why airlines are terrible, and it costs a fortune to fly anywhere. And this is why our mobile phones cost three times as much as they do in Europe, because they regulate them, et cetera, et cetera, right?

But to go back to the Google's et cetera, the reason they're so powerful is they are natural monopolies of a different type. They're in a sense like, imagine a shopping center and the only place you can shop is in the shopping center.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So you have to go to the shopping center.

CARRIE NORDLUND: Yeah.

MARK BLYTH: You could build another shopping center, but nobody's going to build another shop in that shopping center. There's just one.

CARRIE NORDLUND: Yeah.

MARK BLYTH: You can't really-- what do you, break into Amazon Northeast.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Versus Amazon Southwest, and then we'll scour the internet for coupons to see which ones cheaper? It just doesn't work with these things. So you end up in a situation-- it's a bit like how we regulate banks. The answer to that is badly. And the reason we do this is because we don't fundamentally know how to change the business model and make it safe.

So what we do is we regulate accidents when they happen. So what you're looking at is the regulation of an accident after it happened. And then we say, you can't do that anymore and they go, OK. And then they go off and do something else. And they'll keep doing something else until someone says, you can't do that, and they'll go, all right. Well, I won't do that. And you do this kind of ad hoc casualty triage regulation. And that's basically what you get.

So unless you have a real commitment to basically turning these things into public utilities, literally, you buy them out and you socialize them, and you see that ever happening.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Yeah. This is just a different form of capitalism.

CARRIE NORDLUND: I get-- well your point about the shopping center, too. I can only-- I use the credit card, right, because they only take the one credit card, and they-- all the stuff and even if I had another credit card, like, why does it matter? Because they don't take that there. And the other shopping center doesn't have any stuff. So--

MARK BLYTH: No, I mean, if you think about credit card is a great example of this, right? I don't know if you track credit card rates, right? But I mean, they were always extortionate. Remember in the days when we had zero interest rates? Did you ever see a zero interest rate credit card? No you get a zero balance transfer, after which it becomes prime plus 12, right? So you were paying about 17%.

I was on-- I think it was an airline website and they had the advert up for their card. And I was like, I wonder what they're paying these days? They wanted 35%.

CARRIE NORDLUND: Holy cow.

MARK BLYTH: And people were paying this.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? So again, factor this back in to sort of like, the economy's doing well, right? And paying 35% of my credit card, I flew to Oregon and it cost me $1,000.

CARRIE NORDLUND: Yeah.

MARK BLYTH: There was no food, and I was in the middle seat.

CARRIE NORDLUND: This is a true story.

MARK BLYTH: Tell me everything's great. Just, I dare you to tell me everything is great.

CARRIE NORDLUND: Yeah, yeah. Everything's great. OK, well, where do we go from here then?

MARK BLYTH: We cannot dodge the Israel issue. It's very interesting to me that no matter how bad relations between the United States and Israel gets, the United States, because it is always in the position of having Israel's back no matter what they want to do, the United States is meant to be a superpower and it basically becomes a case of, no you're not.

CARRIE NORDLUND: Oh yeah.

MARK BLYTH: Right? You will basically back us in this, is it right?

CARRIE NORDLUND: Yes.

MARK BLYTH: And it's funny when you read the press on this because you get this stuff about Biden's feeling uncomfortable. Oh, I'll bet he is.

CARRIE NORDLUND: Yes.

MARK BLYTH: Because there are 200,000 Muslim Democratic voters in Michigan. And at the moment they're not going to go anywhere near you for this election that's coming up. So they're really beginning to worry about the price that they're going to pay for the support. Second thing is, and this is something that we used to talk about with Ukraine, which we've forgotten about, which is, what is the end game?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? How does this end?

CARRIE NORDLUND: Yeah.

MARK BLYTH: And to me I just don't see how basically turning all of Gaza into rubble, making two million people homeless and killing ten x if not 20 x by the time you're done of the people who harmed you, is going to do anything other than create yet another organization that won't be called Hamas that will have just as many members.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And you're further away from ever-- from peace. So then the end game becomes, is there an end game that is anything other than just perpetual violence?

CARRIE NORDLUND: I know. And your point of, like, we were talking about immigration earlier, already, you start to hear Egypt fussing about the--

MARK BLYTH: I mean, if the endgame is basically to push everyone into the Sinai and turn it into Egypt's problem, right? The Egyptians really just are not going to allow that one to happen.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And if it is essentially, we're just going to keep bombing them until we run out of bombs, then there's no solution in that there either. Is this just-- the answer becomes violence and the problem becomes violence.

CARRIE NORDLUND: Well I never-- and I mean, there was a period last week, a couple of weeks ago, where there was three to four days where there was no-- there was a halt. And you kind of think, well, can't you just continue to do that? Like, why?

MARK BLYTH: But if you have the war aim of destroying Hamas, and destroying its leadership, right, then you do a halt to get some of your hostages back. And then you just continue on with this.

CARRIE NORDLUND: But then doesn't-- don't the goalpost moves? OK, so you destroy Hamas. You destroy the leadership and then it's something else.

MARK BLYTH: What if Hamas isn't a thing? What if Hamas is an idea?

CARRIE NORDLUND: Yeah. Exactly.

MARK BLYTH: You don't destroy ideas.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And that becomes the thing that you can't fight, that's the thing that jeopardizes Israeli security more than anything else.

CARRIE NORDLUND: And your point about Michigan is right. I mean, one of the recent Michigan polls shows that Trump is up in the state that Biden won pretty handedly. So I mean, right, the-- yeah, he's feeling very uncomfortable and very hot.

MARK BLYTH: So the Americans are going to want-- the American administration is going to want a swift resolution.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Whether the Israelis want a swift resolution is an entirely different thing.

CARRIE NORDLUND: No your point about an idea is really-- yeah. Yeah.

MARK BLYTH: So, we dealt with that. Now, on to lighter things.

CARRIE NORDLUND: Oh, yeah. That's a hard U-turn. There are hard left turn there. Any end of the year sort of stuff that you-- favorites, you know, of Twenty Twenty-Three?

MARK BLYTH: No. There was none. It was all just bleak and miserable.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Was there actually good stuff? I'm trying to think. [VOCALIZING] I'm enjoying the recovery of Everton under Sean Dyche in the Premier League. That's a bit of a niche topic.

CARRIE NORDLUND: OK.

MARK BLYTH: What else am I enjoying, or have enjoyed from those? It was a nice summer.

CARRIE NORDLUND: Yeah.

MARK BLYTH: In general.

CARRIE NORDLUND: We have all these positives.

MARK BLYTH: Have you got anything? Give me some. Pitch me some.

CARRIE NORDLUND: Well, yeah. So, I was thinking, you know, favorite movie, favorite-- that sort of stuff.

MARK BLYTH: Nobody goes to the movies. And all movies that are released now are crap. You ever notice this?

CARRIE NORDLUND: Yeah, well there was a big-- Barbie was the big--

MARK BLYTH: Oh that was Barb-- yes, Barbenheimer.

CARRIE NORDLUND: Barbenheimer, yeah.

MARK BLYTH: Of course. Yeah.

CARRIE NORDLUND: Yeah. I mean, I thought that was a great movie. There's a small little movie called Past Lives that I thought-- that I watched on an airplane from a middle seat, actually. But I had some water. So that seemed-- you know, pretty positive.

MARK BLYTH: You know, when you're on American, they say, we've got endless movies on our app, and all you need to do is plug into our Wi-Fi?

CARRIE NORDLUND: Yeah.

MARK BLYTH: I have never got that Wi-Fi to work.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Like ever.

CARRIE NORDLUND: [CHUCKLES] Yeah. But overall, I mean, I think because of the writers' strike and stuff, I think that will bear the brunt of that in '24. But I mean, it was all streaming stuff.

MARK BLYTH: I finally got around to watching the latest Mission Impossible film.

CARRIE NORDLUND: Oh yeah, that.

MARK BLYTH: And it's kind of like, this is part one, and I had to watch it in two chunks because it's about 3.5 hours long. Right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: And there's clearly a sort of like act one where, like, spoiler alert, one of the main protagonists dies. And then after that, there's the, and now we'll go do the rest of the amazing caper thing, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: And I mean, everyone says this. Like, you're looking at Tom Cruise and you're just like, how old are you again?

CARRIE NORDLUND: Right. Yeah.

MARK BLYTH: It's insane.

CARRIE NORDLUND: I mean, and he does his own stunts.

MARK BLYTH: I know.

CARRIE NORDLUND: Like, the whole thing is just--

MARK BLYTH: It's-- yeah, it's just-- and he's going to continue to do it. And I was just thinking, you know, at some point, he's got to be a 70-year-old action hero.

CARRIE NORDLUND: And just, like, physically he'll have to be-- have aged.

MARK BLYTH: Well, you'd think, but I mean, I don't know. There's got to be several mirrors somewhere in an attic aging.

CARRIE NORDLUND: It's the Scientology.

MARK BLYTH: It must be. Maybe it is. Maybe that is the secret.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Oh, [INAUDIBLE].

CARRIE NORDLUND: I mean-- and for Twenty Twenty-Four, I'm just trying to just get through the year. I'm hoping we can just maybe skip over, skip to Twenty Twenty-Six or something, just because of the presidential campaign and just-- it's going to be--

MARK BLYTH: It's going to be brutal.

CARRIE NORDLUND: Yes.

MARK BLYTH: Let's face the facts. It's going to be brutal. So anyway on that nice, cynical note, let's end the year.

CARRIE NORDLUND: Always great to see you. Happy new year.

MARK BLYTH: Yes.

CARRIE NORDLUND: Happy winter break.

MARK BLYTH: Happy Christmas.

CARRIE NORDLUND: And I'll see you next year.

MARK BLYTH: Exactly. Bye.

CARRIE NORDLUND: Thanks for listening.

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