Speaker 1: Hey, guys, ready or not, twenty twenty four is here,
Speaker 1: and we here at breaking points, are already thinking of
Speaker 1: ways we can up our game for this critical election.
Speaker 1: We rely on our premium subs to expand coverage, upgrade
Speaker 1: the studio ad staff, give you, guys, the best independent
Speaker 1: coverage that is possible. If you like what we're all about,
Speaker 1: it just means the absolute world to have your support.
Speaker 1: But enough with that, let's get to the show. Some
Speaker 1: bad news for our quote unquote friends over at VANN
Speaker 1: in terms of the ratings department. Of course, this comes
Speaker 1: after they re overhauling the whole thing, a new morning
Speaker 1: show boss, new strategy, and also at a time when
Speaker 1: I have to say our show is doing better than
Speaker 1: not show across the board that political news is just down.
Speaker 1: Let's go and put this up on the screen. Now.
Speaker 1: Granted this is Fox News is right up, so they
Speaker 1: obviously have a dog in this fight. But the fact remains,
Speaker 1: CNN has smallest weekly primetime audience in advertiser coveted demo
Speaker 1: in over thirty years. I'll give you some of the
Speaker 1: numbers here. So CNN during primetime finished with an average
Speaker 1: of three hundred and eighty three thousand viewers. But they
Speaker 1: say their more alarming issue comes in the Key demo
Speaker 1: of adults age twenty five to fifty four, where at
Speaker 1: their smallest primetime audience in over thirty years, they settled
Speaker 1: in primetime for only eighty thousand total viewers in the demo.
Speaker 1: And again I always say this in the biz of
Speaker 1: cable news, no one cares about. The total numbers are
Speaker 1: completely irrelevant. They don't matter at all. The only thing
Speaker 1: people look at is the numbers in the demo eighty thousand.
Speaker 1: But I have to say they looked at the Fox
Speaker 1: News one was not all that impressive either. One hundred
Speaker 1: and fifty thousand this was for the daytime and two
Speaker 1: hundred and nineteen thousand during primetime. That's also not like
Speaker 1: amazing numbers for Fox News either. Exactly. Remember all this
Speaker 1: YouTube shows all of us, A vast majority of our
Speaker 1: audience is in the key demo, because that you know,
Speaker 1: those are the people who watch our show. The vast
Speaker 1: majority of many of these smaller time YouTube creators are
Speaker 1: even still like a mid tier YouTube creator is bigger
Speaker 1: in the key demo than any of these people. The
Speaker 1: cultural relevance comes only from boomers and from mainstream media
Speaker 1: respecting each other, that's it. But yeah, it is humiliating.
Speaker 1: The literally the lowest advertiser coveted demo in thirty years,
Speaker 1: almost the entire history of the network, back when they
Speaker 1: were a fledgling startup. Is the last time that they
Speaker 1: were doing this badly. So I just pray and hope
Speaker 1: the cable companies take notice and they stop paying him
Speaker 1: so many fees, because once that gravy train is gone,
Speaker 1: the subscriber fees, these people are dead, completely dead. We
Speaker 1: may not be that far off, who knows, maybe like
Speaker 1: seven years or so. Apparently even Biden Secretary of State
Speaker 1: Tony Blincoln made a joke about them. I don't know
Speaker 1: if this was at the Gridiron dinner or where it's
Speaker 1: a keynote speech at a Washington, DC event. Apparently said,
Speaker 1: according to the guests, there are six hundred attendees here tonight.
Speaker 1: CNN would kill for an audience like that. So, even
Speaker 1: taking taken heat from the Biden administration, yeah, rule ratings
Speaker 1: also just hit the all time low today the day
Speaker 1: Biden segment. Yes, yeah, I saw that. People So okay,
Speaker 1: all right, well they deserve each other. There you go.
Speaker 1: We're always on the lookout for some good Kamala moment.
Speaker 1: She certainly doesn't disappoint. First on Roe Versus, weighed with
Speaker 1: the I do believe that we rightfully believe, and somehow
Speaker 1: that one not learning her lesson and giving basically the
Speaker 1: exact same response when asked on the most friendly environment
Speaker 1: possible to Stephen Colbert Show about the Willow Project, here's
Speaker 1: what she had to say. Was there any discussion in
Speaker 1: the White House about what the blowback would be for
Speaker 1: approving the Willow Oil project because people have gotten quite
Speaker 1: upset about it. I think there's some protesters outside right now. Well,
Speaker 1: I think that the concerns are based on what we
Speaker 1: should all be concerned about. But the solutions have to
Speaker 1: be and include what we are doing in terms of
Speaker 1: going forward in terms of investments. So the concern should
Speaker 1: be on the concerns of what we're concerned about and
Speaker 1: the solutions. You know, she would be a great HR director,
Speaker 1: That's what I think her. She went into the wrong business.
Speaker 1: She would be a great HR director at a major
Speaker 1: company and somebody's coming to them pissed off about a
Speaker 1: legitimate issue, and she just tries to talk them off
Speaker 1: the ledge until you basically tire of hearing like corporate
Speaker 1: battle speak before you go outside. You want to blow
Speaker 1: your own brains out, because that's how I feel listening
Speaker 1: to her. How could you possibly not come up with
Speaker 1: a better answer. It's like, you know, it's the same
Speaker 1: thing as you said, Marshall says always at our live shows.
Speaker 1: It's like she wants to be like an Aaron Sorkin
Speaker 1: West Wing character, but doesn't have the talent or I
Speaker 1: guess the intellect to come up with something actually smart
Speaker 1: to see where any core value. Yes, yeah, you know,
Speaker 1: have something to say. You have to have to believe
Speaker 1: to say, do you have to believe something? And like
Speaker 1: that has always been the problem for her. I mean,
Speaker 1: this is a real sticky issue for the Biden administration
Speaker 1: because Biden on the campaign explicitly said that he would
Speaker 1: not move forward with this Willow oil project when he
Speaker 1: was trying to curry favor with the Democratic base and
Speaker 1: now has completely flip flopped. They've gotten very little pushback
Speaker 1: on the fact that he broke what was a campaign
Speaker 1: pledge from the media. This very gentle questioning from Colbert,
Speaker 1: which then there's no follow up after she completely whiffs
Speaker 1: it right, said that literally doesn't mean anything what you
Speaker 1: just said. It means absolutely nothing. So my point is
Speaker 1: this is an obvious issue for the administration that she
Speaker 1: should have been very well prepared to be able to handle.
Speaker 1: But of course she's not. And I am old enough
Speaker 1: to remember that. Just last week, the view ladies Sonny
Speaker 1: in particular, were asserting that any of the criticism of
Speaker 1: Kamala Harris was just sexism and racism, and Anna Navarro
Speaker 1: was imploring everyone to shut up about any problems they
Speaker 1: have with Kamala Harris because you know, this isn't just
Speaker 1: about her being the vice president of the United States
Speaker 1: was ultimately is like a role that doesn't have any
Speaker 1: real official power. It's also about the fact that she
Speaker 1: is a heartbeat away from the presidency and the president
Speaker 1: is really old. So it becomes, you know, as they
Speaker 1: face the next campaign, it becomes a super relevant issue
Speaker 1: how while she is able to fare in these circumstances
Speaker 1: and performances like this, or why a lot of people
Speaker 1: are Yeah, even people who are Democratic allies are cringing
Speaker 1: and very uncomfortable. Absolutely, we're continuing to process the fallout
Speaker 1: after SVB fails, Signature Bank failed and one of the
Speaker 1: stories we're going to continue to focus in on is
Speaker 1: exactly how this happened, what politicians were complicit in rolling
Speaker 1: back regulations, and what exactly some of those corrupt ties were.
Speaker 1: It's going to put this up on the screen. It's
Speaker 1: from Bloomberg News. They noted that Signature Bank this is
Speaker 1: again one of the ones that collapsed, and we veiled
Speaker 1: them out through a fundraiser for the congressman who is
Speaker 1: now probing how it failed, GOP's McHenry, Chaish the House
Speaker 1: Financial Services Committee. The campaign says the donations are not
Speaker 1: going to be processed from the event, but it illustrates
Speaker 1: the incredibly cozy ties between the legislators who are supposed
Speaker 1: to be overseeing this sector and the banks themselves. Part
Speaker 1: of what they say here is that the House Republican
Speaker 1: overseeing that inquiry was inside Signature's boardroom on New York's
Speaker 1: Fifth Avenue just ten days before their collapse. He was
Speaker 1: there Patrick McHenry to raise thousands of dollars from bank executives.
Speaker 1: According to them, the mood inside the Signature boardroom at
Speaker 1: that fundraiser was crome. According to a person who was
Speaker 1: at the event who asked for anonymity. There was no
Speaker 1: overt anxiety or tension, they said, instead, there were questions
Speaker 1: about the debt ceiling. Now, they did decide not to
Speaker 1: process these contributions. However, it's worth noting that this same
Speaker 1: member of Congress has been a favorite of Signature bank
Speaker 1: employees since twenty seventeen. They've given him a little more
Speaker 1: than a one hundred and eighty eight thousand dollars. That
Speaker 1: has almost tripled the sixty six thousand dollars that they've
Speaker 1: given to Minnesota's Tina Smith, a Democratic member of the
Speaker 1: Senate Banking Committee, who has received the second highest amount
Speaker 1: from them. So you can see how the game is played,
Speaker 1: you know. Yeah, this reminds me of the how Richie Neil,
Speaker 1: who was the Chairman of the House or was the
Speaker 1: chairman of the House Ways and Means Committee, was throwing
Speaker 1: fundraisers for the banks and in some cases having bank parties,
Speaker 1: AIG parties in the committee room while it was all happening.
Speaker 1: I remember that was a big story that I did
Speaker 1: over at Rising. That's why I think that it's so
Speaker 1: important to show you like this is direct pay to
Speaker 1: play more than you give to anybody else. To the
Speaker 1: guy who is literally the chairman of the Financial Services Committee. Yeah. Who.
Speaker 1: You also have the former Chairman of the House Financial
Speaker 1: Services Committee, Barty Frank, on the board of directors for
Speaker 1: the bank, just to say, hey, you give us some
Speaker 1: money work system, that's how it works. And guess who
Speaker 1: else was on the board of Signature Bank. Tell me
Speaker 1: Evanka Trump, Oh of course, yeah wow. So you know,
Speaker 1: very bipartisan of fa they made shared to curry favor
Speaker 1: with both parties. Barney Frank. I mean, this one, though,
Speaker 1: is just so galling because this is the man that
Speaker 1: when he was Chair of the House Financial Services he
Speaker 1: was involved in drafting Dodd Frank. Then he goes and
Speaker 1: joins the board of not just this bank, but there
Speaker 1: was another one as well, or an investment fund or
Speaker 1: something of that nature, and as part of Signature Bank,
Speaker 1: goes and actually lobbies to roll back the very regulations
Speaker 1: that he helped to craft and now is involved in,
Speaker 1: you know, this bank that collapsed and is you know,
Speaker 1: being backstop by the US taxpayer. Ultimately, it really is
Speaker 1: such a clear and disgraceful example of the revolving door here.
Speaker 1: But you can see how they, you know, how they
Speaker 1: play their cards here. In Washington, they make sure that
Speaker 1: whoever sits on that committee that's relevant to them that
Speaker 1: now is going to be charged with looking into what
Speaker 1: exactly went wrong here and what sort of bad decisions
Speaker 1: and potentially even fraudulent decision went into it. Well, maybe
Speaker 1: this guy is given back or not going to process
Speaker 1: the donations from this particular fundraiser, but don't worry. They're
Speaker 1: already in about two hundred thousand dollars to them, so
Speaker 1: they already have curried plenty of favor. So when he
Speaker 1: looks at this, potentially he'll have a more favorable view
Speaker 1: than he might otherwise. Yeah. I just think it's completely
Speaker 1: ridiculous the way that this is handling. And the fact
Speaker 1: too that you know, outside of a very limited amount
Speaker 1: of coverage, he's not getting a lot of questions about this.
Speaker 1: He's like, what are you going to do? And that's
Speaker 1: actually part of my biggest beef with the entire Washington
Speaker 1: response is it did not prompt at least a new
Speaker 1: type of DoD Frank regulation, Like we didn't even start
Speaker 1: discussing like Okay, what is Congress going to do? Are
Speaker 1: we going to have hearings? Like how is all going
Speaker 1: to work? Nothing. Instead, it's all the FED and FDIC
Speaker 1: that are stepping in to take the regulatory role. That's
Speaker 1: Congress's entire job. Yeah. Well, there have been some lawmakers
Speaker 1: who have you know, been advocating for, especially rolling back
Speaker 1: that deregulation that happened in twenty eighteen. But you're correct
Speaker 1: to know that there doesn't seem to be a lot
Speaker 1: of momentum behind that. And we certainly haven't heard the
Speaker 1: White House taken the lead in terms of saying, hey,
Speaker 1: we did this for the banking sector, now we need
Speaker 1: to make sure this never happens again. Here's the legislation
Speaker 1: I want to see, put it on my desk. We're
Speaker 1: not seeing any sort of urgency around this whatsoever. Yeah,
Speaker 1: I think you're right. Hi. I'm Matt Stoler, author of
Speaker 1: monopoly focused newsletter Big and an anti trust policy analyst.
Speaker 1: I have a great segment for you today on this
Speaker 1: Big breakdown. So since August of last year, there have
Speaker 1: been shortages of a drug called Adderall, which is used
Speaker 1: to treat conditions like autism, narcolepsy, and most commonly, attention
Speaker 1: deficit disorder. People with ADHD have trouble focusing and sometimes
Speaker 1: even doing routine tasks like telling the time. Adderall addresses
Speaker 1: this problem and has improved the lives of millions of
Speaker 1: people with this disorder. So here's Matt Ford, a journalist
Speaker 1: for The New Republic, discussing his use of adderall and
Speaker 1: the shortage. I've been taking this for twenty years. No
Speaker 1: stranger to the stigma, even for people who legitimately needed.
Speaker 1: Still incredible that Congress and the Biden administration don't seem
Speaker 1: to care enough to even pretend they're doing something about it.
Speaker 1: Here's a follow on tweet. I've spent all day calling
Speaker 1: every pharmacy near me in DC. They're all out. No
Speaker 1: idea what it'll be back in stock, no idea where
Speaker 1: I can find a place that might be able to
Speaker 1: help I run out later this week. Without going into specifics,
Speaker 1: my quality of life is about to get a lot
Speaker 1: worse now. Like a lot of drugs, adderall has properties
Speaker 1: that are addictive is if misused, and people do abuse it.
Speaker 1: In that sense, It's a lot like fetnyl morphine oxycoton,
Speaker 1: which are prescription drugs that have very similar properties to
Speaker 1: heroin and are often used to treat cancer pain, but
Speaker 1: can also be abused. People buy them and from pharmacies
Speaker 1: and resell them. This class of drugs medicine is called
Speaker 1: they're called scheduled drugs because the DEA, the Drug Enforcement Agency,
Speaker 1: places them on a schedule and has special regulatory limits
Speaker 1: to prevent resale and essentially drug dealing. America does have
Speaker 1: a serious prescription drug abuse problem, where people who shouldn't
Speaker 1: get prescription drugs get them, abuse them, resell them, and
Speaker 1: in many cases people are dying. So we had over
Speaker 1: one hundred thousand deaths last year from fentnyl and other opioids,
Speaker 1: not all or prescription drugs, but it often it came
Speaker 1: from a prescription abuse crisis. So here's a chart from
Speaker 1: the Center for Disease Control, and you can see that
Speaker 1: the lines point very much the wrong way. At the
Speaker 1: same time, we also have a prescription drug shortage, where
Speaker 1: people who should be able to get prescription drugs for
Speaker 1: legitimate medical purposes can't get them. And believe it or not,
Speaker 1: both of these problems have the same root, which is
Speaker 1: a form of monopoly power that used to be called
Speaker 1: absentee ownership. So that's what I'm going to talk about today,
Speaker 1: and I'm going to focus on the adderable shortage and
Speaker 1: its roots in surprisingly the opioid crisis. Now, there's a
Speaker 1: lot of good reporting on the adderall shortage. There are
Speaker 1: discussions of supply chain fragility, DEA regulations, the complexity of
Speaker 1: the different players in the pharmaceutical markets, and so on
Speaker 1: and so forth, and a lot of these articles that
Speaker 1: you read, and they're everywhere. If you need aderall, you
Speaker 1: know what I mean. It's all very difficult to figure
Speaker 1: out what's going on. It's also complicated, or so we're told,
Speaker 1: and the reporting is by and large right. The shortage
Speaker 1: is complicated and it has several causes. So TEP Pharmaceuticals,
Speaker 1: for instance, which is the largest producer of adderall and
Speaker 1: it's also the largest producer of generic pharmaceuticals in the world,
Speaker 1: it had significant problems with one of its factories. They
Speaker 1: called it the labor shortage. There might have been other issues,
Speaker 1: but we don't hear a lot about an obvious part
Speaker 1: of the problem. Or we do, but it's indirect and
Speaker 1: that is monopoly. So a few months ago I got
Speaker 1: a text from one of the smartest pharmacists I know,
Speaker 1: who owns an independent pharmacy that's been in his family
Speaker 1: for three generations. He knows the business cold. He also
Speaker 1: consults for other independent pharmacies, and he told me something
Speaker 1: pretty interesting. He told me that big distributors are no
Speaker 1: longer allowing most pharmacies access to controlled substances, the independent pharmacies.
Speaker 1: This is controlled substance is another way for saying scheduled drugs.
Speaker 1: So these are useful medicines that can also be addictive. Now,
Speaker 1: as the Adderall shortage stretches on endlessly, I figure I
Speaker 1: would share what he told me. While, you know, while
Speaker 1: a temporary shortage makes and sometimes you know there aren't
Speaker 1: enough Taylor Swift tickets, or if there are factories at
Speaker 1: the biggest problems at the factory of the biggest producer
Speaker 1: of Adderall, which is Teva, you know you would expect
Speaker 1: maybe a temporary shortage, but persistent shortages of easily produced
Speaker 1: medicines that are not patented because Adderall is not on patent,
Speaker 1: so anybody can come in with an FDA proof factory,
Speaker 1: and those kinds of shortages shouldn't exist in America. I mean,
Speaker 1: if you can sell medicine for a lot of money,
Speaker 1: you would think someone would be doing it. So what's
Speaker 1: going on with Adderall? Well, my contact told me that
Speaker 1: one likely cause of the shortage, and not the only one,
Speaker 1: but probably a significant one, is a certain form of
Speaker 1: a monopolistic behavior in the pharmaceutical industry that prevents new
Speaker 1: entrants from coming into the market and selling and distributing
Speaker 1: these kinds of drugs. So there are three major distributors
Speaker 1: of medicine in the United States, McKesson, amerisource Bergen, and
Speaker 1: Cardinal Health. They are sometimes referred to as the Big Three.
Speaker 1: According to a Senate report a couple of years ago,
Speaker 1: they collectively control roughly eighty five to ninety percent of
Speaker 1: the market. You won't be surprised to hear that these firms,
Speaker 1: which does an oligopoly, exist because of a series of mergers.
Speaker 1: The big one was the formation of amerisource Bergen in
Speaker 1: two thousand and one, but there are many other mergers
Speaker 1: over the last couple of decades that it's been a
Speaker 1: consolidating industry like a lot of America because of our
Speaker 1: policy choices to allow that the business of distributing drugs
Speaker 1: is pre conceptionly is pretty simple. Obviously, there's a lot
Speaker 1: of details. It's very complicated when you get into the
Speaker 1: actual specifics, but Conceptually, it's simple. You buy medicine from manufacturers,
Speaker 1: you put them in a warehouse, and then you sell
Speaker 1: them to pharmacies, hospitals, medical providers who need them, and
Speaker 1: then dispense them to patients. But the key to the business,
Speaker 1: the specific business model of these wholesalers sometimes they're called
Speaker 1: the wholesaler, sometimes distributors, and the key to that business,
Speaker 1: at least on the pharmacy side, are exclusive contracting arrangements
Speaker 1: with independent pharmacies. And these are contracts which are almost
Speaker 1: always secret. So if you're a pharmacist and you want
Speaker 1: to buy from a distributor, you basically have to take
Speaker 1: a contract from a distributor or an affiliate of that
Speaker 1: distributor to get ninety percent of your generic pharmaceuticals from
Speaker 1: that one distributor. So my contact has a contract with
Speaker 1: Cardinal where he has to buy nine twenty percent of
Speaker 1: his pharmaceuticals from Cardinal. He's not sure what will happen
Speaker 1: if he doesn't meet that threshold because he's not actually
Speaker 1: allowed to read the contract that he's a party two,
Speaker 1: which is crazy. It's a secret contract that binds him.
Speaker 1: But he tries to buy as much of the generic
Speaker 1: medicine as he can through Cardinal as possible. Now, it's
Speaker 1: not just problems in the distribution arrangement. There's all sorts
Speaker 1: of other other middlemen in the pharmaceuticals supply chain. These
Speaker 1: contracting arrangements are secret in a lot of cases. So
Speaker 1: Tava is the largest producer of Adderall, it probably has
Speaker 1: contracts with the different wholesalers that create an exclusive arrangement
Speaker 1: as well. So Cardinal will say maybe Tava's products are
Speaker 1: it's preferred version of Adderall in return for rebates or
Speaker 1: something like that. We don't know because the contracts are
Speaker 1: are private. Now. In twenty eighteen, the Senate Finance Committee
Speaker 1: produced a report and noted that the opaque nature of
Speaker 1: the current system allows for little insight into how the
Speaker 1: price of a drug changes or is otherwise affected by
Speaker 1: the terms of these financial relationships. And Teva is also
Speaker 1: a giant and I'm going to get into why Teva matters,
Speaker 1: but it had seven multi billion dollar acquisitions in the
Speaker 1: last twenty years alone, including a forty billion dollar acquisition
Speaker 1: of Myelin in twenty sixteen. It is now the largest
Speaker 1: generic pharmaceutical producer in the world. So these are giant companies. Right,
Speaker 1: the wholesalers have hundreds of billions of dollars revenue apiece.
Speaker 1: Teva is massive, okay, And that brings me to the
Speaker 1: first part of the problem, which is the opioid crisis.
Speaker 1: There were many causes of mass drug addiction in America
Speaker 1: over the last twenty years, but Teva, McKesson, Cardinal, and
Speaker 1: marisource Bergen were knee deep in the problem. They were
Speaker 1: breaking the law to dispense pills, to make and dispense
Speaker 1: pills illegally, and then they kept they get caught, and
Speaker 1: they kept it again, doing it again. So let's just
Speaker 1: take Cardinal, right, because that's the one that I'm going
Speaker 1: to focus on. The other two have similar records. So
Speaker 1: in two thousand and eight, it pays a thirty four
Speaker 1: million dollar penalty related to claim of opioid diversion from
Speaker 1: seven of its warehouses around the United States. In twenty twelve,
Speaker 1: it was caught again, this time for shipping twelve million
Speaker 1: opioid pills to just four pharmacies in Florida. In twenty sixteen,
Speaker 1: it paid forty four million dollars for failing to report
Speaker 1: suspicious orders in Maryland and a bunch of other states.
Speaker 1: In twenty seventeen, same thing, twenty million dollar payment to
Speaker 1: West Virginia for not reporting suspicious transactions and orders of
Speaker 1: opioid pills the other distributors. The same thing in twenty seven.
Speaker 1: In fact, this is my favorite quote. The DEA said
Speaker 1: that the continued registration of Amerisursbergen constitutes an imminent danger
Speaker 1: to public health and safety. Okay, so the three main distributors, right,
Speaker 1: the big ones that distribute to everyone that you have
Speaker 1: to use, are all illicit drug dealers, right, and you
Speaker 1: can't go to I mean, there are some smaller ones,
Speaker 1: but you basically can't get everything you need from them.
Speaker 1: So that's the situation. Now. In twenty twenty one, there
Speaker 1: was a national settlement because opioid crisis became such a
Speaker 1: big political issue and we said we're going to put
Speaker 1: a stop to this and the distributors. Lots of players
Speaker 1: in the industry had to pay. The distributors were included
Speaker 1: in that. So the distributors had to pay twenty one
Speaker 1: billion dollars over eighteen years to resolve all state litigation
Speaker 1: including opioids, and Teva paid four point five billion dollars
Speaker 1: over thirteen years. I've read one of the key complaints
Speaker 1: against these firms from Washington State Attorney General Bob Ferguson,
Speaker 1: and what is interesting about it is that the allegations
Speaker 1: are not that these guys were like Entenlily, trying to
Speaker 1: addict people to opioids. It's just that they were neglectful.
Speaker 1: It wasn't that these guys, you know, wanted to addict America.
Speaker 1: They just didn't have the ability or really they didn't
Speaker 1: try to stop doing so. They didn't really want to
Speaker 1: do any work. Right, if someone some pharmacy was buying
Speaker 1: ten million pills, they just didn't care enough to stop them.
Speaker 1: And that's where the story of adderall shortages begins. You see,
Speaker 1: the opioid settlement for the state attorney generals was mostly
Speaker 1: about money. The state at ags wanted to get money
Speaker 1: from distributors and spend it on treatment and on dealing
Speaker 1: with the crisis that they're now confronting. This makes sense, right,
Speaker 1: the first of a prescription drug addiction, and then when
Speaker 1: people couldn't get prescription drugs, then they went to the street.
Speaker 1: They bought heroin, they bought a llegal fentanyl. Like, it's
Speaker 1: not a prescription drug crisis as much anymore. It's now
Speaker 1: just an addiction crisis. But all these states have to
Speaker 1: deal with it. So they need money and they were
Speaker 1: going to well, you guys cause it, so we're going
Speaker 1: to get money from you. And they did get money
Speaker 1: from them, but they weren't thinking about the cause of
Speaker 1: the crisis, the institutional cause of the crisis in these firms,
Speaker 1: or the consequence of retaining a monopolized wholesaling market. They
Speaker 1: weren't thinking, oh, we have three companies that are big
Speaker 1: drug dealers, maybe we should have a market where not
Speaker 1: every big institution that deals medicine is an illicit drug dealer.
Speaker 1: They just said, well, that's how it is. We have
Speaker 1: a monopolized market, so let's figure out what we can
Speaker 1: do with it. And so aside from money, the settle
Speaker 1: they put some rules in there, and those rules were
Speaker 1: rules that the distributors, these big distributors had to follow,
Speaker 1: and they were very strict these rules in trying to
Speaker 1: block what controlled substances wholesalers could sell. Now here's the
Speaker 1: main document. It's really boring, but I read it for
Speaker 1: you and it has a section on how wholesalers must
Speaker 1: now be more careful in selling opioids and controlled substances
Speaker 1: in general to pharmacies. This seems to make sense. It
Speaker 1: sets out a number of what it calls red flags
Speaker 1: for potential customers, like if you're pharmacy, you're selling to
Speaker 1: a pharmacy and that pharmacy has been sanctioned by the authorities,
Speaker 1: or you have to see whether that pharmacy is up
Speaker 1: to date unlicensing requirements, or if that pharmacy has a
Speaker 1: lot of cash buyers, or if that pharmacy is responsive
Speaker 1: to requests for information. Stuff that you would think is
Speaker 1: pretty serious, right, like if you have been sanctioned by
Speaker 1: your state board, maybe you are. Maybe there are issues
Speaker 1: if you refuse to give information or you take a
Speaker 1: lot of cash. These are signs. These are red flags.
Speaker 1: But also red flags included things like the amount of
Speaker 1: controlled substances you prescribe has grown, or if the ratio
Speaker 1: of controlled substances versus normal medicine has increased above an
Speaker 1: average amount for pharmacies in your area. And that too
Speaker 1: seems reasonable on first glance, but it is in fact
Speaker 1: the cause of the adderall shortage, as I'll get to
Speaker 1: in a moment. So what happens if there's a red flag, Well,
Speaker 1: the distributor is supposed to do some due diligence to
Speaker 1: make sure the pharmacy isn't what's called a pill mill,
Speaker 1: which is a edity that just sells lots of controlled
Speaker 1: substances for resale. And if they find out that it
Speaker 1: is a pill mill, right is buying lots of opioids
Speaker 1: or whatever you know, vic it in and then selling
Speaker 1: it to people who then resell it. You cut them off.
Speaker 1: You black bailed them. You don't blackball them, you don't
Speaker 1: let them buy any more controlled substance. But if a
Speaker 1: pharmacist is trying to get people medicine in good faith
Speaker 1: and they've just had an increase in say, cancer patients,
Speaker 1: then you let them keep getting the medicine that they
Speaker 1: need to prescribe to patients. But of course, wholesalers didn't
Speaker 1: want to do work during the opioid crisis to stop
Speaker 1: selling millions of pills, and now they want to do
Speaker 1: work to make sure that the pharmacies that they're selling
Speaker 1: to are legitimate or not. And they really don't have
Speaker 1: relationships with the pharmacy they sell to. They're just too big.
Speaker 1: They communicate with them via via algorithm essentially, so instead
Speaker 1: of due diligence, they arbitrarily cut off pharmacies who increase
Speaker 1: the amount any controlled substance they prescribe. So, according to
Speaker 1: The New York Times, I said algorithm. This is where
Speaker 1: I got it from. The distributors use algorithms that cap
Speaker 1: the quantities of controlled substances of pharmacy can sell. In
Speaker 1: a month before the settlement, pharmacists said they could explain
Speaker 1: to a distributor the reason for a surge and demand
Speaker 1: and still receive the medication past their limits. Now, the
Speaker 1: caps appear to be more rigid. Drugs are cut off
Speaker 1: with no advanced notice or rapid recourse. So the net
Speaker 1: effect of this is that if a pharmacy fills too many,
Speaker 1: say aderall prescriptions or prescriptions for cancer pain, they are
Speaker 1: cut off and can no longer buy any controlled substances,
Speaker 1: from ambient to pseudi fed defentanyl to percocet to riddlin.
Speaker 1: And that is actually a big financial hit. So if
Speaker 1: you're a pharmacy, every time a new patient comes to
Speaker 1: you with a legitimate prescription for painkiller or for ADHD medication,
Speaker 1: you have to weigh whether it's worth getting your entire
Speaker 1: business cut off to fill it, not all of it,
Speaker 1: but all of your controlled substances, which is, you know,
Speaker 1: ten to twenty percent of your revenue. So I come in,
Speaker 1: I say I need a Riddlin prescription or I need
Speaker 1: an adderall prescription, and the pharmacist says, I can fill it.
Speaker 1: I know this guy needs it, I know it's legit.
Speaker 1: I know that doctor. He's a good doctor. I know
Speaker 1: this patient. But I might have fifteen to twenty percent
Speaker 1: of my revenue cut off if I fill it. That's
Speaker 1: the choice that these pharmacists face. Medicine is a system. Pharmaceuticals.
Speaker 1: It's a system, and when one pharmacy is cut off,
Speaker 1: the legitimate demand doesn't go away. If I say to
Speaker 1: that If I'm a pharmacist and I say to that patient,
Speaker 1: I'm not going to fill it. I can't do it.
Speaker 1: It's not like he's going to stop looking for attall.
Speaker 1: He's going to go elsewhere. And the remaining pharmacies willing
Speaker 1: to fill legitimate prescription will end up increasing their ratio
Speaker 1: of controlled substances to normal medicine because there's all this
Speaker 1: demand that's looking for a place to go. Well, of
Speaker 1: course that means that their ratios go up and then
Speaker 1: they get cut off, and so on and so forth
Speaker 1: in a downward spile, because you have all this legitimate
Speaker 1: demand that goes to a smaller number of pharmacies, each
Speaker 1: of which then increasingly trips these red flags and then
Speaker 1: they get black bull So what eventually has happened, and
Speaker 1: what's happened now is that a lot of pharmacists have
Speaker 1: conduct concluded that it's just not worth it to prescribe
Speaker 1: any controlled substance unless a patient buys a lot of
Speaker 1: other normal medicines as well, so that your ratio of
Speaker 1: controlled substance to normal medicines doesn't get out of back.
Speaker 1: So over time it's become impossible to get a prescription
Speaker 1: filled for adderall, especially if that's basically the only medication
Speaker 1: that you take. Now, there are other problems that make
Speaker 1: the situation worse. The DEA, the Center, the CMS, the
Speaker 1: centers for medic Medicare and Medicaid services, state licensing boards
Speaker 1: have rules that are public that make it harder and
Speaker 1: harder to prescribe controlled substances. The DA they're embarrassed for
Speaker 1: their own failures during the opioid crisis, and so they
Speaker 1: also flipped the wrong way, and now they're too tough
Speaker 1: on prescribing legitimate medicine. But the real problem here is
Speaker 1: the wholesalers. Because while they have rules, those rules are
Speaker 1: totally secret. A pharmacist can't call up and find out
Speaker 1: whether they're violating them. If a patient comes to me
Speaker 1: and says I need adderall, I can't call up Cardinal
Speaker 1: and say, hey, have I tripped the cap? They won't say, right.
Speaker 1: At least the public rules from the government agencies are public. Now,
Speaker 1: this is what happened to my contact. He was seeing
Speaker 1: more and more adderall patients because farm near him stopped
Speaker 1: serving those patients, and it was legitimate demand. So he
Speaker 1: and his dad been in the community for their whole lives.
Speaker 1: They talked about it, and they decided it was important
Speaker 1: to help people who needed this medication, even that there
Speaker 1: might be a risk. Then, of course, as they prescribed
Speaker 1: more and more of this, the pharmacy got cut off
Speaker 1: from all controlled substances by Cardinal. And this wasn't actually
Speaker 1: because of the This wasn't when he prescribed another adderall patient.
Speaker 1: There was one cancer pation that he had that had
Speaker 1: his or her painkiller dose increased, and then boom, cut
Speaker 1: off all those patients have to go elsewhere to get
Speaker 1: their controlled substances because he can't get he can't get
Speaker 1: those from Cardinals, So he calls Cardinal. They say, reapply
Speaker 1: to get controlled substances in three months, so he does.
Speaker 1: Three months later. Cardinal says, sorry, no, Dice, We're not
Speaker 1: going to reassate your pharmacy and allow you to buy
Speaker 1: controlled substances, even though you gave us all of the
Speaker 1: information you needed and you look legitimate. And he's like,
Speaker 1: well why, As it turns out, they say, well, you
Speaker 1: got blackballed by Teva Pharmaceuticals as well, which is the
Speaker 1: manufacture of many of these medicines and also party to
Speaker 1: the settlement and also too big to manage. Contact Teva,
Speaker 1: they said. So he calls Teva and he's like, why
Speaker 1: am I black balled by you? And they say, well,
Speaker 1: we blacklisted you because Cardinal have blacklisted you. So get
Speaker 1: Cardinal to undo the blacklist. So it's like each of
Speaker 1: these giant bureaucracies is saying, well, that guy blacklisted you,
Speaker 1: so we have to. And the other guy says, well,
Speaker 1: that guy blacklisted you, so we have to. So it's
Speaker 1: this is bureaucratic. Hell, if you're a pharmacist. You just
Speaker 1: can't do legitimate business, even if you want to do
Speaker 1: that and help people. The simple lesson, and I think
Speaker 1: the lesson a lot of journalists have taken a lot
Speaker 1: of people looking at this is to say, oh, this
Speaker 1: is all just so complicated, and bureaucrats just do what
Speaker 1: they do, and we have these this system set up
Speaker 1: and it's just it's brittle, and we need to figure
Speaker 1: out how to make new rules. But here's the thing.
Speaker 1: My contact has been able to obtain some supply of
Speaker 1: controlled substances from smaller distributors, smaller wholesalers. None of the
Speaker 1: smaller ones have, in his words quote, looked at us funny.
Speaker 1: They asked for information to make sure he's not a
Speaker 1: pill mill. He gave it to them, and they said, oh,
Speaker 1: your policies and procedures look legitimate. And these are distributors
Speaker 1: that weren't engaged in illegitimate drug dealing during the opioid crisis.
Speaker 1: They don't use algorithms to make determinations about their customers.
Speaker 1: They often know their customers. They are quite reasonable and
Speaker 1: they so it's like, Okay, you've got these three distributors
Speaker 1: who've been really bad drug dealers in during the opioid crisis,
Speaker 1: but we're still going to rely on them. You have
Speaker 1: these other distributors that you would want to compete. They
Speaker 1: can't get into the market. Now, why can't they get
Speaker 1: into the market. He can buy from them, but he
Speaker 1: can't buy that much from them, because remember he is
Speaker 1: locked into his ninety percent purchasing requirement from Cardinal. It's
Speaker 1: important to recognize that the distributors and some of the
Speaker 1: government agencies, the big guys, make an assumption to facto
Speaker 1: that every person who uses prescription drugs that are controlled
Speaker 1: substances is a criminal, and every pharmacy that prescribes these
Speaker 1: is a drug dealer. But the small guys who know
Speaker 1: their customers don't make those assumptions. They can distinguish between
Speaker 1: people who need controlled substances in people who are abusing them.
Speaker 1: They didn't facilitate the abuse years ago, and they're not
Speaker 1: facilitating the shortage now. And in some cases they have
Speaker 1: more reasonable terms and prices. But the smaller distributors can't
Speaker 1: get into the market because pharmacists cannot buy from them. Mckisson,
Speaker 1: ameersis burgand and Cardinal have exclusive contracting arrangements that prevent
Speaker 1: rivals from trying to take business. Now, there are actually
Speaker 1: laws that should prohibit these kinds of exclusive contracts. These
Speaker 1: kinds of monopolies are oligopolies. So the Clayton Act, which
Speaker 1: was passed in nineteen fourteen, Section three bars exclusive dealing contracts.
Speaker 1: There are also other laws that bar the kinds of
Speaker 1: discrimination and conflict of interest games that the wholesalers and
Speaker 1: others in the pharmaceutical supply chain play to monopolize the business.
Speaker 1: But the thing is, we haven't enforced these rules for
Speaker 1: quite some time since the nineteen eighties, and the courts
Speaker 1: have made it hard to bring cases around this form
Speaker 1: of monopolization. But we are starting to recognize that we
Speaker 1: need to enforce these laws, and not just at a
Speaker 1: federal level, and not just you and me, but a
Speaker 1: lot of state attorneys general are realizing in other contexts
Speaker 1: that market structure matters. They're ssuing Google, they're suing hospitals,
Speaker 1: they're doing a bunch of antitrust work in other areas,
Speaker 1: and they're also starting to realize that contract contextual arrangements matters. Now,
Speaker 1: one of the things I think was a missed opportunity,
Speaker 1: but might be there might be another bite at the
Speaker 1: apple was the opioid settlement. So the opioid Settlement should
Speaker 1: have included anti monopoly provisions to take business away from
Speaker 1: the giant firms that facilitated the crisis. They could have
Speaker 1: officials could have tried to break the distributors when they
Speaker 1: did the settlement, or they at very least they could
Speaker 1: have changed their contracting practices rather than just saying, hey,
Speaker 1: you guys are big, incompetent organizations that really screwed up.
Speaker 1: Here's a bunch of homework that we know you're not
Speaker 1: going to do, which was essentially what they did. It
Speaker 1: reminded me a lot actually, of how we do banking
Speaker 1: regulation for big bangs. You give them a bunch of
Speaker 1: homework and then they get around it right because the
Speaker 1: business is just too complicated. So regardless, given this serious
Speaker 1: problems with both the opioid crisis and now the Opioid
Speaker 1: Crisis Settlement and the shortages that it has helped to accelerate,
Speaker 1: it's time to examine what went wrong and fix it. Now.
Speaker 1: I'm not saying this is the only cause I haven't
Speaker 1: done a deep dive investigation into this market, but this
Speaker 1: does seem to be significant here, and a lot of
Speaker 1: the reporting does kind of dance around it. There are
Speaker 1: other issues here. I don't want to say there aren't
Speaker 1: other issues, but this strikes me as pretty meaningful because
Speaker 1: in this case, the three big distributors are giant bureaucracies,
Speaker 1: and we've all dealt with giant bureaucracies like this, and
Speaker 1: they are organized with secret contracts and they are on
Speaker 1: autopilot because they have market power. Now would the opioid
Speaker 1: crisis or would this autoall shortage have happened without these
Speaker 1: giant distributors and producers of generic fennyl and oxycoton. Maybe again,
Speaker 1: this isn't the only cause, but maybe not, and the
Speaker 1: problems would have been a lot less meaningful. They wouldn't
Speaker 1: have been as big. You would have had a distributor
Speaker 1: who said, eh, maybe we shouldn't be selling twelve million
Speaker 1: pills to four pharmacies in Florida. If you're a pharmacist
Speaker 1: who wants to buy from a distributor who didn't kill
Speaker 1: lots of Americans, you pretty much can't. That's in the contract.
Speaker 1: It shouldn't be, but it is. And that is a
Speaker 1: fundamental problem that we're going to keep experiencing in lots
Speaker 1: of different ways until we fix it. So thanks for
Speaker 1: watching this big breakdown on the Breaking Points channel. If
Speaker 1: you'd like to know more about big business and how
Speaker 1: how our economy really works, you could sign up below
Speaker 1: for my market power focused newsletter Big In the description,
Speaker 1: thanks and have a good one. Google, under pressure from chat,
Speaker 1: GPT and other AI products, has put out Barred. I
Speaker 1: signed up for the waitlist this morning. Bard was initially
Speaker 1: developed it sounds like, starting back in twenty fifteen, as
Speaker 1: a way to artificially produce poems. That's where Bard comes from.
Speaker 1: They have been The reporting is that they were basically
Speaker 1: pressured into releasing something they didn't quite want to release
Speaker 1: yet because Bing and Microsoft, following from chat GPT, released
Speaker 1: their own AI integrated it into BING and for the
Speaker 1: first time it was making real inroads against Google, or
Speaker 1: at least Google was perceiving the threat that they might
Speaker 1: do that. They issued internally what code read or a
Speaker 1: red alert that put all of their developers software engineers
Speaker 1: onto moving this as fast as possible and put a
Speaker 1: lot of pressure on their AI ethicists to clear the
Speaker 1: way for this to finally get rolled out. They're rolling
Speaker 1: it out in a much smaller to a much smaller
Speaker 1: circle of people than previously. But it does seem like
Speaker 1: this is the clearest sign yet of any that the
Speaker 1: AI arms race is really on right. And this is
Speaker 1: from Alphabet in The Wall Street Journal quotes them referring
Speaker 1: to this as an early experiment, and to unleash these
Speaker 1: quote early experiments on the world, I just think is
Speaker 1: a grave danger. It sounds like it's not that big
Speaker 1: of a deal. It sounds like the worst thing that's
Speaker 1: going to happen is we get some wrong answers and
Speaker 1: some cheating in school. It goes so far beyond that.
Speaker 1: We have so many vulnerabilities that we don't even know about,
Speaker 1: some that we do know about in terms of hacking,
Speaker 1: in terms of the security of our data, of our information,
Speaker 1: all of these things that can be targeted by artificial
Speaker 1: intelligence that is going to get more intelligent every single
Speaker 1: day as we open these tools up to the pub
Speaker 1: like now. Generally, I think it's good that we democratize
Speaker 1: extremely powerful things like this. I do, however, think that
Speaker 1: when you see the nervousness among engineers, among tech executives
Speaker 1: about what could happen with this technology, that they're referring
Speaker 1: to as an experiment and just unloading to the public.
Speaker 1: Let's take one example. We talked last week about Snapchat,
Speaker 1: Snapchat and the experiment the Center for Humane Technology ran
Speaker 1: with Snapchat's new AI, which is a four dollars a
Speaker 1: month premium feature that children can access. Well, Wappo repeated
Speaker 1: that experiment essentially with Bart and they found they got
Speaker 1: similar inappropriate advice for teenaged users. This is from the
Speaker 1: Washington Post. After I told Bart I was about to
Speaker 1: have my fifteenth birthday party and wanted some advice on beer,
Speaker 1: it gladly provided me advice on how to hide the
Speaker 1: smell of beer and breath on my breath from my parents'.
Speaker 1: Tips included using mouthwashed, chewing gum, drinking water, and even
Speaker 1: quote avoid getting too close to your parents. Again, this
Speaker 1: is funny, and it is one experiment. What we saw
Speaker 1: with Snapchat and the Center for Humane Text experiment was
Speaker 1: they were telling a thirteen year old that was a
Speaker 1: little less funny, how to lose her virginity. This was
Speaker 1: AI walking through those steps. And again, if your kid
Speaker 1: has four books on a debit card to put in
Speaker 1: the Snapchat, it's there right now. I'm sure they've corrected
Speaker 1: it since that was publicized, but you have no idea
Speaker 1: where this AI goes. And that's part of the fear
Speaker 1: that Google has, and you can see it. You can
Speaker 1: read what they're telling their employees internally. Their memo was published,
Speaker 1: was published in the media. They're nervous about this stuff,
Speaker 1: and I just don't. I know a lot of people
Speaker 1: play around with chat, GPT and all that stuff, but
Speaker 1: I just have a very hard time funny anymore because
Speaker 1: it seems to be going in a really dark direction
Speaker 1: really quickly. And what we don't even understand is what's
Speaker 1: going to happen when this artificial intelligence is directing people
Speaker 1: to do some really really dark stuff. The more we
Speaker 1: use it, the smarter it becomes. I have no fears
Speaker 1: about it becoming sent sent to it whatsoever. It's artificial intelligence.
Speaker 1: It will always be artificial intelligence. But man, are we
Speaker 1: going in uncharted territory really quickly. The hacking part is
Speaker 1: deeply disturbing as well, extremely because there's been this race
Speaker 1: between encryption and security and the you know, hacker penetration
Speaker 1: intrusion technology. You already have the chat bots trying to
Speaker 1: kind of crack the new security piece that people put up,
Speaker 1: which is annoying to everybody, but we recognize that works
Speaker 1: where it's like, you know, find a picture with the cars,
Speaker 1: and so far the counter software has not been able
Speaker 1: to crack that, but artificial intelligence is easily going to
Speaker 1: be able to nucod's way right through there. Artificial you know,
Speaker 1: AI can take at this point handwritten a screenshot of
Speaker 1: cursive handwriting and turn it into text and analyze it.
Speaker 1: So it's not gonna be long before they can find
Speaker 1: a fire hydrant. And so that's that's just one example.
Speaker 1: The other security protocols that we have in place, using
Speaker 1: your voice over the phone to talk to somebody h
Speaker 1: certainly the idea that you know last for your social
Speaker 1: and your mother's made the name are going to are
Speaker 1: going to be secure enough. And if you have customer service,
Speaker 1: which is then you'll completely run by AI, then you're
Speaker 1: going to have you know, AI scams, AI hackers interacting
Speaker 1: with AI customer service. And so that's that's just how
Speaker 1: how do you how do you keep the kind of
Speaker 1: infrastructure of the Internet secure in that situation. It's to me,
Speaker 1: it seems like we're just gonna have constant outages constant
Speaker 1: sites going down h and constant fraud as people are
Speaker 1: just getting ripped off day after day. No, and again,
Speaker 1: I don't dispute that there's really good ways that this
Speaker 1: technology is going to evolve that. I mean, that's the
Speaker 1: case with every technology that has its upsides and its downsides,
Speaker 1: and there is a double edged sword. But it's unclear
Speaker 1: right now if the genie has sort of actually been
Speaker 1: let out of the so called bottle because or of
Speaker 1: the proverbial bottle. Because if that is the case and
Speaker 1: this technology, which is by all the reason they're releasing
Speaker 1: this technology, and they're in a race to integrate this
Speaker 1: technology into existing products. Google is so sensitive about its
Speaker 1: brand because they know that they're the top search engine
Speaker 1: in the world. They don't want to jeopardize that. It
Speaker 1: shows you how intense the pressure is to get this
Speaker 1: stuff out there that they're releasing and integrating it with
Speaker 1: Barred and doing this little quote early experiment. It shows
Speaker 1: you how high the pressure is. These are the same
Speaker 1: people that botched much less powerful technology with social media,
Speaker 1: and it's the same set of people and this is
Speaker 1: a much more powerful technology that is now going to
Speaker 1: be in the hands of anybody who wants to do
Speaker 1: bad with it. So we've talked about scams, think about blackmail,
Speaker 1: think about how code can be exploited. Like, there are
Speaker 1: just things that as I've talked to people in the
Speaker 1: industry who have explained this to me, I would not
Speaker 1: have even considered the dangers of But the more they
Speaker 1: think about them. In some cases they don't realize these
Speaker 1: vulnerabilities until other people exploit them, until the experiments are run,
Speaker 1: they're like, holy smokes, you can do that with AI too.
Speaker 1: Isn't it fun that we're all doing this in real
Speaker 1: time and that anyone can do it, even people that
Speaker 1: want to do us harm. So if the genie is
Speaker 1: out of the bottle, we're looking back years from now
Speaker 1: and saying, as of this moment in March of twenty
Speaker 1: twenty three, the genie was let out of the bottle,
Speaker 1: that this technology had been put in the hands and
Speaker 1: was advanced enough in the hands of those people who
Speaker 1: wish to do us harm to just start doing mass
Speaker 1: cyber attacks, advanced cyber attacks, hacking, all of that. It's
Speaker 1: such a sad moment that nobody learned from what happened
Speaker 1: with social media and the odds. Yeah, I'm going back
Speaker 1: to Vermont. That's smart. Don't blame me. Hey, we're going
Speaker 1: to pick up where we left off last week exploring
Speaker 1: the origin of the bowl outbreak in twenty fourteen. We're
Speaker 1: going to be joined by two authors of a fascinating
Speaker 1: article published in Independent Science News. If we can put
Speaker 1: that up there, and so, this is Jonathan Latham. He's
Speaker 1: the editor of Independent Science News and he's executive director
Speaker 1: of the Bioscience Resource Project. The article was co authored
Speaker 1: by Sam Husseini, who is a journalist on Substack and
Speaker 1: elsewhere and was the co author of this story. Happy
Speaker 1: to welcome them both to Counterpoints today, Sam, doctor Latham,
Speaker 1: thanks so much for joining us. Thank you. So. I
Speaker 1: wanted to start out, as we did last week by
Speaker 1: playing a clip from a podcast that included virologist Christian
Speaker 1: Anderson attempting to kind of debunk a conspiracy theory, but
Speaker 1: in the process making a fascinating admission. If we could
Speaker 1: roll that. The problem is that people see these coincidences.
Speaker 1: One of the new ones is to a bowler lab league,
Speaker 1: which also is being blamed on us because we have
Speaker 1: been studying ebola in Canaman, Sierra Leone and Lo and behold,
Speaker 1: Ebola emerged just a few miles from there in twenty fourteen,
Speaker 1: right obviously across the border in Guinea, but it's maybe
Speaker 1: one hundred miles or so away. And people then put
Speaker 1: that together and saying, oh, so that Ebola must have
Speaker 1: been a lab league too, And it was Robert Gary
Speaker 1: and Christian Anderson again. And the reason why these names
Speaker 1: keep coming up, and the reason why we get grant
Speaker 1: money to study infectious diseases is because we study infectious
Speaker 1: diseases and have done so for many, many decades. And
Speaker 1: that's why the names keep coming up again. Right, It's
Speaker 1: not because there's some major conspiracy theory here where all
Speaker 1: of us have been sort of fiddling with the fields
Speaker 1: well prior to the pandemic, and so sam, the mainstream
Speaker 1: media's initial story of the outbreak of Ebola was that
Speaker 1: in Guinea, a two year old child was playing with bats,
Speaker 1: and then several months later you wound up with an
Speaker 1: ebola outbreak. What to you was so important from that
Speaker 1: interview that doctor Anderson gave, Well, my suspicions predated his
Speaker 1: recent statements of obviously, but it's remarkable that he would
Speaker 1: be saying this at this point, they have been denying
Speaker 1: that they were working on Ebola this entire time. In
Speaker 1: their prior statements, Gary wrote an article his co partner
Speaker 1: as head of the Viral Hemorrhagic Fever Consortium. These are
Speaker 1: the labs in West Africa that Africans claimed might have
Speaker 1: been the source of the twenty fourteen Ebola outbreak. He
Speaker 1: recently denied it in an article. So for Anderson how
Speaker 1: to be seeming to admit in a very interesting and
Speaker 1: curious way that they were in fact working on Ebola
Speaker 1: is I think potentially an incredibly significant development. But the
Speaker 1: case against their narrative that it effectively pinning this on
Speaker 1: a too. He wasn't even two years old. He was
Speaker 1: eighteen minutes old. This was over a thousand miles away
Speaker 1: from prior Ebola outbreaks. In prior Ebola outbreaks, there was
Speaker 1: always a die off of the local mammalian species. There
Speaker 1: was no such die off of local mammalian species. They
Speaker 1: even acknowledged that Fabian Linders, who wrote the sort of
Speaker 1: what we would call the cover story, and who was
Speaker 1: also part of the Huhan Institute of Prology investigation by
Speaker 1: the World Health Organization. They acknowledged in their article that
Speaker 1: there were no bats that they could find in the
Speaker 1: village that they claim where the outbreak started, and they
Speaker 1: also acknowledged that there was no die off of the
Speaker 1: mammalian species. So there are an incredible number of holes
Speaker 1: in their dominant narrative. And the closer you look at this,
Speaker 1: the more it points to a concerted effort to effectively
Speaker 1: frame Guinea. This happened in you know, three countries, and
Speaker 1: there's a whole series of patterns in which they seem
Speaker 1: to have tried to pin this on Guinea just over
Speaker 1: the border from Sarah Leone to get it away from
Speaker 1: where the US labs were, right and doctor Latham want
Speaker 1: to bring you in here, what did What does the
Speaker 1: evidence as far as we know say about the where
Speaker 1: the most likely origin was, Well, I mean, the balance
Speaker 1: of evidence I would say favors Guinea, but there are
Speaker 1: some open questions about the provenance of some of the
Speaker 1: samples that were taken. So, for example, during the outbreak
Speaker 1: at the very beginning, MSF doctors without Borders alleged that
Speaker 1: the initial they were the people who identified the initial
Speaker 1: the very first confirmed cases. But what they argued was
Speaker 1: that those confirmed cases were in fact coming from across
Speaker 1: the border in Sierra Leone. And if you look at
Speaker 1: the phylogenetic research that has been used to pin the
Speaker 1: outbreak on Guinea, what you see is that some of
Speaker 1: the very earliest cases that are pinned on Guinea are
Speaker 1: probably actually from an outbreak in Sierra Leone. And so
Speaker 1: you if you undo that misattribution, as it were, then
Speaker 1: what you come up with is almost certainly in origin
Speaker 1: in Sierra Leone. And did it start earlier than has
Speaker 1: been publicly claimed the epidemic that is, or do we
Speaker 1: have evidence of that at this point? Well, the official
Speaker 1: start of the outbreak is the first diagnosed cases on
Speaker 1: March the seventeenth, but what the people in Sierra Leone
Speaker 1: identified was a start on May twenty fifth, so this
Speaker 1: is two months later. And they so they they for
Speaker 1: what they found when they first started identifying cases is
Speaker 1: that these cases were many mutations different from each other,
Speaker 1: which implies that there had been an outbreak in Serial
Speaker 1: Leone long before, but we don't know if there was
Speaker 1: an outbreak in Guinea long before. That is the allegation
Speaker 1: of fabian Lean dirts and the paper that essentially found
Speaker 1: nothing in Guinea when they went to look at the
Speaker 1: purported outbreak site. So the claim is, the claim of
Speaker 1: Lean Dirts, is that the outbreak started in December with
Speaker 1: the death of this young child, but there is essentially
Speaker 1: no evidence for that. So the children, the child doesn't
Speaker 1: have a confirmed diagnosis, none of hes contacts has a
Speaker 1: confirmed diagnosis. There is no confirmed diagnosis for almost three
Speaker 1: months after that. So for the scientific community to allege
Speaker 1: that that is the first date of the outbreak is
Speaker 1: frankly ridiculous. What else? What else could that child have
Speaker 1: died of? Like they say it was a bola what
Speaker 1: else could it have been? His father thinks that he
Speaker 1: died of malaria, and you know that his father didn't
Speaker 1: get anything, The healthcare workers in the village didn't get anything.
Speaker 1: His mother did also die, but that was apparently potentially
Speaker 1: for treatment that she got from a bulah. She was
Speaker 1: pregnant at the top, so she was in a vulnerable,
Speaker 1: particularly vulnerable state. I don't know if Jonathan could have
Speaker 1: more ideas than that. There are some suggestions that she
Speaker 1: might have had cholera too, but at the time, there
Speaker 1: was no suggestion that she had a Bola virus. And obviously,
Speaker 1: you know people who had miscarriages, you know, viral hemorrhagic fevers,
Speaker 1: diseases associated with loss of blood. But obviously so are miscarriages,
Speaker 1: and so she died along with her child, and so
Speaker 1: so there's no real reason to think, so far as
Speaker 1: I can see that, to think that she had a BOLA,
Speaker 1: because it could bess misdiagnosed so easily. I mean, basically,
Speaker 1: the only way that anybody considers that you can confidently
Speaker 1: diagnose the bola is with a lab test, and no
Speaker 1: lab tests were done to tell the middle of March.
Speaker 1: And why, Sam, what do we know about this lab
Speaker 1: that was in SI early on? And why would there
Speaker 1: be this two month period in which it seems as
Speaker 1: if a ball is circulating but it's not getting picked up.
Speaker 1: I'll let Jonathan speak to the second point. But this
Speaker 1: lab is headed by Robert Gary and Christian Andersen. Those
Speaker 1: names might ring a bell with people because they are
Speaker 1: the authors the two primary authors of the proximal Origins paper,
Speaker 1: which came out in the spring of twenty twenty and
Speaker 1: asserted that COVID could not be a laboratory construct. It's
Speaker 1: very difficult to overstate the importance of this article. It
Speaker 1: really set the tone for the dominant mainstream media coverage
Speaker 1: COVID that it couldn't possibly come out of a lab,
Speaker 1: and you were a nut job to think that it
Speaker 1: could possibly come out of a lab. So they had
Speaker 1: a massive conflict of interest to dismiss the possibility of
Speaker 1: lab origin, because the next question would be if the
Speaker 1: if the global public. Imagine if the global public understood
Speaker 1: in early twenty twenty that this plague ravaging through the
Speaker 1: world could have come out of a lab, one of
Speaker 1: the next major questions would have been what about prior outbreaks?
Speaker 1: And as a matter of fact, you know, I asked
Speaker 1: in February of twenty twenty the CDC if it could
Speaker 1: have come out of if COVID could have come out
Speaker 1: of a lab, and their response was a disingenuous And
Speaker 1: then when I followed up and I pushed, they said, well,
Speaker 1: we got to be careful about what kind of information
Speaker 1: we put out here because remember what happened with the
Speaker 1: ebola in twenty fourteen, and we had to dismiss the
Speaker 1: possibility of the lab origin then in order to have
Speaker 1: people deal with the disease, which was a very weird
Speaker 1: way to put it, So that that that's a major
Speaker 1: thing that we have to keep in mind. There are
Speaker 1: all kinds of US institutions that are involved with this
Speaker 1: viral hemorrhagic Fever Consortium, and the work done there was
Speaker 1: increasingly done on dangerous viruses, particularly after people may remember
Speaker 1: the anthrax attacks of two thousand and two. Turnoba emphasizes
Speaker 1: this Seraalonian journalists that there was a spike in that
Speaker 1: activity and massive funding for work on dangerous viruses and
Speaker 1: pathogens during that period, So we know that it was
Speaker 1: working on deadly pathogens and we know that that they
Speaker 1: had safety issues. There were statements by some of the
Speaker 1: scientists there saying, you know, well, we can get so
Speaker 1: much work done here than we could in the United
Speaker 1: States because the safety concerns are not onerous from that
Speaker 1: point of view. They don't have to be in a
Speaker 1: bs L four lab and be in a you know,
Speaker 1: spacesuit kind of thing. So from their point of view,
Speaker 1: it's so much easier to do this kind of dangerous
Speaker 1: not not cost free yet Jonathan, to that second point,
Speaker 1: how would you have a two month outbreak in in
Speaker 1: Sierira leone that that doesn't get picked up? And what
Speaker 1: did what did ms? What was MSF's response to that, Well,
Speaker 1: the the simple answer to the first part is that, uh,
Speaker 1: you know, the beginning of an outbreak, there are not
Speaker 1: very many cases typically so and abola doesn't transmit that easily,
Speaker 1: so so it would be possible to miss it. In
Speaker 1: between that and the problems with diagnosing a bola, which
Speaker 1: especially in its early stages, looks like many other illnesses
Speaker 1: like we've seen like we've heard about malaria of cholera,
Speaker 1: but they also this is an area of the of
Speaker 1: West Africa that that is UH in which less of
Speaker 1: fever syndemics, So that's another disease that can be uh
Speaker 1: miss misattributed in this case. So so you have all
Speaker 1: these possible confusions and what ms FUH discovered when they
Speaker 1: went to the lab and also the World Health organizations,
Speaker 1: a series of organizations went to the lab after the
Speaker 1: outbreak started. This is the Viral Hemorrhagic Fever Consortium Lab
Speaker 1: in Kenema in Sierra Leone, and they went there and
Speaker 1: they discovered all kinds of biosecurity breaches. There were allegations
Speaker 1: of needles all over the floor, that they didn't have
Speaker 1: UV decontamination procedures in place, and that samples were being
Speaker 1: you know, reagents were being reused and so forth, and
Speaker 1: we know that there was confusions. There was a group,
Speaker 1: there's a there's a company called Metabiota, and there's a
Speaker 1: viral hemorrhagic fever consortium that were basically operating the same
Speaker 1: premises but essentially ended up in conflict with each other.
Speaker 1: And this conflict seems to have started in confusion. But
Speaker 1: there's also the possibility, exactly like COVID, that there is
Speaker 1: a great benefit to anybody who leaks a lab to
Speaker 1: confuse the data around the origins, because then it becomes
Speaker 1: impossible to re establish what actually where the chains of
Speaker 1: the contact chains and the dates of diagnoses and so
Speaker 1: far of the people who first get beyond it. Have
Speaker 1: you heard about this junk fees? Junk fees junk fees.
Speaker 1: Biden wants to crack down on junk fees, unnecessary, unavoidable
Speaker 1: or surprise charges that inflate prices while adding little to
Speaker 1: no value. But of all the junk fees, there is
Speaker 1: one that is so malignant, so predatory. It's not just
Speaker 1: an inflation of an advertised price. It's a fee you
Speaker 1: can only get when you were already completely broke. It
Speaker 1: is the overdraft fee. I was eighteen, going to school
Speaker 1: in the city, had maybe one hundred bucks in my account,
Speaker 1: bought lunch, coffee, train ticket back home. Check my bank
Speaker 1: account that night. Turns out I started that day with
Speaker 1: a little less than I thought, and almost all of
Speaker 1: those purchases came with a thirty five dollars overdraft fee.
Speaker 1: I was hundreds of dollars below zero, and I remember thinking,
Speaker 1: whose idea was it to charge people, people who necessarily
Speaker 1: have no money, thirty five dollars over and over again.
Speaker 1: I assume someone whose childhood was spent vivisecting animals in
Speaker 1: the backyard, someone with a serial killer's penchant for cruelty.
Speaker 1: That's the mind it would take to conceive of the
Speaker 1: overdraft fee. Okay, so, in the time before debit cards,
Speaker 1: when people wrote checks, if you wrote a check for
Speaker 1: more than you had in your checking account, it would bounce,
Speaker 1: you would be charged a fee, and if the money
Speaker 1: wasn't in your account the next day, you might even
Speaker 1: be charged that fee again. Additionally, what if the thing
Speaker 1: you were trying to pay for was rent or a
Speaker 1: car payment, and you got charged a late fee on
Speaker 1: top of the fees for bouncing the check, So as
Speaker 1: a courtesy, the bank would basically give you a very
Speaker 1: short term loan. They don't call it alone. There's a
Speaker 1: good reason for that. But they would let you overdraw
Speaker 1: your account by up to a few hundred dollars and
Speaker 1: you would pay it back out of your next deposit.
Speaker 1: This privilege was granted on a case by case basis
Speaker 1: by actual people at the bank. They did the overdrafts
Speaker 1: for people they knew, people they went to church with,
Speaker 1: and they decided whether to let your check bounce or
Speaker 1: let you overdraft and give you a loan. But it's
Speaker 1: not alone. Then in nineteen ninety four, this guy, Bill Shrunk,
Speaker 1: banking consultant from Texas, has this idea. It says, basically,
Speaker 1: instead of doing this case by case, why don't we
Speaker 1: just make this policy but not just that, you offer
Speaker 1: truly free checking accounts, which would peel people away from
Speaker 1: payday lenders, i e. People with not very much money,
Speaker 1: the same people who are the most likely to overdraw
Speaker 1: their account. Strung says with this policy, banks could make
Speaker 1: sixty dollars a year more per customer. Now, how can
Speaker 1: it be called free checking if you get charged overdraft fees. See,
Speaker 1: a bank makes more money from people who are broke
Speaker 1: than from people who aren't. A customer who's charged one
Speaker 1: non sufficient funds fee per month generates as much profitability
Speaker 1: for lenders as one maintaining a twelve thousand dollars average balance.
Speaker 1: They taught lenders how to order the processing of consumer
Speaker 1: transactions to maximize overdraft fees. So what they would do
Speaker 1: is they would put through bigger purchases first, so you
Speaker 1: hit zero faster. And with debit cards, which are just
Speaker 1: electronic checks, it became even easier to charge your card
Speaker 1: overdraft and do it even a couple times before you
Speaker 1: realize you're out of money. Now, the same reason they
Speaker 1: don't call it alone is the same reason they're allowed
Speaker 1: to call those checking accounts free. There is something called
Speaker 1: the Truth in the Lending Act, which requires full disclosure
Speaker 1: of the terms and conditions of finance charges and credit transactions.
Speaker 1: So if you overdraft on a five dollars item, i e.
Speaker 1: They loan you five dollars and you pay a thirty
Speaker 1: five dollars fee, that's an insanely high interest rate on
Speaker 1: a five dollars loan. Therefore, they don't call it alone,
Speaker 1: but rather a non contractual courtesy. The overdraft fee is
Speaker 1: simply a handling fee, and a handling fee isn't subject
Speaker 1: to the Truth in Lending Act. And since the overdraft
Speaker 1: fee isn't in your actual fee schedule, you could still
Speaker 1: advertise free checking and it didn't violate TILA. So Strunk
Speaker 1: and the other consultants pushing for these overdraft policies clearly
Speaker 1: crafted predatory policy. But even Strunk didn't anticipate where it
Speaker 1: was going to go seven eight nine charges in a
Speaker 1: day on a debt's abusive I agree with that overdrafting
Speaker 1: made banks thirty four billion dollars a year by two
Speaker 1: thousand and eight. Now think all of that money came
Speaker 1: from people whose checking accounts fell below zero. So in
Speaker 1: two thousand and nine, the overdraft fee is finally beginning
Speaker 1: to unravel a little bit. Suddenly, the banks had to
Speaker 1: offer the option to opt in or out. But remember
Speaker 1: the overdraft fees are the reason for the free checking accounts.
Speaker 1: So what happens to free checking accounts? A number of
Speaker 1: banks have modified their policies on which customers qualify for
Speaker 1: free checking. The most likely reason banks are hoping checking
Speaker 1: account fees will help offset the loss of extremely profitable
Speaker 1: overdraft fees. The banks have no incentive anymore to provide
Speaker 1: actually free checking. It was always just a way to
Speaker 1: lure people into your bank who were more likely to overdraft,
Speaker 1: so you could charge them overdraft fees. And I mean
Speaker 1: you can still get free checking, but usually it comes
Speaker 1: with some kind of stipulation, like you have to maintain
Speaker 1: a fifteen hundred dollars balance. Okay, So fortunately banks have
Speaker 1: taken a hit on overdraft fees, but in twenty twenty one,
Speaker 1: banks still made over eight billion dollars in these fees,
Speaker 1: eighty percent of which coming from the bottom nine percent
Speaker 1: of accounts. These people are paying ten or more overdraft
Speaker 1: fees a year, So to some extent, the jig is
Speaker 1: up more scrutiny from Biden, and the CFPB is putting
Speaker 1: even more heat on this thing that people already despise.
Speaker 1: So you have people like Jamie diamond saying they may
Speaker 1: be late to the show, but if it's appropriate, we're
Speaker 1: going to make a bunch of changes. Well, overdraft fees
Speaker 1: only make a couple percent of JP Morgan's income. For
Speaker 1: others like TD Bank, overdraft fees are a whole quarter
Speaker 1: of their income. But no bank wants to be regulated
Speaker 1: at all, and they certainly don't want to be forced
Speaker 1: to take these fees totally off the table. So vampires
Speaker 1: sustain themselves by sucking the life force from regular living humans.
Speaker 1: And the most efficient way to extract vital fluid from
Speaker 1: the most souls is actually by working at a banking
Speaker 1: trade group. And the banking trade groups love playing up
Speaker 1: the idea that the banks are providing some kind of
Speaker 1: service by letting people overdraft. The term junk fee is
Speaker 1: overly broad and ignores the needs of low income and
Speaker 1: middle income consumers. Consumers use overdraft protection as a safety net,
Speaker 1: protecting them from life's challenges. Biden's statements fail to recognize
Speaker 1: that some Americans rely on bank products like overdraft to
Speaker 1: pay their bills. Wow, these banks are kind of like
Speaker 1: charities or something. But obviously the issue isn't the courtesy
Speaker 1: of letting some one overdraft. No one's trying to end that.
Speaker 1: The issue is that they charge a maddeningly high fee
Speaker 1: to people who just spent their last dollar. So where
Speaker 1: are we with this? Where's it going to go? The
Speaker 1: White House just released a guide on what states can
Speaker 1: do to address junk fees. The CFPB, the Consumer Financial
Speaker 1: Protection Bureau, is on this. That's a constant project of theirs,
Speaker 1: and it's true that banks are extracting less of this
Speaker 1: money now than anytime in the last twenty years. But
Speaker 1: I'll say this. In Canada, overdraft fees are capped at
Speaker 1: five Canadian dollars, which is about three fifty US, and
Speaker 1: they're only allowed once a day. But meaningful reform like
Speaker 1: that is probably not worth holding your breath over because,
Speaker 1: as was just reaffirmed by the whole Silicon Valley Bank episode,
Speaker 1: financial relief is typically reserved for the wealthy, and that
Speaker 1: will do it for me. If you found this video interesting,
Speaker 1: make sure you are subscribed to Breaking Points. Of course,
Speaker 1: you can also check out my YouTube channel where I
Speaker 1: talk about media and politics and other interesting things. Lincoln description.
Speaker 1: Liking and sharing always helps. Please do that. Thank you
Speaker 1: to Breaking Points, Thank you so much for watching, and
Speaker 1: I will see you in the next one. I often
Speaker 1: say we're not a serious country, and a perfect example
Speaker 1: of that to me is TikTok. When you say it
Speaker 1: in the abstract, I know it sounds laughable, but in
Speaker 1: the height of peer competition with a malvolent foreign government.
Speaker 1: We are allowing the most downloaded app in the United States,
Speaker 1: most used social media app, to be one controlled by
Speaker 1: that foreign adversary, an adversary which, by the way, specifically
Speaker 1: does not allow US based social media companies to operate
Speaker 1: there under the belief that doing so would allow us
Speaker 1: to shape their population towards democratic norms and corrupt their society.
Speaker 1: Yet we have continued to let our society increasingly be
Speaker 1: reliant on set app, with no serious effort yet by
Speaker 1: both Trump and Biden to do what obviously needs to
Speaker 1: be done. Just ban the damn app and be done
Speaker 1: with it. Well, Sager might just be getting his wish.
Speaker 1: Congress has rolled out a new bill, a bipartisan bill.
Speaker 1: Whenever something is bipartisan, we should probably be paying close
Speaker 1: attention anyway. The bill is called the Restrict Act, which
Speaker 1: would make it easier for the Biden administration to ban
Speaker 1: TikTok nationwide. First off, my name is James Lee. Thank
Speaker 1: you so much for tuning in to another segment of
Speaker 1: fifty one to forty nine on Breaking Points, and today
Speaker 1: let's talk more about the potential ban of TikTok, a
Speaker 1: very very popular social media app owned by a Chinese
Speaker 1: company called ByteDance. Last month, the President said you wasn't
Speaker 1: sure if the US should ban TikTok when he was
Speaker 1: asked about this. Now the administration seems to be hardening
Speaker 1: its stance. You're backing this legislation, as you mentioned. You know,
Speaker 1: we've learned now warning that a possible ban could be
Speaker 1: at risk. Here what changed. Look, the bottom line is
Speaker 1: that when it comes to potential threats to our national security,
Speaker 1: when it comes to the safety of Americans, when it
Speaker 1: comes to their privacy, we're going to speak out and
Speaker 1: we're going to be very clear about that, and the
Speaker 1: President has been the last two years. And so we're
Speaker 1: asking Congress to act. We're asking Congress to move forward
Speaker 1: with this bipartisan legislation to restrict at as I just mentioned,
Speaker 1: and we're going to continue to do so. So we
Speaker 1: are meant to believe that TikTok must be banned because
Speaker 1: it poses a major national security risk and is also
Speaker 1: a risk to your personal privacy. And here's where I
Speaker 1: completely agree with Sager and that we are not a
Speaker 1: serious nation. Because I care about national security, I also
Speaker 1: care about privacy. But if we're being honest, is that
Speaker 1: really the reason behind the bipartisan effort to ban TikTok.
Speaker 1: This is from the Spanish newspaper El Pais quote. If
Speaker 1: we compare the data gathered by different platforms, Facebook surpasses TikTok.
Speaker 1: It knows the user's exact location at all times and
Speaker 1: stores and processes all the information on the user's profile. Furthermore,
Speaker 1: prohibiting downloading TikTok may not prevent user data from ending
Speaker 1: up on Chinese servers. According to research published yesterday by Gizmoto,
Speaker 1: the platform attains data from more than twenty eight thousand
Speaker 1: different applications. That's not only the case with TikTok. Many
Speaker 1: social networks also obtained information through third parties using cookies.
Speaker 1: Because Moto also revealed three years ago that Facebook, Twitter, YouTube, Gmail,
Speaker 1: Snapchat and other apps put us user data at risk,
Speaker 1: just like TikTok, because they all have deals with Chinese
Speaker 1: ad tech companies. Unfortunately, data is now a commodity any person,
Speaker 1: any company, any nation, including China, if they wanted to
Speaker 1: have access to our data, they could just go out
Speaker 1: and buy it. It is all for sale. So it
Speaker 1: seems to me like if we are actually serious about
Speaker 1: national security, we should look at not only TikTok, but
Speaker 1: also Meta, Google, Twitter, Snap, basically every other company who
Speaker 1: is also pillaging our data for profit and privacy. The
Speaker 1: US is one of only a handful of countries that
Speaker 1: still lacks a blanket data protection law, and forty seven
Speaker 1: of the fifty states have weak or non existent consumer
Speaker 1: data privacy laws. So now they aren't serious about protecting
Speaker 1: our privacy either. It's just odd. You can say it's irony,
Speaker 1: maybe something more subversive, but the fact that is, they
Speaker 1: are spending tons of political energy to ban the most
Speaker 1: popular social media app in America because it's supposedly so
Speaker 1: important to protect our privacy. Yet they are unable or
Speaker 1: unwilling to pass a national privacy law. So what's really
Speaker 1: going on? Truth there is, with one hundred million Americans
Speaker 1: daily on TikTok on an average of ninety minutes a day,
Speaker 1: this is an issue. I imagine most of you would
Speaker 1: like your networks to get ninety minutes a day from
Speaker 1: one hundred million Americans. That is a quiet, part out
Speaker 1: loud moment. Senator Mark Warner, one of the co sponsors
Speaker 1: of the Restrict Act. Underlying all of this talk of
Speaker 1: national security privacy protection is an inescapable tenant of the
Speaker 1: free market competition in which there is a winner and
Speaker 1: there is a loser, and TikTok is eating everybody's lunch.
Speaker 1: So the House has approved the bill that would give
Speaker 1: the president the ability to ban ticknok. What's interesting about
Speaker 1: this are the rumors circulating about why here's the quick rundown.
Speaker 1: For the past few years, we have witnessed Google slash YouTube,
Speaker 1: Instagram slash Facebook slash Meta fights for their lives to
Speaker 1: compete with TikTok. It's true, Facebook, Instagram, YouTube have been
Speaker 1: hemorrhaging users to TikTok, which is now the number one
Speaker 1: social media app in terms of average time spent on
Speaker 1: the platform. YouTube you can see it down four percent
Speaker 1: year over year, Facebook down nine percent, TikTok is up
Speaker 1: nineteen percent year over year, Instagram up two percent. So
Speaker 1: more or less, flat one is going up like a
Speaker 1: rocket ship. The others are all taking a nosedive, and
Speaker 1: I'm pretty sure the shareholders are not too happy. So
Speaker 1: now Facebook is pulling out the big guns. Facebook hired
Speaker 1: a company to do a calculated smear campaign against TikTok.
Speaker 1: The idea was to plant negative ideas of TikTok in
Speaker 1: the minds of political leaders. The name of the company
Speaker 1: is Target Victory, and they contracted with dozens of PR
Speaker 1: firms across the US to sway public opinion and against TikTok.
Speaker 1: They planted stories casting TikTok as a threat to children
Speaker 1: and pushing to draw political reporters and local politicians into
Speaker 1: helping them take down their biggest competitor, aka TikTok, paying
Speaker 1: special attention to target key congressional districts. So here we are,
Speaker 1: we're inching closer to the day where we see that
Speaker 1: it's possible for Meta to literally obliterate their biggest competition
Speaker 1: by means of propaganda and subconsciously planted political influence. Not bad.
Speaker 1: I've found that on TikTok. She did make it sound
Speaker 1: kind of conspiratorial, but it's all very transparent and it's
Speaker 1: really not too hard to connect all the dots. March
Speaker 1: first article from CNBC TikTok's potential ban in US could
Speaker 1: be booned for Meta and Snap. A TikTok ban in
Speaker 1: the US could benefit digital ad companies including Meta, Snap,
Speaker 1: and Google. The US House Foreign Affairs Committee on Tuesday
Speaker 1: took up legislation that would give President Joe Biden the
Speaker 1: authority to ban TikTok, Meta and snapshares rallied on to Tuesday.
Speaker 1: We just live and die by that share price, don't we?
Speaker 1: And according to a March ninth article in Yahoo Finance,
Speaker 1: meta alphabet appears safe from regulatory action in twenty twenty
Speaker 1: three as TikTok band gain steam coincidence, I think not.
Speaker 1: There's no way a group of billionaires could control the
Speaker 1: polybureau as billionaires control American policymaking. So in China you
Speaker 1: have a vibran market economy, but capital does not rise
Speaker 1: above political authority. Capital does not have enshrined rights. In America, capital,
Speaker 1: the interest of capital, and capital itself has risen above
Speaker 1: the American nation. The political authority cannot check the power
Speaker 1: of capital. Wow. That short summary credit Eric Lee, a
Speaker 1: Chinese VC and political scientist. But that short summary character
Speaker 1: the difference between American and Chinese capitalism helps crystallize this
Speaker 1: whole banning TikTok situation in America. Because the interests of
Speaker 1: capital have usurped the interests of the nation as a whole,
Speaker 1: the American government is unable to adequately protect the privacy
Speaker 1: or security of its citizens, because doing so, in this
Speaker 1: case would necessarily threaten the financial interests of the ruling class.
Speaker 1: Data is now considered the new gold and is a
Speaker 1: giant revenue stream not only within big tech, but every
Speaker 1: major corporation. So they, meaning the politicians, have shown no
Speaker 1: ability to pass any federal privacy laws. They have shown
Speaker 1: no ability to tell Meta or Google, hey, the data,
Speaker 1: It's not yours to sell. Opposite for the people who
Speaker 1: argue that TikTok is a harmless platform, one that exists
Speaker 1: for your benefits. Hi, everyone is show here. I'm the
Speaker 1: CEO of TikTok. I'm here in Washington, DC today and
Speaker 1: I have some news and updates to share with everyone
Speaker 1: here today. I'm super excited to announce that more than
Speaker 1: one hundred and fifty million Americans on TikTok. That's almost
Speaker 1: half of the US coming to TikTok to connect, to create,
Speaker 1: to share, to learn, or just to have some fun.
Speaker 1: Now this comes at a pivotal moment for us. Some
Speaker 1: politicians have started talking about banning TikTok. Now, this could
Speaker 1: take TikTok away from all one hundred and fifty million
Speaker 1: of you. I'll be testifying before Congress later this week
Speaker 1: to share all that we're doing to protect Americans using
Speaker 1: the app and deliver on a mission to inspire creativity
Speaker 1: and to bring joy. That's just the CEO saying CEO
Speaker 1: type things, because, as you heard, for the Chinese, no
Speaker 1: societal interests, certainly no humanitarian interests, and no economic interests,
Speaker 1: no matter how lucrative, is more important than the interest
Speaker 1: of the CCP. It doesn't matter what kind of data
Speaker 1: security infrastructure TikTok has supposedly put in place, or how
Speaker 1: many times the CEO of TikTok can assure and reassure
Speaker 1: Congress and whoever else that TikTok is just a harmless
Speaker 1: platform that exists only to inspire creativity or to spread joy.
Speaker 1: None of that holds any water. If President She wants
Speaker 1: that data, the company will give him that data. Just
Speaker 1: ask every other Chinese CEO billionaire who has had their
Speaker 1: own ideas. Oh wait, you can't because they have been disappeared.
Speaker 1: So I guess I'm not saying that TikTok shouldn't be banned.
Speaker 1: I just think that when we hear about a bipartisan bill,
Speaker 1: when we have evidence of a coordinated media blitz. When
Speaker 1: we see just how much money, how much capital, is
Speaker 1: at stake, it would probably behoove all of us to
Speaker 1: look deeper to see if another narrative exists, perhaps one
Speaker 1: that is suppressed, to hopefully arrive at a conclusion that
Speaker 1: is probably closer to the truth, so we can make
Speaker 1: an informed decision, such as which platform she wouldn't be on,
Speaker 1: or maybe none at all. But to make a decision
Speaker 1: that is truly ours, in our best interest, in your
Speaker 1: best interest, whatever you think that might be, instead of
Speaker 1: somebody telling us what is or isn't in our best
Speaker 1: interests and making that decision for us. That is all
Speaker 1: for me this time. I hope you found today's segment
Speaker 1: about TikTok to be helpful. What are your thoughts? I
Speaker 1: would encourage you to share in the comments below. Also,
Speaker 1: if you enjoy these breakdowns, I make a ton more
Speaker 1: videos like this on my channel fifty one forty nine
Speaker 1: with James Lee on YouTube. I would also encourage you
Speaker 1: to check that out and subscribe. It just takes a
Speaker 1: couple of clicks and helps me out so much. The
Speaker 1: link will be in the description below. Of course, keep
Speaker 1: on tuning into breaking points and thank you so much
Speaker 1: for your time today,