You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and

Android Auto with the Bloomberg Business App. Or watch us live on YouTube. When you grow up the son of a fireman, you've got that irrescible kind of thing. John Bolton, from the very beginning, has been someone of opinion. And he's been someone who said it as clear as he can. People that are for John Bolton, his critics as well, see a distinguished career in public service, and he has been very visible in the last number of weeks on the formation of the second Trump administration cabinet. John, thank you so much for joining Bloomberg today. I'm just going to cut to the chase. Sometimes you write an essay and then you wrote in the Wall Street Journal an essay on Mr. Patel, who is being considered to run the FBI. And line by line, you went through it. Why did you put that much energy into that essay on Mr. Patel, our potential leader of the FBI? Well,

being director of the FBI is one of the most important jobs in government, and it's been held by some distinguished people and by some people who are not so distinguished. But the power in that job is just enormous. And I wanted to show why, in my view, Patel wasn't qualified, not in terms of his competence or his experience or his character. I just thought it was important for senators to have that in mind. The

senators are the key. I can state, folks, my book of the year a number of years ago, ready, 12 years ago, 11 years ago, Garrett Graff, the threat matrix, the FBI at war. It is a spectacular 500 pages on the complexity of the FBI. John Bolton, do you believe that the president-elect doesn't understand the day-to grind of what the FBI does? Yeah,

I think Trump has very little understanding how most of the government operates. He never took the time to learn it. He didn't know much before he became president, and he didn't learn very much when he was president. The FBI has roughly, I don't know, 38,000, 40,000 employees, most of whom spend their time working on investigating real crimes or real threats to the United States from overseas. And the idea that you're going to unleash somebody whose main job, in Trump's view, is hunting down Trump's enemies really demeans the incredibly important work of the overwhelming majority of people in the department. I'm not saying the FBI is free of problems. It certainly is not. But if you want to have somebody come in and fix it, correct the problems, reform it, straighten it up, pick somebody like William Webster, who when Ronald Reagan appointed him was a distinguished federal judge and has since written, he doesn't think either Kash Patel or Tulsi Gabbard are fit for the jobs they've held. Pick somebody who's got a background of integrity and judgment, who's going to resolve the problems you're worried about and not make them worse. John,

for some of the candidates or appointees that you have raised some flags on, do you believe the Senate will in fact challenge them going forward in the confirmation process? Well,

I think there's a real chance of it. You know, the idea that the president nominates somebody and that choice is automatically accepted by the Senate isn't borne out by history. I think the president's entitled to real deference in his picks, particularly in terms of what the appointees think about policies. That's what the president was elected to do. But the function of the Senate, the Federalist Papers make this very clear, is to make sure that people who lack character and competence don't get through. Now, we're all waiting after the first of the year for the FBI full-field background investigations to come in. That's going to be interesting to read for the senators on the key committees. And then there are going to be confirmation hearings where if senators, Republican and Democratic, are doing their jobs, they'll ask the nominees some hard questions. This is still a long way from being over john from a national security perspective what do you

think the to-do list should be for this incoming administration maybe for the first hundred days if not longer well i think it's a long list i think the world

is very threatening to american interest in a variety of places certainly the middle east is on fire the russian invasion of Ukraine continues. The Chinese threat to Taiwan and the South China Sea remain. And I think there needs to be a real focus on going after those countries that have become adversaries of ours and putting in place both the policies we need to protect our interests, but also getting resources. Maybe the highest priority the president has is getting a better defense budget, a substantially larger defense budget. Not to say that there aren't savings that can be had at defense. There certainly can be. But we face threats that are rising around the world. And we've had, over a sustained period of time, inadequate resources to do the job. Our military is way overstretched and we are vulnerable.

Eight ways to go here. Joining us, folks, is John Bolton. Of course, you know him from his many years of service to America, always controversial, always interesting and opinionated as well. In 1964 at the McDonough School, Owings Mills, Maryland, he ran the Students for Goldwater campaign. No kidding. You know, John, I go back to your first public service as a summer intern from the vice president from Maryland, Mr. Agnew. You've seen some White House movement away from the uproar of the first Trump administration. You were articulate about the generals, the admirals that surrounded President Trump in his first term. The military has now seen the Trump process. Can he get the same quality military advice now that he got in January six years, eight years ago? Well,

I think it's open to question. I think part of the Trump effect is to try and intimidate people, to prevent them from speaking out. I hope that's not the case. The military-civilian relationship is critical for our national security, and civilian leadership obviously is dominant, but it depends on getting straightforward, honest military advice. And if the chairman of the joint chiefs, the other joint chiefs, the combatant commanders continue to provide that, obviously it's up for the president to make the final decision. But they need to tell him what the facts are, whether he wants to hear them or not. Do

you think that, what is your confidence level that that will occur this second time around? Because there are some concerns out there that in the second Trump administration, he'll be more authoritative. He'll have more confidence in his moves, maybe at the expense of advice from others. Well, I think it's very likely

that will happen, but you can't tell until the rubber meets the road. We need to know who the Secretary of Defense is going to be. That's not resolved yet either, and know a lot more about what the other top civilian officials at defense are going to look like. But I think there are going to be crises that are going to require some pretty tough political military decisions very early in Trump's term. We don't get to call the shots on when things in the wider world happen. It could happen on day one. Ambassador

Bolton, one final question. This is for Nick Wadams in Washington, and it on the machinery here. I see Iran pulling out of Syria. It's unfair to you because I guess you don't have all the present intelligence, but is it legitimate that Iran is retrenching from the greater Middle East? Look,

Iran is in deep trouble. It's been dealt punishing blows by Israel against Hamas and Hezbollah, two terrorist proxies that were major elements of Iranian power, the fall of the Assad regime in Syria. It's a third critical blow. I think the Ayatollahs are on the back foot now, and this is a point to press them hard. It may well be the regime itself is shaking. At the same time, we've got to worry about making sure that the new government in Syria doesn't establish a terror state, a kind of Afghanistan on the Mediterranean, something we need to pay a lot of attention to. We've got a lot at

stake there. John Bolton, thank you so much for joining us today. We look forward to speaking to you again, the former ambassador John Bolton. This is the Bloomberg Surveillance Podcast.

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We are thrilled to start the year with one of the great academics, of course, with the University of Oxford and always Ambassador John Bolton. forever associated with the Financial Times. John Kay joins us. The new book is The Corporation in the 21st Century. John Kay, thank you so much for joining us. My great theme here is the distrust in America of corporations. And to me, it's the monopsony of it all, the combination, the inevitable transactions that lead to corporate power. Where are we on the cycle of capitalism in terms of the ever greater power of our corporations? I

think we're not in a good place, but I wouldn't put as much emphasis as you do on the greater power of corporations. The greater power of the corporate sector, yes, but the greater power of corporations, people exaggerate over, people exaggerate the permanence of dominance of industries. It's quite amusing to watch at the moment the death throes, in effect, of traditional US steel, which was, when it was formed a century ago, the larger, by far the most valuable corporation in the world. You were talking earlier about NVIDIA, everyone's favorite of the moment. It's quite hard for me to see how that dominance can be maintained for long enough to justify the $3.7 trillion market cap they've achieved. And of course, the great corporation in the first half of the 20th century was General Motors, which doesn't even dominate the world automobile industry. Okay, how

do you determine when to get off the bandwagon? How do you determine when to exit Generous Motors? How do you determine when to exit maybe British Telecom? How do you

determine when to exit NVIDIA? It's almost when there's no one left to be convinced. I have a strong memory of early 2000 and going to that Davos conference of the international business elite then. And that was at the peak of the dot-com boom. And I thought, there is no one left to be convinced that this is a permanent change. And I thought, that's a signal that this is the top. And of course, it was. Within two or three months of that, the great dot com. Do you feel that now? Do you feel that now about

AI? I

do feel that about AI. I mean, AI is important and will change. And indeed, back in 2000, I was unduly skeptical about the impact that the internet would have on business. But the impact it had on business was not an impact in 2001 and 2002. It was the impact that we're still gradually seeing as online retailing and online information acquisition took over. My life has been changed a lot by the internet, but it's over 20 years, not over two. John,

generations of managers, executives, board members, investors have been brought up in this concept of the responsibility of a corporation is to maximize shareholder value. Is that still the case in your mind?

What's the case in my mind is that the responsibility of executives of a corporation is to build great businesses. The truth is, if we're saying, how do you maximize shareholder value, which is the product of the profits the business will earn over even a pessimistic view, 20, 30 years, on an optimistic view, 50 to 100 years. No one can do that kind of sum. What executives should be doing is building great businesses and then shareholder value will follow from that. That's the story of Boeing, which is a good illustration of the problem. In the second half of the 20th century, what we saw was Boeing, and Boeing, Bill Allen, who was CEO of Boeing for a time, said, we live to eat, breathe, and sleep the world of aeronautics. That was what we did. And they built a great business with planes that revolutionized the aviation industry and everyone's lives. From 2000, they took a rather different view. Harvey Stonecipher famously said, people say this is a great engineering business. It is a great engineering business, but people invest in a company because they want to make money. Well, for a time, they did make money, but they traded, in effect, the reputation of the company for short-term monetization. Actually, we see a lot of private equity people doing just that today.