217. The Secret Pentagon Leak That Terrifies Trump

Happy 6 month anniversary, Donald, your 4 week war has just reached the 6 month mark. Make no mistake, we are in a forever war. Behind closed doors though, military leaders are warning Hegseth it can't go on like this, so how does it end? We're going to dig into it. Meanwhile, Trump's Lake Ontario feud is escalating the Canadian trade war even further and swing states are getting caught in the middle, could this upend the midterms? This episode is brought to you by Etoro. A tariff, a spending plan, a regulatory change, it can all start just as the first line of a speech, but it sets in motion things that can reach far beyond Washington and unfold for years to come. That's right, Caddy. Mark has moved on expectations, not just events, investors are constantly weighing. What a decision could mean for companies sectors and the wider economy. So Etoro is an investing platform where you can access a wide range of markets and explore how political and economic developments could affect them. You could also learn from the global community of investors and see how people around the world are interpreting the same news. As with all investing, your capital is at risk, see etoro.com/trippus for full terms. Welcome to the rest of politics US, I'm Caddy K. In Washington. And I'm Anthony Scaremucci back in Manhattan, the beautiful island of Manhattan. Doesn't it feel like back to school, Anthony? What happened to summer? It went too fast. Do you get a little melancholy at the store that you do, yeah, me too? I do. I do. I gotta pull myself out of that, Caddy. Let's start with Iran and Trump and this extraordinary story that broke in the Washington Post on Sunday that I have now spoken to a couple of military experts about. So what happened was the Washington Post ran a story saying that a recent classified assessment that would sent Secretary of Defense Hegseth, which is known as S-Dob, Secretary of Defense Orders book. I don't know. I guess Anthony should be S-Wob now at the Secretary of War, if Orders book, but anyway, this report commissioned by Hegseth gets sent to his office and in it, you've got almost the entirety of the senior generals in the U.S. military saying to Hegseth, "Guys, this cannot go on like this. We have been now six months in this war in Iran. We are massively overstretched and the problem is that we're on this constant state of alert in the Middle East because the war is so messy and that is really diminishing America's ability to protect itself in the way that it needs to in Asia in the case of some kind of conflict in Asia and in Europe as well. So there was a lot of dissent and those dissents, Anthony in the military are known as non-conquers. Now this report was then leaked to the Washington Post and here's what's interesting about this story. These S-Dob's are fairly common. This is what the Secretary of Defense commissions to know what people are feeling about an issue. The non-conquers I'm told are fairly common. It's not unusual for generals to say, "Hold on a second. I don't like that plan of action because that's going to hurt my Navy or I don't like that plan of action. That's going to hurt the Air Force or I don't like that plan of action. That's going to hurt my readiness in Europe." That's not that unusual. What is exceptional about this story is that somebody in Hegseth's office, because this has a very limited distribution list, somebody felt that they needed to ring the alarm bells and alert the American public to the fact that the generals are anxious. That was my reading of what happened and having spoken to a couple of people who were close to the Pentagon. That's how they read it too, that there is dissent, people are pissed off with Hegseth. They don't think he knows what he's doing. They think that he's making their life harder. They're worried about troops getting hurt because of the incompetence at the top. What are you reading into it? What are you reading into this Washington Post story? Well, Cady, what is the Dunning Crueger effect? Do you remember that? That's when you, the less you know, the more confident you are. Okay, exactly. So the Dunning Crueger effect is you actually think you're a genius at something, but you're not actually. You have no substance and you have no capability, but you're wildly overconfident. So it's not necessarily about being dumb, it's just about being overmatched by what's going on. The generals are trying to tell you that about Hegseth. Imagine that a guy whose resume was that he got kicked out of a three and a half million dollar military non-for-profit, and he was on a four person team of fox and friends. That's his resume for running the Department of Defense. I'm never going to call it to the Department of War, which is not going to happen. Any more that I'm going to call Lake Ontario, Lake America. So very avid, and so this is what they're trying to tell you, but you've got three things that I'm very worried about. I want to read you these because I made some notes last night. I love it. I love the three things. We're back to the three things. I've kind of missed them, but okay, go. Okay, but we're back to them because we got maybe disguised nuts. We got to talk about our nuts, nuts, these people are, but number one, you got 50,000 troops on alert for months. Okay, so you're tying up capital, okay, and you're putting people and families in a constant status stress. Number two, the lying is so out of control, right? You're lying about the Abraham Lincoln. You're lying about the decimation that took place to the Iranians, which obviously did not happen. Oh, you mean we haven't won that war? I thought we'd won it multiple times over. You're also lying about the damage that the Iranians did to our supply depots, our bases. You under reported the number of casualties you finally had to release those. And so you've put the military in a morale crisis, and then, and then this is to me the most important point, Kenny, it's going to go on. This is a forever war. This is not a 11 day comms job and then a firing. I mean, Trump said it was going to last a week, your six months into it. Your economic D day, you can't even do because you're going to sanction China and Russia. Trump's definitely not going to put any more sanctions on Russia. We know that. So, so this is a convoluted mess, and I'm going to maintain that excess going to get fired. Okay. And Trump is going to put somebody in place other than hexeth. And people say, well, who would he put in place that would kiss his ass like this? That's the issue. I think, well, I think it's beyond ask kissing. I think if somebody like a DeSantis or somebody's going to end up as the secretary of defense, because I think the Congress is going to go to him and say, hey, buddy, this is an unmitigated disaster. You have a talk show host as the head of the Department of Defense. And by the way, he's purged all of our human capital out of the building. So those are my points, and I'm disgusted by the guy. He doesn't have a great resume, apart from the fact that Donald Trump literally thought he looked good on television. And he defended Donald Trump, which we can repeat that pattern time and again throughout the cabinet. I mean, this is not me saying that. This is Donald Trump saying that that he looked at essential casting. Okay. I'm going to add two more points, because I think all of your points are right, but there's a couple more that I think are important to me. One is the purging of the military and the generals, hexeth has fired over 20 generals and admirals since he has been secretary of defense. And the reason is because they descended with his view, particularly over Iran. So the voices that you might have had in the Pentagon to push back at the table against the Iran strategy, they're not there. They're gone. They're not even at the table anymore. They're not even in the Pentagon anymore. They are outmoving their gardens and pruning their roses and probably appearing on television. So they're not in the building anymore to give those opposing views. And I was going to ask you, you know, is this what happens when you have a building like this where objecting causes you to be fired? Do you believe that leaking is your only alternative? Because that's what this looks like. Oh, that's exactly right. You got to send out the leaks. It's almost like smoke signals that you need help. You got to get the calories. It's an SOS signal. It's an SOS signal. But I want to make the economic point to everybody because I have to understand this. You cannot squeeze Iran without squeezing China, okay? It's this largest trading partner. If you squeeze China, you're squeezing China's beaks and then you're screwing up dollar clearing transactions around the world, which means that you're hurting yourself, Kathy, at a time where people are worried about a $40 trillion debt in America so much so that the Secretary of Treasury is intervening and trying to buy bonds. So you got to think about the imbecility of this. We have a $40 trillion debt. He took out a water pistol for a raging forest fire, $4 billion bond purchase. He's trying to tell you that we have a massive debt crisis and we're going to have a massive interest rate explosion if we're not careful. We've ran up prices with tariffs. We've ran up prices with the war. We've ran up prices with energy. But now we're going to have an economic D-Day but the howitzer that we're going to use is going to blow our feet off. So we can't do it, okay? So I just need to everybody understand the economy. is linked to all of this stuff and their box into a corner and so they have no way out and so this is a forever war and I think Hagset will lose his job because of this one of our founding members as we said Hagset the Rubio was going to lose their job they haven't lost a job yet that's true Trump has been reluctant to fire askissers got that wrong but I think it's going to be a crucible issue for him after the midterms. I think there's another point that puts Hagset in the crossfires of Trump at the moment. I mean I think you're right on the China front of this and I don't see Bessent or the White House or Warshall the top economic team wanting to really put China in the crosshairs of their own economic war against Iran. I don't see that pressure building they've put some sanctions against China's T-pop refineries the smaller privately owned plants but that would be a lot to really take on China on this one and what a fantastic own goal that would be as well but the other thing that I think is putting pressure on Hagset is the munitions question and one of the reasons you have these the head of the Pacific Command who I have been told by somebody who has spoken to him really hate Hagset and the head of the Europe Command and the head of the Navy coming together and saying this is not viable anymore is because of the munitions drawdown and that is on Hagset's watch as well and it's not all munitions America has supplies of some munitions short-range missions what it doesn't have is enough supplies of long-range missions and the problem Anthony when you don't have long-range missions is that were there to be a conflict over Taiwan for example or some kind of conflict involving US soldiers in Europe when you don't have the long-range missiles to fight that war guess what your troops have to get closer to the action and that's what these generals are concerned about is that you could up and end up in a situation where we don't have the supplies we need so US forces are being put in danger because they end up closer to a battlefield and closer to being shot at than they actually need to be if this had been managed properly and thought through and we hadn't been using all of those long-range missiles to take down the Iranian drones and that's the problem I think we're seeing in real time right just watch Ukraine when you don't have the weapons you need to defend yourself and you don't have the long-range missiles to take out Russian launchers you get the kinds of catastrophic attacks on civilians that we saw over the course of the weekend on Ukraine and I you don't think America's adversaries are watching all of this you don't think they're reading the Washington Post story yeah and also remember we've moved we've deployed troops in different directions we've made it more of a regional focus as opposed to the global focus at the US footprint as always had that also creates less deterrence around the world for our adversaries so that's another big issue there was a great article this morning in the Walls Regional it was written by Bill Schneider and David I think it's depth to up and it's about the munitions shortfall and they got a lot of things right in this article and I want to just recant a little bit of it they're just basically saying that if we don't have a strong relationship with our NATO allies where we all work in concert with each other to build these munitions we are going to be crushed by that we'll put this in our free newsletter the link to it but but caddy what they left out and I do admire both of these guys but they're part of that military industrial complex that triangle between the lobbyists the Pentagon and the defense contractors so they left this part out of it but I'm going to put it in is that there's too much cronyism going on with the military there's crony capitalism going on and so we have aging projects in the military that are obsolete now because of what what's going on in the Ukraine war in terms of where modern warfare is but it's in a senator's state or it's in a congressman's district and so no no we want to keep funding that okay but that doesn't make us any safer oh no but there are jobs on my district that we have to fund and oh by the way the defense contractor just gave me a check for my reelection so make sure the Pentagon's money goes into that area they're leaving that part of it out but we have we have a systemic crisis that has been exposed by this war it's not just the imbecility of Trump and headset there's a 60-year circuit that eyes and how are wondrous about called the military industrial complex that needs massive reform and if you call it out then they come after you and they say nasty things about you and your family and they do anything they can to demolish you because it's trillions of dollars yeah slushing through that mechanism and that's always been the impossibility of trying to cut the defense budget at a time when you want to reduce the deficit that's the one thing that's untouchable because so many people have a vested interest in it okay you say that headset is going to go and that somebody else will be brought in but in the end and these are President Trump's policies the reason that we are in this war is because Trump was persuaded or persuaded himself always more hawkish on it rather than his advisors thought and he thought he could do it and he can't find a way out i think the sec def the secretary of defense is the organizing factor of Trump but he's not the strategist who is making the plans this is a super super top heavy administration in the end it is Trump's decision so what difference would changing the sec def make to this particular operation right now there's only one difference and that is i ain't blame in myself gattike never my fault okay watch me i'm the scarecrow in the wizard of ours i got a point a finger of blame to somebody Epstein we're gonna give that the pambondi failed Iran situation we're gonna give that the petexeth and so that's Donald Trump the day Donald Trump gets to a microphone and says hey guys i've made some mistakes here i just wanted like i'm gonna list for you the mistakes that i've made we will know that an alien has inhabited you know yeah there's an alternative universe to just take in place it's like it's like dark matter on apple okay all i've said you know an alternative universe you can change the sec def but it doesn't change the situation on the ground which is that the Iranians have a lot more control over who ends this war than the americans would like them to have because it shouldn't have been started i have to blame somebody i have to blame somebody and that's what i'm gonna do okay we're gonna take a break and come back and talk about oh canada my god you thought it wrong was tricky now canada's the tricky subject of conversation welcome back to the rest is politics us i think we're gonna rename the show and neon call it the rest is politics canada was that what we're doing yeah i feel like our friends to the north deserve a little bit of love you don't want to call it the rest is ontario or the rest is ontario can you believe this okay should we quickly fill people in in case you haven't noticed there used to be a lake the great lakes they're nice i visited super pretty it's called lake ontario one of them is called lake ontario as of this weekend according to google which is being cowed by dawn or trump lake ontario has suddenly become lake america because trump posted a video himself tearing down an avatar of that sign and erecting a replacement saying lake america the caes super unhappy about this actually what's been interesting for the reaction from canada amidst all of the tension between canada and um the united states has been sort of amount of ridicule and i don't know it's very hard to attack people when they're just laughing at you but if you look at the reactions it's an eye roll at president trump this is not the kind of fear that there is around tariffs which is a legitimate fear because it's very hard for the canadian economy to take this on but the lake ontario stuff and the video did you see the video antony of trump posted a video on his true social page of a whole load of geese canadian geese or something all ducks walking around lake ontario holding weapons i mean i had his hairstyle right that is orange hair i mean it's just you know i think it is worth calling some of these videos out sometimes because this is a president of the united states posting a video of an army of ducks with what look like ak 47s and donald trump's orange hairdo walking around lake ontario that is where we're at guys but what do you think of the canadian reaction because i think we spoke a lot about mart carney last week this week it is worth talking about canada again but i would like to drill down a little bit more on the economics of this fight and what canada is doing to future proof itself against the united states because they are taking it's very hard for them to do it is a long term project but what canada is doing is being watched by all of america's allies at the moment who are saying we don't buy the idea that in twenty twenty eight even if we get a democratic president america is ever going to be our friend in the way that it has been i think there has been permanent damage i spoke to a twenty eight twenty eight democratic candidate ron manual this morning and i asked him that question he said there's no reset button we are on a very different path listen systemic foundational damage will take a very long time to repair but i think carney has this right in so many different ways and i just want you to think about it this way it is a war it's a trade war and so when your people are at war and they have an adversary attacking them and you say okay we're going to take the Gneck Analysis. hit, but I'm now going to respond and retaliate. People are willing to take the economic loss category. People are looking around and say, "Okay, we're going to lose jobs up here in Canada. It's going to cost us on a per capita household, but we're not going to lay back. We don't want a reaction or a leader that falls into the fold. We have a sovereign territory year and a nation that we're committed to." So, to me, the Americans, I think, are going to be the ones that capitulate first because they don't like it. Roughly 70% of the Americans do not understand why we're fighting with Canada. Okay, you have a $840 hit per household, okay, just from the tariffs alone. You've got 12% of the exports that go from Ohio into Canada that are being tariffed. Okay, you're going to crush these plants, steel, aluminum, auto parts, farm goods. It's going to impact Illinois. It's going to impact Pennsylvania. It's going to impact Minnesota and Minneapolis, but that's a blue state, so maybe Trump doesn't care about that, but he's got a lot of swing states like Wisconsin, etc., that are in the crossfire of this war, and he doesn't have the people on his side. Carney has got the people on his side, Caddy, as you would be, when you were getting bombs dropped on you in London, it was causing economic damage and hardship, but the people were rallied behind the government. Okay, now that's more of a violent war, but this guy that's declaring the war on Canada is one of the most hated figures of the last 50 years, and he will go down as the most hated American president in my opinion in our history. So that's where I am on all this. The naming of the lake and all that other stuff we can talk about, George Washington and the signing of those treaties that named and codified the lake that were passed by the Senate. So this executive order probably isn't even legal, pursuant to the way American law works, but this is more of an economic issue. By the way, that is also very, the renaming of the lake is almost as unpopular on the American side of the lake as it is up in Canada itself. There was a poll just done over the weekend by CNY, which did a poll on the New York state side of the lake, and it ran 86 to 14 against renaming lake Ontario. So you've even lost the Americans on this one. They think it's absurd too. So here's my question for you. Canada is getting the message as our European allies that it has to future proof itself against the United States. And it is trying to do that. It has, Kani has made a pledge to double its amount of non-US exports over the next decade. It is talking to the Germans and doing deals with the Germans about building submarines. It is doing deals with the Swedes about building fighter jets. It has joined the European Union's safe scheme. It's the first non-EU country to do so. So Kani recognizes that the long-term economic prospects of a close relationship between Canada and America are not the same as they've been. As he said, this is a different path. We can't look back. And I think a lot of countries after Joe Biden was elected in 2020, they took their foot off the pedal. They thought, okay, America's coming back. I spoke to Rahm Emanuel, the Democratic hopeful for 20-28 about this, and said, you know, that ship has sailed. America's not coming back in the way that we knew it for the last 70 years. But it's not easy, right? And I wanted to ask you about that. All of the things that Canada is doing, it's got to shore up its military. It has to diversify its exports away from the United States. But these are super long-term propositions. It took them 12 years to build a pipeline to service an Asian market for its oil experts. How realistic is it for the Canadians to get themselves into a position where they no longer depend on the US in the way that they have done either for its military, which I think Donald Trump is right that the Canadians should have done more sooner to protect themselves and defend themselves militarily and also economically. Yeah, I mean, listen, that's the thing about Trump. There are elements of what he says sometimes that do make sense, you know, raising defense expenditure relative to GDP and NATO, etc. But the way he's going about this is an unmitigated disaster for the US because, you know, 38 million people are wildly turned off by the US now completely and totally unnecessary. But I just want to explain to people, Canada's sending or was sending $450 billion a year of trade to the US. Okay, that's about three quarters of everything that it exports. So we're fighting over this $20 billion worth of trade. But for Canada, that's a chest wound, Cathy. For the Americans, it's a flesh wound. So Karni has to do what he's talking about over the next 10 years. He's got to at least double non-US trade, possibly triple it. Can he do it? Do you think, Anthony? Can he do it? I think he can do it. But here's the thing that I like about Karni. He's not making speeches about it. He's hopping on the plane and he's doing it. He's stopped negotiating with the Americans. He's also putting his tariffs on on September the 8th. Trump was trying to get the auto tariffs and all that stuff done after the midterms, right? Same thing he's trying to do with the big, beautiful spending bill. But Karni said, "No, no, I'm not having that." Yes, this is a chest wound for me. And yes, it's going to hurt my people. But we need to send the Americans a message. And this is going to have an impact on the midterm elections in those swing stages. It's a very negative thing that Trump is doing. You mentioned the military, and I know this is crazy, but if you're Mark Karni, you're going to your minister of defense and you're war-gaming a potential war with the United States. You and I have been told by senior Canadian officials that that is happening. Right. So the bad news is that doesn't come out well for the Canadians. But the good news does that come out well for the United States? You imagine public opinion in the United States of Hegseth and Trump said, "We're going to militarily rush to Canadian border." And by the way, they have the ability to do that because the Iranian thing, we've won the Iranian War 17 times, Cadi, but it's not a war. Because if it's a war, then the Congress would have to vote on it. It's one of the craziest things about the U.S. Constitution. I'm an American, and I love the Constitution, but man, I had no idea how many holes there were in the Constitution. Roy Stewart said something to me. Well, I know you like the Constitution, but aren't you worried about the Constitution? Yeah. How could you not be worried about the Constitution where you've got maniacs like this that can do this type of stuff? And literally, economically and psychically harm the American people and the Canadian people for absolutely no reason. And that deal, Rahm Emanuel said it to you this morning, that deal was on the two-inch line. So for some rogue maniac like Howard Ludnick to come in and bust that deal and now be in this ditch that we're in, is an absurdity. I'm going to play devil's advocate a bit because we're assuming they go back to the table and they do a deal. And the reason they go back to the table and do a deal, because Mark Carney is not an idiot. Yes, at the moment, he is the darling of the West, but he also can't afford to be in a position where his country takes such a severe hit, where it goes off an economic cliff, right? Where you get inflation spiking potentially 100,000 people losing their jobs. That would be, at the moment, he has bipartisan political support. There is no threat from the conservative party, electorally, because they are not going to stand up to him at the moment. But how much longer can he sustain this if this doesn't get resolved in a deal? Because he is doing something that is very difficult. I mean, make no mistake, it is not easy to stand up to the American trading block. And there is potential harm to Canada in standing up to the American trading block. So do you think this is a stand that he can maintain for what, six months a year, two years? Can he stand up to Donald Trump like this for the next two years? Well, first of all, I think he can because of the culture in Canada. So I definitely think he can, but he's not going to have to because Trump is going to blink here. Okay, that's my prediction. I'm going to hold to it. What if he doesn't is what I'm saying. What if he doesn't blink? He has to. He was in the last mile of negotiation. He's got the Republican National Committee beating him over the head in neck. Tom Amher up in Minnesota. He's got the speaker beating on him. He's got Thune beating on him. He has to get this deal done. People who are running for Congress are now deleting from their websites any reference or photographs of themselves with Trump. That is a situation it's got to. But he is capable of acting in a way that doesn't help Republicans. That is not always his priority. I understand that. But just remember last week, he delayed the fracas for 72 hours because he thought, okay, we're right there. These guys underestimated Karni. They thought Karni was going to cave to the nonsense that Howard Lutnik wanted him to cave to, which of course he couldn't cave to. That would have ruined his premiership. It would have ruined his prime leadership and killed his career. Okay, so I think that this deal gets done inside of the next month. I think by the time we get to October 1st, we're going to have a deal. And I think the deal was close enough anyway. So there's no. No downside risk to Carney in taking the stand. - Let me push back to you. I'm completely wrong about it. It's one year later, the Canadians have lost 90,000 jobs. - Yeah, and that's the estimate. - Right, that's the nonpartisan estimate. Where is Mark Carney's political standing? One year later, inflation is up and unemployment is up, and he's in a quagmire trade war with the United States. Where's Carney's popularity, Katty? - I think it slightly depends on how much that would spill out into other areas, and that's why I mentioned the military. Yes, he is trying to do these deals, but these subs aren't going to be online until 2034. Canada is almost still entirely dependent on NORAD for its early warning systems, its continental early warning system. So its security is tied into America. And just as the Europeans are finding it's very difficult for them to extricate themselves, and it takes a long time, and I'm not saying this is going to happen, but it's not a conversation in Canada. We're America to pull, for example, it's support Canadian, support Canadians over NORAD, and say to those Canadian engineers who are in the room, looking at the same radar, sorry you can't be in the room anymore, were it to take punitive action security-wise for Canada? I think there are potential risks for Carney here. I'm just not underplaying how difficult this is for him. - Okay, I think there's a deal there. Everybody that I've talked to and Washington said that there's-- - I assume there's a deal too. - There's a deal there waiting for both of those people to sign. It blew up over some very insignificant things, like labeling and packaging and some other stuff. - Now it really has to look like a win for Carney though. That's he has to be able to sell it as a win. - It's not to me, you know, I'm upset because wreck the alliances with Europe, bus start treaties everywhere, have a fight with our longest standing ally that has the longest non-militarized border in the world. Let's do that. I mean, as you're helping your guy Vlad by doing all this, I get it, but how is that helping the people of the United States? What was the benefit to the Americans? And you know, if you notice consistently and conspicuously absent is a guy named Marco Rubio. Have you heard Marco Rubio once talk about the trade war with Canada, once talk about the nonsense with Europe? Have you? Other than the speech he gave at the Munich Security Conference, where Trump said if you do that again, I'm gonna fire you. Well, other than that, what does Marco Rubio said, Katty? - Yeah, nothing. - He's staying out of it because he-- - He wants to stay out of this one 'cause it's a no-winner. - He knows it's the stupidest of the stupidest things. - And by the way, it's not like there is a massive constituents in the mega base of people who hate Canada. I mean, I'm not hearing those voices from a mega world saying the people we really hate in the world are the Canadians? That just doesn't happen. So I'm not sure this moves a single vote from the non-Republican column into the Republican column over the midterm elections, but I'm pretty sure it moves votes out of the Republican column and into the Democratic column. Okay, guys, we are gonna leave it there. Thank you very much for joining us. And we have a treat for you this week from members only episode. We are gonna have a conversation with the authors of the biography of Roy Cohen, which is gonna be super interesting. Remember we did that series for our members on becoming Trump and how essential Roy Cohen, the lawyer was in Trump's formative years. So it's gonna be a really interesting conversation. - And Kai Bird wrote the book about Oppenheimer. If you read this book, it's another movie. This guy was a crazy person. What an eccentric cat this guy was. - There's some pretty weird shit going on in Roy Cohen's life. Some weird stuff, but there you go. That's Trump's mentor. Where's my Roy Cohen? So that'll be fine, interesting, listen. - Thanks so much for listening. - Thank you guys. (upbeat music)