Money Talks: The Mighty Dollar
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Hello, and welcome to Money Talks from Slate Money. I'm Felix Salmon of Axios, and this is the show where we talk to super interesting people about super interesting things. And one of the things that I have been thinking about and utterly failing to understand for many years now is this whole question of how money

America is asserting its power globally through methods other than, you know, invading people. And this is kind of important right now in particular. And I noticed that the lovely folks at Penguin Random House have no fewer than two books out at the same time on this. So I thought I would invite both of the authors on to try and explain

What on earth is going on? So I am talking this week to Edward Fishman and Saleha Mosin. It's all coming up on Money Talks from Sleep. This message is brought to you by Apple Card. Apply in the Wallet app today and see a credit limit offer in minutes. Subject to credit approval. Apple Card by Goldman Sachs Bank USA Salt Lake City branch. Member FDIC. Terms and more at applecard.com.

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Eddie, who are you and what is your book? Well, thank you, Felix. It's great to be here today. So my book is called Choke Points, American Power in the Age of Economic Warfare. It came out on February 25th.

And the goal here is really to tell the story of the rise of what I call the age of economic warfare, in which sanctions, tariffs, and export controls have become the primary way that great powers compete with one another. This is true not just of the United States, but also China, China's

Russia, the EU, Japan. It's just the way that great power competition is playing out. And so my goal was really to explain how this era came to be, introduce people to the characters, the folks who actually built this new age of economic warfare, and to potentially look ahead into the future and try to speculate on where things are headed in the coming years. My crystal ball has never been cloudier, but Saleha, tell me, who are you and is your book...

Similar? There's a lot of parallels. I've read Eddie's book. Eddie and I know each other. So I'm the senior Washington correspondent at Bloomberg News. My book, Paper Soldiers, How the Weaponization of the Dollar Changed the World Order, it came out just about a year ago. And before we knew for sure Trump was going to be president, although it looked pretty clear that he was going to be the GOP nominee.

It's I've been lucky with the timing of this book because one, we now have a president and a treasury secretary who both want to maintain the dollar's status as the world's reserve asset. Now, that is a super wonky thing to say. Basically, what we're talking about is maintaining the U.S.'s dominance in the world order. Now, the U.S.

has achieved that kind of superpower status in large part through economic power and economic heft. A lot of that power sits inside the U.S. Treasury Department and has for two centuries been

And so the book kind of unpacks how the U.S. gained that power over the last, you know, since its inception as a new country, how that kind of really gained steam after World War II, how 9-11 really honed in on the weaponization of the dollar. And from there, the book kind of delves really deeply into how some of the things that we hear now come up from China

And then Biden and then now Trump again, this whole concept of economic populism and a whole class of people who feel that they've been left behind by various economic recoveries and how that has actually contributed to.

some of the problems that we have now today in terms of our ability to continue to wield geopolitical power when there is a increasing interest in looking inward and making sure that we are taking care of our own before taking care of others. So right, so this is the big tension, isn't it, between what you said was the Trump-Besson desire to have a strong dollar versus the

America first ideology of MAGA, right? The whole point of the strong dollar is that you become this kind of global safe haven and something where you care about the rest of the world and the rest of the world cares about the United States. And we seem to be moving

away from that right now. So I guess the first question for you would be, do you believe them when they say they care about being this global sort of, you know, power and the dollar being strong and globally important? I do because there are huge benefits to the US being the owner of the world's reserve asset. It is the reason that we can have such high deficits.

The world has an insatiable appetite for our government debt, the treasuries market. Countries and companies around the world use our treasuries as a benchmark for their own debt and interest costs. It also means that the U.S. can invest

leverage that power through economic sanctions and kind of export foreign policy goals. Okay, I'm going to interrupt you very quickly here, Soleil. You're giving me very sensible, technocratic answers to this question. You're giving me basically the same answers that every

administration in living memory would have given me and so I guess underneath my question it's not does it make sense to have this policy because I think you know as you say like administrations of all stripes have had this policy for many years it's more like is this something that Trump in particular actually feels and believes and wants on a more sort of practical level well that's what

Well, that's what I'm getting to, Felix, is that from what I understand from my interactions with officials during the first term and now this second presidency, is that they see the benefit of being the owner of the world's reserve asset, but they don't see that it needs to be a constant asset.

quietly suffering through the negative consequences. But I will say that there are huge tensions there, that you can't keep telling the world that we want to be the world's reserve asset. And also, we want a weaker dollar in terms of the foreign exchange rate value to boost our manufacturing sector. Those two things are at odd. So far, for 80 years, up until now, right now, the US has used charm tactics to make the dollar the reserve asset. Nobody has...

The US has not gone around telling people we are the reserve asset. The world has chosen it. So it's a charm tactic. But now Trump is talking about shifting to a bullying tactic by saying that I will tariff your country 100% if you abandon the dollar. Oh, right. That's his big thing about the bricks, isn't it? He's like, if you abandon the dollar, then I will slap 100% tariffs on you. I guess unless you move to Bitcoin, because I'm super pro-

crypto these days eddie you can i like bring you in here because i feel like one of your ideas and most layers ideas too for that matter is that as we have been weaponizing this power in recent decades we've also been sort of undermining it is that fair to a certain extent yes i think that

By weaponizing America's central role in global financial networks, in global supply chains, these are the choke points that give my book its title. It certainly incentivizes countries that are targets of those sanctions and export controls, as well as countries that think that maybe one day in the future, they could be targets of those sanctions and export controls. Which is now every country in the world. Right. To start thinking about

insurance policies and developing workarounds. So you're right. I think initially these types of workarounds and insurance policies were the province of Iran, Russia, China. But I think in the wake of the first few weeks of Trump's second presidency, you're starting to see these discussions happen in places like Ottawa, where the Canadians are thinking, are there other places to export our oil besides the United States?

And in the EU, where we've seen Ursula von der Leyen, the head of the European Commission, voice out loud that the EU might have to reconsider its relationship with China. Because I think if the EU is going to be hit with significant tariffs by the Trump administration, it's going to be hard also for the EU to continue de-risking their economy from the Chinese economy. So I think the big shift that we're seeing right now in the second Trump administration, it's not so much that Trump's using sanctions and tariffs directly,

I mean, every president in the 21st century has relied on these tools more than his predecessor. It's that he's deploying these tools against not just adversaries, but also allies. And that's leading to this sort of hedging behavior occurring globally. Can you like get out your crystal ball for a minute here and tell me, is there like an obvious or natural direction that this is moving in or conclusion that this might end up at? Because I,

Certainly right now, I don't see any alternative to the dollar as this sort of global hegemonic currency. Yeah. So, I mean, if you're looking at it narrowly through the lens of reserve currencies, it'll take a lot for any other currency to match the dollar, not just as a store of value, which is the role of being a reserve currency, but also as a medium of exchange and unit of account, which are also

key roles the dollar plays. And frankly, the reason the dollar is such a choke point that America can weaponize for sanctions isn't so much the reserve currency status, it's more about the dollar's role in cross-border payments.

The thing that I think is more closer on the horizon is that countries like China are developing ways to settle cross-border transactions without using the dollar. So it's not so much that one day we're going to wake up and the RMB is now the world's reserve currency and the dollar's lost its status. It's that

Countries like China, like Russia, like the BRICS are developing parallel financial infrastructure that is gaining steam and that I think could grow quite quickly in the event of a crisis. Say, for instance, China invades or launches a quarantine of Taiwan and the US imposes dramatic sanctions on China.

you know, two thirds of the world's countries count China as their number one trading partner. So, you know, it's highly unlikely in that scenario, Felix, that those countries would all of a sudden say, oh, well, we can't trade with China anymore in dollars. So I guess we can't buy the imports that we depend on to run our economy or sell to the biggest market that we export to. More likely is that they would rapidly scale up things like SIPs, you know, the China's cross-border interbank payment system, which is their alternative to SWIFT,

you know, they'd probably start using things like the digital renminbi, which is China's central bank digital currency. So that's really what they're doing. They're building these parallel infrastructures that could be scaled up quickly in the event of a crisis. So one of the things I think about a lot was in early 2022, when Russia invaded Ukraine,

there was a lot of talk about what at the time was referred to as the nuclear option, which was removing Russia from SWIFT. And SWIFT being the global international payment system, which everyone uses to pay everyone for everything. And if you kicked Russia off of SWIFT, that would...

you know, be like one of the most aggressive acts of economic warfare that you could possibly imagine. And then with astonishing speed, that's exactly what the world did. Janet Yellen and everyone else said, yep, that's a great idea. Let's do it. And they dropped this nuclear bomb onto Russia and nothing kind of happened. I mean, Celia, tell me exactly, am I wrong about this? But like the repercussions of cutting Russia off from SWIFT were,

I feel like they were much smaller than anyone expected. The thing to remember about any kind of economic sanction package is the moment that it was announced, what was going on, what was expected, what did the press release and the announcement, the officials who made the announcement, what were they saying were the goals? Because with sanctions, goalposts change. And honestly, presidents, President Biden is one of the people who changed the goalposts with those sanctions that you're talking about from February 2022.

At first, everyone said economic sanctions are going to work. It's going to take a while and we're going to slow the war down. All of a sudden, you had President Biden come out a couple of weeks later saying, oh, the ruble is now rubble. This is how our sanctions work. And then a couple of weeks later, the ruble recovers. Right. So it was Biden who muddied the waters there on what the benchmark is for sanctions working.

But what I will tell you is that even at the time in my reporting, and when I lay this out in my book, I went back and looked at contemporaneous notes and newspaper articles. What we heard and saw was that in that moment, the U.S. thought that Kiev would fall in 72 hours.

So we need to go big before the weekend is over and markets open and before there can be any kind of asset flight that blunt the force of our economic sanctions. And Kiev did not fall in 72 hours. So if you're measuring it on that benchmark, then they were successful. Do you think those two are connected? Do you think that swift sanctions were part of keeping Kiev in Ukrainian hands? I have no idea. I wish I had the answer to that one. Is there anyone who believes that?

Well, there's Biden administration officials who believe that. I'm not going to use the word for it so easily. Eddie, do you believe that? No, I don't. I think that the initial defense of Kiev is almost entirely up to the unexpected resolve of the Ukrainian military and the unexpected incompetence of the Russian invading forces.

Do you think that there's a big disconnect between the power of what we thought would be the effect of removing Russia from SWIFT and then in effect, like, oh, wait, the ruble isn't rubble? So I think that the media got this one wrong is my honest answer. I think if you had asked... That's me. It's me. No, not... Yeah. And Saleha honestly probably got this one right because Saleha has been covering this stuff for years and she knows these issues as well as anyone. So I'm not... Certainly not referring to her, but...

Look, the reason that people thought SWIFT was the nuclear option was based on two things that were not particularly relevant. One was Iran was kicked out of SWIFT in 2012. And for whatever reason, that has now gone down in history as this really significant act. But if you read choke points, you'll find that it was essentially a sideshow. It was not even the most significant sanction imposed on Iran. So in some ways, it was the wrong lesson that was drawn from the Iran sanctions.

The second reason is that the sort of nuclear option analogy came actually from 2014. So I was actually involved in designing and negotiating the original Russia sanctions. I was the Russia and Europe sanctions lead at the State Department in 2014. And at the time, Dmitry Medvedev, who was then serving as the prime minister of Russia, he had a comment where he said something like, if Russian banks are kicked out of SWIFT, all options would be on the table.

And we in the State Department and in the U.S. government interpreted that as Russia might respond militarily were we to kick Russian banks out of SWIFT. Mind you, though, Felix, this was 2014. You know, Russian banks had over $700 billion in dollar-denominated loan obligations. They were deeply intertwined with the U.S. financial system.

When Russian banks were finally kicked out of SWIFT in 2022, it was a totally different story, right? Russia had had eight years to prepare, right? They had de-dollarized their economy. They'd shifted most of their reserves into other currencies. They started clearing their international trade in euros instead of dollars.

So the repercussions of these types of sanctions by 2022 were not as significant. And frankly, if you talk to the people in the Biden administration who are shaping these sanctions, including critically Dilip Singh, I think the key architect of the sanctions and the main character of my book, he didn't even think that the swift sanctions were a big deal, which is why he kind of quickly pivoted the conversation to a much bigger deal, which was sanctions on the central bank of Russia.

which in some ways were the biggest financial weapon that the US had in its arsenal. And they successfully deployed pretty quickly after Russia invaded Ukraine. One of the things that we're hearing here is this concept of managing the narrative in the moment when you're halfway through and then several months or years later. And that's like, depending on when you ask the question, that's when you pick the narrative. And that's the great thing about choke points. I already read it before the book

even hit the shelves. I was reading it and Eddie does a great job of without the reader realizing he is explaining that there are different narratives for each step as the economic power of the U.S. has been wielded. The envelope has been pushed again and again. And it's something I endeavored to do in my book as well. But that's one reason that you should pick up choke points because you do kind of get this sense of the how the narrative has been managed.

and whether you can believe that a sanction, any given sanction is successful or not. I really love this point and it cannot be underscored enough. And it's something we talk about quite a lot on Slate Money is that markets, you know, we think of them as being these sort of

omniscient pools of capital that, you know, move around in perfect knowledge. But storytelling is such an incredibly central part of how markets work. And it's a central part of whether or not people think that sanctions work as well. And I want to sort of stick with sanctions for a minute here, because we are now in this point at which the US and Russia are

negotiating something, something, Ukraine, something. It's very unclear exactly what is going on there. But presumably, part of those negotiations is going to be this idea that sanctions might or could be lifted. And

I want to ask you, Eddie, about this question of lifting sanctions. Does it do any good? When sanctions were imposed on Russia, all of the American and European companies had to leave Russia. If sanctions were to be lifted on Russia...

How long would it take before they said, oh, I guess we can go back in now? Yeah, this is a really important question, Felix, and I'm glad you've zeroed in on it because I think one of the major takeaways from my research on my book and honestly, my years of experience working on sanctions policy is that the U.S. is much better at turning off economic activity than we are at turning it on.

We can tell U.S. companies what they can and can't do, right? You can make it illegal for ExxonMobil to drill in the Russian Arctic, as we did in 2014. You can make it illegal for U.S. banks to transact with the Central Bank of Russia, which the Biden administration did in 2022, right?

What you can't do is you can't mandate that ExxonMobil must drill in the Russian Arctic. You can't mandate that JP Morgan must open up branches in Moscow, right? This is the problem with sanctions relief, which is that it doesn't always deliver the benefits that you want. And, you know, this was...

brought into relief, I think, for the world in 2016 after the US and its allies implemented the Iran nuclear deal. And the Iranians were expecting an economic bonanza. And it was really hard, frankly, to persuade

global banks and energy companies to reinvest in Iran. At the time, they worried that there were other political risks of doing business in Iran, which they were right to worry about, given that Iran's government was continuing to support militant proxies like Hezbollah and Hamas. But I think they were also right to worry that U.S. policy itself could change. Even at the time, in 2016, you already had then-candidate Trump stumping on pulling the U.S. out of the Iran nuclear deal.

And so most businesses were not willing to go back into a run. And I think that, unfortunately, that problem actually undercuts the deterrent effect of American sanctions. Because for deterrence to work, you both need a credible threat of economic pain, but then also the credible assurance that if you do what America wants you to do, you get some sort of benefit.

And so I think that in some ways it winds up undercutting the efficacy of our sanctions. Yeah. One, one of the, one of the sort of jokes that has got stuck in my head is this idea that we've moved from a monopolar world where like the United States was the hegemon, which everyone had to sort of focus on to a bipolar world where, you know, America is the bipolar hegemon. And

this idea that you are talking about is important to that, right? It's the idea that, you know, Trump can declare tomorrow that he's lifting sanctions on Russia. Nothing's going to happen because no one will believe that he's not going to declare the day after tomorrow that he's going to reimpose sanctions on Russia. So, Saleha, you have looked at the long history of American policy in your book.

Have you ever encountered a period where there was, I guess, so much difference or unpredictability in terms of where we could go next and how the next administration might differ from the current administration? It's always struck me that historically speaking, certainly since the Second World War, in terms of international policy, the D versus R thing hasn't been that important as it is now.

Yeah, you're right. You know, the geopolitical fragmentation that we have now comes after 80 years of peace, which was outside of the norm. And it's only peace based on which narrative you're going to buy, because there's been plenty of war in the past 80 years, and the U.S. has had something to do with many of those conflicts.

But it is the first time that we're seeing in this day and age questions about the U.S.'s ability and even willingness to be a superpower, whether people are going to continue to embrace and accept American ideals being shipped abroad. It's coming at a time where U.S. deficits are so, so high. My

My favorite line in my book is that all empires think they're special, but all empires fall. And if you look at the cusp of the moment when empires, historically the Roman Empire, the British Empire, the Mughal Empire, the Ottoman, when they started to fall is when their deficits got out of control.

So it's a moment where the landscape is pointing to a lot of fragility and we won't know. We're not going to know that this was the moment that it fell until it's a decade past that moment. But the whole U.S. democracy...

right now, rule of law is what underpins the dollar as the world's reserve asset. It underpins the global financial system and underpins America's ability to be a superpower. But when our democracy and our strength of our democracy is being pulled apart, rule of law, we are now questioning our court decisions. We are questioning election results.

We are seeing institutions, you know, their independence being tinkered with. And we have high deficits and we have a lot of acrimony and deep partisanship. All of these things point to either we are currently in the worst of it or maybe it's just around the corner. Coming up, we're going to talk about whether the Trump administration is using some of the powers it has learned internationally and applying them domestically. ♪

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Listen to What Next with me, Mary Harris, wherever you get your podcasts. Hey, everyone. It's Lizzie O'Leary, host of Slate's What Next TBD podcast. On Friday's show, Ryan Mack, who's been covering Musk for years at The New York Times, joins us to talk about the Doge pushback from federal employees. And he explains Elon's Achilles heel.

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So Eddie, you as a former, you know, State Department technocrat, presumably you too believe in the importance of democracy. But is that, I mean, not all empires are democratic, right? Is there a way that America can become less, significantly less democratic, but still retain its international identity?

I think in the short term, the answer is probably yes. But in the medium and long term, I think the answer is almost certainly no. And one reason I actually think Saleha's book is a must read is it does a great job of charting the course of how the dollar did become the world's reserve currency, how America did obtain financial hegemony. I think a really important part of that story is

isn't just about American economic power. In some ways, American economic power as a share of global GDP has declined as the dollar's role as the world's reserve currency has only strengthened. So for instance, if you go back to the end of World War II, the US was like half of global GDP. And now it's a quarter of global GDP, but the dollar is even more integral to the international financial system today. There's a lot of reasons for that. One is

just the hyper-financialization of the world economy that happens after the deregulatory push of the 80s and 90s and the Reagan and Clinton years. But I think another part of it is just about the rule of law and the role of the U.S. Federal Reserve as sort of speak seen as a technocratic, stable arbiter of global financial networks. Of course, this becomes even more true after the 2008 financial crisis when the Fed kind of steps in to become a global lender of last resort.

I think when you're looking at potential threats to the dollar, the renminbi, there are a number of basic financial reasons why it's not quite yet a threat. For instance, China has capital control, so you can't pull money out of China. China doesn't have the same depth and liquidity as US financial markets. I think when the rubber hits the road, the real difference is about the rule of law. And if you're violating a contract and you wind up in court, would you rather be in a Chinese court or a US court?

So I think if in the years to come, the Federal Reserve's monetary independence is undermined, say it's by politicians who say that we're going to start setting interest rates instead of having a technocratic Fed chair set interest rates. Or worse, if you saw the rule of law in the US debased when companies were basically either punished or given favor based on political reasons as opposed to more neutral legal reasons, then

I think that the value of the dollar as the world's reserve currency does begin to look a lot less solid than it does today. So that is to say that I think that American economic power could still be great, but the prospect of the US being seen as stable enough to provide the world's financial plumbing

I'm skeptical of sort of rogue authoritarian America being able to play that kind of role. One of the more recent headlines we've been following is this whole saga of the United States fiscal service, which is another one of those things that no one had ever heard of before Trump too. And now everyone is mildly obsessed with, which is basically when Congress

passes a law saying, you know, the government is going to spend X on Y, then the United States Fiscal Service is the agency that takes the X and sends it to Y. And this has always been an apolitical and very uncontroversial thing that they do. And this is something that has now become highly politicized. And it looks like the White House and Elon Musk and all of that kind of side of the executive branch have worked very hard to

try and insert themselves into that process and even try and prevent many of those payments from being made. And that, as you say, speaks directly to the idea that there is a legal obligation for America to do such a thing. And those things are now being interfered with and might not be happening. And some people are saying, look, if the United States has a legal obligation to

to pick a number at random, send $80 million to New York City because Congress passed a law saying they had to, and then it doesn't, that is effectively a default on an American sovereign obligation. Do you see it in that stark terms? Do you see this as a sort of thin end of the wedge, mini default? Yes. Yeah. I mean, to put it mildly, I think if the US government is not making payments that it's legally obligated to make,

I think certainly, at least in the U.S., it starts undermining the credibility of the dollar. And I could see individuals start being concerned about holding their money in dollars. I think this is a real concern about weaponizing the domestic plumbing of the financial system if it comes to that. I'm sure Saleha, in her many years of reporting on the Treasury Department, has come across Dave Liebrich, the longtime fiscal assistant secretary,

But I mean, this is a gentleman who had served in that role for, you know, or served at Treasury, I think, for 30 years, has a sterling reputation on both sides of the aisle. So I think just me as currently an outside observer, it beggars imagination that anything was going wrong underneath the hood of the fiscal service or under Dave Liebrich's watch. So I've yet to see proof that

there was actual corruption or mismanagement that was occurring. And I'm quite concerned about what could be happening now in the event that, you know, Trump officials or Doge officials actually try to weaponize U.S. domestic payments. Salaya, you're obviously looking at this. How do we know? Like people talk about, you know, the status of the dollar and these kind of

vague hand wavy terms. When you're sitting at your Bloomberg terminal, is there a number that you can look at which tells you, you know, whether the dollar is holding up or not? Is it just the value of the dollar against other currencies? No, no, absolutely not. Because there's a safe haven element to the dollar's value. When there's a crisis anywhere, people pile into a safe bet, which is the dollar and that drives it up. You know, the appearance of

stability and the appearance of projecting confidence and following the law is as important as actually doing all those things. And it's too soon to say what is actually going on in Treasury. A lot of things have been attempted with the payment system and other elements of how this part of the financial system and the plumbing works out of Treasury. But the appearance is now starting to be compromised. It looks as if the U.S. does not have

a grip over how this is working. And we're seeing that, you know, a long held Republican desire, at least a desire among some Republicans that the U.S.,

payment system should allow for payments to be prioritized, which Eddie is right, that is a default by another name, which is how past treasury secretaries have put it. They are now seeing that maybe there is a logistical, technical way of actually doing that. And that's only going to politicize our deficit even more. You're absolutely right that a series of treasury secretaries have come out and said that

We are not going to prioritize payments because that is default and we do not default and we shall not default. You know, we are constantly in the world of debt ceiling shenanigans. As a financial journalist, when I write about other countries, the thing I really care about is do they default on their bonded debt?

This sort of prioritization that you're talking about, is that weirdly a way to protect the bonded debt from the risk of default and to basically say, look, we'll keep on paying our treasury coupons even if we wind up failing to make

Social Security payments. That's almost too intellectual of an analysis for Washington. All it is doing is protecting politicians who want to let this fiscal comedy of errors to play out. That's what debt prioritization does. It has nothing to do with coupons and bond issuance and yields. It just has to do with, you know, Schumer can't agree with McCarthy who can't agree with, you know, Hakeem who can't agree with someone else. And they bring the debt ceiling into the middle of this. Eddie,

I've yet to meet a normal person who thinks that the debt ceiling makes any sense. I'm assuming you are another person who looks at this thing and says, this doesn't make any sense. I'm treating this whole discussion as this idea that there was this sort of post-war golden period when the Pax Americana was guaranteed by a bunch of globally-minded Washington people.

statesmen who cared about like, improving the state of the world. And now we're not but like, for all of that time, they still wound up doing dumb things like debt ceilings, right? I mean, in a way, it's been, we've kind of been muddling through this all along, right? Yeah, I do think that's a fair characterization. And certainly, there have been very stupid foreign and economic policies done by

presidents from time immemorial. I don't think that's anything new. I really think what is new so far is it does feel like a lot of the norms that had undergirded American foreign policy, American international economic policy, have pretty rapidly come undone, or at least have been called into question.

We're seeing this even relative to the first Trump term, when Trump himself negotiated the USMCA with Canada and Mexico. His first term trade negotiator, Robert Lighthizer, who is another important character in my book, I think considered USMCA probably the crowning achievement of his time as the US trade representative.

And then within a couple of weeks of coming into the White House, Trump threatened unilateral 25% tariffs on Canada and Mexico, goes to the brink of imposing them, basically is ready to impose them. And it's not until the markets start going haywire that he decides to kind of pull back from the ledge. So it does feel like...

In the second Trump term, there are fewer adults in the room, fewer people who may have served in other Republican administrations if we lived in a different historical timeline than the one we are right now. I think that the current Trump administration seems to be staffed with mainly people who are just loyal to President Trump. And I haven't seen any

indication that these top officials are really pursuing their own perspectives. And they're really just kind of sitting around waiting to get direction from Trump and then kind of doing the salute. And so I think that will wind up leading to a more Trumpian policy as opposed to a policy that is sort of guided maybe in broad brushstrokes by Trump, but maybe implemented by generals and economists and the other types of people who typically make up presidential cabinets.

So Soleil, I'll leave the last word to you on the subject of Scott Besant, the treasury secretary, who, when he was announced as a nominee, I think there was a broad sort of sigh of relief among not just market, well, international markets in particular. They were like, oh yeah, this guy, he's run like a global macro hedge fund. He understands how money works. He's like clearly got a bunch of common sense and he's

He seems at least as sensible, if not more sensible than Steve Mnuchin, you know, the treasury secretary during Trump won. We should be able to expect what we got, at least what we got from Mnuchin, which was like a lot of very visible, like loud supporting of Trump on Fox news. But then when push came to shove in terms of the operations of treasury, he more or less aligned himself with what treasury always used to do. That,

maybe doesn't seem to be the case. Well, like in these early weeks of looking at Besson and what's been happening in treasury, what's your take on, on how he's going to run this most crucial of all government agencies? Yeah. You know, I covered Steven Mnuchin very, very closely. Same with Janet Yellen after him. And now, um,

I'm watching Scott Besson keenly. Mnuchin, in the moment, everyone thought this guy does not know what he's doing. And slowly over years two and then three and then four, and then especially afterward, people started realizing that he was the right man in that moment because he could stomach all four years. Gary Cohn, who a lot of people thought, oh, he would have been better for that job. People on Wall Street love him. He didn't last all four years. You know, he left.

A lot of secretaries left. And I think if you ask me, a financial journalist, I'm an economic wonk. I think Treasury is one place where you do not want that kind of turnover. You don't want someone fired by tweet and markets don't know who's in charge.

So in that sense, the US, we're fortunate. With Besson, it's just too soon to say. Once again, everyone's saying, oh, does this guy know what he's doing? I kind of remember that we thought the same of Mnuchin and later on people came to appreciate him. It is a little different as Eddie is saying that now you have Trump coming in, knowing how government works, having had four years to

Think about it. Then you have Elon Musk, who was elected by no one, but given this broad authority by the president to just go in and move fast and break things. And Treasury is not one of those places where you can do that. So I think it's going to be at least another year before we know how Besant is doing. I will say that market watchers, market participants are very eager to be assured.

by his reassurances. They want him to be in control. They want him to, when he says, I know what's going on, they want it to be true. But if they think it's not, we'll start seeing that play out.

I'm Leon Nafok, and I'm the host of Slow Burn Watergate.

Before I started working on this show, everything I knew about Watergate came from the movie All the President's Men. Do you remember how it ends? Woodward and Bernstein are sitting at their typewriters, clacking away. And then there's this rapid montage of newspaper stories. About campaign aides and White House officials getting convicted of crimes. About audio tapes coming out that prove Nixon's involvement in the cover-up. The last story we see is, Nixon resigns. It takes a little over a minute in the movie. In real life, it took about two years.

Five men were arrested early Saturday while trying to install eavesdropping equipment. It's known as the Watergate incident. What was it like to experience those two years in real time? What were people thinking and feeling as the break-in at Democratic Party headquarters went from a weird little caper to a constitutional crisis that brought down the president? The downfall of Richard Nixon was stranger, wilder, and more exciting than you can imagine. Over the course of eight episodes, this show is going to capture what it was like to live through the greatest political scandal of the 20th century.

With today's headlines once again full of corruption, collusion, and dirty tricks, it's time for another look at the gate that started it all. Subscribe to Slow Burn now, wherever you get your podcasts.