Ezra Klein

I think we treat in the American political conversation recently, we treat financial dominance as a fake form of power. A financialized economy is a soft, decadent economy, not like the Chinese economy. It really builds things. But historically, if you control the money, you control the world. And there's real power in having all the financial arteries connect back to your pumping system.

I think we treat in the American political conversation recently, we treat financial dominance as a fake form of power. A financialized economy is a soft, decadent economy, not like the Chinese economy. It really builds things. But historically, if you control the money, you control the world. And there's real power in having all the financial arteries connect back to your pumping system.

So the dollar is something of a service we are selling to the rest of the world. And if you're selling the rest of the world a service, a good, you've got to keep your customers happy. Now, we've kept them happy. We tend to think about this in terms of controlling inflation here and being reliable. But one thing going back before Donald Trump...

So the dollar is something of a service we are selling to the rest of the world. And if you're selling the rest of the world a service, a good, you've got to keep your customers happy. Now, we've kept them happy. We tend to think about this in terms of controlling inflation here and being reliable. But one thing going back before Donald Trump...

to the way we've been using sanctions and other forms of financial power, is increasingly we've used it as non-economic leverage, as leverage to get people to do other things that we want them to do, to sanction people we don't like, to give us information that maybe they don't want to give us.

to the way we've been using sanctions and other forms of financial power, is increasingly we've used it as non-economic leverage, as leverage to get people to do other things that we want them to do, to sanction people we don't like, to give us information that maybe they don't want to give us.

And something that's there in your book is the way that people were getting tired of this even before Donald Trump. So could you talk a bit about that piece? Like, where were we on the eve of the Trump administration? And how are people feeling about the way we had changed the leverage that our financial system gives us?

And something that's there in your book is the way that people were getting tired of this even before Donald Trump. So could you talk a bit about that piece? Like, where were we on the eve of the Trump administration? And how are people feeling about the way we had changed the leverage that our financial system gives us?

I think this brings us in maybe the Trump era. So you have these pressures building up. You have the U.S. weaponizing its financial system in more and more explicit and aggressive ways. You have growing U.S. debt when interest rates are pretty low. That felt like not as big of a deal. But then post-pandemic inflation, interest rates are a lot higher.

I think this brings us in maybe the Trump era. So you have these pressures building up. You have the U.S. weaponizing its financial system in more and more explicit and aggressive ways. You have growing U.S. debt when interest rates are pretty low. That felt like not as big of a deal. But then post-pandemic inflation, interest rates are a lot higher.

So all of a sudden, the amount we're going to be paying on our debt is quite a bit up. Then you have Trump and the MAGA movement return to office in 2025. What has happened since then? If you were writing your book now... If it had a story, a chapter, on the last three-ish months, what would that chapter say?

So all of a sudden, the amount we're going to be paying on our debt is quite a bit up. Then you have Trump and the MAGA movement return to office in 2025. What has happened since then? If you were writing your book now... If it had a story, a chapter, on the last three-ish months, what would that chapter say?

I want to hold there for a second as a person who appears to be trying to make the Trump administration's arguments on this podcast. He didn't think we were in great shape. This is their whole argument. That we're in terrible shape. He thought the dollar was in good shape. He thought the dollar was in good shape. But he thinks that dollar dominance is bad for us.

I want to hold there for a second as a person who appears to be trying to make the Trump administration's arguments on this podcast. He didn't think we were in great shape. This is their whole argument. That we're in terrible shape. He thought the dollar was in good shape. He thought the dollar was in good shape. But he thinks that dollar dominance is bad for us.

On some level, they want to make, I find what they say about this. I understand why you say that steel manning their arguments is sort of impossible because on the one hand, they say the dollar should be weaker and it should also be the completely unquestioned reserve currency.

On some level, they want to make, I find what they say about this. I understand why you say that steel manning their arguments is sort of impossible because on the one hand, they say the dollar should be weaker and it should also be the completely unquestioned reserve currency.

They want it weaker. and stronger at the same time.

They want it weaker. and stronger at the same time.

Well, if they do that, it's a default, which they haven't done most of these things yet. What they have done, as best I can tell, or as best I read it, is say this— Their theory of the case is the U.S. financial system and the U.S. global military system are functionally global public goods that we provide at cost to the rest of the world. And you guys are all free riders.

Well, if they do that, it's a default, which they haven't done most of these things yet. What they have done, as best I can tell, or as best I read it, is say this— Their theory of the case is the U.S. financial system and the U.S. global military system are functionally global public goods that we provide at cost to the rest of the world. And you guys are all free riders.