Squawk Pod: California’s billionaire tax & global hot spots – 10/28/26 | Audio Only

Bring in show music, please. >> Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, >> it's an autumn of elections. No results yet in Israel. US former ambassador to NATO Kurt Vulkar says this could go on a while. >> This can go on for many months. So don't expect any changes here in the short term. >> There are hot spots all over the globe. The Houthis in Yemen, the war in Ukraine, and the protests in Europe are changes brewing. >> So far, I think you would argue that this unrest is favoring the far right, not the far left, even though the left is trying to capitalize on it. >> In California, a wealth tax is on the midterm ballot. And in hot debate, economist Gabriel Zukman thinks folks will vote in favor of Proposition 40. There's overwhelming demand and popular support for taxing billionaires. >> But the Hoover Institutions Joshua Row takes the other side passionately. >> When founders leave California, when the startup ecosystem is threatened, they take their jobs with him. >> Plus, a Fed meeting is underway. Open AAI's Sam Alman is warning of tech cyber security risks. And General Motors is revving up a new engine. >> I see you in one of these, Joe. >> No, you don't. A hybrid minivan. It is Wednesday, October 28th. Squawk Pod begins right now. >> Stand back by in three, two, one. Cure, please. >> Good morning everybody. Welcome to Squawkbox right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernin and Andrew Ross Sorcin. And here we go. >> We got a big day ahead for markets and investors. We're counting down to the Fed's latest interest rate decisions coming at 2 p.m. today. It's followed by a news conference with Fed Chairman Kevin Worsh. Wall Street expecting the central bank to stand pat on rates. Uh on then on the earnings front after the close, the hypers scalers. This is going to be the biggie. We're going to hear from Alphabet and Microsoft. Investors going to be listening for any new commentary as you might imagine around AI spending by the tech giants. We'll also hear from Ford, FedEx, and Chipotle. So we're going to have a lot of numbers to chew on. and Sam Alman now warning about AI related cyber dangers and this is a new one uh but also the power of AI systems to find vulnerabilities. The OpenAI ICO speaking at Oracle's AI world event. If I could recommend like only one thing to a company right now to do with AI um in the very short term it even more than like become super productive with codecs, it would be to really understand the security threat landscape from um from AI and and and mitigate against that. I find myself shocked at just how many vulnerabilities these AI systems are finding and what it's going to take just the incred the herculan effort that it's going to take to get ahead of this. >> Alman said that he thinks the AI era calls for new approaches to fixing holes in cyber defenses, adding it may be too difficult to fix bugs one by one across the entire supply chain. And I think his comments sort of changed the dynamic a little bit. But I don't know how much you guys focused on what he was saying, not just there but u in a in a conversation he had at Stanford University. The whole idea that we keep hearing, you know, over the next 6 months everybody could just patch everything and then all of a sudden we'll be in this new utopia of security or at least we won't be in this sort of uh whack-a-ole situation. >> He's not the only one who said that. >> And I think that this sort of shift is like we're going to be in this fight now forever. And part of that fight is defensive, part of that's going to be offensive, right? Sort of offense will be defense. And that this is a whole sort of new like truly new era. I mean, I I don't think you I think he was always saying it was new era, but the idea that, you know, we've heard from others uh who said, you know, get us the next six months, nine months, we'll be so much safer on the other side. >> Yeah. But that was before everybody else got Mythos and everything else the >> No, but no, this was during the myth when once mythos arrived, everyone said do it for six months. before they released it to the broader public, you know, they they were controlling Mythos with who had it. But once you give everybody the same weapons, so to speak, same tools, um I think you're right. >> I'm I it just is a shift, I think, from some of the guys in the valley and some of even the the folks on Wall Street who sort of who had made that suggestion several times. >> Our biggest fear, isn't it? I mean, are we ever going to be truly out of the woods? Especially the the more recursive it gets. I mean, it seems like you're always going to be >> I mean, I you think about, you know, the ever since the nuclear the discovery, you know, Oppenheimer >> can't put it back in the box. >> We're still we're still still looking at that. I mean, one of the things Trump's trying to do now is is make this trilateral meeting about disarmament, not just about Ukraine. We're still dealing. I don't see how we ever completely put this to bed. And every time you figure every time defense gets ahead then offense is going to find something else that to get around the defense and then the defense will try and find I don't see how you know >> cat and mouse for just with higher >> stakes and unfortunately hum humanity is the mouse right. >> Right. All right. In the meantime reports say open AI is planning to buy AI chips made by Google to help accelerate its AI buildout. That would be in addition to significant business OpenAI does with Nvidia for its top-of-the-line chips. Google's devices are known as TPUs or tensor processing units. One engineer who helped develop those chips went on to help OpenAI create its own in-house jalapeno processors. Hot and spicy. >> No clear winner in Israel's first national election uh since the October 23 2023 attack by Hamas. It's uh likely that definitive results won't be known until at least tomorrow. There's there's no clear winner, but looks like there wasn't actually a loser uh in terms of Netanyahu >> changed totally from the exit poll, >> but he can hang his hat on on some type of uh I don't know, we can talk to Dan Sor a little bit later, but with about half of the ballots counted, current Prime Minister Benjamin Netanyahu's block is projected to win 55 seats in Israel's parliament. a block controlled by Netanya who's a main challenger Gotti Eisenote looked like it would win 50 seats and those numbers fall short of either side gaining a majority in the 120 seat Israeli parliament would put more attention on seats won by Arab parties neither candidate claimed victory but Netanyahu called for forming a right-wing government and Eisenhot said voters had rejected the longtime prime minister a deadlock would leave Netanyahu uh in charge for now and >> there a lot circulating around this deal for now. the before and the after is what he's dealing with now that I don't know apparently there were some signals that now in hindsight looked like maybe >> his government should have seen before October 7th >> and then there's of course all the >> but the crazy thing is because of the way the Knesset works and how you have to form a block government here that this is this could be a long time before they figure this out or there could even be another vote that gets called which would probably not be great for Eisenhot because there were a lot of expats that flew in. Probably tens of thousands of expats that flew in to vote for him. It's unlikely he would get those votes again the second time around. Um but both parties have said they weren't going to work with the Arab major minority on any of these. You don't know how this works out from here, but the exit polls were definitely wrong. They had Eisenot having um a leg up over Netanyahu. So, we'll see. There's there's still going to be a couple of days or at least a day probably before we hear the final count. Well, the Rays, Tampa Bay Rays, uh, avoided a sweep in the World Series, but it took extra innings to do it. The Brewers uh, went ahead at the top uh, in the top of the 12th with a solo home run by shortstop Cooper Pratt. But then the Rays hit a walk-off hit, bases loaded from a pitch hitter Ben Williamson uh, for the 4 to3 win. Game five tonight at 8:00 p.m. Eastern. If you go to bed and you look at your phone, something happens. It's not a good idea >> because then you're up. >> Something with the waves, the blue. So, I was going to bed. I've I was going to do the rays and the under and nothing else. No other part just because I I just figured out and it was seven and a half was the under. >> I'm going to get you some blue light glasses, which I use by the way and my family makes fun of me because occasionally they think I look like Elton John. They are they are yellow or red depending on the lenses >> for this reason you have those >> so that I could cuz I I'm working till the last second before I go to bed. I'll even if I wake up in the middle of the night and I like I'm going to scroll for two seconds or whatever. >> You put them on in the middle of the night. They're readers. >> Doesn't putting on glasses wake you up more than the >> I thought the melatonin helped you with the >> I I've got a lot of sleep aids. I got melatonin going. I wear the glasses occasionally. I've got all sorts of strategies. >> They're all right next to you on the bedside table. >> You know, you know the best sleep aid. >> What? >> It's early in the morning. >> Cheese will be next. >> Coming up on SquawkPod, a big issue on the ballots for California voters. A referendum on the so-called billionaire tax that would collect 5% from some of the wealthiest Golden Sters. We'll be right back. You're listening to SquawkPod from CNBC. I'm producer Katie Kramer. The California dream, palm trees, beaches, ultra wealth in mega mansions. Is that all under threat? California is weighing a proposed 5% tax on billionaires. Proposition 40 will be on the ballot on Tuesday, November 3rd, for a straight yes or no vote. Some economists are questioning whether this unprecedented wealth tax is a necessary step for economic equity or a recipe for mass capital flight. Will the billionaires take their toys and go? Google founder Sergey Brin has given $100 million to political groups opposing the measure. So, we turned to one of the architects of the Prop 40 plan, Paris School of Economics professor Gabriel Zuckman. He is a UC Berkeley summer research professor and one-time adviser to Elizabeth Warren's presidential campaign in 2020. His book is called simply we need to tax billionaires. On the other side of the coin, Stanford University finance professor and Hoover Institution senior fellow Josh Ralph. He says this measure will drive the richest right out of the state. Our Andrew Ross Sorcin takes things from here. >> Good morning to both of you. U before we get into the debate itself, uh I'm curious where you think the actual polls uh are and what you think is actually going to happen here. Gabriel. think it has a good chance to pass. I think there's overwhelming demand and popular support for taxing billionaires. Now, of course, the billionaires have spent more than $300 million to fight Proposition 40, the California billionaire tax. So, this might have some effect on the vote. But what we see everywhere in California, in the US, and globally is that this is hugely popular. Well, it's it's it's surprising it wouldn't be popular, though. Have you been surprised, Joshua, that in some cases, depending on how you look at the polls, it hasn't been more popular? >> Well, prediction markets say it's only got about a 25 or 30% chance of passing it. And that's what I think is going to happen. I think people are listening to the the reason that's coming out that that shows that this tax is going to be not a revenue collector for California because of the net losses from the future streams of income taxes that will not be paid by all the billionaires who are left and the fact that it's going to be bad for the economy when founders leave California when the startup ecosystem is threatened. They take their jobs with them and I think voters understand that. I think Prop 40 is going to fail. >> Gabriel, what do you make of that though? You've been a big proponent of this of this tax. Uh you just saw by the way someone like a Mark Zuckerberg, he's going to stay in California. You could say that's good for him. Uh but at some level you're also seeing that the company is going to pay for him to stay in California. No, the company is not paying for him to stay. He would pay the wealth tax. He would pay more than 10 billion. He's committed to staying for at least eight more years in California, but he would keep his 60% voting rights in in meta. but he would pay the tax. And I think he's a good illustration that this supposed exodus that we're hearing all the time doesn't make sense. It's not happening in reality and would not happen. >> Gabriel, I guess what I'm asking is a different question. are when you saw what Meta is prepared to do as it relates to keeping his voting control of the company, which by the way, we had a a governance expert on earlier this morning who effectively suggested that this is perverting the entire system. Do you say to yourself that's a good outcome? I think you know the fact that uh people like Zuckerberg or other tech billionaires can control the firms they own while owning a relatively small economic stake in the firm. They have 10% of the company but more than 50% of the of the voting rights. I think that's not a great system but that has nothing to do with the California billionaire tax. What just this deal between Meta and Zuckerberg shows is that if they want to allow him to keep control of the business, they can find ways pay the tax, he will stay in California and nothing will change for matter. >> I I got to get to Joshua, but what do you make of Larry Page? What do you make of Peter Teal? We can go down the list. Well, there are a couple of billionaires and you've mentioned the two prominent ones that have said that they would move out of California or pretended they've already moved. You know, it's very hard to become a non-resident for tax purposes. You have to change schools for your children. You have to change your burial plots. You have to change everything. So the best experts of that area of the law, you know, residency for state tax law purposes believe that no billionaire was able to successfully move out of California before January 1st of 2026, meaning they would all be on the hook for the 5% wealth tax. >> Oh, please, >> Joshua. I know you're on the other side of this and I know you think it's going to be damaging to the state. My question to you is why folks like yourself have not been advocating for other measures that might raise funds that that might be more palatable uh than than the idea of taxing unrealized gains. >> I'll answer that, but f first I have to just I have to just push back on the fact that look, the people who left California in response to Gabriel's initiative which was announced in October 2025, these people have very sophisticated attorneys. They know all the boxes you have to check to establish residency outside of California. Of course, significant numbers of of billionaires left before the the end of 2025. And we we've documented that. Yeah. So, I I think that's, you know, that's that's really just not not really a a question. Um, as your question for what what other, you know, why are we advocating for other stuff? Well, look, you know, Gabriel's measure is is predicated on this claim that California is somehow facing a fiscal emergency or needs more money. Let's let's examine that claim. All right. Total funds for Medicaid for California are up more than double 123% since 2019. California spends $219 billion dollar on medical from state and federal sources. Medical is the California Medicaid. That's over $7,000 per resident of California, not not per person on on medical. Federal funds for Medicaid are up 113% since 2019. And you know, last year's reconciliation bill slows down the rate of growth of federal money flowing to medical, but that doesn't mean that there's a fiscal emergency. General fund spending in California is up 79% over the last over the last 7 years. The idea that we need more revenue is just a flawed idea. California's take a close look at its at its spending, the efficiency of its spending, not only on healthcare, but in education and many other things. >> Joshua, do you want to tell us what you'd cut then? Very specifically, >> look, I'm not in charge. what what I would I would look at efficient. How can it be that we're running a program that is that has gone up the cost of which has gone up 123% since 2019. I don't think residents of California are saying that their services are much better than they were 7 years ago. So, you know, no, it's not up to me to look at what to cut specifically. Their elected officials need to be put on pressure needs to be put on them to look into whether it is the case that they are stewarding public funds efficiently. And I think in California, the evidence is that they're not. Gabriel, I I imagine you you you disagree there. >> Yeah. I mean, look, if Proposition 40 doesn't pass, 3 million Californians are going to lose health insurance. They're going to lose Medicaid, and there's no plan B. And everybody agrees with that. Even Governor Newsome, you know, there's no plan B. 3 million people are going to lose healthcare. So, that's the choice to be made. Are people of California going to vote to ask 250 billionaires to pay just 5% of their wealth in tax? It would bring their wealth back down to where it was just a few weeks or a few months ago. Their wealth has been multiplied by three since 2023. They would just have to pay 5% in order to allow 3 million people to keep access to health insurance and to healthcare. >> Hey Joshua, the state is swimming in March. Joshua, hold on. Hold on. Did Did the big beautiful bill uh sort of make it impossible to do the California switcheroo on on the they don't use actual federal funds to cover illegal uh immigrants, but they do use state funds. They're covered by medical from from an early age all the way through. So the the way that they do it, federal funds, whether they're part whether they're actually earmarked for that or not, it's fungeable and they end up covering health care for for all for everyone uh in in California. And that's where the when the Republicans were talking about that in that uh that election or the the government shutdown, there was that argument that no federal funds were being used, but they do they cover everyone under medical. That's why it's up 100%. I mean, is is isn't that part of the the issue, Joshua? >> Well, that that's correct. I mean, the the the coverage of of of illegal immigrants cost California up to 10 billion per year. And money is fungeable. These these reductions from last year's reconciliation bill, these simply slow down the rate of growth of federal spending. The idea that that that that millions of people are going to lose lose health insurance, the state is swimming in money. If you look at the state's balance sheet, they've got $75 billion more on their balance sheet than they had in 2019. Where is this emergency need for a hundred billion dollars that's coming up that wants makes Gabriel want to seize uh the assets of people who have built companies in California? It just doesn't add up. >> It's punitive. It's punitive more than anything. and and u Gabriel, I don't know what's happening in in your native land uh right now, but does does anything happening there tell you that the more socialism that you try for, you just it it ends up causing the need for even more socialism till there's just no money left anywhere? Have I got the wrong idea about what's happening in in France? >> Yeah, I think with all due respect, Joe, I'm not sure you're fully familiar with what's happening in France. People are protesting in large part to tax billionaires, to tax the super rich because they don't pay tax in France just like in California. They live in their own parallel society tax-free and education spending has been falling in France and uh schools and universities are crumbling and so they want billionaires to pay their fair share. >> You think higher taxes in France, higher taxes in France is the So that's that's that's your answer. Even more taxation in France and and more >> billionaires on billionaires, Joe, you understand? >> Well, that's not going to be enough. That's not going to be enough. Are there any billionaires in France? There's like two, >> you know. No, no, I think No, again, I don't think you're familiar with the situation, you know. So, the 500 wealthiest people in France, they own wealth that's equivalent to 35% of the GDP of France. It's not very different uh than California where the the 250 billionaires their combined wealth is equivalent to 50% of the GDP of California. Their combined wealth is as big as the total income reported by Californian families on their individual income tax returns. 20 million families. So there's an enormous amount of wealth at the top both in California and in France. And in both cases it's just untaxed. And why should we accept that the most powerful people in the world that don't contribute to our common revenue needs? That's just very hard to understand. >> And it's not a zero sum game, Gabriel. They didn't steal it from the 20 million families that you're that you're comparing it to. They created the wealth because we have a place called Silicon Valley that that has the greatest companies in the world that we report on every single day. And that should be something that that's celebrated and cherished, not something that you punitively use to say 20 million families don't have anything. That's that's that's a specious that's sophistry. >> Creating a business shouldn't give you the right to not pay taxes >> to create all that wealth. >> No, but it's not because you create a business that you have a right to live uh outside of society, right? You've created a business. Gabriel can because you've benefit from infrastructure, from universities, from the ecosystem, from of course the work of Gabriel, let me just put pull pull it back to pay taxes like everybody else. >> I imagine you would prefer to do I don't know if you would prefer or not to do this either do this on a national basis or to do something else to raise taxes on a national basis. I think you'd agree that doing it on a statewide basis does create uh a much more complicated perverse incentives for people to leave the state over time and therefore there there there is a balance issue as to whether you actually are able to collect all of these taxes. I I'm curious whether you would, you know, how you think about things like, you know, t uh taxes at death uh and and step up basis, uh carried interest, uh capital gains taxes. I mean, to me, there's probably lots of things you could do before you actually tax uh unrealized gains that that may raise as much, if not more money on a national basis. Is that something you'd advocate for or not? or is this sort of you're doing this because this is you think your only option? >> Uh so on your first question, I think it's of course easier to do at the federal level than at the state level, but I also think that if Prop 40 passes in California, it will pave the way for for a federal tax. That's how it worked for the income tax at the beginning of the 20th century. It was first created by a number of states. Wisconsin in 1911 most famously and that's what paved the way for the federal income tax. Now second question is of course there are lots of things to fix with the income tax with the est but it would not address the fundamental issue which is that billionaires pay very little and the problem is that these billionaires they find ways to report no or very little taxable income so that no matter what the rate is on income it doesn't address the problem in some years you see Sergey Brain or Larry Page or Zuckerberg reporting no income. They pay themselves no salary. The companies don't pay dividends. They don't sell shares and so fix the income tax of course but it's not going to address the issue. >> Andrew talking about the step up. Andrew wants to get get to some of that in a different way. Joshua can I don't know. I like >> I'm actually curious from Joshua's perspective given the idea there's a broader question which I I agree or or I I I accept that that you where you stand on the California piece. Do you think there are things to do in the tax code that would raise additional taxes or are you just in a position where there should be no effort to raise additional taxes whatsoever? >> Look, you can look at some of these loopholes. I'm all for closing loopholes that would that would improve revenue collection and and and that of course should be looked at. I think the number one problem is spending and spending efficiency. But you know, of course, nothing against closing loopholes, but but things like these strategies that are that are talked about uh you know, buy, borrow, die or the the the idea that there are vast amounts of money that are being borrowed to fund consumption uh have been wildly misstated. You know, the numbers that are out there on that on that strategy, they include things like margin lending on stocks, not only for billionaires, but for just for everybody. They include loans against private businesses. those numbers are drastically overinflated and and you know there's a great study from from from Yale Law School about this about just how minor these kinds of strategies are. So I think you the putting a lens on that is just is just incorrect and and Gabriel's assertion that that billionaires aren't paying taxes. These are that assertion is based on SEC filings about what they're doing with shares in their company. I don't think Gabriel has data on the family offices and how much tax they're paying. They try to do tax efficient investing. These are large amounts of money. The assertion these people aren't paying tax is is is not correct. And perspectively also anytime they want to realize gains they're going to pay taxes. Wouldn't it have been nice if the IPO of SpaceX had happened while Elon Musk was still in in in California? I would ask Californians they want to drive away the next, you know, next generation of founders. So many investors have been have expressed major concern about this. I think the iconic case is Mark Cuban saying he's not going to invest in startup companies in California. Historically, who's the closest uh for the Elon Musk, I think, paid 11 what 11 billion a couple of years ago. What's the closest person historically anywhere near when I hear Elizabeth Warren say Elon Mus doesn't pay any taxes? Who's even close to that number lifetime? Anybody? Well, I imagine some other people on the on the list that Emanuel and uh and April want to want want to pick up in their drag net, >> but but probably a net benefit to to society and and to the tax base and everything else. >> They're paying they're paying tremendous amount they're paying tremendous amounts of taxes over their lifetime. And that's the key that's the key number. >> So, um >> we got to go guys. Gabriel and Joshua, we're going to we'll I'm sure we'll talk about this again with both of you as we get even closer and maybe even after uh whatever the result is in California. Thanks, guys. We're going to come right back after this. >> Still to come on Squawk Pod, Kurt Vulkar. He is former US ambassador to NATO and former US special representative for Ukraine negotiations. He'll explain what's next between Russia and Ukraine, plus how Israel's election will play out on the global stage. But it now may be President Trump after the US midterms that actually forces the agenda because I don't think Israel on its own is going to have uh much more success against Iran than they have already had. It's only going to be combined with the United States. >> Welcome back to Squawk Pod. Here's Joe Kernan. Oil prices uh rising this morning as Houthi attacks on Saudi Arabia's largest oil refinery spark more supply worries. Meanwhile, Finland and Norway's leaders are urging Russia's Vladimir Putin to resolve the Ukraine war uh with Russia Ukraine US talks planned for next month. Joining us now, former US ambassador to NATO, Kurt Vulkar, who served as US special representative for Ukraine negotiations in the first Trump administration. We can throw in you want to talk about the Israeli elections uh and then um the chaos in in France and and spreading the rest of Europe. Other than that, not a lot going on. Can I can I just as an aside >> as an aside, Mr. Ambassador, for the the Houthies, >> when this is over or resolve with Iran, are they still going to be around? because people are are characterizing them as like early stage ISIS or or or al-Qaeda but with very sophisticated weaponry and and um you know supplied by Iran obviously but this is going to be the the gift that that keeps on or the the boil that keeps on festering. It's not a gift but it's it's going to kill do we something has to be done eventually about >> the Houthies. No. >> Yeah. So, um, first off, good morning. And, yeah, there's a lot going on right now. Um, what happens to the Houthis in the future really depends upon how this war against Iran actually ends. Uh, we have a pause right now. President Trump has decided to keep the economic embargo in place, but ratchet down any attacks in an effort to try to keep oil prices lower before the midterm elections. After the midterms, as he said, he has a choice. Does he leave that situation in place where Iran is de facto keeping a bit of control over the Persian Gulf and will increase that control over time and the Iranian regime remains in place and they keep supporting their proxies like the Houthis, like Hamas, like Hezbollah and so forth? or do we go back at this war in an effort to change that setup and ideally the Iranian regime is overthrown in some way by their own people so that we end up with a more normal country in the Middle East and that will dry up a lot of the support that has been flowing to the Houthis up to this point. Now I would distinguish the Houthis from ISIS or al-Qaeda because they are a geographically and and an ethnically based movement in a way more than ISIS and al-Qaeda were just about the Islamist ideology. Uh here you have uh Shia who are from Yemen. They are fighting in Yemen. This this is their turf. Um they have tried to overthrow the government in Yemen. They have attacked Saudi Arabia. Saudi Arabia has fought them back. This has gone on for years and years. This is not something that just come out of the blue. But what has changed is the Houthis are now getting instructions from Iran or or mimicking Iran at least and trying to shut down the Gulf going into the Red Sea or the the straight going into the Red Sea just as the Iranians are doing on the other side in the Persian Gulf. Um that will continue as long as Iran and the Iranian regime are in place and they are providing the support to the Houthis to do this. two birds with one stone. Sounds like if they topple the Iranian regime, that brings us to the elections in uh in Israel uh yesterday and what happens because there there was at least a scuttlebutt was that that um Netanyahu was pushing for even more than what maybe the United States was planning after the midterms and that is to do enough to finally topple the regime. I don't know how much more is is needed if they're if they're teetering. Some say they're teetering. Former President Obama said they're stronger than ever, but they got all those, you know, they got all that cash from those pallets. Maybe they are. Um I don't know. But um what do you what does the the outcome as we know it at this point of the elections in Israel? What does that say about what is likely to happen after the midterm? >> Well, first off, you know, in the very short term, not much change in Israel. Netanyahu's party got fewer votes, fewer seats in parliament, but it's unclear who gets the nod to form a government. Probably Netanyahu. Unclear once he gets that nod, will he have the votes in a coalition? If not, it flips to his opponent. He gets to try. Will he have the votes? This can go on for many months. And so, don't expect any changes here in the short term. Netanyahu wanted to launch a new attack against Iran before the Israeli election. Uh that was blocked inside Israel. Court said no, not before the election. But it now may be President Trump after the US midterms that actually forces the agenda because I don't think Israel on its own is going to have uh much more success against Iran than they have already had. It's only going to be combined with the United States and what our objectives are. So far, that's not clear. and something for President Trump to decide after the midterms. >> Oh, that's uh that's something in in Europe. Mr. Ambassador, I've seen a lot of U and you would know obviously as as former ambassador to NATO. It's it's a little bit of everything. It's not all illegal immigration for over the or open immigration for the last decade obviously. Uh, and it's not all affordability and it's not all um, you know, rundown classrooms and high schools either. There's a lot of I I think left-wing organizations that that sort of uh are imported or exported from other places that that that >> is is doing what what do you what what can end this and what's the cause of it >> and is it coming here? >> You know, it's the combination of all of those things. It's not it's not one of them as you say, but it's a combination. And you know, put yourself in the position of a college student in France. Uh the facilities that you have are terrible. You know, plumbing doesn't work. It's cold. It's dirty. Um then the job market is not there. The way France works is you get a a permanent contract when you finally get a job. But that means that employers are hesitant. So you may go for a very long time after getting a university education and be effectively unemployed. You know, you're doing gig work or part-time work and that is a high unemployment rate or a high undermployment rate uh for people. That is very frustrating. You add to that the immigration issue, you add to that prices, you add to that energy issues and there's just a high degree of frustration and a sense that the political system is is stagnant and frozen. And so that's what you're getting in France. Um they're going to have uh presidential elections next spring. So far I think you would argue that this unrest is favoring the far right, not the far left, even though the left is trying to capitalize on it. And I think you're going to see uh Meen Le Pen in the strongest position going into that election. uh saying that she can offer something better for France, which is, you know, back to a a galist model of um a a nationalist um and rightist identity for France. And just moving on it to uh quickly to to Ukraine and and and what's happening. I I guess the overarching question I always have is when I see the president or Elon Musk or whomever say that the it's just ignored the the the the deaths on both sides of these young soldiers, men and women, and from Russia or from Ukraine on either side. Therefore, when they say, you know, this has got to end, whether it's uh from concessions or or or one way or another with with it, you know, with the the future what a win for Ukraine actually looks like. I don't know if anyone knows or what a defeat for for Russia and Putin looks like. I don't know what what whether anyone knows. Do we just endlessly um support further military uh action with for Ukraine against Russia or or do you push for some type of of peace which conceds that that Putin started it and and is a war criminal and is you know a terrible individual but do you work with him and try to just end it to to end the bloodshed? >> No. You know, we should have learned this lesson so many times in history. When you have a dictator who's willing to attack others and and willing to just try to grab other people's territory, um it always continues. It never ends until they are stopped. You know, that that's the lesson from the Japanese attack on Pearl Harbor. That's the lesson from Hitler. It's lesson from so many things in history. Guys like Putin don't stop unless they're stopped. And what we are doing right now is easing pressure on Putin. Uh allowing him to export oil and gas, bring diesel into the country, giving him, you know, the the political visibility of being part of the club again. Um that's just going to cause him to continue this war. We should be doing the opposite. Um and just just for a little perspective, I mean, anyone watching this program, if your country is attacked, you're going to fight back. You're going to defend your country. And that is exactly what the Ukrainians are doing and will do. So this war will end when Putin stops. Uh he he launched it. He continues it. It's not going well for Russia. But now he's committed himself. We we have to get enough pressure on Russia that he feels it's too costly to continue and then it'll end. >> You don't like anything that's happening right now then. And you couldn't you you couldn't be Trump's ambassador to NATO at this point because you you are it sounds like you're 180 degrees. Well, you know, I still believe very firmly in NATO and there are some things that Trump has done that have strengthened NATO. This pressure on Europeans to spend more on defense. That has been good. But I think his strategy on Russia and Ukraine is backwards right now. >> Backwards right now. We'll end it on that. All right, Mr. Ambassador. Thanks. Appreciate it. >> Meanwhile, General Motors reportedly planning to offer hybrid versions of its most popular uh SUVs. This is a big shift after investing heavily in electric vehicles. The automaker planning to make hybrid models of the Chevy Traverse, Buick Enclave, and GMC Acadia at a plant in Michigan. In a statement, GM saying that it will invest in that factory to prepare for hybrids, but didn't provide details on timing. >> See, that I'm actually interested in. The hybrids are so easy. You don't have to do anything differently, but the gas mileage they get >> unbelievable compared to the traditional models. I mean, I I love my hybrid minivan. I think You You never have to fill it up. >> It goes for forever. It holds everything and you never have to fill it up. I see you in one of these, Joe. >> No, you don't. Oh, a hybrid. A hybrid minivan. >> I do >> with a vacuum cleaner. >> No, this one doesn't have a vacuum. >> This is a Sienna. They don't have the vacuum. >> You're coming along though. People egg me on in my ear. You giving up on the windmill powered car you were getting? >> No, I have that too. But I like to I will tell you difference how infrequently you have to fill up your gas is unbelievable. These things go for forever. >> Um I think the the if if I could be convinced about FSD. I think I I would go electric. >> And >> they keep getting upgrades, right? I mean we're pretty far along. >> We are far along. And I think and I I think you think about it like I like driving kids to Are we there yet? Are we there yet? Are we there yet? I my kids I want them to learn to drive, but I I don't mind the FSD. >> You have like eight cars, don't you? >> Four. >> Four cars. >> Yeah, we've got a lot of drivers in our family. >> Yeah. I don't have four cars, but I do pay for insurance on four cars. >> All right, that is Squawk Pod for today this Wednesday. Thanks for listening. Squawkbox is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorcin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Please follow SquawkPod wherever you get your podcasts. Have a great day. We'll meet you right back here tomorrow. >> We are clear. Thanks, guys.