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A Politically Game-Changing Year for Better or Worse
This week we rolled out GZERO’s Top 10 Political Game Changers of the Year, which you can check out here.
Just hours ago, we named Donald Trump our No. 1 political game changer of the year. Elon Musk, whose net worth just topped a record-breaking $400 billion, is No. 2.
Let’s do a quick detour on that just to get some sense of proportionality: How much is $400 billion? It’s bigger than the nominal GDP of Musk’s birth country, South Africa, as well as countries like Belgium, Portugal, New Zealand, and Qatar (net worth and nominal GDP, of course, are not directly comparable measures but are used here to illustrated the scale of Musk’s wealth).In fact, his net worth is higher than the nominal GDP of all but about 40 countries in the world, but that’s not even why we chose him as a top game changer of the year. Musk’s crucial help in electing Trump, the influence of his social media platform, X, in the culture and political wars around the world, and his breathtaking innovations in space, electric cars, tech, and AI were all factors.
But something both Trump and Musk said this week about foreign aid merits inclusion in our game-changer discussions.
As the Assad regime dramatically fell this week, President-elect Trump declared, “THIS IS NOT OUR FIGHT.” An aversion to foreign intervention and an America-first isolationism is not a surprising stance from Trump, and it’s one many Americans support. But Musk, who Trump tapped to lead the so-called Department of Government Efficiency, or DOGE, went even further: He expressed support for former Rep. Ron Paul’s desire to eliminate all US foreign aid. “Here’s an easy one for @DOGE !” Paul posted on X. “ELIMINATE foreign aid!”
Musk posted a reply: “Ron is not wrong.”
Musk’s partner in DOGE, Vivek Ramaswamy, picked up the baton, saying: “It’s an oxymoron that represents a waste of taxpayer dollars, but the real problem runs deeper: Americans deserve transparency on opaque foreign aid.”
There is a big difference between transparency in foreign aid and the elimination of it.
Transparency on all government spending is a net good, especially when it comes to foreign aid, so no issue there. But would eliminating foreign aid really save US taxpayers a material amount of money and make the world a safer place?
Again, some proportionality is in order.
The US budget in 2024 was about $6.75 trillion — roughly $1.8 trillion more than it collected in revenue, which is why there is such a structural deficit problem. But how much does foreign aid contribute to that? Only about $70 billion. That is less than 1% of the budget.
Some more perspective. After World War II, the US spent about 3% on the Marshall Plan to help rebuild Europe, which led to the longest era of peace and prosperity in world history.
That’s important because Musk and Ramaswamy are playing off the perception that foreign aid is a major drain on the US taxpayer. The truth is, if you run the newly minted DOGE and are looking for savings, foreign aid amounts to the old pennies you find between your couch cushions.
Where does US foreign aid money go?
According to a Brookings report, the US spends about 25% on humanitarian aid, like helping countries during earthquakes and disasters, and 65% on development aid, like food, education, and medical programs to stop the spread of disease. The smallest part is spent on security and helping governments in allied countries stay stable. It is one of the United States’ most fundamental expressions of soft power, and in a global world where viruses, climate change, and migration issues are all serious cross-border threats, this is a low-cost insurance policy.
Foreign aid is distributed mainly to US government agencies and nonprofit organizations. About 20% goes to multilateral organizations like, say, the UN. Some does go to foreign governments like Ukraine, and there is waste and some corruption, but overall, it is highly regulated, especially when dealing with a country with high levels of corruption.
“Accountability of U.S. economic assistance is high — the U.S. imposes stringent, some would say onerous, reporting and accounting requirements on recipients of U.S. assistance, and the General Accounting Office and agency inspector generals investigate possible misuse,” according to the Brookings Institution.
What harm could cutting it cause?
Eliminating foreign aid will produce negligible economic savings for the US economy but consequential negative results on US public safety.
Power abhors a vacuum, and if the US does not support governments or areas that are in crisis — like Syria — someone else will, like Russia, China, or Islamic State.
Closing your eyes to the global neighborhood won’t make global troubles go away. It simply limits Washington’s ability to prevent them from growing into genuine threats that will have to be dealt with one way or another. And worse, it cedes global influence to bad actors that will, eventually, also threaten US and Western stability.
A dramatic turn to US isolationism in a world of crisis would be a troubling, game-changing trend that would only make the US more vulnerable.
Elon Musk is the richest man in history and he’s in charge of government efficiency. He may cut many parts of government, but foreign aid is not the place to be penny-wise and policy-foolish.
Israelis demonstrate during "Day of Resistance" as Israeli Prime Minister Benjamin Netanyahu's nationalist coalition government presses on with its contentious judicial overhaul, in Tel Aviv, Israel.
What We’re Watching: Chaos in Israel, Franco-British thaw, Trump's deepening legal woes, Biden’s budget battle
Israel’s unraveling
The situation in Israel continued to unravel on Thursday when protesters against the government’s planned judicial overhaul took to the streets in a national “day of resistance.” In a bid to create a balagan (state of chaos), Israelis blocked the Ayalon Highway, a main artery leading to Tel Aviv’s international airport, to try to disrupt PM Benjamin “Bibi” Netanyahu’s planned trip to Rome (he got out)! Indeed, footage shows police using heavy-handed tactics to break up the crowds, but that didn’t appear tough enough for far-right National Security Minister Itamar Ben Gvir, who proceeded to fire the Tel Aviv district commander, decrying police for “not fulfilling my orders.” Israel's attorney general has since ordered the freezing of the police chief's ouster, citing legal concerns. Meanwhile, in a very rare emotional speech, President Isaac Herzog – who holds a mostly ceremonial position and remains above the fray of day-to-day politics – urged the government to ditch the judicial reforms. Crucially, things took a turn for the worse Thursday night when a Palestinian gunman opened fire on gatherers in central Tel Aviv, wounding at least three people. With deepening twin crises at home – a constitutional catastrophe and deteriorating security situation – Bibi is going to have a harder time than ever keeping his discordant far-right coalition intact.
Are French-UK relations back on track?
After years of tension, UK-France relations appear to be on the mend! British PM Rishi Sunak travelled to France on Friday to meet with President Emmanuel Macron for the first summit between the countries in … five years. “It’s the beginning of a beautiful, renewed friendship,” a French diplomat said, which was presumably a dig at former PM Boris Johnson, who butted heads with Macron. What's on the agenda? Maintaining a united front against Russia, post-Brexit fishing rights in the English Channel (see this explainer on the great roe row here) and climate change mitigation. Crucially, they are also focusing on how to tackle an influx of migrants arriving by boat through the English Channel. After Sunak this week unveiled fresh legislation that would ban migrants who enter illegally from applying for asylum, a move broadly condemned as a violation of international law, London confirmed Friday that it will offer Paris a lot of cash to help patrol French beaches, which is where most small boats headed for the UK come from. While this meeting is mostly about showing the world that relations are warm and fuzzy, the timing is still a bit awkward: On Monday, Sunak will appear in San Diego along with President Joe Biden and Australian PM Anthony Albanese to unveil the next stage of the AUKUS agreement, the trilateral security pact that incensed the French who were pushed to the side.
Trump may soon face criminal charges
Is an indictment looming? Manhattan prosecutors offered former President Donald Trump the opportunity to testify before a grand jury that’s looking into his business dealings, including alleged payment of hush money to adult film star Stormy Daniels. The offer to testify – most potential defendants decline – usually signals that an indictment is about to drop. Trump is expected to steer clear of the grand jury, but his lawyers will be fighting in his corner and meeting with the District Attorney’s office in a bid to dodge criminal charges. If they fail, Trump may become the first former US president to face indictment – and the NY-based case could be just the start. District Attorney prosecutors in Georgia are also investigating and expected to bring charges against Trump for alleged interference in the 2020 election, while federal prosecutors are investigating his bid to undermine the election outcome. Whatever happens, No. 45 says he will stay in the 2024 presidential race, and experts say there’s nothing legally barring him from running, even if he’s convicted.
Biden’s budget blast
The US president on Thursday unveiled a $6.8 trillion budget proposal that would beef up the military, protect and expand social programs, and slash the deficit by $3 trillion over the next decade. How? By raising a slew of taxes on wealthier Americans (those who make more than $400 grand a year) and slapping a 25% tax on the wealth of billionaires. The budget as it currently stands has no chance of passing the GOP-controlled House — Speaker Kevin McCarthy immediately slammed the budget as “unserious” — but Biden knows that. The proposal is an opening salvo in what will be a bruising battle with Republicans, who say they want a balanced budget in order to raise the debt ceiling but have yet to produce a viable plan of their own. As Biden eyes 2024, that fiscal fight — in which he’ll highlight his progressive spending priorities — will be one of the cornerstones of his campaign.
Texas grid shows need to fix infrastructure in US; RIP Rush Limbaugh
Ian Bremmer discusses the World In (more than) 60 Seconds:
What's happening in Texas?
Speaking of weird weather, my goodness yeah, I didn't know this was coming up here. Yeah, it's cold, right? There's snow. It looks horrible and millions of people without energy and of course that is because the level of infrastructure investment into the Texas grid is well below what it needs to be. There's a lack of integration. Texas' grid largely stands by itself. It is not under the authority of or coordinated multilaterally with broader energy infrastructure. And there has been a lot of investment into renewables in Texas. It is certainly true. They've been very interested in that. Sped up under former Governor Perry but still the vast majority of electricity is coming from fossil fuels. It's coming from coal and mostly oil and gas.
And so, all of these people that recently have said it's because of renewables, and you can't rely on renewables and that's why you've got all of these shutdowns in Texas. No, it's because you haven't invested properly in infrastructure resilience. First of all, there's a lot more gas shut down then there is wind shutdown, and you've got temperatures like this in Northern Europe all the time and worse and they don't have this kind of wind shut down because they invest properly in their infrastructure. So, you know, you go to LaGuardia, and we're finally fixing it in New York, but for quite a while a lot of people including Joe Biden said it was like going to a developing country, they said third world country when you look at LaGuardia. Well, when you look at a lot of infrastructure in the US it feels that way and one of the reasons why I strongly support a trillion dollar plus spend after the $1.9 trillion for relief on infrastructure because that's a good investment that will actually return more than the dollars you put in over the long-term. And that's the way you should think about the deficit of whether or not you're getting a better return on your investment. Just like you do for corporations, you do for sovereigns.
The World Trade Organization, WTO, has a new leader. Who is she and what challenges lie ahead?
She is Ngozi Okonjo-Iweala. And I mean, she's a fixture. I've known her, I've seen her at events for well over a decade. She was the minister of finance for Nigeria. She was the number two at the World Bank. And I mean whether you're talking about Davos or IMF annual meetings, any big multilaterals, her presence there as a technocrat, as a plain smoking, really smart pro-globalization force, is kind of legion. It would be really surprising if she hadn't gotten a major, additional position at some point in her career. WTO was an obvious place for her. Not going to be easy, first of all because big decisions have to be taken unanimously and you've got 160, 170 members of WTO so it's hard to do. Secondly, the WTO needs reform, it needs to be focused much more on digital exchange and trade. It needs to be modernized the way trade agreements, multilateral and bilateral do and that's going to be very hard to do. And of course, the Chinese government, the second most powerful economy in the world routinely abrogates the outcomes that are forced upon it by World Trade Organization judges. So do the Americans not least of which in terms of the US-China trade conflict itself. So, it's not an easy role but I do think that she's going to be seen as very active in it, kind of like Christine Lagarde at the ECB when she got that appointment. I mean, this was completely uncontroversial that she would get this position.
Okay, what's happening between Iran and the US over sanctions?
Not very much. The United States certainly wants to rejoin the old Iranian nuclear deal, but they understand there's a lot of domestic pushback unless it is made tougher or at least broader in terms of how long it lasts as well as involving things like ballistic missile development where the Iranians are in abrogation of the UN security council resolutions. The Iranians are saying, "We'll come back to the JCPO as it was but nothing more." These are hard people to negotiate with. It's a hard government to negotiate with, the bureaucrats there. It took years on the final points under Obama and Kerry and that was when the secretary of state was personally involved. There is no cabinet member in the Biden administration that is personally anywhere close to as invested in getting this Iranian deal done if it's hard as Kerry was five years ago. And so, as a consequence, I think there'll be forward momentum, but I think it's going to be much slower than people expect. Now, there is a point that once you start engaging in negotiations a whole bunch of third countries that were concerned about doing anything that might be seen as gray area in terms of busting sanctions like buying Iranian crude and other sorts of goods will suddenly, you'll see more leakage. And so, the Iranians just by virtue of moving back towards the United States and people getting confident about JCPOA, they won't have another million barrels a day on the market, but you'll start to see slippage, leakage in that and that means that energy prices will start going down a bit.
And Rush Limbaugh at 70 no longer, passed away today. What do I think?
I think that Rush Limbaugh is like a precursor to Mark Zuckerberg. He's someone that became an iconic figure by giving people what they wanted, not what they admitted they wanted but what they actually wanted, figuring out what that was and maximizing his reach and his influence as a consequence of that. Talk radio really became the force that it was in the United States because of Rush and his connection with his audience, his understanding of how the medium worked, his ability to raise extraordinary amounts of advertising revenue that had never been done in radio in a news format before that. All things that he became a unique figure and of course an entire field developed around him. And after talk radio we get cable news; we get Lou Dobbs on CNN even talking about a presidential run at some point. And then of course you get social media and now you have Mark Zuckerberg. And I think that you can draw a line directly between those two men. And I think they both caused a lot of damage internationally and certainly in terms of civil society in the United States but also on this day of Rush's passing to recognize just how well he understood the opportunity that was in front of him and how much he was able to maximize it, kind of a force for capitalism in a country that is most interested in unleashing animal spirits. And there you have it, RIP Rush Limbaugh.