Bill on Securing America with Frank Gaffney 3/28/22



Transcript 3/28/22

Frank Gaffney (00:09):

We’re back and we’re joined by one of our regulars, I’m pleased to say, Bill Walton. He is a former master of the universe on Wall Street, the President of Allied Capital. He is also, these days, the host of a terrific podcast, televised podcast. It’s called The Bill Walton Show and he’s been gracious enough to do home and home with me from time to time, and it’s good to have him back on our program. Bill, thanks so much for joining us again.

Bill Walton (00:36):

Great to see you Frank.

Frank Gaffney (00:37):

I want to get into this issue of food insecurity, Bill. We’re seeing growing signs that the conflict in Ukraine and the repercussions of it, both for Ukraine and for Russia, as a result of the economic warfare that the Western world has now been retaliating with against Russia for this invasion, is having ripple effects through the markets. Notably for wheat, but also for fertilizers. It turns out we are very heavily dependent upon places like Russia, and for that matter, China, even Belarus for various kinds of fertilizer. What are the implications of all of this, as you see it for, well, us, but also an awful lot of other places on the planet?

Bill Walton (01:32):

Well, once again, we’re seeing the results of the lesson we learn over and over again about how the political class does not understand the economic world and how interrelated all our economic relationships are from country to country, industry to industry, and what’s happening in this specific case is they’ve discovered to their shock that Ukraine, which I think everybody already knew, was the bread basket of the world, in terms of wheat production. But also that Russia is one of the world’s largest suppliers of the key nutrients that go into food production and specifically potash, and the other one is phosphate. The other thing is that a lot of the nitrate that we see in our food, as part of the supplements to make it grow better, is made from natural gas, also supplied by Russia, and we’re all seeing all these supply chain shortages in these critical ingredients and a lot of others.

Frank Gaffney (02:37):

The fact is that we have been encouraged to believe by global capitalists, some of whom you used to run around with, that this kind of dependency is actually a good thing. That globalization, as it’s been called, the engagement with these various countries, the integration, going for the cheapest supplier without regard for the possible risks associated with dependencies. We’re now calling them supply chain dependencies, but dependencies of any kind is a good idea, and it certainly seems to be coming a cropper across the board, and not just with respect to food or the stuff that goes into making it, but flat screens and steel and rare earth minerals. You and I have done a program on your show recently with the great Rosemary Gibson about even medicines, we’re critically dependent upon from other suppliers, including China. Talk about the advisability in light of present circumstances particularly, of this kind of, just in time, supply dependency arrangement.

Bill Walton (03:54):

Well, you and I both remember Tom Friedman’s incredibly naive book, The Earth is Flat, or The World is Flat, I don’t remember the exact phrase earth.

Frank Gaffney (04:03):

Earth I think, yeah.

Bill Walton (04:03):

The notion was, was that we’ll have this globalist international world order and we can function economically as if there were no borders or if there were no differences among cultures and that everybody would just be singing this happy kumbaya globalist song. Well, what we’re finding out now is that was always an illusion and it’s really an illusion and we’ve had big major multinationals, think in terms of managing their supply chain, the phrase was, “Just in time,” which was that you wanted to keep your inventories quite low and manage your investment and inventory by not having much available, knowing you could get it from some other country when you needed it.

Bill Walton (04:47):

Well, now we know that’s not true, and people are beginning to see, “Gee, that’s the wrong phrase. We need to think of terms of supply chain and supplies as, ‘Just in case.'” And in this instance, the just in case is, “Well, just in case we have Ukraine invaded by Russia, what’s that going to do to all of our relationships?” And the other thing, this has such a global effect. I mean, Japan now is watching what’s happening with the United States in action, in terms of supporting Ukraine, I’m not saying we should, but Japan’s looking at this and saying, “Gee, it looks to us like United States is not going to protect us if China or North Korea or even Russia gets frisky in the Japanese sea.” So they’re beginning to behave differently. They’re thinking about their supply chain differently, and this is all going to have a major effect on global economic growth and food security.

Frank Gaffney (05:45):

I think among other things they’re rethinking their position of depending on us for a nuclear umbrella, instead of having one of their own.

Bill Walton (05:52):


Frank Gaffney (05:53):

Bill, even Larry Fink, who we routinely, I think, critique here, has now come forward and said, “Globalization is dead.” He blames it on this war thing, but it seems to me, it’s for a whole host of reasons, including just the sheer inadvisability of it. Yet we’re hearing from the Larry Finks of the world and the Klaus Schwabs of Davos, The World Economic Forum and the like, that, “Oh, no, no. Now what we need is a great reset,” that we’ll take their word for how the world ought to be structured going forward. Your thoughts on taking any further advice from these characters Bill.

Bill Walton (06:38):

Well, thankfully I didn’t take much advice from them before and most of us shouldn’t, either then or now or in the future. You know Frank, the effect of the globalist and the elites on what’s happening to ordinary people is just stunning. I mean, take a look at the embargo or the shut down on sales of materials and supplies to Russia. Well, who does that fall hardest on? It doesn’t fall hardest on the big multinational companies. It falls on the smaller, medium sized smaller companies that are maybe supplying sub components to the Russian technology industry and there are a lot of them. All these interrelationships, which Klaus Schwab seems blindly unaware of, are now coming to the fore and they’re hurting a lot of people and they’re hurting a lot of the… Our reaction and the embargoes that we put in place because of Ukraine are a lot like the lockdowns we experienced during the pandemic. It’s the vast middle class that’s getting hurt.

Frank Gaffney (07:40):

Yes, and unfortunately it’s likely to be a lot more people, especially if the world starts getting reordered along the lines, which it seems the Davos crowd is all about, of the Chinese model and their ideas of how those kinds of dependencies basically, entirely on China, will sort out for the rest of the world. Bill speaking of China, one of the things that we’ve been endlessly told we have to cultivate, despite our differences with China, notably the fact that they’re waging an unrestricted war against us, is that climate change is of such surpassing importance that we have to work with the Chinese. John Carey, of course, is one of the principle advocates for this idea.

Frank Gaffney (08:34):

Seemingly to my way of thinking, every bit as a dubious a proposition as the great reset. But at the same time that is being rooted, we’re hearing that the securities and exchange commission here in the United States is now going to use its regulatory power, essentially to cram down the throats of American corporations, the sort of climate change radicals agenda. What’s going on there? And as you lived and breathed that Wall Street stuff, what are the implications would you say for that business sector of our country?

Bill Walton (09:14):

Once again, with the slenderest of majorities, the SEC, three commissioners led by Gary Gensler as the chairman, who I believe is from Goldman Sachs, have proposed a ruling on climate change disclosures for all public companies, regardless of what industry you’re in, to calculate the impact your operations on global climate warming or change. It’s not even warming anymore. The costs of this are enormous. Just the compliance costs` will be $10 to $15 billion.

Bill Walton (09:47):

But the real consequence of this is every company is going to be concerned about disclosing in its footnotes what it’s doing pro or con climate change, and it leaves them open to every activist hedge fund and climate change person out there that wants to wreak havoc. If you’re sitting in the seat of most CEOs that are saying to themselves, “Well, gee, I don’t want to get into all that, maybe we just ought to cut back on our investment in things that are related to fossil fuels.” So they’re getting at this, not directly through some regulation from the EPA or whatever, but through the SEC, and as I remember it, the SEC was supposed to protect individual investors, instead, in mass, it’s harming individual investors and it’s only going to get worse.

Frank Gaffney (10:36):

Well, just to keep up our pace with Larry Fink, we have to recognize that he is one of those who is driving this train on the business side, using the power, the enormous wealth of his company BlackRock to force this through.

Bill Walton (10:54):

But remember, he makes his money skimming fees. He’s got 10 trillion under management-

Frank Gaffney (10:58):

I understand.

Bill Walton (10:58):

… but his wealth is not dependent on necessarily the compound rate of return on that 10 trillion. It’s the fees he can collect from managing the money yeah, and as long as he can keep people feeding him money with the fashionable ESG strategies, he’s going to keep doing it.

Frank Gaffney (11:12):

Yeah. Well, and fees from China, not least the environment social justice and governance crowd, don’t seem to be particularly focused on the Chinese absolute indifference to this whole program. Bill such a bracing set of topics, and so little time to cover them, but you’ve done handsomely. We appreciate the chance to visit with you each week and we look forward to doing so again next week. In the meantime, I know you’ll keep up the great work with your Bill Walton Show. Talk to you soon.

Bill Walton (11:38):

More good news next week.

Frank Gaffney (11:40):

More where this came from that’s right.

Frank Gaffney (11:42):

Next up, speaking of good news, we’re going to talk with Ken Timmerman, one of our country’s leading experts on Iran and what the implications are of our paying the Iranians to get the bomb.