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Speaker 1: Hey, guys, ready or not, twenty twenty four is here

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Speaker 1: and we here at Breaking Points, are already thinking of

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Speaker 1: Breakingpoints dot Com. Good morning, everybody, Happy Tuesday. We have

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Speaker 1: an amazing show for everybody today. What do we have, Christal, indeed,

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Speaker 1: we do lots to get to this morning. We have

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Speaker 1: the very latest in terms of the SVB bail. I'm

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Speaker 1: including comments from President Biden and exactly what happened in

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Speaker 1: the markets yesterday. So we'll break all of that down

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Speaker 1: for you wheels. To have David Daan on to talk

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Speaker 1: about his analysis of everything that is happening. Incredibly sharp

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Speaker 1: financial so excited to speak with him. We have some

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Speaker 1: news regarding China, both brokering a deal between Saudi Araubia

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Speaker 1: and Iran, but also speaking with Zelenski and of course

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Speaker 1: with Russia. And this is a huge, huge deal. So

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Speaker 1: we'll break all of that down for you. Interesting clip

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Speaker 1: coming out of the View and interesting reporting coming out

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Speaker 1: of the Democratic Party. They are very upset. They want

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Speaker 1: people to shut up about the problems they have with

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Speaker 1: Kamala Harris. They are getting very concerned because you may

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Speaker 1: not know this, but Joe Biden is eighty years old,

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Speaker 1: and they're very concerned that. You know, if people don't

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Speaker 1: love Kamala Harris and they realize that she's number two

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Speaker 1: on the ticket and she's a heartbeat away from the presidency,

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Speaker 1: that could be a problem for them. Also, have some

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Speaker 1: polling regarding lab leak. Public did not buy the media

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Speaker 1: spin job on that particular issue. So all of that,

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Speaker 1: plus we have Matt Tyeb in the show today. Doo Yeah,

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Speaker 1: Matt tayve so called journalists. He'll be responding to Congress

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Speaker 1: and we'll actually talk about the content of the Twitter file,

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Speaker 1: something that you missed unfortunately in those hearings. Just a reminder,

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Speaker 1: to Spotify and you'll be good to go. We will

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Speaker 1: make it all good to go. Let's start with the

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Speaker 1: Silicon Valley bailout. So President Biden speaking yesterday to try

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Speaker 1: and calm the markets and assure everybody everything is just

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Speaker 1: aokay despite the bailout. Here's what he had to say today.

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Speaker 1: Thanks to the quick action of my administration over the

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Speaker 1: past few days, America is going to have confidence that

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Speaker 1: the banking system is safe. Your deposits will be there

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Speaker 1: when you need them. Small businesses across the country. The

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Speaker 1: deposit accounts that these banks can breed easier, and knowing

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Speaker 1: they'll be able to pay their workers and pay their bills,

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Speaker 1: and their hard working employees can breathe easier as well.

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Speaker 1: So anytime a politician has to say the banking system

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Speaker 1: is sound and it's safe, you should probably start to

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Speaker 1: ask some questions about what the hell is going on. Unfortunately,

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Speaker 1: Wall Street did not take the president's warning to heat

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Speaker 1: let's go and put this up there on the screen.

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Speaker 1: Absolutely stunning day in the treasury markets. The two year

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Speaker 1: treasury yield posted the biggest three day decline since the

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Speaker 1: aftermath of the nineteen eighty seven stock crash, CNBC writing here,

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Speaker 1: Investors swarmed in the government bonds on Monday after the

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Speaker 1: collapse of the bank, sending treasury yields tumbling. The yield

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Speaker 1: was last trading at four percent, down fifty nine basis points,

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Speaker 1: the largest three day crash since October of twenty second

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Speaker 1: October twenty second, nineteen eighty seven, when it fell a

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Speaker 1: comparable one hundred and seventeen basis points, otherwise known as

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Speaker 1: Black Monday. So one of the worst days in stock

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Speaker 1: market history. But you know, there's an irony here because

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Speaker 1: part of how Silicon Valley Bank got into trouble is

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Speaker 1: they were holding all of these long term treasuries and

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Speaker 1: now with this huge market movement, this may have been

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Speaker 1: enough to pump up the value of their long term

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Speaker 1: drudgeries and make them solvent. But anyway, so that will

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Speaker 1: be helpful to other banks that are potentially in similar situations.

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Speaker 1: But yeah, that's what wellly, you can almost not make

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Speaker 1: it up. The major point being though, that this was

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Speaker 1: a absolute bloodbath of a day for everybody in the

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Speaker 1: regional bank sector. We had the first Republic CEO go

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Speaker 1: CNBC to tell everyone that no, it's actually fine. Many

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Speaker 1: depositors aren't leaving despite the fact that their stock got

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Speaker 1: absolutely massively hammered. Here's what he had to say. Just

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Speaker 1: spoke with with Jim Herbert. He's the CEO of First

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Speaker 1: Republic and I asked him what are the outflows today?

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Speaker 1: And he said, it's business as usual. Now, remember I'm

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Speaker 1: speaking to the CEO. That does not mean Jim Kramer

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Speaker 1: says this business as usual, that they're not that much,

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Speaker 1: that they're that not that many liquidations above two fifty million,

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Speaker 1: two and fifty thousand. It's pretty much the same as

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Speaker 1: you would expect. The JP Morgan funding is working trying

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Speaker 1: to make it so this situation is stable, all right.

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Speaker 1: So despite his assurances, Crystal, let's put this up there

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Speaker 1: on the screen, First Republic Bank dropped sixty percent in

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Speaker 1: stock value in a single day, leading the decline in

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Speaker 1: bank stocks. Despite the government backstop of SVB, they had

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Speaker 1: to raise its unused liquidity to seventy billion dollars again

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Speaker 1: then being able to tap the new FED facility. And

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Speaker 1: I think that is where we need to focus some

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Speaker 1: of our analysis, more of the bailout, right, because it's important.

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Speaker 1: We're going to do an entire thing on the Federal Reserve.

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Speaker 1: But to tie these two things together, even with the

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Speaker 1: extraordinary actions of covering, effectively setting the precedent that from

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Speaker 1: here on out, all banks are too big to fail,

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Speaker 1: All banks deposits are now effectively covered by the FDIC.

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Speaker 1: We're going to see how much more these banks have

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Speaker 1: to pay for the FDIC, and we're also going to

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Speaker 1: see how much more customer fees all of us are

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Speaker 1: going to have to pay in order to make Yeah,

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Speaker 1: once again, if you think those banks are the ones

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Speaker 1: absorbing the cost, then you're an idiot. So somebody's going

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Speaker 1: to pay for it. It's almost certainly going to be

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Speaker 1: us in addition to all of these tax payer You know,

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Speaker 1: it may not be actual appropriated funds, but let's just say,

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Speaker 1: like having the Federal Reserve backstop all of the treasuries

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Speaker 1: on the balance sheet of every bank in the United States,

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Speaker 1: that's just an extraordinary gift. I mean, basically, imagine if

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Speaker 1: you had a loss on your balance sheet that was

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Speaker 1: declining and then the government just came in and said

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Speaker 1: we'll redeal it. Though at the original value of that

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Speaker 1: that'd being real nice for any of us in the

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Speaker 1: small business world. But if you happen to the grass

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Speaker 1: station or a restaurant. You're screwed. If you're open to

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Speaker 1: own a bank. Oh you're all good. Now, if we

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Speaker 1: tried to do that, that would be accounting fraud. Yeah,

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Speaker 1: it would be accounting broad And yeah, I mean, I

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Speaker 1: think it's important to remind everyone of just what is

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Speaker 1: entailed in this bailout. Effectively, because they are backing up

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Speaker 1: one hundred percent of the deposits both at SBB and

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Speaker 1: at Signature Bank de facto, that means every deposit in

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Speaker 1: the entire country, insured or uninsured, is backstop by the FDIC.

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Speaker 1: And in addition, and this is perhaps the even more

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Speaker 1: significant gift, is they're creating a new lending facility at

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Speaker 1: the FED so that banks can borrow against collateral, including

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Speaker 1: some of that collateral that has declined in value. They're

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Speaker 1: just going to pretend that it didn't decline in value.

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Speaker 1: So huge change to the banking system without and this

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Speaker 1: is in a way makes it worse than two thousand

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Speaker 1: and eight. In two thousand and eight, at least there

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Speaker 1: was some pain extracted from industry in terms of Dodd

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Speaker 1: Frank's financial reform. Now, I think we're learning in real

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Speaker 1: time that Dodd Frank didn't go far enough, and especially

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Speaker 1: now that we see some of those regulations being rolled back,

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Speaker 1: but there was at least new guardrails put on the

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Speaker 1: banking sector. Here they're getting a free lunch and they're

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Speaker 1: not being asked for anything. I mean, I don't hear

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Speaker 1: Biden really, you know, calling for Congress to put anything

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Speaker 1: on his desk. Of course, there are some members, Elizabeth

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Speaker 1: Warren in particular, who are calling for a rollback of

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Speaker 1: that deregulation that happened under the Trump administration. But will

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Speaker 1: that get anywhere when you have a Republican House. I

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Speaker 1: you know, I'm skeptical at best that anything will happen

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Speaker 1: on the regulatory front. So they're getting this bailout, they're

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Speaker 1: getting a massive gift from the US federal government, and

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Speaker 1: they're not being asked for anything in exchange. So I

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Speaker 1: think it's really important to remember that. Let me also say,

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Speaker 1: in terms of Biden, there's some new reporting this morning.

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Speaker 1: You know, I don't know if this is really true

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Speaker 1: or not, but the reporting suggests that he really had

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Speaker 1: to have his arm twisted in order to do this

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Speaker 1: bailout because he didn't like the two thousand and eight

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Speaker 1: bailouts whatever. And at the beginning of the weekend he

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Speaker 1: really didn't want to go down this path, but effectively,

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Speaker 1: like you know, Treasure Janiet, Yellen and Powell kind of

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Speaker 1: talked him into going forward with this bailout. So you

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Speaker 1: can see in his comments he goes to great pains

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Speaker 1: to position this as like a populist player, we're just

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Speaker 1: backstopping small businesses, etc. But ultimately they're lying about what

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Speaker 1: this really means. They're lying about the extent of it,

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Speaker 1: they're lying about the idea that it's not a bailout.

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Speaker 1: All of this is very, very misleading in terms of

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Speaker 1: what has actually just happened. So our guest yesterday, Matthew'siland,

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Speaker 1: actually had a great point, and I'll read his tweet here.

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Speaker 1: Quote the no taxpayer money just gives you intight into

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Speaker 1: how legalistic and literal that the government now is. The

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Speaker 1: thrust of dog Frank and just the general vibe was

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Speaker 1: that what happened in eight should be avoided after the bailouts.

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Speaker 1: So the Feds are very carefully just not doing literal

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Speaker 1: two thousand and eight all over again. You can't actually

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Speaker 1: pass a law that says don't do anything wacky with

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Speaker 1: banks again, So the Feds will stay within the lines

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Speaker 1: that Congress has drawn. But what Congress is drawn is

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Speaker 1: by giving this extraordinary authority to the FDIC and also

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Speaker 1: with the Federal Reserve and its expanded powers to basically say, oh, well,

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Speaker 1: it's not an appropriated, congressionally passed, taxpayer funded bailout. Yet

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Speaker 1: the Fed is backstopping the balance sheet of every single

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Speaker 1: bank in the entire United States. And also we just

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Speaker 1: set an insane and extraordinary standard that all deposits in

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Speaker 1: the US are now covered by the FDIC. Hmm. Once again,

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Speaker 1: the FDIC has only what one hundred billion or so

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Speaker 1: in it. There's nine trillion dollars worth of banks that

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Speaker 1: are not bank deposits that are not insured currently by FDIIC.

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Speaker 1: So who is going to make up the difference, and

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Speaker 1: who's full faith and credit and legitimacy is backing it?

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Speaker 1: The taxpayer. So much of this is just you know,

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Speaker 1: as you said, it's semantic. We tried to do it,

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Speaker 1: it'd be tag, it'd be accounting fraud. When they get

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Speaker 1: to do it, it's because the Feds are backing them.

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Speaker 1: And if the Feds are backing you, then it's a bailout.

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Speaker 1: You know, I'm re reading I've said yesterday too big

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Speaker 1: to fail. And one thing that comes through is many

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Speaker 1: of these deals that happened at the time, you know

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Speaker 1: JP Morgan or somebody buy bear Stearns, or Barclays buying

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Speaker 1: parts of Lehman. All of this. It was all orchestrated

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Speaker 1: by Hank Paulson and by Timothy Geithner. Now you can

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Speaker 1: maybe say it's not a bailout because one bank bought another.

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Speaker 1: They never would have done it if the Treasury Secretary

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Speaker 1: wasn't like, hey, you're going to buy this bank, and

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Speaker 1: you're gonna do it because I'm telling you to do so.

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Speaker 1: In many explicit cases in the private conversations, the bankers

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Speaker 1: were saying, I would never do this if Hank did

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Speaker 1: not tell me to do it. So that's called a bailout.

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Speaker 1: If the Treasury Secretary is basically ordering the senior most

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Speaker 1: people in the financial system to take actions they would

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Speaker 1: not have otherwise done by giving them the legitimacy the

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Speaker 1: backing of the federal government, well that is in one

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Speaker 1: sense a taxpayer funded initiative, because one of the ways

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Speaker 1: that we would do it was by guaranteeing their loans

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Speaker 1: or giving them the legitimates are saying, oh, well, we'll

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Speaker 1: give you preferential financing on this part of the deal.

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Speaker 1: Of course, that is backed by the government, which by

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Speaker 1: definition is you know, the representation of the people and

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Speaker 1: of all the taxpayers. So so much of what we're

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Speaker 1: doing here is just semantic games and it's driving me crazy.

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Speaker 1: The way they want to wiggle out of this, yeah,

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Speaker 1: I agree. And the way that they are gaslighting the

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Speaker 1: public means that they're trying to tamp down any sort

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Speaker 1: of populist revolts in reaction to this, which look politically,

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Speaker 1: I understand why they wouldn't want to do that. But

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Speaker 1: because they are trying to tamp down that public pressure,

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Speaker 1: it makes it much less likely that the bank reform

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Speaker 1: that really needs to happen obviously, after this whole debacle

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Speaker 1: really needs to happen, is less likely to actually come

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Speaker 1: to pass. So that's the unfortunate situation that we're in now.

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Speaker 1: I mean, they have with these effectively three actions that

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Speaker 1: they've taken, they have really transformed how banks are going

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Speaker 1: to see themselves, how banks are going to see like

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Speaker 1: the you know view, what type of risky behavior they

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Speaker 1: can engage in. They have sort of revolutionized the banking

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Speaker 1: sector in a really bad way without putting ten guard

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Speaker 1: rails on the industry. So it is kind of a

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Speaker 1: worst of all world's situation now in terms of the

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Speaker 1: market moves yesterday, so a lot of regional bank stocks,

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Speaker 1: as you pointed out, sober, you know, like fell off

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Speaker 1: a cliff. But there's no indication that the big fear

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Speaker 1: that you know, there was a lot of Silicon Valley

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Speaker 1: carping vound and fear mongering about over the weekend was oh,

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Speaker 1: there's going to be this huge flight of depositors from

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Speaker 1: the regional banks to the big players. That's why we

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Speaker 1: have to do this. We have to forestall any sort

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Speaker 1: of a bank run. And it's possible that the actions

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Speaker 1: they took worked and so you know, they cut off

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Speaker 1: the potential of a bank run. That may be the case,

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Speaker 1: but it is worth noting that even as you had

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Speaker 1: and what they described as an investor bank run, so

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Speaker 1: investors fleeing these stocks, you didn't actually see any movement

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Speaker 1: really that we know about massive movement in terms of

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Speaker 1: depositors pulling their funds and moving them to the big banks.

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Speaker 1: So again, maybe that's because the actions worked, or maybe

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Speaker 1: it's because a bank run was not actually going to

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Speaker 1: happen here and people in Silicon Valley were just looking

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Speaker 1: out for their own interesting. There aint no way to know,

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Speaker 1: but what we do know is that an extraordinary line

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Speaker 1: has been passed and now we're just living in another

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Speaker 1: new bank reality, just like we were in two thousand

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Speaker 1: and nine after the eight bailout. So let's go to

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Speaker 1: the second part here. This is important as well, and

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Speaker 1: that we've been trying to make people understand the extent

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Speaker 1: of covering just the deposits is in some sense the

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Speaker 1: least like the least objectionable part of the bailout. Let's

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Speaker 1: go ahead and put this up there on the screen.

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Speaker 1: So the given this new Federal Reserve bailout, the big

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Speaker 1: four US banks have now gotten a two hundred and

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Speaker 1: ten billion dollar federal bailout. How because the Fed's new

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Speaker 1: facility allows banks to borrow against the negative collateral value

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Speaker 1: that it shown here at par instead of at market value.

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Speaker 1: So once again they are able to borrow at par

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Speaker 1: on their securities and assets instead of the losses that

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Speaker 1: they rightfully should take on assets that they bought purely

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Speaker 1: in order to increase the amount of capital to cover

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Speaker 1: their deposits. That is a bailout. There's no other way

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Speaker 1: to describe it. Effectively. The Federal Reserve is saying you

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Speaker 1: do not have to account your business in the same

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Speaker 1: way that every other business on the planet has to,

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Speaker 1: because you're too big to fail. That is the I mean,

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Speaker 1: the greatest gift once you know that we can try

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Speaker 1: and expound is when the Feds and specifically the Federal

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Speaker 1: Reserve here are allowing these accounting gimmicks to take place

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Speaker 1: at all of these banks. They now operate fundamentally different

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Speaker 1: than any other business in the entire country, with a

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Speaker 1: massive advantage and gift. And there is no current there

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Speaker 1: is no current regulation, there is no current law crystal

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Speaker 1: that they cannot use this to this tremendous advantage and

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Speaker 1: they can't pay themselves out bonuses tomorrow. They could pay

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Speaker 1: themselves out bonuses in three months. The ability to survive

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Speaker 1: is everything in business. So if you survive this and

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Speaker 1: then you start making tremendous profits, you think they're going

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Speaker 1: to pay any of this back, like you think they're

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Speaker 1: going to pay some sort of fine or anything. If

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Speaker 1: anything there's going to pass on the FDICS for FDIC

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Speaker 1: fees to all of us customers, and then they will

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Speaker 1: increase even more of their profits and they're gonna either

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Speaker 1: pay dividends out or they're going to buy back their

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Speaker 1: own shares, or they're going to pay themselves out big bases. Yeah,

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Speaker 1: this is bullshit, Like when you really think about it, Yeah,

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Speaker 1: that's that's right. I mean, I think Zeitelin said it

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Speaker 1: really well yesterday when I said, sometimes you can get

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Speaker 1: lost in the semantics of like, Okay, what's the taxpayer dollar,

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Speaker 1: where are they going, who's funding it, et cetera. The

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Speaker 1: bottom line is a gigantic benefit and gift has been

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Speaker 1: given to the entire banking sector in a way that,

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Speaker 1: you know, we never see the machinery of the federal

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Speaker 1: government jump to when it's the interest of working class

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Speaker 1: people that are on the line. So not only do

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Speaker 1: you have the speed of action, not only do you

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Speaker 1: have a sort of shakunaw overwhelming force of the action,

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Speaker 1: but you have all of the machinery in place to

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Speaker 1: make sure that these wealthy, well connected individuals are always

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Speaker 1: taken care of at a moment's notice. And I think

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Speaker 1: that is just incredibly clear from what we've seen and

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Speaker 1: the speed with which we've seen it, you know, if

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Speaker 1: there was even a whiff of a potential problem for

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Speaker 1: these individuals, Biden was convinced over one weekend to take

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Speaker 1: dramatic action, turning the banking system really on its head,

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Speaker 1: and again not demanding a single thing in return. So

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Speaker 1: that is the bottom line here. The other piece of this,

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Speaker 1: and let's go out and put this next piece up

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Speaker 1: on the screen from the Wall Street Journal. All right,

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Speaker 1: So the FED had been engaging in this policy of

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Speaker 1: monetary policy tightening, hiking interest rates with the stated explicit

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Speaker 1: goal of crushing wages and spiking unemployment. Okay. Now, let's

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Speaker 1: keep in mind that the actions that the Fed and

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Speaker 1: the President just took were in the opposite direction when

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Speaker 1: it was the jobs of a certain group of Silicon

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Speaker 1: Valley entrepreneurs and their employees. Well, then they had to

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Speaker 1: make sure there were no job losses. But the overall

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Speaker 1: policy remains, we need higher unemployment and we need lower wages. Okay,

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Speaker 1: So they are getting ready to decide what they're going

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Speaker 1: to do in terms of a rate hike, rate decrease,

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Speaker 1: or keeping things the same. The Wall Street Journal headline

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Speaker 1: here is fed's magical accounting might save banks, but doom

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Speaker 1: rate increases. They go on to say, there are plenty

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Speaker 1: of lessons for investors in the collapse of SVB and

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Speaker 1: other banks. So now there's a big question about Okay, Well,

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Speaker 1: so this entire bailout is, you know, goes in the

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Speaker 1: direction of monetor very easing. So it's the polar opposite

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Speaker 1: direction of what the FED has been trying to do

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Speaker 1: in terms of getting inflation under control. Although we've discussed

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Speaker 1: on this program at nauseum how the FED hiking rates

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Speaker 1: is an incredibly blunt tool that doesn't have any guarantee

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Speaker 1: of success at even getting inflation under control is going

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Speaker 1: to be very painful for a lot of people, especially

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Speaker 1: if they spark a recession and low and pull. Thus

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Speaker 1: far their moves have not actually gotten inflation under control,

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Speaker 1: and you know, we still stand that risk of a recession.

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Speaker 1: So what are they going to do now? The analysis

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Speaker 1: seems to be kind of all over the map. I've

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Speaker 1: seen some people even saying, oh, maybe they're going to

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Speaker 1: actually not only stay in the same place in terms

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Speaker 1: of rates, maybe they're actually going to go in the

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Speaker 1: polar opposite direction because they're worried about banks and their

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Speaker 1: financial soundness. Maybe they're going to continue on the path

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Speaker 1: of rate hikes even though this is like directly at

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Speaker 1: odds with these other actions that they just took. Maybe

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Speaker 1: they're going to just keep rates where they are right

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Speaker 1: now and see what happens. So it's really pretty up

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Speaker 1: in the air now of what the FED is going

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Speaker 1: to decide to do. Yeah, I think you're right, Crystal,

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Speaker 1: and that was let's go and put this one up

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Speaker 1: on the screen right now. The market still expects the

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Speaker 1: FED to go through with rate hikes, but the fact

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Speaker 1: that the question is even in their minds over here

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Speaker 1: also shows you how fundamentally unfair the system is. Whenever

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Speaker 1: the rates start to go up and threaten the balance

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Speaker 1: sheets of the big banks and the too big to

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Speaker 1: fail institutions, then we're allowed to rethink the policy. Right

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Speaker 1: Whenever small businesses like Hours and across the country are

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Speaker 1: getting crushed by rate increases and can't take any loans

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Speaker 1: if they want them. When all of the viewers of

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Speaker 1: our show are literally unable to buy a house because

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Speaker 1: the mortgage rates are at the worst part time that

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Speaker 1: they've been in like fifty years. When you consider both

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Speaker 1: the price increase, the housing market is a disaster. Whenever

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Speaker 1: everything is slowing, unemployment is happening, or at least is

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Speaker 1: happening to the extent that they want it to, or

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Speaker 1: you know, even increasing rates because they want the jobs

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Speaker 1: numbers to go down. It's not a question. This is

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Speaker 1: the only thing that makes them pause and think, yeah,

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Speaker 1: maybe maybe that we won't increase the rates. I think

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Speaker 1: you're right, though, I mean, I don't know. I do

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Speaker 1: feel like they're probably going to increase just simply because

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Speaker 1: of what the jobs numbers were yesterday, but they may

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Speaker 1: not go as far as they originally were going to

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Speaker 1: before this crisis began. Maybe that's twenty five basis points

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Speaker 1: instead of fifty basis points. That seems to be what

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Speaker 1: the market is kind of pricing in. But you know,

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Speaker 1: I think the important point is the one you made Sagur,

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Speaker 1: that you know, they are actively trying to cause unemployment

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Speaker 1: nationwide with their policy. But then when it's this one

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Speaker 1: group that's well connected and has some very loud and

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Speaker 1: influential voices to advocate for their interests, then they do

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Speaker 1: a U turn and go in the polar opposite direction. Yeah,

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Speaker 1: there you go. So, look, system is rigged. I guess

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Speaker 1: that's a common theme of the show. Yeah, trying to

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Speaker 1: explain exactly. I know it can get complicated with the

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Speaker 1: jargon and all of that, but just take away the

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Speaker 1: very basic lesson. It's like they get special tools and

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Speaker 1: accounting that are granted for them that you know, other

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Speaker 1: business on the planet ats and specifically no other workers

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Speaker 1: concern is ever even factored into their minds. And that's

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00:22:00,600 --> 00:22:03,560
Speaker 1: the basics of it. And we're not asking them for

431
00:22:03,720 --> 00:22:08,720
Speaker 1: anything in return. Nothing. We're not tight as of now,

432
00:22:08,880 --> 00:22:12,280
Speaker 1: not tightening, regulate, nothing, nothing. They just get a bailout

433
00:22:12,320 --> 00:22:15,480
Speaker 1: and that's that all right, guys, We want to dig

434
00:22:15,520 --> 00:22:18,800
Speaker 1: in deeper on this same topic with David Dyan. He's

435
00:22:18,840 --> 00:22:22,280
Speaker 1: of course executive editor of the American Prospect, fantastic financial

436
00:22:22,280 --> 00:22:25,240
Speaker 1: analyst and journalist. Want to get his take on everything

437
00:22:25,240 --> 00:22:28,560
Speaker 1: that's happening. So let's get to it. David, greats to you,

438
00:22:28,600 --> 00:22:31,320
Speaker 1: good see you. Yeah, So let's go and put David's

439
00:22:31,320 --> 00:22:33,280
Speaker 1: piece up on the screen here. What he has been

440
00:22:33,480 --> 00:22:36,479
Speaker 1: writing phenomenal work as always, The headline is the Silicon

441
00:22:36,560 --> 00:22:40,080
Speaker 1: Valley Bank bailout did not need to happen. The debate

442
00:22:40,119 --> 00:22:42,720
Speaker 1: over protecting all deposits in a blink looks past the

443
00:22:42,800 --> 00:22:46,600
Speaker 1: incompetence that got us here. So I would love you

444
00:22:46,800 --> 00:22:49,120
Speaker 1: to break down the thesis of this piece, but also

445
00:22:49,200 --> 00:22:52,520
Speaker 1: just give us your reaction to the fairly extraordinary measures

446
00:22:52,680 --> 00:22:56,560
Speaker 1: that were taken by the US government. Yeah, so this

447
00:22:56,720 --> 00:23:00,760
Speaker 1: is absolutely a bailout. It's a bailout of your responsible

448
00:23:00,840 --> 00:23:07,080
Speaker 1: banks that did not prepare themselves for what has now

449
00:23:07,119 --> 00:23:11,760
Speaker 1: been a year of interest rate changes and did not

450
00:23:11,960 --> 00:23:16,000
Speaker 1: take the steps necessary to protect the severe risk of

451
00:23:16,080 --> 00:23:21,880
Speaker 1: short term deposits in their facilities. Silicon Valley Bank has

452
00:23:21,960 --> 00:23:27,320
Speaker 1: essentially no regular customers. It's a bank that serves founders

453
00:23:27,320 --> 00:23:31,960
Speaker 1: and startup companies. The normal bank maybe has forty to

454
00:23:32,040 --> 00:23:36,560
Speaker 1: fifty percent of deposits over the FDICS two hundred and

455
00:23:36,600 --> 00:23:40,400
Speaker 1: fifty thousand dollars limit. Silicon Valley Bank had ninety five percent.

456
00:23:40,720 --> 00:23:45,560
Speaker 1: So you have to have some stability in how you're

457
00:23:45,920 --> 00:23:52,679
Speaker 1: using those deposits because you have this continuous risk of

458
00:23:52,920 --> 00:23:55,400
Speaker 1: deposits fleeing and you not having enough money to take

459
00:23:55,440 --> 00:23:58,080
Speaker 1: care of it. And they put all their money into

460
00:23:58,240 --> 00:24:03,359
Speaker 1: long dated government which are generally fairly safe but have

461
00:24:03,560 --> 00:24:07,920
Speaker 1: interest rate risk and the interest rate risk is that

462
00:24:08,320 --> 00:24:10,679
Speaker 1: if you have to pull out that money right away

463
00:24:10,880 --> 00:24:14,160
Speaker 1: and interest rates are high, they're going to be worth

464
00:24:14,320 --> 00:24:18,120
Speaker 1: less than the face value. And that's exactly what happened.

465
00:24:19,400 --> 00:24:25,040
Speaker 1: And if Silicon Valley Bank was in a regime that

466
00:24:25,200 --> 00:24:30,879
Speaker 1: was tightly regulated in kind of the experience of larger banks,

467
00:24:30,880 --> 00:24:33,440
Speaker 1: and of course Silicon Valley Bank was the sixteenth largest

468
00:24:33,440 --> 00:24:36,800
Speaker 1: bank by assets in the United States, but it did

469
00:24:36,840 --> 00:24:43,040
Speaker 1: not have the same kind of stringent regulation, particularly around liquidity,

470
00:24:43,080 --> 00:24:48,080
Speaker 1: which was the entire problem here as big banks. Because

471
00:24:49,000 --> 00:24:54,280
Speaker 1: SVB lobbied for and received in twenty eighteen essentially a

472
00:24:54,359 --> 00:25:02,280
Speaker 1: deregulation of its bank and similar banks of its size. So, David,

473
00:25:02,280 --> 00:25:05,199
Speaker 1: can you just explain maybe even further here about the

474
00:25:05,240 --> 00:25:08,200
Speaker 1: existing regulations and about the way that this would have

475
00:25:08,240 --> 00:25:13,720
Speaker 1: gone down without the extraordinary interference here by the US government. Right, So,

476
00:25:13,760 --> 00:25:20,320
Speaker 1: when we had dot frank in twenty ten, that created

477
00:25:20,600 --> 00:25:25,119
Speaker 1: a regime where all banks above fifty billion were in

478
00:25:25,240 --> 00:25:31,000
Speaker 1: assets were subject to enhanced regulatory standards that means higher

479
00:25:31,320 --> 00:25:36,040
Speaker 1: liquidity and capital requirements, in other words, absorbing losses exactly

480
00:25:36,440 --> 00:25:39,320
Speaker 1: the kind of losses that we saw here with respect

481
00:25:39,560 --> 00:25:47,040
Speaker 1: to these outflow of deposits, and you know, bigger stress tests,

482
00:25:47,880 --> 00:25:53,600
Speaker 1: more stress tests, just tighter supervision. Generally. In twenty eighteen,

483
00:25:53,760 --> 00:26:01,080
Speaker 1: Republicans decided that they wanted to weaken these regulations. They

484
00:26:01,080 --> 00:26:04,480
Speaker 1: did it in the name of relief for community banks,

485
00:26:05,720 --> 00:26:12,240
Speaker 1: and they smuggled in a change to the enhanced regulatory

486
00:26:12,320 --> 00:26:15,840
Speaker 1: standards from fifty billion to two hundred and fifty billion.

487
00:26:16,640 --> 00:26:20,320
Speaker 1: These are and in a very exhaustive piece in the intercept,

488
00:26:20,600 --> 00:26:23,520
Speaker 1: we call these the stadium banks. This is what some

489
00:26:24,440 --> 00:26:27,920
Speaker 1: individuals in Congress were calling them. That means that these

490
00:26:27,960 --> 00:26:31,040
Speaker 1: are this is a gift for banks that aren't big

491
00:26:31,200 --> 00:26:33,480
Speaker 1: enough to be JP Morgan Chase or Bank of America,

492
00:26:33,880 --> 00:26:37,040
Speaker 1: but they are big enough to have naming rights to

493
00:26:37,080 --> 00:26:45,240
Speaker 1: a stadium, you know, BB and T Field, you know. Anyway,

494
00:26:46,400 --> 00:26:51,639
Speaker 1: So not only were Republicans interested in this because it

495
00:26:51,680 --> 00:26:54,320
Speaker 1: was just Republicans as would die in the Senate, but

496
00:26:54,680 --> 00:27:00,480
Speaker 1: several Democrats on the Senate Banking Committee decided to join

497
00:27:00,600 --> 00:27:04,919
Speaker 1: in on this process. They went around Charrett Brown, who

498
00:27:05,000 --> 00:27:07,159
Speaker 1: was the chair of the Senate Banking or the ranking

499
00:27:07,200 --> 00:27:10,560
Speaker 1: Democrat at that time on the Senate Banking Committee. I'll

500
00:27:10,560 --> 00:27:13,920
Speaker 1: give you the names. It was Joe Donnelly and heidiha Camp,

501
00:27:13,920 --> 00:27:16,320
Speaker 1: who are no longer there and are both lobbyists now,

502
00:27:17,080 --> 00:27:21,760
Speaker 1: and John Tester and Mark Warner, and those four in

503
00:27:21,880 --> 00:27:26,080
Speaker 1: conjunction with Republicans on the Senate Banking Committee, wrote this bill,

504
00:27:27,240 --> 00:27:30,560
Speaker 1: and the key section did what I just talked about,

505
00:27:30,560 --> 00:27:34,760
Speaker 1: which was the enhanced regulatory Standards, moving that threshold from

506
00:27:34,760 --> 00:27:37,439
Speaker 1: fifty billion to two hundred and fifty billion. The second

507
00:27:37,480 --> 00:27:41,000
Speaker 1: thing that it did is it changed one word in

508
00:27:41,800 --> 00:27:45,200
Speaker 1: the US Code. It changed a word from may to shall,

509
00:27:45,640 --> 00:27:49,679
Speaker 1: and this was called the tailoring rule. And this changing

510
00:27:49,720 --> 00:27:52,719
Speaker 1: it from may to shall made it so that the

511
00:27:52,720 --> 00:27:57,800
Speaker 1: Federal Reserve, instead of having the option to tailor rules

512
00:27:57,840 --> 00:28:01,240
Speaker 1: to the size of particular banks, said that they shall

513
00:28:01,320 --> 00:28:04,639
Speaker 1: do that, in other words, a directive to tailor the rules.

514
00:28:04,880 --> 00:28:09,119
Speaker 1: And this changed those rules even further. It gave the

515
00:28:09,160 --> 00:28:13,000
Speaker 1: green light to the Federal Reserve to deregulate and weaken

516
00:28:13,160 --> 00:28:17,640
Speaker 1: standards even more. And they took that opportunity and did it.

517
00:28:17,680 --> 00:28:21,560
Speaker 1: In twenty nineteen, Lale Brainerd, who is now the head

518
00:28:21,560 --> 00:28:24,720
Speaker 1: of the National Economic Council, was the only dissenting vote,

519
00:28:24,800 --> 00:28:27,560
Speaker 1: and she said, this is going to increase risk, this

520
00:28:27,640 --> 00:28:32,440
Speaker 1: is going to create the more propensity for potential bank

521
00:28:32,520 --> 00:28:37,320
Speaker 1: runs and financial crises. Of course, Senator Elizabeth Warren when

522
00:28:37,320 --> 00:28:41,280
Speaker 1: this bill passed said the same thing. Katie Porter, who

523
00:28:41,320 --> 00:28:43,880
Speaker 1: was not yet in Congress, told me this bill should

524
00:28:43,920 --> 00:28:48,360
Speaker 1: get zero votes. At the time, it was very clear

525
00:28:48,480 --> 00:28:51,640
Speaker 1: to people paying attention that if you deregulate this part

526
00:28:51,680 --> 00:28:55,120
Speaker 1: of the sector, and particularly if you change that threshold

527
00:28:55,360 --> 00:28:59,320
Speaker 1: from fifty to two two hundred and fifty billion, the

528
00:28:59,440 --> 00:29:02,600
Speaker 1: limit to how much growth a bank is going to

529
00:29:02,640 --> 00:29:06,080
Speaker 1: want to do suddenly jumps up, and it's going to

530
00:29:06,120 --> 00:29:08,840
Speaker 1: create a lot of consolidation in the system. That's exactly

531
00:29:08,960 --> 00:29:14,080
Speaker 1: what happened. Silicon Valley Bank and many other medium sized,

532
00:29:14,200 --> 00:29:17,680
Speaker 1: large regional banks started eating up all the other community

533
00:29:17,720 --> 00:29:22,000
Speaker 1: banks to get bigger at a great point, and this

534
00:29:22,120 --> 00:29:26,520
Speaker 1: created this very consolidation that the bill was supposed to prevent.

535
00:29:26,560 --> 00:29:31,000
Speaker 1: Because the bill was allegedly because it was supposed to

536
00:29:31,040 --> 00:29:36,040
Speaker 1: be about saving community banks, it actually eight community banks.

537
00:29:36,160 --> 00:29:40,680
Speaker 1: It created this situation where these large regionals got way big,

538
00:29:40,960 --> 00:29:45,280
Speaker 1: way quick, and couldn't handle the risk that came along

539
00:29:45,320 --> 00:29:47,720
Speaker 1: with getting bigger. Well, and there's a great irony in

540
00:29:47,760 --> 00:29:51,440
Speaker 1: the actions that the government just took because at that

541
00:29:51,600 --> 00:29:55,040
Speaker 1: time you know, the CEO of Silicon Valley Bank was

542
00:29:55,080 --> 00:29:59,880
Speaker 1: effectively lobbying Congress to say, we are not a systemic

543
00:30:00,160 --> 00:30:03,560
Speaker 1: risk to the system. And then what has happened with

544
00:30:03,680 --> 00:30:06,640
Speaker 1: this bailout is that they have deemed them a systemic

545
00:30:06,720 --> 00:30:09,280
Speaker 1: risk to the system, and not just Silicon Valley Bank,

546
00:30:09,320 --> 00:30:11,880
Speaker 1: but also Signature Bank, which is a much smaller player

547
00:30:12,480 --> 00:30:16,200
Speaker 1: with a sort of crypto aligned and disgustingly with Barney Frank,

548
00:30:16,520 --> 00:30:19,960
Speaker 1: who wrote the Dodd Frank regulations and you know famously

549
00:30:20,520 --> 00:30:24,040
Speaker 1: sits on the board. Then, as in his position now

550
00:30:24,160 --> 00:30:26,920
Speaker 1: as a board member of this bank, actually went and

551
00:30:26,960 --> 00:30:30,600
Speaker 1: lobbied to roll back the very regulations that he helped

552
00:30:30,600 --> 00:30:35,000
Speaker 1: to craft. Yeah, in twenty eighteen, he was right on

553
00:30:35,040 --> 00:30:39,160
Speaker 1: the front lines lobbying for this on behalf of Signature Bank,

554
00:30:39,200 --> 00:30:43,000
Speaker 1: you might say. And of course they grew big time

555
00:30:43,040 --> 00:30:45,800
Speaker 1: in size. They were in this between fifty and two

556
00:30:45,920 --> 00:30:50,760
Speaker 1: fifty position, and then they failed. You're absolutely right. They

557
00:30:50,960 --> 00:30:53,920
Speaker 1: had to deem a systemic race. So that was the

558
00:30:53,960 --> 00:30:56,320
Speaker 1: only way to get around the rules in Dodd Frank,

559
00:30:56,360 --> 00:30:59,080
Speaker 1: which said we're not going to do bailouts anymore. The

560
00:30:59,280 --> 00:31:01,800
Speaker 1: only way that they could do it is by the

561
00:31:01,880 --> 00:31:06,720
Speaker 1: FDIC triggering a systemic risk exemption. And so the very

562
00:31:06,800 --> 00:31:10,600
Speaker 1: banks who said, don't worry about us under two hundred

563
00:31:10,640 --> 00:31:13,480
Speaker 1: and fifty billion not a systemic risk. Meanwhile, we knew,

564
00:31:13,840 --> 00:31:16,440
Speaker 1: you know, Indiemac was under two hundred and fifty billion.

565
00:31:16,520 --> 00:31:19,480
Speaker 1: Continental Illinois in the nineteen eighties was under two hundred

566
00:31:19,480 --> 00:31:24,680
Speaker 1: and fifty billion. These types of banks have historically triggered

567
00:31:24,720 --> 00:31:29,120
Speaker 1: systemic risk. But you know, the Democrats and Republicans who

568
00:31:29,200 --> 00:31:33,840
Speaker 1: aligned on this bill bought what Silicon Valley Bank and

569
00:31:33,840 --> 00:31:36,360
Speaker 1: these other banks were selling, which is, we're not a risk,

570
00:31:36,880 --> 00:31:41,600
Speaker 1: let us grow. They did it. They deregulated, these banks grew,

571
00:31:42,000 --> 00:31:46,560
Speaker 1: and what do you know, they completely failed. David, let

572
00:31:46,600 --> 00:31:49,040
Speaker 1: me just play Devil's advocate for a moment, because I

573
00:31:49,040 --> 00:31:51,760
Speaker 1: think there are a lot of, you know, good faith

574
00:31:51,800 --> 00:31:54,600
Speaker 1: people who are making the argument like, look, these depositors

575
00:31:54,600 --> 00:31:57,360
Speaker 1: in Silicon Valley Bank, they didn't do anything wrong. It's

576
00:31:57,400 --> 00:31:59,560
Speaker 1: not their fault that the bank was taking on this risk.

577
00:32:00,080 --> 00:32:04,560
Speaker 1: Reasonable to expect individual depositors to be vetting the practices

578
00:32:04,560 --> 00:32:07,160
Speaker 1: of the bank when even the FED was caught unawares

579
00:32:07,160 --> 00:32:10,440
Speaker 1: that there was risky behavior going on here. And furthermore,

580
00:32:10,560 --> 00:32:13,520
Speaker 1: if you don't backstop the depositors and perhaps take some

581
00:32:13,560 --> 00:32:15,480
Speaker 1: of the other actions that were taken in terms of

582
00:32:15,520 --> 00:32:19,240
Speaker 1: creating this new lending facility and allowing them to keep

583
00:32:19,280 --> 00:32:22,640
Speaker 1: their collateral at the original value that they purchased it at.

584
00:32:22,920 --> 00:32:25,040
Speaker 1: Without that, we could have a bank run, because now

585
00:32:25,040 --> 00:32:27,360
Speaker 1: you're going to have all these depositors flee the quote

586
00:32:27,440 --> 00:32:30,160
Speaker 1: unquote stadium banks and go to the JP Morgan Chases

587
00:32:30,200 --> 00:32:32,360
Speaker 1: of the world. So you're effectively just going to end

588
00:32:32,440 --> 00:32:34,480
Speaker 1: up with, you know, not only a bank run and

589
00:32:34,560 --> 00:32:36,840
Speaker 1: financial chaos, but you're also going to make the bigger

590
00:32:36,920 --> 00:32:41,040
Speaker 1: banks even bigger. What do you say to those who

591
00:32:41,480 --> 00:32:46,720
Speaker 1: believe that and have been arguing in that direction, these

592
00:32:46,760 --> 00:32:50,960
Speaker 1: depositors did do something wrong. Roku had four hundred and

593
00:32:51,080 --> 00:32:55,000
Speaker 1: eighty seven million dollars in one bank. That is the

594
00:32:55,080 --> 00:32:59,200
Speaker 1: dumbest risk management I've ever heard in my entire life.

595
00:33:00,200 --> 00:33:06,080
Speaker 1: Are very simple steps that companies take to ensure that

596
00:33:06,480 --> 00:33:10,920
Speaker 1: their money, which is invariably sometimes over two hundred and

597
00:33:10,960 --> 00:33:16,760
Speaker 1: fifty thousand dollars, is protected from all, you know, bank

598
00:33:16,840 --> 00:33:21,080
Speaker 1: risk and limitations like that. It's on the bank to

599
00:33:22,000 --> 00:33:25,440
Speaker 1: make those options available, and those options were available at

600
00:33:25,480 --> 00:33:29,400
Speaker 1: Silicon Valley Bank, although they were somewhat hidden and not

601
00:33:29,600 --> 00:33:33,200
Speaker 1: used very often. But there's things ensured cash sweep, there's

602
00:33:33,240 --> 00:33:37,640
Speaker 1: cash management accounts that essentially cuts up your amount of

603
00:33:37,680 --> 00:33:39,920
Speaker 1: money that you have in your bank and puts them

604
00:33:40,320 --> 00:33:44,360
Speaker 1: in a reciprocal fashion in hundreds of banks that are

605
00:33:44,360 --> 00:33:48,800
Speaker 1: in this network and make sure that you know, if

606
00:33:48,800 --> 00:33:51,160
Speaker 1: there's a failure in one, you can still get access

607
00:33:51,200 --> 00:33:56,480
Speaker 1: your money. It's a simple risk management strategy that practically

608
00:33:56,560 --> 00:34:00,000
Speaker 1: every company on Earth except the big brains in Silicon

609
00:34:00,240 --> 00:34:03,800
Speaker 1: Valley use. And you have people like Jason Calcanus out

610
00:34:03,800 --> 00:34:05,880
Speaker 1: there now saying, oh, we're going to get so much

611
00:34:05,960 --> 00:34:09,360
Speaker 1: innovation because now we're going to come up with digital

612
00:34:09,360 --> 00:34:13,760
Speaker 1: strategies to to you know, get around the two hundred

613
00:34:13,760 --> 00:34:17,360
Speaker 1: and fifty thousand dollars limit. That's like Uber reinventing the bus.

614
00:34:17,719 --> 00:34:22,640
Speaker 1: These guys are idiots. They're complete morons that think that

615
00:34:22,760 --> 00:34:25,400
Speaker 1: nobody else is as smart as them to come up

616
00:34:25,440 --> 00:34:29,440
Speaker 1: with these strategies. In fact, these are extremely common strategies

617
00:34:29,560 --> 00:34:32,960
Speaker 1: used for decades, and when they realized they didn't have it,

618
00:34:33,280 --> 00:34:37,399
Speaker 1: then they started this digital bank run, which then had

619
00:34:37,440 --> 00:34:40,440
Speaker 1: this threat to move to other parts of the system

620
00:34:41,040 --> 00:34:47,880
Speaker 1: and led to this extraordinary Federal Reserve bailout that is

621
00:34:47,920 --> 00:34:51,600
Speaker 1: going on with not just your right to point out

622
00:34:51,920 --> 00:34:56,200
Speaker 1: it's not just that they're essentially making infinite deposit insurance

623
00:34:56,239 --> 00:34:59,920
Speaker 1: for every bank in America and every depositor in America.

624
00:35:00,200 --> 00:35:05,840
Speaker 1: It's this thing about opening this lending facility that says,

625
00:35:06,200 --> 00:35:08,879
Speaker 1: give us all your assets, even if they've gone down

626
00:35:08,880 --> 00:35:12,160
Speaker 1: in value, will pretend that they're worth what they've used

627
00:35:12,200 --> 00:35:16,640
Speaker 1: to be worth. That is again all kinds of risk

628
00:35:16,680 --> 00:35:21,879
Speaker 1: management in banks that we've seen for decades, and it's

629
00:35:22,000 --> 00:35:26,200
Speaker 1: going to create massive amounts of risk to pool. This

630
00:35:26,280 --> 00:35:32,680
Speaker 1: is a bigger problem than what was actually dealt with here,

631
00:35:33,120 --> 00:35:36,879
Speaker 1: and it's going to get much worse. Yeah. I think

632
00:35:36,880 --> 00:35:39,279
Speaker 1: that's really well said. I mean, because the fat is

633
00:35:39,320 --> 00:35:43,880
Speaker 1: basically said to the entire banking chapter, don't worry about risk.

634
00:35:44,760 --> 00:35:47,759
Speaker 1: American people will cover it. We'll take on the risk.

635
00:35:48,120 --> 00:35:50,960
Speaker 1: You just keep making your profits. David, thank you so

636
00:35:51,040 --> 00:35:53,120
Speaker 1: much for breaking all of us down for us. I

637
00:35:53,160 --> 00:35:59,279
Speaker 1: really appreciate it. Extraordinary news on the international scene at

638
00:35:59,280 --> 00:36:02,440
Speaker 1: the same time, so President She and China making major

639
00:36:02,560 --> 00:36:06,640
Speaker 1: diplomatic overtures across the world that are both upstaging the

640
00:36:06,760 --> 00:36:10,279
Speaker 1: US and really just showing us increasingly on a day

641
00:36:10,280 --> 00:36:13,040
Speaker 1: by day slow basis of really what a return to

642
00:36:13,200 --> 00:36:15,879
Speaker 1: multipolarity is going to look like. So let's go ahead

643
00:36:15,920 --> 00:36:18,960
Speaker 1: and put this up there on the screen. Shishinping is

644
00:36:18,960 --> 00:36:22,279
Speaker 1: now announcing a plan to speak with President Zelenski for

645
00:36:22,320 --> 00:36:25,200
Speaker 1: the first time since the Ukraine War broke out. This

646
00:36:25,360 --> 00:36:28,840
Speaker 1: is going to follow the Chinese leaders meeting with Russia's

647
00:36:28,840 --> 00:36:32,160
Speaker 1: President Vladimir Putin next week, making China one of the

648
00:36:32,320 --> 00:36:36,799
Speaker 1: major interlocrators currently between Moscow and between Ukraine. This was

649
00:36:36,800 --> 00:36:39,520
Speaker 1: previously a role that France had taken. There were some

650
00:36:39,600 --> 00:36:42,000
Speaker 1: indications that maybe the Indians would step in into it,

651
00:36:42,160 --> 00:36:45,240
Speaker 1: but with China stepping in, it is an extraordinary moment

652
00:36:45,320 --> 00:36:48,200
Speaker 1: for a couple of reasons. Number one, almost nobody actually

653
00:36:48,200 --> 00:36:52,600
Speaker 1: maintains relations with both countries. But two, this would be

654
00:36:52,760 --> 00:36:57,799
Speaker 1: a huge step in their Beijing's basically current want to

655
00:36:57,880 --> 00:37:01,040
Speaker 1: be the international peace meeker. We're going to talk a

656
00:37:01,080 --> 00:37:03,719
Speaker 1: little bit about the peace deal that they've broken with

657
00:37:03,800 --> 00:37:07,680
Speaker 1: Iran and Saudi Arabe, or at least restoring of diplomatic relations.

658
00:37:07,800 --> 00:37:10,680
Speaker 1: Is not necessarily a peace deal, but to think about

659
00:37:10,719 --> 00:37:13,560
Speaker 1: what level of legitimacy that would bestow upon them on

660
00:37:13,600 --> 00:37:16,799
Speaker 1: the world stage is actually extraordinary. And there was a

661
00:37:16,840 --> 00:37:21,280
Speaker 1: really interesting moment that happened yesterday. There's an Atlantic Council fellow.

662
00:37:21,280 --> 00:37:24,000
Speaker 1: For those who don't know, the Atlantic Council's kind of

663
00:37:24,080 --> 00:37:28,440
Speaker 1: like as Neo lib as it gets protecting the Atlantic Alliance.

664
00:37:29,280 --> 00:37:30,879
Speaker 1: It is the heartbeat of the plot. That's a great

665
00:37:30,880 --> 00:37:35,160
Speaker 1: way to put it. As foreign policy establishment thinking goes like,

666
00:37:35,400 --> 00:37:37,839
Speaker 1: that's where it is. And it was a scholar there

667
00:37:37,880 --> 00:37:40,080
Speaker 1: who is very much of that mind, and she's like, Hey,

668
00:37:40,560 --> 00:37:43,240
Speaker 1: I'm in India. I don't think we in the West

669
00:37:43,719 --> 00:37:48,080
Speaker 1: really understand how little the European and US rhetoric about

670
00:37:48,120 --> 00:37:53,000
Speaker 1: autocracy versus democracy is not landing at all in South Asia.

671
00:37:53,400 --> 00:37:55,360
Speaker 1: She was like, here in India, they don't want to

672
00:37:55,400 --> 00:37:57,920
Speaker 1: hear it. They don't care. A huge portion of the

673
00:37:57,920 --> 00:38:00,880
Speaker 1: global South that we've talked to, spanning for Lula to

674
00:38:01,000 --> 00:38:04,200
Speaker 1: people in Japan, South Korea and elsewhere, are like, I

675
00:38:04,239 --> 00:38:07,719
Speaker 1: don't want to hear all your talk about democracy. And

676
00:38:08,080 --> 00:38:10,080
Speaker 1: you know, even the Indians were like, listen, we're not

677
00:38:10,120 --> 00:38:12,279
Speaker 1: saying that what happened is good, but you know, you

678
00:38:12,360 --> 00:38:15,600
Speaker 1: guys expanded NATO and these things. So the point is

679
00:38:15,600 --> 00:38:18,360
Speaker 1: that they're willing to look at both sides very equally.

680
00:38:18,480 --> 00:38:20,680
Speaker 1: They see it very differently. And when we covered that

681
00:38:21,160 --> 00:38:25,600
Speaker 1: poll that showed that basically only the US, even Europe

682
00:38:25,680 --> 00:38:30,000
Speaker 1: wasn't really buying the like it's democracy versus authoritarianism, even

683
00:38:30,040 --> 00:38:33,480
Speaker 1: they felt like, Okay, this is more about national interest

684
00:38:33,760 --> 00:38:36,959
Speaker 1: And certainly the rest of the world does not view

685
00:38:37,000 --> 00:38:39,279
Speaker 1: this conflict in the way it has been framed to

686
00:38:39,280 --> 00:38:42,400
Speaker 1: the American peapure. China is exploiting that void by basically

687
00:38:42,440 --> 00:38:45,279
Speaker 1: embracing a real politic view of everything, and this is

688
00:38:45,320 --> 00:38:48,280
Speaker 1: to their benefit for variety of reasons. Number one, of course,

689
00:38:48,320 --> 00:38:50,600
Speaker 1: they are currently on the verge of making a decision

690
00:38:50,800 --> 00:38:53,960
Speaker 1: on whether to send lethal aid to Russia basically to

691
00:38:54,000 --> 00:38:56,319
Speaker 1: help them fight the war in Ukraine. It would be

692
00:38:56,400 --> 00:38:58,879
Speaker 1: a major development for them to do so. It would

693
00:38:59,040 --> 00:39:01,720
Speaker 1: definitely open up and change a lot of the Russian

694
00:39:01,760 --> 00:39:04,120
Speaker 1: supply problems that they have, and it certainly would have

695
00:39:04,360 --> 00:39:06,799
Speaker 1: some impact there on the battlefield. But they're doing it

696
00:39:06,880 --> 00:39:09,359
Speaker 1: at the same time that they are also have been

697
00:39:09,400 --> 00:39:14,239
Speaker 1: facing international condemnation. Remember also that China's approval reading worldwide

698
00:39:14,360 --> 00:39:18,320
Speaker 1: dropped dramatically because of COVID. Everybody blames them for COVID rightfully,

699
00:39:18,360 --> 00:39:20,960
Speaker 1: I think in my opinion. We'll cover our poll later

700
00:39:21,000 --> 00:39:23,440
Speaker 1: in the show about everyone thinks it. Basically a super

701
00:39:23,440 --> 00:39:25,279
Speaker 1: majority of Americans are like, yeah, it's a lap leak,

702
00:39:25,719 --> 00:39:28,960
Speaker 1: and that's in America. That's probably low compared to the

703
00:39:28,960 --> 00:39:31,520
Speaker 1: rest of the world, where they're like obviously, it's so

704
00:39:31,880 --> 00:39:35,280
Speaker 1: they need to try and shore up their international support. Second,

705
00:39:35,440 --> 00:39:38,320
Speaker 1: they want to define the world in their way. Why

706
00:39:38,560 --> 00:39:41,560
Speaker 1: because then if there was ever a major showdown over Taiwan,

707
00:39:41,840 --> 00:39:44,960
Speaker 1: they would have a lot more international capital built up

708
00:39:44,960 --> 00:39:48,560
Speaker 1: in the diplomatic system than they currently have right now. So, look,

709
00:39:48,640 --> 00:39:51,359
Speaker 1: the call has not yet been announced. I do think

710
00:39:51,400 --> 00:39:53,960
Speaker 1: it will happen for a very specific reason. Let's go

711
00:39:54,000 --> 00:39:55,920
Speaker 1: and put this next one up there on the screen.

712
00:39:56,280 --> 00:40:02,000
Speaker 1: It's because the Chinese proposed a piece plan about a

713
00:40:02,040 --> 00:40:04,560
Speaker 1: couple of weeks ago on the first anniversary of the

714
00:40:04,640 --> 00:40:07,920
Speaker 1: Russian invasion of Ukraine. Effectively, the plan Wohild just freeze

715
00:40:07,960 --> 00:40:11,560
Speaker 1: the battlefield where it is right now with some negotiation

716
00:40:11,800 --> 00:40:14,520
Speaker 1: over parts of eastern Ukraine and would bring the two

717
00:40:14,560 --> 00:40:17,200
Speaker 1: sides together. The Chinese, you know, they like to frame

718
00:40:17,239 --> 00:40:20,240
Speaker 1: everything in terms of mutual respect, and by that really

719
00:40:20,239 --> 00:40:23,000
Speaker 1: they mean their definitions, but they say, quote, all parties

720
00:40:23,040 --> 00:40:26,040
Speaker 1: must stay rational and exercise restraint, avoid fanning the flames,

721
00:40:26,040 --> 00:40:29,920
Speaker 1: aggravating tensions, prevent the crisis from deteriorating further or spiraling

722
00:40:29,960 --> 00:40:33,080
Speaker 1: out of control. They want to step in and cast

723
00:40:33,080 --> 00:40:36,319
Speaker 1: themselves as the peacemaker. What was also very important is

724
00:40:36,600 --> 00:40:41,359
Speaker 1: despite the fact that Zelenski, anytime somebody like Elon is like, Hey,

725
00:40:41,440 --> 00:40:43,400
Speaker 1: I'm not so sure about this, maybe we should have

726
00:40:43,440 --> 00:40:47,239
Speaker 1: a peace plan, he actually responded very positively to it.

727
00:40:47,360 --> 00:40:49,319
Speaker 1: You know why, because he knows that if he were

728
00:40:49,360 --> 00:40:52,160
Speaker 1: to reject it out of hand completely, the Chinese would

729
00:40:52,160 --> 00:40:53,920
Speaker 1: be like, okay, well, if you're not even willing to

730
00:40:53,920 --> 00:40:55,720
Speaker 1: negotiate it all, then we're just going to send weapons

731
00:40:55,800 --> 00:40:58,319
Speaker 1: to Russia and then you guys will be defeated holistically

732
00:40:58,320 --> 00:41:00,719
Speaker 1: on the battlefield. So the point is is that they

733
00:41:00,760 --> 00:41:03,640
Speaker 1: actually put Zelenski in a bind and have gotten him

734
00:41:03,680 --> 00:41:06,040
Speaker 1: to a point where he has said, I am willing

735
00:41:06,080 --> 00:41:09,759
Speaker 1: to discuss this with the Chinese. So he opened up

736
00:41:09,760 --> 00:41:11,920
Speaker 1: that ground saying I want to speak to President she.

737
00:41:12,320 --> 00:41:14,480
Speaker 1: A lot of people in the West were like, Zelenski's

738
00:41:14,520 --> 00:41:17,440
Speaker 1: calling GI's bluff. I'm like, is it a bluff? Because

739
00:41:17,480 --> 00:41:20,479
Speaker 1: maybe they actually do want to broker this. It would

740
00:41:20,520 --> 00:41:24,759
Speaker 1: be the diplomatic coup of the century. If they were

741
00:41:24,760 --> 00:41:27,600
Speaker 1: to bring this conflict to an end, it would upstage

742
00:41:28,000 --> 00:41:31,720
Speaker 1: and humiliate the United States. It would make a Chinese

743
00:41:31,760 --> 00:41:36,040
Speaker 1: takeover of Taiwan ten times more possible, because just in

744
00:41:36,080 --> 00:41:38,759
Speaker 1: terms of the legitimacy, in terms of the allies that

745
00:41:38,760 --> 00:41:40,560
Speaker 1: they would get through that, in terms of the way

746
00:41:40,600 --> 00:41:43,239
Speaker 1: that Asia would start to look at the conflict, and

747
00:41:43,760 --> 00:41:47,200
Speaker 1: let's be honest, global public opinion wise, they would be

748
00:41:47,280 --> 00:41:49,640
Speaker 1: striking at the core of what most people want, not

749
00:41:49,680 --> 00:41:52,200
Speaker 1: necessarily here in America, although increasingly I think more so,

750
00:41:52,680 --> 00:41:56,480
Speaker 1: but specifically all across the world of people who are like,

751
00:41:56,520 --> 00:41:59,440
Speaker 1: I'm not buying this US framing of this conflict. I

752
00:41:59,440 --> 00:42:01,919
Speaker 1: think it's very very positive. If China wants to play

753
00:42:01,960 --> 00:42:04,640
Speaker 1: the role of peacemaker. God knows that somebody needs to,

754
00:42:04,840 --> 00:42:08,600
Speaker 1: and the US has absolutely abdicated their ability and desire

755
00:42:09,040 --> 00:42:11,960
Speaker 1: to play that role from early in this conflict when

756
00:42:12,000 --> 00:42:15,120
Speaker 1: they decided that our interests were in continuing the war

757
00:42:15,160 --> 00:42:17,560
Speaker 1: in order to be a check on Russia, rather than

758
00:42:17,600 --> 00:42:20,319
Speaker 1: trying to push the parties to the negotiating table to

759
00:42:20,400 --> 00:42:22,960
Speaker 1: bring the conflict to a close and end what has

760
00:42:23,000 --> 00:42:26,880
Speaker 1: been an absolutely devastating war, certainly first and foremost for

761
00:42:27,080 --> 00:42:30,000
Speaker 1: the Ukrainian people, but also for the world in terms

762
00:42:30,000 --> 00:42:32,600
Speaker 1: of energy prices, in terms of food prices, in terms

763
00:42:32,640 --> 00:42:37,280
Speaker 1: of global instability. So I absolutely welcome this role for China.

764
00:42:37,320 --> 00:42:39,400
Speaker 1: I hope they are approaching it in good faith. I

765
00:42:39,400 --> 00:42:41,960
Speaker 1: think the fact that there is any receptiveness on the

766
00:42:42,000 --> 00:42:45,640
Speaker 1: side of Zelenski is incredibly noteworthy because it was interesting saga.

767
00:42:45,680 --> 00:42:48,160
Speaker 1: When the peace plan from China quote unquote was first

768
00:42:48,719 --> 00:42:53,440
Speaker 1: introduced to announce etc. The official response from Ukraine was

769
00:42:53,560 --> 00:42:56,520
Speaker 1: very dismissive, but when Zelenski himself was asked about it,

770
00:42:56,920 --> 00:42:59,719
Speaker 1: he was actually much more receptive. Now NATO, on the

771
00:42:59,760 --> 00:43:03,880
Speaker 1: other hand, is not impressed. They say China doesn't have

772
00:43:03,960 --> 00:43:07,279
Speaker 1: much credibility. This is the NATO Secretary General. China doesn't

773
00:43:07,280 --> 00:43:09,560
Speaker 1: have much credibility because they've not been able to condemn

774
00:43:09,560 --> 00:43:13,760
Speaker 1: the legal invasion of Ukraine. But in fact, the China

775
00:43:13,920 --> 00:43:17,920
Speaker 1: is on the verge potentially of taking some more aggressive

776
00:43:18,040 --> 00:43:21,440
Speaker 1: and clear cut steps to back Russia. At that point

777
00:43:21,480 --> 00:43:24,120
Speaker 1: their ability to play any sort of peacemaker role is

778
00:43:24,200 --> 00:43:27,120
Speaker 1: going to be dead. But they haven't done that. Yet,

779
00:43:27,360 --> 00:43:30,239
Speaker 1: and in fact, the fact that they have kept a

780
00:43:30,280 --> 00:43:34,040
Speaker 1: good relationship with Russia and haven't totally killed their relationship

781
00:43:34,080 --> 00:43:38,279
Speaker 1: with Ukraine actually enables them to occupy this space. So

782
00:43:38,320 --> 00:43:40,200
Speaker 1: I think it's actually kind of the polar opposite of

783
00:43:40,200 --> 00:43:43,719
Speaker 1: what the NATO Secretary General has said here. Yes, it

784
00:43:43,760 --> 00:43:46,040
Speaker 1: was an illegal invasion of Ukraine. We're not afraid of

785
00:43:46,080 --> 00:43:49,160
Speaker 1: saying that here, But the fact that China hasn't said

786
00:43:49,160 --> 00:43:51,600
Speaker 1: that and hasn't really pissed off the Russians in that

787
00:43:51,640 --> 00:43:54,439
Speaker 1: way actually gives them a chance to be useful here.

788
00:43:54,600 --> 00:43:57,520
Speaker 1: It's important to keep in mind as well, prior to

789
00:43:57,600 --> 00:44:02,000
Speaker 1: the war, China was actually Ukrainan's biggest trading part, so

790
00:44:02,280 --> 00:44:05,239
Speaker 1: it's not like there isn't any relationship there. There are

791
00:44:05,320 --> 00:44:09,560
Speaker 1: deep and long standing important ties, economic ties, which also

792
00:44:09,680 --> 00:44:14,680
Speaker 1: underscores that the way China has approached approached their foreign

793
00:44:14,719 --> 00:44:18,440
Speaker 1: policy or their approach to imperialism you might say, has

794
00:44:18,520 --> 00:44:21,480
Speaker 1: been less through we're going to put faces everywhere, We're

795
00:44:21,480 --> 00:44:24,439
Speaker 1: going to enforce it with military might, and more through

796
00:44:24,600 --> 00:44:28,880
Speaker 1: economic ties and cooperation in using those ties as a

797
00:44:28,920 --> 00:44:32,719
Speaker 1: form of leverage and coercion. So you know, certainly they

798
00:44:32,719 --> 00:44:34,160
Speaker 1: have a lot that they can work with here in

799
00:44:34,239 --> 00:44:36,680
Speaker 1: terms of those ties with Ukraine and obviously with Russia.

800
00:44:36,680 --> 00:44:39,000
Speaker 1: And the reason why this is part of a bigger

801
00:44:39,040 --> 00:44:41,160
Speaker 1: campaign is let's put this next one up there on

802
00:44:41,200 --> 00:44:44,360
Speaker 1: the screen. Our friend Tree Deparsi talking about how Saudi

803
00:44:44,400 --> 00:44:47,799
Speaker 1: and Iran normalization of relations is a huge deal, not

804
00:44:47,880 --> 00:44:50,160
Speaker 1: just because of the positive repercussions they could have in

805
00:44:50,200 --> 00:44:52,600
Speaker 1: the region from Lebanon to yen In, but because it

806
00:44:52,719 --> 00:44:56,799
Speaker 1: was mediated by China and not the United States. As

807
00:44:56,800 --> 00:44:59,000
Speaker 1: he lays out here, Saudi and Iran tensons have had

808
00:44:59,080 --> 00:45:00,960
Speaker 1: ups and downs in the last forty years, but this

809
00:45:01,040 --> 00:45:03,120
Speaker 1: is the first time they've ever agreed to lower the

810
00:45:03,160 --> 00:45:07,800
Speaker 1: temperature through Chinese mediation. By not taking sides, China immerged

811
00:45:07,800 --> 00:45:10,720
Speaker 1: as a player that can resolve disputes rather than merely

812
00:45:10,800 --> 00:45:13,920
Speaker 1: just sell weapons. Unfortunately, the US has adopted an approach

813
00:45:13,920 --> 00:45:15,920
Speaker 1: to the region that has disabled it from being a

814
00:45:15,920 --> 00:45:19,000
Speaker 1: credible mediator. Too often, Washington will just take sides in

815
00:45:19,080 --> 00:45:22,160
Speaker 1: conflicts become a co belligerent, as in Yemen, which then

816
00:45:22,200 --> 00:45:25,239
Speaker 1: reduces its ability to play the role of peacemaker. While

817
00:45:25,239 --> 00:45:27,640
Speaker 1: many in Washington view China's emerging role as a mediator

818
00:45:27,680 --> 00:45:29,480
Speaker 1: as a threat, the reality is that more of a

819
00:45:29,520 --> 00:45:32,080
Speaker 1: stable Middle East where Iranians aren't at each other's throats

820
00:45:32,120 --> 00:45:35,320
Speaker 1: and Saudis, also benefits the United States. So I definitely

821
00:45:35,320 --> 00:45:37,600
Speaker 1: think he is right. And the reason though that I'm

822
00:45:37,640 --> 00:45:40,360
Speaker 1: trying to take a step back is listen, all states,

823
00:45:40,719 --> 00:45:43,279
Speaker 1: I am a real poplit like, all states are doing

824
00:45:43,320 --> 00:45:46,600
Speaker 1: things for self interested purposes. All what the Chinese want

825
00:45:46,840 --> 00:45:50,239
Speaker 1: is hegemony over East Asia and specifically to unite China

826
00:45:50,320 --> 00:45:53,320
Speaker 1: and Taiwan, and everything that they are doing is setting

827
00:45:53,320 --> 00:45:55,279
Speaker 1: the ground to try and make that happen. I think

828
00:45:55,280 --> 00:45:57,680
Speaker 1: that would be a catastrophe for the US economy and

829
00:45:57,760 --> 00:45:59,759
Speaker 1: for US relations in Asia, which I think is the

830
00:45:59,760 --> 00:46:02,399
Speaker 1: most important region in the entire world. Hence why I'm

831
00:46:02,560 --> 00:46:05,320
Speaker 1: broadly opposed to much of our aid both to Ukraine

832
00:46:05,320 --> 00:46:07,680
Speaker 1: and to our role across the Atlantic Ocean, because I

833
00:46:07,760 --> 00:46:11,200
Speaker 1: think Europe is a dying society slowing GDP not going

834
00:46:11,239 --> 00:46:13,400
Speaker 1: to be important nearly as much so as it is

835
00:46:13,480 --> 00:46:15,840
Speaker 1: one hundred years as opposed to the Asia Pacific, and

836
00:46:15,920 --> 00:46:19,200
Speaker 1: so everything that they are doing is basically trying to

837
00:46:19,320 --> 00:46:23,240
Speaker 1: replicate what we did all through nineteen forty five and onward,

838
00:46:23,400 --> 00:46:26,839
Speaker 1: broking these peace deals, you know, and recreating the type

839
00:46:26,840 --> 00:46:31,600
Speaker 1: of diplomacy. Listen, we didn't do it for benevolent reasons either.

840
00:46:31,760 --> 00:46:35,280
Speaker 1: We did it also to expand the American economic empire.

841
00:46:35,480 --> 00:46:37,799
Speaker 1: That's the exact same reason that they want to do it.

842
00:46:37,840 --> 00:46:41,360
Speaker 1: And so watching this really what it is is it

843
00:46:41,440 --> 00:46:44,560
Speaker 1: shows to me how foolish the neolib view that the

844
00:46:44,560 --> 00:46:48,160
Speaker 1: Biden administration, the Atlantic worship that they have had both

845
00:46:48,160 --> 00:46:51,440
Speaker 1: of NATO and of aid to Ukraine, and the tremendous

846
00:46:51,560 --> 00:46:54,480
Speaker 1: danger and opening that they have left us to by

847
00:46:54,520 --> 00:46:58,360
Speaker 1: abandoning all pretense of realism in any of this conflict.

848
00:46:58,440 --> 00:47:01,960
Speaker 1: And so to watch this happen, I mean, multipolarity was

849
00:47:01,960 --> 00:47:03,799
Speaker 1: not a joke. It actually led to a lot of

850
00:47:03,840 --> 00:47:07,000
Speaker 1: wars across the world. I'm not necessarily saying that unipolarity

851
00:47:07,080 --> 00:47:10,080
Speaker 1: doesn't have its downsize either, but we shouldn't close our

852
00:47:10,080 --> 00:47:13,480
Speaker 1: eyes as to what like a new more unstable world

853
00:47:13,520 --> 00:47:15,640
Speaker 1: is going to look like. And you know, in this case,

854
00:47:15,640 --> 00:47:18,760
Speaker 1: it can be positive, but it can also be their negative. Well,

855
00:47:18,800 --> 00:47:21,000
Speaker 1: I mean, we've played ourselves, is the bottom line. I

856
00:47:21,080 --> 00:47:23,880
Speaker 1: think Treata's part point here is really critical that we

857
00:47:23,920 --> 00:47:27,440
Speaker 1: are belligerents in terms of the Ukraine War. We're co

858
00:47:27,560 --> 00:47:31,960
Speaker 1: belligerents in terms of Yemen. So of course that complicates

859
00:47:32,040 --> 00:47:35,719
Speaker 1: and disrupts our ability to serve as a credible peacemaker

860
00:47:35,960 --> 00:47:40,120
Speaker 1: in either of these regions and in any of these conflicts.

861
00:47:40,440 --> 00:47:42,839
Speaker 1: So what he ends with here is that Washington should

862
00:47:42,840 --> 00:47:45,400
Speaker 1: avoid a scenario where regional players view America as an

863
00:47:45,560 --> 00:47:49,839
Speaker 1: entrenched war maker and China as a flexible peacemaker. And

864
00:47:49,880 --> 00:47:52,080
Speaker 1: that is exactly the direction that we're headed in. I know,

865
00:47:52,120 --> 00:47:56,520
Speaker 1: another thing is so embarrassing. We have spent billions of

866
00:47:57,160 --> 00:48:01,080
Speaker 1: hundreds of billions on Saudi Arabia. Hey did this in

867
00:48:01,120 --> 00:48:03,520
Speaker 1: the full knowledge that it would make Biden and that

868
00:48:03,600 --> 00:48:06,600
Speaker 1: America look like a fool, like a second rate power.

869
00:48:06,960 --> 00:48:10,920
Speaker 1: What are we doing supporting these people? They're just beyond

870
00:48:10,960 --> 00:48:14,880
Speaker 1: their barbaric society. Why are we doing this for any

871
00:48:14,960 --> 00:48:16,680
Speaker 1: positive reasons? What are we getting out of them? We

872
00:48:16,719 --> 00:48:19,320
Speaker 1: are selling them weapons? Well, they flip us the bird.

873
00:48:19,400 --> 00:48:21,239
Speaker 1: It's like, you know, in Iraq. You know, look, we

874
00:48:21,280 --> 00:48:24,200
Speaker 1: spent what five trillion dollars in Iraq? They turned around

875
00:48:24,200 --> 00:48:26,480
Speaker 1: and signed a deal with an economic deal with the Chinese.

876
00:48:26,560 --> 00:48:28,759
Speaker 1: It's like, you can't even make this stuff up. In

877
00:48:28,840 --> 00:48:31,640
Speaker 1: terms of the level of support that we've provided to them,

878
00:48:31,719 --> 00:48:33,719
Speaker 1: and they'll stab you in the front. They don't even care.

879
00:48:34,040 --> 00:48:36,080
Speaker 1: And it's one of those where I can't blame them.

880
00:48:36,160 --> 00:48:37,640
Speaker 1: I probably do the same thing if I had such

881
00:48:37,680 --> 00:48:39,160
Speaker 1: a foolish person who was willing to give you so

882
00:48:39,239 --> 00:48:42,840
Speaker 1: much money and then also not actually bring any of

883
00:48:42,840 --> 00:48:45,480
Speaker 1: its real power to bear for our own interests and

884
00:48:45,600 --> 00:48:48,080
Speaker 1: just basically to take in for a ride in terms

885
00:48:48,080 --> 00:48:51,520
Speaker 1: of lobbyists. So look, bottom line, this is a big deal.

886
00:48:51,640 --> 00:48:53,840
Speaker 1: This is a very big deal, and if it does develop,

887
00:48:54,120 --> 00:48:59,120
Speaker 1: it will represent a major sea change in international relations. Absolutely, absolutely. Okay,

888
00:48:59,520 --> 00:49:05,319
Speaker 1: let's turn to some domestic politics here. The Democratic administration

889
00:49:05,600 --> 00:49:08,200
Speaker 1: and other Democratic elites are getting very concerned about the

890
00:49:08,200 --> 00:49:14,080
Speaker 1: public's negative impression of Vice President Kamala Harris because there's

891
00:49:14,080 --> 00:49:17,239
Speaker 1: an election coming up and Joe Biden is expected to

892
00:49:17,280 --> 00:49:19,440
Speaker 1: run with Kamala Harris on the ticket again, and they

893
00:49:19,440 --> 00:49:22,280
Speaker 1: are realizing that the fact that you've got a dude

894
00:49:22,400 --> 00:49:24,520
Speaker 1: who's the president of the United States who would be

895
00:49:24,600 --> 00:49:27,839
Speaker 1: eighty six years old by the end of the next term, well,

896
00:49:27,880 --> 00:49:31,480
Speaker 1: that makes the vice presidential position even more important than

897
00:49:31,520 --> 00:49:34,360
Speaker 1: it normally is, because while look, the vice president's always

898
00:49:34,360 --> 00:49:36,239
Speaker 1: a heartbeat away from the presidency. When you're talking about

899
00:49:36,239 --> 00:49:38,480
Speaker 1: the heartbeat of an eighty plus year old man, it

900
00:49:38,560 --> 00:49:40,759
Speaker 1: becomes a kind of a different deal in terms of

901
00:49:40,800 --> 00:49:47,640
Speaker 1: the actuarial tables. So the initial issues started between Democrats

902
00:49:48,000 --> 00:49:51,360
Speaker 1: sort of the Biden administration, Kamala Harris in particular, with

903
00:49:51,480 --> 00:49:54,279
Speaker 1: some comments that Elizabeth Warren made. We actually covered them

904
00:49:54,280 --> 00:49:56,360
Speaker 1: at the time on a radio show where she was

905
00:49:56,400 --> 00:50:00,080
Speaker 1: asked whether Kamala Harris should be the vice presidential nominee

906
00:50:00,160 --> 00:50:04,000
Speaker 1: and kind ahead take a listen to that. I really

907
00:50:04,480 --> 00:50:08,919
Speaker 1: want to defer to what makes Biden comfortable on his team.

908
00:50:09,360 --> 00:50:12,080
Speaker 1: I've known Kamala for a long time. I like Kamala.

909
00:50:12,160 --> 00:50:14,600
Speaker 1: I knew her back when she was when she was

910
00:50:14,640 --> 00:50:18,560
Speaker 1: an Attorney general and I was still teaching, and we

911
00:50:18,600 --> 00:50:22,000
Speaker 1: worked on the housing crisis together, so we go way back.

912
00:50:22,680 --> 00:50:25,160
Speaker 1: But they need they have to be a team. In

913
00:50:25,200 --> 00:50:28,000
Speaker 1: my senses, they are. I don't mean that by suggesting

914
00:50:28,040 --> 00:50:29,799
Speaker 1: I think there are any problems. I think they are.

915
00:50:30,320 --> 00:50:34,480
Speaker 1: So yeah, very interesting. She's like, Oh, they need to

916
00:50:34,480 --> 00:50:36,080
Speaker 1: be a team. I'm not saying they're not a team,

917
00:50:36,120 --> 00:50:38,240
Speaker 1: but just saying like he needs to be comfortable. Okay,

918
00:50:38,520 --> 00:50:42,640
Speaker 1: So Kamala was very upset about this apparently put this

919
00:50:42,680 --> 00:50:45,839
Speaker 1: next piece up on the screen. According to CNN, they

920
00:50:45,840 --> 00:50:49,120
Speaker 1: have a long article here about the worries about Kamala Harris.

921
00:50:49,280 --> 00:50:53,680
Speaker 1: Elizabeth Warren called Kamala twice to apologize after those comments

922
00:50:53,680 --> 00:50:56,400
Speaker 1: she made on whether Biden to keep Harris's VP. Harris

923
00:50:56,440 --> 00:51:00,680
Speaker 1: has not called back. But they go on in this

924
00:51:00,840 --> 00:51:05,319
Speaker 1: article from CNN to talk about the fact that Democratic

925
00:51:05,320 --> 00:51:08,840
Speaker 1: elites just want everybody to shut up about their concerns

926
00:51:08,840 --> 00:51:11,560
Speaker 1: and complaints about Kamala Harris. They want commentators to stop

927
00:51:11,600 --> 00:51:14,600
Speaker 1: talking about it. They want, certainly this issue that came

928
00:51:14,680 --> 00:51:16,680
Speaker 1: up with Elizabeth Warren, they want her to shut her

929
00:51:16,760 --> 00:51:20,560
Speaker 1: mouth about it. What they say is that it's the

930
00:51:20,680 --> 00:51:23,560
Speaker 1: latest in a long string of snubs to a vice

931
00:51:23,600 --> 00:51:26,160
Speaker 1: president who they say has never gotten this respect or

932
00:51:26,200 --> 00:51:31,040
Speaker 1: support she deserves. They also contend multiple Democratic leaders they say,

933
00:51:31,080 --> 00:51:34,920
Speaker 1: contend that if people don't start feeling more positive about

934
00:51:34,920 --> 00:51:37,480
Speaker 1: the next person in the line of succession, they might

935
00:51:37,520 --> 00:51:41,000
Speaker 1: turn away from the ticket entirely. So they're urging allies

936
00:51:41,040 --> 00:51:44,279
Speaker 1: to stop the Harris pylon, if only for Biden's sake,

937
00:51:44,400 --> 00:51:47,759
Speaker 1: or for Democrat's sake or the party's future. So basically,

938
00:51:49,120 --> 00:51:52,000
Speaker 1: keep your mouth shut, don't be honest about the problems here,

939
00:51:52,200 --> 00:51:56,080
Speaker 1: because we're sticking with Kamala and it's really important that

940
00:51:56,120 --> 00:51:59,000
Speaker 1: the American people are somehow persuaded that it would be

941
00:51:59,080 --> 00:52:01,200
Speaker 1: all finding good if she ended up as president of

942
00:52:01,200 --> 00:52:04,040
Speaker 1: the United States. Good luck with that. She has such

943
00:52:04,080 --> 00:52:07,160
Speaker 1: a thin skin for letting something like that get underneath,

944
00:52:07,320 --> 00:52:10,319
Speaker 1: like what is wrong with you? And look, I just

945
00:52:10,320 --> 00:52:14,360
Speaker 1: think it underscores. Only people who are fundamentally weak act

946
00:52:14,440 --> 00:52:17,160
Speaker 1: like this. People who have real holds over the party,

947
00:52:17,239 --> 00:52:21,040
Speaker 1: real constituencies, real operations, and real chances of the presidency,

948
00:52:21,280 --> 00:52:24,120
Speaker 1: they don't behave in this way because they have a

949
00:52:24,160 --> 00:52:28,520
Speaker 1: real power base. Because she is such a media creation. Literally,

950
00:52:28,640 --> 00:52:32,560
Speaker 1: she is almost like a product of the conspiracy of silence.

951
00:52:33,080 --> 00:52:37,759
Speaker 1: Everyone knows she's a terrible politician. Everyone knows that she

952
00:52:37,920 --> 00:52:41,000
Speaker 1: is the least popular vice president in modern history, more

953
00:52:41,040 --> 00:52:43,799
Speaker 1: so than Biden. And she doesn't even do anything, and

954
00:52:43,920 --> 00:52:46,960
Speaker 1: yet no one can say it, mostly because of racial

955
00:52:46,960 --> 00:52:50,719
Speaker 1: politics and because she's a woman, because of basically media enforcers,

956
00:52:50,760 --> 00:52:54,400
Speaker 1: and then the weaponization of identity politics. It's like the

957
00:52:54,520 --> 00:52:57,520
Speaker 1: Hillary factor almost times twenty. I never thought I would

958
00:52:57,560 --> 00:52:59,319
Speaker 1: live to see a national politician who was worse than

959
00:52:59,360 --> 00:53:03,600
Speaker 1: Hillary come to the stage. But if we've been delivered, yeah,

960
00:53:03,640 --> 00:53:06,680
Speaker 1: that's what we've been delivered. Yeah, it is incredible. And

961
00:53:07,280 --> 00:53:10,720
Speaker 1: I mean, listen, the reason Kamala Harris is Vice President

962
00:53:10,719 --> 00:53:12,520
Speaker 1: of the United States, in spite of the fact that

963
00:53:12,560 --> 00:53:14,880
Speaker 1: she couldn't even make it to the primaries, to have

964
00:53:14,920 --> 00:53:17,720
Speaker 1: a single voter cast a vote for her in twenty

965
00:53:17,800 --> 00:53:21,480
Speaker 1: twenty is because James Cliburn basically said, you will pick

966
00:53:21,520 --> 00:53:23,680
Speaker 1: a black woman, and you know, she ends up on

967
00:53:23,840 --> 00:53:26,719
Speaker 1: the list. Actually, Jill Biden did not want her there.

968
00:53:26,880 --> 00:53:29,719
Speaker 1: Joe should have listen to Jill. Sure, but it was

969
00:53:29,840 --> 00:53:32,920
Speaker 1: obvious to everyone that, you know, whatever you think of

970
00:53:32,920 --> 00:53:34,840
Speaker 1: her record, which there's a lot to say about that

971
00:53:34,920 --> 00:53:37,960
Speaker 1: as well, just on the level of political talent, she

972
00:53:38,120 --> 00:53:41,839
Speaker 1: just didn't have it. And to try to deny that

973
00:53:42,000 --> 00:53:45,360
Speaker 1: obvious reality to the American people, I mean, it's just

974
00:53:45,480 --> 00:53:49,480
Speaker 1: not going to work. But this whole CNN article handringing

975
00:53:49,520 --> 00:53:52,919
Speaker 1: about the situation they find themselves in. It's funny because

976
00:53:52,960 --> 00:53:56,239
Speaker 1: they're saying, oh, there's this this pile on on Kamala Harris.

977
00:53:56,400 --> 00:53:59,800
Speaker 1: It's quite the opposite. There's been so little critical coverage.

978
00:54:00,320 --> 00:54:02,359
Speaker 1: Cham Laiir is to be honest with you. I mean,

979
00:54:02,400 --> 00:54:05,480
Speaker 1: she really has been protected from the beginning in a

980
00:54:05,480 --> 00:54:08,839
Speaker 1: lot of ways. It's just that it's really apparent that

981
00:54:09,000 --> 00:54:10,840
Speaker 1: you know, this is going to be a political issue

982
00:54:10,840 --> 00:54:14,880
Speaker 1: for Biden and the ticket moving forward in twenty twenty

983
00:54:14,880 --> 00:54:18,960
Speaker 1: four and definitely impacts his electability. There's no doubt about it.

984
00:54:19,000 --> 00:54:21,120
Speaker 1: Even if you think he's great and did a great job,

985
00:54:21,360 --> 00:54:23,279
Speaker 1: you got to ask yourself who's next in line? And

986
00:54:23,320 --> 00:54:25,400
Speaker 1: the answer is very troubling. And then you know, for

987
00:54:25,440 --> 00:54:27,719
Speaker 1: whatever reason he didn't run or he was unable to run,

988
00:54:28,120 --> 00:54:31,560
Speaker 1: then you have an even bigger problem because she's the

989
00:54:31,560 --> 00:54:34,360
Speaker 1: one who you've said by making her vice president is

990
00:54:34,480 --> 00:54:36,680
Speaker 1: next in line, and they know they have a real

991
00:54:36,719 --> 00:54:40,520
Speaker 1: political issue with her. So this all great clip to

992
00:54:40,520 --> 00:54:44,040
Speaker 1: show you from view. Ladies discussing all of this, the

993
00:54:44,080 --> 00:54:48,600
Speaker 1: CNN report, the Elizabeth Warren comments, etc. Their takes are

994
00:54:48,920 --> 00:54:52,880
Speaker 1: just amazing. Take a listen. I feel like the Biden

995
00:54:53,000 --> 00:54:55,960
Speaker 1: West wing isn't necessarily setting her up for success by

996
00:54:55,960 --> 00:54:58,040
Speaker 1: giving her things that she can go out and champion

997
00:54:58,400 --> 00:55:00,560
Speaker 1: at a time when voters I get this age like

998
00:55:00,640 --> 00:55:03,160
Speaker 1: age is not the most important thing, but you are

999
00:55:03,200 --> 00:55:04,960
Speaker 1: if you're electing someone who's an eighty two year old

1000
00:55:04,960 --> 00:55:07,560
Speaker 1: in twenty twenty four. You need to believe that the

1001
00:55:07,640 --> 00:55:10,239
Speaker 1: vice president is able and willing the next day to

1002
00:55:10,280 --> 00:55:13,520
Speaker 1: be the president. And I think there's some concern about

1003
00:55:13,560 --> 00:55:16,040
Speaker 1: just the lack of a policy accomplishment that she's made

1004
00:55:16,080 --> 00:55:18,640
Speaker 1: as vice I'm surprised if there's concern. I think it

1005
00:55:18,680 --> 00:55:20,480
Speaker 1: has a lot to do with this. She's a black woman.

1006
00:55:20,960 --> 00:55:26,520
Speaker 1: Black women get everything done. We've saved this country democracy first. Amazing,

1007
00:55:26,520 --> 00:55:32,000
Speaker 1: But what specifically, but whoa like where shall I start?

1008
00:55:32,080 --> 00:55:34,160
Speaker 1: I mean, she was in the Senate of pre me.

1009
00:55:35,200 --> 00:55:40,919
Speaker 1: Of course, she's the Inflation Reduction Act. I mean she's

1010
00:55:41,120 --> 00:55:43,440
Speaker 1: the face of Rovy Way. I mean, Solist goes on

1011
00:55:43,480 --> 00:55:45,640
Speaker 1: and on. I'd like to ask you what what operations?

1012
00:55:46,920 --> 00:55:51,600
Speaker 1: What dependable? Put his lips firmly on the butt of

1013
00:55:51,800 --> 00:55:56,360
Speaker 1: Donald Trump and still is fighting a subpoena to testify

1014
00:55:56,719 --> 00:56:00,200
Speaker 1: against Trump. I mean, when Pence finds the cohonas to

1015
00:56:00,280 --> 00:56:03,160
Speaker 1: do something, then I think we can think about how

1016
00:56:03,280 --> 00:56:07,080
Speaker 1: vice presidential it does feel a little. It's so funny

1017
00:56:07,160 --> 00:56:11,160
Speaker 1: because Alyssa Farra there, her critique, her like pushback on

1018
00:56:11,200 --> 00:56:15,439
Speaker 1: the view is like so mild and mellow, like oh,

1019
00:56:15,520 --> 00:56:17,719
Speaker 1: I just think maybe like she could have done a

1020
00:56:17,760 --> 00:56:20,960
Speaker 1: little bit more. And then Sonny immediately pulls the Trump

1021
00:56:21,200 --> 00:56:24,680
Speaker 1: card of you're basically implying she's a racist, right, You're

1022
00:56:24,680 --> 00:56:26,680
Speaker 1: only saying that because she's a black woman, So that's

1023
00:56:26,760 --> 00:56:29,480
Speaker 1: number one. And then Alyssa's like, okay, well, just like,

1024
00:56:29,560 --> 00:56:33,000
Speaker 1: tell me some policy accomplishments. Where do I start? And

1025
00:56:33,040 --> 00:56:35,719
Speaker 1: she can pull up like one or two things, and

1026
00:56:35,719 --> 00:56:37,319
Speaker 1: then she names things that she had nothing to do

1027
00:56:37,360 --> 00:56:40,719
Speaker 1: with Production Act, which Kamala Harris had zero to do with.

1028
00:56:41,160 --> 00:56:44,879
Speaker 1: And being the faith of Roe versus Wade, what is that?

1029
00:56:44,880 --> 00:56:48,640
Speaker 1: That means nothing? That absolutely means nothing. And also, Sager,

1030
00:56:48,800 --> 00:56:51,520
Speaker 1: you were reminded from that comment of one of our

1031
00:56:51,840 --> 00:56:56,960
Speaker 1: personal show favorite moments of the incredibly effective job that

1032
00:56:57,040 --> 00:57:00,759
Speaker 1: Kamala Harris did representing the administration's interest when it came

1033
00:57:00,800 --> 00:57:03,520
Speaker 1: to the issue of abortion. Take a listen to this.

1034
00:57:04,160 --> 00:57:06,640
Speaker 1: I think that, to be very honest with you, I

1035
00:57:07,200 --> 00:57:12,480
Speaker 1: do believe that we should have rightly believed, but we

1036
00:57:12,560 --> 00:57:16,320
Speaker 1: certainly believed that certain issues are just settled, certain issues

1037
00:57:16,360 --> 00:57:19,200
Speaker 1: are just settled. Clearly we're not. No, that's right, And

1038
00:57:19,240 --> 00:57:22,160
Speaker 1: that's why I do believe that we are living sadly

1039
00:57:22,360 --> 00:57:27,000
Speaker 1: in real unsettled times. So that was her response to

1040
00:57:27,040 --> 00:57:29,600
Speaker 1: a question face of words, Roby Wade, Hey, shit, had

1041
00:57:29,640 --> 00:57:32,400
Speaker 1: they maybe done something the Democratic Party when knew had

1042
00:57:32,400 --> 00:57:35,920
Speaker 1: a supermajority under Obama? And that was the gobbledygook answer

1043
00:57:35,960 --> 00:57:38,280
Speaker 1: that she was able to offer. It's just such race

1044
00:57:38,320 --> 00:57:41,560
Speaker 1: baiting BS to say that any criticism of her is

1045
00:57:41,600 --> 00:57:44,520
Speaker 1: because she is a black woman. If anything, the only

1046
00:57:44,560 --> 00:57:47,200
Speaker 1: reason that she is a national office is because she

1047
00:57:47,280 --> 00:57:49,880
Speaker 1: is a black woman. That's a conflating criticism of that

1048
00:57:50,200 --> 00:57:52,640
Speaker 1: is outrageous when really they're the ones who played the

1049
00:57:53,000 --> 00:57:56,400
Speaker 1: race card from the beginning, So it's outrageous. Second, yeah,

1050
00:57:56,440 --> 00:57:58,680
Speaker 1: as you could see in that clip with Alyssa, she's very,

1051
00:57:58,840 --> 00:58:01,880
Speaker 1: very trapidly even pushing. Of course, they could literally the

1052
00:58:01,920 --> 00:58:04,840
Speaker 1: only quote unquote right person they could find as somebody

1053
00:58:04,880 --> 00:58:08,400
Speaker 1: who's like kissing the ass of CNN has denounced Trump

1054
00:58:08,480 --> 00:58:10,640
Speaker 1: at every turn. And look, I'm not saying that that

1055
00:58:10,720 --> 00:58:13,240
Speaker 1: isn't a valid point, but I'm saying like that does

1056
00:58:13,280 --> 00:58:16,440
Speaker 1: not represent conservatism in the United States literally in any way.

1057
00:58:16,640 --> 00:58:18,400
Speaker 1: I don't even also claim to do that, but I'm

1058
00:58:18,440 --> 00:58:20,760
Speaker 1: saying that is literally what her job is supposed to

1059
00:58:20,760 --> 00:58:24,760
Speaker 1: be on. I also like how when Sonny struggles to

1060
00:58:24,920 --> 00:58:28,360
Speaker 1: articulate what Kamala has provided in the office of the

1061
00:58:28,440 --> 00:58:33,040
Speaker 1: Vice Presidency, the next rhetorical trick she pulls is going, well,

1062
00:58:33,080 --> 00:58:36,880
Speaker 1: what about Mike Pence because she knows that the view

1063
00:58:37,000 --> 00:58:41,560
Speaker 1: audience will like, that's an easy rhetorical victory for her

1064
00:58:41,640 --> 00:58:43,640
Speaker 1: to be Like, and Mike Pence was out there kissing

1065
00:58:43,720 --> 00:58:46,600
Speaker 1: Donald Trump's button, It's like, okay, true, what does that

1066
00:58:46,640 --> 00:58:48,880
Speaker 1: have to do with Kamala Harris? But you know, she

1067
00:58:49,000 --> 00:58:50,640
Speaker 1: knows that that's a good way to get the audience

1068
00:58:50,640 --> 00:58:52,840
Speaker 1: on her side since she's struggling to actually defend her

1069
00:58:52,880 --> 00:58:56,000
Speaker 1: record in office. And look, let's be honest, vice presidents,

1070
00:58:56,120 --> 00:58:59,440
Speaker 1: you know they don't typically do a lot. Biden was

1071
00:59:00,000 --> 00:59:02,520
Speaker 1: actually more impactful when he was vice president because he

1072
00:59:02,560 --> 00:59:06,400
Speaker 1: had all those relationships with the Senate. Obama hated doing

1073
00:59:06,480 --> 00:59:09,320
Speaker 1: like that kind of retail politics. Jo Biden obviously loves

1074
00:59:09,400 --> 00:59:11,760
Speaker 1: doing that kind of retail politics. So you could actually

1075
00:59:11,760 --> 00:59:13,840
Speaker 1: make a case, okay, he actually mattered in terms of

1076
00:59:13,880 --> 00:59:15,680
Speaker 1: trying to work with probably going to strike a deal,

1077
00:59:16,080 --> 00:59:19,400
Speaker 1: et cetera with Kamlin. You know, the thing that you

1078
00:59:19,400 --> 00:59:21,560
Speaker 1: would hope for with her is that she would be

1079
00:59:21,600 --> 00:59:26,400
Speaker 1: a competent spokesperson in these various interests, in representing the

1080
00:59:26,440 --> 00:59:30,240
Speaker 1: administration and their positions. That's really the one job she

1081
00:59:30,440 --> 00:59:33,160
Speaker 1: actually has as vice president, and it happens to be

1082
00:59:33,200 --> 00:59:36,200
Speaker 1: a job that she is incredibly poorly suited to because

1083
00:59:36,200 --> 00:59:39,240
Speaker 1: she's just not quick on her feet. In these interviews,

1084
00:59:39,360 --> 00:59:43,240
Speaker 1: she's always trying to she's she's always trying to just

1085
00:59:43,280 --> 00:59:45,440
Speaker 1: like recite what was in the briefing book without having

1086
00:59:45,480 --> 00:59:48,120
Speaker 1: actually spend any time with the briefing book. Marshall always

1087
00:59:48,160 --> 00:59:50,200
Speaker 1: makes the point she's really trying to like west wing

1088
00:59:50,240 --> 00:59:52,720
Speaker 1: it and say something profound every time, when really you

1089
00:59:52,720 --> 00:59:56,160
Speaker 1: should just be like answering the question directly and straight

1090
00:59:56,240 --> 01:00:00,360
Speaker 1: so anyway you know they want, and the it went

1091
01:00:00,400 --> 01:00:03,240
Speaker 1: on with what's her name? Anna Navarro was like, I

1092
01:00:03,240 --> 01:00:05,120
Speaker 1: don't know what's wrong with Democrats. They just need to

1093
01:00:05,120 --> 01:00:08,960
Speaker 1: be quiet about this criticimicism because you're giving Republicans talking points,

1094
01:00:09,160 --> 01:00:12,520
Speaker 1: which also completely drives me crazy because you can't just

1095
01:00:12,640 --> 01:00:15,720
Speaker 1: lie to people and deny reality because you're terrified about

1096
01:00:15,720 --> 01:00:18,200
Speaker 1: what Republicans might say. Republicans already have They're going to

1097
01:00:18,240 --> 01:00:20,840
Speaker 1: have talking points no matter what you do, So you

1098
01:00:20,960 --> 01:00:24,640
Speaker 1: only undermine your own credibility when you are straightforward with

1099
01:00:24,640 --> 01:00:26,640
Speaker 1: the American people about what you actually think. There's a

1100
01:00:26,640 --> 01:00:30,800
Speaker 1: phrase I just remembered called the biggest tree of low expectations. Yeah,

1101
01:00:30,800 --> 01:00:32,840
Speaker 1: and I think that is really what's happening here, is

1102
01:00:32,880 --> 01:00:35,440
Speaker 1: that we have such low expectations of her that it's

1103
01:00:35,600 --> 01:00:39,960
Speaker 1: literally bigoted, so that you're conflating the criticism when what

1104
01:00:40,000 --> 01:00:43,360
Speaker 1: we really expect is a competent vice president and that's it.

1105
01:00:43,680 --> 01:00:45,880
Speaker 1: So to say that we're not allowed to criticize her

1106
01:00:46,120 --> 01:00:49,200
Speaker 1: or the criticism of her for her bad, obviously bad

1107
01:00:49,240 --> 01:00:53,760
Speaker 1: performance is in some way racial, is itself injecting something

1108
01:00:53,760 --> 01:00:56,360
Speaker 1: that has nothing to do with her actual job. Well,

1109
01:00:56,720 --> 01:00:59,840
Speaker 1: I have a perfect example for you. After Hillary Clinton

1110
01:01:00,240 --> 01:01:02,400
Speaker 1: lost against Donald Trump, there were a lot of people

1111
01:01:02,440 --> 01:01:05,320
Speaker 1: who said it was because of sexist Yes, the country

1112
01:01:05,400 --> 01:01:09,840
Speaker 1: was too sexist to elect a female president, And that

1113
01:01:09,960 --> 01:01:12,760
Speaker 1: is an incredibly I mean, listen, I'm not denying the

1114
01:01:12,760 --> 01:01:16,200
Speaker 1: reality of racism or sexism, far from it. But when

1115
01:01:16,240 --> 01:01:18,520
Speaker 1: that is the narrative that you go with when there

1116
01:01:18,520 --> 01:01:22,200
Speaker 1: were so many other obvious failings of Hillary Clinton, well

1117
01:01:22,240 --> 01:01:25,360
Speaker 1: what does that tell Democratic voters the next time around?

1118
01:01:25,440 --> 01:01:27,480
Speaker 1: And this came up in the runs of people like

1119
01:01:27,600 --> 01:01:31,240
Speaker 1: Elizabeth Warren and Kamala Harris and others. You know, I

1120
01:01:31,280 --> 01:01:33,480
Speaker 1: really might like you, or I might like your policy,

1121
01:01:33,600 --> 01:01:37,120
Speaker 1: but I my number one priority is electability, and I

1122
01:01:37,160 --> 01:01:39,360
Speaker 1: was just told with Hillary Clinton that a woman can't win.

1123
01:01:39,840 --> 01:01:43,760
Speaker 1: So you end up when that's your only analysis and

1124
01:01:43,840 --> 01:01:45,800
Speaker 1: when you throw it up as a smoke screen for

1125
01:01:46,000 --> 01:01:49,200
Speaker 1: every single thing, even when there are clearly other obvious

1126
01:01:49,240 --> 01:01:52,240
Speaker 1: issues going on. What you're doing is you're telling other

1127
01:01:52,440 --> 01:01:55,280
Speaker 1: young women or other young black women that they don't

1128
01:01:55,280 --> 01:01:58,480
Speaker 1: have a chance, and you're telling voters that they shouldn't

1129
01:01:58,520 --> 01:02:02,040
Speaker 1: back these people in primary because ultimately the electorate is

1130
01:02:02,080 --> 01:02:04,760
Speaker 1: too racist and too sexist for them to have a shot.

1131
01:02:04,880 --> 01:02:06,640
Speaker 1: So if you care about winning, I guess you just

1132
01:02:06,680 --> 01:02:08,880
Speaker 1: got to stick with the old white guys. Very good point.

1133
01:02:09,000 --> 01:02:13,480
Speaker 1: It really is hopeful. Note though, in terms of the media,

1134
01:02:13,560 --> 01:02:17,360
Speaker 1: so apparently the American public, not Democrats, not Republicans, not independence,

1135
01:02:17,720 --> 01:02:21,640
Speaker 1: but the media spin with regard to the origins of

1136
01:02:21,680 --> 01:02:23,840
Speaker 1: the pandemic. It's going to put this up on the screen.

1137
01:02:23,880 --> 01:02:26,760
Speaker 1: This is really quite love fascinating. This is an economist

1138
01:02:26,760 --> 01:02:30,200
Speaker 1: you go of poll they found that they asked people Okay,

1139
01:02:30,320 --> 01:02:34,200
Speaker 1: what do you think was COVID origin natural or was

1140
01:02:34,280 --> 01:02:38,640
Speaker 1: it a lableak? Sixty six percent super majority of Americans

1141
01:02:38,720 --> 01:02:45,640
Speaker 1: said they lean toward lableak. That includes four percent of Democrats,

1142
01:02:45,680 --> 01:02:48,920
Speaker 1: so a majority of Democrats versus only twenty five percent

1143
01:02:48,920 --> 01:02:51,040
Speaker 1: who say they lean towards natural. That other twenty one

1144
01:02:51,040 --> 01:02:53,160
Speaker 1: percent say they're not sure. So fifty four percent of

1145
01:02:53,160 --> 01:02:56,240
Speaker 1: Democrats they lean lab leak, sixty two percent of independence

1146
01:02:56,400 --> 01:02:59,760
Speaker 1: and eighty six percent of Republicans. So there are some

1147
01:02:59,800 --> 01:03:05,080
Speaker 1: part differences there which you would expect. But even among Democrats,

1148
01:03:05,280 --> 01:03:09,600
Speaker 1: which you know almost entirely consume news media that for

1149
01:03:09,720 --> 01:03:11,960
Speaker 1: years was telling them not only was laud leak wrong,

1150
01:03:12,400 --> 01:03:15,560
Speaker 1: definitively wrong, but it was also racist to even consider it.

1151
01:03:16,200 --> 01:03:20,360
Speaker 1: They didn't really listen to their media purveyors of choice,

1152
01:03:20,760 --> 01:03:23,880
Speaker 1: and I find that to be an incredibly beautiful and

1153
01:03:24,000 --> 01:03:26,520
Speaker 1: encouraging thing. Ultimately, Oh I love this. This is kind

1154
01:03:26,520 --> 01:03:29,360
Speaker 1: of like the Kennedy assassination thing. Yeah, where everyone's like,

1155
01:03:29,400 --> 01:03:31,880
Speaker 1: here's the official story, all of that, and by nineteen

1156
01:03:31,920 --> 01:03:34,520
Speaker 1: seventy five they're like, yeah, I just don't believe a

1157
01:03:34,600 --> 01:03:37,480
Speaker 1: literal word of what I think. It was a complete

1158
01:03:37,520 --> 01:03:40,400
Speaker 1: conspiracy and you know the crazy part when you dig

1159
01:03:40,440 --> 01:03:44,920
Speaker 1: into this is many Democrats even are willing to buy

1160
01:03:45,120 --> 01:03:47,800
Speaker 1: that it was a deliberate leak of the virus. Some

1161
01:03:47,880 --> 01:03:51,800
Speaker 1: thirty five percent say it was actually deliberately leaked in

1162
01:03:51,880 --> 01:03:54,600
Speaker 1: some sort of bioweapon. And so geez. That is you

1163
01:03:54,880 --> 01:03:59,040
Speaker 1: are seeing the level of suspicion that Americans have here

1164
01:03:59,480 --> 01:04:02,520
Speaker 1: about whether COVID was leaked from the lab and whether

1165
01:04:02,640 --> 01:04:06,200
Speaker 1: even it was intentionally leaked from the lab. So I

1166
01:04:06,320 --> 01:04:11,439
Speaker 1: think that that just really encapsulates everything where you can

1167
01:04:11,480 --> 01:04:15,000
Speaker 1: have as much media propaganda as you want. Americans are

1168
01:04:15,040 --> 01:04:17,880
Speaker 1: not stupid. It's been almost two and a half years

1169
01:04:17,880 --> 01:04:20,560
Speaker 1: now that polling has indicated that at least half of

1170
01:04:20,560 --> 01:04:22,800
Speaker 1: the country has always thought this was the lab leak.

1171
01:04:22,920 --> 01:04:25,520
Speaker 1: It just turns out that half is was never represented

1172
01:04:25,760 --> 01:04:28,840
Speaker 1: on television, and now you have a supermajority people. It's

1173
01:04:28,880 --> 01:04:31,240
Speaker 1: like the John Stewart bit. He's like, you're telling me

1174
01:04:31,800 --> 01:04:34,800
Speaker 1: that the lab where they happened to study this is

1175
01:04:34,840 --> 01:04:38,880
Speaker 1: the place where the pandemic happened. It's common sense, people,

1176
01:04:39,240 --> 01:04:42,439
Speaker 1: It's just straight up common sense. All the spin, all

1177
01:04:42,480 --> 01:04:45,520
Speaker 1: the actually foreig intellagencies would have nothing to do with

1178
01:04:45,640 --> 01:04:48,680
Speaker 1: labs all disagree. They're not buying any of this crap.

1179
01:04:48,920 --> 01:04:51,360
Speaker 1: They know what's true and they know what's not. All

1180
01:04:51,400 --> 01:04:53,720
Speaker 1: you had to do is lay out the circumstantial case,

1181
01:04:53,880 --> 01:04:55,760
Speaker 1: and then the reams of evidence on top of that,

1182
01:04:56,080 --> 01:04:59,040
Speaker 1: and then the testimony of the former CDC director and

1183
01:04:59,080 --> 01:05:01,600
Speaker 1: then all of the cover up, and it just confirms

1184
01:05:01,640 --> 01:05:05,360
Speaker 1: everything that they knew from day one. Yeah, sometimes ordinary

1185
01:05:05,360 --> 01:05:08,280
Speaker 1: people have a lot more common sense than these supposed

1186
01:05:09,200 --> 01:05:12,480
Speaker 1: experts and elites that get trotted out on cable news.

1187
01:05:12,520 --> 01:05:15,440
Speaker 1: But you know, it's just really encouraging to see a

1188
01:05:15,520 --> 01:05:19,200
Speaker 1: level of skepticism even among you know, sort of the

1189
01:05:19,200 --> 01:05:23,240
Speaker 1: Democratic base and liberals who had their own ideas about this,

1190
01:05:23,440 --> 01:05:26,200
Speaker 1: even as you know, all of their media outlets were

1191
01:05:26,240 --> 01:05:29,360
Speaker 1: pushing one particular narrative, and even as they're, you know,

1192
01:05:29,440 --> 01:05:31,560
Speaker 1: someone who they could still consider like a hero of

1193
01:05:31,600 --> 01:05:34,280
Speaker 1: the pandemic continues to be on the other side of

1194
01:05:34,280 --> 01:05:36,280
Speaker 1: the debate, they're still able to look at it and

1195
01:05:36,320 --> 01:05:38,520
Speaker 1: be like, you know what, I'm taking off my partisan hat,

1196
01:05:38,560 --> 01:05:41,000
Speaker 1: I'm taking off my like I Love Fauci T shirt,

1197
01:05:41,360 --> 01:05:44,680
Speaker 1: and I am going with what is like common sense

1198
01:05:44,720 --> 01:05:46,560
Speaker 1: to me and what appears to be the most likely

1199
01:05:46,640 --> 01:05:51,200
Speaker 1: explanation here. It's also, in my view, another sign of

1200
01:05:51,280 --> 01:05:56,400
Speaker 1: the decline in trust, much deserved decline in trust among

1201
01:05:56,600 --> 01:06:00,840
Speaker 1: the you know, traditional mainstream corporate press. I think that

1202
01:06:00,960 --> 01:06:04,000
Speaker 1: is also a really good thing, because you know, if

1203
01:06:04,040 --> 01:06:07,440
Speaker 1: you are going to disrupt the status quo in any

1204
01:06:07,480 --> 01:06:09,960
Speaker 1: meaningful way, you're going to need a bulk of the

1205
01:06:10,000 --> 01:06:13,600
Speaker 1: population to be free thinking and to reject the lines

1206
01:06:13,640 --> 01:06:16,520
Speaker 1: that they are at least to question the lines that

1207
01:06:16,560 --> 01:06:18,800
Speaker 1: are being pushed to them from mainstream press. So I

1208
01:06:18,840 --> 01:06:21,440
Speaker 1: see that as nothing but a positive development. Absolutely. My

1209
01:06:21,560 --> 01:06:23,440
Speaker 1: only fear with this is, you know, with a lot

1210
01:06:23,480 --> 01:06:25,400
Speaker 1: of these democrats, because if you also were to be like, well,

1211
01:06:25,400 --> 01:06:28,520
Speaker 1: what do you think about you like, very positively and unfortunately,

1212
01:06:28,680 --> 01:06:32,800
Speaker 1: I think that the explanation for lablink and for the

1213
01:06:32,800 --> 01:06:35,200
Speaker 1: cover up is deeply convoluted. As much as I would

1214
01:06:35,200 --> 01:06:38,360
Speaker 1: love for it not to be, it's difficult to convey

1215
01:06:38,480 --> 01:06:41,640
Speaker 1: to someone who is not already deeply skeptical. Now millions

1216
01:06:41,640 --> 01:06:43,600
Speaker 1: of people are they watch the show. We can see

1217
01:06:43,600 --> 01:06:46,760
Speaker 1: that in terms of the level of interest. But imagine

1218
01:06:46,760 --> 01:06:50,480
Speaker 1: you got to explain to a layman EcoHealth Alliance and

1219
01:06:50,880 --> 01:06:55,240
Speaker 1: back coronavirus research gain a function that is the disconnect

1220
01:06:55,320 --> 01:06:58,680
Speaker 1: where it's like it's kind of like a rack. Everyone's like,

1221
01:06:58,720 --> 01:07:01,120
Speaker 1: well bush led about WMS. It's like, yeah, that is

1222
01:07:01,160 --> 01:07:04,520
Speaker 1: broadly true, but then the actual specifics of it. To

1223
01:07:04,560 --> 01:07:07,960
Speaker 1: try and explain the mechanics of Joseph Wilson and your

1224
01:07:08,200 --> 01:07:10,880
Speaker 1: yellow cake and Valerie Plume and then that was in

1225
01:07:10,920 --> 01:07:13,440
Speaker 1: its own scandal and own it just starts to become

1226
01:07:13,440 --> 01:07:16,400
Speaker 1: too much in people's eyes glaze over, and ultimately they

1227
01:07:16,520 --> 01:07:18,640
Speaker 1: rely on that because that's the way that they never

1228
01:07:18,920 --> 01:07:22,160
Speaker 1: actually get held accountable for these broad crimes, which are

1229
01:07:22,400 --> 01:07:25,200
Speaker 1: immense and which are terrible. So I just wish and

1230
01:07:25,440 --> 01:07:28,320
Speaker 1: hope that if we can try and start a campaign

1231
01:07:28,720 --> 01:07:31,480
Speaker 1: to really get people to get fully sped up on

1232
01:07:31,560 --> 01:07:33,800
Speaker 1: the actual details of this, there would be even more

1233
01:07:33,840 --> 01:07:35,440
Speaker 1: of a level of outreach and there might actually be

1234
01:07:35,480 --> 01:07:38,840
Speaker 1: some accountability too. And look, let's say, let's put Fauci aside.

1235
01:07:38,840 --> 01:07:40,120
Speaker 1: I don't think you'll ever go to jail, even though

1236
01:07:40,120 --> 01:07:42,880
Speaker 1: I think you should. Let's at least ban and put

1237
01:07:43,000 --> 01:07:47,320
Speaker 1: new limitations on game function, like that would be the

1238
01:07:47,400 --> 01:07:49,840
Speaker 1: ultimate factory. I don't think you need a lot of details,

1239
01:07:49,880 --> 01:07:52,920
Speaker 1: and like intimate knowledge of the original conference call and

1240
01:07:52,960 --> 01:07:55,600
Speaker 1: the letter and how it all went down to just

1241
01:07:55,680 --> 01:07:59,960
Speaker 1: get on a really basic level, this research caused a pandemic.

1242
01:08:00,440 --> 01:08:03,919
Speaker 1: We should curb the research or likely or potentially caused

1243
01:08:03,960 --> 01:08:08,480
Speaker 1: a pandemic for the YouTube misinformation sensors. So maybe we

1244
01:08:08,520 --> 01:08:11,640
Speaker 1: should do about that. That's a really simple and straightforward

1245
01:08:11,680 --> 01:08:14,760
Speaker 1: and common sense direction that I think people would be

1246
01:08:14,920 --> 01:08:18,080
Speaker 1: very and I think are very receptive too. Yeah, I

1247
01:08:18,080 --> 01:08:22,160
Speaker 1: think that's well said. All right, tycho, what are you

1248
01:08:22,160 --> 01:08:24,639
Speaker 1: looking at? Well, if you're like me, you're probably incredibly

1249
01:08:24,680 --> 01:08:27,880
Speaker 1: annoyed at the proliferation on Twitter, Instagram, and presumably on

1250
01:08:27,920 --> 01:08:31,240
Speaker 1: TikTok of tips on how to get rich. Seemingly every

1251
01:08:31,280 --> 01:08:33,840
Speaker 1: person who has ever started a business is out there

1252
01:08:34,080 --> 01:08:36,920
Speaker 1: with threads on how to optimize your taxes, how to

1253
01:08:36,960 --> 01:08:39,599
Speaker 1: get into the storage business, how to start a drop

1254
01:08:39,600 --> 01:08:43,000
Speaker 1: shipping company, how to maximize your NFTs, how to get

1255
01:08:43,000 --> 01:08:46,080
Speaker 1: into reats. I could literally go on forever. Much of

1256
01:08:46,120 --> 01:08:48,439
Speaker 1: this is a scam, but clearly the supply is there

1257
01:08:48,479 --> 01:08:50,959
Speaker 1: to meet the demand. At the heart of these schemes

1258
01:08:51,080 --> 01:08:54,080
Speaker 1: is the idea that you can, through sheer force of will,

1259
01:08:54,280 --> 01:08:57,320
Speaker 1: become rich and financially free in this country, and it

1260
01:08:57,439 --> 01:09:00,600
Speaker 1: is certainly true to a limited extent. In fact, I

1261
01:09:00,680 --> 01:09:02,640
Speaker 1: was stunned at a recent New York Times survey of

1262
01:09:02,680 --> 01:09:05,360
Speaker 1: income tax data that showed a massive portion of the

1263
01:09:05,400 --> 01:09:07,719
Speaker 1: people who make over one point five to eight million

1264
01:09:07,760 --> 01:09:10,040
Speaker 1: dollars a year in this country are car dealers and

1265
01:09:10,120 --> 01:09:13,680
Speaker 1: mechanics shop owners. Small business owners very much have the

1266
01:09:13,840 --> 01:09:17,320
Speaker 1: chance at striking it modestly rich in this country. In

1267
01:09:17,360 --> 01:09:20,599
Speaker 1: many ways, that is the American dream. But to really

1268
01:09:20,640 --> 01:09:24,920
Speaker 1: strike it rich, to really become a whale generational wealth,

1269
01:09:25,160 --> 01:09:28,960
Speaker 1: an entirely different skill set is now required, and unfortunately

1270
01:09:29,200 --> 01:09:32,799
Speaker 1: it has almost nothing to do with actually creating value

1271
01:09:32,960 --> 01:09:35,880
Speaker 1: for anyone in America. I couldn't help but be struck

1272
01:09:35,920 --> 01:09:39,360
Speaker 1: in watching this everything go down at Silicon Valley Bank.

1273
01:09:39,640 --> 01:09:43,640
Speaker 1: We have executives at this bank who cashed out millions

1274
01:09:43,680 --> 01:09:47,320
Speaker 1: of dollars in their own stock before the collapse. They

1275
01:09:47,320 --> 01:09:51,040
Speaker 1: gave themselves bonuses hours before the Feds took it over

1276
01:09:51,280 --> 01:09:54,920
Speaker 1: and they were insolvent. It hit me that these thread posters,

1277
01:09:55,080 --> 01:09:57,559
Speaker 1: they've got it all wrong. The way to really become

1278
01:09:57,680 --> 01:10:01,240
Speaker 1: rich in America is apparently star to regional bank, make

1279
01:10:01,320 --> 01:10:04,920
Speaker 1: dumb bets and gambles, run your business badly, pay yourself

1280
01:10:04,920 --> 01:10:09,200
Speaker 1: a bonus then have the government backstop your customer deposits

1281
01:10:09,360 --> 01:10:12,200
Speaker 1: while you laugh all the way to Aspen. Really consider

1282
01:10:12,240 --> 01:10:15,559
Speaker 1: the precedent that we have set, which we expounded on yesterday.

1283
01:10:16,240 --> 01:10:19,040
Speaker 1: All cash deposits in all banks are now backstopped by

1284
01:10:19,040 --> 01:10:21,800
Speaker 1: the government. Okay, but then why do these bank executives

1285
01:10:21,880 --> 01:10:24,920
Speaker 1: get to use our hard earned money to trade loan

1286
01:10:24,960 --> 01:10:27,919
Speaker 1: out to bet on investments when they pay us fractions

1287
01:10:27,920 --> 01:10:30,439
Speaker 1: of the penny on the dollar in interest and paying

1288
01:10:30,479 --> 01:10:34,240
Speaker 1: themselves big bonuses. Now, I have long said, to some controversy,

1289
01:10:34,320 --> 01:10:37,439
Speaker 1: we would be better off if people became billionaires in

1290
01:10:37,479 --> 01:10:40,200
Speaker 1: this country the way that Elon Musk and Bezos did,

1291
01:10:40,320 --> 01:10:44,200
Speaker 1: because at least that requires creating world changing companies. Today

1292
01:10:44,320 --> 01:10:47,320
Speaker 1: it almost has nothing to do with that. Consider the

1293
01:10:47,320 --> 01:10:50,360
Speaker 1: Forbes Billionaire List and the newest editions that are US citizens.

1294
01:10:50,600 --> 01:10:53,000
Speaker 1: Fifty as of April of twenty twenty two were added

1295
01:10:53,000 --> 01:10:55,080
Speaker 1: to the list. What do you think the single most

1296
01:10:55,120 --> 01:10:58,160
Speaker 1: common occupation of these new editions was, to a t,

1297
01:10:58,600 --> 01:11:01,360
Speaker 1: almost every single one of them was finance, including and

1298
01:11:01,400 --> 01:11:04,400
Speaker 1: I'm not joking who they shouted out, Gary Wang, vice

1299
01:11:04,439 --> 01:11:07,559
Speaker 1: president of FTX. I guess he's no longer on the list.

1300
01:11:07,920 --> 01:11:10,680
Speaker 1: But the rest of them. The most common occupation of

1301
01:11:10,720 --> 01:11:14,200
Speaker 1: these new billionaires was almost all the same, some derivative

1302
01:11:14,240 --> 01:11:18,680
Speaker 1: of finance, private equity, fintech, investment, banking, venture capital. Of

1303
01:11:18,720 --> 01:11:22,559
Speaker 1: the additions was Bill Gates's ex wife after her divorce settlement.

1304
01:11:22,840 --> 01:11:25,880
Speaker 1: The rest were a sprinkling of genuine entrepreneurs and then

1305
01:11:25,920 --> 01:11:28,240
Speaker 1: some real estate guys who are effectively as big sharks

1306
01:11:28,240 --> 01:11:31,920
Speaker 1: as the financiers in many ways, the industrialists like Musk

1307
01:11:32,000 --> 01:11:34,800
Speaker 1: and Bezos. That we focus on having the biggest fortune,

1308
01:11:34,920 --> 01:11:37,679
Speaker 1: it misses the fact that the most common way today

1309
01:11:37,920 --> 01:11:41,680
Speaker 1: to become filthy rich is not to start anything. It's

1310
01:11:41,800 --> 01:11:47,160
Speaker 1: financial engineering, shorting stocks, buying companies, gutting them offshoring, selling

1311
01:11:47,200 --> 01:11:49,760
Speaker 1: for parts, squeezing stock value, or in the case of

1312
01:11:49,760 --> 01:11:53,599
Speaker 1: the FTX guy, being a literal fraudster. And by the way,

1313
01:11:53,880 --> 01:11:57,080
Speaker 1: that was just the new billionaire's list. A comprehensive review

1314
01:11:57,120 --> 01:11:59,439
Speaker 1: of the Forbes four hundred list found that the most

1315
01:11:59,479 --> 01:12:04,000
Speaker 1: common occupation in developed nations for billionaires is finance, and

1316
01:12:04,040 --> 01:12:07,519
Speaker 1: if you lower the threshold down to mere multimillionaires, it

1317
01:12:07,560 --> 01:12:11,439
Speaker 1: remains just as common. Basically above small business owners. The

1318
01:12:11,520 --> 01:12:13,960
Speaker 1: only real way to get really rich in this country

1319
01:12:14,160 --> 01:12:16,959
Speaker 1: is to get some way involved in the financial industry.

1320
01:12:17,160 --> 01:12:19,519
Speaker 1: If you compare this to other countries, we are the

1321
01:12:19,560 --> 01:12:23,960
Speaker 1: standout dramatically. Chinese billionaires and Indian billionaires, Russian billionaires. They

1322
01:12:23,960 --> 01:12:30,160
Speaker 1: are disproportionately concentrated in manufacturing, retail, textile, and industry. Now, granted,

1323
01:12:30,400 --> 01:12:32,639
Speaker 1: many of them are oligarchs with connections to the state,

1324
01:12:32,840 --> 01:12:36,360
Speaker 1: but the point stands that their raw wealth is creation

1325
01:12:36,760 --> 01:12:41,400
Speaker 1: coming from hard assets. Ours is just games on a spreadsheet. Yes,

1326
01:12:41,560 --> 01:12:44,000
Speaker 1: I know I am simplifying this significantly. No, I am

1327
01:12:44,080 --> 01:12:46,920
Speaker 1: not saying these businesses have no place whatsoever or in

1328
01:12:46,920 --> 01:12:49,639
Speaker 1: our economy, but do you really believe that it should

1329
01:12:49,680 --> 01:12:53,920
Speaker 1: be number one? Worse, seemingly, our entire tax code is

1330
01:12:53,960 --> 01:12:57,679
Speaker 1: actually geared around protecting this very type of wealth. Once

1331
01:12:57,720 --> 01:13:02,360
Speaker 1: you have generated significant net worth, effective tax rate drops dramatically.

1332
01:13:02,600 --> 01:13:06,000
Speaker 1: Even amongst billionaires, your ability to avoid income tax is

1333
01:13:06,000 --> 01:13:10,600
Speaker 1: on a graduated scale. No single group of American billionaires

1334
01:13:10,840 --> 01:13:14,280
Speaker 1: enjoys more benefits than those in finance, including but not

1335
01:13:14,360 --> 01:13:17,920
Speaker 1: limited to, capital gains taxes, the carried interest loophole, and

1336
01:13:17,960 --> 01:13:20,479
Speaker 1: the ability to borrow against the value of stock to

1337
01:13:20,520 --> 01:13:24,160
Speaker 1: effectively have zero income. Take financial billionaires like Michael Bloomberg

1338
01:13:24,200 --> 01:13:27,000
Speaker 1: and Warren Buffett, for example, both have an effective lifetime

1339
01:13:27,040 --> 01:13:29,679
Speaker 1: tax rate of less than one point five percent. Buffets

1340
01:13:29,760 --> 01:13:32,600
Speaker 1: is actually zero point one percent. It is difficult to

1341
01:13:32,760 --> 01:13:37,639
Speaker 1: comprehend how much the entire system is designed almost entirely

1342
01:13:37,720 --> 01:13:40,639
Speaker 1: for their benefit. Meanwhile, if you're one of those successful

1343
01:13:40,680 --> 01:13:43,760
Speaker 1: small businesses owners that I mentioned, even with all the

1344
01:13:43,840 --> 01:13:47,240
Speaker 1: depreciation in the world, you are likely paying one of

1345
01:13:47,280 --> 01:13:50,760
Speaker 1: the highest effective tax rates in the United States. Maybe

1346
01:13:50,760 --> 01:13:54,160
Speaker 1: it's just me, but that's ass backwards. Businesses that are

1347
01:13:54,200 --> 01:13:58,000
Speaker 1: parts of the community are effectively penalized for earning cash,

1348
01:13:58,200 --> 01:14:01,200
Speaker 1: while the people who ostensibly manage that cash for you

1349
01:14:01,520 --> 01:14:04,559
Speaker 1: take leverage bets on the market, they make a killing,

1350
01:14:04,840 --> 01:14:07,960
Speaker 1: and they pay nothing. I already know nothing is going

1351
01:14:08,040 --> 01:14:10,280
Speaker 1: to change in the immediate term, but it is important

1352
01:14:10,280 --> 01:14:12,120
Speaker 1: to keep this in your mind, what things really should

1353
01:14:12,160 --> 01:14:14,639
Speaker 1: look like should the time ever come that we can

1354
01:14:14,760 --> 01:14:17,720
Speaker 1: ever actually do something about this. You know, this is

1355
01:14:17,720 --> 01:14:19,680
Speaker 1: a point, Crystal, I've always tried to make, and I

1356
01:14:19,760 --> 01:14:21,360
Speaker 1: just wanted to revisit it. And if you want to

1357
01:14:21,360 --> 01:14:24,960
Speaker 1: hear my reaction to Sagre's monologue, become a premium subscriber

1358
01:14:25,000 --> 01:14:30,000
Speaker 1: today at Breakingpoints dot Com. Crystal, what are you taking

1359
01:14:30,000 --> 01:14:31,840
Speaker 1: a look at? Well, guys, As we've been covering here,

1360
01:14:31,880 --> 01:14:35,040
Speaker 1: when things got dicey for wealthy venture capitalists, their friends,

1361
01:14:35,080 --> 01:14:38,679
Speaker 1: and their portfolio companies, the government leapt into action. After

1362
01:14:38,720 --> 01:14:41,479
Speaker 1: Silicon Valley Bank collapsed. It only took the government a

1363
01:14:41,640 --> 01:14:45,599
Speaker 1: single weekend to guarantee all depositors would be made one

1364
01:14:45,640 --> 01:14:47,960
Speaker 1: hundred percent whole, but that was really just the start.

1365
01:14:48,160 --> 01:14:50,600
Speaker 1: They also opened up an entirely new lending facility to

1366
01:14:50,640 --> 01:14:52,960
Speaker 1: make sure that all banks have liquidity, and will even

1367
01:14:53,000 --> 01:14:55,880
Speaker 1: allow banks to use as collateral for those cheap loans

1368
01:14:56,080 --> 01:15:00,200
Speaker 1: assets that have lost billions in value. Now, these actions

1369
01:15:00,280 --> 01:15:03,760
Speaker 1: not only benefits Silicon Valley Bank depositors and Signature Bank depositors,

1370
01:15:03,920 --> 01:15:08,559
Speaker 1: but the entire banking system. Every bank executive and shareholder

1371
01:15:08,600 --> 01:15:10,799
Speaker 1: with a shaky ballot sheet just got a massive bailout.

1372
01:15:10,840 --> 01:15:12,960
Speaker 1: Every wealthy person in America with more than two hundred

1373
01:15:12,960 --> 01:15:14,960
Speaker 1: and fifty thousand dollars in the bank they just got

1374
01:15:14,960 --> 01:15:18,040
Speaker 1: to guarantee that all their deposits are safe, even though

1375
01:15:18,240 --> 01:15:21,639
Speaker 1: their institutions did not pay enough insurance to actually cover

1376
01:15:21,840 --> 01:15:25,400
Speaker 1: all of those deposits. All banks are now effectively too

1377
01:15:25,439 --> 01:15:28,639
Speaker 1: big to fail and all deposits are now effectively insured,

1378
01:15:28,960 --> 01:15:30,439
Speaker 1: and as much as they want to claim this says

1379
01:15:30,479 --> 01:15:33,320
Speaker 1: no impact on the American taxpayer. Were the ones who

1380
01:15:33,360 --> 01:15:37,800
Speaker 1: are backstopping this new revolutionary banking status quo. Even if

1381
01:15:37,800 --> 01:15:41,360
Speaker 1: you just consider one piece of the bailout, the Fed's

1382
01:15:41,400 --> 01:15:45,360
Speaker 1: decision to allow banks to borrow against negative collateral value,

1383
01:15:45,560 --> 01:15:49,120
Speaker 1: this amounts to many billions of dollars in value conferred

1384
01:15:49,160 --> 01:15:53,120
Speaker 1: to one sector of the economy from the US government. Now,

1385
01:15:53,800 --> 01:15:57,240
Speaker 1: I cannot help but contrast this shock gunnav response from

1386
01:15:57,280 --> 01:15:59,680
Speaker 1: the federal government with a response to another crisis that

1387
01:15:59,720 --> 01:16:01,880
Speaker 1: we have spent a lot of time covering here, the

1388
01:16:01,920 --> 01:16:06,240
Speaker 1: Norfolk Southern train catastrophe in East Palestine, Ohio. Both crashes

1389
01:16:06,240 --> 01:16:09,360
Speaker 1: at cor were created by corporate greed and political capture.

1390
01:16:09,600 --> 01:16:12,880
Speaker 1: Case of Silicon Valley Bank, their CEO successfully argued for

1391
01:16:12,920 --> 01:16:16,040
Speaker 1: a light regulatory touch, exempting the bank from struss tests

1392
01:16:16,040 --> 01:16:18,959
Speaker 1: that might have kept it from going belly up. Seventeen

1393
01:16:19,000 --> 01:16:22,280
Speaker 1: Democrats joined with fifty Republicans to usher these changes through

1394
01:16:22,280 --> 01:16:24,880
Speaker 1: Congress during the Trump administration. Now, in the case of

1395
01:16:24,880 --> 01:16:28,000
Speaker 1: Norfolk Southern Railroad, interests had their way with the Obama

1396
01:16:28,040 --> 01:16:31,559
Speaker 1: administration when they successfully limited the scope of new safety REGs.

1397
01:16:31,680 --> 01:16:34,800
Speaker 1: The Trump administration went even further, rolling back several of

1398
01:16:34,840 --> 01:16:38,360
Speaker 1: those Obama era provisions, and the Biden administration maintained the

1399
01:16:38,400 --> 01:16:40,639
Speaker 1: status quo and then sided with the rail bosses over

1400
01:16:40,680 --> 01:16:43,640
Speaker 1: their workers on safety and on working conditions. But in

1401
01:16:43,680 --> 01:16:46,519
Speaker 1: one situation, the victims were wealthy and well connected, and

1402
01:16:46,600 --> 01:16:48,960
Speaker 1: the other the victims were working class people in a

1403
01:16:48,960 --> 01:16:51,360
Speaker 1: part of the country that the fancy people abandoned a

1404
01:16:51,360 --> 01:16:54,320
Speaker 1: long time ago. Now, I'm not saying the train crash

1405
01:16:54,320 --> 01:16:56,360
Speaker 1: in the bank crash are one hundred percent analogous. That'd

1406
01:16:56,400 --> 01:16:58,760
Speaker 1: be ridiculous. One big and important difference is that in

1407
01:16:58,800 --> 01:17:01,439
Speaker 1: the case of SVB, there was a possibility of financial

1408
01:17:01,479 --> 01:17:04,280
Speaker 1: contagion spreading to banks across the country. I tend to

1409
01:17:04,280 --> 01:17:06,360
Speaker 1: think these fares were a bit overblown, but it was

1410
01:17:06,360 --> 01:17:09,000
Speaker 1: certainly a real possibility, especially with a bunch of influential

1411
01:17:09,000 --> 01:17:12,840
Speaker 1: people running around hair on fire, basically willing one into existence. Now,

1412
01:17:12,840 --> 01:17:15,320
Speaker 1: with the Norfolk Southern train derailment, the fact of this

1413
01:17:15,360 --> 01:17:18,840
Speaker 1: one derailment was not going to trigger an onslaught of derailments.

1414
01:17:18,840 --> 01:17:21,519
Speaker 1: There was no contagion risk. So it is different in

1415
01:17:21,560 --> 01:17:24,479
Speaker 1: that it was not going to trigger cascading effects, although

1416
01:17:24,800 --> 01:17:27,080
Speaker 1: if you look at the safety stats, we already have

1417
01:17:27,200 --> 01:17:30,479
Speaker 1: a nationwide epidemic of trained derailments, which should be treated

1418
01:17:30,560 --> 01:17:33,240
Speaker 1: as a crisis. But both crashes have to do with

1419
01:17:33,280 --> 01:17:36,480
Speaker 1: the lives and the livelihoods of American citizens, and evaluating

1420
01:17:36,479 --> 01:17:38,559
Speaker 1: the responses, what you come away with is a pretty

1421
01:17:38,560 --> 01:17:40,920
Speaker 1: clear message about who our government is set up to serve.

1422
01:17:41,280 --> 01:17:43,400
Speaker 1: Who gets a bailout and who gets a raft of

1423
01:17:43,439 --> 01:17:47,120
Speaker 1: excuses for why we can't do anything, Who gets socialism,

1424
01:17:47,200 --> 01:17:50,560
Speaker 1: and who gets that good old fashioned, rugged individualism. So

1425
01:17:50,680 --> 01:17:53,679
Speaker 1: let's do a little thought experiment. What would it actually

1426
01:17:53,760 --> 01:17:58,240
Speaker 1: look like if East Palestine, Ohio got the Silicon Valley treatment.

1427
01:17:59,479 --> 01:18:02,479
Speaker 1: The first critical aspect of the government response to Silicon

1428
01:18:02,560 --> 01:18:05,640
Speaker 1: Valley was speed. It took mere days to marshal a

1429
01:18:05,760 --> 01:18:09,120
Speaker 1: major response and announced groundbreaking new policy, leaving depositors concerned

1430
01:18:09,160 --> 01:18:12,080
Speaker 1: about these bank accounts for only a single weekend. On

1431
01:18:12,160 --> 01:18:16,000
Speaker 1: the other hand, the Norfolk Southern train derailed on February third.

1432
01:18:16,520 --> 01:18:19,720
Speaker 1: It has been six weeks now since that happened, and

1433
01:18:19,920 --> 01:18:24,240
Speaker 1: still the community is lacking in the most basic of answers.

1434
01:18:24,800 --> 01:18:28,720
Speaker 1: Just last week, the EPA finally ordered soil to be

1435
01:18:28,800 --> 01:18:32,880
Speaker 1: tested for toxic dioxians, a glaring oversight given the risk

1436
01:18:32,920 --> 01:18:36,080
Speaker 1: of these chemicals and concerns of health experts, and outrageously

1437
01:18:36,640 --> 01:18:40,559
Speaker 1: that testing is being conducted by Norfolk Southern itself, the

1438
01:18:40,720 --> 01:18:44,040
Speaker 1: very company that caused the catastrophe and which has every

1439
01:18:44,120 --> 01:18:47,679
Speaker 1: incentive to cover up potential problems. I have zero doubt

1440
01:18:47,880 --> 01:18:52,400
Speaker 1: that a wealthy community would have expected and received full air,

1441
01:18:52,600 --> 01:18:57,040
Speaker 1: water and soil testing conducted immediately before anyone was told

1442
01:18:57,080 --> 01:18:59,080
Speaker 1: that it was safe for them to come home. Now,

1443
01:18:59,080 --> 01:19:01,639
Speaker 1: with Silicon Valley Bank, a key concern was the ability

1444
01:19:01,680 --> 01:19:03,559
Speaker 1: of business owners who had accounts of the bank to

1445
01:19:03,640 --> 01:19:06,919
Speaker 1: continue their operations and not miss a payroll. The government

1446
01:19:07,200 --> 01:19:10,160
Speaker 1: immediately stepped in to guarantee that those deposits would be

1447
01:19:10,240 --> 01:19:13,080
Speaker 1: made one hundred percent whole. What would it look like

1448
01:19:13,200 --> 01:19:16,880
Speaker 1: for East Palestine residents to be made one hundred percent whole. Well,

1449
01:19:17,120 --> 01:19:19,559
Speaker 1: they may not have owned fancy tech startups, but plenty

1450
01:19:19,600 --> 01:19:22,800
Speaker 1: of small businesses which have undoubtedly now been destroyed by

1451
01:19:22,800 --> 01:19:25,080
Speaker 1: the fact that their town has become synonymous with a

1452
01:19:25,120 --> 01:19:29,000
Speaker 1: massive industrial accident. Their home values have been decimated overnight.

1453
01:19:29,439 --> 01:19:31,600
Speaker 1: Any idea that perhaps they should move out of a

1454
01:19:31,600 --> 01:19:34,160
Speaker 1: potentially toxic town is being crushed by the fact that

1455
01:19:34,200 --> 01:19:36,559
Speaker 1: whatever they sunk into building wealth by a home ownership

1456
01:19:36,720 --> 01:19:40,439
Speaker 1: has now been completely wiped out. Medical bills are mounting

1457
01:19:40,520 --> 01:19:43,000
Speaker 1: for some who are continuing to report symptoms ranging from

1458
01:19:43,000 --> 01:19:47,240
Speaker 1: dizziness to skin rashes to vomiting blood. Making East Palestine

1459
01:19:47,280 --> 01:19:50,160
Speaker 1: one hundred percent would involve a cash infusion to make

1460
01:19:50,200 --> 01:19:52,600
Speaker 1: up the losses of their assets from homes to businesses,

1461
01:19:52,800 --> 01:19:55,560
Speaker 1: funds to relocate if they desire to do so. It

1462
01:19:55,560 --> 01:19:58,120
Speaker 1: would mean a Medicare for All guarantee that would eliminate

1463
01:19:58,160 --> 01:20:01,000
Speaker 1: current and future medical bills. By the way, there's a

1464
01:20:01,000 --> 01:20:03,879
Speaker 1: provision in Obamacare that could be invoked as secure universal

1465
01:20:03,880 --> 01:20:05,920
Speaker 1: health care for this town. It just requires the government

1466
01:20:05,960 --> 01:20:08,640
Speaker 1: to admit there is a public emergency, something they are

1467
01:20:08,800 --> 01:20:11,479
Speaker 1: ultimately loathed to do. Even this would not make the

1468
01:20:11,479 --> 01:20:13,320
Speaker 1: residents of the town one hundred percent whole when you

1469
01:20:13,360 --> 01:20:16,080
Speaker 1: consider the stress and potential health impacts and splintering of

1470
01:20:16,120 --> 01:20:18,920
Speaker 1: a deeply rooted community, but at least it would be

1471
01:20:18,960 --> 01:20:21,920
Speaker 1: a start. The government's actions with regards Silicon Valley Bank,

1472
01:20:21,960 --> 01:20:24,400
Speaker 1: they went far beyond just that one bank. They create

1473
01:20:24,439 --> 01:20:26,360
Speaker 1: a whole new program in an attempt to make sure

1474
01:20:26,400 --> 01:20:29,559
Speaker 1: no other banks or depositors suffered any losses. What would

1475
01:20:29,600 --> 01:20:31,880
Speaker 1: this look like in the case of industrial accidents like

1476
01:20:31,920 --> 01:20:34,360
Speaker 1: what happened in these palaesty It would mean expanding any

1477
01:20:34,400 --> 01:20:37,840
Speaker 1: programs that benefited that one Ohio community to cover any

1478
01:20:37,880 --> 01:20:41,320
Speaker 1: community impacted by a derailment or chemical spill. It would

1479
01:20:41,360 --> 01:20:44,439
Speaker 1: mean creating dedicated mechanisms like what exists within the FED,

1480
01:20:44,479 --> 01:20:47,040
Speaker 1: where funding can go out immediately without having a weight

1481
01:20:47,040 --> 01:20:48,840
Speaker 1: around for Congress to get their acts together, which they

1482
01:20:48,960 --> 01:20:51,960
Speaker 1: never do. And that's really the key difference between banks

1483
01:20:52,000 --> 01:20:54,960
Speaker 1: and ordinary people. We have an elaborate architecture in place

1484
01:20:55,000 --> 01:20:57,320
Speaker 1: that can spring into action the instant. There is a

1485
01:20:57,320 --> 01:20:59,720
Speaker 1: whiff of trouble for big business and for banks, but

1486
01:21:00,040 --> 01:21:01,880
Speaker 1: all of the mechanisms which are meant to help and

1487
01:21:01,920 --> 01:21:05,679
Speaker 1: protect ordinary people, they are decruppit or inadequate, non existent,

1488
01:21:05,800 --> 01:21:08,839
Speaker 1: or broken. So instead of an actual government response to suffering,

1489
01:21:09,120 --> 01:21:12,040
Speaker 1: you get Pete Boudhajid writing a strongly worded letter to

1490
01:21:12,120 --> 01:21:14,599
Speaker 1: rail bosses and Trump flying in to hand out branded

1491
01:21:14,640 --> 01:21:18,439
Speaker 1: water bottles and McChicken sandwiches. Imagine if in response to

1492
01:21:18,479 --> 01:21:21,439
Speaker 1: these bank failures, Janet Yellen just wrote a letter asking

1493
01:21:21,479 --> 01:21:24,280
Speaker 1: the banking industry to please do better, and Obama flew

1494
01:21:24,320 --> 01:21:26,679
Speaker 1: to California to hand out copies of his latest Netflix

1495
01:21:26,720 --> 01:21:29,760
Speaker 1: series or something like that. Now, there is one unfortunate

1496
01:21:29,760 --> 01:21:33,519
Speaker 1: commonality between these two crashes. Neither incident is likely to

1497
01:21:33,640 --> 01:21:36,759
Speaker 1: lead to the regulatory reform which would prevent future similar

1498
01:21:36,800 --> 01:21:39,719
Speaker 1: crises from recurring. With Silicon Valley, the government is treating

1499
01:21:39,720 --> 01:21:42,280
Speaker 1: the symptoms. With these Palestine, the government is telling suffering

1500
01:21:42,400 --> 01:21:45,120
Speaker 1: residents that the symptoms are all in their heads. In

1501
01:21:45,200 --> 01:21:49,240
Speaker 1: neither case is Congress likely to actually tackle prevention, because

1502
01:21:49,320 --> 01:21:52,240
Speaker 1: that would require taking industry head on, which is hard,

1503
01:21:52,400 --> 01:21:55,160
Speaker 1: versus giving them bailance, which is so easy. All I'm

1504
01:21:55,160 --> 01:21:57,000
Speaker 1: saying in the Masters of the Universe, who converted from

1505
01:21:57,040 --> 01:21:59,320
Speaker 1: mind random marks in the course of forty eight hours,

1506
01:21:59,520 --> 01:22:01,160
Speaker 1: is that you're so socialism for the rich would go

1507
01:22:01,240 --> 01:22:03,600
Speaker 1: down a whole lot easier if it came through with

1508
01:22:03,600 --> 01:22:05,120
Speaker 1: a little bit of socialism for the rest of the

1509
01:22:05,160 --> 01:22:08,320
Speaker 1: country when they really really need it. And I have

1510
01:22:08,360 --> 01:22:10,640
Speaker 1: been struck by the contrast. And if you want to

1511
01:22:10,640 --> 01:22:14,000
Speaker 1: hear my reaction to Crystal's monologue, become a premium subscriber

1512
01:22:14,040 --> 01:22:20,000
Speaker 1: today at Breakingpoints dot Com. Matt Tayebi who went scorched

1513
01:22:20,040 --> 01:22:22,280
Speaker 1: Earth in Congress, and Congress did their best to try

1514
01:22:22,320 --> 01:22:24,800
Speaker 1: to discredit him. So he's joining us now. We're very

1515
01:22:24,800 --> 01:22:27,240
Speaker 1: excited to welcome him back to the show. Matt tayebe

1516
01:22:27,240 --> 01:22:32,680
Speaker 1: so called journalists, welcome back. Oh it's great, man. We

1517
01:22:32,920 --> 01:22:36,320
Speaker 1: were absolutely outraged on your behalf, even though you handled

1518
01:22:36,320 --> 01:22:39,840
Speaker 1: yourself with great applump I love, I will say, uh yeah,

1519
01:22:39,880 --> 01:22:41,840
Speaker 1: I hope it helped out, and I'm sure many of

1520
01:22:41,880 --> 01:22:44,200
Speaker 1: our audience was very much with you. Matt. We wanted

1521
01:22:44,240 --> 01:22:46,799
Speaker 1: to just have you on to talk about the actual

1522
01:22:47,000 --> 01:22:51,240
Speaker 1: content of what you were testifying before in Congress, because

1523
01:22:51,280 --> 01:22:53,880
Speaker 1: apparently many of these Democratic members were not actually interested

1524
01:22:53,960 --> 01:22:56,479
Speaker 1: in that. Wow, that's new. I'm not even sure I'm

1525
01:22:56,479 --> 01:23:02,519
Speaker 1: prepared for this interview because I haven't had one of those. No,

1526
01:23:02,600 --> 01:23:06,120
Speaker 1: the content is is I would say shocking. You know

1527
01:23:06,160 --> 01:23:10,240
Speaker 1: the Twitter files. Originally, when we did the first couple

1528
01:23:10,280 --> 01:23:12,840
Speaker 1: of threads on them, they seemed like it was a

1529
01:23:12,840 --> 01:23:16,760
Speaker 1: pretty limited topic that you know, we're looking first at

1530
01:23:16,760 --> 01:23:20,200
Speaker 1: the Hunter Biden story. I was hoping to answer a

1531
01:23:20,240 --> 01:23:24,240
Speaker 1: pretty small question about whether or not the DHS or

1532
01:23:24,280 --> 01:23:30,080
Speaker 1: the FBI was in any way contacting these companies with recommendations,

1533
01:23:30,600 --> 01:23:33,919
Speaker 1: and then about I would say a month into the process,

1534
01:23:33,960 --> 01:23:38,080
Speaker 1: we discovered that not only was there a very formal

1535
01:23:38,240 --> 01:23:43,120
Speaker 1: system of transmitting sort of mass transmitting those requests, but

1536
01:23:43,240 --> 01:23:45,519
Speaker 1: that there was a deeper layer of it where the

1537
01:23:45,560 --> 01:23:48,799
Speaker 1: government was connected to all these NGOs that were also

1538
01:23:48,920 --> 01:23:53,960
Speaker 1: sending huge numbers of requests of these companies. So yeah,

1539
01:23:54,000 --> 01:23:59,720
Speaker 1: it's a very serious, I think deep problem, and I

1540
01:23:59,760 --> 01:24:03,439
Speaker 1: wish we had gotten an opportunity to talk about it more. Yes, well,

1541
01:24:03,560 --> 01:24:06,799
Speaker 1: it's one of these, and there's one of many issues

1542
01:24:07,080 --> 01:24:11,920
Speaker 1: where the partisan coding of it, first of all is bizarre,

1543
01:24:12,280 --> 01:24:15,960
Speaker 1: but also it completely misses the point because no one

1544
01:24:16,000 --> 01:24:20,000
Speaker 1: is argo this only happens under democratic administrations. No to

1545
01:24:20,040 --> 01:24:21,679
Speaker 1: the contrary, I mean a lot of what you revealed

1546
01:24:21,720 --> 01:24:25,200
Speaker 1: was happening during the Trump administration. So it speaks to

1547
01:24:25,520 --> 01:24:29,679
Speaker 1: a deeper collaboration between what some might call the deep

1548
01:24:29,720 --> 01:24:34,200
Speaker 1: state and these incredibly powerful tech companies. Can you just

1549
01:24:34,520 --> 01:24:38,240
Speaker 1: help people understand what you find as a journalist and

1550
01:24:38,240 --> 01:24:44,240
Speaker 1: as an American citizen so troubling about some of these interactions. Well,

1551
01:24:44,280 --> 01:24:49,480
Speaker 1: the First Amendment expressly prohibits the government from getting involved

1552
01:24:49,800 --> 01:24:55,960
Speaker 1: in barring speech, and what we see here as they're

1553
01:24:55,960 --> 01:24:59,719
Speaker 1: trying to do and end around in a number of ways.

1554
01:25:01,040 --> 01:25:06,480
Speaker 1: First by sending very carefully worded letters to these companies,

1555
01:25:06,960 --> 01:25:12,000
Speaker 1: you know, for your consideration only, we believe that these

1556
01:25:12,080 --> 01:25:16,160
Speaker 1: accounts may violate your terms of service, or they will

1557
01:25:16,240 --> 01:25:19,680
Speaker 1: they will send something like you know, of course you

1558
01:25:19,760 --> 01:25:22,559
Speaker 1: will only remove accounts at your own soul discretion. But

1559
01:25:23,160 --> 01:25:25,840
Speaker 1: you know, here's a list of three thousand accounts that

1560
01:25:25,880 --> 01:25:30,440
Speaker 1: we think our foreign thread actors are potential foreign thread actors. Right,

1561
01:25:31,040 --> 01:25:35,240
Speaker 1: So that's deeply troubling, but crystal to your point. You know,

1562
01:25:35,600 --> 01:25:37,240
Speaker 1: one of the people that I talked to about this

1563
01:25:37,400 --> 01:25:41,400
Speaker 1: is had a really interesting way to describe this phenomenon,

1564
01:25:42,000 --> 01:25:46,200
Speaker 1: saying that it was counter terrorism the counter populism, because

1565
01:25:46,240 --> 01:25:48,800
Speaker 1: what we had was the war and terror machinery. You

1566
01:25:48,880 --> 01:25:52,600
Speaker 1: kind of ran out of gas after the ISIS problems

1567
01:25:52,640 --> 01:25:56,679
Speaker 1: started to recede, and the money still needed to be spent,

1568
01:25:57,160 --> 01:26:02,120
Speaker 1: so they just reconfigured the mission to anti disinformation. And

1569
01:26:02,200 --> 01:26:05,840
Speaker 1: the problem with that is that the reason the Republicans

1570
01:26:05,840 --> 01:26:08,400
Speaker 1: are more interested in that is that in the United States,

1571
01:26:09,160 --> 01:26:13,040
Speaker 1: the bigger threat to the establishment populism wise, is the

1572
01:26:13,120 --> 01:26:15,719
Speaker 1: right wing. But in the Twitter files you see they're

1573
01:26:15,800 --> 01:26:19,200
Speaker 1: very worried about the left in Europe, in Africa and

1574
01:26:19,280 --> 01:26:24,760
Speaker 1: South America. So I think that's a misconception. As you say,

1575
01:26:25,000 --> 01:26:28,639
Speaker 1: the right left coding of this has been an obstacle. Yeah,

1576
01:26:28,680 --> 01:26:30,920
Speaker 1: it's really troubling. And one of the things that I

1577
01:26:30,960 --> 01:26:34,800
Speaker 1: was driven mad by was the also partisan coding in

1578
01:26:34,840 --> 01:26:38,720
Speaker 1: the hearing itself, where they both wanted to say censorship

1579
01:26:38,800 --> 01:26:41,160
Speaker 1: wasn't happening and that when it was, it was good.

1580
01:26:41,400 --> 01:26:43,120
Speaker 1: So they were like, no, no no, no, actually, there's a

1581
01:26:43,160 --> 01:26:46,640
Speaker 1: real bias here in protecting it. And so the censorship

1582
01:26:46,840 --> 01:26:49,040
Speaker 1: it wasn't happening as Tybee was saying it was, but

1583
01:26:49,080 --> 01:26:51,479
Speaker 1: when it did happen, it was in the defense quote

1584
01:26:51,520 --> 01:26:55,000
Speaker 1: unquote really of good information and reality. It's the right

1585
01:26:55,040 --> 01:26:57,960
Speaker 1: wing or whatever and taking the parts and coding out

1586
01:26:58,000 --> 01:26:59,280
Speaker 1: of it. I mean, one of the things that you

1587
01:26:59,400 --> 01:27:03,160
Speaker 1: unveiled here with the Twitter files was how much time

1588
01:27:03,240 --> 01:27:07,840
Speaker 1: and man hours are spent on censoring absolute bullshit, as

1589
01:27:07,880 --> 01:27:12,240
Speaker 1: in like like small accounts with no following that are

1590
01:27:12,240 --> 01:27:16,120
Speaker 1: supposedly either rush spreading, disincarmation, making some bad joke, and

1591
01:27:16,160 --> 01:27:19,320
Speaker 1: we're like, how is it your job to go through

1592
01:27:19,360 --> 01:27:22,680
Speaker 1: and comb through six follower accounts and then flag it

1593
01:27:22,760 --> 01:27:25,280
Speaker 1: and try to get those taken down. Was there any

1594
01:27:25,320 --> 01:27:27,880
Speaker 1: interest in that, apparently from any of these people at

1595
01:27:27,880 --> 01:27:32,599
Speaker 1: the hearing. No, And that's that's an interesting point because

1596
01:27:33,800 --> 01:27:37,200
Speaker 1: you know, there's satire is one of the big problems

1597
01:27:37,360 --> 01:27:41,439
Speaker 1: for AI. It doesn't know how to handle things that

1598
01:27:41,520 --> 01:27:44,799
Speaker 1: are jokes clearly to a human being, but a computer

1599
01:27:44,840 --> 01:27:48,439
Speaker 1: doesn't understand that. So all it sees, for instance, is

1600
01:27:48,479 --> 01:27:53,000
Speaker 1: they there is a an account Peter Douche I think,

1601
01:27:53,080 --> 01:27:56,840
Speaker 1: is what he calls himself, and he was making these

1602
01:27:56,880 --> 01:28:01,400
Speaker 1: sort of fake Biden videos where the tongue was really

1603
01:28:01,520 --> 01:28:05,479
Speaker 1: long and it was clearly a joke. But there was

1604
01:28:05,560 --> 01:28:09,200
Speaker 1: this hole back and forth between like the you know,

1605
01:28:09,280 --> 01:28:13,240
Speaker 1: the Democratic Party or the campaign representative and a Twitter's

1606
01:28:13,439 --> 01:28:16,280
Speaker 1: government liaison about whether or not they should ban this,

1607
01:28:17,120 --> 01:28:19,800
Speaker 1: and this is taking up lots and lots of time.

1608
01:28:19,880 --> 01:28:23,920
Speaker 1: Stuff like this is all over the Twitter files, you know,

1609
01:28:24,360 --> 01:28:29,880
Speaker 1: jokes by who is Mike Huckabee made a joke. Oh,

1610
01:28:29,920 --> 01:28:32,400
Speaker 1: I guess I should get my dead parents to vote now, right,

1611
01:28:32,520 --> 01:28:36,160
Speaker 1: Like it's a joke, clearly, right. I mean, look, maybe

1612
01:28:36,160 --> 01:28:40,080
Speaker 1: he's a jerk to say it, but but they they

1613
01:28:40,120 --> 01:28:43,120
Speaker 1: had a long discussion about it. They sort of pre

1614
01:28:43,280 --> 01:28:47,400
Speaker 1: gave him a strike for saying that, and that is

1615
01:28:47,439 --> 01:28:49,320
Speaker 1: a huge part of the problem too, is that they're

1616
01:28:49,560 --> 01:28:52,640
Speaker 1: trying to apply machine learning to human conversation and you

1617
01:28:52,680 --> 01:28:55,960
Speaker 1: can't do it really Yeah, and that's going to be,

1618
01:28:56,200 --> 01:28:59,240
Speaker 1: you know, continue to be a really important problem. You

1619
01:28:59,240 --> 01:29:01,240
Speaker 1: know that I wish we were thinking harder about as

1620
01:29:01,280 --> 01:29:03,920
Speaker 1: we move forward. You know, have you thought much about

1621
01:29:03,920 --> 01:29:06,920
Speaker 1: solutions because I think a lot of folks on the right,

1622
01:29:07,040 --> 01:29:08,880
Speaker 1: like they kind of put their faith in Elon that

1623
01:29:08,960 --> 01:29:11,479
Speaker 1: this would be like free speech Panaceo once he took

1624
01:29:11,479 --> 01:29:14,000
Speaker 1: over the platform. It's a sort of libertarian view, right

1625
01:29:14,040 --> 01:29:16,240
Speaker 1: of like, oh, if we have a new startup that

1626
01:29:16,479 --> 01:29:18,800
Speaker 1: is like Twitter but different, or if we have the

1627
01:29:18,920 --> 01:29:22,880
Speaker 1: right you know, free pro free speech billionaire owner of Twitter,

1628
01:29:22,960 --> 01:29:26,120
Speaker 1: then maybe things will be different. But ultimately the incentra

1629
01:29:26,160 --> 01:29:29,040
Speaker 1: structure is still the same. They're still really controlled by

1630
01:29:29,040 --> 01:29:31,719
Speaker 1: what advertisers are going to be comfortable with in terms

1631
01:29:31,760 --> 01:29:35,760
Speaker 1: of their speech valance. So have you thought about what

1632
01:29:36,120 --> 01:29:41,599
Speaker 1: some more workable intelligent solutions might look like? Yeah, I mean,

1633
01:29:41,640 --> 01:29:44,360
Speaker 1: those are those are lofty questions that they're very very

1634
01:29:44,360 --> 01:29:48,360
Speaker 1: difficult that I would say, my primary h my first

1635
01:29:48,439 --> 01:29:51,320
Speaker 1: concern is that we get the government out of the

1636
01:29:51,320 --> 01:29:57,920
Speaker 1: business of organizing some kind of pan platform censorship processing system,

1637
01:29:57,920 --> 01:30:01,120
Speaker 1: because there's some evidence that they've already done that and

1638
01:30:01,240 --> 01:30:06,959
Speaker 1: created a a processing system that works between the companies

1639
01:30:07,800 --> 01:30:10,160
Speaker 1: and that is publicly funded, so that that would be

1640
01:30:10,280 --> 01:30:16,280
Speaker 1: very troubling if that existed. I think the libertarian point

1641
01:30:16,280 --> 01:30:18,120
Speaker 1: of view on this that that has a little bit

1642
01:30:18,120 --> 01:30:20,960
Speaker 1: of merit. In my point of view, is this idea

1643
01:30:21,080 --> 01:30:25,559
Speaker 1: that if there was no organized government system, then there

1644
01:30:25,560 --> 01:30:28,040
Speaker 1: would at least compete, and there would be some platforms

1645
01:30:28,040 --> 01:30:31,800
Speaker 1: that would do that less than others, maybe, right, and

1646
01:30:31,880 --> 01:30:35,960
Speaker 1: you wouldn't have this universal cooperation which is what we

1647
01:30:36,000 --> 01:30:39,000
Speaker 1: saw in the Twitter files. However, I don't know. I mean,

1648
01:30:39,000 --> 01:30:42,960
Speaker 1: you're absolutely right. The incentives are what they are. People

1649
01:30:43,040 --> 01:30:45,040
Speaker 1: are always going to do this if they have the

1650
01:30:45,080 --> 01:30:47,880
Speaker 1: power to do it, and that's a problem because distribution

1651
01:30:48,080 --> 01:30:50,920
Speaker 1: is now so concentrated that even you know, shows like

1652
01:30:50,960 --> 01:30:54,040
Speaker 1: yours writing like mine, even though it's on email like,

1653
01:30:54,080 --> 01:30:57,840
Speaker 1: it's always going to be subject to these distributors. Yeah,

1654
01:30:57,880 --> 01:31:00,439
Speaker 1: and that was one where I you know, to bring

1655
01:31:00,439 --> 01:31:02,439
Speaker 1: this up. But one of the worst parts to me

1656
01:31:02,600 --> 01:31:06,200
Speaker 1: was when Debbie Wasserman Schaltz attacked you when you like

1657
01:31:06,360 --> 01:31:08,519
Speaker 1: from the idea that you might have made money by

1658
01:31:08,560 --> 01:31:11,760
Speaker 1: doing your job, when they have no questions about you know,

1659
01:31:11,880 --> 01:31:15,360
Speaker 1: corporate media whenever they get aligned with some major advertiser,

1660
01:31:15,360 --> 01:31:17,320
Speaker 1: and they happen to take that line. Oh that's totally fine,

1661
01:31:17,320 --> 01:31:20,400
Speaker 1: But can you just talk about why. I think at

1662
01:31:20,479 --> 01:31:25,000
Speaker 1: least it was a big moment for independent journalism, regardless

1663
01:31:25,040 --> 01:31:27,760
Speaker 1: of really what the attack was or not, to have

1664
01:31:27,880 --> 01:31:30,160
Speaker 1: these sitting up there, to have these revelations, to be

1665
01:31:30,439 --> 01:31:32,800
Speaker 1: at the center of the story, even for the people

1666
01:31:32,840 --> 01:31:35,200
Speaker 1: in Congress to kind of show their true colors on this.

1667
01:31:35,360 --> 01:31:38,080
Speaker 1: You know, in some ways it was a disgusting attack.

1668
01:31:38,160 --> 01:31:40,479
Speaker 1: But like I said, actually in our video defending you,

1669
01:31:40,520 --> 01:31:42,000
Speaker 1: I was like, you know, this just shows you that

1670
01:31:42,240 --> 01:31:45,800
Speaker 1: they have to attack the character whenever they can actually

1671
01:31:45,840 --> 01:31:48,080
Speaker 1: attack the content. So to me, it was almost like

1672
01:31:48,360 --> 01:31:53,120
Speaker 1: a we've arrived time moment. Yeah. I mean, it's funny.

1673
01:31:53,320 --> 01:31:59,040
Speaker 1: We've found a float chart that these Stanford Internet Observatory

1674
01:31:59,080 --> 01:32:03,160
Speaker 1: put out that talked about all the different stakeholders in

1675
01:32:03,280 --> 01:32:09,240
Speaker 1: the content review process, and it was something like government companies, NGOs,

1676
01:32:09,280 --> 01:32:14,000
Speaker 1: and media and it showed all the content flowing back

1677
01:32:14,040 --> 01:32:17,960
Speaker 1: and forth reports both going to media and from media

1678
01:32:18,080 --> 01:32:21,720
Speaker 1: to these NGOs. But what that showed is that they

1679
01:32:21,920 --> 01:32:26,639
Speaker 1: view the media, especially the traditional corporate media, as part

1680
01:32:26,800 --> 01:32:30,160
Speaker 1: of this system, which makes them inherently trustworthy, which I

1681
01:32:30,160 --> 01:32:34,880
Speaker 1: think is why people it was all independent journalists were

1682
01:32:34,920 --> 01:32:39,160
Speaker 1: chosen to do this project because there's an inherent trust

1683
01:32:39,200 --> 01:32:44,639
Speaker 1: problem now with the corporate press. So look, the press

1684
01:32:45,360 --> 01:32:49,360
Speaker 1: is supposed to adopt a separate adversarial posture to all

1685
01:32:49,400 --> 01:32:54,360
Speaker 1: of these institutions, and if they're viewed as partners, they

1686
01:32:54,520 --> 01:32:57,120
Speaker 1: can't be trusted. And so I think that was an

1687
01:32:57,120 --> 01:32:59,080
Speaker 1: important point. I think that's one of the main things

1688
01:32:59,080 --> 01:33:02,840
Speaker 1: that this project has achieved. Oh I hope so too,

1689
01:33:03,360 --> 01:33:05,280
Speaker 1: as we always say, go ahead and support Matt's work.

1690
01:33:05,280 --> 01:33:07,639
Speaker 1: We got a link down in the description. Really appreciate

1691
01:33:07,640 --> 01:33:09,439
Speaker 1: you joining us and breaking it down. I know it

1692
01:33:09,479 --> 01:33:11,720
Speaker 1: was an annoying moment, I'm sure, but overall I think

1693
01:33:11,760 --> 01:33:14,639
Speaker 1: it worked out to your benefit. Thanks so much, Sober Crystal,

1694
01:33:14,720 --> 01:33:17,840
Speaker 1: take care to be Matt good see. Thank you guys

1695
01:33:17,880 --> 01:33:20,320
Speaker 1: so much for watching. Really appreciate it as always, if

1696
01:33:20,360 --> 01:33:22,639
Speaker 1: you can. We've got the new Spotify full show out there.

1697
01:33:22,680 --> 01:33:24,519
Speaker 1: I know a lot of people are really loving that

1698
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Speaker 1: just for premium members. You can subscribe Breakingpoints dot com,

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Speaker 1: support the show, get the full show on Spotify video audio.

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Speaker 1: All at the same time. People are absolutely loving it,

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Speaker 1: so enjoy people. We'll see you guys on Thursday. We've

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Speaker 1: got a great Counterpoints show for you guys tomorrow