You did not win.
Violence never wins.
Freedom wins.
Hello, I'm Peter Spiegel, US managing editor
of the Financial Times.
And I'm joined by Rana Foroohar, our Swamp Notes columnist,
to talk about what was, let's say,
one of the more interesting weeks in American politics.
Obviously, we thought the big event of the week
was going to be the Georgia Senate races.
And that was a big event.
But then, of course, the events of Wednesday,
where what was supposed to be a relatively
routine certification of Joe Biden's win
turned into, for lack of a better
word, a riot, an insurrection.
Curious, Rana, I just want to start with those two events
to try to tie them together, because I
do think they are related, in that, in many ways the fact
that two Democrats won Senate races in Georgia
- a very red state - in some ways,
strengthens Biden's hand as he comes into power.
Because he does now have a divided Republican party.
Or is that a misreading of the situation,
given that we keep predicting the downfall of Trumpism
and it never really happens.
The attempted coup, the insurrection, the protests,
whatever you want to call it, and Georgia
has been really intricately connected
and what they're underscoring is that both the future
of the Democratic party, and certainly the Republican party,
are up for grabs.
In terms of Democrats, I think that the two events give Biden,
I believe, a stronger mandate to push as much
of his Build Back Better agenda as he can, through as quickly
as he can, without really needing
to seek as much compromise.
And I think that that's going to be really important, because he
doesn't have a lot of time before the 2022
midterms to say, hey, the Democratic party is
the party of the working class.
We are the party of the disenfranchised.
We are going to bring together issues of race and class
into one basket, and really reclaim that territory.
Interestingly, I think the coup actually
emboldens the more, perhaps, electable parts
of the Republican party - the Hawleys, the Rubios.
You're going to start to see this younger
group of economic nationalists, people that believe
that they can speak for some of the Trump base
without being Trump.
And Trump is, of course, now being
repudiated by the far-right business community.
I mean, I was fascinated that the National
Association of Manufacturers - very rightwing group - is
coming out and saying, use the 25th Amendment please,
Mike Pence.
So I think that this is all about where do
Democrats and Republicans go.
And I think you're going to see a doubling down, not so much
on Trump, but on Trumpism, economic nationalism,
on the right.
And on the left, I think you're going
to see, let's push through as much infrastructure,
rural broadband, training.
What can we get through in two years that
is going to make the working class in red states
feel that we are once again their party?
In this budget, another multi-billion dollar tax
cut for the very wealthy millionaires and billionaires.
Here's what he wants to do.
Let me sort of take that and challenge you
a bit on two policy areas which have been fraught
in Washington, certainly through the Trump three years,
but even before.
One is tax and fiscal policy.
Let's start there.
Because, while I think you're right, while I think,
certainly, Biden's hand has been strengthened,
and we have a very divided Republican party, whether that
means a very close majority in the Senate and the House,
frankly, remember, because they lost seats in the House.
The Democrats lost seats in the House.
So Biden has a very narrow majority in the Senate, 50-50,
with Kamala Harris as tiebreaker.
Can he really get some of these more contentious issues
through Congress?
Let's start with economic policy.
Because we saw at the tail end, before the election,
of an effort to get more fiscal stimulus into the system.
We saw Republican resistance until Trump changed his mind.
But there also is obviously tax policy too.
I mean, Republicans, early in the Trump administration,
decided to make their deal with the devil
and sign on with Trump because they wanted their tax cuts.
Clearly, Biden has run on a platform of trying
to wind back, particularly some of those corporate taxes
and those tax cuts for, sort of, above $400,000.
What are the prospects of Biden getting those through?
And what do you think the economic impact's
going to be on that, Rana?
So, right, two things...
I think that the Democratic sweep
means more fiscal stimulus and also higher taxes.
Now, you're not going to get as much of a fiscal package
as Democrats would have, in their dream world, liked.
But I think that you're going to get a substantial amount
of fiscal stimulus through.
And you can already see the markets responding to that.
I mean, you know, I don't know how many times markets actually
rise during an attempted coup, but they did this time around.
In part, not only because in this weird bizarro world
that we live in, bad news is sometimes
good news in the sense that, OK, lower rates, the Fed's
going to come in.
But also the hopes that we are going
to see more fiscal stimulus.
And that, finally, monetary policy and fiscal stimulus
are actually going to be connected in a productive way.
And then we're going to start to see
some of what we've seen on Wall Street trickling down
to Main Street.
So that's point number one.
But you're definitely going to see higher taxes in a Biden
administration.
I mean, that's no question.
He ran, amazingly, on, we're going to turn back these
Trumpian corporate tax 'reforms.'
We're going to make companies pay their fair share.
I think that you're going to see that kick in more in, kind of,
2022.
I think that 2021 is going to be all
about how much fiscal stimulus can we push through.
How much can we help to improve the vaccine rollout.
That, interestingly though, is going
to present potentially a big economic challenge
for the administration.
Because let's say you get a really strong,
co-ordinated response to the vaccine.
You start to get a pretty good recovery in spring and summer.
If the recovery comes in quick and hard,
is that going to raise interest rates?
Is that going to tank the market?
As I've written, as the FT's been writing,
the US economy is largely dependent on asset prices
staying where they are.
So that is a crazy balancing act for Biden, and particularly
for Janet Yellen, to try and walk.
You know, it's funny.
If I could just, sort of, agree with you on one point,
but slightly disagree with you on the other point.
I think it's been interesting to watch the market's reaction
over the last 24-48 hours.
And to me, they clearly are watching the Georgia results
more than the coup attempt.
The fact that they were rallying through an insurrection, to me,
was them looking at the fact that the Democrats
had a majority in the Senate, and were
going to be able to fast-track some of this fiscal stimulus.
So I think you're right on that point.
I guess I'm more sceptical on the tax issue,
just because having only 50 votes in the Senate
- or 51 votes, if you count Harris - and a four or five
or six, depending on what the final count is, majority
in the House, means you have to have incredible party
discipline, which the Democrats, traditionally have not.
And you've got Joe Manchin in the Senate.
And you've got a lot of rebels within in the House Democrats.
I think it can be very difficult to get a large tax increase
package through the House, particularly
at a time when a lot of these guys are up for re-election.
So I guess I'm slightly more sceptical about Biden's ability
to get anything really substantive
through Congress on tax.
Majority leader.
I know of no further debate.
What do you see that wing of the Republican party pushing for?
You talk about economic nationalism.
Is this a change in the Republican party
from the free-trading, deregulation,
low deficit party that we've known from the Reagan
administration, into a sort of neo-isolationist, pro-fiscal
spending?
What do you think economic nationalism,
if it does become the province of a Josh Hawley or Marco
Rubio, what does that look like, do you think, going forward?
Well, so in a word, yes...
isolationist, insourcing of supply chains,
probably more protectionism, definitely more fiscal policy,
which is so interesting.
And in some ways that's so predictable.
Because the Republicans are...
they love to complain about fiscal prudence
when they're not actually in charge of things.
Like, that's the Republican mandate.
You think of that second term of the Reagan era,
where, yeah, you have tax cuts, but you have budgets rising.
Margaret Thatcher was really the only pure Conservative
in that sense.
At least she cut budgets under control, as well as
cutting taxes.
What I find very interesting, I think
we're going to look back at this moment
and see it as a generational pivot point in so many ways,
for the identity of Republicans and Democrats,
but also for the nature of the global economy.
I've actually been thinking a lot
- in part, because I'm doing my next book on this topic
- about neoliberalism and the history of neoliberalism.
And when you look back to the original neoliberals -
economists like Hayek, Ludwig von Mises -
these people were trying to orchestrate
a system of global capitalism because they believed
that that was going to help the world fight fascism
and nationalism.
That by linking global capital markets,
and linking capitalists, internationally,
that that would prevent nationalism
and national interests from becoming pre-eminent.
Well, unfortunately, as with every pendulum shift,
things can go too far.
And so, as this evolved, and particularly with
the deregulation during the Reagan-Thatcher era, and then,
really, with the kind of crony capitalism, I would say,
that rose during the Clinton-Blair era,
in which you had corporate interests kind of capturing
both sides of the political spectrum -
we've now come to a tipping point in which global capital
markets are actually fostering extremism and nationalism.
So that, to me, is a kind of a massive, seismic thing
that we're all going to be thinking a lot about.
And both sides, the Democrats and the Republicans,
as well as others, internationally,
are going to be finding ways to deal with that politically.
It's a very interesting point.
And I think for us at the FT, this
is going to be something that we really need to report more on.
Because your image of a generational shift.
I was just remembering, again, the events
of Wednesday into Thursday morning,
when they finally got the capital back in control,
and they finally got back to the floor of the Senate to debate
are we going to still really go through
with challenging the electoral votes.
Hawley, who was the ringleader, largely,
of this effort to take up the Trump mantle and challenge
the Biden electoral votes...
right behind him was Mitt Romney.
And the imagery of Josh Hawley standing up and saying,
this is important.
We have to challenge the vote.
This is the place to do it.
And then have Mitt Romney behind him, who is over 70 now,
and is the older generation.
And was the standard bearer for the party,
obviously, as a presidential candidate,
stand up and literally chastise him, right behind him.
That imagery sticks in my mind.
Because you may be right.
This may be a passing of the torch from a more,
for lack of a better word, neoliberal Republican party,
to a more nationalist Republican party.
I guess I would say that the one thing that I'm not
100 per cent convinced of is Hawley, in many ways,
stood alone.
And the fact that there were so many Republicans who
were willing to challenge him tells me
that this is not an obvious generational shift that
is going to go smoothly.
Are there going to be Republicans,
even young Republicans, within the party,
who are still going to want to... you know, a David Frum,
and some of these ones who still see it as the party of Reagan,
and want to see it remain the party of Reagan.
But I think that's going to be a really interesting
ideological fight over the next four years,
as the recriminations and the shake-up from both Georgia
and from the capital insurrection
play out over the coming weeks and the coming months.
The fake news and the Big Tech, Big Tech
is now coming into their own.
One last topic.
I wonder if we could just switch to, frankly, your area where
I read you the most, and rely on you the most, which
is tech policy.
Because that also was something that has been,
frankly, a hobbyhorse for both sides.
It clearly played a role in the insurrection on Wednesday.
But if you look at Biden and tech policy and recent events,
where do you think that goes in a Biden administration?
Peter, you're going to see a lot of action
around tech regulation, I think, in the coming years.
Let's not forget, even before this attempted coup,
before Georgia, you still have the big DoJ case already
in train.
You had..
The Justice Department - this is the Justice Department
and, actually, the Federal Trade Commission -
the two big competition authorities in the US
who are investigating the Big Tech companies
for abuse of market power.
Indeed.
And the FTC case, in particular, is really,
I think, a landmark case.
Possibly what I would call the first post-neoliberal monopoly
case, in the sense that it's not about consumer pricing.
It's not about, hey, as long as prices are going down,
everything's OK.
The FTC is really saying, you know what, this is about power.
This is about economic power, market power, political power.
And these companies have too much of it.
It really hearkens back to the kind
of late, early turn of the 20th century industrial trustbusting
that happened.
So that's point number one.
Point number two, and this is really important,
hate is being monetised by the largest tech companies.
Let us not forget that this attempted coup was orchestrated
on social media.
Now, a lot of social media companies
shut the president down after this attempt.
But these services go right back up.
And we see this after every event
- after the bombing of a mosque, after the mass genocide
of the Rohingya.
You see tech companies coming in briefly,
saying oh dear, we're so sorry.
And then going right back to their business
model of monetising hate.
And so I think, particularly now that Democrats
have the Congress, and you don't have
Mitch McConnell with a chokehold on what can come down
the legislative pipe, you're probably
going to see some new proposals around online extremism.
You might see more pressure to turn back those CDA 230,
as they're known in wonky terms, loopholes
that allow tech companies to not be
liable for things that are said or done on their platforms.
I think you're going to see a lot more pressure
around those types of issues.
And taxes too.
I think the tech companies are going
to come under a lot of pressure around tax.
Because, of course, they pay the lowest rates
relative to other big companies because they're
able to offshore so much of their profits,
so many of their 'intangible' assets.