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.