Good afternoon everyone im robert doar and im very glad to welcome you all to super power in peril. A conversation with David Mccormick this event is part of a ise edward and Helen Hintz Book Forum series where we bring in the authors of new and books and we are very grateful to ed and helen for their generous for this mission which makes talks like these possible. Now David Mccormick is the author along with James Cunningham of super power in peril, a battle plan to renew america, which was recently published by Center Street press. David is the former ceo of bridgewater associates, the Worlds Largest hedge fund. He served in the George W Bush administration as the of treasury for international and under secretary of commerce for industry and security. A graduate of west point. He served in the United States army and saw combat during the gulf war and he also was a candidate for, the United States senate, in last years senate race in pennsylvania. Im very proud to welcome david here to air to discuss his book and proposals to restore security, opportunity and purpose to america. First, david, i will discuss the book and then well have plenty of time for audience questions and our online viewers may submit their questions to daniel dot bring at air dot org or on twitter with the Hashtag Hashtag superpower in peril. David, thank you for being with us. We really appreciate your being here. And i wanted to start out. Theres a lot in the book about your point. You a west point cadet and you graduated west point and you served in the army. And theres a lot in about the army. And i wanted you to give us a sense of of why you wanted to talk to that so much. And also the state of the United States army today. First of all, robert, thanks so much for having me. Its an honor to be here. And thank you all for for coming. Get the was inspired by a belief that the country was headed in the wrong direction long before i decided to run for the senate. And and to your question, meaning our super power really is in peril. And and certainly my in the military in my time at west point shaped that because i grew up in rural pennsylvania in a town called bloomsburg. Played sports. I wasnt the best student, but sports got me into west point. And my family had had anybody in, you know, in my immediate family that gone to the military. And when i got accepted my whole towns like a big deal. Nobody gone to one of the academies for a decade. So so the idea of going which way wasnt that excited about sort of became a fait accompli. And when i went there, it opened my eyes to the world. And in many ways, west point is all thats great about america in the sense that it the whole thing is designed around, duty, honor, country, and it it it highlights the responsibility that we all have to keep america the exceptional nation that it is. The other great thing about west and particularly the army is its this melting pot. So i describe in the book when i left west point, i went to the 82nd airborne division, and my first assignment was as a platoon leader. And, you know, youre this 22 year old kid. Youre responsible for all these soldiers. And there was a, you know, a white kid from rural alabama. And there is a black kid from inner city newark. And theres a platoon sergeant whos from puerto rico, whos 35. Hes seemed ancient to me at the time, 35. And he was the guy designing to keep the new lieutenant from making a mistake and getting in trouble. And in all my time in the military, i never remember having a political conversation i couldnt identify who was a republican, who was democrat. We were we were brought together by a common purpose to serve nation, to protect one another, and to be part of something bigger than ourselves. And thats sentiment that im hoping to capture in the book, which, you know, americas exceptional, yet america is in decline, and decline is not inevitable as a as a famous aei. Charles krauthammer said, but its not its neither is renewal or new is not inevitable either. It depends on what we do and this is the what we we should do book. I want to come back to the american decline versus america on the rise in a minute but i want to stay on on military affairs. You served in the first gulf war. You write in the book that the 911 wars you found in your campaign for senate in pennsylvania in you you saw and youve experienced and you watched a kind of disconnect sent with the use of american overseas and and i wondered what what your feeling is about that and especially now that failure in the 911 wars is being used as an excuse to do too much in ukraine. How do you see that discussion . Well, i think the you know, when when 911 happened, i remember it like it was yesterday. And in the time followed, i was someone who was a very advocate of of taking the fight to the terrorist initially in afghanistan and even in iraq when i thought that weapons of mass destruction were imminent as a as i think the Intelligence Services said and i think the president thought at the time and i wrote a piece at the time, which which i could dig up, which was lets roll against saddam hussein. So i was an advocate. Mm hmm. And and you fast forward it and you see 20 years later, there was an enormous expenditure of lives, resource this focus. And i think its it should teach us humility about the possibilities Mission Creep and not having a steady north star on where were headed and and the responsibility to make sure that our our precious people and our precious treasure is is carefully expended. So i think the wrong lesson from this would be that we shouldnt be confident in using leadership and American Force to protect u. S. Interests abroad. That would be the wrong lesson, but the right lesson is one of humility and care, because the precious use of military men and women and resources comes at a cost. It comes at a cost in confidence in the people. And so, you know, when im going to these small towns in pennsylvania those are the folks that pay disproportionately. When we go to war its not mostly people in this part of the country. Its not mostly people in wealthy neighborhoods is people in these rural communities. Thats where the military draws mostly from. And theyre they paid the. And so we need to recognize is that as we move forward strongly in support of american interests abroad but with with humility and care. So would say to that because you describe beautifully the interactions mothers of of soldiers who lost their lives in iraq. Would you would you say to them if they were here youre right, if have some regrets about what happened . Obviously youre heartbroken. But but dont let that prevent you supporting americas support for ukraine, for instance. Yeah. So in the case of. Yes, short answer. But in the case of ukraine, i think its its a its a really important case study. Its one that we situation. Its one that we we should debate. But i think its you. Ukraine is of great interest to the United States because if putins aggression is left unchecked, that will ultimately not reinforce his aggressive in europe, which would be inherently destabilizing americas interest. I think it says a very a very dangerous signal to china. So im not one who believes that if we take focus off of russia and put it on china, that that will enable us to better combat. And i think its the opposite. I think a loss by ukraine and china will be a win with russia rather be a win for not only russia but china. So i think i think that u. S. Leadership is very important. Ukraine. However, i also think that those who counsel that we should be careful to let american troops get pulled in. Those who who worry about our resources being used in corrupt manners only need to look at Bagram Air Force base to know that if were not careful, our investments so our invest, we need to have accountability and prudence. But but that shouldnt stand, in the way of strength and clarity of purpose and mission. So one of the thing is very clear in the book and and in the way that you conducted your was that you understood the tensions and were faced with the tensions that are happening in the Republican Party on americas role in the world industrial policy, free market sort of principles and entitlements. So lets tip lets go to the next one, which is sort of the use of of government policy to to affect the economy. Where do you where did you come out after your experience in the campaign and youre doing the research for this book on, you know, sort of trumpian industrial policy versus Milton Friedmans free market . Well, if you know the thing i had to reconcile when i was writing the book and also in the campaign is ive been a a strong. So what did that mean to me . That meant that our country was conceived with idea that individual liberty and freedom is the defining principle and that government is in support of that purpose, that a small government is better than a big government, that markets and and free market principles should be the underlying drivers of our economy, that americas in the World Americans is exceptional. Its role in the world is is one that requires leadership in support of that exceptionalism. So thats the framework which i come from. But then i go to rural pennsylvania and it was only because of that, but because of the evidence and that those principles working for everybody. In other, you know, the notion of free and and and what that meant for globalization and what that meant for those communities or the idea that we should have hands off technology because the market markets will drive innovation that will, in essence, put the United States the top of the heap. From a technology perspective. Thats not a reality. Thats not a reality. If you go to those small towns, the last 20 years have not been good for them. Theyve been bad for them. While everybody had assets, got a lot richer. Dont have to be smarter. You just had a basket. So you got a lot richer. The people that did have assets stayed the same and got relatively poorer. Real incomes stayed flat for for 20 years. The open and fed now has destroyed those communities. So. So theyre upset. Theyre globalization gutted. Many of those communities they dont think. And china looms large in their minds. So they dont think been working so well for them. So thats one fact that you have to reconcile. Wait a second. Weve had that or that or orthodoxy. It hasnt worked. The second one is that china is winning in the fight for technology. So there was a wall street article a couple of weeks ago. Many of you may have seen it. 37 of 44 technologies identified by this australian think tank. China is in the lead. If you go to our own assessment in our own Intel Community or even public documents in 2017 by the us trade representative, ten of the 20 key technologies for economic wellbeing but also for National Security. China is in the lead, so china is winning in this fight for technology. And if you believe were at a moment where the confluence of economics, technology and National Security are together, then weve got to get working because were going to lose a very point of leadership. Those were the facts they had to reconcile and ultimately, i try to deal with that in the book with how we should deal with china, a holistic strategy should strategically decouple in a number of Key Industries and bring those industries home. I advocate and think President Trump was right on the notion of reciprocity as a general principle, particularly as it relates to china. I believe we have to have a much more thoughtful policy on technology leadership. I try to say in the book that we cant have a chinese tech, techno, authoritarian model and we cant have traditional policy as the Progressive Left would present. I think we need a policy which is essentially using government incentives to draw private sector into those technological areas where we have to win or americas role in the world be will be, will be challenged. So you point to of them, but i go through this argument for the kind of technology we should have. And then i say, what would Milton Friedman say . Because that milton, im sure, would would not be in favor of what im recommending. But then i turn the argument around. I said, well, what would Milton Friedman say to what im saying . Because the fact of the matter is we have had a laissez faire to some these key technologies. And the reality in semiconductors should scare all of us because 90 of the most important tech microchips in the world are manufactured 90 miles from mainland china. China has built 32 fabs in the next decade. Weve we are building one now based on the chips act. So we have lost in a great book, which i know youve highlighted the chip the chips book. We have lost the war on microchips, which is a foundational for our economy and our National Security. Were going to lose continue to lose unless. We rethink how we should pursue technological leadership. So another area where, the sort of changing political situation has influenced people in a i, for instance, and others is trade and where do you come down on tariffs and protectionism . Not china generally a much more leaning towards a free trade orientation . I do think the principle of reciprocity, i mean the evolution of is i think is a good lesson in the sense that the principle that if we just open our markets and ultimately its going to be in the best interest of the other side open their markets and and through time principle and example will be beneficial to everybody that that fell on its head in a case with china. So ive lost my intellectual purity on that and i think that china the china case should worry a bit. At the same time, im that would embrace the power of markets the power of opening market to others the power of negotiated and free trade agreements that give us market access. So i think that free trade should be a critical part of driving our economy but i think it shouldnt be done with such purity that we lose sight. The fact that weve gotten a raw deal, particularly in the case of china. So you you had this youve had this amazing career both in the private and in the public sector. And now youve run for senate in pennsylvania. One aspect of your career that you write and is interesting is your experience with ray dalio and and, and you make a reference his your disagreement with about his attitude toward. I happened to have read his his Powerpoint Presentation which he says is a book on china and i just wanted to know, could you just give us the deal on that . What the heck what the heck is why . Theres two pieces of that bridgewater was a big part of my life. I spent 12 years at bridgewater and theres a couple of parts of the book that that i really of that time that i really had. But one was that i came and for the first year and a half, i was sort of my way around bridgewater and then i became the coceo and then about a year and a half later, ray me from that job, very poor signs of some tension and very publicly. And that was you know, thats on the front page of the wall street journal. This was not a pleasant moment. And i had young kids and we had just moved them from from washington and and so i said, im going to stick with it for another year or two, too. So i get my personal situation, then ill figure out whats next. And i stayed and it started to stick and things started to go well. And i became again, i dont know, four years later or something of that. And then was ceo for the last six years before, i jumped into the, into the senate. So bridgewaters, a very unique place. I wouldnt have traded that experience for the world. And its a global macro investment firm. And so deep understanding of the world is a really important part of it. And and we serve we served, you know, the biggest investors in the world. And they want access markets around the world. So they wanted to diversify their portfolios, including in china. And so had an investment strategy. Ultimately, i think while i was there, like 2 of our assets were in china. But we had 160 billion, 2 to 2 is not an insignificant amount was in china and and the tension was, you know, 30 of most of your homes have china based products in them. So the intent, you know, the integration of the economies is a reality for everybody most investment firms in china. So and i didnt have a dispute on that. I was the ceo. So whatever we did, im responsible for. But our dispute or i disagree it was about the direction of china. Yeah and this diverge its which which i had really calling out since 2005 when i was in the government i had written articles on it. I had described the technology, thievery and all that, but it became much more acute in 2014 with the rise of president. And so i started writing articles as in 2017, 1818, saying, this is a growing concern and we have to take a new approach in america to to making sure we maintain our leadership. And that was the basis for the book and had a a much more benign view of the risk with china and and some things in an interview and so we had a disagreement on that, which ultimately we talked about in a Company Meeting with a thousand people, which course then came into the media. So thats a that was the dispute. Okay but but the point i, i want to be clearer. His benign view of china is troubling to you. Yeah, we disagreed on that. I think poses an existential risk in economic terms and National Security terms. I think its a risk that has to be dealt with with a comprehensive whole of nation strategy. I think we cant do piecemeal things. I think we have to think about this in a in a in a sophisticated way, given the its the largest, the second largest economy in the world, given the risk associated with it. And thats what i try to lay out in the book, is a whole of nation strategy dealing with it. One of the things i find interesting about the book is, is your attitude toward and what you write about the United States you call the superpower in peril. And yet theres a tr